Raine & Creed
[2013] FamCA 362
FAMILY COURT OF AUSTRALIA
| RAINE & CREED | [2013] FamCA 362 |
| FAMILY LAW – PROPERTY – Application for property settlement orders – Whether just and equitable to alter property interests and rights – Where contributions of the parties assessed as being equal – Add-back considerations – Where the wife alleges waste – Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Where the outcome of the assessment of contributions and other factors has resulted in the wife receiving 52.5 per cent of the assets compared to the husband’s 47.5 per cent – Where the husband seeks a splitting order pursuant to s 90MT of the Act – Where such order is opposed by the wife – Where it is not appropriate to make a splitting order as the husband presently has a present source of income and the wife also has some income and where each party contributed to their own superannuation scheme – Where it is determined that the superannuation be taken into account by way of adjustment to the overall pool – Where wife sought an order for spousal maintenance – Where the wife has established that she is unable to support herself adequately – Where it is appropriate to make an order for spousal maintenance for a defined period – Where the order for spousal maintenance is made conditional upon the husband continuing to receive disability insurance payments on the basis of a total disability. |
| Family Law Act 1975 (Cth) ss 79; 75(2); 90MT |
| Baldwin v Baldwin [2010] FamCAFC 227 Bevan & Bevan (1995) FLC 92-600 Browne & Green [1999] FamCA 1483 C & C [1998] FamCA 143 NCH & RCH (2004) FLC 93 – 204 Crapp & Crapp (1979) 5 FamLR 47 In the marriage of Mead & Mead (1983) FLC 91-354 Kennon & Kennon (1997) FLC 92 – 757 Kouper & Kouper (No.3) [2009] FamCA 1080 Kowaliw & Kowaliw (1981) FLC 91-092 Mayne & Mayne [2011] FamCAFC 192 Mitchell & Mitchell (1995) FLC 92-601 AJO & GRO [2005] FamCA 195 Perrett & Perrett (1990) 13 FamLR 464 Polonius & York [2010] FamCAFC 228 Shimizu & Tanner [2011] FamCA 271 Spellson & Spellson & Ors (1989) 13 FamLR 242 Stanford v Stanford [2012] HCA 52 Townsend & Townsend (1995) FLC 92-569 |
| APPLICANT: | Ms Raine |
| RESPONDENT: | Mr Creed |
| FILE NUMBER: | SYC | 2012 | of | 2011 |
| DATE DELIVERED: | 24 May 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 11-13 February 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Gould |
| SOLICITOR FOR THE APPLICANT: | Abrams Turner Whelan Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Schonell SC |
| SOLICITOR FOR THE RESPONDENT: | Barkus Doolan Kelly |
Orders
That, conditional upon the husband continuing to receive disability insurance payments on the basis of a total disability the husband pay the wife spousal maintenance in the sum of $534 per week until the end of April 2017.
That the husband retain for his exclusive use his work equipment.
That the husband and the wife shall each retain the household items, furniture and other personal items of property presently in their possession.
That the wife be paid the sum of $749 603 from the controlled monies account with the balance of the controlled monies account be paid to the husband.
That leave is granted to the parties to make an Application for Costs, if they so wish, within twenty-eight (28) days of the date of these Orders.
That all applications and cross applications be and are hereby dismissed.
That all issues be removed from the Active Pending Cases List.
That all material produced on subpoena shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same not before fifty-six (56) days from the date of these Orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Raine & Creed has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 2012 of 2011
| Ms Raine |
Applicant
And
| Mr Creed |
Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings brought by Ms Raine, (“the wife”) pursuant to s 79 of the Family Law Act 1975 (“the Act”). In addition to the usual issues that arise upon such an application, significant issues arose in relation to a number of “add-backs” sought by the wife and the characterisation of the husband’s entitlements under a policy of disability insurance.
Background
The wife was born in 1958 and is 54 years old. Mr Creed, (“the husband”) was born in 1960 and is 53 years old. There are no children of the relationship.
The parties commenced cohabitation in September 1987. At that time the husband was an assistant. There was some dispute as to the value of his assets which seemed to be constituted by a piece of work equipment and a motor vehicle. The wife was at the time, and had been for some time, a freelance consultant in the art field. She asserts, and the husband denies, that at that time she had some $56 000 in savings as well as a second hand motor vehicle and furnishings.
In April 1990 a company J Pty Limited was incorporated with the husband and wife as shareholders and directors. The wife commenced to operate her business through this company which obtained an overdraft from Westpac in the sum of $10 000 for that purpose.
In November 1999 a company A Pty Limited was incorporated and the husband and the wife became the shareholders and directors. The husband started working as a freelancer specialising in the advertising industry. An overdraft in the sum of $20 000 was obtained from Westpac and the parties gave that bank a personal guarantee.
The parties were married in September 1990.
In December 1992 the parties purchased, as joint tenants, a home at W Street, Suburb N (“Suburb N property”) for the sum of $280 000. The purchase of the property was funded by a mortgage in the sum of $224 000 provided by the Westpac Banking Corporation.
The husband agrees that the deposit was paid by the wife who also paid the balance of the purchase price, after taking into account the sum borrowed, on settlement. The costs of the purchase including the legal costs and stamp duty were shared equally. Up until the late 1990’s the payments for the loan were shared equally by them. In 1993 the husband’s business was becoming more successful and he leased a large work studio and work equipment for the purpose of the business. The wife guaranteed the leases and the Suburb N property was used as collateral.
In October 1996 the parties separated and resumed cohabitation on 22 November 1996. In 1999 the Suburb N property was extensively renovated and extended. The renovations costs $440 825 according to the wife, $525 000 according to the husband and were funded by extending the limits on the existing Westpac home loan. The parties continued to repay the extended mortgages by each paying approximately half of the required mortgage repayments of $5 670.00. From April 1999 the wife made payments towards the mortgages of $1 460.00 per fortnight. Some of these payments were made from her savings. From July 2000 when the wife started making repayments of $500 per fortnight until the loan was repaid in March 2002. The balance of the mortgage payments were made by the husband.
