Potter and Watson
[2010] FMCAfam 556
•4 June 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| POTTER & WATSON | [2010] FMCAfam 556 |
| FAMILY LAW – Spousal maintenance – need of wife established – established husband does not have the capacity to pay. |
| Family Law Act 1975, ss.72, 74 & 75 |
| Bevan & Bevan (1995) FLC 92-600 Evans & Evans (1978) FLC 90-435 N & N (1997) FLC 92-782 O & G [2003] FMCAfam 192 Cachia v Hanes (1994) 179 CLR 463 Dobree v Hoffman (1996) 18 WAR 36 |
| Applicant: | MS POTTER |
| Respondent: | MR WATSON |
| File Number: | SYC5998 of 2007 |
| Judgment of: | Kemp FM |
| Hearing dates: | 9 & 10 December 2009 & 21 May 2010 |
| Date of Last Submission: | 21 May 2010 |
| Delivered at: | Sydney |
| Delivered on: | 4 June 2010 |
REPRESENTATION
| Counsel for the Applicant: | Ms Conte-Mills |
| Solicitors for the Applicant: | Slater & Gordon |
| The Respondent: | Self-represented |
ORDERS
The wife’s application filed 23 August 2007 be dismissed.
All outstanding applications (save as to costs, including any reserved costs) otherwise be dismissed.
All exhibits tendered in these proceedings, be returned at the expiration of 1 (one) calendar month, unless an appeal is lodged.
The matter be removed from the list of cases awaiting finalisation.
If any party seeks costs, an appropriate application to my chambers may be made within 28 days of today’s date and the Court will deal with that matter by way of written submissions unless the parties wish to be heard orally. If no such application is made within that time period, there will be no order as to costs.
IT IS NOTED that publication of this judgment under the pseudonym Potter & Watson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC5998 of 2007
| MS POTTER |
Applicant
And
| MR WATSON |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by the wife for spousal maintenance.
The applicant wife seeks orders, as set out in the Initiating Application filed 23 August 2007, as amended orally in Court on 9 December 2009 to the following effect:
(1)That orders made on 6 February 2004, ordered for spousal maintenance be discharged.
(2)That the respondent father pay lump sum arrears of spousal maintenance in the amount of $69,800.00.
(3)That the amount for spousal maintenance be varied from $200.00 a week to $500.00 per week.
(4)Such further or other orders the Court deems fit.
The respondent husband, seeks orders as set out in the Amended Response filed 14 July 2008, to the following effect:
(1)In addition to the orders sought in my response filed 19 November 2007, where I am seeking the dismissal of the applicants orders in relation to spousal maintenance.
(2)I am seeking an order for costs in this matter.
The wife relies, subject to all proper claims as to admissibility on the following:
a)Affidavit of the wife sworn and filed 11 November 2009.
b)Updated Financial Statement of the wife sworn and filed 11 November 2009.
c)Affidavit of the wife sworn 9 August 2007 and filed 23 August 2007 (limited to paragraphs 8, 9, 24, 26 & 49 and Annexure C, Annexure D, Annexure K (referred to in paragraph 27) annexure M (referred to in paragraph 32) Annexure S (referred to in paragraph 50).
The husband relies, subject to all proper claims as to admissibility on the following:
a)
Affidavit of the husband sworn 15 November 2007 and filed
19 November 2007 (this affidavit annexed copies of two affidavits of 29 May 2006 and 2 June 2006 (without annexures attached) together with an affidavit of Mr W sworn 13 November 2007 (annexure D) and affidavit of Ms P (the applicant’s mother) sworn 14 November 2007 (annexure F) ;
b)
Statement of Financial Circumstances of the husband sworn
29 October 2009 and filed 2 November 2009;
c)
Affidavit of the husband sworn 29 October 2009 and filed on
2 November 2009.
Both parties relied on the decision of Justice O’Ryan in the Family Court of Australia handed down 24 December 2001 which dealt with both property and spousal maintenance issues. The applicant relied specifically on paragraphs 239-248 and order 7. The Court was informed pages 3, 4 and 26 were missing from the copy of the decision which appears as Annexure A to the wife’s affidavit sworn 9 August 2007 and filed 23 August 2007.
Relevantly, those paragraphs and order state as follows:
Spousal Maintenance
239. The relevant sections of the Family Law Act relating to spousal maintenance are sections.71, 72, 74, 75, 77, 77A and 80 to 85.
