SCHOFIELD & MCCANN
[2015] FCCA 3061
•18 November 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SCHOFIELD & MCCANN | [2015] FCCA 3061 |
| Catchwords: FAMILY LAW – Interim hearing – application for de facto spousal maintenance and litigation funding – wealthy respondent – seven year relationship – no children – applicant fails to satisfy the requirement that she is unable to support herself – interim costs not particularised nor any evidence as to which expert evidence is required or the cost – insufficient evidence to substantiate $50,000 – applicant to vacate premises upon sale. |
| Legislation: Family Law Act 1975 (Cth), ss.72(1)(a), 77, 90SD, 90SE, 90SF, 90SM |
| Bevan & Bevan (1995) FLC 92-600 Mitchell & Mitchell (1995) FLC 92-601 Kiesinger & Pajet [2008] FamCAFC 23 Sadlier & Sadlier [2015] FamCAFC 130 Tuck & Dunst and Anor [2015] FamCA 318 Wilson & Wilson (1989/90) FLC 92-033 Gamble & Gamble (1978) FLC 90-452 Evans & Evans (1978) FLC 90-435 |
| Applicant: | MS SCHOFIELD |
| Respondent: | MR MCCANN |
| File Number: | DNC 142 of 2015 |
| Judgment of: | Judge Willis |
| Hearing dates: | 28 & 30 July 2015 |
| Date of Last Submission: | 30 July 2015 |
| Delivered at: | Cairns |
| Delivered on: | 18 November 2015 |
REPRESENTATION
| Solicitors for the Applicant: | Withnalls Lawyers |
| Counsel for the Respondent: | Mr Richards |
| Solicitors for the Respondent: | Howe Jenkin |
ORDERS
Property Orders
The Respondent in his capacity as a Director and Shareholder of (business omitted) Pty Ltd, as Trustee for McCann Family Trust, be at liberty to list for sale the residential property known as Property P, Northern Territory (“the Darwin property”) with the terms of such sale (including as to appointment of a selling agent, the determination of the method of sale, the selling price and other terms of sale) as determined by the Respondent.
The Applicant will, upon five clear days’ notice, facilitate access to the Darwin property by the agent or agents nominated by the Respondent to enable the following:
(a)Undertaking of all work necessary to enable an appropriate engineering certificate to be issued, as will enable the sale of the Darwin property to proceed; and
(b)Inspection of the Darwin property, both as to readiness for sale and inspection by prospective purchasers as and when required by the nominated agent.
Pending the sale of the Darwin property, the Applicant will otherwise be entitled to the sole use and occupation of same to the exclusion of the Respondent, to the intent that the Applicant will maintain the Darwin property in good order and in a clean and tidy fashion, such that the property is appropriately presented for the inspection of prospective purchasers in the company of the nominated selling agent or agents.
Upon settlement of the sale of the Darwin property, the Applicant will vacate the property.
Pending the settlement of the sale of the Darwin property, the Respondent will:
(a)Cause all payments required to be paid by (business omitted) Pty Ltd in relation to account no. (omitted) to be made to (omitted) Bank;
(b)Cause to be paid all rates, taxes, utility costs, cleaning fees, gardening fees and pool cleaning fees in relation to the Darwin property; and
(c)Keep the Applicant informed as to the progress with the sale of the Darwin property, including but not limited to, the terms of any contract pursuant to which the Applicant is required to provide vacant possession.
Disclosure
Each of the parties are to comply with their obligations of disclosure pursuant to the Federal Circuit Court Rules and specifically, the Respondent will provide within 21 days of the date of this Order the following documents by way of disclosure:
(a)All personal taxation returns, notices of assessment and group certificates or payment summaries for the financial year ending 30 June 2014; and
(b)All bank account statements for all bank accounts held in the respondent’s name or jointly with another from 1 January 2014 to date, including but not limited to, (omitted) Bank Account No. (omitted) and (omitted) Bank Account No . (omitted).
The Respondent is to provide to the Applicant, the proposed report of Mr M no later than 31 December 2015 unless further leave is sought.
