Nelson and Nelson

[2018] FamCA 431

FAMILY COURT OF AUSTRALIA

NELSON & NELSON [2018] FamCA 431

FAMILY LAW – SPOUSAL MAINTENANCE – Interim

Family Law Act 1975 (Cth)

Redman and Redman (1987) FLC 91-805
Williamson and Williamson (1978) FLC 90-505

APPLICANT: Ms Nelson

RESPONDENT: Mr Nelson

FILE NUMBER: SYC 5596 of 2016

DATE DELIVERED: 14 June 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 16 March 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Lawson

SOLICITOR FOR THE APPLICANT: Victoria Baker Solicitor

COUNSEL FOR THE RESPONDENT: Mr Givney

SOLICITOR FOR THE RESPONDENT: Campbell Paton & Taylor

Orders

1. Pending further order, from 14 days from the date of this order and monthly thereafter the husband pay by way of interim spousal maintenance the sum of $3,340 to the wife each month.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Nelson & Nelson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5596 of 2016

Ms Nelson

Applicant

And

Mr Nelson

Respondent

REASONS FOR JUDGMENT

1. By way of an Application in a Case filed 22 August 2017 (and affirmed orally by counsel for the wife), the wife makes an application that the husband pay to her, by way of interim spousal maintenance, the sum of $4,000 per month.

2. By way of Response, filed by the husband on 13 March 2018, the husband seeks that that application be dismissed.

3. The wife relies on two affidavits filed on 22 August 2017 and 9 March 2018 and a financial statement filed 9 March 2018.

4. The husband relies upon an affidavit filed 13 March 2018, an updated financial statement filed 13 March 2018 and parts of an exhibit book (being exhibits referred to in his affidavit of 13 March 2018 which were specifically made exhibits during this interim hearing). Other documents were also tendered.

5. The parties were married for approximately 31 years prior to separating on 14 July 2015.

6. They had lived together on the farm which the husband continues to occupy. The wife moved off the farm on the date of separation and currently lives in a new relationship in rented accommodation.

7. Section 72(1) of the Family Law Act 1975 (Cth ) (“the Act”) provides:

   (1)    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).

8. Section 75(2) of the Act provides:

   (1)    In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.

9. The matters to be taken into consideration are set out in s 75 of the Act.

10. In relation to the threshold issues set out in s 72, counsel for the wife relies on ss (b) and (c), given that the children of the marriage are now both over the age of 18 and living away from each of their parents.

THE WIFE’S AGE AND HEALTH – s.72(1)(b)

1. The wife is 57 years of age. She has some previous qualifications.

2. I accept for the purposes of this interim application that the wife suffers from some ill health. The wife:

   12.1.Was diagnosed and treated for breast cancer in 2010;

   12.2.Was diagnosed with bronchiolitis obliterans in 2016 ;

   12.3.Sees her general practitioner on a regular basis;

   12.4.Currently also sees a psychologist to assist with the management of her depression and anxiety;

   12.5.Sees a dermatologist three days a week to manage a chronic skin condition;

   12.6.Has a respiratory physician to manage her chronic lung disease and she is currently undergoing investigation as to whether or not she has an underlying heart condition;

   12.7.Suffers from sleep apnoea; chronic back pain and receives chiropractic treatment for a chronic degenerative spinal condition; and

   12.8.Experiences pain and discomfort in her right hip.

3. I accept that, in the context of this interim application, the wife’s health issues present a real limitation to her returning to full time employment.

THE WIFE’S EMPLOYMENT OPPORTUNITIES

1. At [11] and [16] of the wife’s affidavit, filed 9 March 2018, the wife says the following:

   11.  I believe that I could resume …. [part-time] work. The hours are limited and the holidays allow me to recuperate. I ring the Department…on a regular basis as to positions. Job opportunities in my area are very limited for a person of my age and health.

   16. I lack the resources to produce income myself. I have sought a transfer by the [relevant Department]. There has been nothing offered. I do babysitting for small amounts. This will end in two weeks as the family is to move. I need a Certificate 3 for child care work. The course is not available until 2019 at [B Town] TAFE. The cost is $1,600. I cannot return to [my previous profession] unless I complete the course again. I last [was employed in this field] before the birth of our first child.

