Rice & Rice
[2020] FamCAFC 174
•23 July 2020
FAMILY COURT OF AUSTRALIA
| RICE & RICE | [2020] FamCAFC 174 |
| FAMILY LAW – APPEAL – PROPERTY – Spousal maintenance – Where the primary judge’s reasons for judgment are adequate – Where the respondent met the eligibility threshold and established a need for spousal maintenance – Where the appellant has the capacity to pay spousal maintenance – Child support and spousal maintenance payments – Where it was conceded at the hearing of the appeal that the order relating to the children’s bank accounts be set aside – Appeal otherwise dismissed – Appellant to pay the respondent’s costs in a fixed sum. |
| Family Law Act 1975 (Cth) ss 72(1), 74(1), 75(2), 75(3), 83, 117(2A) |
| Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 Bevan and Bevan (1995) FLC 92-600; [1993] FamCA 95 Black and Kellner (1992) FLC 92-287; [1992] FamCA 2 Clauson and Clauson (1995) FLC 92-595; [1995] FamCA 10 Collingridge & Aiolfi [2019] FamCAFC 88 Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55 De Winter and De Winter (1979) FLC 90-605 Linder & Linder [2016] FamCAFC 139 Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28 Mitchell and Mitchell (1995) FLC 92-601; [1995] FamCA 32 Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 Patterson and Patterson (1979) FLC 90-705; [1979] FamCA 37 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22 Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128; [2016] NSWCA 88 Stein v Stein (2000) FLC 93-004; [2000] FamCA 102 Sun Alliance Insurance Ltd v Massoud [1989] VR 8 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Weir and Weir (1993) FLC 92-338; [1992] FamCA 69 |
| APPELLANT: | Mr Rice |
| RESPONDENT: | Ms Rice |
| FILE NUMBER: | PAC | 6086 | of | 2014 |
| APPEAL NUMBER: | EAA | 22 | of | 2019 |
| DATE DELIVERED: | 23 July 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge, Watts & Tree JJ |
| HEARING DATE: | 15 August 2019 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 31 January 2019 |
| LOWER COURT MNC: | [2019] FCCA 117 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr Longworth |
| SOLICITOR FOR THE RESPONDENT: | Hogg & Associates Lawyers |
Orders
The appeal against Order 31 made on 31 January 2019 be dismissed.
The appellant pay the respondent’s costs fixed in the sum of $10,290.30.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Rice & Rice has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 22 of 2019
File Number: PAC 6086 of 2014
| Mr Rice |
Appellant
And
| Ms Rice |
Respondent
REASONS FOR JUDGMENT
Aldridge J
I have read the reasons of Watts J and agree that the appeal against Order 31 must be dismissed.
On 31 January 2019, a judge of the Federal Circuit Court of Australia made a suite of final parenting and property settlement orders between Mr Rice (“the appellant”) and Ms Rice (“the respondent”). Just two of those orders are the subject of this appeal. The first order required the appellant to transfer to the respondent funds in bank accounts held by him in trust for the parties’ three children (Order 17). The second order required the appellant to pay spousal maintenance to the respondent in the sum of $450 each week for a period of two years (Order 31).
Ground 1: The bank accounts held in the names of the children (Order 17)
At the hearing of the appeal, the respondent accepted that Order 17 made on 31 January 2019 should be set aside because the primary judge provided no reasons for making it. Further, because the funds in the bank accounts that were ordered to be transferred to the respondent were held in trust for the children, those funds were not part of the parties’ property which could be divided between them.
We agreed and set aside Order 17. We also made the remedial orders proposed by the respondent (Exhibit 2) to restore the children’s trust accounts, which involved the respondent providing an oral undertaking to the Court. The orders that were made only related to the parties’ two younger children, as the eldest has reached her majority.
Ground 2: The spousal maintenance order (Order 31)
Were the primary judge’s reasons for judgment adequate? (Ground 2.4)
This issue must be addressed first because it goes to the integrity of the trial process itself (Concrete Pty Ltd v Parramatta Design and Developments Pty Ltd (2006) 229 CLR 577 at [117]; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9]).
The obligation to give reasons is well known. In Bennett and Bennett (1991) FLC 92-191 (“Bennett”) at 78,266–78,267, the Full Court of the Family Court of Australia adopted the principles expounded in Sun Alliance Insurance Ltd v Massoud [1989] VR 8, saying:
In Sun Alliance Insurance Ltd v Massoud (1989) VR 8, the Full Court of the Supreme Court of Victoria, consisting of Fullagar, Gray and Tadgell JJ, followed the principles established by the New South Wales Court of Appeal. Gray J, who delivered the principal judgment, said, at 18:
“The adequacy of the reasons will depend upon the circumstances of the case. But the reasons will, in my opinion, be inadequate if: —
(a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
(b)justice is not seen to have been done.
The two above stated criteria of inadequacy will frequently overlap. If the primary Judge does not sufficiently disclose his or her reasoning, the appeal court is denied the opportunity to detect error and the losing party is denied knowledge of why his or her case was rejected.”
We think that the test propounded by Gray J is a particularly useful one, and one which also applies to discretionary judgments. In Maday and Maday (1985) FLC 91-636, Fogarty J, in a judgment with which the other members of the Court (Emery and Murray JJ) agreed, took the view that these principles clearly did apply to discretionary judgments and, in particular, judgments in custody matters.
In Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110, the New South Wales Court of Appeal said:
57.The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes “a sense of grievance” and denies “both the fact and the appearance of justice having been done”, thus working a miscarriage of justice.
58.The extent and content of reasons will depend upon the particular case under consideration and the matters in issue. While a judge is not obliged to spell out every detail of the process of reasoning to a finding, it is essential to expose the reasons for resolving a point critical to the contest between the parties.
59.The reasons must do justice to the issues posed by the parties’ cases. Discharge of this obligation is necessary to enable the parties to identify the basis of the judge’s decision and the extent to which their arguments had been understood and accepted… it is necessary that the primary judge “ ‘enter into’ the issues canvassed and explain why one case is preferred over another”.
(Citations omitted)
The primary judge’s reasons were as follows:
90.In respect of the [respondent’s] application for spousal maintenance, the Court finds that the [respondent] has established that she is unable to support herself adequately by reason of having the care and control of the children of the marriage and by reason of her incapacity for appropriate gainful employment and that the [appellant] has the capacity to reasonably do so. In this regard, the Court finds that the [respondent] has made various reasonable but unsuccessful attempts at obtaining gainful employment and that she will continue to be the primary carer for the children of the marriage.
91.According to the [appellant’s] Financial Statement he has a significant income of some $200,000 gross per annum. He spends about $500 per week on personal expenses, which are in the Court’s view, unreasonable. He spends about $300 per week on food, the same amount the [respondent] spends on herself and the parties’ three children. He pays $125 per week to [the respondent]. The Court finds that the [appellant] has the capacity to pay spousal maintenance in the amount of $450 per week. Such spousal maintenance is sought for a two year period, on the basis that the property adjustment orders sought will allow the [respondent] to repay some of her debts, but will not enable her to re-establish her financial independence. Rather a weekly spousal maintenance amount of $450 per week will allow her to retrain and re-enter the workforce. The Court accepts that these submissions have been established on the evidence.
(Footnotes omitted)
Her Honour’s reasons for judgment are brief but it is well established that they need not be lengthy or elaborate to be adequate and their content depends on the circumstances of the matter being considered (Thorne v Kennedy (2017) 263 CLR 85 per Kiefel CJ, Bell, Gageler, Keane and Edelman JJ at [61]). The issues raised in a claim for spousal maintenance are relatively straightforward and require a consideration of whether the applicant can support himself or herself adequately (s 72(1) of the Family Law Act 1975 (Cth) (“the Act”)), which requires the Court to look at the applicant’s needs and the income and property available to him or her to meet them. Finally, the capacity of the respondent must be taken into account.
The appellant submits that these paragraphs provide “ambiguous reasoning” and do not show how the figure of $450 per week was determined.
I do not agree. Her Honour’s reasons are clear and there is an explanation as to how the figure of $450 per week was chosen.
It must be borne in mind that the reasons must be read as whole. Earlier, the primary judge found that the appellant “has not been fully open or frank in respect of his obligations for financial disclosure” (at [78]) and “that getting any financial information from the [appellant] was akin to pulling teeth – a painful and messy process” (at [79]).
The primary judge did not accept the appellant’s evidence that he had tax expenditure of approximately $1,406 per week because “[t]he ‘estimated’ amount [was] not supported by evidence from tax returns or an accountant” (at [81(e)]).
It was found that the appellant had retained approximately $96,000 in gold (at [81(j)]).
Finally, the appellant’s evidence that he borrowed money from relatives was rejected by the primary judge (at [83]).
None of these findings was challenged on appeal.
The appellant also did not challenge the finding made in the paragraph quoted above that he had an income of some $200,000 per year (at [91]).
Thus, when the reasons are read as a whole, the finding that the appellant had the capacity to pay $450 per week is explained.
Many of the submissions made by the appellant under this ground of appeal raise the issue of child support, which will be discussed below.
The appellant’s submissions as to asserted factual errors which were repeated under this heading will be dealt with under the topics that directly raise them.
Ground 2.4 therefore does not succeed.
Did the primary judge wrongly fail to take into account the appellant’s payment of child support? (Grounds 2.1 and 2.5)
The appellant’s submission that his payment of child support provided “a reasonable standard of living for the children” is not relevant to the issue of spousal maintenance. Child support is for the benefit of the children and not the spouse.
Whilst the payment of child support reduces the capacity of a person to pay spousal maintenance by the amount of the child support provided by them, again, the child support payment is for the benefit of children and not the spouse. The appellant’s submission that the child support payments had the result that the respondent had no need for spousal maintenance cannot be accepted.
There is no reason to think that the primary judge ignored the appellant’s child support payments in determining the appellant’s capacity to pay $450 per week because the basis for that finding rested in the other facts and appears to take into account that payment.
Did the respondent establish that she met the eligibility threshold under s 72(1) of the Act? (Grounds 2.2, 2.8 and 2.10)
It is not in doubt that an order for spousal maintenance can be made if, and only if, the person seeking that maintenance cannot support themselves adequately, by reason of: having the care and control of a child of the marriage under 18 years of age; age or physical or mental incapacity for gainful employment; or any other adequate reason (s 72(1) of the Act).
