PRIOR & PRIOR

[2015] FCCA 679

FEDERAL CIRCUIT COURT OF AUSTRALIA

PRIOR & PRIOR [2015] FCCA 679

Catchwords:
FAMILY LAW – Interim proceedings – spouse maintenance.

Legislation:  
Family Law Act 1975 (Cth), ss.72, 74, 75 and 80

Mitchell and Mitchell (1995) FLC 92 – 601
Bevan & Bevan 19 Fam LR 35
Redman & Redman (1987) FLC 91-805

Applicant: MS PRIOR

Respondent: MR PRIOR

File Number: DNC 547 of 2014

Judgment of: Judge Harland

Hearing date: 16 February 2015

Date of Last Submission: 16 February 2015

Delivered at: Darwin

Delivered on: 16 February 2015

REPRESENTATION

Counsel for the Applicant: Ms Farmer

Solicitors for the Applicant: Withnalls Lawyers

Counsel for the Respondent: Ms Bowen

Solicitors for the Respondent: Bowen Lawyers, Barristers & Solicitors

ORDERS

1. That the husband pay to the wife the sum of $500 per week with the first payment to be made on 20 February 2015 with such sum to be paid into the wife’s nominated bank account.

2. The parties and their legal representatives do attend a Conciliation Conference with a Registrar of the Court on 29 April 2015 at 3.30pm.

3. The parties each pay one half of the Conciliation Conference fee in accordance with the Family Law (Fees) Regulation 2012 at least

   
   

   28 days prior to the Conciliation Conference unless otherwise exempted from payment.

4. That within 28 days the parties provide mutual informal discovery of all documents in their respective possession, custody or control.

5. That the parties prepare a Draft Joint Statement of Assets and Liabilities on or before 29 April 2015.

6. That with respect to any asset the value of which is not agreed, the parties obtain a joint written valuation at their joint expense to be available on or before 14 days prior to the Conciliation Conference.

7. That the matter be adjourned to 18 May 2015 at 9.30am for further directions.

8. That pursuant to s.11F of the Family Law Act 1975, the parties and the children X born (omitted) 2002, Y born (omitted) 2004 and Z born (omitted) 2006 do attend a reportable child inclusive family dispute conference with a Family Consultant provided by the Child Dispute Services of the Federal Circuit Court of Australia, Darwin on 9 March 2015 at 9.00am with the parties to telephone the Case Coordinator Children Dispute Services on (omitted) to confirm their attendance.

9. That the wife file and serve answering documents in respect to parenting orders within 14 days of today’s date.

10. That the matter be adjourned to 16 March 2015 at 9.30am for mention and possible interim hearing with respect to parenting issues.

11. That the wife’s costs be reserved.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT DARWIN

DNC 547 of 2014

MS PRIOR

Applicant

And

MR PRIOR

Respondent

REASONS FOR JUDGMENT

1. This is an application for interim maintenance.  If written reasons are requested, I will then incorporate the discussion with the lawyers during the course of their submissions. 

2. The wife seeks periodic maintenance of $650 per week. The husband opposes this saying he has recently been assessed to pay $625 a week in child support. The husband had previously been paying $250 since November 2014. Prior to that the husband paid the wife $1,000 a week for the wife and the children.

3. The husband continues to operate the businesses that the parties operated when they were together. During their relationship, the husband was the primary income earner and the wife was the primary carer for the children. The parties split their incomes during the course of their relationship, for tax purposes. This is a common practice and is allowed by the Australian Tax Office.

4. As I pointed out during the course of submissions, the husband’s financial statement is inaccurate with respect to his income, because it does not reflect the fact that he is no longer income‑splitting. Furthermore, the amount that he relies on for his income in his financial statement is from his taxable income return for the year ending 30 June 2014, which is not in any way reflective of his actual income.  This is partly due to the fact that he runs a business, and runs several personal expenses through the business, as many people in his position do.  He is entitled to do that, but it means that the tax return is not a good indicator of his actual income.

5. The financial statement is supposed to be a snapshot of the party’s financial position as at the date of swearing or affirming it. It is not helpful to answer question 9, ‘being total wages before tax’ with

   
   

   “as per 2013/2014 taxable income” followed by an estimated figure as the husband did.  There is no note to explain why this figure was used which does not address the question. He swore or affirmed (the document does not indicate which) his financial statement on

   
   

   4 February 2015. Deficiencies such as this are all the more problematic when the court is being asked to consider a maintenance application.

