Rattigan and Rattigan
[2011] FMCAfam 94
•14 February 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RATTIGAN & RATTIGAN | [2011] FMCAfam 94 |
| FAMILY LAW – Property – very modest pool – spousal maintenance – where the wife has a disability and seeks a final order for periodic spousal maintenance – costs. |
| Family Law Act 1975, ss.74, 75, 79, 81, 90MZD, 117 Federal Magistrates Court Rules, r.21, Schedule 1 |
| Clauson & Clauson (1995) FLC 92-595 DJM & JLM (1998) 92-816 Kennon & Kennon (1997) FLC 92-757 |
| Applicant: | MS RATTIGAN |
| Respondent: | MR RATTIGAN |
| File Number: | NCC1608 of 2010 |
| Judgment of: | Terry FM |
| Hearing date: | 23 December 2010 |
| Date of Last Submission: | 23 December 2010 |
| Delivered at: | Newcastle |
| Delivered on: | 14 February 2011 |
REPRESENTATION
| Solicitor Advocate for the Applicant: | Mr Nash |
| Solicitors for the Applicant: | Nash Allen Williams & Wotton |
| Respondent: | No appearance |
ORDERS
That the husband and wife forthwith do all acts and things and execute all deeds, documents, instruments and writings necessary to sell Property S (“the property”) on the following terms:
(a)the property be listed for sale with a real estate agent nominated by the wife;
(b)the listing price, the time of listing, the method of sale and conditions of sale shall be at the discretion of the wife.
That until completion of the sale:
(a)the wife has the sole right to occupy the property.
(b)the wife shall keep the property in a neat and tidy state and in repair and permit inspection by agents and prospective purchasers at all reasonable times.
That the proceeds of the sale be paid as follows:
(a)firstly to pay the costs commissions and expenses of sale.
(b)secondly to pay the amount owing to Suncorp-Metway Limited in respect of the mortgage secured over the home.
(c)thirdly to pay any outstanding council or water rates.
(d)fourthly the balance to the wife.
That the husband is declared the owner to the exclusion of the wife of the 2004 VY Holden Commodore and upon presentation to her by the husband of the relevant documents the wife shall sign all documents required to transfer her interest in the motor vehicle to the husband.
A splitting order will be made in chambers allocating the wife a base amount of $60,612.50 from the husband’s superannuation interest in [S] Superannuation Scheme and $12,150.00 from the husband’s interest in the [S] Non-Contributory Superannuation Scheme upon proof that procedural fairness has been accorded to the Trustee of the Schemes.
That unless specified in these orders and except for the purpose of enforcing payment of any money due under these orders or subsequent orders, each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in possession of each party and superannuation standing in their respective names.
That in the event that either party refuses or neglects to comply with the provisions of these orders the Registrar of the Federal Magistrates Court of Australia at Newcastle is hereby appointed to execute all deeds and documents in the name of the defaulting party.
The husband is to pay to the wife maintenance of $150.00 each week the first payment to be made seven days from completion of the sale of the Property S property and thereafter be made weekly for a period of twelve months.
The husband shall pay the wife’s costs of and incidental to the proceedings fixed at $8,735.00.
That the costs be paid within 12 months or within 21 days of the husband receiving his entitlement pursuant to the will of the late
Mr C.
IT IS NOTED that publication of this judgment under the pseudonym Rattigan & Rattigan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1608 of 2010
| MS RATTIGAN |
Applicant
And
| MR RATTIGAN |
Respondent
REASONS FOR JUDGMENT
Introduction
The husband and wife separated in April 2009 after a marriage of 11 ½ years and cohabitation of 17½ years.
On 18 June 2010 the wife filed an application in which she sought property settlement orders, an order for periodic spousal maintenance and costs.
The husband was not immediately served with the wife’s application. He had a solicitor of the time and it would appear that he came to know of the application, because a financial statement, prepared as if for filing in the proceedings, was sworn by him on 30 July 2010 and sent to the wife’s solicitor. No responding documents were filed however and the husband did not attend any of the early court events.
On 8 November 2010 the wife’s documents were served on the husband personally.
On 17 November 2010 the husband’s solicitor filed a notice of withdrawal as the husband’s lawyer despite the fact that no documents had ever been filed by the husband.
