Rollins-Wallis and Wallis - [2008] FamCA 1272

FAMILY COURT OF AUSTRALIA

ROLLINS-WALLIS & WALLIS

[2008] FamCA 1272

FAMILY LAW - SPOUSAL MAINTENANCE - threshold applicability where respondent concedes his capacity and conceded a quantum of what is adequate - need to prove matters as to living expenses - matter determined on the evidence

Family Law Act 1975 (Cth)

Bevan v Bevan (1995) FLC 92-600
Brown and Brown 2007 Fam LR 59
Lindon v Commonwealth (1996) 70 ALJR 541
Mitchell v Mitchell (1995) FLC 92-601

APPLICANT:

Ms Rollins-Wallis

RESPONDENT:

Mr Wallis

FILE NUMBER:

MLC

11709

2007

DATE DELIVERED:

13 August 2008

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

6 AUGUST 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Levine

SOLICITOR FOR THE APPLICANT:

Issac Brott & Co

COUNSEL FOR THE RESPONDENT:

Ms Stewart

SOLICITOR FOR THE RESPONDENT:

Clancy & Triado

Orders

That the application in a case filed by the husband on 9 July 2008 and the response thereto of the husband filed 5 August 2008 be dismissed.
That the wife pay $2,800 towards the husband’s costs of this application such payment to be stayed until the conclusion of the property issues between the parties.
All interim applications are otherwise dismissed.
It is directed that the co-ordinating registrar examine the file and determine whether the case should be docketed to a registrar forthwith for trial management including holding a directions hearing on issues relating to the discovery, valuation and preparation for trial.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11709 of 2007

