Noble and Noble
[2014] FCCA 421
•7 March 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NOBLE & NOBLE | [2014] FCCA 421 |
| Catchwords: FAMILY LAW – Application for award of spousal maintenance pending final hearing – nature of interim hearing – is applicant able to support herself adequately – threshold issue under section 72 – care of children aged 6 & 4 – applicant engaged in part time work – has respondent capacity to provide financial support – considerations concerning respondent’s property and financial resources – what is proper. |
| Legislation: Family Law Act 1975, ss.4(1); 72(1); 74(1); 75(2); 75(3) |
| C & C (1996) FLC 92-651 In the Marriage of Kennon (1997) 22 FamLR 1 Bevan & Bevan (1995) FLC 92-600 Kajewski & Kajewski (1978) FLC 90-472 Mitchell & Mitchell (1995) FLC 92-601 Kiesinger & Padget [2008] FamCAFC 23 Brown & Brown (2007) FLC 93-316 |
| Applicant: | MS NOBLE |
| Respondent: | MR NOBLE |
| File Number: | ADC 4739 of 2013 |
| Judgment of: | Judge Brown |
| Hearing date: | 28 February 2014 |
| Date of Last Submission: | 28 February 2014 |
| Delivered at: | Adelaide |
| Delivered on: | 7 March 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr McGinn |
| Solicitors for the Applicant: | Degaris Lawyers |
| Counsel for the Respondent: | Mr Richards |
| Solicitors for the Respondent: | Howe Martin |
ORDERS
The parties and each of them do all such things as may be reasonably required to enable a family assessment to be carried out with respect to the competing applications for parenting orders before the Court, such assessment to include interviews with the children and at the discretion of the family consultant, observed interaction of the children with any relevant adult person in addition to the parties as the assessor considers appropriate, the assessment to be carried out by a person agreed in writing between the parties within 14 days or in default of agreement as may be fixed by the Court upon application after the expiration of that time and with the costs of such assessment and the report arising from such assessment to be borne equally by the parties.
The respondent provide spousal maintenance to the applicant pending trial at the rate of $200.00 per week, to be paid to a bank account to be nominated by the applicant commencing on Thursday 13 March 2014 and each week thereafter or such longer period as the parties otherwise agree.
Pursuant to Section 26 of the Federal Circuit Court of Australia Act1999, the parties and their legal representatives do attend a Conciliation Conference with a Registrar of the Court on 16 May 2014 at 9:15am.
The matter is fixed for final hearing before Judge Brown in Adelaide on 7, 8, 9 & 10 October 2014 at 10:00am NOTING 4 days allowed.
Further consideration of the matter is adjourned to 31 July 2014 at 9:30am for trial directions.
IT IS NOTED that publication of this judgment under the pseudonym Noble & Noble is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 4739 of 2013
| MS NOBLE |
Applicant
And
| MR NOBLE |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties to the proceedings which are the subject of this judgment are Ms Noble “the wife” and Mr Noble “the husband”.
They were married on (omitted) 2004 and are the parents of X born (omitted) 2007 and Y born (omitted) 2009. The parties separated on 4 November 2012, following a relationship and marriage in excess of ten years in duration.
The husband is a (occupation omitted) with interest in a (omitted) at (omitted), in the South East of South Australia. He currently lives alone in what was the parties’ former family home, in Property P. The wife and children having moved into rented accommodation, also in (omitted), after separation.
At present the wife is employed on a part-time basis as a (omitted). She is also engaged in tertiary studies in respect of a (course omitted) at (omitted) University in (omitted). She engages in her studies via the internet.
It is common ground between the parties that during their marriage the husband was the family’s main breadwinner, whilst the wife was the children’s main carer interspersed with some part-time work. This situation has continued after the parties’ separation.
It is agreed that the children currently spend alternate weekends with the father as well as on a mid-week occasion. The impression I have is that the father sees the children on other occasions as well and wishes to spend as much time as possible with them.
The wife commenced these proceedings recently on 16 December 2013, amending her application on 17 January 2014. The major issues in dispute between the parties concern final arrangements for the care of X and Y and how the parties’ marital assets are to be divided.
Necessarily, given the date on which they were inaugurated, these proceedings are some way from being resolved. In particular, the parties have not as yet completed any mandatory process of conciliation in respect of the property issues and there has been insufficient time for the preparation of an independent and expert assessment of the parenting needs of the children concerned.