240. Section 72 imposes an obligation on spouses for mutual support. There are two basic matters to be considered namely the need of the applicant for maintenance and the ability of the respondent to pay.
241. It is necessary for the applicant to establish an inability to support herself or himself adequately. Section 72 lists certain factors that may affect the applicant’s capacity for self support.
242. If is it determined that the applicant is unable to support her self or himself adequately then it is necessary to consider the means and reasonable needs of the respondent and the extent of her or his ability to contribute towards the support of the applicant.
Conclusion
243. The wife’s sole source of income is the disability support pension. However, she does receive some assistance from Mr P and maintenance of $180 per week. As well, I am of the opinion, for reasons I have already given, that once this litigation is concluded the wife has some capacity for limited paid employment.
244. The wife said that her average weekly expenses are $632.75 which includes rent of $382.75. She was not cross examined about her expenses and in my opinion they are reasonable.
245. I am satisfied that the wife is not presently able to support herself adequately by reason of her limited capacity for paid employment.
246. So far as the husband is concerned he has a net income of at least $2,335.98 per week. He has [expenses omitted]. He is currently able to afford payment of $180 per week which is the amount of interim maintenance. His evidence about his current income was unsatisfactory notwithstanding his efforts on the last day of the hearing. The evidence about the financial circumstances of cohabitation with his present wife was also unsatisfactory. In summary, I am of the view that he does have the capacity to contribute to the support of the wife.
247. In conclusion, I am of the opinion, after consideration of the following:
- the wife’s expenses of $633 per week;
- the limited assistance the wife gets from Mr P;
- the capacity of the wife for some paid employment when the litigation is finished; and
- the husband’s capacity to contribute to the maintenance of the wife,
- that the husband should pay $200 per week towards the maintenance of the wife.
248. I have to disregard any social security received by the wife when determining her capacity to contribute to her reasonable needs. I am however satisfied that the wife is able to meet the shortfall of $383 with some assistance from Mr P and or her capacity for some paid employment. The situation may have to be reviewed when the wife’s circumstances improve and she is able to increase her paid employment.
Order 7
7. That the husband pay to the wife as and from the date of these orders spousal maintenance in the sum of $200.00 per week, the first payment to be made within 28 days of the date of these orders and thereafter weekly in advance.
Order 7 referred to above, being the subject spousal maintenance order was on the husband’s application made on 6 February 2004 in the Family Court of Australia suspended by Judicial Registrar Johnston as and from 22 March 2003, with an order that the husband inform the wife in writing within 7 days of becoming aware that he will be commencing paid employment. The reasons of Judicial Registrar Johnston are not before the Court at this time. No doubt the learned Judicial Registrar was satisfied that the wife continued to be in need of maintenance but was of the view that the husband who was no longer a [occupation omitted] and not in employment was incapable of paying the maintenance sum so ordered.
The following documents were tendered as exhibits in the proceedings:
Exhibit No
Document
Date
Tendered by
1
[Omitted] Pharmacy Patient History for Applicant from 1/1/05 to 8/12/09
8/12/09
Wife
2
GP Care Plan from Dr F to the applicant, signed by the applicant on 25/02/08 & Dr F on 23/01/08
23/1/08
Wife
3
Australian Government Department of Health and Ageing, Enhanced Primary Care Program Referral form for allied health service under Medicare, completed by Dr F on behalf of the applicant
25/2/08
Wife
4
[Mr H] Diary Record
10/8/02
Wife
5
Australian Taxation Office Notice of assessment for the husband for the year ending 30/06/01
24/06/02
Wife
6
Australian Taxation Office Notice of assessment for the husband for the year ending 30/06/06
2/04/07
Wife
7
Ms W & Mr Watson Family Trust Balance sheet as at 30/06/08: ‘shares in other companies’
Wife
8
Ms W & Mr Watson Family Trust Balance sheet as at 30/06/08: ‘gifts to trust’
Wife
9
Ms W & Mr Watson Family Trust Balance sheet: ‘investment funds’
Wife
10
Trust Tax Return 2008 (Summary) for Ms W & Mr Watson Family Trust
Wife
11
Raboplus Savings Account Statement for Ms W & Mr Watson Family Trust, for the period 25/03/08 to 30/12/09