Upon the Applicant being provided with the foreshadowed forensic accounting report of Mr M, within 28 days of receipt, the Applicant is to determine if she wishes to challenge the report. If so:
(a)The Applicant be at liberty to appoint/engage a forensic accountant of her own choosing to review the report of Mr M and to advise the Applicant thereon.
(b)The Respondent will pay the reasonable costs of the Applicant’s forensic accounting expert.
(c)The Respondent will facilitate direct dialogue between Mr M and the Applicant’s forensic accounting expert, including the provision of answers to all reasonable questions and any additional information or documents sought as to the content of the report and the data on which it is based.
The parties are to engage in mediation of their financial dispute in these proceedings, such mediation to be conducted upon full disclosure and after the receipt of the report of Mr M and the second expert report referred to in Order 8 herein (if the applicant opts to take that report) (if possible by December 2015) by (omitted) in Adelaide and at the cost of the Respondent in the first instance.
In default of the parties reaching agreement as to settlement of these proceedings, the parties proceed to obtain a valuation at the Respondent’s cost in the first instance of the Respondent’s interest in (businesses omitted), the expert to be chosen by the Applicant, choosing from three nominations to be put forward by the Respondent.
Spousal Maintenance
The application for spousal maintenance is dismissed.
Interim Costs
That the Respondent pay to the Applicant the sum of $15,000.00 to be paid by way of an interim costs order noting that this amount will be finally characterised by the trial judge and is intended to cover the costs of the mediation.
Other Orders
That pursuant to Rule 8.01 of the Federal Circuit Court Rules 2001, these proceedings be heard in the Federal Circuit Court of Australia at Adelaide.
The matter is listed for mention on 3 March 2016 at 10:00 am in the Federal Circuit Court of Australia at Adelaide.
Costs
In the event the Respondent is pursuing any application for costs they are to file and serve within 21 days of the date of this Order, written submissions together with a draft order setting out the scale of costs.
The Applicant is to file and serve a Response within 21 days of being served with any costs application and is to file and serve written submissions together with a draft orders sought.
NOTATION:
A.IT IS NOTED THAT the Respondent has commissioned a forensic accounting report as to the valuation of the (businesses omitted) to be conducted by Mr M.
B.Upon receipt of the report of Mr M, the Applicant will engage an expert to review that report for the purpose of enabling the parties to proceed to financial mediation without incurring the cost of a single expert valuation.
C.The parties will make enquiry as to the availability of (omitted) to conduct the financial mediation.
IT IS NOTED that publication of this judgment under the pseudonym Schofield & McCann is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DARWIN |
DNC 142 of 2015
| MS SCHOFIELD |
Applicant
And
| MR MCCANN |
Respondent
REASONS FOR JUDGMENT
This is an application for interim spousal maintenance by Ms Schofield, the applicant de facto wife, who was in a relationship with Mr McCann, the respondent de facto husband. I shall refer to the de facto wife and de facto husband as the applicant and the respondent. The applicant was born on (omitted) 1967 and is 47 at the moment. The respondent was born on (omitted) 1969 and is 46. The parties commenced cohabitation in (omitted) 2007 and their final separation date was 24 December 2014. The period of cohabitation is therefore seven years. There are no children of this relationship, though each of the parties has children from other relationships. Each of the parties has filed case outlines indicating the material relied upon.
The Law
The application is brought pursuant to section 90SE of the Family Law Act 1975 which provides that after the breakdown of a de facto relationship, the court may make such order as it considers proper for the maintenance of one of the parties to the de facto relationship in accordance with the division. Section 90SF refers to the matters that a court must take into account in determining a spousal maintenance application. Section 90SF lists out:
(1) In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a) only to the extent that the first-mentioned party is reasonably able to do so; and
(b) only if the second-mentioned party is unable to support him or herself adequately whether:
(i) by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii) for any other adequate reason.
(2) In applying this principle, the court must take into account only the matters referred to in subsection (3).
