Plany and Geller

FAMILY COURT OF AUSTRALIA

PLANY & GELLER

[2014] FamCA 114

FAMILY LAW – SPOUSAL MAINTENANCE – wife’s application for periodic spousal maintenance until 31 December 2017 – application for husband to pay the wife’s costs fixed but reserved at an earlier hearing.

Bevan & Bevan (1995) FLC 92-600 In the Marriage of White (1995) 92 FLC 640 Mitchell and Mitchell (1995) FLC 92-601 Curnow & Curnow (unreported, Family Court of Australia, Ellis, Kay and Moore JJ, 28 April 1997)
Family Law Act 1975 (Cth) ss 72, 74, 75, 117
APPLICANT:	Ms Plany

RESPONDENT:

Mr Geller

FILE NUMBER:

MLC

841

2010

DATE DELIVERED:

7 March 2014

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Thornton J

HEARING DATE:

2 December 2013

REPRESENTATION

SOLICITOR/ADVOCATE FOR THE APPLICANT:

Mr Hogan

SOLICITOR FOR THE APPLICANT:

Coulter Roache Lawyers

THE RESPONDENT:

In person

Orders

The husband pay to the wife for her maintenance the sum of $50 per week, payable monthly in advance, commencing on 1 April 2014 and finishing on

31 December 2016.
All payments pursuant to paragraph 1 be paid into a bank account by direct debit as nominated by the wife.
All payments pursuant to paragraph 1 are conditional upon the wife confirming by written notification to the husband that she remains enrolled for a Bachelor of … degree or postgraduate tertiary course and that she is making satisfactory progress in that course. Notification is to be made at the commencement of each semester.
The wife’s application that the husband pay her costs fixed at $1,630.25 but reserved on 3 July 2012 is dismissed.
The husband’s application for travel costs of this hearing is dismissed.
The parties’ application for costs of this hearing are reserved.
On or before 4.00 pm on 7 April 2014 the parties file and serve written submissions in support of any application for costs arising out of or incidental to the hearing on 2 December 2013.

AND THE COURT NOTES THAT:

The wife has given a personal undertaking on oath to the Court on 2 December 2013, that she will immediately inform the husband of any improvement or change in her financial circumstances at any time before 31 December 2016.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Plany & Geller 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 MELBOURNE

FILE NUMBER:

Ms Plany

Applicant

And

Mr Geller

Respondent

REASONS FOR JUDGMENT

Orders were made in this Court, by consent between the parties, finalising property matters on 2 February 2012. Two months later, the wife made an application to this Court for an order that the husband pay her periodic spousal maintenance. These reasons for judgment determine that application together with subsequent applications for costs by both parties.

Background

The parties were married in January 1992, separated in July 2009 and divorced in July 2012. There are five children of the marriage, aged 20, 15, 13, 10 and 6 years. The adult child lives independently and works in Geelong. The husband provides her with occasional financial support. Neither party is living with a new partner.
The wife is 45 years of age and is the primary carer of the four children under 18 years who live with her. She completed a Victorian Certificate of Education in 1988 and a Certificate in Management from a TAFE college in 1990. She has not undertaken fulltime work since 1997, but did some casual work in management in 2002/2003. She has predominantly worked as a homemaker and parent since the parties were married.
The wife is currently enrolled part-time at university undertaking a Bachelor degree program which she began in 2011. She intends to transfer to full-time studies when her parenting role permits. Her long term plan is to undertake a postgraduate course to qualify for employment in the education field by the end of 2017.
The husband is aged 50 years and is employed full-time as a public servant. He resides in rented premises in Surfers Paradise, Queensland. The premises are owned by his parents. He is paying child support through the Child Support Agency for the four children of the marriage who are under 18 years.

Procedural history

Final parenting orders were made in this Court by consent in October 2011. The orders provided for the children to remain in the primary care of their mother and for the parties to have equal shared parental responsibility for the children. The husband spends time with the children in school holidays depending upon his ability to take leave from work and his ability to afford travel and accommodation expenses. He spends time with the children in both states, for three or four days of each school holiday period. He has customarily stayed with his parents in Melbourne.
Final property orders were made by consent on 2 February 2012 in this Court after two years of litigation. The orders provided for each party to retain their superannuation. The husband assumed responsibility for the debts of the marriage which he has been repaying. He agreed to repay an amount of approximately $25,000[1], of which $16,439 remains outstanding. The husband has refinanced the debt from the marriage and is making repayments on several credit cards. The wife’s evidence was that the debts of the marriage only amounted to approximately $23,000. While I prefer the husband’s evidence because of his having the liability for the debts, nothing turns on the small difference in the evidence.
[1] Affidavit of the husband sworn 21 August 2013.
Each party continues to have an interest in what they referred to as ‘[B] investments’, which was part of a family trust, but there is no dispute that this investment is currently worthless. Under the final property orders, the trust is to be wound up in December 2014 if no funds have been redeemed and any funds redeemed are to be divided between the parties as to 60 per cent to the wife and 40 per cent to the husband.
The wife filed an Initiating Application seeking spousal maintenance on