6. The father has recently been assessed by the Child Support Agency to pay $625 a week for child support, which is a significant sum and currently under review.  The husband has started paying the wife $650 (slightly more than the assessed amount) a week in child support and says he will continue to do so whilst his review application is being determined. He says he will pay the school fees in addition to this.

7. The husband’s documents are inconsistent with one another. For example, annexure F of the husband’s affidavit is his answer to the Child Support Agency in response to the wife’s application to the Child Support Agency. It is inconsistent with aspects of his financial statement in terms of his alleged expenses. It is clear that in the financial picture, the husband is attempting to illustrate inaccurate information and cannot be relied on.

8. At the same time, the husband says he cannot afford to pay the wife maintenance as the husband decided to reduce the rent he receives for the caravan by $80.00 a week. He says this was in exchange for some gardening work. The husband continues to receive benefits from the business which is paying for his personal expenses such as electricity and fuel, which the wife no longer enjoys. The husband also has control of the parties’ rental income. The husband has continued to use the business funds to make improvements to the shed he is living in.

9. It is also clear from the bank statements he provided, that he has been able to make decisions to spend money on things like holidays.  His bank account statements show he spent $2,000 on airfares in January 2015. 

10. The husband also has funds in an account in the amount of about $10,000 for boat hire deposits. I accept that he cannot access those funds but it indicates that the business is not as quiet as he says it is and that further income will be coming in. The husband has not provided documents with respect to the business the upcoming boat hires or bob cat hires.

11. The husband pays himself $250.00 a week as drawings from the business, being the same amount he has been paying to the wife. He does not refer to this in his financial statement.

12. The parties’ investment property in (omitted) recently sold which will mean the parties’ debt will be reduced. They will also not be receiving that rental income. Some of the husband’s rental income will reduce once he moves from the shed to a house so that he can have the children overnight.

13. The husband has not provided bank statements past December 2014. The wet season is the slowest time of year for this business.

14. The time that the wife filed her application was prior to the child support variation being made.  She seeks the sum of $650 per week in maintenance.  The father complains about some of her expenses, for example holidays of $100 a week, but ignores the fact that he makes the same claims in his financial statement.

15. Counsel for the husband, Ms Bowen, complained that the wife is paying $30 a week for Austar. The difficulty with this submission is that the husband pays the same amount for his Austar connection. Given this, he can hardly complain about the wife’s expenditure in this regard.

16. The mother claims that she spends $100 on fuel and $100 on the children per week.  The husband says that a greater proportion of that should be for the children than for her and given the activities that the children are doing, this may well be the case.  But it is still reasonable for her to make a claim for fuel, and I would assess that at $70 a week for herself. 

17. The wife is not making excessive claims with respect to most of her expenses.  Certainly, I cannot be satisfied that the husband does not have capacity to pay maintenance on an ongoing basis, given his intermingling of personal and business expenses in the business accounts and him having access to those business accounts to the exclusion of the wife.  The husband had been paying the wife $1,000 a week up until November 2014. This amount was for the benefit of the children as well as the wife.  The husband has made some ad hoc payments to the wife, and the wife accessed $3,000 from a joint account.

18. The husband has not provided a clear picture of his financial circumstances as a party is obliged to do in any financial case. It is particularly important when defending a maintenance application. The husband is legally represented. The husband’s lawyer submitted that I could not base the husband’s income on the last financial year because of the downturn of the business during the wet season. The difficulty with this submission is that the husband has not provided the court with the necessary evidence to support this. She had to concede that the husband’s taxable income, as referred to in his financial statement, should be doubled because he is no longer income splitting with his wife. It was also apparent from the submissions from his lawyer that she was confusing the issue of maintenance and child support. I repeatedly had to direct her back to the issue of maintenance.

19. The law with respect to interim maintenance claims is well settled. The principles I must apply in determining if the wife is entitled to an order for spouse maintenance are outlined in sections 72, 74, 75 and 80 of the Family Law Act1975 as considered in a number of authorities, including Mitchell and Mitchell (1995) FLC 92 – 601.

1. The issues I must consider are:

   (a)is the wife unable to support herself adequately from her own resources; if so

   (b)does the husband have the capacity to pay.