(3) The matters to be so taken into account are:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship); and
(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; and
(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish him or herself in a business or otherwise to obtain an adequate income; and
(i) the effect of the proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(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; and
(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii) the property of a person covered by a subparagraph (i) and of a person covered by subparagraph (ii), or either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q) any child support under Child Support (Assessment) Act 1999 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.
Section 90SF(4) also states:
In exercising its jurisdiction under 90SE, a court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
Subdivision (b) of Part 8AB also has a geographical requirement set out in section 90SD. Section 90SD(1) states that: A court may make an order under 90SE or 90SG (in urgent maintenance cases) only if the court is satisfied:
(a) that either or both of the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application for the order was made (the application time) and
(b) that either:
(i) both parties to the de facto relationship were ordinarily resident during at least a third of the de facto relationship; or
(ii) the applicant for the order made substantial contributions in relation to the de facto relationship, of a kind mentioned in paragraph 90SM(4)(a), (b) or (c);
in one or more States or Territories that are participating jurisdictions at the application time;
or that the alternative condition in subsection (1A) is met.
Section 90SD(1A) states that:
The alternative condition is that the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the relationship broke down.
Section 90SD(2) states:
For the purposes of paragraph (1)(b), a State need not have been a participating jurisdiction during the de facto relationship.
Section 90SD(3) states:
If each State is a referring State, the Governor-General may, by Proclamation, fix a day as the day on which paragraph (1)(b), and the alternative condition in subsection (1A), cease to apply in relation to new applications.
The Application
In this matter, the application was filed by the applicant on 27 March 2015 at a time when she was living in Darwin in the Northern Territory. As to the requirement that either or both of the parties were ordinarily resident in a participating jurisdiction when the application was made, namely on 27 March 2015, whilst no submission was made by the applicant, I am satisfied that the geographical requirement is met in that the parties lived in Adelaide for most of their de facto relationship, albeit a home was purchased in Darwin by the respondent’s corporate entity, at a time when commercial contracts were entered into in Darwin.
It is clear to me that the applicant or her lawyers had no regard to this provision when filing the initial application as the application asks for interim spousal maintenance pursuant to Sections 77 and 72 (1)(a) of the Family Law Act 1975. These provisions refer to married parties, not de facto. No submission or reference has been made by the applicant to the geographical requirements being complied with.
Final amended property orders were also sought on 18 June 2015. The applicant sought orders for disclosure and other orders, and at Order 2 sought interim orders pursuant to Sections 90SE and 90SF(1) of the Family Law Act 1975 which relates to de facto parties.
I have had regard to the case law relevant to spousal maintenance applications, including Bevan & Bevan (1995) FLC 92-600, Mitchell & Mitchell (1995) FLC 92-601 and Kiesinger & Padjet [2008] FamCAFC 23. These and other cases were referred to me by Counsel for the respondent, together with Sadlier & Sadlier [2015] FamCAFC 130 in which the trial Judge found:
She no doubt has capacity to do some work and to receive some income, which she is not presently attending to. Of course, it is, one would have thought, obviously her responsibility to take appropriate steps to try and obtain work.
Counsel also draws my attention to paragraphs 87 to 94 of Tuck & Dunst and Anor [2015] FamCA 318 and submits that the approach to quantifying a spousal maintenance claim is set out as:
1.Determining what the claim for spousal maintenance is;
2.Determining whether the de facto wife is unable to support herself adequately;
3.Quantifying the de facto wife’s need for adequate support; and
4.Determining the extent to which the de facto husband is reasonably able to maintain the de facto wife.
I have also had regard to Wilson & Wilson (1989/90) FLC 92-033 and Gamble & Gamble (1978) FLC 90-452.
I note also that the Full Court has made comment that the quantum of maintenance was not to be determined upon a subsistence level and referred to earlier decisions. The Full Court in Mitchell & Mitchell referred to earlier decisions such as Evans & Evans (1978) FLC 90-435. In Bevan & Bevan the Full Court set out the principles to be applied in spousal maintenance cases.