28 March 2012 and the matter was listed for interim hearing before Senior Registrar FitzGibbon on 3 July 2012. However, the husband did not attend. The wife’s costs of that hearing were fixed at $1,630.25 and reserved. The wife filed a Further Amended Initiating Application on 8 October 2013 seeking that those costs incurred by her for the hearing on 3 July 2012 be paid by the husband.
The wife’s application for interim spousal maintenance was adjourned for hearing before Senior Registrar FitzGibbon on 27 September 2012. Judgment was delivered on 13 December 2012. Interim orders were made providing for the husband to pay the wife spousal maintenance in the sum of $85 per week.

I have had regard to Senior Registrar Fitzgibbon’s comprehensive reasons for judgment.

The application

The wife seeks that the husband pay spousal maintenance of $125 per week until 31 December 2017 to enable her to complete her studies. She intends to ultimately find employment in the education field in regional Victoria where she currently lives. She has also expressed a wish to maintain her role as a full-time mother to the children while she is studying.
The wife also seeks an order that the husband pay her costs fixed but reserved from 3 July 2012.
The husband opposes the wife’s applications. He seeks that each party pay his or her own legal costs and that should spousal maintenance orders be made, the Court order that any spousal maintenance order should cease from the date of any monies received by the wife from B investments.
The husband has been paying interim spousal maintenance of $85 per week pursuant to the interim orders since 13 December 2012.
The husband opposes the wife’s application for spousal maintenance essentially on the following grounds:
·   the amount of interim spousal maintenance which he has paid to the wife since December 2012 is sufficient to satisfy his responsibility;
·   the wife does not meet the threshold test for spousal maintenance as she has an adequate ability to support herself and has an inheritance;
·   he believed that the final property settlement where he agreed to repay the debts of the marriage of $25,000, was in lieu of spousal maintenance because he did not obtain legal advice on the effects of that agreement;
·   the payment of spousal maintenance will detract from his financial capacity to travel interstate to spend time with the children;
·   his financial circumstances have deteriorated since the interim spousal maintenance hearing before the Senior Registrar on 27 September 2013;
·   he does not have the capacity to pay the maintenance sought and also maintain a reasonable standard of living;
·   the wife has the capacity to gain employment, whether it be casual, part-time or full-time, but she has not made any reasonable efforts to obtain employment. He proposed that she work as a school cleaner or mystery shopper by way of examples of work available in regional Victoria;
·   the proposal of the wife to study to become employed in the education field is unreasonable because there is no guarantee that she will find work in regional Victoria; and
·   it would be excessive for him to pay spousal maintenance for such a lengthy period of time.
Both parties relied on their affidavit material filed and were cross-examined.[2]
[2] See Annexure A to these reasons for judgment.

Relevant Law

The right of a party to a marriage to spousal maintenance is found in s 72 and

s 74(1) of the Family Law Act 1975 (Cth) (“the Act”).
72 Right of spouse to maintenance
(1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
74 Power of court in spousal maintenance proceedings
(1) 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 matters to be taken into account in relation to spousal maintenance are set out in s 75(2) of the Act. The following factors are relevant to the circumstances of this case:
(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)the 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
…
(f)the eligibility of the parties for an allowance or benefit under a superannuation fund or scheme; 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
…
(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
…
(n)the terms of the order made under section 79 in relation to:
(i)the property of the parties; 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;
Under s 75(3) of the Act, I must disregard any entitlement of the wife to an income tested pension, allowance or benefit, when considering her financial circumstances.
In Bevan & Bevan (1995) FLC 92-600, the Full Court of the Family Court of Australia outlined the four general principles (at 81,982) that an award of spousal maintenance requires:
1.a threshold finding under s 72;
2.consideration of s 74 and 75(2);
3.no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and
4.discretion exercised in accordance with the provisions of s 74, with “reasonableness in the circumstances” as the guiding principle.
In Curnow v Curnow[3], the Full Court of this Court held that even where the threshold has been met under s 72 of the Act, an obligation to pay spousal maintenance only arises if the party from whom the payment is sought is reasonably able to maintain the other party. I must consider the husband’s income and then his necessary living expenses such as the compulsory and unavoidable commitments of taxation, superannuation, Medibank levy, non-discretionary expenses and reasonable living expenses. After deducting those expenses, I must consider then whether the husband has the capacity to pay spousal maintenance.
[3] Curnow & Curnow (unreported, Family Court of Australia, Ellis, Kay and Moore JJ, 28 April 1997)

