Roth & Roth
[2024] FedCFamC2F 111
•2 February 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Roth & Roth [2024] FedCFamC2F 111
File number(s): HBC 396 of 2023 Judgment of: JUDGE TURNBULL Date of judgment: 2 February 2024 Catchwords: FAMILY LAW – INTERIM PROPERTY SETTLEMENT – whether the Wife should receive $200,000 by way of an interim distribution – whether there are sufficient assets so as to meet the reasonably anticipated orders of each party – whether the monies should come from monies controlled by the Husband where the Wife has access to finds.
FAMILY LAW – INTERIM SPOUSAL MAINTENACE – whether the Wife has a need for spousal maintenance – whether the Husband has the capacity to pay maintenance if a need is established.
Legislation: Family Law Act 1975 (Cth) ss 72, 74, 75(2), 79(4), 80(1)(h) Cases cited: Bevan and Bevan (1995) FLC 92-600
Brown and Brown (2007) FLC 93-316
Chea & Sok [2022] FedCFamC1F 628
Elder v Elder [2009] FamCAFC 224
Evans and Evans (1978) FLC 90-435
Garston & Yeo (No 2) [2019] FamCAFC 139
Hall v Hall [2016] HCA 23
Kyriakos & Kyriakosand Anor (2013) FLC 93-528
Marchant & Marchant (2012) FLC 93-520
Maroney & Maroney [2009] FamCAFC 45
Medlow & Medlow (2016) FLC 93-692
Mitchell and Mitchell (1995) FLC 92-601
Osferatu & Osferatu [2012] FamCA 408
Qin & Donato [2023] FedCFamC1A 223
Redman and Redman [1987] FamCA 2
Seitzinger & Seitzinger (2014) FLC 93-626
Stanford & Stanford (2012) 247 CLR 108
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2011) FLC 93-466
Weir & Weir (1992) 16 FAM LR
Williamson and Williamson [1978] FamCA 57; (1978) FLC 190-505; (1978) 4 Fam. L.R. 355 at FLC
Division: Division 2 Family Law Number of paragraphs: 87 Date of last submission/s: 7 December 2023 Date of hearing: 7 November and 10 November 2023, with written submissions received 24 November 2023 and 7 December 2023 Place: Hobart – delivered in City Q Counsel for the Applicant: Mr Batey Solicitor for the Applicant: Ogilvie Jennings Lawyers Counsel for the Respondent: Mr Zeeman Solicitor for the Respondent: Murdoch Clarke Lawyers ORDERS
HBC 396 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ROTH
Applicant
AND: MR ROTH
Respondent
ORDER MADE BY:
JUDGE TURNBULL
DATE OF ORDER:
2 FEBRUARY 2024
THE COURT ORDERS THAT:
1.Until further order, the Wife have sole and exclusive possession of the property situated and known as B Street, Suburb C.
2.Within 14 days of the date of this order the Husband return to the Wife all keys, garage remotes, and other security devices relating to the Suburb C property.
3.The Wife receive the sum of two hundred thousand dollars ($200,000) by way of interim property distribution, with such payment to be made as follows:
(a)The sum of one hundred thousand dollars ($100,000) from the Husband’s NAB account numbers …86, and/or …26 (with the Husband to deposit that sum into the Wife’s nominated bank account); and
(b)The sum of one hundred thousand dollars ($100,000) from the Wife’s Country D investment account.
4.The Husband pay the Wife interim spousal maintenance in the sum of $1,750 per week (with the first payment to be made 5 February 2024) with such payments to be directed into the Wife’s nominated bank account.
5.The Husband continue to cause E Pty Ltd to pay the Wife a salary of $500 per month.
6.The Wife’s interim application — forming part of her Amended Initiating Application filed 9 November 2023 — be otherwise dismissed.
7.The matter is listed for directions at 9.30am 13 February 2024 with all parties granted leave to appear by MS Teams.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE TURNBULL
Overview
These are interim property and spousal maintenance proceedings brought by Ms Roth (‘the Wife’) against Mr Roth (‘the Husband’). In her Amended Initiating Application, the Wife seeks $2,500 per week by way of spousal maintenance and $200,000 as an interim property distribution. She also seeks:
·sole occupation of the matrimonial home situated at B Street, Suburb C (‘the matrimonial home’) and that the Husband pay outgoings and the mortgage relating to that property;
·that the Husband pay outgoings for properties situated at F Street, Suburb G (‘the Suburb G property’) and H Street, Suburb C in Tasmania (‘the H Street property’);
·that the Husband return certain items in his possession;
·that the Husband pay the Wife’s tax liabilities relating to E Pty Ltd and the Roth Family Trust, and from other sources;
·that the Husband pay for the cost of preparing the Wife’s taxation returns;
·that the Husband pay the Wife her wages and dividends from E Pty Ltd;
·that the Husband provide disclosure of certain documents.
The Husband agrees to orders that the Wife solely occupy the matrimonial home, and that he return keys, remotes, and security devices for the same. Consequently, the Wife does not, at this time, seek orders for disclosure, the payment of certain expenses nor the return of the other items set out in her application,[1] and only presses for $2,500 weekly spousal maintenance and $200,000 as an interim property distribution.[2]
[1] Amended Application for Final Orders of Ms Roth, filed 9 November 2023 Annexure ‘B’ [7].
[2] Ibid [1]-[2].
The Husband opposes any order for him to pay monies to the Wife, but in the alternative — if it is determined that there should be a payment — proposes that he pay spousal maintenance of $2,000 per calendar month and $50,000 as an interim property distribution.
Short History
The Wife is 55 years of age and is engaged in home duties.
The Husband is 54 years of age and is a professional, employed by his company E Pty Ltd.
The parties commenced cohabitation in 1994, married in 1995, and separated on 15 September 2021. The parties have two children — Ms J and Mr K — who are both adults.
The Wife has complex health issues. She relies upon an affidavit of Dr L, who confirms that the Wife endures significant medical issues including:
·several surgeries for her medical conditions;
·ongoing pain from a motor vehicle accident;
·fatigue from PTSD and perimenopause;
·dealing with the trauma of being threatened at work, her estrangement from Ms J and Mr K’s serious illness.
Dr L opines that due to mental health issues arising from this background, the Wife is unable to work now, or for the foreseeable future.[3]
[3] Affidavit of Dr L, filed 30 August 2023 Annexure ‘C’.
The Husband reports that he suffers from anxiety and depression, which is being treated by his psychologist, Dr M, who opines:
5. Whether our client’s earning capacity is affected when he is suffering the symptoms of his condition and how his capacity is affected.
I assume that [Mr Roth]’s earning capacity has been affected during the time-periods where he has taken some time away from work. It is my understanding that he is self-employed, and that there are no ‘leave entitlements’ for him to rely on. It would seem that [Mr Roth]’s capacity to work has been improving over the past 18 months, and I would imagine that this would continue to be the trend, barring any further incidents that would exacerbate his symptoms, such as may occur during settlement processes.
There is always possibility for [Mr Roth] to potentially experience a relapse of his symptoms in the future, particularly if there are further incidents between him and his ex-wife. However, I am hopeful that should these not occur, then [Mr Roth] would likely not relapse.[4]
[4] Affidavit of Dr M, filed 25 October 2023 Annexure ‘A’ (‘Affidavit of Dr M’).