This matter, at the election of the parties, proceeded on the papers and there was no cross examination.
Background
In this matter, as I said, there are no children of the relationship. At the time of the application, the applicant was living at Property P, in the Northern Territory (“the Darwin property”) and had been doing so since separation. It seems to be agreed that the parties primarily lived in Adelaide during their relationship and that during that time they lived in a rented accommodation at (omitted) in South Australia (“the Adelaide property”). There is contested evidence about the purpose of initially purchasing in Darwin. The applicant says specifically in relation to the year 2011:
Mr McCann and I lived in Darwin for six months in 2011 and my youngest son, X, resided with us and I home schooled him in Darwin. The remaining other half of 2011 was spent by Mr McCann and I two weeks in Adelaide and two weeks in Darwin with rental accommodation in Adelaide and residing in our residence at Property P. Property P, Darwin was purchased on 17 November 2010 for the purposes of living in Darwin and in anticipating spending extensive periods in Darwin and greater periods than in Adelaide. Since the purchase of the home, Mr McCann has met all expenses associated with the home and has continued to do so since the separation.
Nonetheless it is agreed that the parties primarily lived in Adelaide for the duration of their relationship and that the applicant’s children remain living in Adelaide as do the respondent and the respondent’s children. The respondent gives his address as (omitted) in South Australia. The respondent explains that he has an interest in the (businesses omitted) and sets out the history of that group which comprises of 40 companies and trusts, and in which the respondent and his brother are directors each of the companies and, with Mr T (lawyer to the (businesses omitted)), appointors each of the discretionary trusts in the group. The respondent further states at paragraph 2.12:
(businesses omitted) Pty Ltd, as trustee for the McCann Family Trust, purchased Property P on 17 November 2010 at a cost of $3 million, funded in part by borrowings of $2,320,150. The property was purchased as the (businesses omitted) was finding it difficult to find suitable accommodation in Darwin not only for myself but others from the organisation who attended there for work on a major project for the (omitted) and also for (omitted) works within the Northern Territory. The cost of hotels and rental apartments was very significant.
At paragraph 2.21 the respondent sets out the costs of maintaining the Darwin property in a table:
Property
Value $ per month
Mortgage payments (noting current interest rate)
9754
Council rates
330
Water rates
400
Gardening
400
Cleaning
460
Pool maintenance
350
Utilities (including electricity, Telstra, security)
1300
Payment for Ms Schofield’s mobile phone
150
TOTAL
$13,144.00
The respondent denies any suggestion that the Darwin property was purchased for the purpose of the parties living permanently in Darwin and states at paragraph 3.1 that “The Darwin property was purchased for use by (businesses omitted) personnel including myself”.
Orders Sought
The respondent submits that the applicant now seeks to retain the Darwin property rather than, as was her initial position in her initiating application filed on 27 March 2015, which sought final orders that the Darwin property be sold and the applicant give vacant possession upon the sale. The respondent is correct as the applicant has altered her position in relation to the Darwin property in which she now lives as seen in her amended application filed on 18 June 2015 in which, as a final order, the applicant sought an order that the respondent transfer all his right and title in the Darwin property to the de facto wife. The application actually reads “to the de facto husband” which I assume is an error.
The initiating application filed on 27 March 2015 requests that the matter be dealt with on an urgent basis. Order 2 states that
Pursuant to Section 77 and 72(1)(a) of the Family Law Act until further order the de facto husband shall pay by way of ongoing periodic spousal maintenance the following:
(a) expenses associated with the de facto wife’s continued occupation of Property P, (“the former matrimonial home”) including
(i) the mortgage;
(ii) the rates;
(iii) the utilities;
(iv) the cleaner;
(v) the gardening, lawn and mowing expenses;
(vi) the pool maintenance;
(b) that the motor vehicle registration and insurances for the de facto wife’s BMW (omitted) registered in the de facto wife’s name; and
(c) periodic spousal maintenance in the sum of $6,000.00 per month.