Given the personal subject matter of family law cases, there is an emphasis in such cases on the court’s providing mechanisms to the litigants concerned to enable them to resolve the disputes arising between them consensually and in a dignified and orderly manner.
This is particularly important in cases involving children where it is usually helpful to the children affected by the proceedings that all steps be taken to ensure some form of workable relationship is being maintained between their parents after the litigation has concluded.
By their nature, adversarial court proceedings are not conducive to fostering positive relationships between separated parents or assisting them to communicate effectively with one another. Importantly, the expense arising from funding a case to final hearing has the potential to be very significant indeed.
This is the rationale for such things as conciliation conferences and family assessment reports. In the present case, both these mechanisms for resolution have been put in train, but not as yet actioned.
The parties are scheduled to attend a financial mediation conference on 10 May 2014. In addition, they agree to commission a suitably qualified expert to provide a family assessment report for the court in due course.
However, regrettably the parties’ respective counsel are not confident that these interventions will lead to a resolution of the difficult issues arising between the parties. As such, counsel jointly request that the court allocate a date for the final hearing of their respective clients’ applications for final orders. A final hearing is not usually allocated until all opportunities for a consensual resolution have been exhausted.
Primarily, the reason for this unusual request relates to the nature of the issues in dispute between the parties regarding what are the appropriate final parenting arrangements for X and Y and the orders which will serve the children’s best interests.
At the end of 2014, Ms Noble wishes to relocate the children’s place of residence from Property P to Adelaide. On the other hand, Mr Noble aspires to a shared parenting regime for the children with X and Y moving between their parents’ respective homes on a weekly basis during school terms.
It is approximately 380 kilometres between Property P and Central Adelaide. In the event of a relocation, the wife proposes that the children should spend alternate weekends during school terms with their father from 5:00pm Friday until 5:00pm the following Sunday, with the children spending half of each school holiday in Mr Noble’s care.
Essentially, Ms Noble advocates that the children will not be spending significantly less time with their father if they live in Adelaide and as such, will continue to be able to maintain a meaningful level of relationship with him. The chief benefit of the potential move will be that she will be able to provide care for the children in a location of her choice where she feels happy and well supported.
Necessarily, this proposal creates some logistical issues given the distance between Property P and Adelaide. To give effect to the regime, Ms Noble proposes that the children be exchanged at (omitted), which is about half way other than in vintage time when she would be prepared to travel all the way to Property P for handover.
Given his line of employment, Mr Noble cannot easily move away from Property P and his business interests. In addition, he describes himself as a loving and caring parent who up to this point, has been involved in every aspect of the children’s day to day care. The children’s paternal grandmother (and step grandfather) and other close relatives live in (omitted), which is fifty kilometres to the north of Property P.
In these circumstances, he is opposed to the children moving away from Property P permanently. He does not think such an outcome would be in the children’s best interests as the move would undermine X and Y’s currently strong relationships with him and other members of their paternal family. It is his position that the mother is motivated by her own needs and aspirations rather than those of the children.
Significantly, Mr Noble asserts that the wife’s proposal for him to spend time with the children on alternate weekends if her position is adopted is essentially unworkable. The distance to be driven is unsafe and it would be unduly burdensome on the children concerned. It would also render his desired outcome of shared care otiose.
Ms Noble’s reasons for wishing to move to Adelaide are rational and understandable. She feels isolated in (omitted). Her parents and siblings live in Adelaide and she feels she will be better supported if she lives in closer proximity to her family. In addition, in due course, the children will be able to more easily access the private school in Adelaide which the parties have selected for the children’s secondary education.
Ms Noble does not believe her wish to relocate the children to Adelaide can be considered as selfish, particularly given that she has been X and Y’s main provider of day to day care up to this stage. Rather, she believes it is both unreasonable and unworkable that Mr Noble should expect her to remain living indefinitely in (omitted), against her wishes, to satisfy his long term aspirations for the children and what is convenient to him.
Accordingly, this case raises issues to do with what lawyers call “relocation”. Relocation cases arise when one parent for legitimate and understandable reasons, wishes to live with a child or children some distance away from the other parent concerned.
On the one hand, Australia is a free country whose citizens are entitled to live how and where they choose. On the other hand, pursuant to the provisions of the Family Law Act 1975, children have an entitlement to have a meaningful level of relationship with both their parents.
