S & S
[2006] FMCAfam 396
•2 August 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| S & S | [2006] FMCAfam 396 |
| FAMILY LAW – Interim property and spousal maintenance application – application for injunction to restrain husband accessing superannuation or disposing of other assets – consideration of wife’s capacity to do paid work – comparison of parties financial circumstances – what is “proper” or “reasonable” in all the circumstances. |
| Family Law Act 1975 – ss.72, 74, 75, 114 |
| Redman v Redman (1987) FLC 91-805 Bevan & Bevan (1995) FLC 92-600 Harris and Harris (1993) FLC 92-378 G & T (2004) FLC 93-176 Waugh & Waugh (2000) FLC 93-052 |
| Applicant: | J E S |
| Respondent: | R S |
| File Number: | DNM444 of 2005 |
| Judgment of: | Brown FM |
| Hearing date: | 25 July 2006 |
| Delivered at: | Darwin |
| Delivered on: | 2 August 2006 |
REPRESENTATION
| Counsel for the Applicant: | Ms Terry |
| Solicitors for the Applicant: | Janet Terry Barrister & Solicitor |
| Counsel for the Respondent: | Ms Capar |
| Solicitors for the Respondent: | Withnalls |
ORDERS
That the parties’ competing applications for final property orders be fixed for hearing on 8 and 9 March 2007 as a reserve matter and on
22 and 23 March 2007 as a head matter.
That each party file all affidavits of evidence on which they propose to rely on at hearing together with up-dated statements of financial circumstances by 8 February 2007.
That the matter be listed for directions at 9.30am on 17 October 2006 to determine whether the value of the husband’s interest in the mud crab licence and the appropriate methodology for such valuation has been resolved between the parties and if not whether the court should appoint a single expert to conduct such valuation.
THAT UNTIL FURTHER OR OTHER ORDER:
The husband to pay to the wife spousal maintenance in the sum of $400.00 per week to be calculated to commence on 23 May 2006 and to be payable on Tuesday of each week to a bank account to be nominated by the wife.
By way of interim property settlement the husband pay to the wife the sum of $10,000.00 by 9 August 2006.
The interim applications be otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
DNM444 of 2005
| J E S |
Applicant
And
| R S |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property and spousal maintenance proceedings. The applicant in the proceedings is J E S “the wife”. The respondent is R S “the husband”.
The parties met in the mid 1970’s and married on 26 January 1983. They have one child, J, now 23 and financially self-supporting. The parties finally separated on 7 September 2005, when the husband left the parties’ jointly owned property situated at 5/21 G Crescent, Fannie Bay. The wife continues to live in that property.
The wife was born with cystic fibrosis. As a result, she has a number of related medical problems. These include insulin dependent diabetes; hypertension; peripheral vestibular failure; osteoporosis; sleep apnoea; enzyme deficiency; and a paralysed bowel.
In 2003, she received a double lung transplant at the Sir Charles Gairdner Hospital in Perth. She was absent in Perth, where her mother lives, until April of 2005, when she returned to Darwin. The parties have lived in Darwin for the majority of their married life and both were involved in the paid workforce during their marriage.
As a result of her condition, it has been necessary for the wife to return to Perth regularly for medical treatment, since April of 2005. She stays with her mother in Perth on these occasions. As a result of her various conditions, the wife has been assessed as being entitled to receive a disability pension. She receives a sum of $250.00 per week. She has not been able to return to paid work since 2002 but apparently worked up until that time.
The wife commenced these proceedings on 12 October 2005. On a final basis she seeks orders that would see her retaining the G Crescent property and receiving 65% of the parties’ total marital assets. She estimates the value of these assets, which include superannuation, as being in excess of $1.8 million.
The husband concedes the parties’ property is worth at least $1.2 million. In his response filed 4 November 2005, he seeks that the parties’ property be divided equally. At this stage, it seems to be the case that the parties have different views as to the application of the factors set out in s.75(2) of the Family Law Act 1975 to the division of their marital property, particularly so far as the wife’s health and capacity to obtain paid employment is concerned.
