Raymond & Raymond (No 4)
[2024] FedCFamC2F 919
•26 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Raymond & Raymond (No 4) [2024] FedCFamC2F 919
File number: NCC 838 of 2023 Judgment of: JUDGE KEARNEY Date of judgment: 26 June 2024 Catchwords: FAMILY LAW – spousal maintenance – remittance of the wife’s application for the husband to pay interim periodic spousal maintenance –whether the wife had a unrealised income-earning capacity – whether the wife’s alleged expenses are reasonable – whether the wife can adequately support themselves – what is a reasonable amount for the husband to pay to support the wife – whether spousal maintenance should be capitalised and deducted from the impending sale proceeds of the family home or alternatively be a non-characterised lump-sum payment from the sale proceeds – two subject children with complex medical needs for the 5-year-old child – weekly spousal maintenance to be paid to the wife Legislation: Family Law Act1975 (Cth) ss 72, 74, 75, 95, 96, 117 & 117C
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Ch 12 & rr 6.01, 6.03, 6.06(3)(h) & (9)(f)
Cases cited: Raymond & Raymond [2024] FedCFamC1A 45
Hall & Hall [2016] HCA 23; (2016) 257 CLR 490
In the Marriage of Slattery (1976) 2 Fam LR 11,251
Masters Home Improvement Australia Pty Ltd v North East Solutions Pty Ltd [2017] VSC 88; (2017) 372 ALR 440
Strahan & Strahan (Interim property orders) [2009] FamCAFC 166; (2009) 42 Fam LR 203
Division: Division 2 Family Law Number of paragraphs: 68 Date of hearing: 18 June 2024 Place: Newcastle Counsel for the Applicant: N/A – Self Represented Solicitor for the Applicant: N/A – Self Represented Counsel for the Respondent: Mr Weightman Solicitor for the Respondent: Seton Family Lawyers ORDERS
NCC 838 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR RAYMOND
Applicant
AND: MS RAYMOND
Respondent
ORDER MADE BY:
JUDGE KEARNEY
DATE OF ORDER:
26 JUNE 2024
UNTIL FURTHER ORDER, THE COURT ORDERS THAT:
1.Pursuant to s 74 of the Family Law Act 1975 (Cth), and by way of periodic spousal maintenance, the applicant MR RAYMOND (‘the husband’) shall pay or cause to be paid for the benefit of the respondent MS RAYMOND (‘the wife’) the weekly amount of $545 (‘the weekly spousal maintenance payment’) by 4.00pm each Wednesday, commencing with the first payment to be made by 4.00pm Wednesday 3 July 2024.
2.To facilitate Order 1, by 4.00pm Friday 28 June 2024, the wife shall nominate to the husband a financial account into which the husband is to electronically transfer the weekly periodic spousal maintenance payment and as part of that nomination, the wife will notify the husband of all necessary details to effect such transfers by way of email.
3.All outstanding interlocutory applications related to periodic spousal maintenance are dismissed.
THE COURT NOTES THAT:
A.Should a party file an application for costs as a result of the determination of the periodic spousal maintenance proceeding (‘the SM proceeding’), then at the time of filing such application, they are permitted to contemporaneously notify the chambers of Judge Kearney of this occurrence by email at …@... in order to ensure that such application is listed for hearing before Judge Kearney.
B.The proceedings are next before the Court for an electronic audio-visual interlocutory hearing conducted by a Senior Judicial Registrar on 18 July 2024 at 9.30am (‘the July hearing’).
C.At the June 2024 hearing of the SM proceeding, an inefficient use of the Court’s resources occurred because of the Court having to hear and determine oral applications brought to cure each party’s varying non-compliance with Orders of this Court and/or various provisions of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Family Law Rules’) and the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth).