Ms Rollins-Wallis

Applicant

And

Mr Wallis

Respondent

REASONS FOR JUDGMENT

This is an application for the review of a decision of the Senior Registrar made on 2 July 2008. The Senior Registrar ordered that the husband pay to the wife $266 per week by way of spousal maintenance. He also made other orders by consent of the parties which have some impact on the outcome of the matter and I shall return to them. The Senior Registrar also ordered that the wife pay $4,000 towards the husband’s costs.
It is the wife who has brought the review application.
The wife seeks more than $266 per week and wants the costs order discharged.
I reserved my decision because I wanted to contemplate an argument put by counsel for the applicant wife about whether the quantum of any order had to bear some resemblance to the evidence or whether I was completely at large and exercising an entirely discretionary and unfettered judgment.
In my view, the answer is that the former rather than the latter is right.
The application to review is a de novo hearing.
Each party was represented by counsel. At the start of the case, I inquired what material each was relying upon. I read that material and in one case, made a ruling upon it. I permitted some limited evidence in chief and cross-examination. Each counsel made submissions.
By way of brief background, the husband is a 55 year old self-employed health professional. The wife is currently 45 years of age. She described herself as unemployed. She has hairdressing and beautician qualifications.
Cohabitation commenced in 1999 but there is a dispute between the parties about when they separated. On the husband’s view, it was in 2002 and the wife’s, 2007. Just exactly what sort of relationship they had in the intervening period is for a court to examine in the future. However, there appears to have been some form of financial relationship between them up until 2007.
They married in March 1992.
The parties have unresolved property proceedings in the Court.
The wife filed an application in a case on 22 February 2008. It was accompanied by affidavit material. In her application, the wife sought:
The husband pay such sum for spousal maintenance, by way of lump sum payment and periodic payment as this court deems to be just and equitable;
The husband pay the arrears on the mortgage on the D property and continue to make the payments thereon each month;
The husband pay the Bankwest Credit of the wife.
The wife then also sought that the husband pay “reasonable costs of the legal expenses of the wife in the sum of $35,000” and in addition, her costs of this particular application.
The husband in response sought orders that the wife’s application be dismissed and that she pay his costs. There was also a further order sought which is not relevant for my purposes.
After a contested hearing, the Senior Registrar ordered that the husband pay $266 per week. Importantly, and by consent of the parties, he also ordered the husband to pay:
(a)the wife’s credit card statement; and
(b)various utilities,
which are all noted as being by way of partial distribution of property.
Further, on 14 April 2008, the husband was ordered to pay the mortgage payments on the property in which the wife lived. In the consent orders in July 2008, the parties agreed to a refinancing arrangement of the mortgage.
For the Senior Registrar’s hearing, the wife filed a list of documents to be relied upon which included an affidavit “dated” 13 March 2008. No such affidavit appears in the file. I was told that it was something to do with an application to abridge time but it has no other relevance to these proceedings.
For that hearing and for the hearing before me, the wife relied upon her affidavit filed 22 February 2008 and her financial statement filed 31 January 2008.
Objection was taken to paragraph 9 of the wife’s affidavit. It refers to her view of her medical condition and she attached a letter from a medical practitioner. Counsel for the husband said that prior to the last hearing, whilst the letter was hearsay, the husband had not opposed the material being read provided the doctor was available for cross-examination. He was not. I was informed that the Senior Registrar struck out the paragraph relating to that medical material. The husband again requested it be ruled inadmissible.
No attempt had been made to put the material on affidavit.
Apart from being hearsay which is admissible for the purposes of an interlocutory hearing, the problem is that the doctor’s letter contains an expert opinion as to the medical problems of the wife from which the doctor then makes statements including that:
[she] has a depressive illness that has been severely exacerbated by her current personal difficulties including marital breakdown, conflict with her ex-husband and severe financial hardship.
The expert opinion was not just a simple diagnosis and in any event, it was not conceded by the husband. In addition, the husband claimed that the doctor was not an objective witness. Even accepting that the evidence was tendered as an expert opinion and that the medical practitioner had the expert knowledge to give it, the document would need to establish the accepted facts that were to form the basis of the opinion. Was there a proper basis for the opinion? Without something more, the evidence could not be admissible and even if it were, it must have diminished probative value.
It is claimed by the husband that there is more to the evidence than that set out in the simple statement. Having regard to the duration of the doctor’s professional relationship with the wife and for the reasons that I have mentioned, the letter as an annexure to the affidavit of the wife was ruled inadmissible.
Counsel for the wife indicated that the doctor was not being called.
On 9 July 2008, the wife filed another application in a case which became the application to review the determination of the Senior Registrar. In that, she sought orders:
The orders made by Senior Registrar Fitzgibbon on 2 July 2008 that the wife received the sum of $266 per week in spousal maintenance and that she contribute to the Husband’s costs in the sum of $4,000 be set aside.
The husband pay such sum for spousal maintenance, by way of lump sum payment and periodic payment as this court deems to be just and equitable and such sum to be no less than $500 per week.
The husband pay the reasonable costs of the legal expenses of the wife in the sum of $35,000.
The husband pay the wife’s costs of this application and the hearing before Senior Registrar Fitzgibbon.
Mr Levine said at the outset that he was not proceeding with the $35,000 issue.
Because the issue was then confined to one about spousal maintenance, I asked what material was relied upon. Mr Levine said paragraphs 9 to 14 of the wife’s affidavit and her financial statement.
Ms Stewart for the husband sought and was given leave to file, a response to the application of the wife. It simply sought the dismissal of the wife’s new application.
Importantly, Ms Stewart made the concession that the husband’s position was that he would agree to an order in the same terms as those made by the Senior Registrar but not beyond. In other words, he was conceding the wife was unable to adequately support herself without $266 but she would need to prove that issue beyond that.
The wife’s evidence was that she had no marketable skills at the current time and more physically demanding occupations were out of the question because she could not stand or sit for a long period of time. She described her training as a hairdresser and more recently, but did not state when, she worked in retail and hospitality positions.
In respect of that evidence, I could not find that the wife has no “marketable skills”. I am not entirely sure what the expression means having regard to the matters that need to be established in Part VIII of the Family Law Act 1975 (Cth) (“the Act”). If it is meant to say that the wife has no skills to obtain employment, I reject that on the basis of her own evidence.
The wife said that she was responsible for the household and assisted in the husband’s business working approximately 20 hours per week. For reasons which are not clear, the wife was given a certificate of termination of her employment with the husband in 2005 so that she could thereafter be eligible for some form of Centrelink benefits. From 1998 until 2000, the wife worked in the entertainment industry.
The wife asserted that she had “suffered a catastrophic collapse” in her standard of living since separation. It is hard to tell just when that was because of the disagreement between the parties. It is also arguable what the phrase means. She said she borrowed a considerable amount of money from friends but no evidence was produced to that effect. In her financial statement, there was a reference to $12,870 of “other personal liabilities” but no list was attached as it would appear was intended by the author of the document. In her affidavit, the wife referred to loans from friends in the sum of $8,000. She also said that there had been demands on her credit cards. In respect of those however, the payment by the husband under the consent orders had removed those as a liability.
The wife’s affidavit set out the high standard of living she enjoyed during the marriage but again, there was no indication of when this all happened having regard to the dispute as to when separation occurred. As it turns out, the husband disputed the lifestyle.
The wife set out the financial position of the assets and liabilities. The liabilities included debts that were covered by the husband’s agreement under the consent orders. The parties seem to have about $3 million net to divide.
The financial statement which was sworn before the affidavit to which I have just referred mentioned the liabilities covered by the consent orders. Leaving aside things such as rates and car registration about which there was no evidence and which I have presumed were therefore not pressing, the only living expenses set out, totalled $266. The wife did not connect any of these expenses with anything said in her affidavit. The closest I could get to finding some evidence was her statements that her standard of living had collapsed and she was eating at the home of friends.
The list of living expenses is under the heading of “Average weekly expenses”. Mr Levine pointed to the fact that at the time the affidavit was sworn, the wife did not have any income from which to pay those expenses and as such, she could not be expected to show amounts she could not possibly spend. However, no attempt in either the financial statement or the affidavit was made to estimate what her daily needs were. Hence, I was asked to exercise some arbitrary discretion and determine what would be reasonable having regard to the lifestyle and financial position of the husband and the wife’s past lifestyle. The problem with that is that it is inappropriate to guess or for me to estimate subjectively, what the wife’s needs are.
The wife was called to give some evidence. She said that her physical ailments were that she had pain in the lower back and in her arms if she held them up. She said she could do things such as hairdressing slowly but what would have previously taken her an half hour would now take her 2 to 3 hours because of her back pain. She said she felt depressed, “shocking” and lethargic, meaning that she had no interest and did not want to get out of bed. This had been how she had felt since separation which, from her perspective, was last year.
However, the wife conceded that she had applied for a job in a carnival which was seasonal work that will most likely start in October if she is successful. That would entail taking money in a booth which I presumed meant much sitting down. She said she had the capacity for that. She admitted she had not applied for any other jobs. That was odd having regard to the fact that she had applied for the carnival position. Her evidence was that if she did not obtain that position, she would pursue something else.