In relocation cases, these competing considerations collide. In such cases, although the court cannot ignore the reasonable expectations of the parents concerned, it must remain focussed on the best interests of any child affected by the move concerned.
Issues relating to the possible compromise of future parental interactions arising from a relocation are particularly sensitive in the case of young children who are developmentally immature and so may have difficulty sustaining significant and intimate relationships over distance.
For obvious reasons, the implications of the move for the children potentially affected vary according to such things as the ages of the children and the nature of their relationship with the parent proposed to be left behind; the distance of the move; the financial resources of the parents concerned; and the willingness of each to foster an on-going parental relationship in changed circumstances.
Because of the difficulty inherently arising in relocation cases, they invariably require a close and intricate analysis of the pros and cons of either allowing a move or otherwise from the perspective of not only the parent wishing to move; but also the parent proposed to be left behind; and particularly the children themselves; as well as invariably, many other individuals such as grandparents and other relatives who are interested in the outcome of the case.
For these reasons in relocation cases, it is often useful to engage the family concerned in an objective and expert assessment to assist both them and the court in determining what outcome will best serve the interests of the child concerned.
It has been sagely pointed out that every relocation case is unique. It may have implications for a child’s best interests if his or her primary carer is shackled indefinitely to a locale unpalatable to him or her as such an outcome may not be conducive to that parent discharging his or her parenting obligations to an optimal degree.
I am not determining the relocation issue at this stage. It is however clearly the main or one of the most significant issues in the case. Necessarily, the inauguration of the issue has precipitated strong emotion in each of the parties. It is in this difficult context that financial issues have also been raised.
Ms Noble seeks a thirty five per cent division of the parties’ net assets in her favour. In so doing, she acknowledges that Mr Noble inherited a significant sum of money from the estate of his late father in 1981 when he himself was an infant. The sum bequeathed was about $1.5 million, which apparently crystallised when a family farm was sold.
The balance of this money was and is held by a trust, the Noble Trust “the Trust”, which was settled on 1 June 2003. The trust holds cash savings to a value of $367,421.00; a portfolio of shares valued at around $269,268.00; a block of land at (omitted) valued at $300,000.00; and a third interest in a property at Property N, valued at $558,333.00. The property is however mortgaged in a sum of $516,000.00.
The parties themselves own their formerly shared home at Property P valued at $370,000.00 which is subject to a mortgage to the (omitted) Bank, which according to the husband currently stands at $185,000.00. The parties also have a self-managed superannuation fund holding less than $100,000.00; the contents of their home; and a motor vehicle currently in the wife’s possession which is subject to finance.
The husband also owns a half interest with his parents in a (omitted). He is in partnership with his parents. The (omitted) is subject to a significant mortgage, leaving him a modest equity. It is his case that the partnership has been operating at a loss because of an oversupply of (omitted) in recent years. The partnership also owns two blocks of land, at (omitted).
Overall, putting aside issues surrounding the Trust, Mr Noble estimates the parties’ net worth (excluding superannuation) to be somewhere in the vicinity of $265,000.00. He proposes by way of final orders that the wife transfer her interest to him in the Property P home in consideration of the sum of $280,000.00 as well as transfer to her of the motor vehicle currently in her possession.
Necessarily it would seem controversies will arise between the parties (if they have not done so already) regarding how the assets of the Trust are to be treated, particularly whether they are to be directly included in any nominal pool of assets to which issues of contribution will be directed. In addition, I suspect controversies may emerge regarding the value of the (omitted) property and its assets.
Again these are not controversies which need to be resolved at this stage of the proceedings. It is to be hoped that the conciliation conference scheduled for May will help the parties resolve these issues in a cost effective manner or at least narrow the issues between them.
However, as foreshadowed, the fraught nature of the relocation aspect of the case may hinder the parties’ capacity to negotiate the property component of it. It also may be the case that a family assessment report will not assist in this regard.
In these circumstances as requested, I will allocate the parties’ competing applications a date for final hearing. Otherwise, it is likely to be the case that the matter will not be able to be heard until 2015. As the wife wishes to relocate at the commencement of 2015, this may be prejudicial to her given that she has indicated she will not agitate the issue of relocation as an interim issue. I will allocate 7, 8, 9 & 10 October 2014 as the dates for the final hearing.