In June 2000 there was a restructuring of the parties’ debts. The husband obtained a business access loan with a credit limit of $375 000 and an over-draft with a limit of $75 000. At that time the amount outstanding to Westpac under the loans mortgaged on the Suburb N property was $531 242. The idea of the arrangement was to convert an obligation to the bank under the home loans in respect of which the interest would not be a tax deduction into business loans where the interest would be tax deductible. What occurred, in accordance with the plan, was that all of the husband’s gross income was paid to Westpac in reduction of the home loans. They were fully repaid in March 2002. During that time the business access loan and the overdraft were used to fund business and living expenses. In March 2002 the home loans had been fully repaid but the business loans now totalled some $450 000. A reduction of $80 000 had been made. For the parties to obtain these loans a guarantee from the wife was required.
The wife strenuously maintained that she consented to this arrangement only because the husband and the husband’s accountant promised her that this arrangement would see all of the indebtedness to the bank (that is the entirety of the home loans and the business loans), repaid in two years. This issue was agitated at some length by the parties but it does not seem to me to be particularly relevant to issues before the court. However, I record that I am not satisfied that such promises were made because they seem to be inherently unlikely (given the income of the husband at the time it would not be possible for the repayment of all loans to occur within 2 years); because the two notes (one made by her husband and one made by his accountant) the wife relies on as recording this arrangement do not do so and because in a letter the wife wrote to the husband in July 2007 this arrangement was not mentioned when one would have expected it to be raised.
In 2001 the husband obtained income protection insurance from Tower Australia Limited (“TAL”). The husband had previously been denied income protection in 1995 due to concerns about his alcohol intake. It was not contested in these proceedings that the husband suffered from alcoholism for the duration of the relationship. In 2002 the parties saw a psychologist at C Hospital in relation to this problem.
The wife asserts that from about 2005 her business became less successful. In 2007 she undertook a design course and then in 2008 another design course. The wife formed the view that she would be interested in establishing a design and manufacturing business.
In March 2007 the husband commenced to see Dr D, a psychiatrist specialising in addictive behaviours.
In June 2007 the lease for the studio rented by the husband expired and the husband placed the work equipment in storage. In early 2008 the husband was diagnosed as suffering from severe depression and in May 2008 commenced seeing Dr E. At some time in 2008 he consulted his insurance broker with a view to making a claim against his income protection policy but did not do so at the time.
The parties separated on 14 March 2009. The wife lived in the home until its sale. The husband lived in rented premises until he commenced to live with his new partner in July 2011.
Between March 2009 and July 2010 the wife drew $107 727.34 from one of the Westpac bank loans which funds were primarily used for preparing the Suburb N home for sale, joint household expenses, interest payments on the business loans and a relatively small proportion on her living expenses. Neither party suggested that there should be any particular adjustment in relation to this. In June 2010 the work equipment in the storage unit were damaged by water. The husband had not renewed the insurance policy and consequently the goods were uninsured. The goods remain damaged and in storage.
In July 2011 the husband commenced to live with his current partner who has a substantial income and with whom the husband has travelled overseas extensively since separation. The husband’s partner is obliged to carry out such travel as a part of her work.
In June 2010 the husband lodged a claim with his disability insurer, and in October 2010 the claim was accepted with the insurer finding that his disability commenced in March 2010. On 19 October 2010 the husband received $135 495.32 from TAL to cover the period from March to October. He has since received $3756 per week from the insurer.
On 17 February 2011 the Suburb N property was sold for $2 500 000. From the balance after discharge of the mortgage $150 000 paid to the wife. By way of partial property settlement a further $100 000 was paid to the wife and $100 000 to the husband. The balance of $1 385 578.26 was paid into a controlled monies account pending the outcome of these proceedings where it has remained. A further partial property settlement was made pursuant to orders of Ryan J on 25 May 2012 with each party receiving $100 000.
At the hearing the parties handed up a joint balance sheet and neither party sought to have added back to the property pool any of the sums paid out from the proceeds of sale by way of interim property settlement.
On 13 July 2012 Ryan J made an interim spousal maintenance order in favour of the wife in the sum of $667 per week plus any income the husband might receive from his business royalties up to an amount of $1023 per week.
Applicable Principles
According to guidelines established through a series of leading decisions, the Court is required to determine the following matters:
·having regard to the breakdown of the marriage, if any, is it just and equitable to consider whether the alteration of the parties interests in their property is just and equitable
·the assets, liabilities and financial resources of the parties to the marriage
·all relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other
·the matters in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes up by reference the provisions of section 75(2) must be considered and a determination made as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of contribution
·an order under section 79 must not be made unless the Court is satisfied that, in all the circumstances, it is just and equitable to make the order.
There was ultimately little dispute between the parties as to their assets and liabilities, motor vehicles and associated leases and personal debts arising after separation.
There was an issue as to the value of the business equipment of the husband and I accept the husband’s evidence, which was essentially unchallenged, that much of it is damaged and out of date. I will therefore find it is valued at $25 000.
There was a dispute as to the value of the furniture and contents in the wife’s hands. I accept her evidence because she has more experience in this area by reason of her occupation and I find it is valued at $15 000.
There was a more significant dispute about the furniture and contents in the husband’s hands. The dispute centred on the wine he took from the Suburb N property. The wife tendered a list of what she says was taken from the house. No evidence was given as to the value of items on that list. There is no evidence as to what wine the husband presently has, its condition or its value. The husband gave some brief evidence that he valued the wine presently in his possession by looking at an online auction and taking the values from that site into account at arriving of this figure of $2000. That is some evidence of its value as opposed to none and I will adopt that figure.
There was an issue as to the husband’s unpaid tax bill of $52 802 for income received post separation. The husband submitted it should be taken into account as a liability because the wife had the benefit of receiving spousal maintenance from the income that gave rise to the tax liability. The order for spousal maintenance was based on net income. It would defeat that order, at least in part, for the wife now to have to pay part of the income tax on the husband’s income. This liability is something to be taken into account in the spousal maintenance assessment and not in the alteration of the parties’ property rights.
The husband, in the course of his work, supplied art pieces to the advertising industry. Sometimes those art pieces were used over a number of years which resulted in royalty payments being made to him. The husband’s evidence was that he thought that future royalty payments from his art pieces would be unlikely because it had been some time since he had created the art pieces and because the subjects change making the earlier art pieces redundant. A single expert was appointed to value the income stream from these royalties. The valuer had some difficulties in identifying royalty payments, noted that it seemed that no royalty payment had been derived in the last 15 months and that no marketing of the art pieces had recently been undertaken. He found “in the light of the considerable uncertainty involved, that a reasonable market value for the royalties would be $7500.00”. The valuer took into account the caveats raised by the husband and he greatly discounted the present value of the royalties for those reasons. I find that the husband has a financial resource in that sum.
