Read and Chang

[2010] FamCA 320

FAMILY COURT OF AUSTRALIA

READ & CHANG [2010] FamCA 320

FAMILY LAW – REVIEW – of Registrar’s orders – Spousal maintenance

APPLICANT: Ms Read

RESPONDENT: Mr Chang

FILE NUMBER: SYC 1553 of 2009

DATE DELIVERED: 27 April 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cohen J

HEARING DATE: 1 April 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell

SOLICITOR FOR THE APPLICANT: Karras Partners Lawyers

COUNSEL FOR THE RESPONDENT: Mr Kearney

SOLICITOR FOR THE RESPONDENT: Barkus Doolan Kelly

Orders

1. That the wife’s appeal against order 7 made on 1 December of Judicial Registrar Loughnan is hereby dismissed.

2. That costs are reserved.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1553 of 2009

MS READ

Applicant

And

MR CHANG

Respondent

REASONS FOR JUDGMENT

1. In this aspect of the proceedings the wife has appealed against an order of a Judicial Registrar; order 7. made on 1 December 2009, that she pay interim spousal maintenance to the husband at the rate of $4,000 per week commencing within 7 days of 1 December 2009. The wife submits that I should discharge that order and in its place order her to pay $18.00 per week. Although the husband applied for $5,890.00 per week in his application filed 28 October 2009 which was heard by the Judicial Registrar, he now only seeks to retain the benefit of the orders made on 1 December.

2. The husband works as a casual waiter. He does from 2 to 6 shifts each week when the restaurant is open. It closes during the Christmas period. He earns, on average, about $380 per week before tax from this employment. He has an additional income from investments of $91.00 per week before tax. He has, according to his financial statement filed on 28 October 2009, current expenditure of $4,375.00 per week. However, of this, the wife is obliged to pay $2,278 per week; mortgage instalments of $2,105 per week, council rates of $95 per week and insurance on the former matrimonial home of $78.00 per week. This reduces the outgoings which the husband claims to be obliged to meet at present to about $2,100.00 per week. If this spending is reasonable and the husband can be regarded as having an earning capacity which is the same as his earnings of $471.00 per week, his current outgoings are about $1,630.00 more that he receives each week. However, he says that he is limited by lack of sufficient funds to live as he should and that his reasonable maintenance needs are very substantially greater and he should be paid $4,000 per week in spousal maintenance in addition to the other payments the wife was ordered to make by the Judicial Registrar.

3. The wife is a homemaker / parent who lives overseas. Her income comes entirely from a trust distributions and interest. On average, it is $58,529.00 per week. Of this, she spends about $11,800.00 per week herself and for the parties’ two children who also live overseas.

4. As she also has about $1.18 million in cash in bank accounts and a total of more than $6.4million in property, not including superannuation worth an additional $1.1million approximately and her trust income is likely to continue to rise, it cannot be said and she does not submit, she cannot afford to meet her own reasonable needs and pay whatever weekly sum the Court concludes the husband reasonably needs to support himself. This is notwithstanding her claim to have liabilities of about $10.1million. Of this, $9.76million is because she has purchased a home overseas off plan for about $9.9million, of which she appears to have paid a deposit of about $115,000.00.

5. The trust which provides her income, from 1989 until 10 August 2009 distributed more that $18million to the wife. It will not be wound up until 2031. In the last four years, the distribution to the wife has increased each year from more than $1.2 million in 2006 to more than 2.9million in 2009. I was informed by senior counsel for the trustees that there is something like $600million in assets held by the trust and that there are 7 beneficiaries including the wife receiving distributions. The trust is entirely discretionary except on its winding up. The wife has a contingent vested interest in the final distribution and a vested interest as a discretionary beneficiary.

6. The husband has only one immediate source of funds other than his income. He has savings of about $8,000. Other than his half interest in the former matrimonial home and its contents at G, he owns a car worth $56,000.00 and shares worth about $66,000.00. The value of the home is in dispute. It is worth between about $3.5million and $5million. He has $822,000 in superannuation. The husband has credit card debts of about $44,000.00.

7. The husband is aged about 50yrs. The parties commenced living together in 1985 and married in 1989. They have two children, aged 17 and 13. The husband is, from his appearance in Court, an elegantly presented man. He was born in Asia and has no tertiary qualifications. He worked full time at a Club when the parties commenced living together. He had previously owned a business in Sydney. From 1989 to 1996 he held two part time jobs at the same time; one during the day and another at night, both as a waiter. In late 1995, according to the husband, the wife asked him to cease working because they could afford to live on the trust distributions she was receiving. The wife was not willing to have a second child unless the husband gave up paid work. He did so in 1996, prior to the birth of the parties’ younger child. He did not resume paid work until after the parties separated.