On 18 November 2010 the matter came before the court. The husband did not appear and orders were made requiring him to file and serve a response, affidavit and financial statement by 10 December 2010 and adjourning the matter to 23 December 2010.
The husband was directed to attend court personally on 23 December 2010 and an order was made that if he failed to do so and failed to file responding documents the wife’s application would be heard and determined on an undefended basis.
The 18 November 2010 order was served personally on the husband on 29 November 2010.
The husband did not file responding documents or attend court on
23 December 2010 and I considered it appropriate to hear the wife’s application on that day.
The property pool is very modest and the wife suffers from a disability. She sought an order that she receive the whole of proceeds of sale of the former matrimonial home together with 70% of the husband’s superannuation.
The wife also sought orders that the husband pay her $400.00 per week spousal maintenance and that he pay her costs of the proceedings.
The evidence
The wife relied on her application filed on 18 June 2010, her financial statement filed on 8 October 2010 and her affidavits filed on 8 October 2010 and 23 December 2010.
The wife also relied on the affidavit sworn by her solicitor Dominic Nash to which was attached to a copy of the financial statement sworn by the husband on 30 July 2010 and a copy of a statement from the husband’s superannuation fund dated 8 July 2010.
Ultimately the husband’s financial statement was tendered as an exhibit, and a valuation of the husband’s superannuation dated
8 December 2010 superseded the information in the statement from the fund dated 8 July 2010.
The orders sought by the wife were contained in a Minute of Order which was tendered at the hearing.
Background
The wife and husband commenced cohabitation in November 1991, married in October 1997 and separated in April 2009.
There are no children of the marriage.
Prior to the commencement of cohabitation the wife, who was born with spina bifida, was in receipt of a Disability Support Pension. During the relationship she was engaged in home duties.
Prior to the commencement of cohabitation the husband was employed by [R] as a [omitted] and he continued in this employment throughout the relationship.
The only significant asset acquired by the parties (save for the superannuation accumulated as a result of the husband’s employment) was a property at Property S which was purchased in joint names in 2005.
The parties were able to purchase the Property S property because the husband inherited some money from one of his grandparents. $70,000.00 of the inheritance was used as a down payment on the property and the balance required to complete the purchase was borrowed from Suncorp-Metway Limited.
When the parties separated in April 2007 the husband ceased to reside in the Property S property and ceased paying the mortgage. The wife remained in the home but as her only income was the Disability Support Pension she was unable to keep the mortgage payments up to date.
The Property S property was listed for sale in March 2010 but at the date of the hearing in December 2010 it remained unsold.
The law applicable to the property settlement application
Pursuant to s.79 of the Family Law Act, a court can make such orders as it considers appropriate altering the parties’ interests in property. S.79 (2) provides that the court shall not make an order under this section unless it considers that it is just and equitable to do so.
The procedure usually adopted in determining applications for property settlement is:
i)to identify and value the assets and liabilities of the parties;
ii)to assess the contributions of the parties under ss.79(4)(a), (b) and (c) and to express those contributions as a percentage;
iii)to consider the matters set out in ss.79(4)(d),(e),(f) and (g), which include the matters in s.75(2), so far as they are relevant, and to determine whether any adjustment should be made as a result to the contribution based entitlements;
iv)to consider the effect of those findings and resolve what orders are just and equitable in all the circumstances of the case.
The assets and liabilities
The non-superannuation asset pool consists of the following:
Description
Ownership
Value
Property S Joint 230,000.00 to 280,000.00 2004 VY Holden Commodore Wife but in husband’s possession 9,000.00 Furniture Joint but in the wife’s possession 2,000.00 Total 241,000.00 to 291,000.00
The Property S property must be sold, as the mortgage is substantially in arrears, and ultimately the value of the property will be fixed by its sale.
In March 2010 the property was listed for sale with an asking price of $299,000.00. No offers were received and it is now listed with another agent. The wife has been advised to list it for sale for $280,000.00 with a view to accepting $250,000.00. Evidence given at the hearing suggests that there is a real possibility that $230,000.00 or even less may be received for the property.
The Holden Commodore is registered in the wife’s name but has been in the husband’s possession since separation. The wife attached a printout from Red Book as guide as to its value.
