Poulos and Poulos

[2016] FamCA 800

FAMILY COURT OF AUSTRALIA

POULOS & POULOS [2016] FamCA 800

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the wife seeks periodic spousal maintenance for rent and living expenses – Where the husband concedes that the wife is unable to support herself adequately for the purposes of section 72 – Extent to which the wife is unable to support herself – Reasonable needs of the wife – Where the wife is to vacate the former matrimonial home – Whether it is reasonable for the wife to seek pet-friendly rental accommodation – Extent of the capacity of the husband to meet such an order – Where the husband is able to drawn down on capital – Consideration of section 75(2) factors – Orders made as sought by the wife.

Family Law Act 1975 (Cth) ss 72, 75(2)

Drysdale & Drysdale [2011] FamCAFC 85
Hall & Hall (2016) 332 ALR 1
Maroney & Maroney [2009] FamCAFC 45

APPLICANT: Ms Poulos

RESPONDENT: Mr Poulos

FILE NUMBER: SYC 4886 of 2016

DATE DELIVERED: 21 September 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: McClelland J

HEARING DATE: 12 September 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kearney SC

SOLICITOR FOR THE APPLICANT: Dimocks Family Lawyers

COUNSEL FOR THE RESPONDENT: Ms Giocomo

SOLICITOR FOR THE RESPONDENT: D R Farrell & Co

Orders

The Court orders by consent and pending further order that:

1. The husband shall:

   (a)Pay all amounts and do all things necessary to ensure that the current health insurance policy in respect of the wife is continued and that any and all payments made pursuant to that policy in respect of expenditure by the wife are paid to her forthwith upon receipt by the husband;

   (b)Meet as and when the same fall due, all registration expenses, compulsory third party insurance and comprehensive insurance premiums in respect of the German motor vehicle registration number … (“the wife’s car”);

   (c)Do all things necessary to ensure that the wife has sole and unrestricted use of the wife’s car.

2. By way of partial property settlement, the husband shall forthwith do all things and sign all documents necessary to pay to the wife the sum of $250 000 and pending such payment the husband shall be and hereby is restrained from operating upon the St George Offset account in his name save and for the purpose of effecting such payment.

3. Within seven (7) days of the wife notifying the husband that she has identified rental premises into which she intends to move, the husband shall retain and pay the costs of removalists (and associated insurance) for the purpose of moving her belongings from the Northern Queensland Suburb B property and upon the wife vacating the Suburb C property, the husband shall have exclusive occupation of the same pending further order.

4. Upon the wife securing rental accommodation:

   (a)       The wife shall be entitled to remove from the Suburb C property:

   (i)Her personal effects;

   (ii)Her computer;

   (iii)The drafting desk and chair, treadmill, brass rubbing, two ottomans, two pot plants from the side of the house; and

   (iv)The contents of the terrace off her bedroom (pot plants and furniture).

   (b)The wife be entitled to remove from the Suburb B property such items as she requires to furnish her new premises provided the wife shall simultaneously provide to the husband a list of the items removed

   and the issue as to the parties’ ultimate entitlements to the contents of the Suburb C and Suburb B properties be reserved to trial.

5. Pending further order, the husband shall meet as and when the same fall due all expenses in relation to each of the properties known as and situate at:

   (a)       Suburb C Road, Suburb C; and

   (b)       D Street, Suburb B (also known as Property A);

   including but not limited to all mortgage repayments, statutory rates and charges, land tax, utilities and insurances (with the husband to maintain at all times home and building insurance), and the husband shall indemnify the wife and keep her indemnified in respect of the same.

The Court orders pending further order that:

1. The husband shall pay to the wife by way of spousal maintenance, the sum of $2000 per week, with the first payment to be made by close of business on 23 September 2016 and weekly thereafter.

2. Within seven (7) days of the wife notifying the husband that she has identified rental premises into which she intends to move, and providing the husband with details of the rental bond she is required to pay for that rental accommodation, the husband is to pay to the wife a lump sum payment of not more than $4980 in respect to that rental bond.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Poulos & Poulos has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4886  of 2016

Ms Poulos

Applicant

And

Mr Poulos

Respondent

REASONS FOR JUDGMENT

Introduction

1. This matter concerns an application for interim spousal maintenance by the wife. It is made in the context where the parties have adopted a sophisticated and substantially cooperative approach to dealing with their post separation finances. That co-operation is reflected in a number of orders that have been made by consent and which will be referred to later in these Reasons.

