Owen and Bouchard
[2013] FCCA 746
•10 July 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| OWEN & BOUCHARD | [2013] FCCA 746 |
| Catchwords: FAMILY LAW – Property – the parties’ competing applications for a division of assets and the wife’s application for ongoing spousal maintenance – 31 year relationship – husband’s earning capacity considerably greater than the wife – agreement that parties made equal contribution to matrimonial assets – ordered 15 per cent adjustment in wife’s favour for section 75(2) factors – wife’s application for spousal maintenance dismissed on basis that the wife failed to establish she is unable to adequately support herself. |
| Legislation: Family Law Act 1975 (Cth), ss.72, 75, 79, 81 |
| Atwill & Atwill (1981) FLC 91-107 Stanford v Stanford [2012] HCA 52 |
| Applicant: | MS OWEN |
| Respondent: | MR BOUCHARD |
| File Number: | MLC 3899 of 2012 |
| Judgment of: | Judge Bender |
| Hearing date: | 3 May 2013 |
| Date of Last Submission: | 3 May 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 10 July 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Dickson |
| Solicitors for the Applicant: | Schetzer Constantinou |
| Counsel for the Respondent: | Ms Stoikovska |
| Solicitors for the Respondent: | Cornelius Family Law |
ORDERS
The parties’ superannuation and non-superannuation assets be divided between the parties such that the wife receives 65 per cent of same and the husband receives 35 per cent of same.
The wife’s application for ongoing spousal maintenance in the sum of $500.00 per week be dismissed.
AND THE COURT NOTES THAT:
A.The parties have agreed for the purposes of order 1 herein that:
(a)any taxation liabilities including any capital gains tax payable on the sale of any of the assets owned or controlled by the parties shall be paid from the proceeds of sale of such assets prior to division between the parties;
(b)the furniture in the property at Property C shall be sold and the proceeds of sale divided between the parties;
(c)the husband shall retain the stamp collection and Aboriginal painting; and
(d)the husband’s share of the parties’ non-superannuation assets shall be retained by the wife and there will be a commensurate adjustment made against the amount the wife would otherwise have retained by way of a superannuation split.
B.
The husband’s obligations to pay the wife the sum of $4,765.00
per month pursuant to order 2 of the consent orders made 28 May 2012 shall continue until such time as the wife receives the full amount of the parties’ realisable assets in accordance with these orders.
IT IS NOTED that publication of this judgment under the pseudonym Owen & Bouchard is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 3899 of 2012
| MS OWEN |
Applicant
And
| MR BOUCHARD |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter relates to the parties’ competing applications for an adjustment of property and the wife’s application for ongoing spousal maintenance arising from the breakdown of the parties’ 31 year relationship.
The wife is seeking orders that the parties’ assets, including superannuation entitlements, be divided such that she receives
65 per cent of same and the husband receives 35 per cent of same.
Pursuant to interim orders made 28 May 2012, the husband currently pays the wife interim spousal maintenance in the sum of $4,400.00 per month together with a further $365.00 per month; this latter payment to be ‘categorised’ at final hearing.
The wife seeks orders that upon the division of the matrimonial assets, the husband continue to pay ongoing spousal maintenance in the reduced sum of $500.00 per week until such time as the husband ceases full-time employment.
The husband is seeking orders that the parties’ assets, including superannuation entitlements, be divided such that the wife receives
60 per cent of same and the husband receives 40 per cent of same. The husband opposes any orders that he pay ongoing spousal maintenance.
Background
The wife was born [in] 1955 and is 58 years of age. She is currently engaged in home duties. The wife has not re-partnered.
The husband was born [in] 1956 and is 57 years of age. The husband is employed by [omitted]. The husband is currently based in Dubai. The husband’s total remuneration from this employment including salary, annual bonuses, rental assistance, living away from home assistance, motor vehicles and health insurance is in excess of $400,000.00 per annum. The husband’s employer also pays superannuation of 14 per cent of the husband’s gross base salary and annual gross bonus payments. The husband has not re-partnered.