8. In 2007 the parties moved overseas permanently although they kept their home in G. They separated in May 2008. The husband then returned to Australia and resumed living in the G home. In July 2008 he obtained his job as a casual waiter. Although he claims he is looking for full time work, he says if he obtains it he will not be able to visit the children who attend an exclusive boarding school overseas or spend enough time with them when they visit him in Australia.

9. Although the parties originally lived moderately, by about 1989 the wife commenced receiving distributions from the trust. The first was of $60,000.00 but by the mid 1990’s she was receiving about $200,000.00 pa. The distribution increased significantly in 2000. The parties’ standard of living has, no doubt, evolved in accordance with the wife’s income.

10. A good measure of the way they have lived is the parties’ black AMEX credit card activity for the period of July 2006 to June 2007. Total charges on credit were $500,527.00 or $9,625.00 per week and payments were $585,456.00 or about $11,250 per week. It is common knowledge that black AMEX credit cards have no limit on expenditure. The parties also used other credit cards when it was convenient.

11. The evidence of the husband is that, until separation the parties lived a luxurious life; one easily accommodated by the wife’s exceptional income. For example, in 1999 they purchased the former matrimonial home in G for more than $1.43million. The parties borrowed $920,000.00 of this. From 2000 to 2003 they spent a further $3.5million demolishing the home which stood on the land and building a new home. Although neither was in paid employment, they employed a housecleaner and a gardener.

12. From the mid 1990’s the parties always owned expensive cars. In 2003 they spent $134,000 on three paintings and a sculpture. They travelled oversees and interstate many times, usually with the children. They stayed in high priced accommodation and dined at expensive restaurants. They spent $1,200 for one dinner at a restaurant in Tokyo and $1,000 at another in Paris. The whole family usually travelled business class by air.

13. From 2004 to late 2007 when they moved overseas, they spent considerably more that $500,000.00 on holidays. When they moved overseas, they spent more that $100,000 on furniture for a rented house including $19,230 for a TV set and $4,500 for an espresso machine. Before renting the home, they stayed in hotels costing from $1,100 to $1,800 a night. The children’s school costs $87,000 and $105,000 p.a. The wife has a car overseas which the husband says is worth $150,000 and another car in Australia which he says is worth $90,000.

14. The husband says that he would, based on the past expenditure if he had the funds, spend $8,543.00 per week plus credit card payments, to maintain the lifestyle he has become accustomed to. This sum must be reduced by deducting the $2,278 the wife is now required to pay pursuant to the Judicial Registrar’s consent orders, to $6,265.00 plus credit card payments. The credit card payments are to reduce his credit card debt of about $44,000. Currently he pays $236 per week which would take 3 years and 6 months to clear his credit card debts. If he only redeemed the debts at this rate he would need $6,500 per week.

15. The wife claims the husband’s work capacity is higher than his income because he does not work full time. She says he admits he would earn $550 net per week if he did and that he has not explained why he is not working full time. It follows, she submits, that it should be held that he can earn from employment $600.00 net per week because he has admitted that is the sum at the top of the range for his type of employment. Accordingly, she argues that, with his investment income, he has an earning capacity of $691 per week net.

16. The wife has attacked some of the husband’s claimed spending; not what he would spend if he had the funds, but what he currently says he spends; $2,100 per week. That he has spent at this rate is not difficult to believe. Of $100,000 the wife gave him at separation in 2008, he has about $8,000.00.  It is not suggested that he has committed waste. What is suggested is that some of his expenses have been exaggerated and that there has been some double counting.

17. The alleged double counting is because the $236 per week the husband claims to spend paying credit card debts as stated in paragraph 30 in Part G of the husbands financial statement, it is submitted on behalf of the wife, is reflected in the husbands additional living costs of $1,777 in paragraphs 32 of Part G and itemised in part N. Put simply, it is said that if $1,777 is spent on living costs and met by spousal maintenance there will be no accumulation of credit card debts. The husband has spent $100,000 less $8,000, that is, $92,000.00 plus $44,000 which equals $136,000 plus his income of $471 per week between July 2008 to mid January 2010. This is about 70 weeks, so he must have earned about $33,000. Thus he has spent about $169,000 or about $2,414 per week if this method of estimating his spending is correct. He says, on average, he spent $4,375.00, less $2,105, being $2,270 per week which is about $159,000 if the average of $2,270 was over the 70 weeks. The figures tend to confirm each other. The $2,105 mortgage instalments were not paid by the husband. The wife has paid the mortgage instalments since separation.