The Wife filed proceedings for a property settlement on 8 May 2023, seeking real estate, cash, superannuation, and spousal maintenance — without stating a desired percentage of the property pool.[5] The Husband responded on 14 June 2023, seeking 50% of the net pool. During the interim proceedings, the Wife revealed that she no longer desires to retain the matrimonial home, proposing that it be sold.
[5] Interim hearing: Wife’s submissions.
These interim proceedings commenced on 7 November 2023 before adjourning to 10 November 2023, and finalising with the provision of written summaries of argument, last received 7 December 2023. Both parties rely upon the documents set out in their respective Case Outlines.[6]
[6] Both filed 3 November 2023.
The Wife’s Interim Property Proceedings
The Wife states that that she has a need for the interim distribution to pay various pressing expenses (‘the expenses’):
89. I seeking that [Mr Roth] pay me a lump sum of $200,000 to cover repayment of the debt to [Dr L], service and repair of the [Motor Vehicle 1] before it is reclaimed by [Mr K], the purchase price of my replacement vehicle, repairs and maintenance for the [Suburb C] property, my health costs including surgery, my outstanding tax, the cost of preparation of my 2022 tax return and my current and future legal fees.[7]
[7] Affidavit of Ms Roth, filed 8 May 2023 [89] (‘Wife’s affidavit’).
The Wife also hopes to enrol in a course of education. Aside from legal fees, she estimates that the cost of meeting the expenses will be in the order of $120,000.[8] Her legal costs are estimated to be $135,700 — including the costs of the trial.[9]
[8] Ibid: Totals of figures referred to at [84]-[99].
[9] Costs Notice of Ms Roth, filed 3 November 2023.
The Wife admits that she does have access to funds in Country D, but they are invested, and a penalty is incurred whenever she withdraws from the fund:
98. Each time I "cash in" part of my [Country D] investment, I crystallize the loss on the investment (due to market downtown) rather than giving the portfolio time to recover. I also incur various fees and my mother incurs tax liabilities in [Country D]. My parents are elderly and my mother has no other family support. I need to visit my parents regularly in [Country D] and I wish to use the [Country D] funds solely for that purpose, not for my living expenses.[10]
[10] Wife’s affidavit (n 7) [98].
Mr Batey, counsel for the Wife, submits that an interim distribution as sought by the Wife will not impact the Husband’s aspiration for an equal division of the net assets:
15.In accordance with the Husband’s Response to Final Orders filed 14 June 2023 it is clear and plain that the Husband seeks for the matrimonial pool to be divided equally between the parties. Whilst in preliminary stages of these proceedings, there exists a Balance Sheet dated 10 November 2023, that suggests the total matrimonial pool to exceed $4,000,000, with the [Suburb C] property being valued at upwards of $1,500,000. In these circumstances, and where the Husband seeks an equal division of the matrimonial pool, the Husband would be hard pressed to persuade the Court there will be insufficient funds remaining after payment of the $200,000 to satisfy 50% of the net pool division.
16.Therefore, it is not the case that the Wife will receive $200,000 by way of interim release of funds in addition to retaining the [Suburb C] property come Final Hearing. It is to be understood that the [Suburb C] property will be sold, and the $200,000 interim payment will be deducted from the Wife’s entitlement at Final Hearing, no matter the just and equitable division that transpires.[11]
[11] Written submissions of Ms Roth, filed 24 November 2023 [15]-[16] (‘Wife’s written submissions’).
Mr Batey also submits that the Husband largely has control of the parties’ assets, including two NAB accounts holding a combined sum of approximately $197,000, and funds he purportedly withdrew from E Pty Ltd in the amount of $227,570.[12] He also submits:
19.Since separation, the Husband has received all income from the parties’ joint assets. The Husband has been able to support himself without selling capital assets but has also been able to save a significant amount of money in accounts he has opened post separation in his sole name.
20.Furthermore, the Husband holds the resources of [E Pty Ltd], and salary and/or dividends which result from the operation of the Husband’s business. The extent of these earnings is significant, and the Husband has complete discretion as to amount in which he is to receive.[13]
[12] Exhibit W1 – The Wife’s balance sheet set out several items with purported values. There was no total agreement regarding W1.
[13] Wife’s written submissions (n 11) [19]-[20].
Mr Batey further submits that the Husband had not made full and frank disclosure in these proceedings, allowing the court to ‘err on the side of generosity’[14] when considering the Wife’s case. As to the asset pool, he states:
26.Lines 9, 10 and 11 of the balance sheet reveal shares and investments in joint names, with a total value of $456,477. These are managed by the Husband. The Husband deposes the parties are locked out of these investments and other than by court order are not available to address the Wife’s application. Even if they were, the Husband chooses not to reveal what tax or charges attach if the investments or parts thereof were made available, thereby denying the Court an assessment of the quantum of equity available for release on an interim basis.[15]
[14] Weir & Weir (1992) 16 Fam LR.
[15] Wife’s written submissions (n 11) [26].
Mr Batey concludes:
27.In such circumstances the Court can take a very simplistic approach and find that the net asset pool, (excluding superannuation) is at least $4 million, if the [Suburb C] property is included at the Husband’s value of $1,525,000, and that on an equal split the Wife would receive approximately $2 million in assets. Lines 6, 12, and 13 identify assets currently in the possession of the Wife totalling $271,733. A further payment of $200,000 would provide her with $471,733 or, expressed as a percentage of the net asset pool, 12%. Such an amount is well within the Husband’s Application that she receives 50%.
28.The Husband has the possession and control of the bulk of the parties’ net assets (other than the Wife’s current occupation of the [Suburb C] property) available to him thereby providing adequate funds to source the $200,000 sought by the Wife. The Wife contends that Court will recognise that there are ample funds available to the Husband for the purpose of this order. Initially, and in accordance with the Balance Sheet dated 10 November 2023, (Exhibit W1), as of 7 November 2023 the Husband holds $125,621 in NAB bank account number […86] […35] and a further $68,538 in NAB bank account number […26]. A total sum of $194,159 available to him and which consists of monies directly received by the Husband from wages and dividends from [E Pty Ltd], which is an entity completely controlled by the Husband. There is no evidence that these funds are in any way assets of [E Pty Ltd] or secure any debt or mortgage of [E Pty Ltd], despite the Husband’s arbitrary annotations on bank statements.[16]
[16] Ibid [27]-[28].
The Husband opposes any payment to the Wife, stating in his affidavit:
66.In relation to paragraph 89 of the Applicant's Affidavit I dispute the Applicant is in need of a lump sum of $200,000. She has been provided a total of $90,858 since separation. I continue to support our children and the Applicants living costs are minimal. The fact she has chosen not to look for work is unexplained. The Applicant's position is unreasonable and unrealistic. I understand the Applicant is doing volunteer work rather than paid work. She renewed her [volunteer work] registration [in late] 2022. In her own Affidavit she states she enjoys regular trips around the State and in to [City N] to enjoy social activities with friends. The contract the Applicant has entered into allegedly to purchase an electric vehicle from EV Dealer is excessive and not necessary. She has a vehicle to use that is satisfactory.
