Owen and Lane

[2012] FamCA 1088

FAMILY COURT OF AUSTRALIA

OWEN & LANE [2012] FamCA 1088

FAMILY LAW – Application for Spousal Maintenance – where the trial in property division proceedings is part-heard after a re-opening - where the application for spousal maintenance is two years out of time –– whether the refusal of leave to make the application would cause the applicant hardship – where some preliminary assessment of the merits of the application if leave were granted is necessary - whether the husband has capacity to contribute to the wife’s maintenance– whether the wife cannot adequately support herself –  where there have been substantial distributions of capital in recent years by way of partial property settlement – whether the wife meets the evidentiary burden that she bears as the applicant – where it is determined that the spousal maintenance application would not succeed if leave were granted – whether there is hardship– where no hardship would be caused by refusal to  grant leave– a further application for distribution of more of the remaining capital pending finalisation of the proceedings – where remaining capital of the parties is held in trust – where there is litigation against the husband and the wife in CTTT (NSW) for damages arising out of sub-division, development and sale of real property on which was located the former matrimonial home – where the quantum of damages claimed against the couple is more than twice as much as the capital retained in trust – where it is determined that on an interim basis it would not be just and equitable to accede to the wife’s application – where the application is dismissed

Family Law Act 1975 (Cth)

Gallo v Dawson (1990) 64 ALJR 458
Re F: Litigants in Person Guidelines (2001) FLC 93-072

APPLICANT: Ms Owen

RESPONDENT: Mr Lane

FILE NUMBER: SYC 6078 of 2008

DATE DELIVERED: 21 December 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 19 December 2012

REPRESENTATION

FOR THE APPLICANT: Ms Owen in Person

SOLICITOR FOR THE RESPONDENT:

Ms Huntsman

Uther Webster & Evans

Orders

(1)That the wife’s Amended Application in a Case filed 11 December 2012 is dismissed.

(2)That the husband’s oral application for orders pursuant to s 118 of the Family Law Act 1975 is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Owen & Lane 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 BRISBANE

FILE NUMBER: SYC 6078 of 2008

Ms Owen

Applicant

And

Mr Lane

Respondent

REASONS FOR JUDGMENT

Introduction  

1.This is an application for periodic spousal maintenance and partial distribution of capital brought by the wife whilst property division proceedings between her and her former husband that have been before the Court for several years are not yet finalised.

2.In March 2008, the parties separated after just over 10 years of marriage. It is not in dispute that around the time of their separation, the wife withdrew and retained to her use the sum of $346, 242 from a bank account of the parties. In October that same year, the husband commenced proceedings seeking orders for property division pursuant to s 79 of the Family Law Act. In December that same year, the wife filed her Response. She was represented by solicitors. In her Response, the wife sought different orders for property division. No proceedings for spousal maintenance were commenced by her at that time.

3.In November 2009, the wife, represented by different solicitors again, filed an Amended Response. Again, no proceedings for spousal maintenance were commenced by her.

4.Just a few weeks after filing that Amended Response the wife filed an application for dissolution of her marriage to the husband. That was heard and granted on 14 January 2010, becoming absolute on 15 February 2010.

5.In December 2009, the trial of the property division proceedings was adjourned to be heard in June 2010. The parties agreed to distribution of $200,000 to each of them by way of partial property settlement entitlement at the time of that adjournment.

6.Judicial Registrar Loughnan (as his Honour then was) heard the property division trial in June 2010 and handed down his judgment on 6 July 2010. Shortly thereafter, the wife filed an application for review of the Judicial Registrar’s decision. She was, by then, represented by a different firm of solicitors again.

7.On 29 July 2010, by further agreement, the parties received further cash distributions by way of partial property settlement entitlement. The wife received $270,224 and the husband received $331,745. A further $276,622 was paid to the husband’s mother who had intervened in the proceedings claiming a debt owed to her by the parties. That was paid without any admissions and pending the outcome of the application for review.

8.Whilst the rehearing of the property division proceedings necessitated by the review application was pending, the wife became represented by yet another firm of solicitors, the fourth to that point in time. By the time the trial came on before me in March this year, though, she was unrepresented. She did not at any time prior to or during that trial seek to have any application for spousal maintenance included amongst the matters for determination. At the conclusion of that three day trial, I reserved my judgment. The parties had approximately $215,000 still held in a controlled monies account with the husband’s solicitors, the disposition of which was to be determined by me as part of the determination of just and equitable property division orders.