18. In these proceedings, where spending has been on a large scale, the difference is not sufficient to satisfy me that the husband’s spending estimate has been exaggerated. In fact there is little difference because the $2,270 does not include any credit card repayments. These must have been made but would not average $236 per week because of the increase in required repayments with the increase in debt.

19. The attack on the quantum of the husband’s claimed spending is essentially that the husband has not proven it. In the wife’s counsel’s written submissions, which are part of his case outline, it is said: “The onus rests upon the Applicant for maintenance to demonstrate a need. There is not one scintilla of evidence that would entitle the court to come to the conclusion that the husband needs or is expending $220 per week in house repairs, $60 per week on furnishings and appliance repairs or $115 per week on gifts”.

20. In these interim proceedings there needs to be prima facie evidence. Rather than “not one scintilla of evidence”, there is the husband’s sworn financial statement which is the source of the expenditure the wife’s counsel makes example of. It is clear prima facie evidence of the expenditure. It is remarkable that without the $2,105 payment the wife made, the husbands outgoings are said to be $2,270 per week plus credit card payments whereas I have attempted to calculate his actual spending and estimated it to have been about $2,414 per week; a nearly identical amount.  

21. In paragraph 97 of the husbands affidavit filed in 28 October 2009, the husband tabulates his current living expenses which include the same figures. He also provides clear prima facie evidence of what he would expect to be spending as a result of his past spending experience if he was able to live as he had before separation; being $8,543 per week before income tax and credit card repayments. The inclusion of the mortgage, home insurance payments, land rates and taxes is not misleading or intended to be so. To remain in the home he would have had to pay these until the Judicial Registrar ordered the wife to pay these outgoings after the affidavit was sworn. If those assessed  payments are deducted he will still, according to his prima facie evidence, need $6,265 per week less his income of $91 per week, being about $6,175 plus credit card debt payments if he does not work.

22. There is no doubt that the wife is reasonably able to maintain the husband to the extent of his $4,000.00 spousal maintenance claim. The issue is then whether the husband is unable for adequate reason to support himself appropriately having regard to subsection s75 (2) of the Family Law Act. The Court must then decide, if there is a liability in the wife to maintain the husband, what amount is proper in all the circumstances.

23. I shall briefly further consider all matters required by s75 (2) to be taken into account. I have, in dealing with the facts, already referred to and considered matters which that section requires; the most important of them in sufficient detail.

    s75(2)(a) The wife is a few months younger than the husband. Her state of health is irrelevant to her income. The size of her income would permit her state of health to be very poor without undermining her ability to pay the spousal maintenance claimed by the husband. The husband has sinus problems and needs an operation, so will lose some earnings.

    s75(2)(b) I have dealt with the income, property and financial resources of the parties adequately. The husband did not work for many years before separation. He lived a life of a very wealthy gentleman. He now works as a part time waiter and has the skills which might lead to better employment. It should be emphasised that this paragraph requires consideration of the husband’s capacity for “appropriate” gainful employment. I do not regard his work as a part time waiter as “appropriate” work. It would be less appropriate for him to work full time. I know of no capacity in him, demonstrated in the evidence, for any appropriate employment in the circumstances that he has been a gentleman of leisure for many years. To expect him to work as a waiter or in a suburban restaurant or club, as he was when he met his wife, and as he is now doing, is quite unreasonable.

    s75(2)(c) The husband pays nothing toward the children’s care, except if he visits them or when they visit him. The wife can afford to pay whatever she chooses to keep the children without these payments impinging on her capacity to pay the $4,000.00 per week spousal maintenance claimed.

    s75(2)(d) I have already discussed the parties’ commitments. The wife’s income is so high her income exceeds her weekly commitments by about $47,000 without her seeming to deny herself or the children anything within reason. The $11,782 she spends puts the husband’s claim of $4,000 per week into proper perspective. By comparison, and in view of the wife’s income and the way the parties lived for many years before separation, his claim appears to be very reasonable. It would have appeared to be the same if he had not provided details of his need for a larger amount. In his affidavit, in paragraph 97, his past expenditure needs to be adjusted for the payments the wife must make as a result of the Judicial Registrars’ Orders which are not challenged. These are mortgage instalments, the rates and the building insurance but not content insurance. This would reduce his current prima facie need for funds to maintain his pre-separation living standards; something the wife can easily afford to pay him to maintain, to about $6,175.00($8,543-$2,105-$95-$78) plus credit card payments of $236 per week, making his needs about $6,400 per week, ignoring tax which is unlikely to need to be paid if he does not maintain his job. He would still earn dividends so about $6,300 per week would be needed for spousal maintenance from the wife.