….
68.The Applicant has the funds available for use in [Country D] and it is not reasonable for her to quarantine those funds in a hope that the value grows in the current circumstances.[17]
[17] Affidavit of Mr Roth, filed 14 June 2023 [66]-[68] (‘Husband’s affidavit’).
Mr Zeeman, counsel for the Husband, submits:
9.The Applicant has changed her position in relation to retaining the [Suburb C] property. She has now adopted a value for that property at $1,500,000 when that was disputed at the commencement of the Interim Hearing. The asset pool is not $4,000,000.00. The Respondent's position is it is $3,371,664. Liabilities have not been considered by the Applicant in arriving at the value of $4,000,000.00. In the event the [Suburb C] property sells for less, or the Applicant again changes her position, the Respondent will be prejudiced if the $200,000 is paid.
10.The appropriate approach is that the Applicant should use her [Country D] funds which are in her control.[18]
[18] Written submissions of Mr Roth, filed 7 December 2023 [9]-[10] (‘Husband’s written submissions’).
He submits that there will be negative consequences for the Husband if $200,000 is provided to the Wife from assets under his control:
12.If the shares are sold there will also be a financial penalty. The Respondent's position is he seeks to retain the shares in finalisation of property matters and forcing a sale now will prejudice his position.
13.The asset pool does not have available funds at the level of $200,000 that can be allocated to the Applicant without risk in the final determination of the matter.
Funds, assets and financial resources currently available to meet the Wife's request for $200,000.
14.The Respondent states although the [Country D] funds are in the Applicant's name there were gifted jointly (see the Respondent's Affidavit paragraphs 21, 22 and 49). Any sale of assets to fund a part property settlement crystallises loss.
16.The Respondent cannot access the [O Company] as stated as the account has been locked.
17.To provide funds to pay the Applicant's legal costs is not just and equitable in all the circumstances given the funds the Applicant has had since separation and the funds she has access to make the payment in any event. The Applicant has prioritised international travel and should have used those funds to pay legal fees.[19] (original emphasis)
[19] Ibid [12]-[14], [16]-[17].
Mr Zeeman also refutes the claim that the Husband has not made adequate disclosure, or that the Husband has used E Pty Ltd’s income to pay his personal expenses, particularly via the repayment of credit cards. Ultimately, he submits that the Husband does not have $200,000 available to pay the Wife without assets being sold.[20]
[20] Ibid [27].
The Law — Interim Property Proceedings
The principles concerning a partial or interim property order are set out by the Full Court of the Family Court of Australia in the matter of Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466, Marchant & Marchant (2012) FLC 93-520 and Kyriakos & Kyriakosand anor (2013) FLC 93-528.
The principles are helpfully summarised in Chea & Sok [2022] FedCFamC1F 628:
49.In Strahan, the Full Court held that there is a two-stage process to applications for interim partial property settlement. Firstly, the procedural step, which is the question of whether the Court should exercise discretion to entertain and determine the application, and secondly the substantive step, namely the nature of the order which should be made.
50.With respect to the first step, the Full Court in Strahan approved the approach adopted in Wenz. There must exist appropriate circumstances for an interim order to be made, rather than compelling circumstances. Boland & O’Ryan JJ commented:
132. In relation to the first stage, in our view, when considering whether to exercise the power under ss 79 and 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
51.Their Honours continued at [133] that circumstances warranting the exercise of the power at an interim stage, included where both parties consent, in urgent situations to avoid injustice, and where “one party requires funds to assist in defraying the costs of litigation without which funds an injustice may be cause.”
52.The second step identified in Strahan involves the exercise of the Court’s power pursuant to s 79 of the Act. Insofar as it is possible in interim proceedings, this step requires the Court to:
(a) identify “the parties’ property and of their interests in it” (Medlow & Medlow (2016) FLC 93-692 at [69]); and
(b) consider and apply the provisions of s 79 (Strahan at [135]).
53.Any interim property order should not exhaust the discretion in s 79 of the Act. In Strahan at [136] the Full Court said:
As to the third matter identified at 79,930 by the Full Court in Harris, in discussion before us it was described as the “adjustment issue” or “claw-back issue”. It was submitted by senior Counsel for the Wife that it is relevant to consider whether an order would give the applicant “more than they would be indubitably entitled to on a final hearing” or alternatively “would it give them so much that it could not be adjusted on a final hearing?”. As we have observed the Full Court in Zschokke at 83,220-221 stressed the importance of consideration of the “adjustment issue” if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be “capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power”.
54.In Osferatu & Osferatu [2012] FamCA 408, Watts J at [41] made clear a detailed inquiry is not required:
As was discussed in Harris and confirmed in Strahan, the second step in making an interim property order is to have regard to the usual matters in a section 79 order (ss 79(2) and 79(4) FLA). A detailed inquiry is not required, but there must be some assessment of section 79 factors. Given it is an imprecise exercise, the interim property order has to be “conservative” so that the final outcome of property settlement will not be compromised by the interim property order. Either the remaining property needs to be sufficient to meet the legitimate expectations of both parties at the final hearing, or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.
Consideration
Interim Distribution to the Wife
The Wife’s application is for an interim payment of $200,000, exercising the power found in s79 and s80(1)(h) of the Family Law Act 1975 (Cth) (‘the Act’).[21] Taking the Wife’s evidence at its highest — as extracted at paragraph 12 of these Reasons — there may be a proper basis, in the interests of justice, warranting the exercise of such power under those sections. The Wife’s detailed future legal costs and listed expenses far exceed $200,000 and are, prima facie, reasonable.
[21] Wife’s written submissions (n 11) [10]-[11].
Mr Batey submits that the interests of justice will be served by exercising the power under s79 of the Act — particularly in circumstances where a party (in this case the Husband) has effective control of the major assets and his substantial income:
18.In Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166, it was understood that:
‘[209] The Court may use this power [section 79] to “require the party who controls most of the assets of the parties to provide the other party with funds to conduct his or her case, with the provision of such funds then being a matter to be taken into account in the final settlement of property between the parties”: Zschokke at 83,215 …
[226] … once the Court has determined that the interests of justice require it to exercise the power, the condition on which the power is to be exercised are governed only by the obligation to make an order that is “appropriate” and to ensure that the proposed order is “just and equitable” by reference to the matters set out in s 79(4).’
19.Since separation, the Husband has received all income from the parties’ joint assets. The Husband has been able to support himself without selling capital assets but has also been able to save a significant amount of money in accounts he has opened post separation in his sole name.
20.Furthermore, the Husband holds the resources of [E Pty Ltd], and salary and/or dividends which result from the operation of the Husband’s business. The extent of these earnings is significant, and the Husband has complete discretion as to amount in which he is to receive.[22] (emphasis added)
[22] Ibid [18]-[20].
The Husband is certainly in control of the income generated by E Pty Ltd. There is some question as to whether he uses his credit card and E Pty Ltd’s monies to meet his personal expenses. Ultimately, these are matters for trial, but I accept that the Wife does not have control as to how the income of E Pty Ltd is used, nor how the money held in the NAB accounts is spent. The Wife has little income from employment,[23] and she says — as corroborated by the evidence of Dr L — that she cannot work at this time. Again, this will be explored at trial, but there is evidence supporting her position.