D.In those circumstances, the parties would be wise to ensure that any evidence and/or submissions they intend to read and/or rely upon for the July hearing are compliant; failing which the parties are on notice that it is open for the Court to deal with the proceedings pursuant to rr 1.33 and/or 10.27 of the Family Law Rules.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE KEARNEY
These reasons for judgment were delivered orally and have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.
Eighteen (18) months on from separation, and with the wife now unemployed and living interstate with the two (2) subject children of the broader dispute, I am asked to determine whether there is a case for the husband to pay the wife periodic spousal maintenance. The wife contends that they need support and that the husband can afford to provide it. The husband refutes both contentions. Should I make an order for periodic spousal maintenance, and if so, how much should I order be paid?
Unless a person's preference is known to the Court, gender-neutral language will be adopted. I have decided to reference the parties by their status in the substantive proceedings rather than this interlocutory proceeding, to ensure overall consistency and the avoidance of confusion between the various orders made throughout the proceedings.
To resolve the controversy between the parties, the issues to be determined are:
(a)Does the respondent, MS RAYMOND (‘the wife’) have an unrealised income-earning capacity?
(b)Are the wife's alleged expenses reasonable?
(c)Can the wife adequately support themselves?
(d)If the wife cannot adequately support themselves, then does MR RAYMOND (‘the husband’) have a reasonable capacity to support the wife?
(e)Should periodic spousal maintenance be paid, and if so, what is a reasonable amount for the husband to pay to support the wife?
(f)If there is capacity, can the husband pay this amount weekly, or should it be capitalised and deducted from the impending sale proceeds of the family home (‘the sale proceeds’)?
(g)In the alternative to periodic spousal maintenance, should a non-characterised payment of $20,000 be paid to the wife from the sale proceeds?
At least one party sought that a costs order be made, but given the unspecified nature of the claim, I am content for the parties to make an application in the usual way should they wish to.[1]
[1] See ss 95, 96, 117 & 117C of the Family Law Act 1975 (Cth) and Ch 12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘The Family Law Rules’).
On 28 March 2024, the appellate court remitted the wife's application for the husband to pay interim periodic spousal maintenance.[2] Having reminded the parties about the basis for my involvement in the proceedings, all other claims for relief fell away, invoking consideration only of ss 72, 74 and 75 of the Family Law Act1975 (Cth) (‘the Act’), noting that both parties had alternate positions, and to the extent applicable I have also had regard to those.
[2] Raymond & Raymond [2024] FedCFamC1A 45 at [69] (‘the appellate decision’).
In summary, the wife's primary position was for the husband to pay them $545 per week by way of periodic spousal maintenance on an interim basis, and the husband's primary position was for the application to be dismissed.
There are two (2) children of the party's marriage:
(a)Y (aged 16 years); and
(b)Z (aged 5 years).
Unless otherwise specified, a legislative reference will be a reference to the Act.
I have had regard to all of the evidence before me, as well as the oral and written submissions relied upon by the parties. Turning then to the issues.
Does the wife have an unrealised income earning capacity?
There was a contest about:
(a)Whether the wife has not been employed since about 2014;
(b)Whether the wife was making a conscious decision to under-utilise her ‘exceptionally unique skill set’,[3] developed academically and during the creation and operation of at least C Company (‘C Company’);
(c)Whether the wife could reinvigorate C Company now so that it could once more become a source of income for them;
(d)Whether the wife could find employment based on their existing skills and/or more generally that would still allow the wife to provide the primary care for the children, particularly Z.
[3] See exhibit ‘H1’ being the husband’s case outline at page 1.
At paragraph 35 of the appellate decision, Austin J helpfully summarised a contested factual issue, and I adopt that summary.
Informed by that summary, I am satisfied that at this time the wife does not have an unrealised income-earning capacity. My reasons are set out below.