Although the property issues are not to be determined at this stage they are relevant as to the issues currently at hand. Essentially, the wife views the husband as a comparatively wealthy person who controls significant assets through the Trust. On the other hand she is currently asset poor and engaged in poorly paid and part-time employment. She also has the predominant care of the parties’ two children.
It is her case that currently her recurrent expenditure exceeds her income by at least $200.00 each week. In these circumstances, she seeks an award of spousal maintenance to be made in her favour pending final hearing in an amount of $220.00 per week, which she would characterise as a modest payment given the Trust holds assets worth around one million dollars.
The husband resists this application and contends that he has no capacity to pay such a sum or indeed any amount of spousal maintenance. It is his case that currently his recurrent expenses are just about equal to his actual income. He also asserts that the Trust currently generates no income and due to the nature of its holdings in Property N, is at present running at a loss which represents a further recurrent expense to him which he must fund.
Issues in dispute between the parties
Before turning to matters in dispute between the parties, it is useful to summarise what appears to be agreed between them particularly in regards to financial matters.
The wife is employed by (omitted) and receives $349.00 gross per week by way of wages. In addition, she receives social security and rent assistance to the value of a further $354.00 per week.
Mr Noble has been assessed to pay child support for X and Y. The assessment is for $173.00 per week, but to his credit he pays $185.00. Accordingly, in global terms, the wife has coming into her household in gross terms, a sum of $888.00 per week.
Her major items of weekly expenditure are as follows: tax ($67.00); rent ($180.00); health insurance ($38.00); other insurance and car expenses ($35.00); food for herself and the children ($200.00); childcare and OSHC ($157.00); car running expenses ($120.00); electricity ($39.00); as well as other itemised miscellaneous expenses.
All in all, Ms Noble calculates her recurrent expenses in total to come to a figure of $1,096.00. Mr Noble does not seek to challenge this figure directly. Although none of the wife’s various items of expenditure has been subject to exhaustive scrutiny at first blush, none appear exceptional, exorbitant or inherently unreasonable.
It is this difference between recurrent expenditure and income which founds the basis of Ms Noble’s claim for spousal maintenance. It is her position that it is axiomatic that she is a modest income earner with the principal care of two school aged children whose expenses exceed her income.
Apart from the parties’ motor vehicle which is registered in the husband’s name, it is Ms Noble’s position which does not appear to be refuted by the husband, that she does not have access to any other of the parties’ assets. As previously indicated, Mr Noble occupies the Property P home but is also paying the various outgoings relating to it.
Mr Noble deposes that his income derived as a (omitted) from his employment at (omitted), amounts to $1,323.00 gross per week or $68,796.00 per annum. In addition, he receives modest dividends from shares and has the benefit of a motor vehicle provided to him by his employer.
He estimates his recurrent living expenses to be $545.00 per week. The major item of expenditure being food ($120.00); house repairs ($60.00); electricity ($36.00); and car running ($25.00). As with the wife, none of the expenses seem extraordinary but again they have not been subject to any detailed scrutiny.
The husband lists his other major items of expenditure as being income protection ($41.00); other forms of insurance ($69.00); child support ($185.00); and finance payments on the motor vehicle in the wife’s possession ($70.00). Of some moment, the husband asserts that the mortgage repayments required of him come to $256.00 per week.
In total, the husband asserts that his expenditure in total comes to around $1,504.00 per week and his income to $1,511.00 rendering it impracticable for him to make any payment of spousal maintenance to Ms Noble.
In general terms, the wife does not quibble with the husband’s various expenses apart from one discrete issue which relates to the Trust. At one stage the parties lived in Property M, New South Wales, where the husband had employment as a (omitted).
As a consequence, they purchased a home located at Property M. This property was registered in the husband’s name and according to his evidence, was sold in January 2013 for $380,000.00 recouping the sum of $364,923.00.
The parties’ Property P property was again, according to the husband’s evidence, purchased in January 2012 for $390,000.00. This sum was raised by a mortgage of $195,000.00 from the (omitted) Bank and an unsecured loan of $200,000.00 from the Trust.
I have not been provided with any loan agreement document (if any) in respect of this loan and do not know its terms and conditions, particularly if it attracted interest. Following the sale of the Property M property, it appears that the Trust was repaid the sum of $200,000.00 advanced by it to enable the purchase of the Property P property. This event is controversial.