[23] $500 per month from E Pty Ltd, reduced from $7,339 per month post separation.
Taking the Wife’s evidence at its highest, it is reasonable that the Wife be able to pay her detailed expenses, including repairs to the Suburb C property and her legal costs. I am satisfied that there is a proper basis, in the interests of justice, warranting the exercise of such power under ss 79 and 80(1)(h) of the Act. That said, I am conscious of the need to consider deeply the question as to what the ‘appropriate’ order is to make (if any) when considering the second step from Strahan — particularly as the Wife has the Country D invested monies available to her.
The second step, as extracted paragraph 24, involves the exercise of the Court’s power pursuant to s79 of the Act. Insofar as it is possible in interim proceedings, this step requires the Court to:
(a)identify “the parties’ property and of their interests in it” (Medlow & Medlow (2016) FLC 93-692 at [69]); and
(b)consider and apply the provisions of s 79 Strahan at [135].
The property of the parties is largely identified in exhibit W1. Although there is disagreement as to some of the items included and the values given, the Husband accepts that the net pool has a value of approximately $3,371,664.[24]
[24] Husband’s written submissions (n 18) [9].
Both parties clearly agree that it is just and equitable for a property order to be made — as evidenced by their respective applications to the Court. This was a long marriage where both parties made significant contributions, however, they no longer desire to hold property and debt jointly. The agreements and assumptions underpinning their relationship no longer stand.[25] It is therefore just and equitable for a property order to be made.
[25] Stanford & Stanford (2012) 247 CLR 108, 122 [41].
I also accept that both parties made significant financial and non-financial contributions throughout 26 years of their marriage, including the rearing of children, the purchase of property, and the establishment of a successful business. It appears that both parties worked very hard over the years to build the asset base available for distribution.[26]
[26] The Wife’s affidavit (n 7) sets out the history of contribution at paragraphs [6]-[41].
I also accept, again taking the Wife’s evidence at its highest, that she has an inferior income earning capacity to the Husband and is impacted by significant health issues. The Husband’s mental health issues appear, on the evidence, to be improving, and he, at this stage, continues to work full-time.
Having made this quick assessment of the matters set out in s 79(4) on the limited evidence before me, I accept that both parties’ positions, as set out in their competing applications, are possible outcomes at trial. The Husband also appears to agree that the Wife should receive an interim distribution of $200,000 — provided it comes from her monies invested in the Country D fund.[27]
[27] Husband’s written submissions (n 18) [10].
There are three remaining questions that I must consider, to determine if an interim distribution to the Wife is just and equitable:
(a)Will the payment of $200,000 to the Wife defeat the Husband’s claim for an equal division of the net non-superannuation assets, at trial?
(b)Are there funds available to pay the Wife $200,000, outside of the monies invested in Country D?
(c)Should the Wife use some or all her Country D investment to meet some part of her stated expenses?
As to the first question, there are sufficient funds available to meet the Husband’s reasonable expectations at trial. Fifty percent of the pool — even on the Husband’s estimation of the net non-superannuation pool — is $1,685,832.[28] His Response does not detail the assets he hopes to retain, but if I assume that he will retain E Pty Ltd with a value of $263,000[29] and the share portfolios,[30] then there is real estate and other funds available to satisfy his claim for an equal division of the net assets. I am satisfied that a payment to the Wife of up to $200,000 will not impact on his ambition at trial and can be ‘clawed back’ from the Wife if necessary.
[28] Husband’s written submissions (n 18) [9]: The Husband claims the pool is valued at is $3,371,664. He is concerned that the figure may be less if the Suburb C property sells for less than anticipated.
[29] Exhibit W1.
[30] Husband’s written submissions (n 18) [12].
The second question is more vexed. Currently, there is approximately $197,000 in the Husband’s NAB accounts.[31] There was some argument at the hearing as to whether these are business or personal accounts of the Husband, and whether the monies may be needed to meet business expenses, including tax. There is also a share portfolio worth $237,839, another worth $16,539 and a managed fund holding $183,404.[32] There is no evidence as to what penalty may be incurred if the managed fund is accessed. I assume that selling down the share portfolio may create a tax consequence. Both parties also have personal accounts with savings — the Wife $3,194 and the Husband $10,000.[33]
[31] The Husband has two NAB accounts – number …35 holding approximately over $125,000 and a further $68,538 in NAB bank account number …26
[32] All these figures come from Exhibit W1 – noting that there was some amendment to W1 signalled during the hearing – most notably the reduction in the amounts held in the NAB accounts.
[33] Exhibit W1.
The Husband claims that the monies in the NAB …35 account — into which he pays his wage and dividends from E Pty Ltd — reduces interest on the home loan.[34] The Wife contends that the Husband not only receives an income from E Pty Ltd but that he has the added benefit of using three credit cards to meet personal expenditure which is ultimately paid by E Pty Ltd.[35] Mr Batey’s examination of the Husband’s bank accounts and credit card statements, as detailed at paragraph 33 of the Wife’s written submissions, points to the possibility of the Husband accessing funds from E Pty Ltd for his personal expenditure:
33.Examples of the Husband’s prowess at accessing [E Pty Ltd] funds appear at pages 33-36 of the Wife’s Tender Bundle. These pages display regular transfers from the [E Pty Ltd] account ending […]55, into the Husband’s personal NAB account ending […]83. This is recorded on pages 55-56 of the Wife’s Tender Bundle when, for the months August, September, and October 2023, a monthly amount of $55,400 is transferred to the Husband’s personal account […]83. On an annualised basis this equates to $12,784 per week, an amount well in excess of $2,307 the Husband claims in his Financial Statement filed 14 June 2023 at paragraph 9. There are further regular monthly withdrawals from [E Pty Ltd] of approximately $1,905 per month which the Husband deposes are paid to each of the parties two children. A discretionary spend for his son, and a round robin for his daughter to enable her to pay the rental on the [Suburb G] apartment to the Husband. Neither of which result from any obligation greater than the support of the Wife. Further, the Husband withdrew $203,986.73 on 30 June 2023 from his NAB account ending […]52, before redirecting $203,986 back into the same account just three (3) days later on 3 July 2023. The source of the $203,986 had been in [E Pty Ltd] (see pages 30 to 31 of the wife’s Tender Bundle) thereby reducing a significant asset in [E Pty Ltd], resulting in a manipulated net asset position for [E Pty Ltd] as shown in [E Pty Ltd]'s financials for FYE 2022. For reasons best known to the Husband the Court is not provided with [E Pty Ltd]'s draft financials for FYE June 2023, thereby leaving the Wife and the Court without any means to find, estimate or guess the current value and profitability of [E Pty Ltd] for the purpose of determining the ongoing ability of [E Pty Ltd] to continue its past generous benevolence to the Husband.[36] (emphasis added)
[34] Husband’s affidavit (n 17) [51].
[35] Wife’s written submissions (n 11) [29]-[33].
[36] Ibid [33].