The applicant also sought sole use of a Toyota Corolla whilst living in Darwin, and that the respondent was to continue to meet all associated insurance, maintenance, registration and fuel costs in relation to that motor vehicle.
I note for the record that the order for sole occupation of what was described as “the former matrimonial home” is misleading and inaccurate in that there is no disagreement that the parties lived primarily in Adelaide for the duration of their relationship. The parties, of course, were never married.
In the amended initiating application filed on 18 June 2015, the applicant sought interim orders that the respondent transfer the Darwin property to herself. She also sought orders to retain all the contents of the Darwin property to the exclusion of the respondent. Her orders also sought monies by way of periodic spousal maintenance requesting the respondent to pay all expenses associated with her continued occupation of the Darwin property, including all of the previous expenses listed. In addition, the applicant sought motor vehicle registration and insurances for what was again described as “the de facto wife’s BMW (omitted)” and periodic spousal maintenance in the sum of $8000.00 per month (an increase of $2,000.00 per month). In addition, the applicant sought sole use of the Toyota Corolla whilst living in Darwin with the respondent to meet all associated expenses including fuel. In addition, the applicant sought the respondent to increase the applicant’s credit card limit to $5000.00 and make payment as and when any amount was due. The applicant also sought $50,000.00 by way of interim costs, and that the matter remain listed in the Darwin registry. In the event the proceedings were transferred to Adelaide, the applicant asks the respondent to pay all or any travel costs, including airfares for travel, of the de facto wife and her solicitors to attend at any mediation or court events requiring the de facto wife’s appearance in person. The applicant also sought costs of her application.
In summary, as was submitted by Counsel for the respondent, Mr Richards, the applicant was seeking effectively in dollar terms the cost of maintaining the house that she now has taken occupation of amounting to some $13,144.00 a month, as particularised. In addition, the applicant was seeking the use of two vehicles; the BMW, which is in Adelaide, and which it seems the applicant had use of during the relationship, and a vehicle in Darwin, being the Toyota Corolla – with the respondent to pay all expenses associated with both vehicles, including fuel. In addition, the applicant sought that she have a credit card limit of $5,000.00 and the respondent was to make all payments when any amount is due to the (omitted) Bank. I consider this effectively is an order requiring the respondent to pay at least $5,000.00 a month (or such greater amount that the applicant incurred on her credit card). This was in addition to periodic spousal maintenance in the sum of $8,000.00 per month. The totals therefore are:
(1)$13,144.00 the respondent to pay for the applicant to occupy the home owned in Darwin by (business omitted);
(2)$8,000.00 a month by cash way of spousal maintenance;
(3)$5,000.00 a month by way of extra spending on the credit card each month (I note that it says the orders sought are that the respondent is to pay any amount due, which would be an open invitation for the applicant to exceed the limits) and an order for the respondent to pay whatever she incurred;
(4)The cost of running two cars. The respondent sets out at paragraph 2.25 that:
The BMW motor vehicle is owned by (businesses omitted) Pty Ltd and has always been kept in Adelaide. Ms Schofield has the use of a Toyota Corolla motor vehicle in Darwin owned by (businesses omitted) Pty Ltd, and all expenses including fuel being paid from me as follows -
(a) insurance $500 per annum; registration, $682 per annum; and maintenance, $500 per annum; and finance, $500 per annum. I do not regard the cost of depreciation as being a cost to the company. It is more of an offset and a paper entry. The $1100 per annum is possibly meant to be $1100 per month.
In terms of the monthly amount the applicant is seeking, it seems to me that it is no less than $26,144.00 a month, being: $13,144.00 for the Darwin home; $8,000.00 per month by way of spousal maintenance; $5,000.00 per month by way of extra spending on a credit card; plus the costs of maintaining two vehicles. It would not be unrealistic to assume the amount sought by the applicant is around $30,000.00, as the applicant also wished to add in further incidental amounts for her attendance upon a hypnotherapist and a chiropractor. Presumably, the applicant is content to also receive costs currently being paid by the respondent to accommodate the applicant’s children in Adelaide, given that there is no evidence of the applicant making any arrangements of her own to house her own children. This cost is around $465.00 per week.