9.In early August this year, whilst my judgment was still reserved, the wife filed an application in which she sought the release of $8,160 from the controlled monies account or, alternatively, the payment by the husband of periodic spousal maintenance. Shortly thereafter, the husband filed an application as well. Although it was not entirely clear on the face of the application he filed, it was determined by me to actually be an application for leave to reopen the property division trial and to adjourn the further hearing of the proceedings pursuant to s 79(5) of the Family Law Act 1975. It was made by the husband because the parties had, since the trial before me, been made respondents in the NSW Consumer, Trader and Tenancy Tribunal to a claim for damages of $480,000 by two sets of purchasers of properties that the husband and wife had subdivided and developed before their separation and sold around the time of their separation. The claim is based on alleged serious structural defects in retaining walls constructed on the site.

10.On 10 October 2012, the husband and wife consented to an order, made by me, that a further $8,160 be released from the controlled monies account and paid to the wife by way of partial property settlement entitlement. That disposed of the wife’s application.  After a contested hearing of the husband’s application, I made an order reopening the property division trial and adjourning it until the proceedings commenced against the parties in the NSW CTTT are determined.

11.The wife received $8,160 in late October 2012 and just a month later filed another application. In this application, the wife seeks orders that the husband pay her $750 per week spousal maintenance and that a further $98,996 be released to her from the controlled monies account. The husband opposes the making of these orders.

12.It is this application in a case that I now determine.

The Spousal Maintenance Application

13.As was correctly submitted for the husband, the wife is out of time for “as of right” institution of proceedings for spousal maintenance because of the effect of s 44(3) Family Law Act 1975.  

14.Of course, the Court may, pursuant to that same statutory provision, grant leave for the commencement of such proceedings and may do so even if the proceedings have already been instituted. However, pursuant to s 44(4) of the FLA the discretion to grant leave is only enlivened in this case if the Court is satisfied:

(a)that hardship would be caused to the applicant if leave were not granted; or

(b)that, at mid-February 2011, the point in time when the limitation period expired, the applicant’s circumstances were such that she would have been unable to support herself without an income tested pension, allowance or benefit.

15.The husband’s solicitor effectively submitted that not only has the wife not properly sought leave in her application but also that the evidence the wife has put before the Court does not adequately address the matters of which the Court must be satisfied before the discretion to grant leave is enlivened. The husband’s solicitor submits, similarly, that the wife’s evidence also does not adequately address any of the matters which become relevant to the exercise of the discretion to grant leave, even if the Court is satisfied the discretion is enlivened.

16.When asked by me about her understanding of the impact of the limitation period and the requirement for leave to be obtained in her case, the wife conceded that she was conscious of the fact that her application for spousal maintenance was out of time but she asserted that she thought all she had to do was apply for spousal maintenance and that then the question of whether or not leave should be granted would be a live matter for the Court to have to determine. 

17.As McHugh J said in Gallo v Dawson (1990) 64 ALJR 458, lack of legal knowledge is a misfortune, not a privilege. Of course, that is not to say that a litigant, such as the applicant wife in this case, who can no longer afford legal representation, must fend entirely for herself when she comes before the Court. Application of the guidelines set out by the Full Court of this Court in Re F: Litigants in Person Guidelines (2001) FLC 93-072 ensures that she does not. However, there remains, nevertheless, an evidentiary burden on an applicant for leave to commence spousal maintenance proceedings out of time that must be met before leave can be granted. That fact can not be overlooked by the Court simply because the applicant is unrepresented.

18.In this case, the wife’s application in a case is supported by three affidavits. In addition to her own affidavit filed 21 November 2012, the wife relied upon affidavits of each of her parents filed 11 December, 2012. The wife’s mother’s evidence is that in May this year she mortgaged her home to secure a line of credit from the Commonwealth Bank for just under $21,000 that she then loaned to the applicant wife for her use. She deposes to the need to have that repaid urgently so the mortgage can be discharged. The wife’s father’s evidence is simply that he opened a bank account to allow him to monitor the amount of money the applicant wife needed to borrow to meet her living expenses.

19.The applicant wife, in her affidavit, gives evidence that she has been borrowing money from her parents since 2009 for her rent and living expenses. She deposes to using credit cards to meet her living expenses and that her parents assist her in paying these. She deposes to having recently sold her car so that she could pay her rent. She deposes, without giving any particular detail, that from December this year (this month) she will have no money to pay rent and will be “officially homeless” and not able to maintain a standard of living “that in all the circumstances is reasonable”.  She deposes that she will have to “officially declare [herself] bankrupt” by December if she does not pay the full amount owing on her credit cards. She annexes a letter from the ANZ Bank dated 9 July 2012 in respect of an ANZ credit card she holds. The letter describes terms of an “arrangement” the bank agreed to at that time and goes little way towards establishing that the applicant must declare herself bankrupt if she does not pay the credit card debts by this month. 