Disability Insurance Payment
A more significant issue was the manner in which the insurance policy payments should be regarded. It was not an issue that if the husband remained disabled within the meaning of the policy the payments would continue until he reached the age of 70. The insurer could, at any time, determine that the husband was no longer disabled within the meaning of the policy and could reduce the payments if it determined he had a partial disability or cease them altogether. In those circumstances it would be up to the husband to take proceedings against the insurer. It has twice conducted a review as to whether the husband remains totally disabled. Obviously, if the disability ceases and the husband becomes fit to resume employment the payments will cease.
A court ordered valuer found the present value of the husband’s entitlement to payments from the policy, assuming receipt of benefits until the age of 70 and taking into account tax that would be paid by the husband on receipt of those payments, to be $1.6 million. In his report the valuer opined that there were various reasons why the benefits under the policy may cease or reduce before the husband turns 70 including the fact that he might die, re-commence to derive income from his work or that the insurer may determine that he is capable of returning to work or otherwise that payments should reduce or cease. For those reasons, the valuer said that the figure derived by him by applying a discounted cash flow approach could not be treated as representing a fair market value or value to the owner of the entitlements. The entitlement to total disability ceases if the life insured is no longer totally disabled or if they die.
The benefits of the policy are not transferable. At present the husband has an expectation that, if matters remain as they are, he will receive income of $3756.00 per week from the insurer until he reaches the age of 70. He cannot unilaterally convert that expectation into a sum of $1.6 million. It is not a sum that is presently available to him by any means except with the agreement of the insurer. There is no evidence that it is prepared to convert the weekly entitlement into a lump sum, let alone as to what that lump sum might be if it was prepared to do so. I find that the present value of an income stream of $3756.00 per week less tax is neither property of the husband nor a financial resource.
I note that this approach to the payments received by TAL is in accordance with the decisions in the marriage of Spellson & Spellson & Ors (1989) 30 FamLR 242; Crapp &Crapp (1979) 5 FamLR 47 and Perrett & Perrett (1990) 13 FamLR 464. The cases are not factually identical to the present case but support the view that in circumstances such as these it is of limited assistance to seek to capitalise such a future entitlement by trying to derive a present value of them. It is appropriate to view the disability payments as potentially continuing and probably not permanent income under s 75(2).
It is also far from certain that the entitlement under the policy will continue for any particular period of time. Dr E, the husband’s present treating consultant psychiatrist, having seen him on many occasions since 21 May 2008, said in an expert report dated 28 January 2013:
In terms of prognosis I still believe he has a reasonable chance of full recovery especially after the conflict with his ex-wife is resolved, which I think is major ongoing stressor. I suspect he will get back to work at least on a part-time basis and may in time return to full-time capacity as a [freelancer].
On the basis of this evidence I find that it is more probable than not that the payments to the husband from the insurer will not continue in full until the husband is 70.
The husband was cross-examined to suggest that he had not been entirely frank with the insurer and had failed to inform them that he was able to go out to lunch or dinner several times a week and travel extensively overseas. On 19 October 2011 the husband was interviewed by G Pty Limited on behalf of the insurer. As is evident from the reports it provided to the insurer the husband disclosed his overseas trips and his social activities. On the evidence before me I do not find that the husband has concealed information from the insurer.
In summary, I find that the husband is likely to receive income from the insurer for some time but it is more likely than not that it will not be until he reaches the age of 70. I will not take into account its present value of $1.6 million but will take into account, where appropriate, the income stream.
Add-Backs
In submissions counsel for the wife sought that there be added back to the matrimonial pool of assets available for distribution five separate items. In submissions in reply two of these were abandoned leaving three to be considered.
The approach I take is that, for the reasons that follow, claims for losses, as opposed to distributions of property, should generally be dealt with under s 75(2) rather than as add-backs.
In AJO & GRO [2005] FamCA 195; (FLC 93 – 218) the Full Court of this Court indicated that there were three well known categories of add-backs. These categories were where the parties had expended money on legal fees, where there had been a premature distribution of matrimonial assets or in the circumstances outlined by Baker J in Kowaliw (1981) FLC 91-092.
As to the first category in NCH & RCH (2004) FLC 93 – 204, at 56, the Court said that, in relation to the payment of legal expenses, whilst it remained a discretionary matter for the trial judge in determining how to exercise that discretion regard should be had to the source of the funds. In paragraph 57 their Honours said:
[I]f the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
On the other hand if the funds used to pay legal fees were generated post separation or received by the payer in his or her own right or borrowed they would generally not be added back. The difference is, as their Honours explained at paragraph 55, because the former can be regarded as a premature distribution of funds in which both parties have an interest whereas the latter cannot be so regarded.
The Full Court in AJO & GRO, when dealing with its second category, referred to the well known case of Townsend & Townsend (1995) FLC 92-569. In that case there was, in fact, a premature distribution of an asset in which the other party had a legitimate interest. The husband had sold a taxi plate which, had he retained it, would have been dealt with in the same way as the other property of the parties. The Court expressed the view that the value of the sold taxi plate should be added back into the pool of assets.
As to the third category in Kowaliw Baker J said at 76,645:
If a party has acted in the manner to which I have referred earlier either by:
(a) embarking upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) acting recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value,
then such conduct in my view and the economic consequences which flow there from are clearly matters to which the Court may have regard pursuant to the provisions of sec. 75(2)(o).
If, on the other hand, losses of a financial kind have been suffered by the parties to a marriage in the course of the pursuit of matrimonial objectives, such as the gaining of income or the acquisition of assets whether the liability for such losses be joint or several then, in my view, such losses should be shared by the parties (although not necessarily equally) and taken into account when altering property interests.
A number of subsequent authorities have said that, whilst it is ultimately a matter for the exercise of discretion of the trial judge, the use of add-backs should be exceptional. C v C [1998] FamCA 143 at paragraph 46; Kouper, & Kouper (No.3) [2009] FamCA 1080 at paragraph 107; Shimizu & Tanner [2011] FamCA 271 at paragraphs 73 and 76; Mayne & Mayne [2011] FamCAFC 192 paragraphs 91, 183 and 184.