The Applicant
The applicant states in her material that:
Whilst living in Darwin, Mr McCann continued to rent accommodation in Adelaide at (omitted) South Australia. We rented and lived when in Adelaide in (omitted), South Australia, for approximately eight years. Since separation, Mr McCann required my children to vacate that home in which both my children and his children continued to reside post-separation. Mr McCann signed the lease, paid the bond and secured alternative accommodation for eight months at (omitted). The children and I packed up the (omitted), over the weekend of 7 to 11 May 2015.
The cost of housing the applicant’s children is an issue for herself and their father and it is only through the good will and generosity of the respondent that the arrangement has continued. In my view the time has come for the applicant to address this issue with the father of her children. However, whilst she fails to do so, this act of generosity by the respondent is a matter that I can consider under section 90SM(4) and which will no doubt be considered as a further ongoing contribution by the respondent when assessing his contributions in relation to the property adjustment.
In her financial statement filed in support of her claim, the applicant sets out that her total average income is $250.00 per week, and that her expenditure is $2,274.00 per week. It notes she owns property to the value of $12,676.00 with liabilities of $4,752.00. The applicant describes her current occupation as home duties. She lists out that she receives child support from her former husband, Mr D, in relation to her children Y and X of $250.00 per week. Other than that, she says she has no salary or income of any kind. I note that she deposes at Part F that the respondent is paying insurance on the motor vehicles; the expenses of the motor vehicles in Darwin and Adelaide; her accommodation expenses in Adelaide and Darwin; private health insurance and credit card expenses.
The applicant’s expenses as listed out at Part N of the financial statement (over and above the costs of vehicles and the cost of the applicant living alone in the $3 million house in Darwin) include other expenses which total $2,024.00 per week. This sum includes $200.00 food per week; clothing and shoes $200.00 a week; entertainment and hobbies $500.00 a week; holidays $500.00 a week; hairdressing and toiletries $200.00 a week; gifts $150.00 a week. These costs are said to be simply for the applicant.
In the case outline filed by the solicitor for the applicant, reference is made to the applicant and her income, stating the applicant has not been in paid employment throughout the relationship and has no independent income.
The applicant says in her affidavit: “I have not been in any paid employment through the relationship and have not completed taxation returns as I have not had any income” and explains that she has been “...wholly reliant upon Mr McCann for money and have been throughout the relationship once my settlement funds from my previous marriage had been expended”.
The applicant explains that she has two sons from a previous marriage: Y, born (omitted) 1992, now aged 22, and attending university in (omitted); and X, born (omitted) 1997, aged 18, completing year 12 at (omitted) Grammar School, also in Adelaide.
Each of these parties has been in previous relationships, as I have referred to, and the father himself has three children from his earlier marriage: A, 18; B, 16; and C, 13.
The Respondent
It is the respondent’s position that the applicant has, since separation, decided to move to Darwin and live in the home there, by way of a relocation from Adelaide. There is contested evidence about how much time the parties spent in Darwin, though it is not contested that in both the Adelaide and Darwin homes, the respondent paid all of the expenses. The applicant’s own material set out that they lived in Adelaide for 8 years.
The respondent submits that it is entirely unreasonable for the applicant to plant herself in a $3 million asset which is owned by (business omitted) which is well beyond anything that, essentially, one person would occupy. This is particularly so when the applicant’s own children do not even reside in Darwin. The applicant submits that her youngest child may come and live with her when he finishes school, however the respondent submits that he understands that son will likely consider moving to live with his own father, not in Darwin.
Whilst the applicant makes much of what happened in 2011 in terms of the parties coming and going from Darwin, there is no denial on her own evidence that they lived primarily in Adelaide. The applicant’s material refers to her inviting friends/family to stay with her for months in the Darwin property since separation.