10/05/10
Wife
12
Entirety of NAB Business Cheque account for “[O] Group Pty Ltd as trustee for the Ms W & Mr Watson Family Trust”, for the period 31/05/08 to 30/06/08
Wife
13
NAB National Flexidirect Account Balance Statement for Account number [4], for the period 1/08/07 – 31/08/07
Wife
14
NAB National Flexidirect Account Balance Statement for Account number [4], for the period 1/03/06 – 31/03/06
Wife
A
Letter from the applicant to her mother
Undated
Husband
B
Page of Minute Book from [O] Group Pty Ltd
Husband
B1
Deed of settlement of the Ms W & Mr Watson Family Trust
Husband
C
Tax Invoice/Receipts for Dental Care from [W] Dental Care
20/2/08, 7/03/08 & 1/12/08
Husband
D
Tax Invoice/Receipt for [W] Dental Care
19/08/09
Husband
E
[C] Sleep Laboratory report for the husband
October 2009
Husband
F
Income Tax Return for the husband for the period 1/07/08 to 30/06/09
Husband
G
4 receipts for teeth from [W] Dental Care & [C] Dental Care, totalling $1272.00
Husband
H
2 receipts for Dentures from [D] Denture Clinics, dated 7/03/08 and 9/04/10
7/03/08 & 9/04/10
Husband
J
Receipt for Diagnostic Hearing Assessment from [B] Hearing Centre, dated 1/03/10
1/03/10
Husband
K
Two invoices from [C] Chemist
Husband
L
[R] Super Member Account Summary for the husband for the period December 2009
Husband
History of the proceedings
On 5 December 2007, the matter was listed for a 2 day hearing on 11 & 12 August 2008. At that time, the wife was represented by Mr Cohen, solicitor of David H Cohen & Co.
On 11 August 2008, the matter was adjourned to 11 & 12 March 2009 for final hearing. Ms Gillies appeared for the wife. The husband was directed to provide to the wife’s legal representatives certain financial documents and the wife was given leave to forward to the husband a request for answers to specific questions. The parties’ costs were reserved. The matter was then afforded priority for the hearing on 11 & 12 March 2009.
On 11 March 2009, the hearing dates were vacated. The matter was stood over for mention on 27 May 2009 and the Court noted certain matters that related to the issue of a subpoena addressed to the proper officer of the Ms W & Mr Watson Family Trust, a copy of which the husband stated that he would provide to his wife, Ms W. Further, that the husband had provided to the wife bank statements from April to August 2008 and that there were no outstanding documents to be provided by him.
On 27 May 2009, the matter was again listed for final hearing on 9 & 10 December 2009 with priority. The hearing proceeded on those days with Ms Conte-Mills of Counsel representing the wife and the husband being self-represented.
On the second day of the hearing, at approximately 2.45pm, Ms Conte-Mills was cross-examining the husband with respect to a transaction that occurred on one of his accounts in 2003. The husband became very anxious and upset and stormed out of Court. Subsequently at 3.15pm when the Court resumed he apologised to the Court and his apology was accepted. The Court noted that as a self-represented litigant he had no doubt felt some frustration with the Court process but that his annoyance and anger directed at Ms Conte-Mills was inappropriate given that she, as Counsel, was acting in accordance with her retainer to put her client’s case before the Court and was seeking to test the veracity of his asserted positions.
An adjournment of the proceedings was then necessitated by an earlier call made by Ms Conte-Mills for documents evidencing the receipt of the husband’s redeemed superannuation monies. Given the husband’s clear concession that the receipt of such monies impacted on his asserted financial position and that he thought he had brought those documents to the Court, it became apparent that an adjournment was necessary given that there was no way that the documents could, otherwise, be forwarded to the Court during the course of the hearing. As an adjournment was necessary, the Court also granted Ms Conte-Mills application for the issuance of a subpoena addressed to the husband’s current wife, Ms W to give evidence on the resumed hearing in particular in relation to the Ms W & Mr Watson Family Trust. Given the state of preparation of the wife’s case, the Court only granted that leave, as an adjournment was otherwise to be given, in any event.
On the resumed hearing on 21 May 2010, Ms Conte-Mills of Counsel continued to appear for the wife and the husband was again self-represented.
The wife had caused the subpoena to be issued to Ms W who was the sole director and shareholder of a company known as “[O] Group Pty Ltd” being the trustee of the Ms W & Mr Watson Family Trust. The subpoena had not been personally served on Ms W, however she attended in Court and gave evidence. She was, with leave, cross-examined by both the wife and the husband.