The Husband is in control of E Pty Ltd, and these transactions need to be explained. In his responding submission, Mr Zeeman states:
31.The Respondent has consistently stated that the credit card #[…]38 and #[…]23 are for business expenditure. It is correct and appropriate they are paid for by the business. Scrutinisation of the credit card spending is not an exercise without tested evidence that can assist in determination of the interim property settlement application. Submissions are not evidence. A large part of the Applicant's Submissions are conclusions from statements about expenditure which is untested and not referred to in the filed Affidavit material. It cannot be relied upon to determine the application.
32.The Respondent consistently has refuted that [E Pty Ltd] is paying personal expenses.
33.Determination of the need for a part property settlement cannot occur from analysing accounts to conclude as the Applicant is suggesting.[37]
[37] Huband’s written submissions (n 18) [31]-[33].
The Court accepts that these are matters to be properly examined at trial, however, the Husband could have made some effort to explain the transactions and entries set out in the Wife’s submissions.
I have examined the E Pty Ltd and NAB accounts as analysed at paragraph 33 of the Wife’s written submissions. The mentioned accounts evidence the Husband utilising funds from the E Pty Ltd account to meet expenses unconnected with the business, including expenses for the parties’ children, and the three $55,400 transfers from the E Pty Ltd account into the Husband’s NAB …35 account.[38] I am therefore satisfied, based on the untested evidence, that there are monies available, from both the earnings of E Pty Ltd and the NAB accounts, for the Husband to make an interim distribution to the Wife in some amount. I note, E Pty Ltd already pays the Wife a small salary of $500 per month.
[38] Tender bundle of Ms Roth, dated 7 November 2023, 33-36, 56 (‘Wife’s tender bundle’): Pages 33 to 36 show the amounts coming out of the E Pty Ltd account and page 56 show the monies going into the NAB account.
The final question is whether the Wife should use at least some of the Country D monies to meet her financial needs — which goes to the essential question — what is the appropriate order to make in this case?[39]
[39] Strahan & Strahan (Interim Property Orders) (2011) FLC 226.
Exhibit W1 evidences that the Wife has $266,802 (AUD) invested in a Country D trust fund. Her mother is the trustee. The Wife has been using that investment, but as extracted at paragraph 14 of these Reasons, she worries about the cost of accessing the monies, the tax impact for her mother, and the crystallization of losses given that the fund is not performing well. She also wants to use those funds to travel and spend time with her parents in Country D. She does not want to use those funds to meet the costs and expenses she has detailed, nor for day to day living expenses, which she believes to be unnecessary when there are adequate monies available — over which the Husband has complete control — from the income of Country D, the Husband’s wages, the NAB bank accounts, managed funds and share portfolios.
I note that the Wife did not detail how much her future Country D travel will cost between now and a trial date in 12-24 months, but it seems unlikely that $266,000 would be spent on such travel. In fact, to spend that amount on travel would be excessive. Further, the Wife did not detail the extent of penalty and tax that might arise if the Country D monies are accessed. It may be possible — with sufficient notice — to access the investment without significant penalty. Some evidence regarding this should have been produced by the Wife.
The Husband proposes that the Wife access the Country D funds to meet her stated expenses:
10.The appropriate approach is that the Applicant should use her [Country D] funds which are in her control.[40]
That is, he is content for her to receive $200,000, but from the Country D fund.
[40] Husband’s written submissions (n 18) [10].
The question is whether it is reasonable for the Wife to receive an interim payment in any amount from the assets controlled by the Husband, when she has access to invested funds in Country D, standing at more than the interim amount she seeks?
Taking the Wife’s evidence at its highest in relation to the potential for penalties and tax to be incurred, accessing the Country D funds may unnecessarily deplete a matrimonial asset. That said, if the Wife can plan the withdrawal of monies and give adequate notice to the fund managers, she may be to avoid or reduce such financial penalty.
I am also conscious of not fully depleting the NAB accounts. It is unclear whether some of those funds are necessary for the operation of E Pty Ltd. Mr Zeeman alluded to this possibility, although there was little evidence to corroborate that position. Acting carefully and conservatively, it is unwise to fully deplete either the Country D investment or the NAB accounts.
Doing the best I can on the untested evidence, the Wife should receive a payment from the NAB account of $100,000. She should then give the relevant fund manager adequate notice that she intends to draw down the remaining $100,000 from the Country D investment. This will leave funds in both the Country D investment and the NAB accounts to meet other expenses as they may arise over the next 12 to 24 months — including monies from the Country D investment to meet the cost of the Wife travelling to Country D.
Both the Husband and Wife can expect that the other will seek to add-back to the asset pool the monies that they take from these accounts at trial. Ultimately, how the expenditure of such monies is to be treated is a matter for the trial judge. The parties should expect that such expenditure will be considered, in some fashion, by the court. As such, both parties should keep a careful record of their use of monies withdrawn from these accounts.
Conclusion regarding an interim property distribution
Having considered all the matters set out above, I conclude that the Wife is entitled to an interim distribution of property in the amount of $200,000, with the appropriate order being that $100,000 be received from the Husband’s NAB account numbers ending …35 and/or …26, and the balance be received from the Country D investment.
The Wife’s Claim for Spousal Maintenance
The Wife’s position is that she is unable to support herself adequately from her own resources due to the state of her health and her inability to recommence work as an educator.[41] As stated, the Wife’s position regarding the state of her health is corroborated by the affidavit of Dr L.[42]
[41] Wife’s affidavit (n 7) [96].
[42] See paragraph 7 and 8 of these Reasons.
The Wife says that she needs maintenance to meet living costs including rates, insurance, car costs, costs of a gardener, and money for travel — including to Country D. This last stated expense was also stated as a reason for her needing to retain the monies in the Country D investment fund.[43]
[43] See paragraph 14 of these Reasons.
The Wife’s case is that the Husband had previously provided her with money from E Pty Ltd, in the amount of $7,339 per month, but that reduced to $500 per month in 2022. Further, he stopped paying her credit card bills, electricity, and outgoings for Suburb C.[44] He also stopped paying her tax, mobile phone, and internet bills and took her off the family health insurance. This all occurred in the year when she underwent serious surgery.[45] As a result, the Wife says she has limited her socialising, borrowed monies from her friend and her mother, and withdrawn funds from the Country D investment, to survive.
[44] Wife’s affidavit (n 7) [62]-[83].
[45] Ibid [68].
Mr Batey submits that the Wife cannot meet her reasonable expenses by virtue of the state of her health and her inability to work:
44. It is to be recognised that in circumstances where the Husband has ample resources and the parties have enjoyed a high standard of living during the marriage, it is unreasonable to expect the Wife to seek unskilled and low paid employment, especially in circumstances where the marriage is of long duration and the Wife has not worked for several years.
45. Further, an Applicant for maintenance need not have used up all assets and capital in order to satisfy the requirement that they be unable to support themselves ‘adequately’.
…
46. As per the Wife’s Financial Statement filed 8 May 2023, she has a total average weekly income of $115 before tax. This consists of the $500 which the Husband pays the Wife each month. As for the Wife’s total average weekly expenditure, such is estimated to be $2,425. Therefore, there exists an offset of $2,310.