There is no real explanation by the applicant as to why she has decided to now live full time in Darwin post-separation. The respondent remains in Adelaide and is paying rental of around $1,000.00 per week in Adelaide. Prima facie the position of the applicant in seeking for the respondent to maintain the Darwin home at over $13,500.00 a month with one occupant is certainly a very expensive option, one which I consider in the circumstances to be entirely unreasonable. This is particularly so as the home is owned by a corporate entity in which the respondent has only a part interest. I have the impression that the applicant has not turned her mind to the legal ownership of this asset.
What was apparent during these proceedings was that the applicant’s application shows little regard to the commercial reality of the structures and entities of the respondent and their legal ramifications. It is not the case that the respondent owns this house. To secure a transfer of the home to herself would require a decision of the owners of the home being the corporate trustee not just the respondent.
It is the respondent’s evidence that, having paid out his first wife with whom he had his three children and a reasonably long relationship, he and his brother agreed that the dividends and distributions from the group would thereinafter be 60% to McCann Family Trust and 40% to McCann Family Trust.
The respondent seeks orders that the applicant forthwith vacate the property at Darwin, and has advised the court that it is a commercial decision that the Darwin property now be sold and that there are interested buyers for the Darwin property. He also seeks orders that the proceedings be transferred to the Adelaide Registry, that the applicant pay the costs of and incidental to this application, that the respondent be given leave to dispense with the filing of financial statement, and such orders as the Court thinks fit. In terms of the application for interim spousal maintenance, the respondent submits that the applicant has not met the threshold issue of satisfying the Court that she is not able to support herself.
Evidence
There are three affidavits filed on behalf of the applicant, one on 16 April 2015, another one on 24 June 2015, and one by leave on 23 July 2015 just prior to the hearing on 28 and 30 July 2015. The applicant says:
I have been unemployed since 2006. My self-employment was my (omitted) business which operated from (omitted) 2004 to (omitted) 2006. My employment as a (occupation omitted) was for approximately two years in or about 1986 and I was employed as a (occupation omitted) for a period of four months in (omitted) 2005. I resigned this employment without completing the traineeship at Mr McCann’s request as he requested I attend a function with him and the (employer omitted) would not agree to me having the time away from work.
The applicant also says she undertook a four week course at the (omitted) in Adelaide in 2010 which, she says, she paid for. She said:
I have completed the course and have not utilised this qualification in paid employment. To commence employment as a (occupation omitted) I am required to undertake further training to update my skills and my inquiries are that the training is not currently available in Darwin. As such I am currently unable to utilise this qualification.
There is no independent evidence of any further qualifications that the applicant would need to now obtain. She said she did (occupation omitted) with friends, but had not done so in a professional or paid capacity. It seems to me the applicant has not only relocated to Darwin, but having done so she relies on this relocation as a barrier to her obtaining what she says is a further qualification required which, it seems, is available in Adelaide. This evidence was in the affidavit filed by the applicant in response to the respondent raising that the applicant actually had some work qualifications. This was in support of his overall position that the applicant has not even met the threshold issue of establishing that she is unable to support herself, nor has she established or provided any evidence of any attempt to seek employment to support herself or explain why she has not sought employment.
Counsel for the respondent makes submissions that the claim for spousal maintenance in accordance with the applicant’s documents is that she is, effectively, claiming at least $28,647.00 per month and that, notwithstanding that the de facto wife has filed three separate affidavits in relation to these interim hearings, she makes no reference nor is there any evidence of her having considered seeking employment, having made any application for employment or having engaged in any course of study to upgrade her skills and assist her in obtaining employment. I accept that this is so.
It is further submitted that the de facto wife’s application is predicated on the basis that the respondent is a man of some wealth and substantial income and that she is entitled to live in circumstances of considerable luxury with substantial provision for her day-to-day support whilst living in fully funded luxury accommodation with cleaners, gardeners and full services provided, and whilst the respondent provides two fully maintained vehicles – one in Darwin and one in Adelaide – and that he will provide for provision of regular, interstate and overseas travel without the applicant making any effort to curb her spending or to support herself in any way.