It is uncontroversial that the wife has responsibility for the care of two (2) children under the age of 18 years and that they all live interstate, away from any regular support that the husband may be able to offer. The wife declares their income to consist of Commonwealth benefits.[4] The husband says that the youngest child Z attends an educational facility in City AA on a full‑time basis.[5]The husband says that Z also has a weekly appointment with a health professional during office hours.[6] The husband says that when Z lived in New South Wales, the child had access to NDIS funding and that (it seems)[7] this has continued in Queensland.
[4] See the financial statement of Ms Raymond filed 28.05.2024 at Part D. Future references to this document and its contents will be using the acronym ‘MSR-FS’ and item/part descriptors.
[5] See the affidavit of Mr Raymond filed 14.06.2024 at [97]. Future references to this affidavit and its contents will be using the acronym ‘MRR’ and square parenthesis for the paragraphs.
[6] MRR-[98].
[7] MRR-[62] & [98].
The wife's evidence is that Z has been diagnosed with global development delay, autism spectrum disorder, and other medical conditions.[8] The wife says that Z has frequent chest infections and requires strict supervision when eating and drinking.[9] The wife says that Z is engaged with a speech therapist, occupational therapist, support worker and nutritionist and that the wife works closely with them.[10]
[8] See the affidavit of Ms Raymond filed 28.05.2024 at [66]. Future references to this affidavit and its contents will be using the acronym ‘MSR’ and square parenthesis for the paragraphs.
[9] See above footnote.
[10] See above footnote.
At paragraph 67 of their affidavit, the wife sets out what their usual week looks like, and reflecting on that schedule leads to the inevitable conclusion that there is limited opportunity for the wife to either work in paid external employment and/or restore the client base (and therefore profitability) of C Company to what it once was.
On that last point, the wife says that they stopped working in an employed role from 2014,[11] by which I infer the wife means that thereafter the wife was self-employed. This state appears to be somewhat consistent with the husband's evidence about C Company being registered as a business in 2015.[12] The difference in dates is insignificant in the context of the decision I must make.
[11] MSR-[63].
[12] MRR-[116].
The parties agree that prior to separation in January 2023, the wife's role within their business enterprise (C Company) had reduced, with the husband saying that at the conclusion of maternity leave in 2019, the wife returned to working in C Company, but on a limited remit that did not include travelling to engage with clients.[13] It is clear from the husband's evidence that travel was a significant component in at least retaining the client base of C Company and that they were struggling with the demands of this aspect of the work even when they had the support of the wife.[14] The husband says that from about September 2021, the husband was primarily operating C Company without assistance from the wife.[15]
[13] MSR-[63] & MRR-[149]-[150].
[14] MRR-[177]-[182].
[15] MRR-[184].
Post-separation, regardless of how it came about, the husband registered and traded as D Company (‘D Company’)) and set up a partnership with the same supplier (‘B Company’) which had generated clients for C Company, and the husband says a limited number of shared clients with C Company became clients of D Company.[16]
[16] MRR-[16] on page 14.
I am satisfied from the evidence that C Company is no longer the trading entity it once was and that (from the husband's own evidence), a significant amount of energy and time, if not travel, would be required to rebuild C Company (if this is even possible). I have qualified that finding because it seems that in early 2023, the husband had informed C Company clients of the change in circumstances around C Company[17] (arguably leading to clients moving over to D Company) and B Company made the decision in mid- 2023 to ‘temporarily’ pull down from its website, the tile promoting C Company (arguably reducing the available client ‘leads’ available to C Company to exploit).[18]
[17] Exhibit ‘W2’.
[18] Exhibit ‘H3’.
There is no dispute that the wife currently has no paid employment.
Any income-tested Commonwealth benefit is to be disregarded,[19] and I take judicial notice that the wife's receipt of the single parent pension, family tax benefit part A, family tax benefit part B, and rent assistance totalling $905 fall within that category.
[19] The Act s75(3).
The husband asked me to infer that the wife had an unrealised income-earning incapacity due to several factors.