47. The Applicant has a range of needs and expenses all of which are reasonable and made apparent in her Financial Statement filed 8 May 2023.
48. Importantly, the Wife has exhausted her entitlement to Medicare funded surgeries. As recognised above the Wife has multiple complex health issues in which require regular scans, specialist attention, and further surgeries. Without an order for spouse maintenance, the Wife will be unable to afford private health insurance.[46]
[46] Wife’s written submissions (n 11) [44]-[48].
The Wife says that the Husband has significant income available to him to meet his needs:
99. [Mr Roth] is receiving all the income from the assets we built up together over more than 20 years. [Mr Roth] is not only able to support himself without selling capital assets but also able to save hundreds of thousands of dollars in the accounts he has opened post separation in his sole name.[47]
[47] Wife’s affidavit (n 7) [99].
Mr Batey submits that the Husband can meet a payment of $2,500 per week:
52. The Husband has available to him the whole of the income of [E Pty Ltd], whereby it is at the Husband’s discretion as to how much he receives. The business has very low overheads with no premises and no receptionist. The Husband makes his own bookings and travels with his specialised equipment in his car to [work] premises.
53.In accordance with the Husband’s tax return (year ending 2021), the Husband had a gross taxable income of $385,139, from a total profit of $246,255.80 as per [E Pty Ltd]'s Profit and Loss Statement (year ended 30 June 2022). However, in accordance with the Husband’s tax return (year ending 2022), the Husband had a gross taxable income of $202,318, despite [E Pty Ltd] making increased profit of $332,408. It is therefore the Wife’s contention that the Husband elected to take $182,821 less in 2022, despite [E Pty Ltd]'s profits increasing by $86,152, in an attempt to conceal his capacity to meet a spouse maintenance order.
54. … There is no explanation as to why there exists a need for the Husband to receive a substantially reduced amount when compared to years past. Or why he cannot be paid the income and dividends paid regularly to the Wife before separation so as to enable him to pay spouse maintenance. For reasons extensively canvassed above in submissions supporting an interim property distribution to the Wife, the Court would not accept any limitation on whether the Husband or [E Pty Ltd] had insufficient income/profit to prevent a regular payment to the Wife, funded wholly from an asset of the parties, but paid via the Husband.
55. It is within the Husband’s control to pay the Wife the $2,500 she seeks, and his choice as to how to fund the payment, providing he ensures that any payment from [E Pty Ltd] results in a tax-free payment of $2,500 per week to her. On the current evidence, it is not open to the Husband to assert that neither he nor [E Pty Ltd] have no capacity.
56. The Husband has not disclosed the reasons as to why the bank balance of [E Pty Ltd], being $176,508.61 as at end of financial year 2022, stands now at $7,474.72 as of 19 October 2023, despite the 2021 accounts revealing only $41,897.85 in total current liabilities. Yet, on 1 July 2022 a sum of $176,447 was transferred into the Husband’s personal NAB account number […] 52 then mere days later transferred back to the business account. However, following this, the monies are gradually incorporated back into the Husband’s personal account whereby on 21 February 2023, the Husband’s personal account has a balance of $442,279.42. As such, with the exception of cryptic entries in the bank statements that cannot be correct as [E Pty Ltd] has no loan that requires an offset account, the Husband plainly fails to disclose the overall reduction of [E Pty Ltd]'s and his current personal accounts to their current minimal balances.[48]
[48] Wife’s written submissions (n 11) [52]-[56].
Mr Zeeman submits that the Wife has the capacity to meet her own reasonable expenses:
38. The Applicant has significant funds available to her in her own name and has had significant funds provided to her post separation, such that she reasonably cannot establish need for spousal maintenance.
39. The Applicant has continued to enjoy a lifestyle similar to that during the marriage. Her bank statements establish exactly that, overseas travel, shopping, eating out, beauty appointments and interstate travel. On average $3,000 per month is spent. The Applicant has not behaved post separation like a person concerned about money. She lives in mortgage free accommodation and has not contributed to the other loan repayments for assets in the property pool. Approximately $1,000 per month could be justified for utilities, insurance and groceries. More than half of the Applicant's current spending is discretionary in nature.
40. The spending by the Applicant indicates she is well enough to travel and socialise and it is the Respondent's position that that supports she has capacity to work. There can be no justification for a need for spousal maintenance at $2,500 per week.
41. The Applicant's salary has not been terminated. Paragraph 43 of the Respondent’s Affidavit deals with that issue.
To what extent can the Applicant support herself?
42. The Affidavit of [Dr L] is untested, disputed and cannot be relied upon.
43. The Respondent's Affidavit refers to Applicant's [work] qualifications and the Applicant's ability to return to such a career. The Respondent has health issues as outlined in paragraph 65 of his Affidavit however continues to work.[49] (original emphasis)
[49] Husband’s written submissions (n 18) [38]-[43].
The Husband also scrutinised the Wife’s stated expenses, believing them to be exaggerated:
66. … [The Applicant] has been provided a total of $90,858 since separation. I continue to support our children and the Applicants living costs are minimal. The fact she has chosen not to look for work is unexplained. The Applicant's position is unreasonable and unrealistic. I understand the Applicant is doing volunteer work rather than paid work. She renewed her [volunteer work] registration [in late] 2022. In her own Affidavit she states she enjoys regular trips around the State and in to [City N] to enjoy social activities with friends. The contract the Applicant has entered into allegedly to purchase [a vehicle] from [a dealership] is excessive and not necessary. She has a vehicle to use that is satisfactory. In relation to urgent maintenance issues, the Applicant has shown no concern about paying for many things given her discretionary spending. There is no justification for the need for a payment of spousal maintenance at the rate of $2,500 per week. The costs and the amounts that the Applicant refers to in paragraph 90 would not equal a total amount of anywhere near $2,500 per week. The expenses as referred to in the filed Financial Statement conveniently add to the sum of $2,500 per week, however are not reasonable. The sum of $6,000 per year on household repairs is excessive. I don't recall a time where we spent any money doing repairs at that level. If the Applicant is buying an electric vehicle then she will not need petrol and the amount of $3,500 per year will not be required. Most electric vehicles need little to any maintenance. In relation to fares for Uber/parking $100 per week is excessive. The Applicant's bank statements do not establish that she has taken any Uber rides. To the point of separation we had never caught an Uber in our lives in Australia. The sum of $5,000 for clothes per year is excessive. The Applicant has a pair of shoes worth $2000 in her closet and has upwards of 40 pairs of shoes. She has three wardrobes in our master bedroom. At the time of separation she had clothes in 2 ½ of them. The sum of $20,000 per year on elective cosmetic surgery is a very large figure when she is paying $497 per month for top [private health] cover. Entertainment at over $5,000 per year again there is nothing on her bank statements to support that level of spending. She has certainly spent a lot of money on wine and travelling the State but there are no regular outgoings to suggest spending at that level. Holidays at $20,000 per year is excessive, even if you include an overseas trip. The amount for chemist expense is excessive. There is no obvious routine or regular outgoings to the chemist throughout the last 10 months based on her NAB statements. Gardening has been sporadic with payments to [Mr P] that do not total the sum of $140 per week or a yearly cost of $7000. There is no evidence on bank account statements of any cleaning services. Repairs to furnishings and chattels at a sum of over $3000 per year is excessive given there is no obvious maintenance issues inside and no costs seen in any bank statement since separation, and the house has been fully renovated since purchase. Dry cleaning has never to my knowledge been undertaken throughout our relationship. Books/magazines and gifts are spurious at best. Hairdressing/toiletries at a cost of $100 per week is excessive. few entries on the Applicant's credit card only for such expenditure. The cost for [exercise and health care] is excessive. The statements provided support an expenditure of $1000 per year, well less than $3000 plus being claimed for [exercise and health care].[50]
[50] Husband’s affidavit (n 17) [66].