The husband did not make any reference to this vehicle in the financial statement sworn on 30 July 2010 although he was clearly using a motor vehicle at that time as he claimed that he had expenses for comprehensive motor vehicle insurance, petrol and vehicle maintenance.
The Red Book print out is not admissible evidence of value but I have nothing else. The husband was aware, from the information in the wife’s financial statement that she was then asserting that the vehicle was worth $7,000.00 and he has chosen to take no part in the proceedings. I am satisfied that it is reasonable to adopt the median of $9,000.00 from the Red Book print out as the value of the vehicle.
The wife estimated that her household contents were worth $2,000.00. This estimate is not admissible evidence of value, but again the husband was aware of the estimate and has chosen to take no part in the proceedings and thus leave this estimate unchallenged. The estimate is not an unreasonable one in the light of common second hand values placed on furniture and the amount is small in comparison to the pool overall. As a matter of expediency I intend to place the furniture in the pool at $2,000.00.
In his financial statement the husband stated that he had household contents worth $1,000.00. The wife’s solicitor did not ask that any household contents in the husband’s possession be included in the pool.
The liabilities are:
Description of debt
Ownership
Value
Home mortgage Suncorp-Metway Limited Joint 202,000.00 NAB Visa Card Wife 3,105.00 Centrelink debt Wife/or Joint 1,272.84 Selling costs of the home Joint 9,090.00 Total 215,467.84
At separation the parties owed $182,000.00 to Suncorp-Metway. After separation the husband ceased paying the mortgage and the wife was unable to keep up with the payments from her Disability Support Pension.
As at 10 December 2010, $198,157.00 was owing on the mortgage.
The wife has no capacity to make the mortgage payments between now and the sale of the home and she estimated (based on the interest being charged on the loan) that about $202,000.00 would be owed if the home is sold by March 2011. I intend to include the mortgage in the pool at $202,000.00.
The parties will be obliged to pay conveyancing costs (estimated at $1,500.00) and agent’s commission of 3.3%. If the home sells for $230,000.00, as seems likely, the commission will be $7,590.00. It is reasonable to include these amounts as liabilities.
The wife’s currently owes $3,105.00 on her credit card. She owed $3,000.00 on the card at separation.
The wife did not give any evidence about how she had used the card after separation but given her very low income it is entirely credible that she has been unable to reduce the balance owing at separation and I intend to include this debt in the pool as a relevant liability.
In her affidavit the wife said that she owed $120.00 to Aged and Disability Support Services at separation but she made no reference to any debt being owed to Centrelink at that time. However in her financial statement filed on 8 October 2010 the wife said that she and the husband owed a joint debt of $1762.00 to Centrelink.
The wife produced a document confirming that there was currently $1,272.84 owing to Centrelink and I intend to include the debt due to Centrelink as a relevant liability.
In his financial statement the husband said that he owed $10,000.00 to GE Finance. He did not file any other documents in the proceedings and it is impossible to know whether this is a pre-separation or post-separation debt or why it was incurred. I do not intend to include it as a relevant liability.
The non-superannuation pool is therefore worth between $25,532.16 in the scenario of the house selling soon and selling for $230,000.00 and $73,892.16 (taking account of a change in the commission payable) if the house sells soon and for $280,000.00.
The wife has no superannuation. The husband is a member of [F] State Super and a valuation of his interests in accordance with the Family Law (Superannuation) Regulations as at the date of separation was obtained by the wife’s solicitor. His interests are as follows:
Name of fund
Value
[S] Superannuation Scheme 85,129.84 [S] Non-contributory Superannuation Act 17,065.22 Total Superannuation 102,195.06
The total pool is thus worth between $127,727.72 and $176,087.22.
Contributions
The wife had no significant assets at the commencement of cohabitation. The husband had been a member of [S] Super since November 1989 and had a small superannuation entitlement, but otherwise had no significant assets.
The husband was employed as a [omitted] by [R] throughout the relationship and his income financially supported the family. The wife did not work outside the home.
In about 2005 the husband inherited $96,000.00 from his grandparents. $70,000.00 of this money was used to assist in the purchase of the Property S property. The balance was used among other things to modify the home for wheelchair accessibility ($6,000.00), construct a garage ($8,000.00) and purchase blinds ($2,000.00).