The parties commenced co-habitation in October 1980 and married [in] 1982. The parties have two independent adult children.
In 2001 the husband commenced employment with [omitted]. In 2008 the husband was appointed [occupation omitted] at which time the parties relocated to Kuala Lumpur.
At the time of the parties’ move to Kuala Lumpur, the wife was in
full-time employment working in [omitted].
The parties separated in December 2011 when the wife returned to Melbourne.
In January 2012 the wife withdrew $24,993.40 from the parties’
ANZ savings account and $2,000.00 from the parties’ ANZ cheque account. The wife utilised these funds for living expenses including the payment of bond and three months’ rental on a unit in [omitted] where she continues to reside.
It is the wife’s evidence that the breakdown of the marriage caused her significant anxiety and depression such that she has been, and continues to be unable to work. From January 2012, the wife was under the care of Dr J, clinical psychologist, and from February 2013, the wife has been under the care of Ms H, psychologist.
Dr J and Ms H both provided reports to the Court and were not required for cross-examination.
The husband challenges the wife’s evidence that she does not have the capacity for employment in the future.
The wife commenced these proceedings on 3 May 2012. On
28 May 2012 interim orders were made by consent that provided
inter aliathat:
·within seven days the husband pay to the wife the sum of $35,000.00, such sum to be characterised by the Trial Judge and a further $5,000.00 to be characterised as partial property settlement;
·until further order, the husband pay to the wife by way of periodic spousal maintenance the sum of $4,400.00 per month and an additional monthly sum of $365.00 to be characterised by the Trial Judge;
·the wife have continued use of a vehicle as provided by the husband’s employer, subject to the policy of [omitted] being met;
·the husband cause his employer to continue to pay all amounts necessary to provide the wife’s ongoing private health cover;
·the husband pay all costs necessary to maintain the wife’s existing life insurance with OnePath; and
·the parties obtain a joint sworn valuation of their real properties; the cost of same to be borne at first instance by the husband and the wife’s half cost of the valuations to be deducted from the wife’s share of property at trial.
The Court was not given detailed evidence as to the manner in which the parties managed their financial affairs during their relationship save that the parties’ assets are held either in their names, in the name of [Bouchard] Pty Ltd or in the name of the parties self-managed superannuation fund, [Mrs & Mr Bouchard] Superannuation Fund.
On 22 October 2012, the parties attended a conciliation conference. The parties were unable to resolve the matter but interim consent orders were made for the property owned by [Bouchard] Pty Ltd at Property R (“the [R] property”) to be sold. The interim consent orders also provided that the property owned by the parties’ self-managed superannuation fund at Property H be sold with the net proceeds of sale to be placed into the parties’ private superannuation fund’s bank account.
When the final hearing commenced, the Court was advised as follows:
·the [R] property had sold for $240,000.00 but settlement had not taken place;
·most of the shares owned by [Bouchard] Pty Ltd had been sold and the net proceeds of sale, after discharge of the margin loan which had funded the share trading, has been paid to the wife. The wife received $210,776.00;
·the former matrimonial home in the parties’ joint names at Property C (“Property C”) has been placed on the market for sale;
·the parties have agreed that any tax liability payable on the sale of the shares and the sale of the [R] property by [Bouchard] Pty Ltd and/or the wife shall be deducted from the proceeds of sale of the [R] property and Property C prior to division between the parties;
·the parties have agreed the furniture in Property C will be sold and the proceeds of sale divided between them;
·the parties have agreed that the husband shall retain the stamp collection and Aboriginal painting; and
·the parties have agreed that the husband’s percentage share of the non-superannuation assets shall be retained by the wife and there will be a commensurate adjustment against the amount the wife would otherwise have retained by way of a superannuation split.