2. Counsel for the husband drew attention to a letter written to the wife by the Department on 19 December 2016 which approved a period of leave without pay for the wife on that day. That letter contains the following paragraph:

   Where the period of leave without pay exceeds 12 months and loss or right of return has or will occur, and the employee has not submitted a transfer application. The [sic] Department will undertake a process to transfer the employee to the nearest suitable vacancy of the employee’s former position prior to, or at the time of the expiry of the leave without pay period.

3. Counsel for the husband points out that 12 months from the date of the approval contained in that letter expired in December 2017 and the wife has provided no evidence as to whether or not the Department has done anything to attempt to provide her with a suitable vacancy.

4. Given the evidence, however, in [11] of the wife’s affidavit referred to above, that submission is not available.

5. I accept for the purposes of this interim application, that the wife’s age and physical and mental incapacity, create difficulties for her in obtaining appropriate gainful employment.

ANY OTHER ADEQUATE REASON – s.72(1)(c)

1. The wife, pursuant to s 72(1)(c) of the Act, also relies upon the circumstance that almost the entirety of her financial resources are tied up in the farm which the husband currently occupies and which is presently used exclusively by him. I accept that at the current time the wife cannot access that financial resource.

2. The wife has applied for Centrelink benefits. That application, however, was declined on the basis that she is one half the registered proprietor of the farm and has half ownership of the partnership assets which are located on the farm.

3. In November 2017, when the husband failed to make a payment under urgent spousal maintenance orders, the wife made an application to have some monies released to her early from her superannuation fund.

4. The wife over the duration of the parties’ relationship has contributed to the income earning capacity, property and financial resources of the husband. During the marriage the wife asserts she looked after the parties’ children and the husband’s frail parents. No assets were developed between the parties outside those in the farming venture.

5. The wife now lives with her partner who is a driver. The wife asserts that her partner is not a financial resource for her given that he has limited earnings.

6. I accept the fact that the wife is unable to access assets which she has helped to acquire, conserve and maintain over a 31 year period, and that satisfies the threshold requirement in s 72(1)(c) of the Act.

QUANTUM OF THE WIFE’S NEEDS

1. In interim proceedings, the Full Court in Redman and Redman (1987) FLC 91-805 endorsed a statement made by Fogarty J in Williamson and Williamson (1978) FLC 90-505 as follows:

   Another consequence is that on an application for interim maintenance, the court conducts ‘not as final or exhaustive a hearing as would be the case if one were hearing the matter finally’ ... the evidence need not be so extensive and the findings not so precise.

2. So, upon an application for interim maintenance, an approach can be taken with a broader brush.

3. In the wife’s financial statement, filed 9 March 2018, the wife in Part N indicates that the total of her average weekly living expenses are in the sum of $803.74. However, a number of those “expenses” need to be excluded. Firstly, part of that sum includes $56.20 in relation to her partner’s food. Next, there is another sum of $54.95 per week that relates to “attending court expenses”.

4. Counsel for the husband also submitted that the figure of $90.21 for medical, dental and optical expenses (not including health insurance premiums) was not supported by any independent documentation by the wife. I have set out above the extent of the wife’s involvement with medical professionals and other professionals in relation to her health and I accept the wife’s figure.

5. Counsel for the husband queries an expense for “gardening/lawn mowing” of $13.88 and gifts of $115.35 per week. I do not take those asserted expenses into account.

6. Counsel for the husband also points to the issue arising in relation to the financial circumstances of the wife’s cohabitation with her partner. He firstly asserts that there has not been a proper disclosure of that financial relationship. The wife in her most recent financial statement indicates that her partner receives $306 per week. The financial statement, however, is constructed on the basis that the wife pays the whole of the rent in the sum of $350 per week in respect of the property in which they live. It is also unclear as to whether or not gas, electricity and petrol, as claimed by the wife in Part N of the statement, are joint expenses with her partner or are her share of those expenses.

7. Using a broad brush approach, I allow the wife $500 per week for her living expenses as set out in Part N of her financial statement.

8. It is proper that I allow $175 per week for the wife’s rent (being one half of $350 per week claimed by the wife). There is also further expenditure by the wife as set out in items 26 (home contents insurance, motor vehicle insurance and HCF), 27 (motor vehicle registration) and 30 (Mastercard payments on debt of $1,461.17) of her financial statement which total about $96 per week.

9. Overall, therefore I find that the wife’s needs are in the sum of $771 per week ($500 + $175 + $96) or $3,340 per month.