At separation the parties owned a VY Holden Commodore, which was the last in line of a number of vehicles which were purchased and later disposed of during the relationship. The Commodore was purchased by means of trading in an existing vehicle, using money drawn from the wife’s credit card and drawing $10,000.00 from the mortgage.
I accept the wife’s evidence that during the relationship she performed 80% of the household duties. The wife conceded that the husband hung out the washing and brought it in and that he mowed the lawn. She also conceded that the husband would bring the car to the supermarket and assist her to transport the groceries home after she purchased them and that he would assist with the cleaning three or four times a year prior to his family visiting.
The wife alleged that the husband was violent to her on occasions during the relationship and damaged property when angry. Regrettably I am not able to take this into account in assessing contributions.
In Kennon & Kennon[1] Fogarty and Lindenmayer JJ considered the circumstances in which conduct (including family violence) might be relevant in property proceedings and said as follows:
[1] Kennon & Kennon (1997) FLC 92-757
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 contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than 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.
………….
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass… conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).
I accept the wife’s evidence about the husband’s violence, but the wife did not give any evidence which would allow me to find that the husband’s behaviour impacted on her ability to contribute during the marriage or had an economic effect because valuable items of property were destroyed[2] or because the parties were required to pay for repairs to property.
[2] I am sympathetic to the distress which the husband’s destruction of the dinner set the wife received for her 21st birthday must have caused the wife, but I am not persuaded that this event is relevant to the assessment of contributions in property settlement proceedings.
Neither party made any post-separation contributions which are relevant to the assessment of contributions. It is reasonable to infer that the husband made contributions to his superannuation fund after separation but it appears from the information obtained from the husband’s superannuation fund that the wife’s solicitor requested a valuation of the superannuation as at 17 April 2009, the date of separation.
Conclusion about contributions
I am satisfied that the parties contributions from their own efforts during the 17 ½ year relationship should be assessed as equal. The husband was the primary income earner and the wife the primary homemaker.
The fact that the husband introduced a large sum of money from an inheritance late in the marriage must however lead to a finding that the husband’s contributions exceeded those of the wife.
Some of the capital introduced by the husband has effectively been lost, but absent this contribution the parties would have a non-superannuation pool at separation would have been of very limited value indeed.
The wife’s counsel submitted that contributions should be assessed as 70% by the husband and 30% by the wife. This is a reasonable submission and it gives weight to the husband’s contribution of his inheritance but also gives full weight to the wife’s homemaker contributions over a period of 17½ years.
A 70/30 division of the assets would entitle the wife to between $7,659.65 and $22,167.65 from the non-superannuation pool and $30,658.52 of the superannuation and the husband to between $17,872.51 and $51,724.51 from the non-superannuation pool and $71,536.54 of the superannuation.
Section 75(2) factors
As required by s.79(4)(e) I now turn to consider the matters in
s.75(2) of the Family Law Act. Ss.79(4)(d), (f) and (g) have no relevance to these proceedings.
The wife is 43 and is confined to a wheelchair. She was diagnosed at birth with spina bifida and hydrocephalus and she also suffers from lymphoedema.
The wife undertook a [omitted] course after completing school in 1985 but although she applied for jobs she was not successful in gaining employment. She was on a disability support pension when the parties met and has been on a disability support pension since separation.
I am satisfied that the wife has no capacity for paid employment and will be dependent on the Disability Support Pension for the rest of her life. The pension currently pays the wife $340.00 per week.
On the basis of contributions the wife is entitled to cash of between $7,600.00 and $22,000.00 and superannuation of $30,600.00. This is on the basis that the wife pays out the Centrelink debt and the credit card debt. If the wife chooses not to pay them out she would have some extra cash of about $3,400.00 but would of course have to continue to make repayments on the debts.
The wife has unpaid legal costs of $21,037.28.[3] If she receives the amount to which she is entitled by way of contributions she will on a worst case scenario be able to pay only part of her solicitor’s bill or on a best case scenario have nothing left after paying it.
[3] Exhibit H
The wife is not cohabitating with anyone or liable to support anyone else.
Pursuant to s.75(2)(o) I am required to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account and I take into account here that since separation the wife has been living in the former matrimonial but has failed to make any meaningful mortgage repayments, with the result that the mortgage has increased from $182,000.00 at separation to $198,000.00 as at December 2010.
