Qin & Donato
[2023] FedCFamC1A 223
•11 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Qin & Donato [2023] FedCFamC1A 223
Appeal from: Qin & Donato (No 2) [2023] FedCFamC2F 1214 Appeal number(s): NAA 257 of 2023 File number(s): SYC 7664 of 2021 Judgment of: ALDRIDGE J Date of judgment: 11 December 2023 Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – SPOUSE MAINTENANCE – De facto relationship – Application for Review of refusal of interim spouse maintenance rejected by primary judge – Where leave depends on the merits of the appeal – Appellant’s expenses exceeded her income but primary judge found she had been able to adequately support herself – No expenses rejected as unreasonable – Focus was on expenses rather than reasonable needs – Failure to consider the appellant’s previous standard of living – Incorrect application of subsistence level as the standard for spouse maintenance – Finding that the appellant was not fully exercising her earning capacity did not remedy the shortfall in income – Substantial injustice would flow if leave refused – Leave to appeal granted – Appeal allowed – Respondent to bear the costs of the appeal. Legislation: Family Law Act 1975 (Cth) s 90SF
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 28, 67, 68
Federal Proceedings (Costs) Act 1981 (Cth) s 6
Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth) reg 4.02
Cases cited: Bevan and Bevan (1995) FLC 92-600; [1993] FamCA 95
Brown and Brown (2007) FLC 93-316; [2007] FamCA 151
Evans and Evan (1978) FLC 90-435; [1978] FamCA 23
Hall v Hall (2016) 257 CLR 490; [2016] HCA 23
House v The King (1936) 55 CLR 499; [1936] HCA 40
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Mitchell and Mitchell (1995) FLC 92-601; [1995] FamCA 32
Redman and Redman (1987) FLC 91-805; [1987] FamCA 2
Williamson and Williamson (1978) FLC 90-505; [1978] FamCA 57
Wilson and Wilson (1989) FLC 92-033; [1989] FamCA 34
Number of paragraphs: 45 Date of hearing: 11 December 2023 Place: Sydney Counsel for the Appellant: Mr Cohen Solicitor for the Appellant: Abu Legal Counsel for the Respondent: Mr Ahmad Solicitor for the Respondent: Australian Criminal & Family Lawyers ORDERS
NAA 257 of 2023
SYC 7664 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS QIN
Appellant
AND: MR DONATO
Respondent
ORDER MADE BY:
ALDRIDGE J
DATE OF ORDER:
11 DECEMBER 2023
THE COURT ORDERS THAT:
1.Leave is granted for the appellant to amend the grounds of appeal contained in the Notice of Appeal filed 15 September 2023.
2.Leave to appeal is granted.
3.The appeal is allowed.
4.Order 2 of the orders dated 18 August 2023 is set aside.
5.The balance of the Application for Review is remitted for rehearing by a judge other than the primary judge.
6.The respondent is to pay the appellant’s costs of the appeal fixed in the sum of $17,000 within 28 days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Qin & Donato has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTALDRIDGE J:
INTRODUCTION
This is an appeal from a judge of the Federal Circuit and Family Court of Australia (Division 2) who heard an Application for Review of a decision of a senior judicial registrar who refused the application for both lump sum and periodic maintenance.
The primary judge ordered Mr Donato (“the respondent”) pay lump sum maintenance in the sum of $8,408.40 to Ms Qin (“the appellant”) but otherwise dismissed the Application for Review.
The parties’ relationship was a very short one being less than two years. They have one child, born in 2021. The child lives with the appellant and spends three nights per fortnight with the respondent together with most of one day.
Before turning to the appeal itself, something should be said about the material that was before the primary judge. The Appeal Book consists of 1951 pages, including extensive affidavits by both parties. That evidence includes 648 pages of invoices, apparently in response to the respondent taking issue with the costs of the appellant’s claimed household supplies, clothing, shoes, cleaning and other necessary commitments.
I note that the appellant’s average weekly expenses, as set out in Part N of her Financial Statement filed 8 August 2023, totalled $922. The respondent’s, as per his Financial Statement filed 25 April 2023, were $3,861.
In hearing interim spousal maintenance, the Court does not conduct an audit of the parties’ expenses or require extensive proof of every expense. Such a course would place an intolerable burden on those seeking maintenance, who after all, are doing so because they assert they are unable to support themselves adequately.