The wife’s financial circumstances and reasonable needs

The wife is not employed and has no income other than government benefits, child support and the interim spousal maintenance. She is renting a three bedroom unit.
The wife has no real property.
The wife’s only liability is a HECS debt of $8,884.
In terms of other property, the wife deposed to recently receiving an inheritance from her late father’s estate which comprised a car to the value of approximately $32,000 and an amount of $47,000 in cash. A sum of $44,000 has been invested to provide a modest income by way of interest.
The wife deposed that she anticipates receiving a further amount of $98,000 from the inheritance on or around 30 June 2014 depending upon the expenses of the estate, however in her oral evidence before me she stated that she is uncertain of the exact amount.
The wife proposes to use her inheritance as a deposit for the purchase of a house for herself and the children. This will depend upon when she has an income to repay a housing loan for a mortgage.
It is the wife’s case that it is not reasonable to expect her to deplete her capital by using her inheritance, which is invested, in order to support herself and the children, especially in circumstances where the husband is in a position to contribute to her support from his income.
The wife also has an entitlement to superannuation which she estimates is valued at $94,360. The evidence does not allow me to make any finding as to when this will be paid.
I accept the submission of the solicitor for the wife, based on the wife’s evidence in Part N of her financial statement, that the wife’s weekly needs amount to $305 and that this is reasonable. This figure excludes the wife’s legal expenses and expenses for the children. The figure also only allows for the expense of one third of the rent, and one third of the wife’s motor vehicle insurance and registration. I accept this on the basis of Part N of her financial statement. The reasonable needs of the wife were not challenged by the husband, other than to complain of her spending on legal expenses. Given that the legal expenses were not included in the figure of $305, there is no challenge to the needs of the wife.
I am satisfied on the evidence before me that the wife’s reasonable needs amount to $305 per week.

Is the wife unable to support herself adequately?

In considering spousal maintenance, I must be satisfied of the threshold finding under s 72 of the Act.
The husband argued that the wife does not meet the threshold test for being unable to support herself financially. He referred to her significant cash assets, anticipated further payments from her inheritance and her ability to finance legal costs in pursuit of her application. He also emphasised the fact that the wife has the use of a new motor vehicle which he asserted she had purchased from her father prior to his death.
In Mitchell and Mitchell (1995) FLC 92-601, the Full Court of the Family Court of Australia comprising Nicholson CJ, Fogarty and Jordan JJ stated in reference to spousal maintenance applications that the threshold question of whether the applicant “is unable to support himself/herself adequately” is not to be determined by any fixed or absolute standard but having regard to the matters in s 75(2) and particularly (a), (b) or (c) of that section. In that case the Full Court pointed out at 81,995 – 81,996 that:
The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself “adequately”. Where the line is to be drawn will depend upon the circumstances of individual cases.
The wife is unemployed and her capacity for paid employment is limited because of her parenting role and the time that she has spent out of the paid workforce. Although the youngest child has begun school, the wife provides for the children’s physical and emotional needs when they are not at school. Her lack of qualifications, lack of recent work experience and requirement for flexible working hours present a significant hurdle in the workplace. The age of the children is relevant because of the need for before and after school care which may involve costs if such care was available. The cost and availability of childcare was not addressed, presumably because of the wife’s wish to continue her parenting role.
The wife last worked casually for eight months approximately 11 years ago as a Management Consultant. Acquiring qualifications to equip her for employment in the education field will maximise her chances of participating in the workforce when her childcare responsibilities diminish.
I am satisfied that the wife is unable to support herself adequately from her own resources by reason of having the care and control of four children who have not attained the age of 18 years and by reason of her lengthy period out of the paid workforce whilst she was undertaking her role as homemaker and child carer.

The husband’s financial circumstances

The husband has filed two financial statements. Relying on his most recent financial statement, the husband deposed that he does not have a reasonable capacity to pay spousal maintenance to the wife. He deposed that he has:
·increased costs of medication having been diagnosed with depression;
·increased medical expenses with a family history of heart disease and a low iron condition that is currently being investigated; and
·does not have the financial capacity to pay the wife because he already pays significant child support at the rate assessed by the Child Support Agency; and
·if ordered to pay spousal maintenance, his capacity to fund his interstate travel or accommodation to spend time with the children and his capacity for an adequate standard of living in the long term would be insufficient.