In some cases a party would be held to account for such an increase in the mortgage, but in this case it is clear that the wife has simply not had sufficient income to pay the mortgage, and she did take steps to place the property on the market in March 2010.
The husband is 41. There was nothing to suggest that he had any health problems.
The husband has been employed by [R] as a [omitted] for 21 years. In his financial statement the husband said that he was earning $1,000.00 per week or $52,000.00 per annum. However the wife produced copies of the husband’s 2005, 2006 and 2007 Notices of Assessment which showed that his taxable income was $50,750.00 in 2005, $54,863.00 in 2006 and $68,252.00 in 2007.
The wife produced a copy of the husband’s payslip dated 7 March 2007 which indicated that the husband had a base salary of $41,056.00 and received extra by way of penalty loadings and overtime.
The husband declined to take part in the proceedings and in my view I am entitled to find that the husband’s earnings have been increasing and that his last known income was $68,000.00 per annum.
There was no evidence to suggest that the husband’s employment with [R] would not be available to him in the future.
On the basis of contributions the husband is entitled to cash of between $17,870.00 and $51,000.00 and superannuation of about $71,500.00. According to his financial statement he owes $10,000.00 to GE Finance.
There was no evidence that the husband was liable for the support of any other person. In his Financial Statement the following appears in Part N:
Other necessary commitments support towards recently born child – 3 months
The husband did not put any monetary figure against this alleged commitment however and did not indicate in Part E of the Form that there were any other occupants of his household.
Evidence was tendered at the hearing that the husband is entitled to a one ninth share of the estate of his grandfather Mr C who died on [date omitted] 2010. According to the draft Inventory of Property produced by [W] in answer to subpoena, the estate has assets to the value of $716,676.29, and a one ninth share of this is $79,630.70.
There will be costs incurred in administering the estate and the Inventory of Property produced was only a draft, but it is reasonable on the material available to conclude that the husband will have an entitlement when the estate is finalised to something in the vicinity of $79,630.70.
The wife is clearly entitled to an adjustment for s.75(2) matters. The husband earned $68,000.00 per annum or $1,307.00 per week in 2007, and the wife receives only $340.00 per week. The husband has long standing and stable employment and will continue to accrue superannuation for the remainder of his working life, which could be for twenty five or more years. The wife will never work and will never accrue any superannuation.
The wife has a substantial debt for legal fees which will eat up any amount she receives on the basis of contributions. The husband has no such debt and in addition he has a significant resource in the form of the inheritance which is coming to him from his grandfather’s estate. I take into account that he apparently owes about $10,000.00 to GE Finance.
The wife proposed that she receive the whole of the proceeds of sale of the home, the furniture and $72,762.00 of the husband’s superannuation, that she be responsible for payment of the Centrelink debt and her credit card debt, and that the husband receive the Commodore motor vehicle and retain the balance of his superannuation.
This would give the wife between $16,532.16 and $64,892.16 cash. At the lower end it is still not enough to get the wife out of the woods as far as her legal fees are concerned and at the upper end (which is unlikely to eventuate) it would give the wife a very modest buffer against the future.
Taken together this would give the wife about 70% of the pool overall, and it represents a 40% adjustment in the wife’s favour for s.75(2) factors.
This is a substantial adjustment, but in Clauson & Clauson,[4] the Full Court emphasised that in considering an appropriate adjustment for s.75(2) factors the court needs to take into account not just the percentages but the actual dollar effect of the percentages.
[4] Clauson & Clauson (1995) FLC 92-595
Nothing less than the outcome which results from a 40% adjustment in favour of the wife would be appropriate given the comparative situations of the parties and the limited pool of assets available for division.
The effect of the findings
This case presents some difficulties because I cannot be certain about the ultimate selling price of the Property S property.
If by some extreme good fortune the house sells for a price at the higher end of the spectrum the wife will in addition to receiving 70% of the superannuation receive $64,000.00 in real assets while the husband will only receive 30% of the superannuation and a motor vehicle worth $9,000.00. However the husband has an ongoing earning capacity, no known legal fees to pay and the prospect of receiving a valuable inheritance in the not too distant future. I would still consider this a just and equitable outcome given the size of the pool and the disparity in the parties’ circumstances.