When questioned about her potential hairdressing and beautician capacities, the wife said that she had not cut hair for over a year but the only reason why she could not take on that sort of work at home was that she did not have the facilities such as a basin and equipment. She conceded that she could do the beautician work at home if she had the facilities. She agreed she had taken some equipment from the former home.
She had not attempted to obtain work as a shop assistant because of her back.
Counsel for the husband put a summary dismissal argument after the close of the wife’s case. I rejected that. As Kirby J said in Lindon v Commonwealth[1] if it is clear that proceedings are doomed to fail, the Court should dismiss the action to protect the respondent from being further troubled, to save the applicant from further costs and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit. In this case, there was some evidence of the wife that was relevant and that justified calling upon the husband to respond.
[1](1996) 70 ALJR 541
The husband’s evidence was much wider and more comprehensive than that of the wife. His evidence gave a different picture from that painted by the wife. However, in respect of the spousal maintenance issue, the husband agreed he knew nothing of the wife’s personal circumstances relating to her standard of living and he disagreed with her assertions about the lifestyle that she said they had previously led. There is little doubt if the wife’s financial statement is correct, her capital position at least at this stage, is not as strong as that of the husband. The husband said that the wife had worked right through their relationship either full time or part time but that was of little assistance because on his evidence, the relationship had ended some years ago and he knew little of her current circumstances.
The husband was asked about the amount that it was suggested the wife needed but he remarked that his view was that she had other income that was not declared. The husband’s evidence took the matter little further than that of the wife.
The issue comes down to whether the wife has proved her case on the evidence before me.
In an application for spousal maintenance, whether it be interim or final, the provisions of s 74 and s 72 of the Act apply.
Before making any order under s 74, regard must be had to the provisions of s 75(2) of the Act[2].
[2] Bevan v Bevan (1995) FLC 92-600
Section 72 says in essence that before a party is called upon to pay maintenance, the Court has to be satisfied that the applicant is unable to support himself or herself adequately.
The reason a party may be unable to support himself or herself adequately may be because of having the care and control of a child of the marriage under the age of 18 years or by reason of age or physical or mental incapacity for gainful employment or for any other reason.
In this case, the wife had put her case on the basis of her incapacity for gainful employment.
Section 74 gives the Court a discretionary power to make the order it considers proper, taking into account the matters referred to in s 75(2) which section in turn, permits the Court to take into account only the matters there set out.
S 75(2)(a) requires the Court to look at the age and state of health of the parties. Apart from the wife’s statement about how she feels and the incapacity she says she suffers, there is no evidence about her health which is relevant to s 72(1)(b).
I have not admitted the wife’s medical evidence. To have done so and then not have it subjected to cross-examination would have been unsafe. I am not in a position therefore to say that the wife’s physical ailments as vividly described in the witness box, are such that she could not pursue employment that might enable her to adequately support herself.
Section 75(2)(b) covers much the same issue. The disparity in wealth is obvious but in respect of the wife’s capacity both physically and mentally for appropriate gainful employment, the evidence is sadly lacking. At best, the wife asserts that she cannot work as a hairdresser and beautician both because of her capacity and her lack of equipment. That evidence came out in cross-examination. I was not told about what efforts she had made or could make to cure the problem of obtaining the equipment.
The wife herself has set the parameters because she is optimistic about the carnival job and if she does not get it, she will pursue something else. I accept that she cannot perceive herself working for a hairdresser or beautician and thereby earning an income but on her own evidence, she could do that work from home if she had the appropriate equipment. The wife did not explore that in her evidence in chief; it was a matter elicited in cross-examination.
The wife relies on the fact that she presently has no marketable skills to obtain employment. Having regard to the matters that I have just mentioned, I could not find that to be the case. She has not been out of the workforce substantially for the duration of the marriage; quite the opposite, the evidence suggests that she worked hard and in various occupations including office work for the husband.
I considered the reasoning of the Full Court in Mitchell v Mitchell (1995) FLC 92-601 where the Nicholson CJ, Fogarty and Jordan JJ said:
Importantly, and particularly in more recent times, there is the notorious circumstance that there is a significant gap between theory and reality for employment, especially for people in middle age, lacking in experience and confidence, and who have been out of the skilled workforce for many years.
…
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, … are notorious circumstances of which the Court must take notice and apply in a realistic way. In this regard, we refer to the detailed analysis of comparable problems in Canada by the Supreme Court of Canada in Moge v Moge (1992) 43 RFL (3d) 345 and the discussion by this Full Court.