The paucity of evidence upon which I could draw a probable inference as sought by the husband, as opposed to the wife's competing inference that the wife did not have such a capacity, means that to do so would cause me to speculate. In coming to this conclusion, I have considered the totality of the facts, the most significant of which I have set out above.[20]
[20] See generally the decision of the Full Court of the Supreme Court of Victoria (Santamaria, Ferguson & Kaye JJA) in Masters Home Improvement Australia Pty Ltd v North East Solutions Pty Ltd [2017] VSC 88; (2017) 372 ALR 440 at [101] (‘Masters Home Improvement Australia’).
In short, the wife has for a long time not been employed by others and nor have they had a significant role in C Company or exposure to prospective clients and/or the field of endeavour where they are best qualified. Indeed, it was unclear to me from the evidence and submissions even what the quantum of the wife's potential unrealised income-earning capacity amounted to. In addition, the wife now has primary care of two (2) children, one of whom has multiple diagnoses requiring significant attention and care for which (currently) the wife is solely responsible for providing.
Are the wife’s alleged expenses reasonable?
The wife claims weekly expenses of $2,131, from which I have deducted $100, being the benefit, the wife receives from the husband paying the family's health insurance[21] in accordance with an earlier order made in 2023.
[21] MSR-FS, parts F & G.
The husband's oral and written submissions[22] paid little attention and offered little criticism of the wife's claimed expenses.
[22] Exhibit ‘H1’.
Nonetheless, I have had regard to those expenses, and I am satisfied that once the sale of the family home at F Street, Suburb G (‘the home’) settles this week, the wife's weekly exposure to mortgage repayments of $225 will be reduced to ‘NIL’. I have also disregarded the costs of the children, as specified at Part N of the financial statement, totalling $823 per week, as the focus of my decision is on the wife's capacity to support themselves adequately, and part of that requires an exploration of the wife's reasonable weekly needs.
As averred to by Austin J in the appellate decision at paragraphs 20 to 24, the discretionary determination of an interlocutory application such as this is an ‘impressionistic evaluation of the available evidence.’ Given the evidence, the impending sale of the home and the parties' submissions (or lack thereof), I am satisfied that the wife's reasonable living expenses amount to $983 or $2031 - $1048 [$225 + $823].
Conclusion- Can the wife adequately support themselves?
The answer is “no”.
The wife cannot adequately support themselves.
The wife does not receive any income and has no unrealised income-earning capacity.
The wife's reasonable costs of supporting themselves amount to $983, which is a figure that was adopted within the wife's case outline document.
Accordingly, there is a deficit of about $983 per week.[23]
[23] Exhibit ‘W4’ at para 5, page 4.
Given this finding, I turn now to the consequential issue of ‘capacity to pay’.
Does the husband have a reasonable capacity to support the wife?
It was uncontentious that the husband earns $2,590 per week.[24]
[24] See the financial statement of Mr Raymond filed 14.06.2024 at Part D. Future references to this document and its contents will be using the acronym ‘MRR-FS’ and item/part descriptors.
There was contention about the husband's claimed expenses to support themselves which, broadly speaking, amounted to $2979 per week.[25]
[25] MRR-FS at item 33.
The controversies were concisely identified within the wife's case outline[26] under the heading of ‘Husband's Capacity’ on page 6 of that document. I will take each contention in turn. In doing so, I am reminded of my earlier references to Austin J’s commentary in the appellate decision.
[26] Exhibit ‘W4’.
Rental payments
The wife contends that it is not reasonable for the husband to be paying $590 per week for a three (3) bedroom property, when the reality is that the husband is the sole occupant. The wife also contends that the husband has failed to make full and frank disclosure about the terms of the tenancy.[27]
[27] See rr 6.01, 6.03, 6.06(3)(h) & (9)(f) of The Family Law Rules.