The more likely outcome is that the house will sell for a price at the lower end of the spectrum, and another possibility is that the mortgage debt will be greater than is allowed for in this judgment because the house takes a long time to sell. In either of these eventualities the wife will be in a very poor situation indeed, but absent increasing the superannuation split or ordering the husband to hand over the Commodore, neither of which outcomes were sought by the wife, there is nothing I can by way of property settlement orders do to alleviate the wife’s situation.
I am satisfied that the outcome on any scenario is just and equitable as between the parties.
The orders
The wife sought a superannuation splitting order. Section 90MZD(1)(a) of the Family Law Act provides that:
(1) An order under this Part in relation to a superannuation interest may be expressed to bind the person who is the trustee of the eligible superannuation plan at the time when the order takes effect. However:
(a) in the case of a trustee who is not a secondary government trustee--the court cannot make such an order unless the trustee has been accorded procedural fairness in relation to the making of the order;
The wife asserted that the trustee had been accorded procedural fairness and relied on a letter from [S] Super to her solicitors dated
30 November 2010. However the letter commences as follows:
We hereby acknowledge your telephone request regarding preferred wording on 18 November 2010.[5]
[5] Annexure J wife’s affidavit filed 23 December 2010
The letter goes on to set out various standard types of orders.
This is not evidence that the Trustee of the husband’s superannuation funds has been accorded procedural fairness.
As a result I cannot make a splitting order and all that I can do is to note that I will make a splitting order in chambers allocating the wife a base amount of $60,612.50 from the husband’s superannuation interest in [S] Superannuation Scheme and $12,150.00 from the husband’s interest in the [S] Non-Contributory Superannuation Scheme upon proof that procedural fairness has been accorded to the Trustee of the Schemes.
The wife proposed that an order be made that the husband pay the rates for the Property S property pending the sale of the property and also pay the mortgage.
I do not intend to make those orders. No evidence was given about the status of the rates payments. As to the payment of the mortgage, I am not inclined to order the husband to pay this now when I have taken into account the potential non-payment of the mortgage by anyone between now and the date of sale of the home in calculating a mortgage balance.
The spousal maintenance application
The wife sought an order that the husband pay her $400.00 per week spousal maintenance.
Section 72(1) of the Family Law Act provides that:
A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if and only if, that other party is unable to support herself or himself adequately whether-
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason,
having regard to any relevant matter referred to in Section 75(2).
Section 74(1) provides that:
In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
As the wife sought a final order for periodic spousal maintenance I also need to take into account s.81 of the Family Law Act which provides that:
In proceedings under this Part...the Court shall, as far as practicable, make such orders as will finally determine the financial relationship between the parties of the marriage and avoid further proceedings between them.
To determine the wife’s claim for spousal maintenance I therefore need to consider:
i)whether the wife has established that she is unable to support herself adequately for any of the reasons in s.72(1)(a) (b) or (c).
ii)if yes, what amount does the wife require for her support.
iii)whether the husband has the capacity to provide any support for the wife and if yes
iv)whether, in the exercise of my discretion and in the light of s.81, I should make an order for the payment of periodic spousal maintenance for an indefinite period.
Whether the wife has established that she is unable to support herself adequately for any of the reasons in s.72(1)(a) (b) or (c)
I am satisfied that the wife suffers from medical conditions which make it impossible for her to obtain employment.
The wife’s sole income is the disability support pension, which is an income tested pension. Pursuant to s.75(3) of the Family Law Act when dealing with a maintenance application I am required to disregard the wife’s entitlement to an income tested pension and therefore the wife must be treated as having no income from which to support herself.
Hopefully the wife will receive between $14,000.00 and $64,000.00 from the sale of the Property S property. It is more likely that the amount will be in the region of $14,000.00 than in the region of $64,000.00. The wife owes her solicitor $21,000.00 and on a worst case scenario she will have nothing left after paying her solicitor and on a best case scenario she will be left with a small capital sum. It will not be a capital sum of such size however that the wife should be required to invest it to provide herself with income.
The wife will also have $72,700.00 of superannuation.
I am satisfied that the wife is unable to support herself adequately by reason of her physical incapacity for appropriate gainful employment.
What amount does the wife require for her support
The wife provided information about her weekly expenses in both her financial statement and her affidavit. The information in the two documents differs a little and I will rely on the information in the later document being the wife’s affidavit filed on 23 December 2010.