At present, the husband is employed as a drilling supervisor by Water Resources – a Northern Territory Government Agency. His most recent group certificate indicated[1] that he received an annual salary of $52,548.00 for the financial year ending 30 June 2006. This equates to a weekly income of $1,010.54 before tax.
[1] Exhibit “C” husband’s PAYG payment summary for year ending 30 June 2006
At some time, whilst the wife was interstate undergoing medical treatment, in circumstances which still rankle with her, two real properties owned by the parties in Darwin were sold, realising a sum of approximately $380,000.00. This sum has been deposited in a term deposit in the husband’s name at the National Australia Bank. It produces interest in the sum of $1,702.58, which up until this stage has been accumulated with the principle amount invested.
In addition, the husband owns a mud crab licence, which he has assigned to a company known as NT F Pty Ltd. There is controversy between the parties as to the value of this licence and, more importantly, in the context of these proceedings, the extent of the nett income it produces for the husband by reason of the assignment.
On 23 May 2006, the wife amended her application. On an interim basis, she seeks the following orders:
“1. That until further order the husband:
i) forthwith assign to the wife the income from the Mud Crab Fisheries Licence;
ii) pay to the wife forthwith the sum of $10,000.00 from the fund invested in the National Australia Bank Term Deposit in the husband’s sole name.
2.That except for the purposes of complying with order 1 the husband be restrained and an injunction be granted restraining him from:
i) assigning, transferring encumbering by mortgage or change or otherwise deal in any way with the Mud Crab Licence;
ii) dealing in any way with the funds deposited in National Australia Bank on Term Deposit other than to give instructions to National Australia Bank for the funds to be invested for a further period.
3.That the Trustee of NTGPASS & NTSSS are directed:
(a)not to make any splittable payment in respect of the interest of R S in the said funds without leave of the court; and
(b)to notify the court, within 28 days of the next occasion when a splittable payment becomes payable in respect of the interest.”
The husband responded to this application on 21 July 2006. On an interim basis, he seeks the following orders:
“1.That orders 1, 2 & 3 sought as interim orders in the wife’s amended application filed 23 May 2006 be dismissed.
2.That the husband do all acts and things necessary to transfer one half of all funds presently held in his name in National Australia Bank Account number 58-059-0640 to an account as nominated by the wife in writing.”
These proceedings are directed to the resolution of these interim issues, namely what, if any, periodic payments of spousal maintenance the husband should pay to the wife; whether there should be an interim or partial distribution of the parties’ property pending final hearing; and whether it is appropriate that the husband be restrained from dealing with some of the property vested in his name, until the final hearing of the parties’ competing applications.
Necessarily the orders made today will stay in place only until the final hearing. The parties have attended two conciliation conferences and unfortunately have not been able to resolve how their marital property should be divided between them. Accordingly, it is necessary to allocate a time for the final hearing. I will appoint that hearing date in conjunction with the orders made today. Essentially, the orders made today, will stay in place until that final hearing.
The order the wife seeks in her application for spousal maintenance does not specify an actual figure, rather she seeks the assignment to her of the income produced by the crab licence. There is some doubt about what this figure actually is and what taxation implications attach to it. As a consequence, in submissions made by her counsel Ms Terry, the wife indicated that, as an alternative to the proposed transfer, she would seek a specific sum of spousal maintenance from the husband of $400.00 per week.
Documents relied upon
The wife relies on the following documents filed on her behalf:
i)Her amended application filed 23 May 2006;
ii)An affidavit of herself filed 23 May 2006;
iii)A statement of her financial circumstances filed 12 October 2005.
The husband relies on the following documents:
i)His amended response filed 21 July 2006;
ii)An affidavit of himself filed 21 July 2006;
iii)A statement of his financial circumstances filed 4 November 2005;
iv)A case outline document filed on his behalf.
Both parties were represented by their respective solicitors. In the wife’s case by Ms Terry and in the husband’s case by Ms Capar. The parties’ competing applications came on for hearing on 25 July 2006. On that occasion both parties gave additional sworn evidence and each was cross-examined by counsel for the other party. In addition a number of documents were tendered.
