Petrucci and Petrucci

[2008] FamCA 1152

FAMILY COURT OF AUSTRALIA

PETRUCCI & PETRUCCI [2008] FamCA 1152

FAMILY LAW – MAINTENANCE – interim spousal maintenance
FAMILY LAW – COSTS

Family Law Act 1975 (Cth) ss 72, 74, 75

APPLICANT: Ms Petrucci

RESPONDENT: Mr Petrucci

FILE NUMBER: SYC 1489 of 2008

DATE DELIVERED: 2 June 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan JR

HEARING DATE: 2 June 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Batey

SOLICITOR FOR THE APPLICANT: Watts McCray Lawyers

COUNSEL FOR THE RESPONDENT: Ms Nash

SOLICITOR FOR THE RESPONDENT: Stacks/Family Law

Orders

1. Orders are made in terms of paragraph 1 of the Initiating Application of the wife for Interim Orders filed 14 March 2008 as set out hereunder:

   “1.That by way of interim spousal maintenance pursuant to Section 72 of the Family Law Act the husband shall do all things necessary to pay to the wife the sum of $2,339 per week to be made fortnightly in advance as follows:

   1.1The first of such payments to be made within 7 days of the date of these orders;

   1.2    Subsequent payments to be made fortnightly thereafter; and

   1.3Such payments to be made as cleared funds to the wife’s [S] Credit Union bank account number […] or such account as nominated by the wife to the husband from time to time in writing.”

2. That the husband pay to the solicitor for the wife costs of the wife of and incidental to these proceedings of $8,250.00 being the assessed sum. Payment to be made within two (2) months from today’s date.

3. The balance of the interim proceedings be adjourned for mention to the conciliation conference on 26 August 2008 at 9:30 am.

IT IS NOTED that publication of this judgment under the pseudonym Petrucci & Petrucci is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1489 of 2008

MS PETRUCCI

Applicant

And

MR PETRUCCI

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for interim spousal maintenance.  There was some other relief sought, and I understand those things have been addressed between the parties.  The application I am dealing with is the wife’s application filed 14 March 2008.  The matter came before the Court, I think, for a case assessment conference in May. The wife seeks interim spousal maintenance of $2339 a week payable fortnightly in advance, first payment within seven days and payments into a particular account.  The formal position of the husband is that the application be dismissed.  I understand that he thinks it would be reasonable that there be with payment of $1000 a week.

2. The background to the case is a husband and wife, 47 and 39 years of age respectively.  They married in 1995, separated in August of last year.  They have two children, a son and a daguther, eight and five years of age.  There is a former matrimonial home, I think at Q, and I understand there is a another property that was sold and there is in excess of $1 million held in a trust account to abide these proceedings. The parties have already arranged between themselves for there to be an interim distribution of $50,000 to each of them from that fund, and it seems to be an agreed fact that the wife has, in effect, exhausted that fund to the extent that she has paid $30,000 on account to her lawyers, which is yet to be allocated to profit costs.

3. The spousal maintenance is a remedy available between parties who have been married, whether the marriage is on foot or not. Sections 72, 74 and 75 of the Family Law Act combine to provide that where one party to a marriage is not adequately able to support themselves from their own resources, the other party can be called on to provide that support to the extent of his or her capacity. So, it involves an examination of outgoings and income and earning capacity. In the calculation, I am obliged to ignore income in the wife's hands by way of income tested benefit.

4. The wife's case is that she has $600 a week by way of income in the form of child support.  I think there is a reference somewhere to that being the amount of the current child support assessment.  There is also reference to that being an agreement.  There is also reference to a raft of other payments being made directly by the husband, including, for example, school fees.  The wife says that she spends more than $600 a week in her child support, so that money is fully taken up, but it is relevant to the inquiry I make that she has expenditure over and above what she receives referable to the children.

5. For the purposes of today, the wife has no income.  There is an argument between the parties as to the extent of her capacity, and I think the fair position is that the wife thinks she has some capacity, and she has worked in a range of things over the years.  There is no sign in this case that she has been out of the workforce for a huge period.  But what she says is she has made some specific inquiries, looked for the sort of flexibility she needs because of the ages of the children to work around a school day and, to date, that flexibility has not been offered to her.