The Full Court was also keen to use research as occurred in Canada. However, their Honours went on to say that the Court had to be cautious about taking judicial notice of research as a substitute for evidence in a particular case. Their Honours recommended that courts could take judicial notice of research as “background information”. In this case, it was urged upon me to look at the wife’s circumstances as they related to her capacity for employment. Mr Levine argued that the wife’s “marketable skills” were diminished because she was not in the workforce. He said I could take notice of research about that. Again, I would agree if I had some evidence of what it was that the wife meant by her own lack of “marketable skills” at a time when she was optimistic about a carnival position.
The wife has not established that she does not have the mental and physical capacity for appropriate employment such as would enable her to be able to provide for herself beyond the $266 per week offered by the husband.
Section 75(2)(d) requires the Court to look at the wife’s commitments necessary to enable her to support herself.
The only evidence that I have about what her daily living expenses are or might in the immediate future be, is that set out in her financial statement. Whilst as I have just said, s 74 permits the Court to make the order it considers proper, that must be within the bounds of the available evidence. I cannot arbitrarily determine that a particular person has particular needs. Here there was no evidence other than the wife’s own estimates. They must be seen as her own considered estimates because at that time, she was not in receipt of any income at all. I accept that everyone must estimate costs of living which are within their means including their projected means based upon what they are pursuing in the litigation. In this case, the wife had an opportunity to detail what it was that she required. Mr Levine suggested that $90 per week for food was too low. He said that $266 was less than the pension and below weekly earnings. Whilst that is clearly right, the argument has little logic when one contemplates that there were other benefits such as accommodation and debt payment taken on by the husband. Those have to be factored in to the determination of what is proper.
No evidence was led about the wife’s eligibility for a pension other than that her apparent interests in assets with the husband excluded her. That is surprising but there was no evidence to corroborate her statement or details of where that information came from. In any event, such income would be excluded from my determination.
Section 75(2)(g) requires the Court to take into account a standard of living that in all the circumstances is reasonable. I have already referred to the wife’s evidence about that.
No evidence was led by the wife about how any particular sum of maintenance would resolve her earning capacity problem.
In respect of s 75(2)(j), the wife did not lead evidence about how she had contributed to the wealth of the parties and in particular, how her input meant that she was entitled to those assets. I was not asked to make any interim property orders.
The Act requires me to take into account the duration of the marriage and how that has affected the wife’s earning capacity. In this case, I cannot determine the issue on this evidence.
Mr Levine drew to my attention the Full Court decision in Brown and Brown[3]. There are some reasons to be cautious about drawing too much from that decision. First, it was an appeal against a specific order for a substantial lump sum spousal maintenance payment. Secondly, there was significant evidence about needs. Thirdly, it was a final hearing.
[3] 2007 Fam LR 59
The Full Court made some observations about spousal maintenance with which it is hard to argue:
·The word “adequately” is not to be determined according to any fixed or absolute standard.
·The idea that “adequate” means a subsistence level has been firmly rejected.
·Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
·In some circumstances it may be reasonable for the parties to live at a higher standard than previously enjoyed.
·It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
·However, an applicant is not entitled to live at a level of considerable luxury or comfort merely because the other party is very wealthy.
What the Full Court did not say was that any of those considerations could be based on anything other than evidence of some sort.
The trial judge in that case was O’Ryan J. His Honour comprehensively examined not only the authorities but also the legislation. When examining s 74 of the Act, his Honour said:
(C)onsistently with s 74, an order for maintenance should be proper. The word proper is defined in the Macquarie Dictionary 2nd Edition to mean appropriate to the…circumstances and this definition was adopted in Wilson and Wilson (1989) FLC 92-033. The maintenance should be at a level sufficient to enable the applicant to support him or herself adequately, since an order below that level would not remove the need for maintenance, as defined in s 72.
The Full Court in commenting on this said:
… the argument may remain that the discretion under s 74 as to what is “proper” is so broad that no greater particularity than that provided by O’Ryan J was necessary.
Their Honours went on to say that what was meant by “proper” in s 74 was circumscribed by the provisions of the Act relating to maintenance. I would add that it is circumscribed also by the evidence that the parties present.
In saying that, the Full Court went on to say:
Adequacy is the key concept in determining whether the threshold set by s 72 has been crossed. But that concept is not left behind once the step into the s 74 enquiry as to what is “proper” is taken. Though application of the factors set out in s 75(2) may, in a given case, lead to a generous interpretation of needs that are “adequate” and of what is “proper”, the nexus between “adequate” and “proper” must remain. As Asche J said in Robinson and Willis (1982) FLC 91-215:
“An order which is either insufficient or excessive in the circumstances is not “proper”.
To determine what is sufficient let alone excessive, one has to look to the evidence. To do otherwise would not be proper. It is not permissible to “pluck a figure” or to arbitrarily and subjectively say what is sufficient.
The unusual feature of this case is the concession of the husband as to the threshold. He quite properly conceded that he had the capacity to pay. He conceded also that the wife could not support herself adequately without his $266 per week and all of the other benefits established by various orders. His dispute was about the quantum having regard to the evidence lead by the wife. He required the wife to establish that she needed more than $266 to adequately support herself.
It is not appropriate to simply look at what the husband has and then presume that his capacity justifies an order.
Mr Levine said I could look at the husband’s own financial living circumstances including the fact that a large sum is paid into a superannuation fund for him on a weekly basis. Whilst I agree with that, I am still left in a position where I would be guessing as to what opportunities there are in the workforce for the wife to earn something to enable her to contribute towards her own support. She does not say that her age precludes her from employment.
I am not satisfied on the evidence that the wife has demonstrated the requisite need for spousal maintenance beyond the concession made.
I therefore reject the wife's application to review the orders made by Senior Registrar Fitzgibbon.
To avoid the parties having to incur further costs, I sought an indication about costs.
Counsel for the husband said she sought $4000 if successful and on the same basis as the order of the Senior Registrar, it remain stayed until the property issues were determined.
Counsel for the wife said that the quantum would be too much and that the scale should apply. I agree. However, an order for costs is a discretionary matter and the provisions of the Act must be applied.
I have regard to the provisions of s 117, the general rule being that each party pay their own costs of proceedings unless there are circumstances justifying a departure from that rule. In this case, the registrar no doubt canvassed in his reasons which I have not read, the basis of his findings. If there were holes in the wife’s case, I would have thought the four week period would have meant there was ample time to endeavour to rectify things. I refer here specifically to the fact that the medical evidence was ruled inadmissible on that occasion. Further, unless I am mistaken, the husband has conducted the proceedings on the same basis as last time which is that there is not sufficient evidence from the wife to satisfy the test. Even if the wife disagreed with that, prudence would have suggested that there might be further evidence produced.
In the circumstances therefore, it is appropriate to depart from the rule that each party pay their own costs.
In departing from that rule however, I must have regard to the provisions of s 117(2A) and I do so now.
I am now familiar with the financial circumstances of each of the parties to the proceedings. It would seem that there will be a financial settlement and the husband has indicated a willingness to wait for the payment of the costs. The wife’s financial circumstances are therefore not dire on that issue.
Having regard to the income of each, even with the husband’s obligation to pay spousal maintenance, their positions will be greatly different.
I am satisfied that the husband's capital position is better than that of the wife.
No-one has suggested that there are legal aid considerations in this case.
I am entitled to take into consideration the conduct of the parties. In this case, apart from what I have said, nothing turns on that issue.
In this case, the wife has been wholly unsuccessful in the proceedings and this is a matter I have taken into account.
Mr. Levine urged me to say that the attendance of an instructor was not necessary and that was evident because he had not one. He said it was a straight-forward matter. I disagree. There are many tasks for an instructing solicitor even in a simple matter. However, in the exercise of discretion and taking into account the financial power-imbalance between the parties, it is something that I have adjusted.
I am conscious that at the hearing before the Senior Registrar, the written material had been included in his costs calculations along with presumably correspondence and attendances. In this review, the costs were confined to counsel’s attendance, the instructor’s time and the preparation of the response. There are also no doubt costs of the solicitor in attending her client and briefing counsel. I am intending to treat the matter as a scale case in which the hearing was up to 3 hours.
Having said that, I fix the husband’s costs at $2800. They will be stayed until the property settlement.

I certify that the preceding Ninety Four (94) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate:

Date: 13 August 2008