There is no dispute that the husband’s weekly income before tax is $1,841.

Whilst the wife asserted in her affidavit material that the husband may have additional income from a commission sales plan, this was not pursued in the hearing before me and the solicitor for the wife conceded that there is no dispute between the parties about the husband’s income. Accordingly, I am satisfied that the husband’s only income is from his employment with the government department.
The husband has no real property and I accept his valuation of his motorcycle at $6,500. He has an amount of $2,917 in the bank.
There was no dispute about the value of his superannuation being $56,522.
In his financial statement sworn 21 October 2013, the husband deposed that his total personal expenditure is $1,453. In his figure for personal expenditure he included weekly child support of $397 and spousal maintenance of $85 per week. In addition to this expenditure, he deposed in Part N to average weekly expenses of $694 which included other expenses for the children. Excluding the children’s other expenses, he deposed to a figure of $556 for his own weekly expenses.
The husband submitted that his living expenses have increased significantly since the interim orders were made by Senior Registrar FitzGibbon because of increased rent, credit card interest and medical expenses. He anticipates dental expenses of $9,000. He also has a loan of $7,278.94 for a motor cycle which he has been repaying since May 2013 at the rate of $173.13 per month. The motor cycle is his means of transport to work.
There is no dispute that the husband has liabilities of $23,717. There is $16,438 owing for the remainder of the debt from the marriage and $6,933 owing for the motor cycle loan.

Is the husband reasonably able to maintain the wife?

The solicitor for the wife took issue with the average weekly expenses claimed by the husband for his rent and rate of repayment of the debt from the marriage outlined in Part G of the husband’s personal expenditure in his second financial statement. The expenses to which the husband deposed in Part N of his second financial statement were also challenged.
The solicitor for the wife submitted that after payment of reasonable expenses, the husband would have a weekly surplus of $245 from which to pay the wife $125 for spousal maintenance until the end of 2017. This surplus was calculated from a comparison of the expenses outlined in the two financial statements and substituting a lower figure for various expenses including food, rent and the credit card repayments.

Expenditure of the husband in issue

The solicitor for the wife essentially submitted that having regard to the “vague way” the husband had approached his financial position, it is reasonable to infer that the earlier financial statement of August 2013 represents the real expenses of the husband in contrast to the second financial statement filed.
It was the husband’s evidence that he had been paying $97 per week for rent until January 2013 when it was increased by his parents to $185 per week. It was submitted by the solicitor for the wife that there was no reasonable explanation for this increase. In cross examination, the husband agreed that his rental was a private arrangement between himself and his parents and that it was not the subject of a lease agreement. The solicitor for the wife submitted that in the absence of an explanation by the husband for such an increase in the rental payments for his accommodation and bearing in mind that the husband’s landlords are his parents, the appropriate/reasonable figure to be taken into account for the husband’s rent is the $97 figure to which he had previously deposed. On the wife’s submission this would decrease the husband’s necessary weekly expenditure by $88.
It was also submitted that the expenses claimed by the husband for repayments on the credit cards for the debt from the marriage should be reduced to the minimum amount payable rather than the higher amount that the husband is currently electing to pay. It was submitted by the solicitor for the wife that, as the husband is not obliged to pay the higher amount, the wife’s needs should be prioritised over the preference for earlier repayment of the debt, bearing in mind that the relevant time frame for spousal maintenance sought by the wife is limited until 2017. On the wife’s submission, the difference in weekly expenditure between the minimum payment towards the debt and the higher amount currently being paid by the husband towards this debt is $113 per week.
In his submissions, the solicitor for the wife relied upon the expenditure outlined by the husband in his first financial statement in order to calculate the husband’s ‘true’ weekly surplus. For example, where the husband specified in his second statement that his average weekly expenditure for household supplies was $21, the solicitor for the wife asserted that the reasonable figure is in fact the $10 specified in the husband’s first financial statement. The solicitor for the wife proposed figures which he submitted were reasonable for items of expenditure such as food, telephone and motor vehicle. The wife’s solicitor proposed $90 for food instead of the husband’s $190 figure. He emphasised that the wife’s expenditure for food in her financial statement was only $60 per week.