The issues
Having heard the parties’ evidence, considered their proposals and heard submissions, the Court identifies the following as the issues requiring determination in order to ascertain the appropriate division of property between the parties:
(a)What constitutes the property pool and in particular:
(i)should the husband’s 2013 mid-year bonus of $32,000.00 net, which he is yet to receive, be included in the pool; and
(ii)should the sum of $2,195.00, being the wife’s half share of the cost of the valuations of the parties’ properties completed in accordance with order 7 of the orders made 27 May 2012, be an ‘add back’ to the pool?
(b)What should the adjustment in the wife’s favour be for section 75(2) factors and in particular:
(i)what should the adjustment be arising from the husband’s greater earning capacity; and
(ii)what, if any, should the adjustment be for the wife’s current health issues?
The wife’s application for ongoing spousal maintenance in the sum of $500.00 per week is also to be determined.
The legislation
Section 79 of the Family Law Act 1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account under section 75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(b)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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)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; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The High Court in the matter of Stanford v Stanford [2012] HCA 52 sets out the approach the Court is to take when determining the division of property pursuant to section 79 of the Act.
Firstly, the Court must determine pursuant to section 79(2) of the Act whether it is just and equitable to make orders affecting the parties’ rights and interests in property.
In this matter, the parties are separated and are desirous of effecting a division of their assets to enable them to move on with their lives. In these circumstances, I am of the view that it is just and equitable that the Court make orders adjusting property between them.
Having determined that it is just and equitable that the Court make orders for the division of property, the manner in which that property is divided must be in accordance with the pathway set out under the Act.
Firstly, the Court determines the parties’ assets and liabilities. Secondly, the Court evaluates the parties’ contributions to those assets and liabilities in accordance with sub-sections 79(4)(a),(b) and (c) of the Act. Thirdly, the Court must then consider the relevant section 75(2) factors.
Section 81 of the Act obliges the Court to, as far as is practicable, make orders which will finally determine the financial relationship between the parties to a marriage and avoid further proceedings between them.
Assets and liabilities
The husband’s bonus
The husband’s remuneration consists of a base salary, an annual personal bonus, an annual company bonus together with the provision of a motor vehicle, payment of health insurance and a living away from home allowance plus superannuation at the rate of 14 per cent of the husband’s annual gross salary and 14 per cent of the annual gross company and personal bonuses paid by the company.
At the final hearing of this matter, the husband had received advice from his employer that he would receive the 2012 company bonus in the sum of $32,000.00 net on 17 May 2013.
It is submitted on behalf of the wife that this payment upon receipt will be capital or ‘savings’ available for division between the parties and, as such, forms part of the property pool for division.
It is submitted on behalf of the husband that the wife is ‘double dipping’ as the wife is arguing on the one hand that the husband has an income of in excess of $400,000.00 per annum, which includes the $120,000.00 per annum gross of bonuses he receives each year, and on the other hand, the wife is seeking that a part of that income also be deemed property available for division between the parties. It is submitted on behalf of the husband that the wife cannot argue that these monies are both property and income.
It is further argued on behalf of the husband that as this income was earned by the husband post separation, it cannot be seen as a joint matrimonial asset for division between the parties.
In response to these submissions, the wife’s Counsel argues that parties’ savings form part of the property pool and that in the majority of cases, the parties’ savings have been accumulated from the income they have earned. It is submitted on behalf of the wife that the fact that a party’s income is received in a ‘lump sum’ rather than by way of weekly payments does not mean, if saved, that lump sum payment does not form part of the asset pool.
It is further submitted on behalf of the wife that as the parties have not financially separated their affairs, the bonus payable to the husband on 17 May 2013 must be seen to form part of the matrimonial assets available for division between the parties.
There is no doubt that the savings of parties to a marriage accumulated from income earned by them is property, whether that income has been paid as a weekly wage or by way of a lump sum payment.
Generally, the Court will determine the asset pool and the value of its components as at the date of trial. However where an asset has been acquired post separation and from resources, including labour, that are not related to the period of the relationship, it is open to the Court to find that asset not to be joint matrimonial property to be divided between the parties.