Of course, the applicant must prove his or her case. However, long standing and widely accepted authority states the Court conducts “not perhaps as final or exhaustive a hearing as would be the case if one were hearing the matter finally” (Williamson and Williamson (1978) FLC 90-505 at 77,650). This was quoted with approval by the Full Court in Redman and Redman (1987) FLC 91-805 at 76,081 where the Full Court added:
The evidence need not be so extensive and the findings not so precise.
This last comment was approved by the High Court in Hall v Hall (2016) 257 CLR 490.
Justice Strauss referred to both of these decisions in Wilson and Wilson (1989) FLC 92-033 at 77,451 and said:
The practice of this Court has been to deal with applications for orders for maintenance pending the determination of a property settlement in a fairly summary manner.
The approach of the parties, particularly it seems the respondent, in requiring precise proof of many ordinary everyday expenses when his expenses for the same were over four times as high, does not appear to be in accordance with their obligation under s 67 and s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCA Act”) to conduct the proceedings according to law and as quickly, inexpensively and as efficiently as possible. The evidence in what is supposed to be a summary procedure was more extensive than in some final property hearings. This approach is not to be encouraged.
The primary judge’s reasons, however, adopt an approach entirely consistent with the authorities and her Honour was not drawn into the vortex of minutiae adopted by the parties.
The primary judge found that the appellant’s income was $762 and her expenses were $1,348, leaving a deficit of $586 (at [25]). There was no finding that any of these expenses was unreasonable. However, her Honour found that the appellant “appears to have been able to adequately support herself without additional support since February 2022” (at [29]). Thus the threshold test posed by s 90SF of the Family Law Act 1975 (Cth) was not met.
Her Honour did not include rent in the above figures because the appellant was living with her family and although it would be reasonable for her to have her own premises, she was not satisfied that the appellant “actually intends to rent a property” (at [41]). It followed that the application for lump sum maintenance for a bond and the first six weeks’ rent was also refused.
The primary judge ordered lump sum maintenance in the sum of $8,408.40 to assist the appellant to purchase a car.
LEAVE TO APPEAL
Neither the Notice of Appeal nor the Summary of Argument referred to the need to seek leave to appeal. An oral application for leave was belatedly made at the hearing of the appeal. Orders for interim spousal maintenance are clearly interlocutory and cannot be described as child welfare orders. Leave to appeal is therefore needed (see s 28(1) of the FCFCA Act and reg 4.02 of the Federal Court and Federal Circuit and Family Court Regulations 2022 (Cth)).
Whilst the discretion to grant leave is unfettered, it is generally done by looking to see whether there is a material error which warrants reconsideration, and whether a substantial injustice would flow if leave was not granted, supposing the decision to be wrong (Medlow & Medlow (2016) FLC 93-692).
In this case, the grant of leave will depend greatly on the merits of the grounds of appeal to which I now turn.
THE APPEAL
The decision the subject of the appeal is discretionary and so the following principles set out in House v The King (1936) 55 CLR 499 apply (at 504–505):
… It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
Ground 5 – did the primary judge err in failing to make an order for spouse maintenance having found the appellant’s expenses exceed her income?
It is convenient to commence with Ground 5 which is in the following terms:
That Her Honour erred in failing to make an order for periodic spouse maintenance having determined that the Appellant’s reasonable living expenses exceeded her income by $500 per week having regard to the Respondent’s apparent ability to pay maintenance given his significantly superior income.
The second part of the ground can immediately be put to one side because the consideration of the respondent’s capacity to pay maintenance only arises once the Court has determined that the applicant is unable to adequately support him or herself.
After finding that the appellant’s expenses exceeded her income by $586 per week, the primary judge noted that the appellant was able to support herself without increasing her liabilities since 2 February 2022 (at [27]).
Her Honour continued:
28.I also accept the [appellant] says that she has been cutting down her expenses, and that there are various items she has been unable to afford, but her evidence does not suggest she is at “subsistence level” as per Brown nor is the Court obliged to ensure she maintains the same standard of living that she previously enjoyed during the relationship.
This led to the finding that “the [appellant] appears to have been able to adequately support herself without additional support since February 2022” (at [29]).
There are a number of difficulties with these passages.
First, the primary judge is asking whether the appellant could adequately support herself at the time of the hearing. The answer to that question was ‘no’, because of the finding that her income, at the time of the hearing, fell well short of her expenses, none of which was rejected as unreasonable. How she had been able to manage previously was only indirectly relevant, if at all, particularly when the primary judge accepted that the appellant had reduced her expenses.
