PENROD & PEARL
[2019] FCCA 2504
•6 September 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PENROD & PEARL | [2019] FCCA 2504 |
| Catchwords: FAMILY LAW – Interim spousal maintenance – child support – departure application. |
| Legislation: Family Law Act 1975 (Cth), ss.66F, 66G, 66P, 72, 74, 75 |
| Cases cited: Brown & Brown (2007) FLC 93-316 |
| Applicant: | MS PENROD |
| Respondent: | MR PEARL |
| File Number: | PAC 3484 of 2018 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 23 August 2019 |
| Date of Last Submission: | 23 August 2019 |
| Delivered at: | Parramatta |
| Delivered on: | 6 September 2019 |
REPRESENTATION
| Appearing for the Applicant: | Mr Wells |
| Solicitors for the Applicant: | Balmain Lawyers |
| Appearing for the Respondent: | In person |
ORDERS
The husband is to pay to the wife by way of interim spousal maintenance an amount of $185 per week.
The application for a departure order pursuant to s117(2)(c)(ia) of the Child Support (Assessment) Act1989 is dismissed.
The matter is listed for directions at 2.15pm on 1 November 2019.
IT IS NOTED that publication of this judgment under the pseudonym Penrod & Pearl is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 3484 of 2018
| MS PENROD |
Applicant
And
| MR PEARL |
Respondent
REASONS FOR JUDGMENT
Introduction
By way of Application in a Case filed 10 December 2018, the wife, who is the respondent in the substantive proceedings, seeks orders for interim spousal maintenance in the amount of $185 per week as well as a departure order in the amount of “$227 per month on top of the administrative assessment”.[1]
[1] Leave was granted for the wife to amend her application orally
The wife relied on her Financial Statement sworn 23 August 2019 and an Affidavit filed 10 December 2018 in support of the orders she sought.
The husband had filed a Financial Statement on 27 July 2018, but he sought to rely on an Affidavit filed 23 July 2019.
Spousal Maintenance – Relevant Principles
In determining whether to make an order for spousal maintenance, it is appropriate for the Court to determine the issue in the following manner[2]:
a)Can the applicant support themselves adequately in terms of s72 of the Family Law Act?
b)If not, what are the applicant’s reasonable needs?
c)What capacity does the respondent have to meet those needs?
d)What order is reasonable, having regard to s75(2) of the Act?
[2] Hanas & Jolaha (No.4) [2019] FamCA 483 at [79] citing MS & PS (2006) FLC 93-268 per Coleman J
The question as to whether or not a person is able to support themselves “adequately” is:
… not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances. [References omitted].[3]
[3] Hanas & Jolaha (No.4) at [79] citing M v M (2006) 36 Fam LR 97 at 106
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.[4]
[4]Brown & Brown (2007) FLC 93-316 at 81,455-56 cited in Hanas at [80]
Furthermore, a claim for maintenance is not limited by reference to current expenses because an applicant applying for maintenance may not have the ability to pay for commitments necessary to support themselves and thus avoid incurring what otherwise would be a reasonable expense. Therefore, the focus is on what is necessary for support. [5][6]
[5] Aldridge J (sitting as the Full Court) in Garston & Yeo (No. 2) [2019] FamCAFC 139 at [24] citing Hall v Hall (2016) 257 CLR 490 at [8].
A claim for interim maintenance “would normally involve some hearing on the merits, although not perhaps as final or exhaustive a hearing as would be the case if one were hearing the matter finally”.[7]
[7] Garston at [32] citing Williamson & Williamson (1978) FLC 90-505 per Fogarty J at 77,650
“Capacity” to meet an order for interim spousal maintenance is not confined to income[8].
[8] Maroney & Maroney [2009] FamCAFC 45 at [56]
The Court can only make such an order “as it considers proper”[9] taking into account the factors set out in s75(2) of the Act.
[9] Section 74(1) of the Act.
Should there be an order for spousal maintenance?
The wife seeks $185 per week by way of spousal maintenance. She bears the onus of demonstrating that she is unable to support herself adequately.
The wife is 35 years old. She is in good health.
The parties have two children, X aged nine and Y aged three. The children live with the wife and she is their primary carer, although the children do spend time with the father. The wife and the children live in the former matrimonial home. The wife pays the mortgage.
The wife is employed on a full-time basis.
Apart from the former matrimonial home, which is mortgaged and has limited equity, the wife has shares valued at $24,200[10] and some $2,000 in savings. There are also some household items of furniture and general household contents.
[10] from which the income is already included in the amounts referred to above
The wife’s Financial Statement discloses a weekly income of $2,813 which includes $240 per week in child support[11]. Her expenses are $3,225 per week. Such expenses include $1,056 in weekly expenses relating to the children.
[11] The other evidence before the Court in the wife’s case is that the husband is assessed to pay $17,530 annually, which is $337 per week
It was submitted on behalf of the wife that she is $412 “out of pocket” each week. Using the figures set out in Part N of her Financial Statement sworn 23 August 2019, it was submitted that approximately 45% of the wife’s weekly expenses are attributable to her personally and 55% are attributable to the children. Using the same logic, it was then submitted that of the $412 weekly shortfall, the amount of $185 is attributable to the wife’s expenses.
It is perhaps more appropriate to take the following approach:
a)The wife has a gross weekly income of $2,813, including child support;
b)Her weekly expenses, including those for the children, are $3,225;
c)Once she pays income tax, the mortgage, outgoings on the property, private health insurance and the children’s expenses, she is left with $447[12];
d)Her personal expenditure is $859 per week. Her discretionary spending is perhaps a little on the high side, but given the standard of living the parties enjoyed while living together, it is not unreasonable;
e)This leaves the wife with a shortfall of $412 per week.