In this matter the bonus to be received by the husband arises from his employment in 2012, that is, post separation. In these circumstances, I am of the view that the husband’s bonus should not be included in the list of assets for division between the parties as it is not attributable to the parties’ joint endeavours.
I note however that the receipt by the husband of these monies can and should be considered as a financial resource of the husband for the purposes of section 75(2)(b) of the Act.
The wife’s share of valuation costs
The husband seeks an order that the wife’s half share of the costs of valuing the parties’ real estate be classified as an ‘add back’ to the pool of assets for division between the parties.
The wife opposes that such an order be made. The wife argues that the valuations were paid by the husband from the parties’ savings and as such, she has paid for her share of the valuation, from these joint savings.
Both of the parties’ submissions on this issue are misguided.
On 28 May 2012, an order was made by consent by
Federal Magistrate Hartnett (as she then was) in the following terms:
7. THAT by no later than 27 August 2012 the parties jointly engage a valuer to be agreed to provide sworn valuations of the following real properties:
7.1Property C;
7.2 Property R;
7.3 Property H
with the Husband to pay the cost of such valuations in the first instance and an adjustment of ½ of the costs of the same to be deducted from the Wife’s share of property at trial.
Order 7 of the orders made 28 May 2012 clearly imposes an obligation on the wife to reimburse the husband half the costs of the valuations from the monies or property received by her at trial.
As this order remains in full force and effect, the wife’s obligation to reimburse the husband remains live and is payable by her from the monies she receives by way of the orders made by this Court.
The asset pool
Pursuant to the orders made on 28 May 2012, the wife received a lump sum payment of $35,000.00 and an ongoing monthly payment of $365.00, both of which were to be characterised by the Trial Judge.
The Court was advised at the commencement of the final hearing that the husband did not seek that these amounts be characterised as partial property settlement in the wife’s favour and that she is to retain the benefit of those monies.
Both parties agreed that the monies expended by them from their joint savings on their legal costs were to be added back to the pool.
At the final hearing of this matter, save for the two abovementioned matters, the parties provided an agreed ‘Balance Sheet’ which reflected an agreed asset pool.
The asset pool of the parties is therefore as follows:
Ownership Description Value ASSETS Joint Property C E$1,200,000.00 Joint Property R ([Bouchard] Pty Ltd) $240,000.00 Joint Shares ([Bouchard] Pty Ltd) $6,219.00 Joint [Bouchard Pty Ltd] Westpac Account $548.00 Wife [omitted] Shares (net) $25,988.00 Wife CUA esaver account $1,015.00 Wife CSA prime account $587.00 Husband Malaysian shares $25,671.00 Husband Banking and investment accounts $30,096.00 TOTAL E$1,530,124.00 ADD BACKS Wife Partial property settlement to wife pursuant to order 1.2 of orders made 28 May 2012 $5,000.00 Wife Monies paid to wife from the sale of [Bouchard] Pty Ltd shares $210,776.00 Wife Legal costs paid by wife from joint funds $11,614.00 Husband Legal costs paid by husband from joint funds $27,000.00 TOTAL $254,390.00 TOTAL (assets + add backs) $1,784,514.00
LIABILITIES Joint [Mrs & Mr Bouchard] Mortgage with ANZ $526,510.00 Joint ANZ Equity Loan $247,748.00 Joint Capital gains tax on sale of [Bouchard] Pty Ltd shares E$19,616.00 Joint Capital gains tax on sale of [R] Property E$10,481.00 Husband Tax on superannuation contribution in excess $9,865.00 Joint Joint accounting expenses for [Bouchard] Pty Ltd up to 2014 $9,820.00 Joint Joint accounting expenses for
Superannuation Fund up to 2014$6,835.00 Joint Sale expenses of Property C property E$30,000.00 Joint Sale expenses of [R] property $8,000.00 Joint Sale expenses of Property H $8,000.00 Joint Conveyancing expenses for properties E$4,500.00 TOTAL E$881,375.00 TOTAL ASSETS less liabilities E$903,139.00 SUPER Joint [Mrs & Mr Bouchard] Superannuation Fund – self-managed E$770,860.22 Husband [B] Superannuation Fund - accumulative $303,983.00 TOTAL E$1,074,843.22 TOTAL ASSETS including super $1,977,982.22 FINANCIAL RESOURCES Husband 2012 company bonus $32,000.00
Contributions
The parties agree that their contributions pursuant to sub-sections 79(4)(a)(b) and (c) of the Act over their long marriage are equal and there should be no adjustments in relation to this factor. I agree with this assessment by the parties.