It is to be recalled that the primary judge found that the threshold test posed by s 72(1) of the Act was met because of the respondent’s care of the children under 18 years of age and her incapacity for gainful employment.
The appellant challenges these findings and asserts that the two children under 18 years of age were independent, mature, did not require full time care and have a reasonable standard of living (Appellant’s Summary of Argument filed on 17 July 2019, paragraphs 32 and 33).
The parties’ first child was born in 2000. The respondent ceased work to care for her at that time and has never returned to full time work (at [19]). The respondent has always been the primary carer for the children and the appellant has had little involvement in their lives (at [55]).
The appellant submits that the younger children required little care and referred to the respondent’s evidence in paragraphs 361 to 386 of her affidavit filed on 3 April 2017. I do not accept that to be the case. The evidence was to the effect that the respondent still devoted significant time to the care of the children to the extent that it made full time work difficult for her and the youngest children still required considerable care.
Taking these matters into account, the findings made by the primary judge were clearly open on the evidence.
The appellant submits that the care of the children nonetheless did not prevent the respondent from returning to work part time and that she is only 47 years of age. Consequently, the appellant submits that the finding that the respondent lacked the capacity adequately to support herself was erroneously made.
The respondent had been out of the full time workforce for 19 years and gave evidence as to her unsuccessful attempts to obtain employment and lack of qualifications (Respondent’s affidavit filed on 30 June 2017, paragraphs 199 to 212).
The finding of the respondent’s lack of capacity to obtain employment was thus open on the evidence.
The appellant contended under Ground 2.10 that the respondent had been offered a position which she declined to accept and that therefore the respondent had the requisite capacity for employment which she simply declined to exercise. It is true that the respondent had been offered a position which she did not accept. Her unchallenged evidence was that the job was offered to her on the condition that she owned a reliable car with a comprehensive insurance policy. The respondent said that her car had failed its registration test, required repairs and she could not afford a comprehensive insurance policy. Thus, she could not accept the offer.
The findings made by the primary judge were clearly open on, if not compelled by, the evidence. These grounds of appeal do not succeed.
Did the primary judge properly take into account the considerations raised by s 75(2) of the Act? (Grounds 2.3 and 2.7)
The appellant contends that the primary judge did not take into account the considerations raised by s 75(2) of the Act. I shall address the subsections specifically raised by the appellant below.
It is useful to commence the discussion by pointing out that the primary judge is not required to record and discuss every contention that is put to her Honour (De Winter and De Winter (1979) FLC 90-605). Further, the weight to be given to particular matters is particularly a matter for the primary judge and appeals challenging such findings face a high bar (Norbis v Norbis (1986) 161 CLR 513).
Section 75(2)(a) of the Act requires the Court to take into account the age and health of each of the parties.
The appellant is three years older than the respondent and said that he is suffering from diabetes and is currently being monitored for a possible reoccurrence of skin cancer (Appellant’s Summary of Argument filed on 17 July 2019, paragraph 39).
The primary judge was well aware of the parties’ ages (at [13] and [14]). There is no reference to diabetes in either the appeal book or the transcript of the proceedings before the primary judge (although, there is a reference to the appellant consulting a nutritionist as a “pre-diabetic” (Respondent’s affidavit filed on 3 April 2017, paragraph 47). Her Honour cannot be faulted for failing to take into account a matter that was not in evidence.
The possibility of a reoccurrence of skin cancer was not raised by the appellant before the primary judge. That being so, there was little need for her Honour to address it and there was no suggestion that the appellant’s health prevented him from earning a substantial income.
The appellant submits that the respondent had the mental and physical capacity for employment, which was not impeded by her having the care of the children (s 75(2)(b) and s 75(2)(c) of the Act). As I have discussed above, this was the subject of express consideration by the primary judge and her Honour’s findings in this regard were open on the evidence. There is no reason to think that the primary judge did not take into account the parenting orders made by her Honour when making relevant findings in relation to the property settlement proceedings. Thus, Ground 2.7 fails.
The appellant’s Amended Financial Statement filed on 30 June 2017 indicates that he pays $150 per week to help support his mother. That is a relevant consideration (s 75(2)(e) of the Act). There is no reason to suggest that this payment was ignored but it is difficult to see its relevance.
The appellant’s contention that the respondent’s receipt of a pension must be taken into account under s 75(2)(f), must be rejected (see s 75(3) of the Act).
Section 75(2)(na) of the Act requires the Court to take into account any child support payable. The primary judge found that the appellant had been assessed to pay child support but was in arrears (at [64]). Her Honour said that the appellant “continues to earn a high income yet has significant child support liabilities” (at [77]).
The appellant’s evidence was that he had child support arrears of $36,284 and that although he had been assessed to pay child support in the sum of $805.62 per week (Exhibit 1), he was paying $1,248.37 per week at the time of the trial. The appellant told the primary judge that he was paying $906 per week and his Summary of Argument filed on 17 July 2019 at paragraph 14 referred to payment in the sum of $952.04 per week.
Whatever the correct figure was, the obligation to pay child support was taken into account by the primary judge.
It follows that these grounds of appeal must fail.