[12]Some of the funds utilised by the wife for the mortgage, insurance and outgoings are possibly attributable to the children. A failure to differentiate between expenses of the wife and those of the children is not fatal to an interim spousal maintenance claim: Drysdale & Drysdale [2011] FamCAFC 85 at [36]-[39].
The husband filed an Affidavit on 23 July 2019, which provides updated financial information. Annexure 3 to that Affidavit is his monthly personal expenditure. He earns $7,900 each month and spends $7,910 each month. His monthly expenses are said to be:
a)Child support $1,040
b)Additional child support $200
c)Rent $2,580
d)Petrol $450
e)Car repayments $1,050
f)Car service/registration $180
g)Insurance $200
h)Support for Mr A $250
and Ms B
i)Tolls to get to work $300
j)Bills $410
k)Groceries $1,250
Given that the wife spends $1,915 on herself and the children each week as set out in Part N of her Financial Statement, it is difficult to see how the husband’s expenses, in what appears to be discretionary spending (at least in part), are reasonable. On groceries alone, the husband spends over $300 per week.
The husband’s expenses includes “support” for Mr A and Ms B, who it appears live in the husband’s household but do not contribute any income. There is no evidence as to who these persons are.
Having regard to s72(1) and the relevant s75(2) factors, the Court is satisfied that the wife is unable to support herself adequately by reason of having the care and control of the parties two children.
Having regard to the husband’s income and expenditure, it is reasonable for the husband to pay $185 per week in spousal maintenance. He is able to do so by not contributing to support Mr A and Ms B and by reducing his discretionary spending.
Departure Order
The Court can make an order (“departure order”) under Division 4 of the Child Support (Assessment) Act 1989 (Cth) (“CSA”) only in limited circumstances.
The following sections are contained in Division 4.
a)Section 116(1) provides that a liable parent or a carer entitled to child support may apply for a departure order subject to the conditions precedent referred to in that section applying.
b)Section 117(1) provides that a discretionary power to make a departure order provided that the Court is satisfied in relation to the matters set forth in subsection (1)(a) and (b).
c)Section 117(2) provides the grounds for departure.
d)Section 118 identifies the different orders that may be made under Division 4.
There are pending proceedings before the Court in respect of property adjustment and as such the Court has jurisdiction to hear the application and the power to make the order.
The applicant for a departure order must satisfy the Court that it would be in the interest of the husband and the wife (in this instance) for the Court to consider whether an order should be made under Division 4 in relation to the child in the special circumstances of this case.[13] Leave is discretionary.
[13] s116 Child Support (Assessment) Act 1989 (Cth)
The wife in support of the orders she sought, relied on written submissions which were handed up on the day of the hearing. Those submissions addressed ss66F, 66G and 66P of the Family Law Act 1975 (Cth) which have no application or relevance to the present proceedings. This is not an application for child maintenance. On the facts of this matter, the Court does not have jurisdiction to hear such an application.
The Court invited submissions in respect of the relevant legislative provisions, namely ss116 and 117 of the CSA. It was submitted by the wife’s solicitor that the special circumstances were that while the husband was assessed and was paying child support, his assessment would go down because his income had gone down, and consequently the wife would not be able to support herself and the children.
The Court is not satisfied that the applicant has established special circumstances within the meaning of s116, with special circumstances being something which sets this case apart from others. Furthermore, the applicant has not satisfied the Court that it would be in the interests of both the husband and the wife for the Court to consider whether it should make a departure order. The conditions precedent in s116 have not been met by the applicant wife.
If the Court is wrong about this, the Court is in any event not satisfied that the wife has established a ground of departure pursuant to s117 or that it is just and equitable or otherwise proper to make the order.
In Gyselman and Gyselman[14] (“Gyselman”) the Full Court (Nicholson CJ, Fogarty & Nygh JJ) set out the approach a Court must take in determining whether to make a child support departure order. This is the “three step process” to be followed to determine a departure application.[15] Section 117(1)(b) identifies a clear three-step process:
a)Whether one or more grounds of departure in s117(2) is established.
If so:
b)Whether it is “just and equitable” within the meaning of s117(4) to make a particular order.
c)Whether it is “otherwise proper” within the meaning of s117(5) to make a particular order.
[14] (1992) FLC 92-279
[15] Page 79,064
The wife did not address the Court in respect of what ground(s) might be established on the evidence, nor why it was just and equitable and otherwise proper to make the order sought.
The wife will now have the benefit of a spousal maintenance order, pursuant to the Court’s decision herein. While it was submitted that the amount payable by the husband pursuant to the assessment will ‘go down’ it is unclear on what evidence this submission was made.
Furthermore, it was unclear on the evidence exactly what the current amount the husband was assessed to pay was. According to the husband, by way of his Affidavit filed 23 July 2019, he is assessed to pay $1,040 per month in child support and he pays an additional amount of $200 per month voluntarily.
In the wife’s case, a letter dated 11 July 2019 from the Child Support Agency was tendered in the proceedings. This contained a decision regarding change of assessment, and the outcome of the decision was that the husband was assessed to pay an additional amount of $9,458 per annum. According to the decision, the annual rate of child support payable by the husband for the period 1 July 2019 to 31 October 2019 is $17,530.
As such, the application for a departure order is not made out.
For all of the above reasons orders are made as set out at the forefront of these Reasons.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 6 September 2019
[6] Garston at [29]
Key Legal Topics
Areas of Law
-
Family Law
Legal Concepts
-
Remedies
0
5
3