20.The wife deposes to being 55 years of age, unemployed and in receipt of Newstart Allowance only. She deposes to attending university to gain qualifications but she told the Court at the hearing of this application that she is about to graduate. She told the Court that she must then obtain accreditation in her profession and will have to apply for casual positions in the new year of 2013. She also told the Court she could readily undertake other unrelated work but that she wants to teach, as that is what she has retrained herself to do in the last few years. She also deposed to the need to repay her parents the money she owes them as well as the Commonwealth, ANZ and Westpac banks. That can be said to be virtually the full extent of the evidence the wife led in support of this application.

21.The wife would certainly point to this evidence as supporting the proposition that she is enduring financial hardship at the moment. I have little doubt that is correct. However, there is more to the determination of whether hardship would be caused to the applicant wife if leave were not granted than simply looking at her immediate financial circumstances for signs of necessity, poverty or need. The authorities support an interpretation of “hardship” in this context as “substantial detriment”. Determining whether a refusal to grant leave to bring a spousal maintenance application nearly 2 years out of time would cause hardship therefore necessarily involves some consideration of the prospects of success of the application if leave were granted.

22.The right of a spouse to maintenance is determined pursuant to s 72 and s 75(2) of the Family Law Act 1975. The respondent husband will be liable to maintain the applicant wife, to the extent that he is reasonably able to do so, if, and only if, the applicant wife is unable to support herself adequately by reason of age or physical or mental incapacity for appropriate gainful employment, or for any other adequate reason having regard to any relevant matter referred to in s 75(2).

23.I turn firstly to a consideration of the husband’s capacity to reasonably be able to maintain the applicant wife. I am satisfied that he has a gross weekly income of $2,686. I do not include the allowance of $791 he receives in addition to that for his work-related expenses as I am not satisfied that he does not spend all of that on those work-related expenses. I am satisfied that he most probably does. In his Financial Statement filed on 28 February 2012, he deposed to weekly expenditure of $3,013, thus exceeding his weekly gross income.

24.Of that weekly expenditure, $924 was listed as mortgage repayments in respect of the house he has bought since his separation from the wife. That house is registered in his sole name and said by him to be worth $700,000 whilst the mortgage debt was said to be $446,000. He deposes to having a partner living with him in the home who earns about $960 per week. There is no evidence as to whether that partner contributes towards the mortgage liability and he does not depose to that partner paying him anything for rent or board. As such, I would consider it reasonable to attribute a slightly lesser sum as a reasonable weekly expense in so far as the mortgage debt is concerned. I would notionally reduce it by $200 per week for this reason.

25.The husband deposes to an estimate of $200 per week for expenses associated with entertainment and hobbies and $100 per week for holidays. I accept the wife’s submission that those amounts are excessive in the circumstances and would reduce them by $100 and $50 per week respectively. I also accept that amounts claimed by the husband as spent on house repairs, electricity, gardening and lawn mowing are unreasonably excessive for his personal needs in the circumstances and would reduce the total of those claimed of $100 by $50. I do not accept the wife’s submission that the claimed expenditure of $200 per week on food is unreasonably excessive.

26.Accordingly, I would reduce the husband’s claimed weekly expenditure by $400. That would bring the husband’s reasonable weekly expenditure down to $2,613. That would leave the husband with just $73 available weekly capacity to contribute to the applicant wife’s maintenance on that determination.

27.I turn then to a consideration of the issue as to whether the applicant wife is unable to support herself adequately by reason of her age or physical or mental incapacity for appropriate gainful employment or for any other adequate reason, having regard to the relevant matters referred to in s 75(2) of the Act.  I have to say I am not satisfied, on the evidence before me, that she is unable to support herself by reason of one of those stated reasons. 

28.Although she is 55 years of age, the wife does not contend that she is physically or mentally incapable of appropriate gainful employment. In fact, the wife told the Court that she could work in other jobs right now but particularly wants to work as a teacher as she is about to become qualified to do so after some years of additional study. The wife does not put any evidence before the Court to support a finding that she will not, or might not, obtain accreditation and employment as a teacher. She did not even make a submission that she may not, although, of course, that is a possibility. Also, she put no evidence before the Court that satisfies me that she could not obtain employment in other spheres of endeavour outside teaching that would generate income sufficient for her own support.

29.Additionally, the wife did not explain in evidence what she did with the $8,160 that she recently obtained by way of partial property division entitlement. Although parties are not necessarily required to use precious capital for support before turning to a spouse for maintenance support, the short period of time that might now elapse before the wife obtains employment as a teacher makes the failure to say anything about the use of that money so recently obtained a relevant matter in this particular determination. If it, or any portion of it, is still in the wife’s hands it might not be unreasonable to consider she could use it for her support during that short period rather than pursuing a spousal maintenance application that is well out of time.