Although there was a brief hearing before me, I am conscious that, at this stage, I have not been able to conduct a detailed examination of all the evidence which is likely to be available to the court at final hearing. In Redman v Redman[2] the Full Court of the Family Court considered the procedural and evidentiary requirements which attach to interim spousal maintenance proceedings. The Full Court said as follows:
“…The very fact that the order is limited in time imports certain different considerations. One of these is that such an order is intended to be reconsidered, quite apart from a variation under section 83. …The most common purpose of an interim order is to make provision for the spouse and children pending the determination of the property settlement. …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. …The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of section 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 section 83.”
[2] Redman v Redman (1987) FLC 91-805 at 76,081
The legal principles to be applied
Pursuant to s.74 of the Family Law Act 1975, the court may make such order as it considers “proper” for the provision of maintenance to the wife in accordance with the provisions of Part VIII of the Act. In particular, s.72 deals with the right of a spouse to maintenance and reads as follows:
“(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).”
Given the factual basis of this case, the relevant matters referred to in sub-s.75(2) are likely to be the following:
a)The age and state of health of each of the parties;
b)The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
d)Commitments of each of the parties that are necessary to enable the party to support:
i)Himself or herself;
g)Where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
j)The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
k)The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
Pursuant to s.75(3) of the Act, the court is directed to disregard any entitlement of a party to the proceedings to an income tested pension, allowance or benefit. Accordingly, the fact that the wife is receiving a disability pension is not a relevant consideration in this matter.
The Full Court of the Family Court in Bevan & Bevan[3] determined that the approach to be taken in respect of applications for spousal maintenance involved a four step process as follows:
1.a threshold finding under s.72;
2.consideration of s.74 and s.75(2);
3.no fettering principle that a pre-separation standard of living must automatically be awarded where the respondent’s means permit;
4.discretion exercised in accordance with the provisions of s.74 with “reasonableness in the circumstances” as the guiding principle.
[3] Bevan & Bevan (1995) FLC 92-600 at 81,981-2
The Full Court of the Family Court discussed the relevant considerations in respect of the making of interim property orders in Harris and Harris[4] and said as follows:
[4] Harris and Harris (1993) FLC 92-378 at 79,929 – 79-930
“We do not doubt that the Court has power in a proper case in s. 79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing. We do not consider that it is necessary to draw a distinction in terminology between an “interim” order and a “partial” order.
But in the exercise of that power the following matters need to be considered:-
(a)The exercise of the power should be confined to cases where the circumstances presented at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s. 79 proceedings. However, circumstances may arise before there can be a final hearing which dictate that some part of the property of the parties should be the subject of orders. A common example is where both parties agree to the disposal of some assets pending the trial. However, we do not consider that it is confined to cases where the parties consent. Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children. ….
(b)It is an exercise of s. 79 power. Consequently it must be performed within those parameters. Since it is not the final hearing the Judge is unlikely to have the final findings, but the exercise must fall within that general framework and the material available at that time.
(c)Of necessity it is likely to be a somewhat imprecise exercise. Consequently, it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so.”
Pursuant to s.114(3) of the Family Law Act 1975, the court may grant an injunction, in any case in which it appears to it to be just or convenient to do so. In the present case, the wife seeks an injunction to restrain the husband from either disposing of the mud crab licence or accessing his superannuation and the monies deposited on term with the National Australia Bank. The husband resists the court making such an injunction.
In G & T[5] O’Reilly J summarised the principles relevant to the granting of such an injunction as follows:
“The purpose of interlocutory restraining orders in a case such as this is to preserve the status quo until the trial. In order to exercise its discretion the court is required to find that there is a serious issue to be tried and that the balance of convenience supports the making of an order…
Plainly, it is also a requirement that the restraints sought be reasonably necessary in the sense that if the restraining orders sought are not made there would be a real risk of the defeat of the applicant’s claimed interest.”