6. There is nothing about the breakdown of a marriage that makes one better fitted for paid employment; quite the contrary. In dealing with the issue of interim spousal maintenance, where there has been a history accommodated during the marriage of somebody having the primary role as a parent and homemaker, it is not uncommon that that would be left in place uncritically by the Court for the duration of any interim spousal maintenance.  Sometimes that gives way to necessity, but, as I say, it is not uncommon that a Court would not say somebody has to do something more; they should be straight out earning income and too bad in relation to the children's school hours. Minds differ about that, and, no doubt, the parties know the circumstances best.  It may be that it would be very easy for the wife.  There is some reference in the husband's material to one of the children referring to some work the wife did with a friend or a company that she was familiar with.  So he thinks that there is some paid employment readily available.  It is very hard for me to go behind the sworn testimony of the parties in an interim proceeding.  I am not permitted just to pick a winner out of the versions of events, so I need to be fairly careful where there has been a pattern of the wife being the primary homemaker, and it is a pattern, I think, that the parties both say or the inference from their evidence would be that that suited the fact that the husband has had paid employment with a business that has involved, particularly in the past he says, some significant travel.

7. For the purposes of today, it would be acceptable for me to take the wife as she is.  I do not mean to be patronising about that.  I mean that the parties had in place an arrangement where she was substantially out of the paid workforce.  That is the situation today.

8. We come then to her expenses and what can be a demeaning process of going through the day‑to‑day expenses of parties.  She claims some costs in relation to a motor vehicle totalling $49 a week.  She claims $650 a week in rent, and she claims $1640 a week in recurrent expenditure for food and other outgoings.  There is no complaint about the rent.  There is a complaint in relation to recurrent payments she says she makes.  The husband would have it, I think, that the car is fully maintained so there is no need for $30 a week in vehicle maintenance.  There is no complaint about the food allocation, no complaint about electricity and telephone.  There is a complaint about clothing and shoes at $250 a week, medical dental and optical at $30 a week, entertainment and hobbies at $200, holidays at $200 and an omnibus claim for $150 a week for gym membership, personal trainer, yoga and tennis.  They are the things that were mentioned in submissions.  I do not know what the parties spent during the marriage on their own clothing and shoes.  The husband says that he only spends $60 a week on his clothing.  He spends only $30 a week on entertainment.  He spends only $80 a week on holidays, and his omnibus claim in relation to outgoings is $80 a week, including charitable donations.  He spends a lot more than the wife on household supplies, more than he spends on food.  But it gives you an idea of how demeaning this exercise is.  The parties probably threw out more food while they were together, than they are claiming here.  Here they have some stranger going through their weekly budget.

9. It is possible to spend $250 a week on clothing and shoes. It is certainly possible to spend $200 a week towards holidays, and, in that regard, the husband spends or wants to spend $420 per week on the children's holidays. That gives the flavour of the sort of expectations the parties had. The standard of living during the marriage is relevant to my inquiry. The legislation sets out a menu of things in s 75. It is an omnibus section that does a whole lot of jobs: age and state of health of the parties, the income, property, financial resources of each of the parties and their physical and mental capacity for appropriate gainful employment, whether either of them has the care and control of a child of the marriage who has not attained 18 years of age, their commitments for themselves and for others, including children, the responsibilities they have to support somebody else, the eligibility of them for a pension or superannuation, the standard of living that in all the circumstances is reasonable, 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, the duration of the marriage and the extent to which it has affected earning capacity, the need to protect a party who wishes to continue in that party's role as a parent, child support assessment, and there is a catch‑all provision.

10. So there is complaint about need.  So it is appropriate, I think, to look at the husband's capacity and see what is left.  In the year 30 June 2006, the husband's income was roughly $6000 a week after tax.  Going through his expenditure, there are a number of things that seem a bit odd.  For example, he pays $1430 a week on his Visa card, but the minimum payment is $99.  There is no need for him to pay any more than the minimum payment.  On his Amex card he pays $172 a week, and the minimum payment is $55.  There is no need for him to pay more than the minimum payment.  He includes in his expenditure $128 a week that he says he is already paying for the wife.  So that is already part of his expenditure.  That amounts to about $1600‑odd that he is already paying or he does not need to be paying.

11. I said his income for that year was $6000 a week after tax.  He has been promoted since then. I think I was told that his base salary is $317,658.  His income has been made up of base salary and bonuses.  The bonuses do not seem to be a one‑off event. They might be one off to the extent that they are paid annually, but there is evidence that there was a bonus the year before and so on.  There is no evidence from the husband that the increase in base salary that came with his promotion to CEO, (the documents refer to Managing Director and Country Manager) for B Business, came at the cost of any entitlement he might have to bonuses.  One might even assume that his position in relation to bonuses would be improved by that promotion.  I do not know.  There is some reference to share options.  It is not a significant part of the disclosure in his financial statement.  There is a bit of confidence lost in him in terms of his declaration of income.  His financial statement tells us that his income is about $6000 before tax.  His counsel, who deserves the Croix de Guerre for bravery, suggested to me that that was a proper reflection of his income on the basis that ‑ I am not doing justice to it ‑ the bonus was paid once a year.  That is silly, with respect.  His income obviously would include the bonus.