It also appears to be the case that at least initially the husband paid down the other loan owed to the (omitted) Bank secured against the Property P property.[1] The sale of the Property M property also attracts capital gains tax. The husband deposes as follows in respect of this transaction:
“I then used $194,000 of those remaining funds to pay out the funds owing on the mortgage to the (omitted) Bank on the former matrimonial home…I recently, on 9 January 2014, drew back these monies of $185,000 against the home loan facility…My wife’s solicitors have queried that transaction.”[2]
[1] See husband’s affidavit filed 18 February 2014 at paragraphs 34 &38
[2] Ibid at paragraphs 47 - 49
It appears to be the case that the mortgage payment made by the husband in the sum of $256.00 per week, services the redraw of the (omitted) Bank mortgage. It is the wife’s position that the redraw was not necessary and therefore, ipso facto, it demonstrates that the husband has the capacity to meet her application for spousal maintenance.
In terms of the querying of the transaction by those representing the wife, I have been provided with copies of the somewhat waspish correspondence relating to the issue passing between the parties’ respective solicitors.
What the husband’s solicitor wrote can be summarised as follows:
· Property M house was registered in the husband’s name and the net proceed of sale ($364,923.00) were paid into the Trust’s bank account on 29 January 2013 “to repay the sum of $200,000 borrowed from the Trust by our respective clients to purchase the current Property P home.”
· The husband subsequently decided to reduce the (omitted) Bank home loan by $194,000 on 14 August 2013.
· (omitted) Bank apparently indicated to the husband that it would close the loan in these circumstances and if he needed to access funds to pay out the wife at some stage in the future, he would have to renegotiate a further loan with the Bank at some unspecified cost to him.
· For that reason, the loan was drawn back down by $185,000.00 on 9 January 2014.
What happened to this sum of $185,000.00 is not specifically stated in the letter of the husband’s solicitor of 19 January 2014. However, it is suggested that the sum was paid into the Trust, leaving a balance which was similar to that which prevailed on 30 June 2013. As such it was said the transaction “was for an appropriate purpose, which does not adversely affect your client, as the net overall position remains the same.”
The wife’s solicitor suggested in responding correspondence, that this explanation “borderlines on the absurd” (sic). He asserts with some apparent justification, that the jointly held mortgage in favour of the (omitted) Bank will have to be discharged in that event that Mr Noble ultimately acquires the wife’s interest in the property.
Further clarification is requested by the writer as to where the monies actually drawn down from the (omitted) Bank are. It is assumed that the sum is deposited in the Cash Management Account of the Trust.
More recently, over the objections of counsel for the wife, I was provided with a copy of the financial documents for the Trust for the year ending 30 June 2013.
These documents as yet untested through any process of cross examination, indicate that in 2012 the Trust, as one of its current assets, held unspecified unsecured loans to the value of $283,328.00. These unsecured loans did not exist in the balance sheet for 30 June 2013 but cash at bank was listed at $383,234.00.
The husband’s position in respect of the Trust, is that it has run at a loss for many years particularly as a consequence of the failure of its investment in the property in Property N. The husband asserts that he is required to pay the sum of $1,800.00 per month “to cover the shortfall in the running of the property.”[3]
[3] Ibid at paragraph 46
As far as I can tell, this sum is not reflected in the husband’s statement of financial circumstances. It is however his position that he has not received any distribution from the Trust since 2008. He also concedes that he in reality controls the Trust.
The profit and loss statement for 30 June 2013 indicates a loss from the Property N property of $25,177.00 against a roughly equivalent sum of income received by way of share dividends and interest. The Trust is said to have accumulated losses.
The nature of an interim hearing
The controversy arising between the parties regarding the mortgage on the Property P property and their respective financial situations, occurs at the interim hearing stage. Accordingly, the resulting hearing before me took place in a truncated or shortened form where the only evidence available to me was in the form of the parties’ respective written affidavits.
At this interim hearing stage there is usually not sufficient time to allow additional oral evidence particularly in the form of cross examination. Accordingly, it is difficult if not impossible for the court to resolve issues in factual disputes between the parties at this stage.