Baker J did not add-back the rent that was lost by the reckless party in that case but dealt with it under s 75(2)(o).
It can easily be seen that if a party to the marriage took property in which both parties of the marriage had a legitimate interest and destroyed it, then the misappropriation and destruction can been seen as a premature distribution of an asset that would otherwise have been available to the parties for distribution. On the other hand the conduct of an enterprise that resulted in losses, assuming that conduct to be wanton, reckless or negligent, does not involve a premature distribution of an asset but rather conduct that has resulted in a loss to the parties. In that case there is not an “asset” to be added back into the list of the parties’ property. In the first two cases there was in fact property, as defined under the Act, which could be dealt with by the Court or had been dealt with by a party. Losses are not property as so defined.
In Kouper supra it was considered appropriate to approach the issue of an add back by asking five questions, the first of which was:
(a)Is it contended that property (including money), that would otherwise be available for distribution between the parties if a s 79 order is made, has been dissipated with a consequential loss to the property otherwise potentially divisible between the parties at the date of trial?
Section 79 of the Act is concerned with the alteration of property rights between the parties to a marriage. An early step in that process is to identify a pool of assets which are to be divided between the parties in the manner determined by the Court. So called notional assets, such as losses, are not property and cannot be divided and distributed. It is conceptually consistent with that process of determination and division of assets for assets which have actually existed but which have been distributed prematurely to one of the parties, even if by a unilateral act, to be included in the list of actual assets. This is because, as a matter of reality, the asset has existed and has been distributed and the inclusion in the list of assets recognises this reality. It is quite different conceptually to say that the assets should be increased because of losses that have been suffered. Losses are not an asset that has been distributed. This is not to say that they should not be taken into account but rather that the fictional approach of regarding them as assets is not desirable.
In Polonius & York [2010] FamCAFC 228 the Court said at paragraph 89:
It follows that in certain circumstances financial misconduct or financial misbehaviour may be taken into account in a number of ways. It may be taken into account by the notional inclusion of an amount at step one of the preferred approach to the determination of an application pursuant to s 79 of the Act which was explained in Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 or when assessing the contributions at step two of the preferred approach or perhaps when considering the other factors at step three of the preferred approach: see M and M [1998] FamCA 42 (1 May 1998).
The authorities establish that it is within a judge’s discretion to add-back such matters as seems appropriate to them but in my opinion add-backs should generally be confined to the premature distribution of assets and that matters that are akin to them - that is to say limited to property that exists or has existed but has been prematurely distributed. Matters that need to be taken into account that are not of that category should preferably be dealt with under s 75(2)(o). There is no reason why a loss in a specific sum cannot expressly be taken under account under that sub-section.
Thus although the court can add-back items other than those that can be described as premature dispositions of property in my opinion it is conceptually more appropriate to treat those matters as conduct being taken into account under s 75(2)(o) of the Act.
As the above brief reference to authority illustrates add-backs should be approached with care and with the aim of achieving an equitable result in the interests of justice. The use of add-backs should not lead to an absurd result as the facts in this case illustrate.
Counsel for the wife ultimately sought to have added back to the list of matrimonial assets of $1 355 380 (wife’s figures) add-backs totalling $725 206 leading to an adjusted figure for total net assets of $2 080 586. None of the add-backs could be categorised as premature distributions of property – they were losses. Counsel then sought a distribution of 85% of that adjusted pool to the wife, namely $1 768 498. This means she would be entitled to receive a distribution of some $413 118 in excess of the assets that presently, or had, existed. This is clearly an untenable result.
Finally, I note that merely because one party to a marriage initiates a venture and exercises control over that venture any losses arising from that venture should not be borne solely by that party. Generally, such losses should be shared by the parties. (Browne v Green [1999] FamCA 1483; (1999) FLC 92-873).
The first claim is that there should be added-back the sum of $292 000.00 said to be the loss arising from the husband’s failure to claim disability insurance from December 2007 to March 2010. This is said to be a loss of $16 000.00 per month for 27 months less tax at 25%. The failure to claim pursuant to the policy in between December 2007 to March 2010 is said to be reckless, negligent or wanton conduct as set out in Kowaliw.
For the reasons set out earlier this is not an appropriate add-back.
There was a dispute between the parties as to when the husband had in fact ceased work at the time. This is, of course, not the definitive question for the purpose of the policy which is when the husband became disabled from earning his income within the meaning of the policy. That is not the same as merely ceasing work. One can cease work without being totally disabled. I find that the husband did not in fact cease work in December 2007. The husband says that he did not do so. More importantly he tendered invoices for work sessions conducted on 19 February 2009; 20 October 2009; 2 November 2009; 7 December 2009; 17 December 2009; 26 February 2010; 3 March 2010; 27 August 2010 which support his claim that he ceased working in January 2010. This precludes a finding that he was totally prevented from engaging in any occupation by reason of his disability prior to that time because he had, in fact, engaged in an occupation by reason of that work.
This evidence demonstrates that, at that time, the husband was also seeking some work.
Had the husband made a claim under the policy at that time he would have been obliged to disclose that work he was doing. It is difficult to see, had he done so, that the insurer would have found a total disability.
The wife has failed to establish the factual basis for seeking to have the failure to make a claim on the policy in December 2007 found to be wanton, reckless or negligent conduct of the husband.
There is another difficulty with this claim. It assumes that the insurer would have accepted that claim and that the acceptance would have been from a particular date. That assumption is not warranted on the evidence.
The second claim for an add-back was in the sum of $90 006.00 said to be the loss suffered because of the failure to renew the insurance on the work equipment which was subsequently damaged by water. The figure of $90 006.00 is derived from the certificate of insurance of the value of the goods that were originally insured. There was no evidence that the policy which had not been renewed was an agreed value policy or a policy for reimbursement of the actual value of the assets. There was no evidence of the value of the loss except from the husband who gave evidence that much of the equipment was outdated and of little or no value. I accept that evidence because there was no evidence to the contrary and am not satisfied that the quantum of this claim has been made out or that it should be taken into account as an add-back.
The last claim for an add-back for what was described as “waste on alcohol” of $200-$300 per week for every week of the marriage. The total claimed was $343 200.00. It is not disputed that the husband was an alcoholic for the entirety of the marriage.
This argument assumes an acceptable level of expenditure on alcohol. The wife brought no evidence that would enable any rational consideration of this issue.