12. If you put those things together, the husband thinks $1000 is proper, which is more than he says he is paying now.  I can see about $1600 in payments that he is already making and payments that he does not need to make.  That is based on his income before he was promoted to CEO, Managing Director and Country Manager of B Business and the potential for bonuses.  So we are close enough, it seems to me.

13. The next thing to be said is that there is no requirement that maintenance be paid out of income.  It can be paid out of income; it can be paid out of a financial resource; it can be paid out of ‑ subject to something that I will come to in a moment ‑ property; it can be paid out of a borrowing.  Sometimes it is a bit unclear about financial positions in interim proceedings, and that is resolved, hopefully, either on settlement or at a final hearing.  If there has been a mischief done ‑ it is hard to see how that could apply in this case, but in other cases, for example if there is an incorrect assumption made about a source of income ‑ the Court at the final hearing can accommodate that.  It can be accommodated directly by some allocation back to the person who made the payment.  It can be accommodated indirectly by the Court making a finding about an imbalance of contribution after separation. There are a number of ways these things can be tidied up. 

14. The subtext of these proceedings, in my view, is that the parties live decently and that there is no hint of controlling, manipulative behaviour whereby one person is beholden to the other and at the same time forced to negotiate with that person in the lead up to a final resolution of their property case.  I am not saying that that is any part of the husband's motivation here, but to keep somebody in circumstances that are more restricted than they were used to can have the look of somebody seeking to put pressure on for an advantageous settlement.  As I say, it has not been said to me by anybody here, but it is something the parties would not have wanted for each other at any time when they were together and when they were happy.

15. There is a necessary inexactitude about the wife's claim, just as there is about the husband's.  The parties will not exactly spend $300 a week on food, for example, or $50 a week on household supplies.  It will, in fact, be $284 one week and so on.  This is all a somewhat artificial exercise of pulling apart a complicated weekly budget and make estimates about what it would look like, and I accept that the parties have done their best.

16. Doing the best I can, the wife has a need.  One could argue a few dollars here or there in relation to some issues.  Some other claims by the husband more than balance out the claim by the wife.  For example, the holiday claim in relation to the children.  So it seems to me that it is safe in circumstances like this, where we know about the husband's income, that the order be made as asked by the wife.

ORDERS DELIVERED

1. There is an application for costs arising out of these proceedings.  Generally parties pay their own costs.  The Court has power to make an order and, in doing so, s 117 says that I am to take into account the financial circumstances of the parties, whether either is in receipt of legal aid and, if so, the terms of the grant, whether either party has been wholly unsuccessful in the proceedings, the conduct of the parties in relation to the proceedings, particularly filing documents and attending, whether the proceedings have been brought about by a failure to comply with a Court order and any other matter that would be relevant to the question of offers of settlement in writing under s 117(c) or otherwise.

2. I have said what I can say about the parties' finances save that the husband, I think, I was told has about $103,000 of the bonus paid in 2008 sitting in an account.  As to the conduct of the proceedings, documents that were to be filed by the husband were not filed on time.  The husband has been wholly unsuccessful in the proceedings.  There has been no breach of Court orders, no legal aid.  As to conduct, and offers of settlement.  We have not really got an offer of settlement, but the parties had in place an arrangement – a very sensible one, in my view. It is something that parties who have the capacity to pay should do more often ‑ that is, they had arranged for a senior counsel to conduct a mediation, presumably to look at the whole issue.  That is a great idea.  It is a way of jumping the queue and it is a way of the Court system being spared a case where parties have means and do not need to use it.  They had lined that up.  Unfortunately, it miscarried, and I think it miscarried because there were to be documents filed by the husband and they were not provided to the other side in time.  There was an agreement between the parties whereby documents were to be provided not later than Friday, 23 May.  On 27 May the solicitors for the wife said, "We have not got the documents, we're not going to go ahead with the mediation." That is sensible; you cannot mediate something unless you have sufficient information. 

3. All that suggests that the husband should pay.  This is not a situation where the normal position would apply.  These are entirely unnecessary proceedings in my view.  The parties are not people who need a Court system; they are people of obvious sophistication.  In their normal life, they would sort these sorts of problems out without turning a hair.  Why on earth they would come to a Court and have somebody arbitrate this or decide this is beyond me.  The husband is in a more powerful financial position. He is the one of the two parties who has all the flexibility.  He could command finance.  He controls probably the greatest asset of the marriage, his earning capacity.  He knows all of the information about his financial arrangements and the wife will have a deficit of information.  He has been wholly unsuccessful.  He did not provide documents when he was required to.  His financial disclosure was not adequate, in a silly way; in a way that just was insulting.  For those reasons, there should be a payment.  There is no complaint about the quantum.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan .

Associate: 

Date:  5 January 2009