Did the appellant have the capacity to pay spousal maintenance? (Ground 2.9)
The appellant submits that the primary judge did not take into account under s 75(2)(o) of the Act that the appellant’s contract of employment was for a fixed term of five months and could be terminated with one week of notice. The contract referred to a “[s]tart date” of 22 June 2017 and an “[e]xpected end date” of 29 November 2017 (Annexure “[A]29” to the appellant’s affidavit filed on 30 June 2017).
I am unable to locate any submission made to the primary judge to this effect and her Honour cannot now be criticised for not taking this matter into account.
Did the property division obviate any need for spousal maintenance? (Ground 2.6)
The appellant contends that the property settlement orders made by the primary judge at the same time as the spousal maintenance order had the effect that there was no need for any further payment to the respondent by way of spousal maintenance.
It is well established that having a source of capital is not a bar to a spousal maintenance order (Bevan and Bevan (1995) FLC 92-600 and Mitchell and Mitchell (1995) FLC 92-601).
The primary judge accepted that the property settlement orders would permit the respondent to repay her debts but not to “re-establish her financial independence” (at [91]). That is a relevant consideration and a finding that was open on the evidence. This ground of appeal does not succeed.
Conclusion and Costs
I agree with the orders proposed by Watts J and with his Honour’s reasons for the costs order.
Watts J
Introduction
By way of an Amended Notice of Appeal filed 17 July 2019, Mr Rice (“the appellant”) appeals Order 31 made by the primary judge on 31 January 2019, that he pay spousal maintenance to Ms Rice (“the respondent”) in the sum of $450 per week for a period of two years. The respondent resists the appeal.
The appellant challenges the primary judge’s findings that the respondent is unable to support herself adequately and that the appellant has the capacity to do so.
For the reasons which follow, the appeal shall be dismissed.
Background
There were substantive proceedings between the parties in relation to parenting and the adjustment of property, in addition to the respondent’s spousal maintenance application. The applications concerning parenting and property were also determined by final orders made on 31 January 2019.
The parenting orders provide that the two younger children live with the respondent and for her to have sole parental responsibility. The middle child is to spend time with the appellant in accordance with his wishes. The youngest child is to spend time with the appellant on alternate weekends and Wednesday afternoons during school terms as well as half of school holidays. The eldest child, who lives with the respondent, is over the age of 18.
The primary judge made a property settlement order based upon the known assets in the amount of $498,241, as to 70/30 in the respondent’s favour. The respondent received $348,769, comprising $212,162 in superannuation and $136,607 in publicly listed shares.
In addition to 30 per cent of the known assets of the parties, the primary judge found that the appellant retained unknown assets including gold bullion which in May 2013 had a value of $96,000.
Relevant statutory provisions
Section 74(1) Family Law Act 1975 (Cth) (“the Act”) provides that the Court may make such order as it considers proper for the provision of maintenance.
Section 72(1) of the Act is in the following terms:
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 subsection 75(2).
Section 75(2) of the Act sets out a well-known list of the only matters that are to be taken into account.
Relevant findings and reasons of the primary judge
The reasons for the spousal maintenance order, which the primary judge at [76] indicated would be “set out in a nutshell” were at [90] and [91]:
90.In respect of the [respondent’s] application for spousal maintenance, the Court finds that the [respondent] has established that she is unable to support herself adequately by reason of having the care and control of the children of the marriage and by reason of her incapacity for appropriate gainful employment and that the [appellant] has the capacity to reasonably do so. In this regard, the Court finds that the [respondent] has made various reasonable but unsuccessful attempts at obtaining gainful employment and that she will continue to be the primary carer for the children of the marriage.
91.According to the [appellant’s] Financial Statement he has a significant income of some $200,000 gross per annum. He spends about $500 per week on personal expenses, which are in the Court’s view, unreasonable. He spends about $300 per week on food, the same amount the [respondent] spends on herself and the parties’ three children. He pays $125 per week to [the respondent]. The Court finds that the [appellant] has the capacity to pay spousal maintenance in the amount of $450 per week. Such spousal maintenance is sought for a two year period, on the basis that the property adjustment orders sought will allow the [respondent] to repay some of her debts, but will not enable her to re-establish her financial independence. Rather a weekly spousal maintenance amount of $450 per week will allow her to retrain and re-enter the workforce. The Court accepts that these submissions have been established on the evidence.
(Citations omitted)
The primary judge dealt with the issue of spousal maintenance after her Honour made a determination in respect of the final property settlement order. As part of the one judgment, which should be read as a whole, her Honour had already made findings relevant to a number of considerations under s 75(2) of the Act.
At [13] and [14] the primary judge recorded that at the time of the judgment, the appellant was 50 years of age and the respondent was 47 years of age (s 75(2)(a) of the Act).
At [77] the primary judge found that the respondent had a significantly lower earning capacity than the appellant who continued to earn a high income. At [76] the primary judge determined that the property pool was to be divided as to 70 per cent to the respondent and 30 per cent to the appellant (s 75(2)(b) of the Act).
At [19] the primary judge found that the parties’ first child was born in 2000 “and the [respondent] ceased working to care for the child. She has never gone back to full-time work”. At [77] her Honour found that the respondent “has had and will continue to have the primary care of the parties’ children” (s 75(2)(c) and s 75(2)(l) of the Act).