[5] G & T (2004) FLC 93-176 at 78,989
Accordingly, it is necessary for the wife to provide evidence that the husband intends to dispose of any of the assets which she has nominated with an intention to defeat her claim pursuant to s.79 of the Act. It is not sufficient that she mistrusts the husband or feels anxious. She is not entitled, as of right, to some form of security over the property in question.[6]
[6] See Waugh & Waugh (2000) FLC 93-052
The evidence
The parties separated in difficult circumstances in September of 2005. No doubt these difficulties were compounded by the circumstances surrounding the wife’s very serious illness. It was apparent to me from the wife’s demeanour in the witness box and her tendency to direct gratuitous and somewhat acerbic barbs to the husband about his previous conduct that she is currently very ill-disposed towards him and feels hard done by, particularly in regards to the sale of former matrimonial assets and the fact that many of them have been registered in the husband’s sole name.
However, although the wife has followed a common tendency, in proceedings such as these, to exaggerate her financial needs, perhaps extenuated by her hostility towards the husband, I consider her overall to be an honest witness, who has made a genuine and proper attempt to summarise her recurrent financial needs at the present time. Necessarily, this must be a somewhat imprecise process and must be conducted on a rule of thumb basis. These difficulties are compounded by the fact that at times she is required to live in Perth, where her costs of living are different. In addition, for obvious reasons, the minutiae of her expenses vary from week to week.
The husband presented himself as a financially unsophisticated person, who struggled to make ends meet. I consider him to be far from a fiscal naïf. Unfortunately, much of his evidence seemed to be directed at obfuscating rather than clarifying financial issues, particularly in regards to his income from the crab licence and the potential tax he was required to pay in regards to it. He did not provide any of his income tax returns. Essentially, the thrust of his evidence seemed to be that the tax payable in respect of the licence was approximately the same as the income generated. I find this difficult to accept.
When the husband was asked to clarify this issue, he replied that he merely paid the invoices presented to him by the tax office and that if any detail was required, the court and presumably the wife could ring his accountant. Given the responsibility of the husband to make a full and frank disclosure of his financial affairs, such a response is unsatisfactory and leads the husband into a position where it is likely that the court will draw adverse inferences against him. This is likely to be particularly so in interim proceedings such as this one.
The husband too evidenced considerable bitterness against the wife and appeared resentful at any suggestion he should pay spousal maintenance to the wife. In his evidence, he indicated that he “worked for his money” and “as long as she [the wife] earns it, she can spend it.” The clear import of his evidence was that he believes that the wife is now currently able to return to paid employment. In his own words, “lots of transplant people work.”
The wife has not provided any detailed medical evidence in respect of her current condition. In addition, in the context of the present proceedings, the husband has not been able to subject that evidence to any detailed scrutiny. At this stage, the only evidence available to the court is in the form of a letter from the wife’s respiratory physician at the Sir Charles Gairdner Hospital. In part, it reads as follows:
“Although the transplant has given J a new lease on life, she still suffers from many medical problems that require constant specialist treatment and daily medications, many of which are not subject to the Government’s PBS subsidy. This causes considerable financial hardship. This will be the case for the rest of her life.
Unfortunately J will never be able to return to the workforce because of her multiple medical problems and the risk of complications.”
It seems to be the case that the husband does not accept this conclusion. However, he has not been able to present any evidence to refute it. It seems clear to me that the wife has been significantly ill for a considerable period of time. It is to her credit that she has been able to work until comparatively recently, in spite of suffering from cystic fibrosis from birth.
I think, in the context of these proceedings, I am entitled to assume that a person who has received a double lung transplant and who has hypertension, diabetes and the other conditions previously outlined suffers a significant degree of physical disability. Certainly this was the evidence of the wife herself and her presentation in court. In addition, I take into account the fact that the wife has been found to be entitled to receive a disability pension, which necessarily involves some assessment of her physical capacity to do paid employment.
The wife’s case
For the reasons provided, I accept that the wife is currently suffering a significant physical disability, which prevents her from gaining paid employment. In the past, it has been feared that her condition has been terminal. However thankfully, due to the intervention of the lung transplant, she has been given a new lease of life.