    If he does continue in his job he will pay about $30 per week in tax on his total income of $471, so he will need, in all, $5,960 per week to maintain the living standard he previously enjoyed.

    In the light of his claim for $4,000 per week, the wife’s criticism of minor aspects of his expenses such as those for gas and electricity and others are not worthy of serious consideration, especially as claims are very low. The parts of the husband’s claim for expenses which have been criticised are based on pre-separation expenses. These are not claims for the cost of the whole family of four. They are claims for expenses based on his share in the past; the quantum of which would be little different to what is needed to pay for his usage now. I regard to the husband’s claim his pre-separation expenses entirely reasonable because of the exceptional wealth the parties had. This includes his claim for $1,600 per week for hobbies and entertainment which, I would assume includes eating at expensive restaurants. The claim for $120 per week in telephone expenses is very modest in view of the fact that, before separation, the children commenced boarding school overseas and now live overseas.

    (e) I have already said all that needs to be said about the parties’ responsibility to support the children.

    (f) I have already discussed the source and extent of the wife’s income. No other aspect of this paragraph is relevant.

    (g) In view of the ease which the wife is able to meet the cost of living for the husband to be able to continue to live at much the same standard as he lived before separation, his claim for $4,000 maintenance with the payments the wife is making in respect of the home in which he lives is not excessive. It will not, on the prima facie evidence, allow him to maintain that standard but he has not claimed more.

    (h) There is no evidence that a maintenance payment would help the husband improve his earning capacity. He would need capital to open a restaurant, something he has considered. This is a matter which ought to be left to the s79 proceedings.

    (ha) This does not apply here.

    (j) The husband has not contributed much financially to the home the parties own in G. He provided funds for an earlier home and these funds can be traced to the G property. His mother, no doubt on his behalf, lent the parties $100,000 without interest when they were building the G home. This loan has not been repaid. However, the husband contributed greatly, because he was not in paid employment, to homemaking and parenting. He says he has done at least as much as the wife in this regard.

    (k) The marriage has been lengthy. It is the direct reason why the husband has not maintained or developed employment skills, is not used to work and is used to a life of leisure, luxury and privilege. That this the situation is to be seen in part from the orders made by the Judicial Registrar that the wife pay the husband’s accommodation and car hire expenses when he visits the children up to $1,500 per night and $300 per day respectively. These orders have not been the subject of an appeal.

    (l) This can have no application here.

    (m) So far as I have been told, neither party is cohabitating with another.

    (n) The s79 proceedings, when finalised may alter the situation the husband is in and may, but will not necessarily, end his need for spousal maintenance. These are but interim proceedings.

    (na) There is no claim against the husband for child support or child maintenance at this stage. One cannot say what the situation will be in the future. The children are at ages when any child support or maintenance generally is unlikely to last for long after s79 proceedings have been decided.

    (naa) Irrelevant because inapplicable.

    (o) I have already mentioned all matters which, in justice, should be taken into account.

    (p) & (g) These considerations are not applicable.

1. A consideration of all the above facts and matters leads to the clear conclusion that the proper order would be for the wife to pay spousal maintenance to the husband of $4,000 per week in addition to the payments she must make under the 1 December 2009 orders of the Judicial Registrar. Because I am satisfied that the husband would need significantly more that $4,000 per week to maintain himself in an appropriate manner there is no need to make any specific calculation or to deal with the detail of heads of expense to justify the need for $4,000 more specifically.

2. If the husband had requested more, I would probably have ordered a considerably larger spousal maintenance payment. It would not be proper to make a higher order because it was not sought. As the Judicial Registrar ordered the payment of $4,000 per week in spousal maintenance, there is no need to do more than order that the wife’s appeal against order 7 made on 1 December 2009 of Judicial Registrar Loughnan be dismissed and reserve costs.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen

Associate:     

Date:              27 April 2010