At [64] the primary judge found that the appellant, whilst assessed to pay child support, was in “significant arrears” (s 75(2)(na) of the Act).
At [38] the primary judge found that the appellant had unreasonably withheld financial support from the respondent to meet reasonable living expenses for her and the children post separation at which time the respondent was, at least predominantly, dependent on the appellant for financial support (s 75(2)(o) of the Act).
At [78] and [79] the primary judge found that the appellant had not been fully open or frank in respect of his obligations of financial disclosure (s 75(2)(o) of the Act).
The spousal maintenance order made by the primary judge for a payment of $450 per week for a period of two years requires an overall payment by the appellant to the respondent of $46,800.
Grounds of Appeal
The Amended Notice of Appeal filed 17 July 2019 initially challenged not only Order 31 but also Order 17 which required the closure of accounts in the parties’ children’s names and paying those monies to the respondent. The primary judge had not given any reasons for making this order. The parties reached a resolution in respect of this challenge and on 15 August 2019, this Court set aside Order 17, made orders requiring the establishment of new bank accounts in trust for the children in accordance with Exhibit 2 and noted the oral undertakings given by the respondent.
There are 10 grounds of appeal in respect of the spousal maintenance order (Order 31). All but one challenged the primary judge’s findings and adequacy of reasons in respect of the respondent’s need for spousal maintenance. Ground 2.9 challenges the appellant’s capacity to pay the spousal maintenance order.
Adequacy of Reasons
Ground 2.4
Ground 2.4 is in the following terms:
2.4.The judgement [sic] provides ambiguous reasoning at most as to why spousal maintenance has been ordered and does not show how a figure of $450.00 per week was determined nor the length of time to maintain such payments.
Reasons for judgment according to Bennett at 78,266–78,267 will be inadequate if either:
…
a)the appeal court is unable to ascertain the reasoning upon which the decision is based; or
b)justice is not seen to have been done
…
As is evident, apart from the specific complaint as to the adequacy of reasons in relation to quantum and the period of payment, the appellant’s general complaint as to adequacy of reasons is un-particularised, except for that which is implicit in other grounds of appeal. We have set out relevant findings and reasons above. Whilst the reasons for judgment are not lengthy, they are adequate. The general challenge in respect of adequacy of reasons fails.
In relation to how the figure of $450 per week and the two year period to pay it was determined, the appellant highlights the fact that the respondent made applications for two higher amounts of spousal maintenance ($1,000 and then $900) before reducing her claim in her written submissions to $450 per week. The appellant claimed that it was unclear from the respondent’s Financial Statement filed on 20 June 2017 how that need was established. During submissions before us, it was pointed out to the appellant that on the face of the respondent’s Financial Statement, her weekly living expenses were approximately $353 per week (compared to his at approximately $1,305) and in addition, she was paying on a weekly basis rent of $275; compulsory third party motor vehicle insurance of $18; and TAFE expenses of $100. Those amounts total $746.
In the reasons for judgment at [90], the primary judge refers to the respondent’s application for spousal maintenance (which was for an amount of $450 per week). Her Honour found that the respondent did not have the current capacity to support herself. The respondent in fact had no income once the Commonwealth benefits which she received were ignored as being income for the purposes of considering the spousal maintenance application. The respondent’s unchallenged expenses well exceeded the claim she made. Whilst her Honour’s reasons for judgment were brief, she needed to say little more given that it seemed uncontroversial that the quantum of the respondent’s needs well exceeded the amount which she was claiming.
The respondent had more than established the basis upon which she sought an amount of $450 per week and it was open on the evidence for the primary judge to conclude that the respondent needed $450 per week for two years to allow her to retrain and re-enter the workforce.
There is no merit in Ground 2.4.
The respondent’s needs
Grounds 2.1 and 2.5
Ground 2.1 is in the following terms:
[The appellant] provides child support for all the children from the marriage under the age of 18. Therefore in support of s 72(1)(a) – there is money in place to maintain a reasonable standard of living for the children.
Ground 2.5 is in the following terms:
It would be reasonable to assume that in determining the [respondent’s] needs for spouse maintenance the judgement (sic) would refer to her financial statement affirmed on 21/06/2017. In Part 13 Section D, the [respondent] declares the amount of child support received as $488.00 per week. The amount stated is incorrect as evidenced by Pay Advice for the [appellant] from 26 February 2017 to 25 June 2017. The correct amount is $905.62 at the time. At the time of the final hearing the [appellant] was making weekly payments of $1,284.37 per week to CSA for child support as evidenced in Exhibit #8 of the proceedings. Therefore the [respondent’s] need for spouse maintenance has not been established.
(As per the original)
On their face, the appellant contends in these grounds of appeal that because child support is assessed and paid by the appellant, the respondent cannot rely upon the care and control of the children of the marriage who have not attained the age of 18 years as a basis to assert, pursuant to s 72(1)(a) of the Act, that she is unable to support herself.