At the present time, she needs to take multiple medications, some of which are subsidised pursuant to the pharmaceutical benefits scheme and some of which are not. It is also necessary for her to regularly visit Perth and the members of the lung transplant team which operated upon her. These matters entail significant expense on her part.
In addition because of the magnitude of the surgery involved and its consequences for her auto-immune system, the wife must be particularly careful to guard against bacterial infection. I accept her evidence that these factors lead to an increase in her grocery expenses because she is limited in the foods she can consume.
In particular, the wife estimates her weekly expenses as follows:
PBS medication
$ 23.40
Non PBS medication
$ 216.30
Medical extras
$ 87.05
Visiting Perth
$ 84.70
Other living expenses
$ 708.23
Total
$ 1,119.68
The husband did not challenge the wife on the expenses related to her pharmaceutical and medical needs. In addition, the wife will be required to purchase a breathing machine for herself, which is likely to cost $1,900.00.
When the wife visits Perth for medical treatment, she stays with her mother in Rockingham. However, it is necessary for her to catch taxis to get to and from the airports in both Darwin and Perth and also to travel between the hospital and her mother’s home. In addition, she contributes towards living expenses, whilst she is with her mother.
I accept the wife’s evidence that, if her necessary expenses in Perth were calculated on an annual basis, the figure of $84.70 per week would be a reasonable one. Necessarily, such an exercise will be an imprecise one.
The property in which the wife lives in G Crescent is unencumbered. However, I accept the wife’s evidence that she has been responsible for paying the body corporate fees and the utilities which relate to it. The wife also runs a motor vehicle and estimates it costs her about $110.00 per week to pay for fuel, maintain and insure the vehicle. This does not seem to me to be unreasonable and was not challenged by the husband.
The major criticisms the husband has of the wife in regards to her living expenses relate to the amounts attributable for food; hairdresser and entertainment. In all the circumstances, I do not believe that the wife’s food expenses of $250.00 per week, given her medical needs, can be said to be exorbitant. Nor that she spends approximately $115.00 on entertainment and the hairdresser. In any event, I accept that these figures are necessarily proximate. At the end of the day, the wife has significant recurrent financial needs, which she does not have the capacity to meet. It is probably not useful to engage in “nit picking” regarding individual items of the wife’s expenditure, such as her expenses in Perth or on food.
The wife estimates the value of the parties’ marital property as follows:
Joint property
5/21 G Crescent, Fannie Bay
$ 390,000.00
Third share of land at Berry Springs
$ 51,666.00
Property in the husband’s name
NAB term deposit
$ 393,391.71
Mud crab licence
$ 420,000.00
Holden ute
$ 20,000.00
AMP shares
$ 7,544.00
Multiplex shares
$ 11,200.00
Barossa Vines Investment
$ 11,446.00
Life insurance annuity
$ 10,000.00
ANZ Access account
$ 6,952.00
Westpac Classic account
$ 1,218.00
Westpac Maxi Direct account
$ 14,455.00
Commonwealth Bank Investment account
$ 49,225.54
Wife’s name
Mitsubishi Lancer
$ 7,000.00
Superannuation
Husband’s superannuation with NTGPASS
$ 231,561.68
Wife’s superannuation with Westpac
$ 230,000.00
Total:
$1,855,659.88
It is the wife’s position that she is currently not able to access her superannuation entitlements and, in any event, has no wish to because of her current level of disability. It is her position that she wishes to resist dipping into her capital resources for as long as possible. The wife was born on 8 September 1951. Although it is an issue which has not been fully explored in the proceedings to date, I accept at the present time that she is unlikely to be able to return to the paid workforce for the foreseeable future. This seems to be implicit in the assessment that she is entitled to receive a disability pension.
It is also the wife’s position, which is uncontroverted by the husband, that during the parties’ relationship and subsequent marriage, she was in paid employment and made direct financial contributions towards the acquisition of the parties’ marital property. A fact which is not currently properly recognised by the legal holdings of that property.