Background facts
The wife was born [in] 1954 and at the time of hearing was 55 years of age.
The husband was born [in] 1953 and at the time of hearing was
57 years of age.
The parties were married [in] 1976.
The parties had competing positions as to their separation date. The husband asserted the date was 4 March 1993 and the wife asserted
15 September 1992. The separation date was found by His Honour Justice O’Ryan to be 15 September 1992 as set out in paragraph 134 of his reasons for judgment dated 24 December 2001. The parties divorced on 20 January 1999.
There are no children of the marriage under the age of 18 years.
The wife’s mother is now deceased.
The husband’s mother who is 86 years of age is currently hospitalised.
The husband remarried and his current wife is Ms W.
The law
The Court must consider the spousal maintenance claim in accordance with the assessment process identified by the Full Court of the Family Court of Australia in Bevan & Bevan (1995) FLC 92-600;
19 Fam LR 35 which requires a threshold finding under s.72 of the Family Law Act 1975 (“the Act”), a consideration of the factors in ss.74 and 75(2) of the Act, without the application of a fettering principle that any pre-separation standard of living must automatically be awarded where the respondent’s means permit and finally, subject to the Court’s general discretion, to be exercised in accordance with provisions of s.74 of the Act with “reasonableness in the circumstances” as the guiding principle.The threshold requirement is set out in s.72 of the Act provides that 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, [emphasis added] that other party is unable to support himself or herself 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 s.75(2).
Goldstein J in Evans & Evans (1978) FLC 90-435 noted that:
Section 72, for all that it is a threshold provision in the maintenance Part must not be read alone and it must firstly be read in the light of sec. 74. Section 72 cannot restrict the Court's duty to make such order “as it thinks proper”.
Further, Mullane J in N & N (1997) FLC 92-782 stated that:
[T]the interpretation of the expression "unable to support herself or himself adequately" is subject to the words "having regard to any relevant matter referred to in subsection 75(2)".
Consideration of sections 74 and 75(2)
Section 74(1) of the Act provides that:
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.
Section 75(1) of the Act provides that:
In exercising jurisdiction under section 74, the Court shall take into account only the matters referred to in subsection (2).
The matters to be so taken into account under s.75(2) of the Act are as follows:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l) the need to protect a party who wishes to continue that party's role as a parent;
(m) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties; and
(q) the terms of any Part VIIAB financial agreement that is binding on a party to the marriage.
The Full Court in Bevan & Bevan (1995) FLC 92-600 held that, while the Court should pay proper regard to the factors set out in s.75(2) of the Act, an award of maintenance should not be at a subsistence level.
Importantly, ss.75(3) of the Act provides that when a Court exercises jurisdiction under s.74, the Court
Shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit”.
Evidence
The husband cross-examined the wife. He, however, accepted generally that the wife had “some demonstrated need”.
A substantial amount of the evidence before the Court concerned various of the husband’s bank statements and the like. Ms Conte-Mills stated that the wife’s application had been brought on the basis that she believed that the husband was in receipt of income which would have enabled him to pay the spousal maintenance order originally made by Justice O’Ryan but suspended by Judicial Registrar Johnston.
Further, the wife’s application was brought in circumstances where she was aware that the husband seemed to be living on a country property known as the “[F]” which was owned by the husband’s mother and operated by the husband’s brother, although the wife says that the husband, himself, had been working on that property.
The wife’s evidence in support of her application related to various deposits made by the husband of some $16,432.42 to his National Australia Bank Account [6] by a cash and/or cheque deposit made in April 2003 of $11,174.36, $2,208.06 on 13 May 2003; $1,500.00 on 26 May 2003; $1,000.00 on 9 June 2003; $550.00 on 19 June 2003 and 16cents on 30 June 2003. The husband explained the $11,174.36 deposit was a tax refund from the Australian Taxation Office.
The wife annexes to her affidavit a copy of an article from the [newspaper omitted dated [omitted] 2007 (Annexure C) where the husband’s mother is reported to have said that the husband and his brother are managing the“[F]”.
The wife also refers to a statement provided by the husband to the effect that he thanked his brother and his mother for a leave pass from the “[F]”.