The respondent’s Financial Statement indicates that her needs for the children (excluding accommodation) were in the sum of $772 per week. Both parties agreed that the child support assessment was in the sum of $805.62 per week. The respondent asserted the actual amount being received was an estimated $488 per week. The appellant disputed the figure he was paying at the time of the hearing before the primary judge, asserting it was greater than the assessed weekly amount. However, importantly, it was agreed, notwithstanding what periodic sum the appellant might then have been paying by way of child support, the arrears at the time of the hearing were approximately $33,293.72.
The respondent’s needs arising from her having the major care for the children is not to be aggregated with her own needs when assessing whether the respondent is unable to support herself adequately (Stein v Stein (2000) FLC 93-004).
The Full Court in Clauson and Clauson (1995) FLC 92-595 said at 81,911:
…it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility and the restriction on an independent lifestyle which the obligation to care for children usually entails…
(Citation omitted)
The respondent was and is the children’s primary carer and the evidence details the responsibilities that she has for them. It was open for the primary judge to conclude, as her Honour did, that the provision of s 72(1)(a) of the Act was satisfied in this case.
There is no merit in Grounds 2.1 and 2.5.
Grounds 2.2, 2.8 and 2.10 – the respondent’s earning capacity
Ground 2.2 is in the following terms:
[The respondent] is at (sic) capacity to find work and therefore is not incapacitated – FLA s 72(1)(b).
Ground 2.8 is in the following terms:
[The appellant’s] affidavit provides in paragraph 74 and 84 a testament to the [respondent’s] lack of intention to find work and obtain financial independence –furthering the confusion as to the reasoning of why spousal maintenance was ordered.
(As per the original)
Ground 2.10 is in the following terms:
Page 102-103 of the transcript from the FCC proceedings on Tuesday the 1st of August 2017 – [the respondent] was offered a job with [a community agency] however turned down the job, furthering to (sic) the lack of intention to obtain financial independence.
(As per the original)
These grounds of appeal seem to be a challenge to the primary judge’s findings about the respondent’s capacity for employment and “that the [respondent] has made various reasonable but unsuccessful attempts at obtaining gainful employment” (at [90]) (footnote omitted).
As set out above, the primary judge found that the respondent is “unable to support herself adequately…by reason of her incapacity for appropriate gainful employment” (at [90]).
The respondent bears the onus of establishing that the threshold test in s 72(1) of the Act has been satisfied (Patterson and Patterson (1979) FLC 90-705 at 78,760). Section 72(1)(b) and s 72(1)(c) focus on the respondent’s incapacity for appropriate gainful employment by reason of age and for any other adequate reasons.
Axiomatically a person’s absence from the workforce for many years can impact upon their ability to re-enter the workforce. The Full Court in Mitchell and Mitchell (1995) FLC 92-601 (“Mitchell”) at 81,997 said:
…Loss of security, missed promotion opportunities, loss of retraining in developing skills in an increasingly skilled work-force with the loss of confidence which this brings, particularly in times of high unemployment, are notorious circumstances of which the Court must take notice and apply in a realistic way…
It is not disputed that the respondent is currently 49 years of age, has been the primary carer with little involvement by the appellant since separation (at [55]) and has been out of the workforce for over 18 years. The primary judge was aware of and took into account the respondent’s employment history. It was open for the primary judge to make the finding which has been challenged by the appellant.
In relation to the primary judge’s findings about the respondent’s attempts to obtain employment, this Court should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony” (Robinson Helicopter Co Inc v McDermott (2016) 331 ALR 550 at [43] citing Fox v Percy (2003) 214 CLR 118 at [28]).
Both parties refer to the respondent’s evidence in her affidavit filed on 22 June 2017. Under the heading “My efforts to obtain employment”, at paragraphs 199 to 212 the respondent outlines her various attempts at obtaining gainful employment and concludes “I continue to look actively for paid employment”. The respondent was cross-examined at some length about her efforts to find employment.
In relation to the specific issue as to the job that the respondent was offered at a community agency, in her affidavit, the respondent gave evidence of having been offered employment at a community agency but that in the second part of the recruitment process, she was required to declare she “owned a reliable car with comprehensive insurance” (Respondent’s affidavit filed on 22 June 2017, paragraph 211). The respondent further deposed that at that time her car had recently failed to pass registration, that it was in need of repair and that she did not have sufficient funds for comprehensive car insurance (Respondent’s affidavit filed on 22 June 2017, paragraph 211). The respondent was cross-examined on these issues. This evidence supports the findings of the primary judge.
There is no merit in Grounds 2.2, 2.8 and 2.10.
Ground 2.3 – the respondent’s receipt of government benefits
Ground 2.3 is in the following terms:
Section 75 of [the Act] provides matters to be taken into consideration by the court when determining spousal maintenance orders. Subject to subsection (2)(f) the [respondent] receives government benefits as provided in her financial statements.
At paragraph 44 of the appellant’s Summary of Argument filed on 17 July 2019, the appellant asserts that the primary judge incorrectly disregarded the respondent’s receipt of Government benefits and that it should have been taken into account pursuant to s 75(2)(f) of the Act. The appellant further referred to the fact that in the respondent’s affidavit filed on 3 April 2017 at paragraphs 361 to 392, under the heading “Current Circumstances & Children’s current Schedule”, the respondent described in detail her living arrangements post separation and the children’s schedules and activities. The appellant asserts that these paragraphs describe a standard of living that could be considered reasonable in all the circumstances (a reference to s 75(2)(g) of the Act).