The husband made an oral submission that one of the bedrooms has been converted to a home office,[28] thus saving the business the cost of a leased premises. The husband also invited me to reflect on the prospective likelihood of at least one of the bedrooms being used by one or more of the children pending the outcome of upcoming parenting proceedings. I apprehend that there is some controversy about the husband's proposed parenting arrangements, otherwise why would there be a need for a hearing?
[28] MRR-[56].
I am conscious of not wanting to fall into “the vortex of minutiae”.[29] Having said that, I am concerned about the husband's failure to make full disclosure, meaning it is unclear to me if the claimed rent is accurate, and if so, for how long the liability will extend.
[29] The appellate decision at [22].
The paucity of evidence up which I could draw a probable inference, as sought by the husband, that the claimed rental expense is reasonable, as opposed to the wife's competing inference that the claimed expense is not, means that to do so would cause me to speculate. In coming to this conclusion, I have considered the totality of the facts, the most significant of which I have set out above.[30]
[30] See generally the decision of the Full Court of the Supreme Court of Victoria (Santamaria, Ferguson & Kaye JJA) in Masters Home Improvement Australia at [101].
Credit Card debt
The husband claims approximately $159 per week.[31] During the hearing, the parties agreed to pay out what appeared to be the entire debt from the sale proceeds, and last week an order was made accordingly.
[31] MRR-FS at item 30.
From this information, I can comfortably infer that it is reasonable to anticipate that within the next week or so the husband will no longer have to pay the weekly sum claimed.
Total expenditure at Part N
The husband claims $796 for the cost of daily living for themselves ($680-odd) and the children ($116). Part of the husband's expenses is a weekly food bill of $400. By contrast, the wife's claim is for $150 for themselves, and for the children the wife asserts a weekly cost of $200.[32] I have had regard to the husband's other evidence in their submissions about their weekly food bill. Whilst avoiding the minutiae and instead taking a totalistic approach on what was before me, it appears to me incongruent that one man can spend more on food each week than the wife and their children (combined), and for me to then be satisfied that this expenditure is reasonable.
[32] MSR-FS at item Part N.
Spousal maintenance
Order 3 made 28 March 2024 provides for the existing spousal maintenance payment of $545 to be set aside upon the re-determination of the wife's application. In other words, the existing obligation will be discharged as soon as I pronounce my decision.
At item 31 of the husband's financial statement, they ascribe an ongoing expenditure for maintenance/support of approximately $485, whilst identifying the source of the sum as being an order for $545.
For the above reasons, I accept the wife's contention that the husband's weekly expenses should be reduced by the sum of $485.
ATO liability
Based on the evidence and disclosures by the husband, the wife contends that the husband's existing taxation liability of about $133 per week[33] will be paid off by January 2025. The submission was not rebutted.
Conclusion - Does the husband have a reasonable capacity to support the wife by way of periodic spousal maintenance?
[33] MRR-FS at item 29.
I am satisfied that the husband does have a reasonable capacity to support the wife. My reasoning follows.
It is uncontentious that the husband has a weekly income of $2590. The husband claims expenses for the same period of $2979. In the exercise of my discretion and taking a holistic approach to the husband's evidence and the contentions of the parties, I refuse to allow the husband to have all their claimed expenses.
In my view, the weekly expenses for the credit card liability of $159 and spousal maintenance of $485 should not be allowed. These amounts combine to total $644.
As for the claim to rent and food expenses, I have decided to summarily reduce those to $400 down from $590, and $200 down from $400, respectively, meaning a combined reduction in the overall claimed weekly expenses for those expenses of $390 [$190 + $200]. There is not much magic in my reasoning, save to say that if I accept the husband is making a business saving by using the second bedroom as an office, then it is open for me to reasonably infer that a more appropriate claim for rent in the current circumstances that the husband finds themselves in, would be $400, being approximate to dividing the asserted $590 rent by two-thirds. I am wary of putting too much stock on the $590 figure because of the husband's non-disclosure, and this calculation is also an attempt at pragmatism founded on the summary way this hearing has necessarily been conducted.