It is the wife’s position that she needs to have ready access to a lump sum of funds to protect her from the exigencies of life. Given the level of her disability, this does not seem to be an unreasonable request. In particular, the wife would like to install an air conditioner at the G Crescent property. I do not regard such a thing as an extravagance. In addition, it seems likely that the wife will require some funds to perform necessary repairs at the property.
In her affidavit material, the wife deposes that she has borrowed significant sums of money from her mother and brother, particularly in regards to her expenses whilst living in Perth. I accept that this is so. Given the extent of the wife’s disabilities and the gravity of her medical condition, it is likely that she will find herself liable for many out of pocket expenses. At the present time, she has no facility to budget for unforseen expenses. On any view, there is a gross disparity in the way the parties’ matrimonial assets are held.
The wife does not point to any specific action, which she alleges the husband has recently taken to dispose of or access either his superannuation or the crab licence. Rather she is highly suspicious of him because of the circumstances surrounding the sale of the parties’ two units in Darwin, whilst she was ill and the subsequent creation of the National Bank term deposit in the husband’s sole name. In her initiating affidavit, the wife deposes as follows:
“I am seeking an injunction to prevent B dealing with significant assets in his sole name until the property matters are settled between us. 70% of the asset pool is in B’s name and if assets disappeared, this could affect my ability to achieve a reasonable settlement.”[7]
Accordingly, in my view, the wife’s application for an injunction against the husband is based on conjecture and suspicion rather than on any actual course of conduct on his part.
[7] See wife’s affidavit filed 12 October 2005 at paragraph 14
The husband’s case
The husband was born on 26 July 1948. There is nothing in his affidavit material to indicate anything other than that he enjoys good health. However, in his oral evidence, he indicated that he was getting to an age when he should consider retirement from the occupation of driller, which involves heavy physical work, often in remote locations. He indicated that he was currently suffering a number of physical disabilities relating to his employment. None of these have been formally medically documented.
Accordingly, it seems likely that the husband will continue in fulltime employment until at least the time this matter is fixed for final hearing and will receive a gross income of about $1,000.00 per week. This is slightly less than his income for the preceding financial year, during which he earned the sum of $58,386.00 or $1,122.80 per week.
At the present time, the husband is living in a self-contained flat constructed beneath a mate’s elevated house in Rapid Creek. I accept that this accommodation is not luxurious, a fact which is reflected in its modest rental of $100.00 per week. The husband struck me as a frugal person, who had modest needs. His greatest luxury appeared to be consuming “a few beers” after work. I do not regard this as an unreasonable luxury or believe that the sum of $150.00, which he attributes to his entertainment, is excessive.
The nature of the husband’s work requires him regularly to travel outside of Darwin. In recent times he has been required to work at Daly River, Manbullo Station and in Alice Springs. His employer pays him a travel allowance in respect of such work related trips. The husband bitterly resented any suggestion that he was liable to profit on his travel allowance and pointed to the fact that he had to pay “dead money” in respect of his accommodation in Darwin. Given the current amount of his rent, the degree of loss does not seem to be severe, particularly as he does receive compensatory travel allowance.
The husband acknowledges the ownership of the crab licence, which he has owned since 1990. It was purchased when he cashed-in a previous entitlement to long service leave and holiday pay. As previously indicated, the value of the licence is likely to be a subject of controversy between the parties.
The husband himself concedes that the licence produces an annual income of approximately $20,000.00, which equates to $1,666.00 per month. It is his position that, due to changes in government regulations regarding the size of crabs which may be harvested, the licence is much less remunerative than it was previously. It is also his position that the current licensee is unreliable in respect of his payment of the required licence fee. However, the greatest area of uncertainty, in regards to the licence, is the extent of tax which the husband must pay in respect of the income received from it.