Section 75(2) factors
It is submitted on behalf of the wife that there should be an adjustment in her favour for section 75(2) factors of 15 per cent arising from:
·the marked discrepancy between the parties’ earning capacity. The husband earns in excess of $400,000.00 per annum and the wife is currently unemployed. If the wife were to obtain employment in the future, she would earn substantially less than the husband;
·the difficulty in the wife finding suitable employment given her current health issues, her age and that she has been out of the workforce for over five years, having given up her employment when the parties moved to Malaysia in 2008 to further the husband’s employment opportunities; and
·the husband’s capacity to accumulate ongoing superannuation in excess of $50,000.00 per annum until retirement.
The husband agrees that there should be a loading in the wife’s favour pursuant to section 75(2) factors but that such loading should be ten
per cent.
It is submitted on behalf of the husband that whilst he has a greater earning capacity than that of the wife, his age of 57 years means that the husband has a limited working life of only seven and a half years at best.
It is submitted on behalf of the husband that an adjustment pursuant to section 75(2) is made in an endeavour to achieve some level of equality between the parties. It is further submitted on behalf of the husband that if there is a ten per cent adjustment of the parties’ assets in the wife’s favour, she will receive approximately $400,000.00 more of the parties’ assets than the husband. It is submitted on behalf of the husband that as he only has seven years remaining in the paid workforce, even with his relatively high income, he will only be able to ‘equalise’ the parties’ respective financial positions in that short amount of time.
The husband does not accept the wife has a limited capacity to obtain paid employment in the future.
The husband challenges the wife’s evidence that the anxiety and depression suffered by her post separation impacts on her capacity to work in the future.
The husband refers to the final paragraph of the report of Ms H, the wife’s treating psychologist, contained in her affidavit sworn 5 March 2013 and filed 6 March 2013, where Ms H states:
In my opinion, [Ms Owen] will continue to be unable to return to employment, or function to her previous level, until these financial matters are settled and she is able to arrange secure housing and have some certainty about her financial future.
It is submitted on behalf of the husband that as the financial matters are ‘settling’, the wife will have the financial certainty which will enable her to return to paid employment.
The husband also challenges the wife’s claims she will have difficulty finding paid employment because of her age and the length of time that she has been out of the workforce.
It is the wife’s evidence that because of her health, she has not been well enough to seek employment.
The husband argues that in these circumstances the wife has placed no evidence before the Court that support the wife’s claim that she will have difficulty finding paid employment.
The husband argues that the wife had been in full-time employment in [omitted] for many years prior to the parties’ move to Malaysia and that she has the experience, qualifications and expertise to return to a position in that field.
Given the husband’s far greater earning capacity; the reality that the wife is 58 years old and has been out of the workforce for some time and therefore could experience some difficulties in immediately finding paid employment; the husband’s financial resources being the $32,000.00 bonus he is receiving; and the husband’s capacity to generate ongoing superannuation until retirement, I am of the view that there should be an adjustment in the wife’s favour for section 75(2) factors of 15 per cent.
I note the parties’ agreement that, given the parties’ ages, any percentage adjustment should be made in relation to both realisable assets and superannuation entitlements. I agree that such an approach is appropriate.
Such a division of the parties’ assets would result in the wife receiving an estimated $1,285,681.90. As the parties have agreed the wife is to retain all realisable assets available for distribution, the wife will have the benefit of the parties’ current assets valued at approximately $876,000.00 net and will receive the balance of her settlement by way of superannuation.