2. The husband acknowledges that it is appropriate for the wife to be paid spousal maintenance. The issue in dispute concerns appropriate accommodation for the wife in circumstances where the parties are in agreement that the husband shall remain in the former matrimonial home with the parties’ sixteen year old daughter. The main issue in that respect is whether it is reasonable for the wife to want to rent pet-friendly accommodation so that she can take her pet dog with her.

Background

1. The husband is currently 56 years of age and the wife is currently 48 years of age. They commenced cohabitation in January 1995 and were married in 1999. The parties separated on 17 January 2016 but remained residing under the same roof in their former matrimonial home at Suburb C.

2. The parties have made a joint decision that it is appropriate for the wife to find alternative accommodation and they agree that the husband and the parties’ daughter, E, who is currently aged sixteen years old, should remain living in the former matrimonial home with the husband.

3. The husband is self-employed in the media and earns a comfortable income by community standards. The wife, who unfortunately suffers from a number of health issues, is unemployed. The parties agree that the net assets of the matrimonial property pool range between approximately $5 333 000 and $5 680 000.

The Law

1. In the recent case of Hall & Hall (2016) 332 ALR 1, the High Court set out the appropriate approach in considering an application for interim spousal maintenance as follows:

   3. … The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1).  That sub-section 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, that other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)".

   4. The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1).  That sub-section provides that, "[i]n 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". 

   5. A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as "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". They also include, by virtue of s 75(2)(o), "any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account".

   …

   8. Unlike a court exercising the power to make an urgent order conferred by s 77, a court exercising the power to make an interim order under s 74(1) must be satisfied of the threshold requirement in s 72(1) and must have regard to any matter referred to in s 75(2) that is relevant. No doubt, on an application for an interim order "[t]he evidence need not be so extensive and the findings not so precise" as on an application for a final order. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth). A court determining an application for an interim order under s 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it, that the threshold requirement in s 72(1) is met having regard to any relevant matter referred to in s 75(2).

   (Footnotes omitted)

2. In this case, the husband concedes that the gateway requirement referred to by the High Court in Hall & Hall (supra) is satisfied. That is, as result of her health issues, the wife is unable to support herself adequately as contemplated by s 72(1)(b) of the Family Law Act 1975 (Cth) (“the Act”).

3. The issues for determination therefore are:

   (i).To what extent is the wife unable to support herself?

   (ii).What are the wife’s reasonable needs?

   (iii).What capacity does the husband have to meet a spousal maintenance order, if such an order were made?

   (iv).If (i) to (iii) favour an order for spousal maintenance being made, what order is reasonable having regard to s 75(2) of the Act?

To what extent is the wife unable to support herself?

1. The wife’s Financial Statement filed 4 August 2016 set out her total average weekly income as $432 per week, which is the child support payment that she receives from the husband in respect to the parties’ daughter.

2. The Financial Statement notes that the wife makes credit card repayments of approximately $37 per week. The wife incurs weekly living expenses, as set out in Part N of her Financial Statement, in the sum of $755 per week.

3. As noted, the parties agree that the wife will move out of the former matrimonial home. The wife has expressed the desire to move into a rented terrace, villa or house in the same area as the former matrimonial home, being either in the Eastern suburbs or Suburb C area.

4. At paragraph 90 of her affidavit filed 4 August 2016 the wife says:

   For more than 10 years I have cared for my dog “…” and therefore propose moving into dog-friendly accommodation with [the dog]. From enquiries that I have made, the rental of suitable two-bedroom property in this area, with off street parking, will amount to $1,500 per week.

5. In her Case Outline document and in oral submissions made on her behalf, however, the wife indicated to the Court that she required spousal maintenance in the sum of $2000 per week in order to meet her weekly living expenses of $755 per week and rental expenses of $1245 per week.

6. At paragraph 91 of her affidavit, the wife indicates that, in addition to weekly rent,  she estimates that she will require approximately $10 000 in order to pay a one month rental bond and to pay removalist costs.