The evidence does not disclose what his weekly expenditure on alcohol was over the marriage. I am quite unable to determine from the evidence, or from any other basis, what would be a reasonable expenditure on alcohol. What people would regard as a reasonable expenditure on alcohol would vary from person to person. There are no doubt people that drink extensively but cheaply and people who drink sparingly but expensively. It is very much a subjective matter and I am unable to make any findings on the evidence before me or otherwise that would allow me to quantify such claim let alone to consider what would be a reasonable amount of alcohol for the parties in this case to have consumed and what was a wasteful amount. If it involved the husband and possibly the wife expending their income as they saw fit it was not the diminution of an asset.
In Mayne (supra) Faulks DCJ said in paragraphs 77 and 78:
It seems that human experience (and common sense) shows that while parties are together, each might, from time to time and with the consent of the other, either express or implied, apply or appropriate assets or funds to his or her own purposes. When the relationship is good, no-one is likely to care – let alone keep records. Individual amounts may stand out, as is the case here, but many small transactions in combination may exceed, in total value, one large transaction.
It is not the Court’s function to conduct an audit of the marriage or of the relationship finances. The parties’ remedies for resolving disputes about expenditure while they are together are centred on them and them alone. Choosing one transaction from many prior to separation for different treatments, specifically “to be added-back” or notionally included in the pool of property may make doing justice and equity between the parties difficult.
In my opinion to accede to this submission that I should consider whether or not the husband’s expenditure on alcohol was wasteful would be to conduct an audit of the marriage and seek to substitute for the actions of the parties over 22 years my own opinions. That is not appropriate and I shall not do so.
I am not satisfied there should be an add-back for this matter.
It follows that I am not satisfied that any of the matters asserted should be added back to the property of the parties.
There was no dispute as to the other assets and liabilities than those discussed above, I find the list of assets and liabilities at the date of hearing to be:
LIST OF ASSETS AND LIABILITIES
Assets
Joint
Wife
Husband
Proceeds of W Street $1 290 380 Work equipment $25 000 Furniture – contents $15 000 $ 2 000 Total $1 290 380 $15 000 $27 000 Total assets $1 332 380 Liabilities – NIL Superannuation ING Integra $66 527 A XA $49 663 ING Integra $134 536 Total Superannuation $ 250 726 Total net assets $1 583 106
As can be seen from evidence discussed earlier TAL regularly review the husband to see whether he is totally disabled within the meaning of the policy. The continuation of payments is dependent upon him meeting, to the satisfaction of TAL, the definition of disability within the policy. The husband would be entitled to take proceedings against TAL in respect of any payments which he asserts it ought to have paid under the policy but which it has in fact not paid. Neither party sought to include the payments from TAL, or any figure relating to capitalised payments as property of the parties. The wife did seek to have it taken into account as a financial resource the sum of
$1 600 000.
For the reasons given earlier the disability insurance payments can not be capitalised and treated as a financial resource in a particular sum. It would be appropriate to take into account s 75(2) of the Act that the husband has a contractual entitlement to be paid pursuant to the policy, that the insurer might at any time cease making the payments and that the evidence of Dr E, extracted in paragraph 34 of these reasons, is that that the prognosis for the husband is good at least to the extent that the husband will resume some form of work at least on a part-time basis and in time return to work full-time as a freelancer.
Section 79(1)
I must first determine whether it is just and equitable that there be an alteration in the property rights of the parties. This must be done by consideration of the relationship, its breakdown if any, the property held by the parties and the basis on which it was held and used by them. This determination is not to be conflated with the consideration of the matters arising under s 79(4) Stanford v Stanford [2012] HCA 52.
In the present case I am satisfied that it is just and equitable to make orders altering the interests of the parties to the marriage to the property held by them. They are no longer living in a marital relationship. The basis on which the ownership of their property and the use of it by reason of them being in a married relationship and living together has ended and it is appropriate that their property interests are altered so as to meet their new needs and circumstances. The parties join in seeking such an order.
Section 79(4)(a), (b), (c) and (d) of the act
It is not disputed that the acquisition of the Suburb N property in December 1992 was funded by the wife paying approximately $50 000 towards its purchase. Whilst there was a dispute between the parties as to whether this sum came from savings held by the wife prior to the marriage or was saved by her in the early days of the marriage there is not a significant difference in the effect of either position. The husband concedes that the wife had a higher income than him in the early days of the marriage. It was either sufficiently high to enable that money to be saved or the wife already had those funds. In either event it is a significant financial contribution made by the wife. It is true that it was made some twenty years ago but it is the acquisition of this property and its subsequent renovation and extension that has generated the bulk of the property that is the subject of these proceedings.
The position in relation to the relative income of the parties changed with the husband eventually earning a significantly greater income than the wife. The wife suggested that at some stage her income had been as high as
$135 000 per annum but was not able to produce any documents to support this. Although the wife took nine months and then six months off work to deal with the renovations to the property she gave unchallenged evidence that she continued to pay what had been her agreed proportion of the parties’ loans. Nonetheless, I find that it was the substantial income of the husband that enabled the extensive and, on either party’s evidence, expensive renovations to take place to the Suburb N property. From 1999 the husband’s payments in reduction of the mortgages were significantly higher than the wife’s. I infer that this was because his income enabled that to occur. The bulk of the parties’ assets have come from its sale.
The wife contends that “as a result of the husband’s wastage” the following debts were repaid out of the proceeds of the sale of the Suburb N property that otherwise would have been paid out in full throughout the period of the marriage:
·
A Pty Ltd overdraft
$20 000
·
WBC Business Access Loan
$375 000
·
WBC Business Options Overdraft
$75 000
·
WBC Equity Access Loan (portion as at date of separation relating to husband’s business overdraft)
$114 000
Total
$584 000
These sums do not appear in the joint balance sheet as add-backs sought by the wife to account for the behaviour of the husband that has intentionally, negligently or recklessly diminished the assets of the parties. It is said that the income of the husband did enable some of these accounts to be reduced to small amounts on occasions and that he improperly allowed them to increase again. As I understand the claim it is essentially that the husband had the income to have reduced these loans and to maintain them at low levels but did not do so, inferentially, because of his alcoholism and the life style and expenditure that flowed from it. For the reasons set out earlier I do not accept that submission. The husband had a significant income and whilst it is true that as that income fluctuated the business loans also fluctuated, sometimes almost being completely reduced. There is no evidence that links the fluctuations specifically to any excessive spending caused by his alcoholism.