The wife’s application for Spousal Maintenance
The wife seeks an order that, upon finalisation of property matters, the husband pay the wife $500.00 per week by way of ongoing spousal maintenance and that this continue until the husband ceases full-time employment.
The wife’s Counsel, in response to my question, agrees that the wife’s entitlement to ongoing maintenance will be impacted in the event she obtains paid employment and that the wife will have an obligation to advise the husband in the event she does return to the workforce.
A parties’ obligation to pay spousal maintenance is set out in section 72 of the Act. Section 72(1) of the Act provides as follows:
(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).
Section 74(1) of the Act states:
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.
The Full Court in the matter of Bevan & Bevan (1995) FLC 92-600 at 81-981 held that:
An award of spousal maintenance requires:
(a)a threshold finding under s 72;
(b)consideration of ss 74 and 75(2);
(c)no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
(d)discretion exercised in accordance with the provisions of s 74 with “reasonable in the circumstances” as the guiding principle.
Where the Court is determining an application for both adjustments of property and spousal maintenance, the property application must be determined first as the outcome of the property application may be a factor in the determination of the maintenance application.
Further, where a matter involves both property and maintenance matters, the manner in which the Court applies section 75(2) factors in relation to the respective applications must not be confused.
The Full Court of the Family Court in the matter of Clauson & Clauson (1995) FLC 92-595 at 81-907 held that:
Where spousal maintenance is sought in addition to a property order it becomes, in effect, the fourth step in the process. It is only to be exercised after the three step process under s. 79 has been completed and it is not to be confused with the s. 75(2) component in that latter exercise. The reason why it must be exercised after the s. 79 exercise is because that latter exercise establishes the background against which s. 74 must operate, that is, the financial circumstances of the parties.
The result of the s. 79 order may be such that the applicant for maintenance can no longer be described as being “unable to support himself or herself adequately” because he or she may have sufficient assets which, with or without income arising from the investment or use of those assets, will provide an adequate level of support. It also defines the other party’s capacity to meet any order.
The first ‘step’ in determining whether an order be made for spousal maintenance in the wife’s favour is for the Court to determine that the wife is unable to support herself adequately.
In the matter of Eliades & Eliades (1981) FLC 91-022 at 76, 232, Nygh J held:
… the test of ability to support oneself is not identical to the test of whether one is in need but means whether the applicant is in a position to finance himself or herself from his or her own resources. That is to say, the test is whether by reason of earning capacity, by reason of capital or other sources of income which have accrued independently to the applicant, the applicant is in a position to look after herself…
In this matter, it is the wife’s evidence that she is unable to adequately support herself because she is unable to return to her former employment in [omitted] by reason of her age, the period she has been out of the workforce and the depression and anxiety she has suffered following the breakdown of her marriage.
The wife provided the Court with no evidence that her age and time out of the workforce have impeded her capacity to obtain paid employment. The wife concedes that she has not made any application for paid employment since returning to Australia in December 2011, citing her health issues as preventing her from being able to do so.
In the matter of Atwill & Atwill (1981) FLC 91-107, Nygh J was determining whether the wife was unable to support herself by reason of her lack of earning capacity or from her assets. His Honour at 76792-76793 stated:
The first question is whether she has a capacity for remunerative employment. In her affidavit she states in para 7: “I turned 57 years of age on 14 January 1981. Despite my age I have been able to obtain part-time work as a shop assistant …” There is no direct evidence of any other attempt to obtain employment … Can it be deduced from her age, 57, that she has a reduced capacity for gainful employment? In my opinion there ought to have been additional evidence about lack of training for employment, reduced health … or other factors. However, I can take judicial notice that 60 is the normal age of retirement for women and that it may be difficult for women approaching that age to retain or obtain full-time employment.
As noted, the wife places no evidence before the Court that her age and her being out of the paid workforce since 2008 have impeded her capacity to obtain employment. The wife did not, for example, have evidence of job applications made by her whereby she failed to obtain an interview or was overlooked because of these factors.