The wife in paragraph 26 of her affidavit filed 23 August 2007 refers to the husband’s financial statement sworn 11 August 2003 filed in proceedings in the Family Court of Australia (a copy of which has not been put before this Court) wherein it was asserted that he received $2.00 per week income and under liabilities referred to a payment of $1,160.00 per week for a property at Property A, ACT (“the Property A property”). This property it would appear was then owned by the husband’s current wife, Ms W.
The wife gave a history of her medical problems after experiencing a fall in about 2004 wherein, she says she further damaged her back. The wife gave evidence that she suffers from irregular heartbeat, high blood pressure, epilepsy, asthma and emphysema. She gave evidence of a further fall in December 2009. She takes a range of prescribed drugs. Many of these drugs are on the Pharmaceutical Benefits Scheme (PBS) which provides that the wife pay for certain drugs up to a certain monetary amount for each drug on the list and, thereafter, those drugs are provided at “nil” cost for that calendar year.
Apart from the wife’s asserted spinal injuries and pain in her legs and lower back, she says she is also allergic to various food items, has indigestion problems, cholesterol problems and requires a low fat diet. Notwithstanding all of that, the wife conceded that she continued to smoke as she asserted that her doctor had agreed that the stress of the current litigation meant that she need not start a stop smoking program until January 2010.
The wife’s financial statement filed on 23 August 2007 reveals that she is on a disability support pension receiving $265.45 per week and receives various government assistance payments in relation to medical and medication of some $84.70 per week and rent assistance of $228.25 per week. She stated that she paid income tax of $253.00 per week but declared that to be an error in the statement. She pays $63.00 per week towards her rent. Her only other expenditure on her financial statement was $8.00 for motor vehicle registration and $19.00 per week for a Centrelink advance payment loan. She did not declare her weekly expenses, apart from itemising those in paragraph 60, which she said totalled some $909.15 per week. Her only assets then were a Jaguar motor vehicle and household contents, she had no superannuation. Her expenses claimed, seemed somewhat inflated in the areas of telephone $30.00 per week, medical, dental, optical and chemist totalling some $446.00 per week.
The wife’s updated financial statement filed on 11 November 2009 disclosed an income of $328.70 per week again made up of a disability support pension of $277.00 and disability pension allowance of $50.77. She received further allowances from the Government by way of rent $275.00 per week, medication $61.00 per week, registration of car $350.00 and housekeeping $34.00. She continued to pay a sum of approximately $70.00 per week towards her rent. In this statement she particularised her expenditure as $370.00 per week which appeared to be a much more reasonable figure than that previously asserted. She had sold the Jaguar motor vehicle purchasing a Toyota 1993 model for $3,000.00 together with a television of $200.00 and her household contents were estimated at $500.00. She had no superannuation and had a Centrelink loan (which had been paid off in October 2009). She had $2.00 in her Westpac Bank Account
The wife’s evidence was that she has 2 dogs. She has had other dogs, but has not, since the parties were together, sold any dogs for reward.
The wife gives a detailed history of her relationship with the husband from their marriage in 1976 to their separation. There is no dispute that the husband was employed at some time, in some capacity with his brother as a joint manager of “[F]” and that the parties lived on the property.
The wife sets out her employment history from about 1981 up until 1983. In cross-examination, she admitted that she had also, in addition to the employment history set out in her affidavit, which was not disputed by the husband, operated a [business] in Wollongong with other family members between 1996 and 2000. The wife’s evidence being that because of her illness and the [business] not making sufficient money she and her business partners had been locked out of the lease and lost the business.
The property and spousal maintenance proceedings which came before His Honour Justice O’Ryan were concluded in his decision dated
24 December 2001.
At the time of that decision, the husband was a [occupation omitted] in receipt of an income of some $3,172.00 per week together with expenses of $121.00 per week. The husband, at that time, was a member of the [P] Superannuation Fund and had an entitlement as at the date of the hearing to the value of some $29,000.00. He also had a [F] Super Policy with an estimated value of $9,000.00 and a [M] Super Policy with a value of $6,926.34.
The effect of Justice O’Ryan’s orders were that the wife was to receive an entitlement of 55% of the parties’ net property equating to $83,281.55. The husband was to receive an entitlement of 45% with a value of $68,139.45. His Honour, however, also made the subject spousal maintenance order referred to above.
All of the matters deposed to by the wife in her affidavit of 11 November 2009 in paragraphs 3-20 and 24-44 were either before Justice O’Ryan and/or before Judicial Registrar Johnston at the time of their relevant decisions, or were capable of being put before them at such times.