The difference between the husband’s financial statements filed 21 August 2013 and 21 October 2013

The husband was cross-examined about the disparity between his two financial statements filed on 21 August 2013 and 21 October 2013. By way of explanation, he gave evidence that he had failed to properly investigate his true financial position in August 2013. The husband’s evidence was that the financial statement of 21 August 2013 was incorrect and that he had re-examined his bank records and recalculated his expenses. He stated that his second financial statement was more accurate. The evidence of the husband did not adequately address the question as to the disparity between his two financial statements filed.
The husband submitted that his expenditure on food had increased due to poor health requiring an upgrade of diet to include “more red meat… more leafy greens... a switch from full cream milk to low fat milk…[and] a switch to low fat yoghurts”.[4]
[4] Transcript of 2 December 2013, page 40, lines 23-27.
The husband was cross-examined in some detail about the costs of his petrol, motor bike, medical (including pharmaceutical) expenses and holidays. His explanation of the difference between his motor vehicle expenditure detailed in the August 2013 financial statement and the financial statement of October 2013 was that he had purchased new equipment for his motor bike, including new clothing, bag and helmet. He also testified that he purchased more tools to maintain his motor cycle.
The husband attributed the increase in costs for holidays from $50 to $100 per week, since the first financial statement, to the need to travel interstate and for accommodation when he spends time with the children.
It was the husband’s evidence that he has incurred dental expenses and that he will continue to incur further dental expenses in the near future. The husband also deposed that he would be undergoing surgery in a week and a half to investigate an iron deficiency and that the cost of this procedure was unknown to him.
The husband submitted that his capacity to afford the spousal maintenance sought by the wife may be impacted by expenses because of the state of his health and would be unfair because of the amount of debt that he owed relative to the level of debt of the wife. The husband did not provide the Court with expert independent evidence as to his ill health.
As to the veracity of his weekly expenditure on rent, the husband gave evidence that the higher figure of $185 per week is the amount he pays to his parents and that this rent is still less than the market rate for the property. He did not provide any evidence about the rental market rate for similar properties.
It was the husband’s evidence that he pays in excess of the minimum payment required for the debt from the marriage to reduce the interest payable. The husband submitted that his weekly expenses for the marital debt repayments were reasonable and financially prudent because it would reduce his long term expenditure.
The husband submitted that some of the figures proposed by the wife’s solicitor would simply not cover his living expenses.

Findings about the husband’s expenses

I accept the evidence of the husband, including his bank records of the regular payments made to his parents, that his rent has increased to $185 per week. The amount of rent he is paying is not unreasonable.
I accept on his evidence that the husband will incur medical expenses investigating the state of his health. However, he does have private health insurance. I accept the amount he has claimed for his increased chemist or pharmaceutical expenses as reasonable.
I accept that the husband may incur dental expenses. However, there is no evidence as to the need for the dental costs or the reasons. The husband has private health insurance whilst the wife is on a two year public waiting list for dental treatment.
I do not accept as reasonable all of the figures for expenditure in Part N of the second financial statement of the husband and in particular the increase in his holiday/access expenditure which he asserted had increased by $50 weekly since his first statement. The purchase of new equipment and tools for his motorcycle will not be a recurring expense. On the other hand, where the husband’s expenditure for discretionary expenses was challenged, I regard the figures proposed by the solicitor for the wife as insufficient for some items under Part N and in particular with respect to food.
I do not accept that the husband’s weekly expenses in part N have increased by $144 since his first financial statement was filed. In particular, I consider that an amount of $50 per week is reasonable for his total access/holiday expenses, based on the evidence. However, I note that there was no clear evidence on which I could determine the costs of the exact arrangements or the circumstances of the husband’s accommodation while spending time with the children in Melbourne. The husband deposed that his elderly parents could no longer accommodate the children in future when he spent time with them in Melbourne and relied on an email to this effect from his parents. This was challenged by the solicitor for the wife and there was no admissible evidence from the husband’s parents who live in Melbourne. I accept the affidavit evidence of the wife, that to the best of her knowledge the children have only ever been accommodated with the parents of the husband in Melbourne whilst spending time with the father. I have considered the costs of the husband spending time with the children, doing the best I can having regard to the state of the evidence before me. There is no clear evidence about the number of times during the year that the husband travels to Melbourne or that the children travel to Queensland and the husband in oral evidence stated that it was a fluid situation.
In terms of the husband’s other expenditure, I am satisfied that by paying the minimum amount on his credit cards for the debt from the marriage, he would have a surplus of $113 per week. On these two expenses alone that would leave the husband a weekly surplus of $163. However, there are also other discretionary expenses which might be marginally reduced such as gifts and the $22 weekly expenses for sport and donations.