7. The husband accepts that the weekly expenses set out in Part N of the wife’s Financial Statement are reasonable. However, it was submitted that a one-bedroom unit in the Suburb C area for approximately $600 to $700 per week would meet the reasonable accommodation needs of the wife pending final hearing or settlement of the proceedings.

8. In that respect, at paragraph 88 of his affidavit filed 8 September 2016, the husband refers to printouts of appropriate apartments for rent from the website “real estate.com.au”

9. Based on the submissions of counsel for each of the parties, the wife’s reasonable needs appear to be somewhere between $1355 per week and $2000 per week.

Capacity of the husband to pay spousal maintenance

1. The husband asserts that, despite his weekly expenses exceeding his weekly income, he is nonetheless prepared to pay spousal maintenance to the wife in the sum of $1455 per week.

2. At Part D of his Financial Statement the husband states that his weekly income is $10 578 per week. However, in her Financial Statement, the wife asserts that the husband’s weekly income is $14 130 per week. For reasons which will be discussed below, it is unnecessary for the Court to resolve this factual dispute in these interim proceedings.

3. The husband’s Financial Statement indicates that his total personal expenditure, which included meeting the mortgage and outgoings associated with the former matrimonial home, total approximately $10 000 per week. In addition, the husband states that his average weekly expenses in respect to the parties’ daughter, E, are $1541 per week.

4. The expenses claimed by the husband were not challenged by the wife. However, it was noted as a point of observation, by senior counsel for the wife, that the weekly expenses claimed by the husband in Part N of his Financial Statement totalled $1781 as compared to the wife’s $755. It is to be recognised, however, that the weekly expenses claimed by the husband include items in respect to house repairs, gas, electricity motor vehicle running costs, medical insurance and repairs to furnishings and appliances.

5. Despite the Court’s attention being drawn to this discrepancy between the husband’s weekly expenses and the wife’s weekly expenses, I was not invited to make any findings that the husband’s weekly expenses are excessive or unreasonable.

6. The husband’s Financial Statement also indicates that the husband has approximately $500 000 in a St George offset bank account and other investments totalling approximately $1 185 000. There was a dispute between the parties as to the extent to which the husband is able to call upon his investments for the purpose of paying spousal maintenance and, specifically, the percentage of those investments which are held in cash at bank.

7. I accept, having regard only to the husband’s average weekly income, that the husband may not have the capacity to meet a spousal maintenance order to the wife to the extent of $2000 per week. It is nonetheless appropriate for the Court to have regard to his ability to draw upon capital. In that respect I refer to Maroney & Maroney [2009] FamCAFC 45 where the Full Court said at [56]:

   Once a party …establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.

8. Having regard to both the husband’s income and the funds held in his St George Bank account as well as his investments, I find that the husband has a capacity to pay spousal maintenance to the wife in the sum of $2000 per week. This amount can be satisfied out of the husband’s capital or borrowings against those capital assets.

9. The question becomes then, however, whether it is reasonable for the Court to make an order to that effect having regard only to the matters set out in s 75(2) of the Act.

Section 75(2) factors

1. In terms of s 75(2)(a), I note that the husband is currently 56 years of age and the wife is currently 48. While the husband disputes the extent to which the wife is physically incapacitated by her health conditions, the husband accepts that her current physical ailments do impact upon her capacity to work, such that a payment of spousal maintenance is justified.

2. In terms of s 75(2)(b), I have referred to the parties’ contentions in respect to the average weekly income of the husband and have noted the amount of $500 000 which is held by the husband in the St George offset bank account together with the husband’s investments totalling $1 185 000. As set out above, while the husband disputed the extent to which the wife is incapacitated as a result of her health conditions, he acknowledged that her health issues do impact upon her capacity for appropriate gainful employment such that it warrants a payment of spousal maintenance.

3. I have also had regard to the fact that the parties have reached agreement for there to be an interim property distribution to the wife, pending final hearing, of the sum of $250 000. Given the size of the potential property pool and the direct and indirect contributions made by the parties to the property, I find that such an interim order is just and equitable.