The wife claimed expenses of $720.00 per week. If the amounts for the mortgage, council rates, water rates, house insurance and house maintenance are deducted however (because they will end once the house is sold and there is no evidence the wife is actually paying them anyway) her total expenses are $342.00.
The wife’s expenditure as itemised is very modest.
Once the house is sold the wife will need to rent accommodation and she said that her enquiries suggested that her rent would be not less than $180.00 per week. The wife’s total weekly expenses are thus at least $522.00.
For the purposes of the spousal maintenance application the wife has no income from which to meet these expenses.
Whether the husband has the capacity to provide any support for the wife
The husband earned $68,252.00 in the 2007 financial year. He chose to take no part in the proceedings and to provide no current information about his income and I intend to proceed on the basis that he earns $68,252.00 per annum or $1312.50 per week.
If the deductions shown on the husband’s 7 March 2009 payslip, which appear to be for tax, superannuation and a union fee, are taken off this amount the husband is left with $965.00 per week.
In his financial statement the husband listed his expenses as being $813.00 per week after tax, comprised of rent ($400.00 per week) contents and motor vehicle insurance ($15.00 per week) GE Finance debt ($90.00 per week) and “all other expenditure” ($300.00 per week).
The husband provided details of how the $300.00 was made up in Part N of his Financial Statement. The claimed expenses are modest.
The evidence in the husband’s Financial Statement is of course untested. There was no documentary evidence to support his claim that his rent is $400.00 per week, and the wife said that she might be able to obtain accommodation for around $180.00 per week. Whether there is an element in this of a rental allowance was not made clear by the wife.
Another unsatisfactory aspect of the matter is that the husband’s expenses include the $90.00 weekly repayment to GE Finance and I have no idea what the GE debt relates to and whether it is reasonable to prioritise payment of it over the wife’s need for support.
If the rent is overstated common sense suggests that it may not be by too much, and if I allow for the GE debt out of an abundance of caution the situation is that husband has $152.00 per week available to assist with the support of the wife.
Whether an order for payment of periodic spousal maintenance should be made
It does not automatically follow that because the wife has a need and the husband has some capacity to meet that need that an order for spousal maintenance must be made. Whether an order is made is within the discretion of the court.
There is good reason to be cautious about making final orders for periodic spousal maintenance. We live in a society in which people expect that upon separation they will be required to share property with their former partner, but they do not expect that they will be required to share their income with their former partner for years or even decades after a relationship has ended. This expectation is recognised in s.81 of the Family Law Act, which emphasises the desirability of ending financial relations between separated parties.
In the particular case before me the husband and wife have been separated for nearly three years and the husband has to date effectively walked away from his old relationship. He will almost certainly resent an order now being made that he pay periodic spousal maintenance to the wife.
This resentment, or simply the exigencies of life, could spill over into the necessity for the wife to bring enforcement proceedings, or require the wife to deal with an application by the husband to vary or discharge the order. The financial relationship between the parties will not be finalised and there is a very real prospect of further legal proceedings occurring between the parties.’
On the other hand, s.74 does not bar the court from making an order for long term periodic maintenance, and s.81 itself states that the court must as far as reasonably practicable make the orders which will end the financial relationship and avoid further proceedings. In DJM & JLM[6] the Full Court emphasised that there may be cases where the goal of finalising the financial relationship between the parties simply cannot be achieved.
[6] DJM & JLM (1998) 92-816
In the case before me the parties have a very limited pool of assets and there is insufficient in the asset pool to properly provide for the wife. On the evidence available the husband has the capacity to contribute $152.00 per week to the wife’s support and for someone in the wife’s circumstances this is an amount worth having. The wife should still be entitled to some or all of her disability support pension.
If the amount the husband was able to pay was very small, it might have been preferable to prioritise the desirability of ending the financial relationship between the parties and avoiding the prospect of further litigation over the small benefit to be gained by the wife and to decline to make an order at all. The amount of $152.00 is not small however to someone in the wife’s position.
I am satisfied that it is appropriate to make an order, but I do need to consider whether the order should be indefinite or whether it should have an end point.