Apart from the receipt of child support, the only other source of income received by the respondent was Government benefits which were a combination of Centrelink, Newstart allowance, energy supplement, GST component, pharmaceutical allowance and family tax benefit. That amount was in the sum of $403 per week.
Section 75(2)(f) of the Act requires the Court to take into account:
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth…
…
and the rate of any such pension, allowance or benefit being paid to either party…
Subsection 75(3) is in the following terms:
In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
Accordingly, the appellant has misconstrued s 75(2)(f) of the Act as having the opposite meaning to the one which it has. Nor is there any relevance in the lifestyle the respondent has maintained on a Commonwealth income tested pension allowance or benefit.
There is no merit in Ground 2.3.
Ground 2.6 – the receipt by the respondent of the property settlement order
Ground 2.6 is in the following terms:
Page 92 of the transcript from the FCC proceedings on Tuesday the 1st of August 2017 – the [appellant] was not opposed to paying spousal maintenance – this was prior to asset pool split of 70:30 and changes to the care arrangement in his favour pursuant to the orders made on 31st Jan 2019. This split provides the [respondent] with enough financial support until she successfully obtains work.
(As per the original)
The reference in this ground of appeal to the appellant’s agreement during the hearing before the primary judge that he would pay spousal maintenance in accordance with any need that the respondent established, is dealt with further below when considering the appellant’s capacity to pay spousal maintenance. During the hearing before us, the appellant made it clear that he considered that he should no longer be bound by that position because of the property settlement order that the respondent had received.
Receiving a property settlement order is not a bar to receiving an order for spousal maintenance. It is not necessary for the respondent to deplete an already comparatively meagre capital sum to support herself adequately (Bevan and Bevan (1995) FLC 92-600 at [40]). Further, it is legitimate for a person with limited earning capacity “to set aside a reasonable capital sum by way of a nest egg against future contingencies and uncertainties such as illness or holidays or other significant changes in her life which may call for expenditure which would go beyond the parameters of a small income” (Mitchell at 81,995).
The primary judge was well aware of the property settlement order that her Honour had decided to make. In this case, although the respondent received 70 per cent of the assets, the amount of superannuation ($212,162) was not readily accessible. The respondent had received $136,607 in publicly listed shares, but she also had personal liabilities which the primary judge had not included in the table of assets and liabilities. As set out above, at [91], the primary judge found that the property settlement order would allow the respondent to pay some of her debts but not re-establish her financial independence.
The respondent was not required to rely upon the small amount of liquid capital funds which she had remaining to live on until she found work.
There is no merit in Ground 2.6.
Ground 2.7 – the change in the parenting orders
Ground 2.7 is in the following terms:
Parenting arrangements as per 31st January orders also imply a reduced level of care by the [respondent] and consequently reduced weekly expenses to provide such care.
The appellant asserts that the primary judge failed to take into consideration, pursuant to s 75(2)(c) of the Act, the effect of the new parenting orders and the change in the level of care for the children of the marriage under the age of 18. The appellant claims that the diminishing level of the respondent’s care of the children meant that the appellant’s weekly expenses would increase and the respondent’s would reduce.
The primary judge said at [77] that the respondent “has had and will continue to have the primary care of the parties’ children”.
That finding is made by the primary judge in circumstances where her Honour had already announced the changes in the parenting orders that were to be made. The primary judge was aware that the appellant was to have the children with him for some increased time. The appellant asserted that he now had the children for 30 per cent of the time. It is unclear to us how that calculation is made given the terms of the final parenting orders, as set out above.
There is no merit in Ground 2.7.
Ground 2.9 – the appellant’s capacity to pay spousal maintenance
Ground 2.9 is in the following terms:
This order does not take into account [the appellant’s] on-going capacity to pay spouse maintenance for a continuous period of 2 years. The [appellant] was employed on temporary contract basis as outlined by copy of his employment contract in evidence. The terms of this contract stipulate that his contract may be terminated within a 1 week notice. The Contract is of a fixed term of 5 month. In the event that his employment is terminated, or the contract of employment is expired, and he is not able to secure other employment, no mechanisms have been proposed by order 31 for him to address any diminished capacity in earnings or his ability to adjust the amount of spouse maintenance payments.
(As per the original)
Ground 2.9 seems to be a challenge to the primary judge’s implicit assumption that the appellant’s income was as he had stated it to be in his Financial Statement. There he had indicated that he had been working as a “Project Manager – Temporary Contract” for the same employer for one year and three months and had been receiving an income in excess of $200,000 per annum.
The respondent points to the appellant’s evidence in his trial affidavit filed on 16 December 2016 at paragraph 90 where he indicates that he has a very strong work ethic, has “never been out of work” and “rarely take[s] sick leave”. The respondent conceded the appellant was less upbeat about his employment in a further affidavit filed on 30 June 2017 at paragraph 180, referring to it being either “temporary” or “short to medium term”. The submission of the appellant in the second affidavit that there may be gaps between his contracts is at odds with what he said in the first affidavit, where he indicated that he had never been out of work. The appellant did not give evidence as to why he had now become more pessimistic.
