O’Neill and O’Neill

[2012] FamCA 879

FAMILY COURT OF AUSTRALIA

O’NEILL & O’NEILL [2012] FamCA 879

FAMILY LAW – SPOUSE MAINTENANCE – Wife’s application for spouse maintenance – where wife and the child have been evicted from the former family home – where husband earns an income – wife has need for spouse maintenance – husband concedes that wife has need – wife’s prospects for paid employment are low – it is not demonstrated that husband has the capacity to pay spouse maintenance – application dismissed

Family Law Act 1975 (Cth), ss 72(1), 75(2)

Curnow & Curnow (unreported, Family Court of Australia, Ellis, Kay and Moore JJ)

APPLICANT: Ms O’Neill

RESPONDENT: Mr O’Neill

FILE NUMBER: CAC 983 of 2009

DATE DELIVERED: 24 October 2012

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Faulks DCJ

HEARING DATE: 16 October 2012

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Self-represented

COUNSEL FOR THE RESPONDENT: Mr S Gill

SOLICITOR FOR THE RESPONDENT: Mr A Bak

Orders

1. The wife’s application for spouse maintenance filed on 27 March 2012 is dismissed.

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

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 983 of 2009

Ms O’Neill

Applicant

And

Mr O’Neill

Respondent

REASONS FOR JUDGMENT

Foreword

1. In an application originally filed in the Federal Magistrates Court on 27 March 2012, among other things, the applicant wife sought that “[t]he husband pay to the wife by way of urgent spouse maintenance the sum of $2,000 per week.”[1]

   [1] Application in a Case, filed on 27 March 2012, Order 3

2. In the same application she sought other orders (which are still pending) relating to property matters between the parties. 

3. In a matter such as this where much material has been filed in relation to a number of different issues between the parties it is important to identify the material upon which the parties relied for the purposes of this application for spouse maintenance.  The applicant relied on affidavits filed on 27 March 2012, 1 May 2012, 10 August 2012 and one sworn on 5 October 2012. She also relied on written submissions filed on 30 May 2012 which I agreed having been appropriately verified will be treated as an affidavit in the proceedings. 

4. The respondent sought that the wife’s application for maintenance be dismissed and relied upon his financial statement filed on 27 April 2012, an affidavit filed on 27 April 2012 and two lots of written submissions filed on 30 April 2012 and 14 June 2012. 

5. A list of the exhibits in the proceedings relating to spouse maintenance is annexure 1Annexure 1.

6. Notwithstanding that the application was originally made in relation to urgent spouse maintenance when the matter was transferred from the Federal Magistrates Court to this Court on 20 September 2012, on 21 September 2012 I directed that the proceedings for spouse maintenance be adjourned for determination on 5 October 2012. 

7. On that day the matter was adjourned and determination of the spouse maintenance application was set down for 16 October 2012.

8. The matter proceeded as a matter of spouse maintenance (as opposed to urgent spouse maintenance) and the parties were permitted to cross-examine each other about the affidavit material filed and other matters.  In these proceedings the husband was represented by experienced counsel, Mr Gill, and the wife was self-represented. 

Background

1. The parties were married for about 11 years. The parties had four children in relatively rapid succession and while the wife continued to work from time to time throughout the period of the marriage she asserts that the husband discouraged her from doing so on the basis that she should be looking after the children and had “enough to do to keep the house clean”.[2] 

   [2] Wife’s affidavit, filed on 1 May 2012, [5].

2. It would appear that the wife has a Bachelor’s Degree. She also has a Masters Degree, although it is not clear in what discipline. The wife has previously worked as a professional.[3]

   [3] Husband’s affidavit, [5].

3. The husband is currently employed by P Pty Ltd as a consultant and has been on secondment at a government department.[4]

   [4] Husband’s affidavit, [38]-[40] and annexure ‘C’.

4. The husband maintains his own company which, without any pejorative intent, might be referred to as his alter ego. 

5. The parties owned a property in G suburb in the Australian Capital Territory which was sold and some proceeds were distributed between the parties.[5]  It would appear, at least from the wife’s point of view, that all that money disappeared fairly rapidly in meeting various financial obligations she had at the time.  No cross examination was directed to this matter and no impropriety in relation to its disposal was suggested. 

   [5] Wife’s affidavit, filed on 1 May 2012, [2].