Findings as to the s 75(2) factors

The wife is 45 years of age and in good health. The wife has no income for the reasons I have outlined previously. There is a disparity of income between the parties. She receives child support from the husband referred to below.
The husband is 50 years of age. He is engaged in full-time employment and has a regular income. I accept his evidence that he has been diagnosed with depression and has been experiencing low iron levels.
Neither party owns any real property. The husband has no significant savings. The husband has a motorcycle purchased second-hand and for which he has taken out a loan.
The wife has invested her inheritance. I am satisfied that the motor vehicle driven by the wife is valued at $32,000 and was given to her as part of her recent inheritance from her father, post separation. The vehicle is used for the benefit of the children. I accept that because the wife received the motor vehicle, her inheritance was reduced. She received $47,000 in cash as part of this inheritance post-separation. She has spent about $3,000 of the inheritance purchasing bicycles and sporting goods for the children. The balance remaining, being an amount of $44,000, has been invested. I accept the wife’s evidence that she intends to use the $44,000 as a deposit for the purchase of a home for herself and the children. I accept that this is reasonable in all the circumstances. She also requires a fund for unexpected expenses.
I cannot quantify with precision the future payment due to the wife under the inheritance but it is clear that she has an expectation of receiving a payment in or about June 2014. It is surprising that the wife has not provided any further information about the amount.
The wife has deposed to an expectation of receiving $98,000.[5] I accept that about $98,000 (or less to allow for administrative expenses) will be paid to the wife in or around June 2014. This is an asset which can be taken into account under s 75(2)(b) and as a circumstance under s 75(2)(o) of the Act, which the justice of the case requires to be taken into account, where the husband has no savings or valuable assets and spousal maintenance is being considered for the next four years.
[5] Affidavit of wife sworn 7 October 2013 at paragraph 34.
In Bevan & Bevan, the Full Court of the Family Court of Australia took into account the property settlement of the parties and ascribed an amount of $155,000 to be received by the wife and $75,000 to be received by the husband, in anticipation of the real property being sold. The Full Court stated:
We do not think that the law requires that a wife should deplete an already comparatively meagre capital sum, to enable a much higher earning husband to avoid his obligation to maintain a former spouse who is in financial circumstances such as those in which she finds herself. She may well wish to apply all or part of that sum to the purchase of new premises and we do not think that she should be prevented from doing so should she desire it.[6]
[6] Bevan & Bevan (1995) FLC 92-600 at (81,980).
This case was relied upon by the solicitor for the wife but is distinguishable on the facts. The husband in that case was required to pay interim spousal maintenance of $125 per week until the sale of the former matrimonial home and distribution of the proceeds, following which a permanent order for spousal maintenance of $50 per week was made. The case is not authority for the proposition generally that a wife is not required to deplete her capital. As the Full Court stated in Mitchell and Mitchell, where the line is to be drawn will depend upon the circumstances of individual cases.
The inheritance which has vested in the wife is a circumstance I have taken into account under s 75(2)(o) of the Act. The wife should not have to deplete her capital to pay living expenses. However, whilst it is reasonable for the wife to preserve her inheritance for the purchase of a home for herself and the children, the husband has no assets and is not in a position to accumulate any significant savings. I have considered this as an additional factor in determining the length of time which is appropriate for payment of spousal maintenance.
The circumstance of the inheritance here is distinguishable from the prospect of an inheritance.[7] The Full Court of the Family Court decided in In the Marriage of White (1995) 92 FLC 640 that an inheritance expectancy was not a financial resource within the meaning of s 75(2)(b) of the Act in relation to a property settlement. Here the wife has already received part of her entitlement as a beneficiary of her father’s estate since his death and the balance is to be paid in June 2014.
[7] In the Marriage of White (1995) 92 FLC 640.
Both parties have the prospect of superannuation benefits, but there is no evidence that either party will have access to those funds before 2017. No submission was made on this issue.
Both parties have the physical and mental capacity to engage in appropriate and gainful employment but for the reasons I have outlined, the wife is not in a position to find appropriate employment having regard to her responsibilities for the four children under 18 years and the length of time she has been out of the paid workforce.
Under s 75(2)(c) of the Act, the wife has the care and control of the four children of the marriage who have not yet attained the age of 18 years. However, I have also taken into account the costs to the husband of visiting and accommodating the children. Although he usually stays with family for these visits, at times he has had to pay for accommodation interstate and these expenses are ongoing. I do not accept, however, as reasonable the amount of $100 per week averaged over 12 months that he has claimed for this cost. The evidence does not support this expense.
Neither party has responsibility to support any other person.[8]
[8]Family Law Act 1975 (Cth) s 75(2)(e).
I conclude that both parties in this case live prudently and within their modest means. They have not exaggerated their personal needs and the husband is understandably concerned about limiting his expenses in order to spend time with the children.
The payment of spousal maintenance to the wife would increase her earning capacity by enabling her to undertake a course of educational training to qualify for employment in the education field or some other employment. Having been out of the fulltime paid workforce for 16 years there would be little prospect of any work other than unskilled employment. Participation in unskilled casual work such as cleaning is not a long term solution for improving her future employment prospects and is inappropriate given her work history in management. In the absence of any other evidence, I accept the evidence of the wife where she deposed that she has moved to regional Victoria to improve her employment prospects because there are “fewer [employees in her chosen career] available”.
On the affidavit material, under s 75(2)(j) of the Act I am satisfied that the wife has contributed to the income earning capacity of the husband by surrendering her commitment to studying during the course of the marriage in order to prioritise care of the children. At one stage during the marriage both parties were studying, however the wife then ceased studying and shortly afterwards the husband discontinued his own course of study. Nevertheless, the husband remained in employment and the wife was the full time homemaker and child carer for a significant period.
Under s 75(2)(k) of the Act, the duration of the marriage, being some 17 years, is particularly relevant as the earning capacity of the wife, whose maintenance is under consideration, has been diminished having regard to her role as homemaker and full-time carer of the five children of the marriage. This has resulted in a limited capacity to engage in the paid workforce. Her qualifications are now out-dated and unsupported by recent work experience.
Under s 75(2)(l) of the Act, the payment of maintenance to the wife would allow her to continue her role as a parent whilst undertaking her course of study.
Neither party is cohabiting with another person so the financial circumstances relating to any cohabitation are not relevant under s 75(2)(m) of the Act.