In C & C[4] the Full Court of the Family Court indicated that the logistical issues arising as a result of the court having to determine an ever increasing number of contentious matters, precluded it from being able to embark on lengthy hearings at the interim stage. The court said as follows:
“This court has finite resources and a limited number of judicial officers coupled with an ever increasing work load. If it was required to embark upon lengthy examinations of interlocutory issues, such as interim custody, important though they may to the parties, this would inevitably lead to an inability to provide hearings of final determinations of custody and property within a reasonable time. In addition, other persons requiring a determination of these and similar issues would be impossibly inconvenienced.”
[4] See C & C (1996) FLC 92-651 at 82,675-6
These comments in my view apply with equal force to this court and interlocutory applications regarding financial issues. For these cogent logistical reasons, there has been insufficient time available to the court to embark upon a detailed and exhaustive hearing of all the parties’ claims and counterclaims particularly regarding the mortgage arrangements on Property P and their interaction with the affairs of the Trust.
In addition in my view, this would have been inappropriate at this early stage in the litigation particularly as there has been no attempt as yet for the parties to achieve a conciliated outcome of the disputes arising between them.
In any event, the issues in dispute between the parties cannot be regarded as momentous. I accept that the wife is currently in straitened financial circumstances. She is a modest and part-time income earner who lives in rented accommodation with two young children. Necessarily, she will struggle to make ends meet.
There is also some substance to the husband’s contention that the wife has apparently been able to manage financially since the parties separated in November of 2012. I also accept that he cannot be regarded as anything other than a modest salary earner who also has significant calls on his recurrent income. It is trite, but true nonetheless, to point out that two families cannot live as cheaply as one.
Where disputes arise, they concern the mortgage on the Property P property and the implications of the losses accumulated by the Trust relating to its investment in the Property N property. Essentially the wife asserts that the husband has engineered a situation whereby he has to pay the instalments on the mortgage in favour of the (omitted) Bank to frustrate her claim for maintenance.
I accept that the liability to the (omitted) Bank exists and the husband must pay it. However, it is unclear to me whether if the monies had remained outstanding to the Trust, the husband would have been liable to pay interest at market rates. As I say, I have not been provided with any specific loan agreement.
It is also unclear to me as to what was the husband’s specific rationale for re-drawing the monies available from the (omitted) Bank. To my mind, the reason provided namely that the loan facility would be closed, does not appear to be a particularly compelling one in the circumstances of the case. However, I concede that this issue has not been examined in detail.
In addition, there has been no detailed examination of the affairs of the Trust. It is conceded that it controls assets of significant value and these are available to the husband. However, the nature of its loss relating to the property at Property N, is un-delineated. Does the property generate any income? How is the apparent short fall met by the husband? These questions remain outstanding.
At the end of the day, pending trial, the amount of maintenance sought by the wife is around $6,600.00. I fear that the parties have expended more monies than this arguing about it. With respect to them and their lawyers, this does not at first blush, appear to be a good use of their financial resources particularly given the likely expense of a family assessment report. In these circumstances, I am concerned that the powerful emotions unleashed by the relocation issue have clouded the parties’ judgment.
The legal principals applicable
The operative section of the Family Law Act dealing with spousal maintenance is section 72. It reads as follows:
Right of spouse to maintenance
72 (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).
Two salient or threshold issues arising from section 72 relating to spousal maintenance need to be emphasised :
· Firstly, one party is reasonably able to maintain the other; and
· Secondly, the other party is unable to support him or herself adequately.
The actual jurisdiction of the court to make a spousal maintenance order stems from section 74 (1). It reads as follows:
Power of court in spousal maintenance proceedings
74(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.
Again, it needs to be emphasised that considerations of propriety provide a lodestone for the exercise of the discretion arising under section 74.
Section 75(2) is headed as follows: Matters to be taken into consideration in relation to spousal maintenance. The list of matters which follows is an exhaustive one. The court is required to have reference to those matters in section 75(2), as it considers relevant, in reaching its conclusion regarding spousal maintenance.
The effect of section 75(2) is to limit the matters to which the court can have regard in determining spousal maintenance issues. Question of conduct are not relevant. Spousal maintenance is “essentially concerned with issues of need and capacity”.[5]
[5] See In the Marriage of Kennon (1997) 22 FamLR 1 at 21 per Fogarty and Lindenmayer JJ
This is the focus of the criteria listed in section 75(2), the most germane of which, in any given case, are likely to be the following:
· Age and state of health of the parties;
· Income, property and financial resources of each of the parties and physical and mental capacity for gainful employment;
· Care and control of a child of the marriage (or de facto relationship) under the age of 18 years;
· Responsibility to support another person;
· What is a reasonable standard of living in all the circumstances;
· The duration of the marriage and the implications of this for the income earning capacity of the party seeking maintenance;
· If either party is cohabiting with another person, the financial circumstances arising;
· Child support;
· Any other fact of circumstance which the justice of the case requires be taken into account.