The wife asserted that the husband had failed to disclose his superannuation policy with [M]. However, Ms Conte-Mills conceded that the policy referred to by the wife had been disclosed to Justice O’Ryan as it was referred to in his decision.
Nevertheless, the Court is of the view that the wife has established that as a result of her disabilities, the need for ongoing medical treatment and the expenses associated with that, that she is still in financial need and is unable to maintain herself out of her own income, property and resources. The Court accepts that the wife does not have good prospects of obtaining gainful employment and would, otherwise, require maintenance in the sum of $350.00 per week (the Court does not accept that the sum of $500.00 would be reasonably required as asserted by the wife), given that the Court must disregard any entitlement to an income tested pension, allowance or benefit under the legislation.
The Court does not accept the husband’s assertions which are not backed up by any evidence that the wife has undisclosed property or any ability to earn an income from her previous dog breeding pursuits or otherwise.
The next issue before the Court then is whether the husband has the capacity to pay such spousal maintenance and if not, how much he could pay. The onus is on the wife to show that he has that capacity.
The husband led evidence from his adopted son, Mr W, the son of the wife from a previous marriage. The evidence of Mr W was to the effect that he was sure the husband was not in receipt of any remunerative employment and, further, that the husband had suffered stress and anxiety from the current litigation and that this had impacted on the husband’s relationship with Ms W.
Mr W was cross-examined by Ms Conte-Mills. The Court accepts the evidence of Mr W that, to his knowledge, the husband has been entirely dependant upon the financial support of his current wife, Ms W, and is not in remunerative employment.
The husband was cross-examined by Ms Conte-Mills. That cross-examination went to the nature and undertaking of “[F]”. The husband’s evidence was unshaken and to the effect that he had given up any managerial role in 1998 when he went into [occupation omitted] and that after he [left said occupation] and returned to the said property he was to a large extent excluded by his brother, [name omitted], from any further management role. He receives no income from the said property which is still owned by his 86 year old mother and which on the husband’s evidence is run solely by his brother who, he understood, held his mother’s power of attorney for that purpose. The husband lives there rent free and occasionally assists in the maintenance and operation of the property, for example, by maintaining his current residence using the property’s equipment, to mow the lawn and [omitted]. The husband’s evidence was that he transferred any interest in the property to his brother. Most of the material put to the husband was “old” material relating to a period when the husband did take an active role in the property. The husband’s current wife, Ms W, appears to have a small [omitted] business operating by agreement with the husband’s mother. The husband still has an understanding of the general nature of the property’s operations which it would appear include [omitted]. His knowledge has been gained from living on the property and was recorded in the diary note prepared by a Mr H (being Exhibit “4”).
The Court accepts that the husband last received income from [F] in late 1998 and 1999. The Court accepts that he receives the benefit of being able to live on the property rent free.
The husband, however, is a specified beneficiary of the Ms W &
Mr Watson Family Trust. The trustee of that trust is, as said, [O] Group Pty Ltd and the husband’s current wife, Ms W, is that company’s sole director and shareholder.
The issue of the family trust relates to alleged payments to the husband which the wife sought to argue gave him the capacity to pay her spousal maintenance. The trust it would appear was set up, with legal advice to protect Ms W’s assets at or about the time of her commencing a relationship with the husband. The Property A property which was in Ms W’s sole name was sold in May 2006 and gave rise to the sum of for $397,200.15 (being the partial sale funds), which was then paid into a joint account in the name of the husband and Ms W. The husband was surprised by this, however these funds together with other joint funds were then transferred to accounts under Ms W’s control only. Ms W’s evidence was that those funds were entirely hers and should not have been placed into a joint account. The Court accepts that the assets of the trust which now largely include shares and funds on investment have arisen entirely from the property of Ms W.
The evidence is that the husband has only ever had one distribution from that trust of some $8,000.00 in about 6 August 2007. The husband says that this sum was treated by the Australian Tax Office (“ATO”) as both capital and income and that he paid tax on it of some $5,000.00.
The husband’s evidence was that Ms W had paid some $14,000.00 for a holiday with him to the Seychelles in May 2008. She also regularly deposited $500.00 sums into his account for him to meet his daily expenses.
The wife says that the husband’s tax returns show that he discloses his occupation as [omitted]. The husband disputed this and the matter was left for the production, by the wife, prior to the resumed hearing, of codes from the ATO which would indicate what that office classified the husband’s occupation as. This was never produced.