Regarding s 75(2)(n) of the Act, the parties’ property settlement was concluded in February 2012. The former matrimonial home was sold and after payment of expenses and the mortgage there was nothing remaining. The husband has continued to pay the outstanding debt of the marriage which now amounts to $16,438. The husband has asserted in his written material that he believed that the final property orders made by consent were in lieu of spousal maintenance because he was not legally represented. The husband did not pursue this in the hearing before me and in the absence of evidence about this I make no finding on this point. However, I take into account the effect of the settlement, which is the debt assumed by the husband.
In reference to s 75(2)(na) of the Act, it is significant that the husband is paying child support of $397 per week and will continue to have the responsibility to pay child support for the four children for some years into the future. His responsibility will potentially continue until he is 62 years of age.
The husband deposed that he is called upon to assist his 20 year old daughter who is living independently and that he would like to be able to continue to “give her money on an ad-hoc basis”. No doubt both parties would wish to assist their eldest child who is living independently, despite the fact that there is no legal obligation to maintain this adult child. Nevertheless, I have taken this into account as a factor for each party under s 75(2)(o) of the Act which the justice of the case requires.
I have taken into account all of the relevant factors under s 75(2) of the Act.

Conclusion

The husband’s weekly compulsory and unavoidable expenses of taxation, superannuation, rent, medical and other insurance, motor cycle loan repayment, registration, minimum repayment of credit card debt and child support amount to $1,255.
After deducting these expenses from his income, the husband has an amount of $586 remaining for his other weekly living expenses in Part N of his financial statement. I accept as reasonable the weekly expenses outlined by the husband for food, electricity, telephone, pharmaceutical, petrol, household repairs and supplies, parking, hairdressing, clothing and shoes, children’s activities, entertainment and dry cleaning.
I do not accept as reasonable the following weekly expenses:
·$63 for medical, dental, optical exclusive of health insurance;
·$50 for motorcycle maintenance;
·$100 for holidays/access visits;
·$35 for gifts; and
·$23 for sport, donations to adult child and anti-virus software.
By reducing this discretionary spending, I am satisfied that the husband would be in a position to pay $50 weekly for the maintenance of the wife whilst preserving a reasonable amount of approximately $100 for unexpected contingencies.
Having taken into account all of the s 75(2) factors under the Act, and in particular the fact that the husband continues to repay the debt from the marriage, pays child support and has the care of the children during holidays, I am nevertheless satisfied that the husband has the capacity to pay periodic spousal maintenance of $50 per week.
I find that it is appropriate and reasonable to make an order for that amount to be paid to the wife weekly until 31 December 2016. The wife should then be in a position to obtain some employment, having completed her degree, and the extent of her responsibilities for the children should have diminished. I have also taken into account the amount and the period that the husband has been paying interim spousal maintenance to date.
The wife gave a personal undertaking on oath before me at the hearing on 2 December 2013 that she would inform the husband of any change in her financial circumstances in the event that an order for spousal maintenance was made.[9] This would include any circumstances in the future if the wife received any payment from B investments which are currently worthless. The wife has an obligation to inform the husband, if her financial circumstances improve or change at any time before 31 December 2016.
[9] Transcript of 2 December 2013, page 62, line 35.
In order to reduce the need for further litigation between the parties and particularly to reduce the costs, given the parties’ limited means, the order for periodic spousal maintenance is contingent upon the wife remaining enrolled in her course and successfully completing her subjects until 2016.
If the parties’ circumstances change, spousal maintenance can of course be adjusted and an application made under s 83 of the Act.