The Full Court of the Family Court in Bevan & Bevan[6] determined that the approach to be taken in respect of applications for spousal maintenance involved a four step process as follows:
· a threshold finding under s.72;
· consideration of s.74 and s.75(2);
· no fettering principle that a pre-separation standard of living must automatically be awarded where the respondent’s means permit;
· the discretion exercised in accordance with the provisions of s.74 with “reasonableness in the circumstances” as the guiding principle.
[6] Bevan & Bevan (1995) FLC 92-600 at 81,981-2
There is a significant limitation on the overall jurisdiction of the court to make a spousal maintenance order which is relevant to the question of the adequacy of an applicant’s capacity to provide for him or herself financially.
The proviso is created by section 75(3). It reads as follows:
75(3) In exercising its jurisdiction under section 74, a court shall disregard any entitlement of a party whose maintenance is under consideration to an income tested pension, allowance or benefit.
As a consequence of section 4(1) of The Act, the expression income tested pension, allowance or benefit is prescribed under the Family Law Regulations [Regulation 12A]. It includes:
· Centrelink payments;
· Family Tax Benefits;
· Austudy and Abstudy payments; and
· Service Pensions under the Veterans’ Entitlements Act 1986.
The effect of section 75(3), which was inserted into the Family Law Act in 1987, was to remove any uncertainty as to where the responsibility to provide financial support for a separated spouse lies. The responsibility to provide maintenance for a spouse now rests on the other spouse so far as he or she is able to bear such a responsibility, not on the public purse.
It should be noted that although the eligibility of a person for an income tested pension is irrelevant to the determination of whether a person is or is not able to provide an adequate level of self-support, the actual amount of such a pension may be relevant in respect of the quantum of any award of spousal maintenance made.[7]
[7] See Kajewski & Kajewski (1978) FLC 90-472 at 77,427 per Lindenmayer J
From authority, it seems clear that what is an adequate level of support is to be determined by an overall analysis of the circumstances of any particular case. As such, there is no prescribed level of what is adequate support.
It is apparent that spousal maintenance is not to be kept to the provision of a minimum amount to support the bare bones of life, nor should it necessarily support a luxurious standard of living, which perhaps the parties enjoyed in the past. It is a question of horses for courses or what is objectively reasonable.
In Mitchell & Mitchell[8] the Full Court said:
“… the question whether the applicant can support herself ‘adequately’ is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in section 75(2) ...”
In the case, the Full Court rejected that the threshold question was to be determined by reference to a subsistence level of financial support.
[8] Mitchell & Mitchell (1995) FLC 92-601 at 81,995
In Kiesinger & Padget[9] the Full Court said as follows:
“In our view, the concluding words of s 72(1) direct attention to each of the provisions of s 75(2) which the Court, in the exercise of the wide discretion conferred by s 74, considers relevant in determining whether or not a spouse is able to support himself or herself adequately. The reference is not merely, for example, to s 75(2)(b) which directs the court to consider the “income, property and financial resources of each of the parties…” The Court would be entitled, for example, to have regard to s 75(2)(j), which directs the Court to consider “the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party”.
In our view, it was well open to her Honour to consider that the stark imbalance in the capital resources of the husband and the wife after a lengthy relationship was a relevant consideration in determining that the wife was entitled to look to the husband for periodic support pending the final hearing, rather than having to deplete her investments, which represented only a minute proportion of the wealth of the family.”
[9] Kiesinger & Padget [2008] FamCAFC 23 at [26] – [27]
In Brown & Brown[10] the Full Court summarised the following propositions, as emerging from the applicable authorities:
· The word “adequately” is not to be determined according to any fixed or absolute standard.
· The idea that “adequate” means a subsistence level has been firmly rejected.
· Where possible both spouses should continue to live after separation at the level which they previously enjoyed, if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
· In some circumstances it may be reasonable for the parties to live at a higher standard than previously enjoyed.