The only other receipt of monies by the husband appears to have come from two sources. The first, is Ms W who has gifted and provided him with monies for him to live on. The second, is the redemption of [P] superannuation monies which the husband said he received in April 2009 of some $181,579.00 of which $37,465.00 was tax free and $144,114.00 was potentially taxable. The husband said in recent discussions with the ATO, an assessment which had issued in the “amended” sum of $29,846.00 was to be reduced to “nil” as a result of his payment of $300.00, given that he was in excess of 55 years of age when the redemption occurred. The husband had used some $14,000.00 to pay off debt, provided Ms W with some $30,000.00 to repay monies advanced by her to him of approximately $5,000.00 per annum over 6 years. The husband says that $90,000.00 of the $181,579.00 received was also paid to Ms W pursuant to an agreement between them as a result of her giving up her employment as a [omitted] and her contributions towards his [omitted] career.
When the husband first gave his evidence he was uncertain as to what had happened to the disbursal of the superannuation monies. He originally asserted that those monies received by him from his superannuation had been paid into a joint account with Ms W, but that she had taken considerable funds of that as she felt because she had given up work and made a contribution to his career, she was entitled to that by way of a financial arrangement and settlement. The husband asserted that he and Ms W were at the time experiencing marital difficulties and were living together on and off and refers to them having “voluntarily separated in May 2009”.
The husband’s financial statement filed 2 November 2009 caused some difficulties as it disclosed his only income to be $3.00 per week from interest and dividends (from about 165 IAG shares). He, however, also included the sum of $3,491.00 per week which, on his evidence, he explained as an error, in that he had divided his receipt of his superannuation monies by 52 weeks in order to get a weekly figure for that lump sum receipt. The husband conceded that this did not truly reflect his weekly income going forward. He has personal expenditure of $480.00 per week. He has a life cover with [M] of $45,065.00, a Mitsubishi Magna worth $1,000.00 and a trailer worth $500.00. He has household contents of $20,000.00, books, firearm, tools, clothes and art of $10,000.00. He has superannuation remaining of $21,819.00 made up of $8,020.00 with [M] and $13,799.00 with [R] Super. He has a credit card debt of $347.00 and a liability (currently not quantified) to the ATO in respect of the redemption of superannuation monies in April 2009, although his evidence was to the effect, that subject to formal confirmation from the ATO, he believed he had no such liability.
The husband’s expenses totalled some $433.00 per week. The husband discloses some $30.00 per week medical, some $10.00 chemist/pharmaceutical. He tendered a number of accounts totalling some $4,571.00 in a period from March 2008 to May 2010 relating to his dental problems, hearing problems and issues arising out of sleep apnea. None of these expenditure items as set out in the financial statement or in the exhibited accounts appeared unreasonable. The husband appears to survive by drawing up on his credit card debt with National Australia Bank Limited (“NAB”) and then repaying the same from funds received from his superannuation moneys, the sale of some shares or from Ms W.
The husband says that he then expended further monies on living expenses and at present there is approximately a balance of some $16,000.00 held by him and his current wife in their joint Commonwealth Bank account.
The wife put to the husband that he had also received some $3,600.00 in August 2007. The husband could not recall this figure but said that, if he had received it, it was a payment from his wife and not any distribution from the trust.
The husband provided a minute dated 10 April 2009, signed by the Ms W, which recorded his removal as a beneficiary of the trust.
The trust document being Exhibit “B1” provides that there can be no variation to the Trust Deed other than by written deed.
Ms Conte-Mills submitted that the minute referred to in paragraph 71 had no legal effect given that there had been no variation to the Trust Deed, as formally contemplated. The Court accepts this submission. However, the effect of the minute is indicative that Ms W, as the mind of the Trustee, [O] Group Pty Ltd, given her clear evidence in the witness box, is unlikely to exercise any future discretion, in favour of the husband, even if he was still a beneficiary.
Ms W’s evidence was that she had provided monies to Mr Watson in effect to reimburse for his living expenses. There was no evidence that she had made any other substantial payments on his behalf. The Court is satisfied that it is unlikely given the history of the Trust and Ms W’s evidence that the husband would receive anything other than small amounts to provide for his ongoing living requirements.
The husband’s financial statement filed 2 November 2009 reveals only $3.00 per week received from interest and dividends
Ms W who gave her evidence on 21 May 2010 was a thoughtful and highly impressive witness.