In one sense it is another expression of the claim that the husband has wasted $343 200 on alcohol which I have already rejected.
I am satisfied that each of the parties made a significant financial contribution to the acquisition of their assets.
Non-financial contributions of the parties
Both parties worked for much of the marriage and there are no children of the relationship. There is no doubt that the wife put a very significant effort into the two sets of renovations. She took nine months and six months off from work to assist with and supervise them. I am satisfied that the work was thorough, meticulous and, as said by the husband, impeccable. Whilst I accept that the husband did carry out some work in relation to the renovations I am satisfied that the wife put more time and effort into the renovations than the husband and that, in particular, it was her skills and efforts that ensured their success.
The husband developed his expertise and career during the course of the relationship with the active support of the wife.
The wife also claims that she spent some two years preparing the house for sale. Although I am satisfied that she spent significant time and effort in preparing the house for sale and maintaining the property in appropriate condition the evidence does not satisfy me that it required two years full-time work by her.
I find that the wife made a greater non-financial contribution to their assets than did the husband for these reasons.
Welfare of the family
On the evidence I am find that each of the parties contributed equally to the welfare of the family.
Other matters
I take into account the wife living for two years in the property post separation with the mortgage being paid from joint funds and that she has received the benefit of spousal maintenance.
Thus I find that the contribution to the assets of the parties is
equal.
S 75(2) factors
The wife is in reasonable health although she has consulted doctors in relation to the stresses arising from the marriage.
The husband is presently receiving a disability payment in respect to his depression which prevents him currently from working. It is that depression and the associated lack of motivation that is currently preventing him from working. It is more likely than not that he will at some time be able to do some work. It is impossible to say when he will be in such a condition.
The wife retains some earning capacity. In the financial year ending June 2012 she earned $40 000 gross. Her actual deductable business expenses, as opposed to those claimed in her tax returns, are up to approximately $10 000 per annum. The evidence was that to date the wife had done less work than previously. The wife last looked for work in January 2011 when she applied for two positions. At that time she also sent a number of emails to companies in the art field advising that the she remained available to carry out work. She has done nothing to seek employment since. The wife gave evidence that a goal of hers was to develop the design and manufacturing business and that she had purchased some materials and had had some samples made up. She gave no evidence of the costs that would be required to set up such a business, the likely profits such business would make, if any, and the time it would take for any such profits to be achieved. She gave evidence that she would hope to receive sufficient funds from these proceedings to establish a business. The only business that was mentioned specifically was that business and there is insufficient evidence to satisfy me that there is any reasonable basis that making a provision of funds for that purpose is likely to lead to any benefit.
The orders that I propose making will give to both parties a standard of living which in all the circumstances is reasonable.
The husband is living with his partner at premises owned by her. The husband pays her $250 per week by way of board and pays for some grocery and household items. Otherwise, save for the cost of joint entertainment expenses, each is solely responsible for their own personal expenses. The partner travels extensively for work purposes, often overseas. In respect of those trips the husband pays the cost of his own air fare and sometimes his accommodation costs.
The wife will be responsible for providing her own accommodation and presently lives in rented premises. As will be seen the wife will secure a measure of success in her application for spousal maintenance.
The husband has the financial resource, at least for the time being, of the royalties. He also has the benefit of the disability insurance payments while they continue. They constitute a valuable income stream. They arise from an insurance policy entered into during the marriage and the premiums were paid from the parties’ funds.
The wife submitted that an extra adjustment in her favour should be made under s 75 (2)(o) because her contributions as set out above were rendered more onerous by the conduct of the husband because of his alcoholism throughout the marriage.
In Kennon v Kennon (1997) FLC 92–757 at 82, 924 Fogarty and Lindenmayer JJ said:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage, which is demonstrated to have had a significant adverse impact upon that party’s contribution to the marriage, or, put the other way, to have made his or her contributions more arduous then they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties respective contributions within s 79. We prefer this approach to the concept of ‘negative contributions’, which is sometimes referred to in this discussion.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but its application is not limited to that.
Later on the same page their Honours indicated that these principles should only apply in exceptional cases.
For the principle to apply it is necessary to show that the conduct occurred during the course of the marriage and had a discernable impact on the contributions of the other party.
At page 82-299 their Honours said:
Marriage involves a myriad of matters, large and small, which go to make up that union and differentiate it from more casual, transitory relationships. It involves sharing the minutiae of daily life, support during good and bad times, care and intimacy.
In Baldwin v Baldwin [2010] FamCAFC 227 the3 Full Court said at [102]:
With or without the earlier decision in Kennon v Kennon (1997) FLC 92 -757, all that was necessary in this case was for His Honour to find, as he did, that the husband’s problems with alcohol had made the wife’s contributions to the welfare of the family more difficult and hence deserving of greater recognition than that which they might otherwise have received.
As the Full Court in Kennon and in Baldwin pointed out there must be a link between the conduct of one party and the contributions which have been rendered more onerous because of that conduct. Here there is no evidence that the contributions of the wife, that is her financial contributions or the non-financial contributions in relation to the renovations were made more onerous in any particular way by the alcoholism of the husband. The evidence does not establish that the wife’s contributions were made more onerous by the conduct of the husband. The wife asserted that she was forced to leave the job she had just obtained prior to separation because of the stresses caused by the husband. Even if I were to accept that there were then stresses arising from the relationship between the parties itself which was causing the wife stress.
The wife has set out some few instances in particular where the husband’s alcoholism affected her. I am not satisfied that they were such as to have caused her contributions to have become more arduous in the way contemplated by authority. I do not conclude from those instances set out in her affidavit, or from the husband’s alcoholism generally, that her contributions were rendered more arduous or require greater recognition.
Accordingly, taking all these matters into account, I am of the view that there should be an adjustment to the entitlements of the parties under s 75(2) so that the wife receives 52.5 per cent of the asset pool. Whilst this adjustment reflects, in part, the income stream presently available to the husband and the limited income earning capacity of the wife it takes into account the limited spousal maintenance order that I will be making.
Form of orders
The wife has no use for the work equipment which should be retained by the husband.