6. The husband’s financial evidence does not disclose that he has any of the proceeds from the sale of G suburb left in his bank accounts either.   

7. In addition to the Suburb GG suburb property, the parties also owned a number of lots of land in M Town in New South Wales (collectively referred to as “the South Coast property”) and it was upon one of those properties that the wife was living immediately prior to the hearing of this matter.  Since separation the parties have been in significant dispute and for reasons not entirely clear on the evidence at this point the mortgages on the South Coast property had not been paid for some time.  As a consequence, the Commonwealth Bank of Australia (“the bank”) obtained a Writ of Possession from the Supreme Court of New South Wales and moved to take possession of the property. 

8. When this matter first came before this Court on 20 September 2012 the bank was due to take possession of the South Coast Property. On that day, the husband, the wife and the bank agreed in principle that the husband would be appointed as the trustee for sale of the South Coast Property. The bank would proceed with its Writ. Orders were made confirming the terms of the husband’s trusteeship by me on 15 October 2012. It seems likely that there may be some disagreement between the parties and the bank about the application of the powers given to the trustee under the orders made by me.  However, the bank failed to appear when this issue, among others, was to be resolved by the Court. 

9. As a consequence of the bank taking possession of the South Coast property, the wife was effectively rendered homeless and, at the time of the hearing, was living in a car and in such other accommodation obtained temporarily as she was able to do so.  Her homelessness also impeded her ability to turn her attention fully to the preparation of matters before the Court.  Her computer also “died” in the process which has meant that she did not have access to all of the material she would ordinarily have wanted to have available to her. 

10. The husband for his part, has two forms of accommodation.  During the week while he works in Canberra, he has a room in shared accommodation which, from its description (which I accept), appears very modest indeed including what amounts to a share of a wardrobe for his clothing.  This costs him some $200 a week.  In addition, he rents a property at K Town for $330 a week which he regards as his residence. He resides there on the weekend.  

The law

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

   Right of spouse to maintenance

   (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).  (Emphasis added)

2. It may seem reasonable that in circumstances where parties have been married for some time and are now separated and where they share responsibility, if not legally at least morally, for the children of their union, that income and expenditure should in some way be shared between them. 

3. However, this is not the law as expressed in s 72(1). And in the matter of Curnow v Curnow[6] an appeal from one of my decisions heard by the Full Court, the proposition set out above was rejected unequivocally (and correctly) by their Honours.  My obligation is to apply the law and I turn to what the law is before proceeding further.

   [6] Curnow & Curnow (unreported, Family Court of Australia, Ellis, Kay and Moore JJ, 28 April 1997),

4. The significance of the decision in Curnow v Curnow (supra) is that an obligation to pay spouse maintenance arises only if the party from whom payment is sought is reasonably able to maintain the other party. This is so even if the person seeking spouse maintenance can demonstrate that he or she has satisfied the other criteria under s 72

5. In Curnow v Curnow his Honour Justice Ellis, who delivered the primary judgment, said as follows:

   In determining whether a party is reasonably able to support or contribute to the support of another party, one should have regard to the income of the first-mentioned party and then the unavoidable, non-discretionary expenses of that party, including his or her reasonable living expenses.  After that exercise, one can consider the amount, it any, from which the first party may be able to contribute to the maintenance of the other party.[7] 

   [7] Curnow & Curnow (unreported, Family Court of Australia, Ellis, Kay and Moore JJ, 28 April 1997), 5.

6. His Honour Justice Kay, in agreeing with the conclusions reached by Ellis J said as follows:

   There is no liability to provide any maintenance until the necessary living expenses of the payer and the compulsory and unavoidable commitments of the payer such as taxation, Medibank levy and some superannuation and the like has been met.[8] 

   [8] Curnow & Curnow (unreported, Family Court of Australia, Ellis, Kay and Moore JJ, 28 April 1997), 9.

7. In this matter not only did the wife suffer from not having funds to retain a lawyer she was obliged to overcome the subtleties of the legislation to which I have referred.  When I set the matter down for hearing I expressly pointed out the factors that the wife would have to prove in the course of the hearing but I expect that some of the more complicated aspects of it failed to register with her. 

Application of the law to the present matter

The wife’s need for spouse maintenance

1. It is hard in this matter not to feel sympathy for the wife.  What resources and assets she brought into the marriage have substantially been dissipated with the exception of the property on the South Coast. 