4. The reality is, however, that the wife will be required to meet substantial legal fees and other related expenses and it was not argued by counsel for the husband that the interim property distribution should be used by the wife to meet her weekly expenses.

5. In terms of s 75(2)(c)(d) and (e), I note that it is intended that the parties’ daughter will continue to live with the husband in the former matrimonial home and it was not disputed that as a result that the husband will incur weekly expenses in respect to the parties’ daughter of approximately $1541 per week. I have had regard to the fact that this commitment will impact upon the husband’s capacity to meet an order for spousal maintenance. However, as against that, as I have previously noted, the husband has the capacity to draw upon capital or borrow against capital in order to also meet such an order.

6. In that context I note that these proceedings relate to an order for interim spousal maintenance only, and can be revisited at final hearing. In that context, in Drysdale & Drysdale [2011] FamCAFC 85, Coleman J exercising the appellate jurisdiction of the Full Court said:

   40. It is the nature of an interim spousal maintenance order that, as here, it is made after a circumscribed hearing, in reliance upon evidence which is incomplete and/or unable to be fully tested. Whilst different to urgent spousal maintenance pursuant to s 77 of the Act, orders for interim maintenance are as their title implies. The Court hearing and determining financial proceedings between the parties on a final basis, as clearly will occur in this case in the absence of any intervening settlement, has abundant power to accommodate within its final orders, whether by way of settlement of property or spousal maintenance, any anomalies which full agitation of disputed issues of fact may reveal to have resulted from an earlier interim spousal maintenance order…

7. In terms of s 75(2)(f), the issue of superannuation is more relevant to a considering the parties’ future needs at final hearing. Nevertheless, I note that the draft balance sheet prepared by the parties’ legal representatives indicates that the parties agree that the wife has a superannuation entitlement in the sum of $243 370 and the husband has an entitlement of $459 872.

8. In terms of s 75(2)(g), it is significant that the husband will continue to reside in the former matrimonial home at Suburb C which is a reasonably substantial and comfortable residence located in a desirable area of Sydney. The wife has agreed for the husband to remain in the former matrimonial home, in those circumstances. However, within reason, the wife is entitled to obtain accommodation which allows her to maintain a standard of living which in all the circumstances is reasonable. I will subsequently discuss the issue of suitable accommodation in terms of considering s 75(2)(o).

1. In terms of s 75(2)(h), the wife states that as result of the problems she has with her balance, tightness and muscle pain, she has given up study and has not worked since 1999. There is no suggestion that the wife intends to utilise a payment of spousal maintenance for the purpose of updating her existing skills or developing other skills with a view to returning to the workforce. Further, no amount has been sought by the wife in respect to enrolment or tuition expenses.

2. In terms of s 75(2)(j), at paragraph 30 to 60 of her affidavit, the wife provides quite detailed evidence as to the extent to which she undertook responsibilities as a homemaker and the primary carer of the parties’ daughter. This clearly included some challenging times after the parties’ daughter was diagnosed with anorexia. It is reasonable to assume, in these interim proceedings, that the wife’s contributions as a homemaker and the primary carer of E enabled the husband to pursue his career and in that respect assisted him to concentrate on developing a successful business.

3. In terms of s 75(2)(k), the parties were married for approximately seventeen years and lived together for twenty-one years. At paragraph 29 of her affidavit the wife states that:

   I worked in my business until I was 7 months pregnant with [E] and then stopped in about September, 1999. I recall [the husband] saying to me, “I’m earning good money now, it’s best you care for [E] and I earned the dollars.

4. In these interim proceedings it is neither necessary nor desirable for me to make findings of disputed fact in respect to the arrangements agreed to between the parties for the care of E. It is acknowledged by both parties, however, that the wife has not worked since 1999 and clearly this would present some challenges to the wife in updating her skills with a view to returning to the workforce.

5. In terms of s 75(2)(l), it is to be noted that E will continue to reside with the husband in the former matrimonial home. However, as E is now sixteen years of age there is a relatively short period of time until she becomes an adult. It is reasonable that the wife would want to have suitable accommodation so that E can stay with her if she so desires.