2. It is well established that an applicant for maintenance does not need to deplete all of his or her capital before seeking maintenance: In the Marriage of Bevan 19 Fam LR 35.

3. As this is an application for interim maintenance, the evidence has not been tested by way of cross-examination. A court has a greater degree of flexibility than it does at a final maintenance hearing: Redman & Redman (1987) FLC 91-805. It is also important to note that a trial judge at a final hearing of maintenance or property or both can address any anomalies resulting from an interim maintenance order.

4. Ms Bowen submitted that I am not in a position to determine the matter today because the husband’s position is unclear. The only reason why the husband’s position is unclear is because he has failed to file documents explaining it. The wife’s application has been on foot for months. In order to argue that he does not have capacity to pay maintenance, he has to clearly outline his current financial circumstances.  He filed his documents on 5 February 2015.  I do not know if it is deliberate, reckless or negligent but I am comfortably satisfied that the husband has not properly disclosed his financial position and that he has the capacity to pay maintenance.

5. Ms Bowen failed to properly address the inconsistencies in the husband’s documents. The husband was not in court to provide instructions or to hear the submissions. Ms Bowen submitted that the husband did not seek legal advice when preparing his answer to the Child Support Agency. This may be the case but that does not assist her or her client because Ms Bowen made the decision to annex the document to her client’s affidavit. It was incumbent upon Ms Bowen to exercise forensic judgement when preparing her clients documents. If she had done so, she would have seen the inconsistencies in the husband’s material.

6. Ms Bowen frequently referred to child support issues. Child support is separate from spouse maintenance. There are no child support issues currently before the Court.

7. As is abundantly clear by the legislation and case law, that I am not permitted to take into account child support when determining a maintenance application, and I do not do so.

8. I find that the wife does not have the capacity to support herself from her own resources.  She is earning $750 a week but her expenses exceed her income. She has the children of the marriage in her primary care and must do a significant amount of travelling to take the children to their various commitments. She lives in (omitted), a rural area outside of Darwin.

9. The wife spends $190 on fuel each week. She annexed receipts and credit card statements verifying this. It was not reasonably open for

   
   

   Ms Bowen to submit that the wife had not proven this. Again it is incumbent upon lawyers to read all documents, not just documents that are used in support of their client’s case, but the opposing party’s cases and to make submissions based on the evidence.  What she did say is that it is likely that more than half of this amount is spent on the children. I will allow the sum of $70 a week in fuel consumption for the wife. Ms Bowen then tried to make the same analogy with respect to the husband’s expenses. The husband says the business is really quiet because of the wet season, yet he claims he spends $400 per week in fuel expenses and has $10,000 in deposits for boat hires. I accept this is money that he cannot access but it is indicative of work coming in for the business.

10. I have ignored the expenses that the wife claims for the children as they are dealt with by the child support assessment. On the husband’s evidence, the figure at question 9 of his financial statement for his total salary should be doubled to reflect the fact that he is no longer income splitting the income from the business with his wife. Even that figure is not accurate because it is based on his taxable income for the year ending 30 June 2014, and I do not know whether that income has increased or decreased. The husband’s financial position is unclear because of the quality of his documents. I am satisfied that he has the capacity to pay maintenance. It is clear that the Child Support Agency also found that the taxable income is not reflective of his actual income, given the amount he has been assessed to pay in child support. I accept that he has an increased child support liability to pay but even acknowledging that, I am still satisfied he has a capacity to pay maintenance.

11. The husband has control of the parties’ assets and business. He continues to benefit from the business by paying for various personal expenses and has shown the ability to incur discretionary expenses such as $2,000 for airfares in January 2015.

12. The wife is not making excessive claims with respect to most expenses.  I cannot be satisfied that the husband does not have capacity to pay maintenance on an ongoing basis, given his intermingling of personal and business expenses in the business accounts, and him having access to those business accounts to the exclusion of the wife.  The husband had been paying the wife $1,000 a week up until November 2014.  The husband has made some ad hoc payments to the wife, and the wife accessed $3,000 from a joint account.  Due to this I will not order the husband to pay maintenance from the date of the application. I will order him to pay maintenance in the sum of $500 a week pending further order.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Judge Harland

Associate: 

Date:  25 March 2015