It is the husband’s evidence that the licence payments are paid into an ANZ account in his name. According to his financial statement, as at
4 November 2005, a sum of just under $3,000.00 stood in this account. In this financial statement, the husband also acknowledged that he had a sum of approximately $68,000.00 available to him in various bank accounts standing in his name. The husband was not cross-examined about these various sums and their provenance. In my view, they indicate both that the husband has a capacity to save and it is likely that he has some sources of income other than his salary alone.
As has been previously been indicated, whilst the wife was receiving medical treatment interstate, two properties located at 11/11 G Street, The Gardens and 5/19 B Street, Fannie Bay were sold and the nett proceeds of approximately $380,000.00 paid into a term deposit, in the husband’s sole name, at the National Australia Bank. The husband has never attempted to access any of these monies. The most recent statement dated 29 June 2006, indicates that the sum of $398,359.53 is currently standing in this account and it is producing $1,702.58 gross interest per month. There are obviously taxation implications in regards to this sum but the husband has not explained them to me.
At this stage of the proceedings, the husband proposes that the monies in the National Australia Bank account be divided equally between the parties. Thereafter, he proposes that the wife purchase herself an annuity, which would produce a regular income stream for her. The wife is not agreeable to this proposal and, apart from the suggestion itself, the husband has not provided any specific evidence in regards to it. From the wife’s point of view, it would represent her having to utilise some of her capital, something she is reluctant to do until all the property proceedings between her and the husband are concluded. Otherwise, it is the husband’s position that the wife’s claim for periodical spousal maintenance should be dismissed.
In round terms, it seems that the husband currently has the following weekly sources of income:
Salary from Water Resources
$ 1,000.00
Gross income from crab licence
$ 384.61
Interest from NAB account
$ 392.90
Total:
$ 1,777.51
It should be noted that this sum does not include any income received by the husband from other sources. These other sources include his bank accounts and other investments. In any event, the husband himself gives $1,832.90 as his gross income in his financial statement filed 4 November 2005.
Far more problematic in this case is the extent of the husband’s necessary recurrent expenses, particularly his liability for tax on both the income received from the crab licence and his other investments. In his most recent affidavit, the husband estimates his weekly expenses as follows:
Food
$ 150.00
Petrol
$ 30.00
Entertainment
$ 150.00
Health insurance
$ 15.00
Clothing
$ 10.00
Rent
$ 100.00
Total:
$ 455.00
I do not regard any of these expenses as being unreasonable. As I have previously indicated, I regard the husband as a frugal person, who is careful where money is concerned. In addition to these expenses, it is possible to calculate the approximate level of taxation paid by the husband on his salary alone from his group certificate. It equates to an amount of $239.00 per week. In addition, the husband’s statement of financial circumstances lists the following expenses which he has:
Household insurance
$ 10.00
Motor vehicle insurance
$ 10.00
Motor vehicle registration
$ 12.00
Contributions to superannuation
$ 62.25
Rates[8]
(Tax on salary)
$ 52.88
$ 239.00
Total:
$ 386.13
[8] I am uncertain to which property these rates relate as the wife asserts she is paying the rates on the G Crescent property. It may be that they relate to the property at Berry Springs.
On my calculations, this gives the husband a surplus of income over expenditure of about $160.00 per week, putting aside the issue of the crab licence and his other sources of income and liability.
It seems to be the husband’s position, although it is far from clear, that his taxation position, arising from his other investments, considerably erodes this positive financial position. He points to the fact that his most recent quarterly PAYG instalment notice, for the period from April to June 2006, was for a sum of $7,115.00.[9] This is so, but the husband was either incapable or unwilling to explain in any detail how this tax was made up and to what it related. It seems to be his position, although again this is far from clear, from his financial statement that he has a further liability for tax of about $315.00 per week.[10] How this gels with the tax payable as a result of the quarterly PAYG instalment notice is unclear to me.
[9] See exhibit “B”.
[10] In his statement of financial circumstances, the husband indicates his weekly amount of tax payable is $553.00 per week. If the tax deducted by his employer from his salary is subtracted from this sum, it leaves a balance of $314.00.