Most of the furniture owned by the parties is in the possession of the wife either at her apartment or at a storage facility. The husband has taken some items with him and wishes to have the remaining furniture divided equally between them. He has demonstrated no need for the furniture, he has taken items which, I infer, appealed to him and in the absence of any evidence that he is entitled to or should for any reason have some particular pieces of furniture I find that the better way to deal with the furniture is for the wife to retain it but to be taken into account as property of the parties which is received by her on division.
Finally, it remains to deal with the superannuation. The husband seeks a splitting order pursuant to s 90MT of the Act. This claim is opposed by the wife. In the present case I am not satisfied that it is appropriate to make a splitting order as the husband presently has a present source of income and the wife also has some income. Each party contributed to their own superannuation scheme. I think it is preferable that the superannuation be taken into account by way of adjustment to the overall pool. The wife said that she had $10,000.00 in superannuation at the commencement of cohabitation. The bulk of the parties superannuation entitlements have thus arisen during the relationship and have been acquired by the use of income derived during the marriage. I have taken the wife’s initial contribution of $10,000 into account as a contribution made from funds acquired prior to the relationship. In those circumstances I do not find any further adjustment to the overall distribution of property to take in account superannuation issues to be necessary.
Accordingly I find that the wife is entitled to 52.5 per cent of the total net assets which is $831 130.65. She already has her superannuation entitlement of $66 527 and will be entitled to retain the furniture in the sum of $15 000. Thus an order to achieve that percentage distribution of the properties is that the wife is to receive $749 603 from the controlled monies account with the balance going to the husband.
S 79 (1) of the Act
Taking all of the above matters into account I am satisfied that the orders I propose to make are appropriate, that is to say, just and equitable taking into account all the matters I have discussed under the heading ss 79 (4) and 75 (2) of the Act as set out above. The orders meet the obligation under s 81 finally to determine the financial relationship between the parties and avoid further proceedings between them to the extent possible. The fact that the husband’s disability payments are subject to review means that the spousal maintenance order must be subject to review if those payments cease or are varied.
Spousal maintenance
A court can only make an order for spousal maintenance pursuant to s 74 if the party claiming the maintenance is unable to support herself or himself adequately. Adequately is a relative concept which varies from case to case and in relation to which the standard of living which the parties enjoyed prior to separation is relevant (Bevan & Bevan (1995) FLC 92-600; Mitchell & Mitchell (1995) FLC 92-601).
Since separation the wife’s income has been as follows:
Year Ended
Taxable Income
30 June 2009
$ 3 975
30 June 2010
$ 575
30 June 2011
$11 241
30 June 2012
$34 255
The wife’s unchallenged evidence was that most of that income is interest earned on the controlled monies account. Her company according to its tax return has traded largely at a loss making the following losses:
Year Ended
Loss
30 June 2009
$ 4 885
30 June 2010
$30 563
30 June 2011
$19 874
30 June 2012
$ 6 798
The earnings of her company to 30 June 2012 a year were some $40 000. In cross examination the wife conceded that in coming to the losses claimed she had included her personal non-deductible expenses as deductible expenses of the company. She accepted that the only relevant expenses that she was entitled to set off against that income was some $3 000 to $5 000 a year resulting in income for the company of some $35 000 in that year. Since 30 June 2012 the company has rendered the following invoices:
Date
Invoice Number
Amount
2 July 2012
…45
$ 6 765.00
6 August 2012
…47
$ 1 160.93
11 August 2012
…48
$ 3 135.00
31 August 2012
…49
$ 2 626.80
2 November 2012
…50
$ 3 296.48
18 December 2012
…51
$ 2 145.00
18 December 2012
…52
$ 473.00
Total
$19 602.21
If one doubles the company invoices for 2012 (to arrive at a figure for the full year) one arrives at a gross income of just under $40 000. This seems to be consistent with previous years. There is no evidence to suggest the expenses would be any different. Accordingly, I find that the wife’s present income from her exertions is $30 000 per annum or $577 per week. Senior counsel for the husband conceded the wife had an income of between $550 to $600 per week.
Other than to say that she would like to acquire a small business from whatever funds that she might receive from this case there was no evidence as to what the wife is otherwise likely to do with the funds to be received. In her Financial Statement filed on 25 January 2013 she was paying rent in the sum of $598 per week. She could use the funds received from the controlled monies account to purchase a place to live. On the other hand the wife could invest them and receive an income. In what manner she might do so and what she would be likely to receive from such an investment was not explored in the evidence. She could purchase a business with them. Similarly, there is no basis for making any findings that a business is likely to return the wife an income other than the business she presently conducts. I shall proceed on the basis that the funds received from the controlled monies account will be used to purchase appropriate accommodation thus removing rent from her expenses because it is more likely than not she would take the more prudent and tax effective course of buying a home even if some of the funds were used to acquire a small business.
Turning to the Part N expenses. The wife sees Dr H every week paying him $240 per visit and receiving back from Medicare $150 resulting in a net weekly cost of $90. The wife consults Dr K once every three months paying him $240 per visit and receiving back, to the best of the wife’s recollection $90 from Medicare resulting in a net cost of $150. She sees an exercise physiologist for osteoporosis every fortnight at a cost of $110. She sees her general practitioner once every three months paying him $120 per visit receiving back $60 from Medicare resulting in a net cost of $60. The weekly cost of medical expenditure is thus $162.50.
Dr H
$90
Dr K
$12.50 ($150 ÷ 12)
Exercise physiologist
$55
General practitioner
$5 ($60 ÷ 12)
Total
$162.50
The wife said that her main entertainment and hobby was going to reasonable restaurants which, having regard to the parties’ lifestyle when they were cohabiting, seems not inappropriate.
The only other matter upon which the wife was cross-examined were the golf club membership and green fees. She said she was hoping to play once a week but had not played for about eighteen months. The husband maintains his golf club membership without playing regularly and again I do not find that an inappropriate expense.