THE HUSBAND’S CAPACITY TO PAY

1. The husband asserts that he does not have a capacity to meet a maintenance order but I am unable to accept that that is so. The most reliable evidence in relation to the husband’s capacity to pay is found in exhibit 5 which is a profit and loss management report prepared by C Accountants in D Town.

2. That document indicates that in the period between July 2017 and March 2018 the farming enterprise made a profit of about $6,000. Two of the expenses, however, were drawings on behalf of the wife of $15,000 and personal expenses on behalf of the husband of $27,513.

3. When those three figures are added together, the amount available in that period is $48,500. If that two thirds of the year is extrapolated to a full year, the amount available would be $72,750 (48.5 ÷ 2 x 3).

4. That estimate can be compared to the previous two financial years, namely the 2017 and 2016 financial years (Exhibit 4). The profit in those years was $29,677 and $74,852 respectively. However, the figures for those full financial years have a depreciation expense of $63,616 and $65,525 respectively. If those figures are added to the profit for those years then both the previous years exceed the figure of $72,750.

5. However, there is some further evidence which sheds light upon what might be expected in the fourth quarter of the 2018 financial year.

6. The husband, at [101] of his affidavit dated 13 March 2018, indicates that there is currently in the business trading account a sum of $28,000 from the recent sale of livestock (and that income is not included in the year to date income). The husband indicates that he will need funds of about $48,000 to pay for general running costs up until the end of the financial year, fertilizer, farm package insurance, and chemicals for cropping. In addition, at [111(f)] the husband indicates that he has just finished sheering, has received the test results and that he estimates that if the wool was sold they may receive about $50,000. I was promised a document that would give a more precise figure but that was not forthcoming by the end of the hearing. Based upon those three figures the last quarter of the 2018 financial year will yield a profit of $30,000 ($28,000 - $48,000 + $50,000).

7. Based on that information, the net farm income for the 2018 financial year is $78,500 (48,500 + 30,000). If that profit was divided evenly between the parties, then each of them would receive $39,250 or $3,270 per month.

8. However, I also take into account that although from an accounting point of view some private use expenditure is attributed to the husband in the drawings, he does receive, and counsel for the husband conceded he receives, the overall benefit of having the company pay for most of his motor vehicle expenses, most of his telephone expenses and most of his electricity expenses. He also has free accommodation on the farm.

9. The wife asserted that the husband has accommodation on the farm that is a potential source of income if it was made available to a tenant. The husband does not disclose in his financial statement any income from a tenant. I was not taken to any evidence that would support the submission that money is available from a tenant.

10. Further, at the beginning of January 2018, there was $98,000 in the farm trading account. That account has now reduced to a sum of $28,000. One of the major reasons for that reduction was the purchase by the husband of extra stock in that time. It appears that the current stock levels of the property are higher than the two previous financial years. Currently, there are 1,109 animals on the property. This is a similar number of animals to “closing stock” in 2017 (1,141) and in 2016 (958) (see Exhibit 6). The husband continues to work the farm although he says he suffers from depression (which is a malady of long-standing and has not to date stopped him managing the property).

11. The farming activities in the financial statements that I have for the last two and a half years seem relatively stable.

12. The husband says at [75] that:

    Throughout the relationship [the wife] and I have drawn on capital of the partnership to fund the shortfall of our living expenses. We would take drawings against our capital accounts in the partnership to supplement our expenses from time to time.

13. The husband says in November 2015, his adult, married daughter needed a car. She did not have any money. She approached her father to help her and he agreed. The husband has entered into a loan with E Bank to assist his adult daughter to purchase a car. The loan is in his name. The car is recorded as an asset of the partnership and has so far been paid out of farming income. It is unclear to me, however, whether or not that appears as a motor vehicle expense on the profit and loss statement or has been assigned to the husband’s personal drawings. The weekly amount that the husband is required to pay is not recorded on his financial statement as an expense. In any event, that liability cannot take precedent over the husband’s interim responsibility to maintain the wife pending final property settlement.

14. Overall, I find that the husband has the capacity to pay the wife her need assessed in the sum of $3,340 per month.

CONCLUSION

1. I find it is proper that an order for interim spousal maintenance be made in the sum of $3,340 per week.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 14 June 2018.

Associate

Date:  14.6.18