· It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
· However, an applicant is not entitled to live at a level of considerable luxury or comfort merely because the other party is very wealthy.
[10] Brown & Brown (2007) FLC 93-316 at 81,455 [161]
Conclusions
The first issue to be considered is whether Ms Noble is currently able to support herself adequately. On the evidence available to me, I accept that she leads a modest lifestyle which cannot be described as excessive in any way. She has the care to two children aged 6 and 4.
In addition, Ms Noble is engaged in the paid workforce. She is also studying. The evidence indicates there is a shortfall between her income and her recurrent level of need. In these circumstances, although she has got by up to this stage, I do not consider that she is currently able to support herself adequately.
No evidence has been provided to me regarding either the overall practicality of Ms Noble working more hours per week or whether such work is, in any event, available to her. Given the likely needs and ages of X and Y and the wife’s already significant expenditure on out of hours school care, it does not appear to me that there is a compelling case that Ms Noble should work more hours.
In these circumstances, the evidence indicates that Ms Noble is supporting herself on a very modest part-time wage, augmented significantly by social security payments. In this regard, I bear in mind the strictures of section 75(3) and conclude that her current financial resources are such that she is to be considered as being able, at best, to support herself at close to a subsistence level.
As I have indicated above, the Full Court has rejected the notion that adequate support means a subsistence level. In addition, where ever possible, the parties concerned following separation should live as close as possible to their previous circumstances, if this objectively possible. At this stage, the evidence indicates that Ms Noble is not paying her way whereas Mr Noble is.
The next issue to be considered is whether Mr Noble is reasonably able to provide some level of financial support to Ms Noble. He contends that he is not because his income and recurrent level of expenditure are approximately equal, leaving him with no spare capacity.
I also accept that Mr Noble cannot be considered a high income earner. He is, however, much better renumerated than is Ms Noble and does not have the restrictions on his capacity for employment arising from the care of two young children. In this context, I accept of course, that he aspires to caring for X and Y, as much as is possible in future.
In my view, the evidence which indicates that Mr Noble’s expenses and income come close to equilibrium is not the end of the matter. Rather, the court as best it can, is required to conduct an objective assessment of his overall financial circumstances to determine whether it is reasonable that he provide some form of interim recurrent financial support to Ms Noble.
In this regard, it is highly relevant that Mr Noble controls a trust with assets of around one million dollars in value. As such, his financial resources must be considered to be grossly disproportionate to those of Ms Noble. This is putting aside the uncertainty regarding the circumstances surrounding the re-drawing of the (omitted) Bank mortgage funds, in preference to those available from the Trust and the lack of clarity regarding the Property N investment.
In this context, the considerations engaged by section 75(2)(b) are highly relevant. The property and financial resources controlled by Mr Noble are far superior to those available to Ms Noble who is living in rented accommodation whilst claiming social security benefits.
In my view, as was indicated in Kiesinger & Padget,[11]the imbalance in capital resources of the parties is a relevant consideration in determining whether it is proper that an award of spousal maintenance be made particularly for a defined period of time pending final hearing.
[11] Kiesinger & Padget [2008] supra
In all these circumstances, I consider that it is reasonable that Mr Noble provides a recurrent form of maintenance to Ms Noble for her personal support. In addition in my view, given the very different financial circumstances, it also proper in the sense of what is correct and in conformity with societal norms that spousal maintenance be assessed.
Mr Noble has indicated through his counsel that the only means by which any award for spousal maintenance can be satisfied is through the capital resources of the Trust. I accept that this is so. However, in the context of these proceedings, particularly the likely extent of the order in question and given its potential quantum, that the capital of the Trust cannot be regarded as sacrosanct in this regard.
In all these circumstances, I have come to the conclusion that it is proper that Mr Noble provide spousal maintenance to Ms Noble, pending trial, at the rate of $200.00 per week to be paid to a bank account to be nominated by her commencing on Thursday 13 March 2014 and each week thereafter or such longer period as the parties otherwise agree.
I will also fix the parties’ competing applications for trial on the dates advised earlier in these reasons for judgement and formalise the parties’ agreement regarding the preparation of a family assessment report. I will adjourn the proceedings to a convenient date following the conciliation conference listed on 16 May 2014.
For all these reasons the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of Judge Brown
Date: 7 March 2014