As for food, my reasoning is laid bare by the evidence of the parties, and I refuse to accept that there is any rationale for it being reasonable to claim a weekly amount for food that well exceeds what the wife claims.
So, all in all, I am satisfied that the husband's weekly expenses amount to about $1945, or $2979 minus $1034 [$644 + $390], or a surplus of income over expenses of $645.
Should periodic spousal maintenance be paid and if so, what is a reasonable amount for the husband to pay to support the wife?
I have found that the wife has a need for support amounting to $983 per week.
I have found that the husband has a capacity to pay the amount of $640 per week.
The wife claims the sum of $545 should be paid by the husband by way of weekly periodic spousal maintenance. The husband rejects this contention.
I have considered all the s 75(2) factors but will only dwell on those matters that were of some significance to the exercise of my discretion.
The wife attests to (at times) relying on others to support themselves, including from charity organisations and/or the support of family or friends, although the evidence does not amount to anywhere near the ‘reasonable expectation’ level capable of attribution to a finding about a financial resource[34] as espoused by the High Court in Hall & Hall [2016] HCA 23; (2016) 257 CLR 490 at 54 (French CJ, Gageler, Keane and Nettle JJ).
[34] Section 75(2)(b).
Insofar as other s 75(2) factors may be relevant to the wife, the wife's financial circumstances are parlous, with them having no ready access to funds[35] and the significant ongoing support of the two (2) children as averred to earlier. By their conduct and involvement with the children's service providers, it is clear that the wife wishes to maintain that role as parent.
[35] I accept that the husband has an alternative proposal about the wife receiving $20,000 from the sale proceeds of the home.
As for the husband's circumstances, I recognise that the husband would like to play more of a caring role for the children and that there are potential costs involved,[36] but to what extent remains contingent on the outcome of a future parenting hearing, and for the same reasons as before, I cannot speculate on what that role (and subsequent costs) might look like because there is insufficient evidence upon which I could draw an inference.
[36] For example, MRR-[59].
The husband too has limited recourse to ready capital but does have access to an income stream which they have control over, and will have the weight of the credit card liability lifted from their shoulders and any ongoing legal, if not actually paid obligations arising from the home (the sale of which is due to settle at any time now).
I also acknowledge the husband's ongoing physical ailments and the diminution in the husband's mental health. The costs associated and claimed by them have not been the subject of judicial criticism.[37]
[37] See for example MRR-[39], [42],[43] & [50]-[52].
In the circumstances of this matter and having identified a “need” and a “capacity to pay”, I am satisfied that it is reasonable and proper for the husband to make periodic spousal maintenance payments fixed in the sum of $545 per week. I acknowledge that this amount does not cover all of the wife's deficit, but I also have to weigh up what is reasonable through the prism of both parties' circumstances.
Apprehending from the parties' submissions that the home is to be sold in the immediate future, and thus there is some uncertainty in actually when the credit card liability will reduce, the order will have the effect of the husband's obligation commencing now, but being paid in arrears each week, with the first payment of $545 due by 4.00 pm next Wednesday.
Given the determination thus far, there is no utility in considering the wife's alternate claim. As for the husband's alternate claim,[38] the capacity for me to make an order for the payment of a sum without characterisation is fraught with appellable risk, given the body of case law on this topic,[39] and I refuse to embark on that course, because the power relied upon for the granting of such relief is unknown.
[38] See exhibit ‘H1’ last page first dot point.
[39] See for example In the Marriage of Slattery (1976) 2 Fam LR 11,251 and Strahan & Strahan (Interim property orders) [2009] FamCAFC 166 at [84]; (2009) 42 Fam LR 203.
CONCLUSION
Those are the reasons for the orders that I now intend to make.
I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Ex-Tempore Reasons for Judgment of Judge Kearney delivered orally on 26 June 2024. Associate:
Dated: 19 July 2024
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