30.Ultimately, I am not satisfied that I would consider it proper to make an order for periodic spousal maintenance in favour of the applicant wife in the circumstances of this case if leave were granted. Accordingly, I cannot say that I am satisfied that hardship, in the relevant sense, would be caused if leave to proceed with a spousal maintenance application is refused.

31.As to the matter that the Court could alternatively be satisfied of in order to enliven the discretion to grant leave, namely, whether in February 2011 the applicant wife would have been unable to support herself without an income tested pension, allowance or benefit, I have to say again that I am not so satisfied. The applicant wife has simply put no evidence before me upon which I could safely rely to make such a finding. I cannot second guess the applicant when she fails to meet the evidentiary burden that is required of her. That part of the case for leave to be granted is just not made out.

32.Having found that neither of the alternative requirements for the enlivening of the discretion is made out on the evidence before me, I can dismiss the wife’s application. However, another failure of the wife in respect of the evidentiary burden that she bears in such an application would also tell against her, even if she had satisfied me that the discretion was enlivened.

33.The applicant wife adduced not one piece of evidence in which she explained the failure to bring a spousal maintenance application within the prescribed limitation period. Having regard to the fact that she was, throughout the time within which an application could have been brought as of right, represented by not one but several different firms of solicitors and more than one barrister, the absence of any explanation for the failure to bring the application within time would, in my view, be good reason to refuse the discretionary grant of leave in any event.

34.Accordingly, I refuse to give leave to the applicant wife to bring an application for spousal maintenance at this point in the proceedings. Her application for spousal maintenance will be dismissed. 

The Application for a further payment of Capital

35.The wife gives evidence that she is in debt as follows:

(a)to the ANZ bank in the amount of $29,621;

(b)to the Westpac bank in the amount of $13,284;

(c)to her parents in the amount of $21,091;

(d)to her father alone in the amount of $20,000.

36.She also gives evidence that she owes or must have (it is not clear to me which as she has deposed to recently being forced to sell her car) a car that will cost $15,000.

37.The wife’s application is for an order that the sum of $98,996 (the total of the above amounts) be paid to her out of the controlled monies account so that these debts can be paid.

38.There are two principal reasons why I refuse to make such orders.

39.The first is because I am satisfied that proceedings commenced against the parties in the NSW CTTT involve a claim against the parties for damages of greater than two times as much as the parties have left in the controlled monies account. The wife has absolutely no capacity to contribute to any shortfall between a damages award greater than the amount in the controlled monies account and that amount retained by the parties in that account. The applicants in the CTTT are likely to look solely to the husband to make up any shortfall that might eventuate between the amount retained in the controlled account and any damages awarded. That in itself is very likely to be unjust and inequitable as between the husband and the wife and virtually impossible to make up for in property adjustment orders as between the husband and the wife. Any such injustice would only increase if the wife is given nearly $100,000 from the controlled monies account that is then immediately dissipated by her.

40.Although the wife says she is confident that the applicants will not succeed against her and the husband, I simply cannot find that they will not. If they do not succeed against the husband and the wife, the money will still be in the controlled moneys account to be considered for division between the parties at that time.

41.The second is because the solicitor for the husband submits that the wife may well have already received her full entitlements to just and equitable property division as between her and the husband, having regard to the large amounts of capital she has already had the use of to this point in time. To give her more of the remaining capital now, it is submitted, would simply create substantial injustice and inequity in this case. I consider that there is merit in this submission at this interim stage. I have heard enough evidence already in the substantive proceedings to be sufficiently concerned that justice and equity might not be done between the husband and the wife if another $98,000 was paid out to the wife right now.

42.I do not consider that the current circumstances, as unfortunate as they might immediately present for the wife, compel distribution to the wife of another $98,000 to allow her to pay off post-separation creditors to the likely prejudice of the husband’s just and equitable property division entitlements.

43.The wife’s application for such orders will be dismissed.

The Husband’s Application pursuant to s 118 Family Law Act 1975

44.In her written outline of submissions the solicitor for the husband made submissions that the wife’s application should be dismissed and determined to be frivolous and/or vexatious with the consequence being that the wife would not be permitted to commence any further applications in the Court without the leave of the Court first obtained. During the course of the hearing, counsel for the husband informed the Court when the Court expressed concerns about the draconian nature of such an outcome that the husband did not press the point. That is to his credit.

45.Accordingly, the husband’s application for orders pursuant to s 118 Family Law Act 1975 will be dismissed.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 21 December 2012.

Associate: 

Date:  21 December 2012.