This is not a case in which the wife’s circumstances are likely to improve in the future, because for example she will finish a course of study and gain well paid employment. The wife came into the relationship with a disability and she will always have a disability. She will never enter the workforce. On the other hand the husband, although he has some capacity to make a weekly payment to the wife, is not a high income earner who might be expected to hardly notice a payment of $150.00 per week from his wages as the years passed, and I do need to give the objects set out in s.81 some weight.
The wife’s circumstances will be the most difficult in the next year or so, when the house is sold and she must adjust to the reality of moving into rented accommodation and being required to pay rent each week, rent which will be in excess of any voluntary payments she has been making on the Property S mortgage. She may also have some unexpected expenses associated with moving, and she may well not have any capital from the sale of the house to assist her to meet those expenses.
An order that the husband pay the wife periodic spousal maintenance for sufficient time to allow her to ease into the change in her standard of living. It is difficult to fix on a sufficient time but I intend to order that the husband pay the wife periodic spousal maintenance of $150.00 per week for twelve months from the sale of the Property S property.
One way the necessity of making a final order for periodic spousal maintenance could be avoided would of course be to make an order for lump sum maintenance, but the wife did not seek this and in addition the only source from which such a payment could come would be the husband’s inheritance. I could not consider making such an order unless the husband had been put squarely on notice of the possibility of it being made
Costs
The wife made an application that the husband should pay her costs fixed at $21,037.28.
Pursuant to s.117(1) of the Family Law Act each party to proceedings under the Act shall bear their own costs. Section 117(2) however empowers the court to make an order for costs if the circumstances justify it doing so. In considering whether to make a costs order, the court must consider the matters in s.117(2A).
The first matter I am required to take into account is the financial circumstances of the parties. The wife is in receipt of a disability support pension and will have to pay her legal costs from capital. The husband earns an income but given that I intend to make an order for spousal maintenance he will have nothing left from his income after paying his own reasonable expenses to meet any costs order.
The husband does however have an advantage over the wife in that he will receive an inheritance of about $79,000.00 in the not to distant future.
As to the other s.117(2A) matters the wife is not in receipt of legal aid. The husband failed to take part in the proceedings but there was no evidence that his conduct increased the wife’s costs, except to the extent that the wife was required to incur an additional service fee.
The proceedings were not occasioned by the failure of a party to comply with a court order. The wife has been wholly successful in the property proceedings and she was successful in obtaining an order for spousal maintenance but not in the amount or for the duration she proposed.
There have been no offers of settlement and there are no other relevant matters.
The most significant matter is the financial disparity between the parties. It is quite possible that after the home is sold the wife will have barely sufficient to pay her solicitor, and entirely possible that she will be left with a bill for legal costs. The husband is not wealthy, but he is employed and he will be receiving the inheritance from his grandfather.
In my view it is appropriate to order that the husband pay the wife’s costs.
The wife submitted that the husband should pay her costs on an indemnity basis. Indemnity costs however are only awarded in exceptional circumstances, resulting as they do in a situation where the other party becomes bound by all the choices made by the applicant in terms of such things as entering into a costs agreement to pay her solicitor at a certain rate or allowing unnecessary work to be done or travelling costs to be incurred in circumstances where a taxing master might disallow them.
I am not persuaded that there is anything about this case which attracts an order for indemnity costs.
The matter was dealt with predominantly in the Federal Magistrates Court and r.21.10 of the Federal Magistrates Court Rules provides that unless other ordered by the court costs shall be in accordance with Schedule 1 of the Rules.
It is appropriate to fix costs in accordance with Schedule 1 rather than requiring the wife to go through the process of a taxation. Doing the best I can with the information provided I intend to order that the husband pay the wife’s costs fixed at $8,735.00 being $1,760.00 for stage one plus a daily hearing fee of $880.00, $1,465.00 being the costs up to and including the conciliation conference, $3,750.00 being preparation for a one day hearing and $880.00 being a daily hearing fee for attendance by the solicitor at that hearing.
The wife sought an order that this amount be paid within 12 months or within 21 days of the vesting of the husband’s interest in his grandfather’s estate whichever was earlier and I intend to make that order.
For all of the above reasons the orders of the court shall be as set out at the beginning of this judgment.
I certify that the preceding one hundred and forty-six (146) paragraphs are a true copy of the reasons for judgment of Terry FM
Date: 14 February 2011
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