Whilst His Honour Justice Nygh took “judicial notice” in 1981 that
60 years of age was “the normal age of retirement for women”,
in 2013 I am of the view that 65 years of age is more reflective of the normal retirement age for women who are in the workforce today.
In relation to the wife’s health issues, as set out earlier in this judgment, the wife filed an affidavit sworn by her treating psychologist Ms H on 5 March 2013 annexing a report dated 21 February 2013 which concludes as follows:
[Ms Owen] is a 57-year-old woman who continues to suffer from severe anxiety and moderate to severe depression as the direct result of her marriage being unilaterally terminated by her husband about 17 months ago. Her distress has been significantly exacerbated by his leaving her with no explanation, and without a home or sufficient financial resources for her to resume any normal kind of life.
In my opinion, [Ms Owen] will continue to be unable to return to employment, or function at her previous level, until these financial matters are settled and she is able to arrange secure housing and have some certainty about her financial future.
The wife is seeking an order that upon the settlement of property matters between herself and the husband, the husband pay ongoing spousal maintenance in the sum of $500.00 per week.
The wife places no evidence before the Court for the basis upon which the amount of $500.00 per week is required to enable the wife to support herself adequately. Absent such evidence, the amount sought appears to be something of an ‘ambit claim’.
As held by the Full Court in Clauson (supra), when considering an application for spousal maintenance, the Court must consider the impact of any property orders made on the parties’ capacity to adequately support themselves.
I have determined that there be a division of matrimonial assets in the wife’s favour of 65 per cent. Given the parties’ property pool, the wife will receive approximately $860,000.00 in ‘realisable’ assets and the balance by way of superannuation.
That an applicant for spousal maintenance is not required to utilise their capital to fully support themselves is not disputed. They can use some or all of their capital to purchase a house or on other necessary capital expenditure when re-establishing themselves and can still be entitled to payment of spousal maintenance.[1]
[1] Bevan & Bevan (1995) FLC92-600 at 81,890.
The wife was cross-examined as to what if any decisions she has made as to her financial arrangements following the finalisation of property matters between the parties. It is the wife’s evidence that she does not know what she will do financially and whether she will buy a property, continue to rent or invest the monies she receives.
The wife will receive approximately $860,000.00 in ‘realisable’ assets. Conservatively invested at six per cent, if an allowance is made for the wife to pay outstanding legal costs and other expenses, she should have a balance of approximately $800,000.00, would generate an income of $48,000.00 per annum.
Whilst the wife may purchase a new home for herself once property matters are finalised, it is still open to this Court to find that, upon finalisation of property matters between the parties, the wife will have available to her a capital amount to invest from which she will be able to generate an income.
In this matter, the medical evidence provided by the wife does not establish that she is unable to return to paid employment because of health reasons. The wife’s own medical evidence supports her return to paid employment upon the finalisation of these proceedings.
I am of the view that the wife has not placed before the Court satisfactory evidence that she is unable to obtain gainful employment. The wife has a long history of employment that pre-dates the parties’ move to Malaysia. I am of the view that the wife’s age and the time she has been out of the workforce do not prevent her from being able to obtain employment.
I am also of the view that the amount the wife is receiving pursuant to the property orders being made in this matter is such that the wife will receive an amount that will be capable of investment from which she will be able to generate an income for herself.
Accordingly, I find that the wife has not been able to satisfy the Court that she is unable to adequately support herself and therefore the wife’s application for ongoing spousal maintenance in the sum of $500.00 per week be dismissed.
To avoid any confusion arising from this determination, the husband’s obligation to pay the wife the sum of $4,765.00 per month pursuant to the orders of 28 May 2012 is to continue until the wife receives the full amount of the parties’ realisable assets in accordance with the property orders to be made in this matter.
I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of Judge Bender
Associate:
Date: 10 July 2013
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Family Law
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Equity & Trusts
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Remedies
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Contract Formation
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