I had earlier found, and it was conceded by the wife in cross examination, that the entirety of the car expenses had been inappropriately claimed incorrectly as deductions against income in the wife’s tax returns leading to a small income. I have had regard to what the wife’s income would be with appropriate deductions as conceded by her being made. In Part N of her Financial Statement previously referred to, however, no claim was made for motor vehicles, petrol or maintenance. It is therefore appropriate to include in Part N an amount for those as only the business related part of that expenditure has now been taken into account. These expenses are of course paid by her company as she is the sole shareholder and director of that company. If the true income of the company (that is to say its income less appropriate correct deductions) is to be taken into account then it is also appropriate that what would then be regarded as the personal costs of the motor vehicle also be taken into account in assessing the wife’s weekly expenses. According to her tax return for the year ended June 2012 her motor vehicle leasing expenses were $11 671 of which $1459 was properly deductible and her motor vehicle expenses were $3 649 of which $456 was properly deductible. When one removes the deductions already taken into account the expenses are $13 405 which is a total of $257 weekly.
I note that on 22 January 2013 the wife advised the Australian Taxation Office of the correct amounts of the deductions and sought an amended assessment issue.
The effect of this is to give the wife an income of $673.07 per week. The Part N expenses need to be adjusted by reducing the medical, dental and optical expenses from $326 per week to $162.50, a reduction of $163 per week and adding the motor vehicle expenses of $257.69 per week, a net gain of $94.49 resulting in a new Part N expenditure of $1 209 per week approximately. This means that after the property orders are carried out in this matter the wife’s weekly expenses will exceed her weekly income by $536 per week.
It is the husband’s case that the wife is capable of earning more. There was evidence that not long before the separation the wife had obtained a full time consulting contract. She left that position after only a few weeks saying she found the work unpleasant because of the long hours and feeling that she was under the supervision of a person significantly less qualified than herself. Her case was that it was the husband’s alcohol abuse that made it impossible for her to manage to work.
It is true that the wife has not actively sought employment. It seems however that her earnings for the last eighteen months or so have been quite consistent. Her gross earnings through her company are some $40 000 per year. There are no documents that suggest that her income has been significantly higher than that. On balance, I find that the wife’s present earning capacity is quite modest and of the order of approximately $35 000 per year. I am not satisfied on the evidence that there is a business venture in which the wife is likely to engage that will earn her a significant income. She will shortly be able to access her modest superannuation.
The wife has earned income of this order throughout much of the marriage as I earlier found. There is no evidence that either party was dissatisfied with her earnings and her career path. The parties conducted the relationship on that basis. They enjoyed a good standard of living in a very stylish house.
Having regard to the property the wife will receive, as a result of these proceedings, that property will not be sufficient for her to maintain that same standard of living in a dwelling of similar comfort. If she expends the majority of the funds she will receive on a home there will be little left over to generate an income. Alternatively, if she invests the funds, either in her own business or otherwise, she will have to rent accommodation. In either event, it is difficult to see how that accommodation could match the former matrimonial home. She will not, as had been the case previously, be able to share in the income of her husband to support her lifestyle.
I am satisfied the wife has established that she is unable to support herself adequately having regard to the manner in which the parties lived prior to separation, her earning capacity and the income presently available to her. I have already considered s 75 (2) factors above and discussed matters relevant to s 75(2) (h) – (k). Both parties receive medical assistance but the husband’s medical condition presently renders him incapable of work but the wife’s difficulties do not seem to have the same effect.
Neither party is obliged to support any other person or is entitled to receive a benefit. This was a long marriage and there were significant financial and non-financial contributions by both parties. I have made orders pursuant to s 79. In doing so I took into account under s 75(2), to an extent, the disability insurance payments received by the husband. The disability policy giving rise to those payments was paid for from income of the husband which would otherwise have been available to the husband and the wife. It was a joint decision to divert part of that income to the disability policy premiums for their joint benefit. It was envisaged by them at the time that should the husband become disabled within the meaning of the policy the payments would be available to them both for the maintenance of their joint lifestyle.
Having regard to the previous lifestyle of the parties I find that the wife’s expenses as set out in Part N of her Financial Statement are in all the circumstances reasonable.
The husband’s financial circumstances are set out in his Financial Statement filed on 24 January 2013. It discloses he has a weekly income of $3 756. He pays $250 board to his new partner.
From this the husband pays $1 035 per week income tax, $94 superannuation, $206 per week for disability policy insurance. His Part N expenses total some $1 837 per week of which $194 is spent on other adults. This means that his total personal expenditure is $4 096 per week which of course includes $670 per week maintenance payable to the wife pursuant to an interim spousal maintenance order made by this court.
The husband’s partner earns $4 484 per week so it cannot be said that she is dependent on him for the payment of $194 per week. The husband estimates that she spends $500 for his benefit every week. The husband’s entertainment and hobby expenses are significantly higher than the wife’s. However, excluding the maintenance of $670 and the payments made to other adults of $194 the husband’s income exceeds his expenses by some $524 per week. ($4 096 – $864 = $3 232).
I do not take into account any income that might be earned by the husband by way of royalties from his art pieces as that has been taken into account as a capital sum in the property settlement.
The income of the husband is received pursuant to the insurance policy discussed above. It enables the husband to maintain his previous lifestyle in contrast to the wife. His accommodation costs are very much less than the wife’s.
The husband is in a stable relationship with a person of considerable income who is able to provide him with financial support. Since separation the husband has been able to accompany his new partner on several extensive overseas trips.
It has been established that the husband’s income exceeds his expenses by such an amount as to be able to pay to the wife by way of maintenance the sum that she needs to maintain herself adequately.
It is appropriate to make a spousal maintenance order for these reasons. It is appropriate that the wife have financial support as she adjusts to her new circumstances and determines her future course. I take into account that she is 54 years old and her career options are limited. The husband, on the other hand, has the possibility of a significant income until he reaches the age of 70. I have earlier found that it is, however, more probable than not that the payments will cease or diminish in the future. I do not think it appropriate to make an order for maintenance for an indefinite period. A period of fours years will give the wife time to adjust to her new circumstances and for her lifestyle not to be suddenly affected.
I shall make an order therefore that the husband shall pay the wife spousal maintenance in the sum of $534 per week until the end of April 2017.
The husband’s source of income to make these payments is the disability insurance payments. I have found that it is more probably than not that these payments will cease, or at least diminish, at some time in the future. If they do the husband’s ability to make these payments will be adversely affected. I will therefore make the payments of spousal maintenance conditional upon the husband continuing to receive disability insurance payments on the basis of a total disability. If the payments cease or are reduced the issue of spousal maintenance will have to be considered afresh.
I certify that the preceding one hundred and thirty three (133) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 24 May 2013.
Associate:
Date:22 May 2013
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