It was submitted by the respondent that the finding of the deficit was just the start in the reasoning process which culminated in the global finding that the appellant could adequately support herself because she had been managing to do so for some time without incurring debt. If that is so, the primary judge must have rejected the claims for expenses that gave rise to the deficit or not accepted the evidence of the appellant that these were, in fact, her expenses. If that was so, her Honour did not say so and there would appear to be an absence of relevant reasoning.
Secondly, however, the section focuses on the needs of the applicant for spousal maintenance. Whilst adequate needs can often be inferred from a person’s expenses, such expenses may not extend to reasonable needs. A person with no income and who cannot pay any expenses, still has needs.
Thirdly, what are assessed to be ‘reasonable needs’ are to be assessed having regard to the parties’ previous standard of living. This was confirmed in Brown and Brown (2007) FLC 93-316 where the Court said (at 81,455):
Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable.
Her Honour noted it is a factor to be considered at [22], where the principles to be applied were correctly identified. However, they were mistakenly applied.
Whilst the primary judge correctly identified the task as falling short of ‘ensuring’ that the previous standard of living was maintained, that standard remained relevant, albeit not determinative, to the consideration of reasonable needs. The appellant’s standard of living, as disclosed by her evidence, fell well short of that which was enjoyed during the relationship. That consideration was not undertaken at all.
Fourthly, the only sensible reading of [28] is that the appellant failed because she had not hit subsistence level. Reasonable means reasonable in all of the circumstances, not subsistence (Evans and Evans (1978) FLC 90-435; Bevan and Bevan (1995) FLC 92-600 and Mitchell and Mitchell (1995) FLC 92-601).
Again, her Honour correctly quoted the principle at [22] saying “the idea that “adequate” means a subsistence level has been firmly rejected”. Again, this was not applied.
There was accordingly merit in this ground.
Ground 2 – was the appellant not fully exercising her earning capacity by working for three days a week and not four?
The appellant’s evidence was that she had reduced her work to three days a week because of the stress of the proceedings and the need to preserve her health for the sake of the child.
Assuming that the primary judge was entitled to reject that evidence, what was the consequence?
The appellant’s Financial Statement showed her income from employment as $762 per week. If that is for three days as the evidence suggests, then it is a reasonable inference that the daily rate is $254. Working a fourth day would see that sum earned in addition to the existing $762, but it would not cover the shortfall. Taking it into account the appellant’s expenses would still exceed her income by $314 a week and the appellant would still be unable to support herself.
The primary judge did not undertake this consideration and thereby erred.
There is therefore no utility in considering the remaining grounds because these matters, if leave is granted, are sufficient to require the matter to be reconsidered.
The respondent submitted that there was no utility in the appeal because the appellant had abandoned her claim for final property orders so that there is no longer any basis for interim orders pending that determination. That may be so but the extensive evidence in this matter can easily found a final spousal maintenance order by a simple amendment to the application.
I am satisfied that substantial injustice would flow if leave was not granted.
There will be a grant of leave, the appeal allowed and Order 2 of the orders of the primary judge set aside. The balance of the Application for Review is remitted for rehearing by a judge other than the primary judge.
COSTS
The appeal has been successful. The respondent is in a very much superior financial position to the appellant.
It is true that the precise basis on which I have allowed the appeal was not articulated by counsel for the appellant, but I consider that Grounds 2 and 5 were sufficiently drawn so as to bring attention to the errors that I found.
Taking all this into account, I do not consider that it would be a just outcome for the costs of the appeal to abide the outcome of the rehearing, as was originally submitted, or that the appellant should bear her own costs. There is therefore no need to consider an application for a certificate under s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) because such certificates are only granted when there is no order as to costs. I consider that it is appropriate that the respondent pay the costs of the appeal because in my view it ought to have been conceded.
The appellant’s costs schedule includes sums incurred prior to the delivery of the primary judge’s reasons which, therefore, cannot be costs of the appeal. They appear to total some $14,633. I do not consider the solicitor’s fees of $8,800 for preparation for the hearing of the appeal to be at all reasonable as there is no reason to think other than that the relevant preparation was undertaken by counsel. Doing the best I can, an appropriate figure appears to be $17,000. The respondent will pay the appellant’s costs fixed in that sum within 28 days.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Aldridge. Associate:
Dated: 13 December 2023
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