Ms W had a clear understanding of the nature of the Ms W & Mr Watson Family Trust which had been set up after she had received legal advice. It is understandable given that the major assets of the Trustee company consisted of the sale proceeds of her own property, the Property A property, which had been sold in March 2006 for $593,000.00 and which after payment of a mortgage on title provided her with a balance of some $500,000.00. The settlement proceeds apparently were paid in 3 instalment sums of $397,000.00; $100,000.00 and $3,000.00.
Ms W’s operation of her [omitted] business appears to be a long term project with little current financial returns to her.
The Trustee of the Ms W & Mr Watson Family Trust being [O] Group Pty Ltd, held 3 banking accounts being a cheque account with NAB, a savings account with NAB and a further savings account with RABO Bank. Ms W used the cheque account to buy and sell shares on behalf of the Trustee company and the dividends from those shares and the sale proceeds were paid initially into the NAB savings account, then transferred to the NAB cheque account and paid into the savings account with RABO Bank to obtain a better interest rate from time to time.
There seemed to be some confusion as to the income derived by the Trustee company over the years. That confusion arose by virtue of some of the financial documents showing share sales in the balance sheet as a profit. In effect, the assets of the company consisted of funds and shares in other companies. The Trust returns indicate that whilst the company is described as being involved in primary production being its main business activity, (contrary to Ms W’s evidence) it appeared that it earned only $1.00 for the year ended 30 June 2008 from such an income, but had expenses of some $3,919.00 from that business. The companies non-primary income consisted of distributions from trusts of $5,605.00 and gross interest $2,718.00 and dividends of $1,396.00 totalling $9,719.00 which less the loss from the primary production of $3,919.00 totalled $5,800.00 and which after allowable deductions of $6,957.00 left a “loss” of $1,157.00. The company had capital gains of $6,806.00 and other assessable foreign source income of $1,401.00, leaving a total net income for the company of $7,050.00, for the year ended 30 June 2008.
Ms W gave evidence that she had utilised the said Trust to provide funds to her children, the husband’s children and the husband. However, as the Trust is an entirely discretionary trust, it would appear that the husband has only been able to survive and to meet his ongoing living requirements by virtue of the generosity of Ms W, either causing the Trustee company to exercise a discretion in his favour or by paying his liabilities.
The wife has issued a large number of subpoenas to various financial institutions. Having access to the documents produced, Ms Conte-Mills conceded that the only basis upon which it could be said that the husband had any capacity to meet a spousal maintenance order was by virtue of the Ms W & Mr Watson Family Trust.
The Court accepts that the husband has no other asset or income source and has not been in remunerative employment and is unlikely to enter into such employment.
The Court accepts that this is not the case of a husband hiding behind a trust or where matrimonial assets have been removed into a Trust. This is a situation where the husband’s new wife, Ms W, has created a Trust to protect her own asset position from that of the husband and anyone claiming on him or through him.
The Court is not satisfied on the evidence before it that the husband either has the income or the assets out of which he could reasonably meet any spousal maintenance order made and it would not be proper to expose him to such an order, where the only way it could be met would be from the exercise of Ms W’s generosity.
As the husband records, the parties have been separated some 17 years and were divorced some 11 years ago and the property proceedings between them were concluded some 8 years ago. The husband says that there have been over 50 court appearances in various proceedings since 1999 and this evidence was not challenged. He says that he has had to travel from Canberra to Sydney for many of those Court appearances and with adjournments and procedural matters, he has been “worn out” by the protracted litigation. He further says that the proceedings have taken a toll on himself and Ms W and, indeed, Ms W gave like evidence.
Accordingly, the Court is of the view that in the circumstances of this case, the wife’s application should be dismissed. The husband makes a claim for costs. In light of him being self-represented, the Court simply notes that in O & G [2003] FMCAfam 192 Raphael FM said “It is settled law that an unrepresented litigant is not entitled to costs see Cachia v Hanes (1994) 179 CLR 463 and this applies even if the self represented litigant is in fact a legal practitioner see Dobree v Hoffman (1996) 18 WAR 36.
However, if any costs application is to be made, an appropriate application must be forwarded to my chambers within 28 days of today’s date and the Court will deal with that matter by way of written submissions, unless the parties wish to be heard orally. If no such application is made within that time period, there will be no order as to costs.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of Kemp FM
Date: 4 June 2010
0
3
1