Mr Zeeman also submits that the Husband has no capacity to meet a spousal maintenance order in the amount sought by the Wife:
44. The Court needs to be cautious in concluding capacity to pay the sum claimed by the Applicant if accepted payment at that level is reasonable. The Respondent has his own health issues. Paragraph 52 of the Respondent's Affidavit details that the Respondent through his personal exertion is in fact [E Pty Ltd]. The business overheads are low and he does his own booking. His income as outlined in his Affidavit can vary with no certainty of future earnings. Concluding ability to pay $130,000 net per year to the Applicant is not appropriate and again the Respondent states the Applicant cannot establish a need for such payments.[51]
[51] Husband’s written submissions (n 18) [44].
In essence, the Husband argues that the Wife has no need for maintenance given the monies available to her and her ability to work. Further, the Husband is careful with the monies he earns and has no capacity to pay the amount she seeks.
The Law — Spousal Maintenance
Section 74 of the Act states that the Court may make such provision for spousal maintenance ‘as it considers proper’. A right to spousal maintenance is embodied in s72 which states:
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… (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;
These considerations are to be assessed with regard to any of the relevant matters under s75(2).
The Full Court in In the Marriage of Mitchell and Mitchell provided guidance as to the interpretation of this provision, confirming that s72 establishes a threshold question before the power of s74 can be exercised.[52]
That threshold is whether the applicant “is unable to support herself or himself adequately” by reason of the matters set out in (a), (b), or (c) of that section, but having regard to any relevant matter referred to in sub-section 75(2).
Thus, the question of whether the applicant can support herself “adequately” is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in s 75(2) and more specifically the paragraphs of that sub-section identified above.
Nor is that question to be determined upon a “subsistence” level, as earlier cases under State maintenance legislation suggested. In Nutting and Nutting (1978) FLC 90-410 at 77, 094 Lindenmayer J said:
“By sec. 72 of the Act, the Respondent is liable to maintain the Applicant only to the extent that she is incapable of supporting herself adequately, and again ‘adequately’ imports a standard of living which is reasonable in the circumstances, including the circumstances that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.” (emphasis added)
[52] Mitchell & Mitchell (1995) FLC 92-601.
In Hall v Hall [2016] HCA 23, the High Court summarised the issues to be considered:
(a)To what extent is the wife unable to support herself;
(b)What are the wife’s reasonable needs;
(c)What capacity does the husband have to meet a spousal maintenance order if such an order was to be made; and
(d)If the wife’s circumstances favour an order for spousal maintenance to be made, then what order is reasonable having regard to s75(2) of the Act.
In the Marriage of Bevan & Bevan (1995) FLC 92-60, the Full Court confirmed that an award of spousal maintenance should not be at a subsistence level but should pay proper regard to the factors in s75(2).[53] Nor does a party seeking a maintenance order need to deplete their resources before satisfying the threshold question.[54] The Full Court in In the Marriage of Bevan & Bevan succinctly summarised the law regarding an award of spousal maintenance as:
1.a threshold finding under s72;
2.consideration of s74 and s75(2);
3.no fettering principles that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and
4.discretion exercised in accordance with the provisions of s 74 with “reasonableness in the circumstances” as the guiding principle.[55]
[53] In the Marriage of Bevan & Bevan (1995) Fam LR 35, Nicolson CJ, Lindenmayer & McGovern JJ (‘Bevan & Bevan’).
[54] Ibid 40.
[55] Ibid 7.
Recently, in Qin & Donato [2023] FedCFamC1A 223, the Full Court confirmed this approach:
Whilst adequate needs can often be inferred from a person’s expenses, such expenses may not extend to reasonable needs. A person with no income and who cannot pay any expenses, still has needs.
Thirdly, what are assessed to be ‘reasonable needs’ are to be assessed having regard to the parties’ previous standard of living. This was confirmed in Brown and Brown (2007) FLC 93-316 where the Court said (at 81,455):
Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable.
…
Reasonable means reasonable in all of the circumstances, not subsistence (Evans and Evans (1978) FLC 90-435; Bevan and Bevan (1995) FLC 92-600 and Mitchell and Mitchell (1995) FLC 92-601).[56]
[56] Qin & Donato [2023] FedCFamC1A 223 [27]-[28], [31].
In Garston & Yeo (No 2) [2019] FamCAFC 139, the Full Court considered what amounts to a ‘reasonable expense’:
A claim for maintenance is not limited by reference to current expenses because an applicant applying for maintenance may not have the ability to pay for commitments necessary to support themselves (s 75(2)(d) of the Act) and thus avoid incurring what otherwise would be a reasonable expense. Therefore, the focus is on what is necessary for support.
Often, and conveniently, the identification of reasonable needs may be done by reference to expenses that are currently being incurred but obviously, that will not be possible or lead to adequate support in all cases. It is reasonable to claim that you need more money than you are currently spending (Seitzinger & Seitzinger (2014) FLC 93-626 at [53]).[57]
[57] Garston & Yeo (No 2) [2019] FamCAFC 139, [29], [30].
A court exercising jurisdiction under s 74 of the Act, ‘shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance, or benefit’.[58] This was interpreted by the Full Court in Elder v Elder [2009] FamCAFC 224 to mean that the entitlement or receipt of a pension cannot be taken into account in determining whether the party to receive a maintenance is unable to support themselves.[59]
[58] Family Law Act 1975 (Cth) s75(3) (‘FLA’).
[59] Elder v Elder [2009] FamCAFC 224, [50].
In relation to the question of ‘capacity’ to meet a payment of spousal maintenance, in Maroney & Maroney,[60] Coleman J said at paragraph [56]:
The “capacity” to meet an order for interim spousal maintenance is not confined to income. Once a party, such as the Wife in this case, establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.
[60] Maroney & Maroney [2009] FamCAFC 45.
Finally, these are interim spousal maintenance proceedings, where the inquiry does not need to be as forensic as that would be the case at a final hearing. In Redman and Redman [1987] FamCA 2, the Full Court observed:
Another consequence is that on an application for interim maintenance the court conducts “not as final or exhaustive a hearing as would be the case if one were hearing the matter finally”: Williamson and Williamson [1978] FamCA 57; (1978) FLC 190-505; (1978) 4 Fam. L.R. 355 at FLC p.77,650; Fam. L.R. p. 359 per Fogarty J. The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of sec. 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under sec.83.[61]
[61] Redman and Redman [1987] FamCA 2, [24].