6. Finally, the remaining provision of s 75(2) that I regard of relevance in these proceedings is s 75(2)(o) which requires the Court to have regard to:

   …any fact or circumstance which, in the opinion of the court, the Justice of the case requires to be taken into account.

7. In his report dated 13 May 2016,[1] Dr F, a neurologist and neurophysiologist, reported that:

   Since last review dated 8/03/2016, [the wife] has deteriorated somewhat in terms of fibromyalgia. This is however related to her substantially increase stress related to an increasingly problematic divorce and financial situation.

   [1] Annexure “C” to the wife’s affidavit.

8. Without accepting the veracity of that opinion, it is reasonable to assume that parties, who are before the Court in an attempt to resolve financial matters between them as a result of the breakdown of their relationship, would experience at least some level stress.

9. The husband, in his affidavit, did not challenge the wife’s assertion that for more than ten years she has cared for her dog.

10. In Nahrstedt v Lakeside Village Condominium Assn,[2] Kennard J of the Supreme Court of California, with whom Lucas CJ, Mosk, Baster, George and Werdegar JJ concurred said, in respect to a case involving planning law:

    Those of us who have cats or dogs can attest to their wonderful companionship and affection. Not surprisingly, studies have confirmed this effect. (See, e.g., Waltham Symposium 20, Pets, Benefits and Practice (BVA Publications 1990); Melson, The Benefits of Animals to Our Lives (Fall 1990) People, Animals, Environment, at pp. 15–17.)

    [2] (1994) 878 P.2d 1275 at 368.

11. In these proceedings it is unnecessary to make findings in respect to the academic literature referred to by the Supreme Court of California. Indeed, I note that the parties have not been provided with the opportunity to make submissions in respect to that material or that decision which is from another jurisdiction. Nevertheless, the decision is of some value in considering the reasonableness of the wife’s desire to find pet friendly accommodation.

12. In the circumstances of this matter, it is entirely reasonable that the wife should want to take her dog with her to her new accommodation for companionship. The wife is not in the workforce, she is involved in the stress of a marriage breakdown which has given rise to litigation and she will not have the companionship of the parties’ daughter who will continue to live in the former matrimonial home. In circumstances where the wife is agreeing to the husband continuing to reside in the former matrimonial home, it would be unreasonable to expect her to also break her ten year bond with her pet dog.

13. Having determined that in the circumstances of this case, it is not unreasonable for the wife to be seeking pet-friendly accommodation I note that the only evidence before me as to such accommodation is that referred to in paragraph 91 and Annexure “E” to the wife’s affidavit.

Payment of rental bond

1. It is a necessary aspect of the wife vacating the former matrimonial home to obtain rental accommodation that she will be required to pay a rental bond. It was accepted by the parties that the normal practice is for that the bond to be equivalent to four weeks rental.

Summary and conclusion

1. Accordingly, in the circumstances of this case, where the wife has voluntarily agreed to vacate the former matrimonial home, it is appropriate that she has the capacity to obtain suitable rental accommodation that are enables the parties’ daughter, E, to stay with the wife if she so wished. I also find that it is reasonable for the wife, in the circumstances of this case, to require pet-friendly accommodation.

2. It is also reasonable that the wife should want to live in the same locality as the parties’ former matrimonial home, where the husband and E will continue to reside. The only evidence of the cost of pet-friendly accommodation in one of the areas where the wife wishes to live is that attached as Annexure “E” to the wife’s affidavit. In those circumstances I find that the wife’s application for spousal maintenance in the sum of $2000 per week, which includes the amount of $1245 in respect to rent, is reasonable. I find that the husband has the capacity to pay that amount, and I will therefore make orders for the husband to pay spousal maintenance to the wife in the sum of $2000 per week.

3. Pursuant to s 77A I will also order that, upon the wife providing the husband with details of the rental bond she is required to pay, the husband is to pay to the wife a lump sum payment of not more than $4980 in respect to that rental bond to enable the wife to secure appropriate accommodation.

Supplementary orders

1. Further, as noted, it is a credit to the parties that during the course of proceedings, the parties agreed to a number of orders in respect to the issues that were the subject of the wife’s application. Those orders are reflected in the orders set out at the commencement of these reasons.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 21 September 2016.

Associate: 

Date:  21 September 2016