It beggars my belief that the husband is operating the crab licence at a loss. I concede there would be tax payable on the interest generated by the National Australia Bank term deposit and, as this is not being paid directly from the account itself, the husband must be the only source of it. No doubt the husband is entitled to some deductions against his income in respect of licence fees relating to the crab licence itself. The key to working out definitively what is the husband’s surplus of income over expenditure is his tax return, which has not been provided to me. As I say, either consciously or inadvertently, the husband’s evidence resulted in obscuration rather than clarification of these issues.
Perhaps a more useful exercise is to calculate the husband’s nominal income each week and deduct from this sum his expenditure as calculated thus far:
Salary
$1,000.00
Crab licence income
$ 384.00[11]
NAB term deposit
$ 392.00
Total:
$1,776.00
Less weekly expenditure
$ 841.13
Additional taxation
$ 314.00
Total expenditure:
$1,155.13
Balance:
$ 620.87
[11] This sum is calculated by dividing $20,000.00 by 52.
This calculation, which I concede may be erroneous, leaves the husband with a weekly surplus of over $600.00. However, in my view, the most telling factor, which indicates that the husband is in a more secure financial position than he would want either the wife or the court to know is his obvious financial liquidity. The husband has considerable sources of cash. He has not disclosed the sources of this cash. Accordingly, I believe that I am entitled to infer that the source of these monies is, at least in part, from one or other of his current income streams.
Discussion
In my view, the evidence at this stage of the proceedings, clearly indicates that the wife has cleared the threshold provided by s.72 of the Family Law Act 1975. I accept that, as a result of her current level of physical disability, it is not possible for the wife to obtain paid employment. It may be the case that other people, who have undergone the surgical procedures which the wife has done, may be capable of performing some form of work, as the husband asserts. However, he himself has been able to produce no evidence to rebut that provided by the wife, in regards to her current medical condition. Bearing in mind the interim nature of these proceedings, it would be unreasonable to require the wife to provide more detailed medical evidence at this stage.
Pursuant to s.74 of the Act, the court is granted a discretion to make an order for spousal maintenance, which it considers to be proper. In determining what is a proper award, the court must consider the relevant matters as set out in s.75(2). In this case, there is a gross disparity in the incomes, property and financial resources of each of the parties. The husband is in secure employment. He has access to comparatively large amounts of cash. When compared to the wife, his expenses are able to be easily met from his resources.
On the other hand, the wife is in poor health. She is precluded from providing for herself financially. Her level of weekly expenditure is high, in large part due to her level of physical disability and her need to purchase medication and other medical supplies on a regular basis. She has no financial buffer to protect herself from unforeseen circumstances. She is forced to live from hand to mouth. As matters currently stand, it is impossible for her to meet her current financial needs.
On any view, during the parties’ long marriage, the wife has made significant contributions to the husband’s current level of property and financial resources. In all these circumstances, it would be proper for the husband to make some contribution towards the wife’s current expenses by way of an award of spousal maintenance.
Given the current level of the wife’s financial needs, the sum she seeks is not an excessive one. In addition, I am satisfied that the husband has a significant level of ability to meet those needs. In all the circumstances, I am satisfied that it is reasonable for the husband to pay the wife the sum of $400.00 per week by way of spousal maintenance, until the parties’ competing applications for final orders can be heard. It is appropriate that the payments commence from the date of the wife’s amended application.
The wife also seeks an interim or partial distribution of property in her favour in the sum of $10,000.00. Given the overall size of the parties’ pool of assets, it is a modest sum. Given the wife’s current precarious financial position, I am satisfied there are sufficiently compelling reasons why such an award should be made at this stage. Although the wife has secure accommodation, she has little else. She needs to purchase a breathing machine for herself. No doubt she has other needs, which if satisfied, will make her life more comfortable.
Finally, I am not persuaded that there are sufficient grounds to make the injunctions which the wife seeks in these proceedings. There is no evidence to indicate that the husband has any intention to secrete or dispose of assets with the intention to defeat any aspect of the wife’s application.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding seventy-four (74) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: C White
Date: 2 August 2006