Consideration
Based on the Wife’s untested evidence, and that of Dr L, I am satisfied that she has health issues that have and continue to prevent her from working. Her registration as an educator has also lapsed.
The Wife’s Financial Statement[62] evidences that she earns $115 per week from E Pty Ltd — down from approximately $1,693 per week[63] — with expenses of $2,425 per week. The shortfall is therefore $2,310 per week.
[62] Financial statement of Ms Roth, filed 8 May 2023, 3 (‘Wife’s financial statement’).
[63] Wife’s affidavit (n 7) [67]: The Wife says that the Husband was paying her $7,339 per month from E Pty Ltd which reduced to $500 per month in 2022.
The Husband challenges many of the Wife’s stated expenses as being excessive. I have considered the expenses set out in her Financial Statement and several of the stated expenses may be higher than one might reasonably expect or will be met from the monies the Wife will receive from the interim property distribution, or by using the Country D invested monies to pay for trips to Country D.
Given this analysis, the following weekly expenses can be removed as justifying a payment of spousal maintenance:
·Holidays $385 — the Wife wants to use the Country D monies to pay for trips to Country D and therefore the Husband’s figure of $130 seems reasonable for other holiday expenditures.
·House repairs $115 — the interim property distribution is sought, in part, to meet this cost and therefore it should not be included.
·Uber $100 — the interim distribution will allow the Wife to purchase a car and therefore it should not be included.
I also regard the Wife’s stated expenses of $140 per week for gardening to be excessive. Fifty dollars per week or $200 per month is a more reasonable sum.
Given the above, I find that the Wife’s reasonable expenses — considering her past standard of living and the state of her health[64] — to be $1,865 per week. Deducting her income of $115 — based on her Financial Statement, and which I assume E Pty Ltd will continue to pay — her weekly shortfall amounts to $1,750 per week. This amount is similar to the income she once received from E Pty Ltd — $1,693 per week ($7,339 per month, net).
[64] Wife’s financial statement (n 62) 11: The Wife states that her non-insurance health costs are $360 per week.
Given these findings, I am satisfied, on the untested evidence, that the Wife is unable to support herself adequately by reason of her health which impedes her ability to engage in remunerative employment. The Wife is not required to live at a subsistence level and the parties’ previous standard of living informs the reasonableness of her stated expenses. I infer that the parties had a high standard of living prior to separation. I am, however, satisfied that her shortfall is less than she claims — approximately $1,750 per week.
The authorities are clear[65] that the Wife should not have to use her capital resources to meet her financial needs — particularly where the interim distribution is earmarked to meet the cost of repairs, a vehicle, and legal costs and outgoings, and the other expenses she set out in her material. The Country D investment will also be used to assist meeting the cost of her travel to Country D. That fund will otherwise be an asset forming part of the pool for division. I do note that any monies the Wife spends from the Country D investment and from the interim property distribution may be notionally added back to the property pool or taken into account by the trial judge.
[65] Bevan & Bevan (n 53).
Consequently, I am satisfied that the Wife has established a need for maintenance, but not as high as she claims. Her need is $1,750 per week.
The question is whether the Husband has the capacity to meet a maintenance payment?
The Husband’s Financial Statement evidences that he has an income of $2,707 per week and expenses of $3,183 per week — a shortfall of $476 per week.[66]
[66] Financial Statement of Mr Roth, filed 14 June 2023, 2.
I note that his weekly expenses include credit card payments of $461 per week, which seems high as a minimum payment. The Husband says that he pays the credit card off every month, so I infer that payment is not the minimum that can be paid.[67] The Wife claims that he uses the credit card to meet personal expenses, unconnected with E Pty Ltd. This will no doubt be explored at trial. His stated expenses otherwise appear to be reasonable.
[67] Husband’s affidavit (n 17) [41].
The Husband accepts that he controls the income of E Pty Ltd,[68] but urges caution when determining his ability to meet a spousal maintenance payment because of his own health issues. The evidence of Dr M is, however, optimistic about the Husband’s ability to overcome his past mental health issues:
It would seem that [Mr Roth]’s capacity to work has been improving over the past 18 months, and I would imagine that this would continue to be the trend, barring any further incidents that would exacerbate his symptoms, such as may occur during settlement processes.
There is always possibility for [Mr Roth] to potentially experience a relapse of his symptoms in the future, particularly if there are further incidents between him and his ex-wife. However, I am hopeful that should these not occur, then [Mr Roth] would likely not relapse.[69]
[68] Ibid [43].
[69] Affidavit of Dr M (n 4) Annexure ‘A’.
Prior to separation, E Pty Ltd paid the Wife a salary of $7,339 per month (net) and dividends of $10,000-$20,000 per month,[70] although the Husband claims the payment of dividends was ad hoc.[71] Following separation, the Husband stopped paying the Wife dividends[72], and in 2022 reduced her wages from $7,339 per month to $500 per month.[73]
[70] Wife’s affidavit (n 7) [47].
[71] Husband’s affidavit (n 17) [47]
[72] Wife’s affidavit (n 7) [52].
[73] Ibid [67].
The profit and loss statement for E Pty Ltd reveals that the profit before tax in 2021 was $246,255 when salaries cost the company $341,100. In 2022 (post separation), the profit before tax was $332,408 when salaries were $276,000 — a difference of $65,100.[74] There are no figures produced for 2023. This evidence suggests that there is enough profit in the business to withstand higher salaries and that the reduction in the cost of salaries in 2022 may have been attributable, in part, to the business no longer paying the Wife a high income. I also find merit in Mr Batey’s analysis of the true income available to the Husband from the business.[75] There is no evidence that the income and profit of E Pty Ltd has declined. Until 2022, E Pty Ltd was able to provide both parties with wages of $7,339 (net). Prior to separation the company provided each party with significant dividends. As such I am satisfied, on the untested evidence, that the Husband, who controls E Pty Ltd, does have the capacity to meet the Wife’s need for interim spousal maintenance — $1,750 per week ($91,000 per annum). This figure assumes the Husband will continue to pay her a wage from E Pty Ltd of $115 per week or $500 per month.
[74] Wife’s tender bundle (n 38) 5.
[75] Extracted at paragraph 57 of these Reasons.
Conclusion regarding Interim Spousal Maintenance
I have considered the matters set out at s75(2) of the Act and conclude that by reason of the Wife’s state of health, her income, and necessary commitments to support herself, the standard of living that the parties enjoyed during the marriage, and the Husband’s income and resources and his ongoing control of the income earning asset of the relationship, it is appropriate that the Husband pay the Wife interim spousal maintenance in the amount of $1,750 per week. As stated, it is assumed that E Pty Ltd will continue to pay her $500 per month, but to avoid doubt I will order that the Husband cause E Pty Ltd to continue to pay the Wife this wage. The Husband will likely need to draw down on monies received by E Pty Ltd to meet the spousal maintenance payment, but ultimately, he is in control of the monies earned by that company and will be able to utilise those earnings to meet his obligation. If the Husband choses to meet the payment by increasing her wage paid by E Pty Ltd, then the $1,750 must be net of tax.
I will make the orders as set out at the start of these Reasons.
I certify that the preceding eighty-seven (87) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Turnbull. Associate:
Dated: 2 February 2024
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