Wife’s application for costs of the hearing on 3 July 2012

The general rule is that each party should bear his or her own costs of proceedings under the Act. However, pursuant to s 117(2) of the Act, if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the Court considers just.
Section 117(2A) of the Act mandates the factors to which the Court should have regard in considering what order (if any) should be made. The factors are:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
In considering whether there are circumstances which justify an order for costs being made, the weight to be attached to any of the considerations in s 117(2A) is wholly discretionary.
Section 117(2A) must be read having regard to the primary position in s 117(1) that each party to proceedings under the Act ‘shall bear his or her own costs’.
I accept the explanation of the husband as reasonable, that because of the short notice and work commitments he was unable to attend the hearing before the Senior Registrar scheduled for 3 July 2013. The wife did not accept his explanation and her solicitor wrote to the husband with a conditional proposal to consent to the adjournment. It is not surprising that the husband was not prepared to agree to the conditional proposal which included that he pay spousal maintenance to be backdated. The interim orders ultimately made did not provide for any retrospective payment.
Relevant to the circumstances here is the fact that the final property orders did not include any reference to maintenance and the wife abandoned spousal maintenance as part of her originating application.[10] The wife filed a fresh application less than two months after the final property orders were made, which has been costly and has duplicated proceedings.[11] As Senior Registrar FitzGibbon noted, the whole procedural approach in concluding the proceedings and then reigniting them so soon afterwards has troubling aspects, although permissible as a matter of law.
[10] See Reasons for Judgment of Senior Registrar FitzGibbon delivered 13 December 2012 at paragraph 19.
[11] See Reasons for Judgment of Senior Registrar FitzGibbon delivered 13 December 2012 at paragraphs 18 – 25.
There is no factor under s 117(2A) of the Act which would justify the making of a costs order against the husband in favour of the wife. Accordingly, I dismiss the wife’s application for costs reserved at the hearing on 3 July 2012.

Costs of the hearing on 2 December 2013

Both parties made an application for costs to be paid by the other party for the proceedings on 2 December 2013 but did not make any submissions at the hearing. The husband confirmed that he was making such an application in the hearing without any further submission.
However, I reserve the question of costs of the hearing because no submissions were made.
I see no reason to depart from the general principle under

s 117(1) of the Act that each party bear his or her own costs of proceedings. However, should the parties wish to pursue such an application I would accept submissions in writing.

Husband’s application for his travel costs

The husband sought that the wife pay his travel costs in attending Court for the hearing before me but did not ultimately pursue this during the hearing. As the husband was self-represented, for the sake of completeness, I consider that he should bear his own travel costs in attending Court, particularly as the case was listed to coincide with a visit to see the children.

I certify that the preceding one-hundred and ten (110) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 7 March 2014.

Associate:

Date: 7 March 2014

ANNEXURE A
Material relied upon by the wife:

Further Amended Initiating Application filed 8 October 2013;
Affidavit of the wife sworn 7 October 2013;
Affidavit of the wife in reply sworn 4 November 2013;
Financial statement of the wife filed 7 October 2013; and
Financial statement of the husband filed 21 August 2013.

Material relied upon by the husband:

Response of the husband filed 21 October 2013;
Affidavit of the husband sworn 21 October 2013;
Affidavit of the husband sworn 21 August 2013; and
Financial statement of the husband filed 21 October 2013.

[2014] FamCA 114

Key Legal Topics

Areas of Law

Family Law

Contract Law

Legal Concepts

Costs

Remedies

Statutory Construction

Offer and Acceptance

Reliance

Duty of Care