2. The South Coast property itself is the subject of significant dispute.  The husband seems to think, from his affidavit material, that the properties are worth collectively over $3 million.[9]  The wife, from her material, suggests that the properties are worth closer to $1 million.[10] The South Coast property is currently on the market for sale. If the sale price is closer to that suggested by the wife there will be little left in the property pool to be distributed between the parties.  If the sale price is closer to that suggested by the husband there is a substantial sum of money to be distributed. 

   [9] Husband’s affidavit, [29].

   [10] Wife’s affidavit, filed on 10 August 2012, [13].

3. Whatever may be the ultimate situation about property, at present the wife is in as parlous a financial situation as might reasonably be imagined.  Her only income is a Widow’s Allowance of $529 a fortnight.[11] The parties’ daughter, BKate, who is still in high school receives $220 Youth Allowance per fortnight.[12]  From her Widow’s Allowance, the wife has to in some way support herself and that child. It is noted that the husband has received an assessment to pay child support.  She also claims that she needs to provide accommodation for a number of the no longer (legally) relevant children who are attending university during their various vacations.[13] 

   [11] Wife’s affidavit, filed on 29 May 2012, [23]. I note that in [17] of her affidavit sworn on 5 October 2012, the wife says she receives $519 per fortnight.

   [12] Wife’s affidavit, filed on 29 May 2012, [25].

   [13] Wife’s affidavit, filed on 27 March 2012, [7];

4. I note the husband in his affidavit asserts the wife has the capacity to earn and has training and abilities to enable her to maintain herself.[14] 

   [14] Husband’s affidavit, [4]-[7].

5. In this regard I accept the wife’s evidence about her capacities and her attempts to find employment. The wife has not been in paid employment for some years (it would appear this has been the case since the parties’ children were born).[15] She has applied for various positions over the last two years and has rarely received a response.[16] I find that the wife has no present capacity to earn money.  That situation may alter in the future after the property division and after she is in a position to reorganise her life.  However, if she does not receive from the property division funds sufficient to re-establish herself, she may be reduced to living on Social Security essentially for the rest of her life. 

   [15] Wife’s affidavit, filed on 1 May 2012, [5].

   [16] Wife’s affidavit, filed on 1 May 2012, [6].

6. In this case Mr Gill, on behalf of the husband, properly conceded in final submissions that the wife had satisfactorily established that she had a need for spouse maintenance and it was not argued the wife was able to support herself adequately within the meaning of s 72.

The husband’s capacity to pay spouse maintenance

1. In contrast the husband appears to have secure and satisfactory employment from which he earns about $130,000 a year.[17]  He claims that his expenditure exceeds his income and that he has no capacity to contribute to the alleviation of his former wife’s financial misery.

   [17] Husband’s financial statement, Part B.

2. As it transpired the wife sought to put into evidence spreadsheets from times in the past. These, the wife says, demonstrate that, in the past, the husband was able to provide more money towards the family than he says he is presently able to provide for his own expenses, even though he is on about the same income now as he was previously.  Even if the spreadsheets and the cross-examination of the husband had been successful in demonstrating this proposition it would at best have been inferential rather than direct evidence of a capacity at present to pay. 

3. Little, if any, attention was directed by the wife in her cross-examination of the husband to his current expenses and most of the husband’s current expenses remained substantially unchallenged.  The husband’s current expenses appeared in his financial statement which, although somewhat out of date, were said to be currently relevant. 

4. The wife did direct her cross-examination to why the husband needed two forms of accommodation, the cost of such accommodation and the petrol/fuel associated with his travelling between Canberra and the South Coast.  Other expenses remained substantially unchallenged.  In such circumstances I am entitled to accept the sworn evidence of the husband as to those expenses.

5. The husband’s financial situation can be reasonably summarised in this way.

   a)The husband receives some $2,517 a week by way of salary and a small allowance for computer devices.

   b)From this he pays:

   a)Income tax of $689

   b)Rent in relation to the property in K Town of $330

   c)Rent (or board) in relation to the property in Canberra of $200

   d)Motor vehicle registration of $18

   e)Credit card payments of $65

   f)A HECS payment of $199

   g)Medicare levy of $37

   h)A flood levy of (the relevance of which is not at all clear to me) of $10

   i)And has weekly living expenses (recorded in Part N of his financial statement) of $916.  These include food, telephone, petrol etc. 