The appellant submits that at the time of the hearing before the primary judge, he was employed on a temporary contract. A copy of the contract was in evidence as Annexure “[A]29” to the appellant’s affidavit filed on 30 June 2017. The terms of this contract stipulate that his contract may be terminated with one week notice. The contract was for a fixed term of five months. The appellant submits that in the event that his employment was terminated, or the contract of employment expired, and he was not able to secure other employment, no mechanism was provided in Order 31 in order for him to address any diminished capacity in earnings or his ability to adjust the amount of spousal maintenance payments.
There is no requirement for a spousal maintenance order to provide for the basis upon which that order may be modified. Section 83 of the Act does that.
The appellant made no submission to the primary judge about uncertainties around his employment contract. Had the appellant put his capacity to pay spousal maintenance in question at the trial, it is easy to envision that he would have been tested on that capacity (Metwally v University of Wollongong (1985) 60 ALR 68 at [71]). This is sufficient to dispose of this part of the appellant’s complaint.
There is no merit in Ground 2.9.
Although it is not the subject of any specific ground of appeal, the appellant more generally in submissions challenged the basis upon which the primary judge had found that he had the capacity to pay spousal maintenance in the amount of $450 per week.
The appellant’s Amended Financial Statement filed on 30 June 2017 disclosed a total average weekly income of $3,886 per week and total personal expenditure of $5,474 per week. That is a claim of a shortfall by the appellant in the sum of $1,588 per week. Even after the finding made by the primary judge at [91] that $500 of the amount claimed by the appellant for personal expenses was unreasonable, there remained a shortfall of $1,088 per week. As part of the appellant’s weekly expenses, he claimed $1,405 as income tax. At [81(e)] of the reasons for judgment, the primary judge gave little weight to the appellant’s estimate, finding that it was not supported by evidence from tax returns or an accountant. The primary judge also did not accept the appellant’s evidence in relation to loans which the appellant asserted were $140,000 ([83]). It is true that the primary judge did not attempt to mathematically calculate the effect of her Honour’s findings but it is tolerably clear that had she done so, the appellant’s ability to pay $450 per week would have been demonstrated. However, that lack of analysis needs to be seen in the context of the appellant’s position at trial about his ability to pay.
During his cross examination in relation to the payment of spousal maintenance, the appellant indicated that he was happy to pay spousal maintenance if the respondent demonstrated a need. The appellant now complains that at that point he did not know what the outcome of the property settlement order would be, nor what the outcome of the parenting orders would be. The appellant however did understand what the respective applications for parenting and property orders were. Again, the appellant made no submission to the primary judge about the effect of other proposed orders.
Further, it is to be observed that spousal maintenance, particularly for a closed period as in this case, does not necessarily have to be paid from income but can be paid from other assets or financial resources.
It was open for the primary judge to draw an inference that the appellant’s true financial position was better than his stated position to the extent that he could meet an order for the payment of the spousal maintenance claimed.
The primary judge specifically noted at [79]:
At times, it seemed that getting any financial information from the [appellant] was akin to pulling teeth – a painful and messy process. Despite very lengthy evidence and detailed submissions, the Court is not able to make precise findings about the asset pool and indeed there is no agreed pool of assets. In such circumstances, the Court should not be unduly cautions [sic] about making findings in favour of the innocent party.
(Footnote omitted)
The appellant’s failure to make full and frank disclosure meant that the primary judge did not need to shy away from a robust exercise of discretion in the respondent’s favour (Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338; Linder & Linder [2016] FamCAFC 139 at [32]; Collingridge & Aiolfi [2019] FamCAFC 88 at [38]).
Although again not a specific ground of appeal, the appellant made submissions that he had health concerns arising from diabetes and the removal of a cancer growth which requires ongoing monitoring. There was no evidence before the primary judge that the appellant had diabetes. The evidence that was disclosed in relation to the appellant’s cancer, was that he had had follow up tests which were not urgent and his prognosis was said to be very good. Again, the appellant did not assert before the primary judge or lead any evidence that any current medical condition that he may have had impinged upon his earning capacity.
For the sake of completeness, the appellant points to the primary judge’s reasons at [89] where her Honour, as a reason for why she left a motor vehicle with the appellant concluded, “the Court does not find that he has sufficient funds available to cause an unencumbered transfer of the car to the [respondent]”.
We take the primary judge’s reference to “sufficient funds” in that paragraph to refer to funds available from known assets. That finding needs to be read with the more general finding in relation to the appellant’s failure to make full and frank disclosure and the access that he had to gold bullion worth tens of thousands of dollars.
Conclusion
Given the appellant has not demonstrated any error in the reasons of the primary judge, the appeal against Order 31 will be dismissed.
Costs
The respondent sought that the appellant pay costs in accordance with a schedule of costs calculated at scale. The appellant has been wholly unsuccessful in the appeal against Order 31. It is just that an order be made that the appellant pay the respondent’s costs in the fixed sum of $10,290.30.
Tree J
I agree that the appeal should be dismissed for the reasons given by both Aldridge J and Watts J, drafts of which I have had the advantage of reading.
I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Aldridge, Watts & Tree JJ) delivered on 23 July 2020.
Associate:
Date: 23 July 2020
7
15
1