6. I will return to some of those payments in Part N in due course. 

7. The husband wrongly recorded in his financial statement that superannuation of $229 per week was paid by him from his salary.  That sum is in fact paid in addition to his salary by his employer. 

8. After paying the expenses outlined at [33], the husband has a surplus of $53 a week.

9. The husband had, since the swearing of his financial statement, been assessed for child support in the sum of $754.33 per month, which is about $188.58 per week. If he is to pay child support of $188.58 per week after his other expenses, this leaves the husband with a deficit of $135.58 each week.   

10. The total accommodation expenses of the husband are some $530 a week.  It is reasonable for the wife to say she would be happy to spend that amount or even a part of that on her own accommodation if she had the means to do so.  However, this is not a determination “by comparison” and I accept that in the overall circumstances of the matter, including the nature of the husband’s employment, and his desire to live primarily on the South Coast, the total spent on accommodation is “reasonable”.  This necessarily carries with it, as a lifestyle choice, the necessary expenditure of $150 a week for petrol because the husband is driving between Canberra and the South Coast.  Again, the applicant could say with some justification that she would like to have that sort of choice in her own life about her living style and standard.  Nevertheless it seems to me to be inevitable that the cost of the petrol is a reasonable extrapolation from the living arrangements of the husband. 

11. The credit card repayments referred to above of $65 per week might be regarded as non-essential expenditure but possibly in the circumstances a reasonable expenditure. There are three possibilities in relation to the credit card repayments. The first is that it is a debt which the husband previously incurred and is now obliged to pay off. In this case, the credit card repayments would be a non-discretionary expense. The second is that the husband uses this credit card to pay for other non-discretionary expenditure such as food, rent and petrol. If that is the case, the husband would be double-counting his credit card repayments and his expenses as set out in Part N. The third possibility is that the husband uses the credit card to pay for discretionary expenses. If that is the case, it would be reasonable for the husband to curb that expenditure and apply the funds towards spouse maintenance.

12. However, it is not possible for me to find that any of those possibilities is a reality because no cross-examination was directed towards the nature of the husband’s credit card repayments.

13. Among the expenses listed in Part N[18] there are a number of weekly expenses which might properly be regarded as discretionary, that is, they are not “compulsory and unavoidable commitments”. These include:

    a)Entertainment and hobbies - $50

    b)Holidays - $20

    c)Gardening and lawn mowing - $20.

    d)Books and magazines - $20

    e)Gifts - $20

    [18] Husband’s financial statement

14. These expenses total $130 and are expenses which the husband does not have to pay. If they are removed from the husband’s expenses, it might be argued that the husband has capacity to pay $130 spouse maintenance a week.  However, if he does pay $130 spouse maintenance to the wife, after taking into account the husband’s child support obligation of $188.58 a week, the husband is still in a deficit of $135.58 a week. 

Conclusion

1. Admittedly, the wife’s original claim for spouse maintenance included expenses for maintaining the South Coast property which, sadly, from her point of view, are no longer relevant.  However, she still has a need for spouse maintenance as she needs to pay for expenses such as rent, food and petrol. As mentioned previously, this need is conceded by the husband.

1. The husband, as demonstrated by the analysis above, does not have a capacity to pay spouse maintenance.

2. Any order I might have made for spouse maintenance would necessarily be the subject of reconsideration at the time of the division of property between the parties.  If, as the husband has suggested in his material, the South Coast property is worth some millions of dollars, then there would be sufficient property for the financial situation of each of the parties to be the subject of some adjustment by reference to elements of s 75(2) (as is well established by authority).  The wife’s needs and lack of resources for the future may be properly taken into account perhaps at that point

3. However, with respect to this application, there is no basis upon which I can make any order for spouse maintenance as it has not been demonstrated that the husband has a capacity to pay. Accordingly, the wife’s application for spouse maintenance is dismissed.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 24 October 2012.

Legal Associate:

Date:  24 October 2012

Annexure 1

Exhibit reference	Document description	Tendered by
H2	Child support assessment application acceptance dated 28 September 2012	Respondent
W1	Wife’s expected expenditure	Applicant
MFI2 (W3)	Spreadsheet titled “balancing acros [sic] companies all years”	Applicant
MFI3 (W4)	Spreadsheet titled “Mr [O’Neill] ANZ …47”	Applicant