Having read all of the affidavit material filed by the applicant, there is force in the submission that there is no material at all to explain to the Court or establish that the applicant is not able to support herself or why that it is so, and whether it is for any of the reasons set out in the relevant provision, section 90SF(1)(b). The applicant is not spending her days raising her own children. They are not even living in the Northern Territory. They remain in Adelaide either at university or school. There is no evidence that the applicant suffers a medical or mental health condition preventing her from obtaining employment to support herself.
Threshold Issues
In the legislation, effectively spousal maintenance would be payable by the respondent after the breakdown of their de facto relationship providing the geographical requirement in s 90SD is satisfied and that the Court is satisfied of at least one of the matters in s 90SB. Pursuant to Section 90SF the Court must apply the principle that a party to a de facto relationship must maintain the other party only to the extent that the first party is reasonably able to do so. It is conceded that the respondent has wealth estimated at around $15 million and therefore his capacity to pay is not in question.
The Court must also be satisfied that:
a)the applicant is unable to support herself for any of the reasons set out in the legislation which is:
i)by reason of having care and control of a child of the marriage who has not attained 18;
ii)by reason of age or physical or mental incapacity for appropriate gainful employment; or
iii)for any other adequate reason, having regard to any relevant matter referred to in section 90SF which states:
The Court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a) only to the extent that the first-mentioned party is reasonably able to do so.
This issue goes to the capacity of the respondent to pay which, in this matter, is not an issue. And:
(b) only if the second-mentioned party -
the applicant in this matter -
is unable to support herself adequately whether: (i) by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years, or (ii) by reason of age or physical or mental incapacity for appropriate gainful employment; or for any other adequate reason.
Section 90SF(2) states:
In applying this principle, the court must take into account only the matters referred to in subsection (3).
Section 90SF(3) lists out various matters which include the age and health of the parties; the income, property and financial resources of each of the parties; the commitments that are necessary to support themselves and a child or another person that the party has a duty to maintain; a standard of living that in all the circumstances is reasonable; 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; the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and other matters.
In this matter, the applicant does not have care of a child under 18 years as each of her children are living independently in Adelaide. There is also no evidence that the applicant is unable to support herself adequately by reason of age, or physical or mental incapacity for appropriate gainful employment, or for any other adequate reason.
Applicant’s ability to support herself
Certainly the applicant, at the time of her initial application and on the date of the hearing in the last week of July 2015, had been unemployed for seven months, noting that the parties separated on 24 December 2014. The initial application was filed in March 2015 and the position in terms of the applicant’s unemployment had not changed by the date of the hearing in the last week of July. As I have said, there is no evidence of the applicant having any medical condition or physical disability that would preclude her from re‑entering the workforce.
In the applicant’s material there are two references to the applicant being “not able to cope emotionally well since separation”. In the original affidavit of the applicant the only reference to her unemployment at all is 10 words in a sentence at paragraph 17 which says “I have not been in paid employment throughout the relationship”.
There is nothing in the affidavit to explain what steps have been taken to obtain employment or making reference to her qualifications, previous work experience nor is there evidence to explain why she is not able to support herself.
In the second affidavit filed which the applicant says was “in support of my amended initiating application and the interim orders sought listed for 28 July” the applicant says that she encloses, at paragraph 31, additional expenses including her attendance upon Ms H on 14 occasions, starting on 8 December 2014 (prior to separation) for which she pays $150.00 per month as per a letter at Annexure D. This consists of a photocopy letter from Ms H, a clinical hypnotherapist and counsellor. The date on the letter is “Wednesday, 17 June 201” [sic]. The hypnotherapist and counsellor states that the applicant has seen her since 8 December 2014 and:
Her presenting issue was depression and anxiety related to her recent relationship breakup, and Ms Schofield has attended 14 sessions since December and will continue to see me monthly for the time being.
I do not regard Ms H, who has an (qualifications omitted), as being in any way qualified to diagnose depression and anxiety. The applicant says that she continues to attend with Ms H and claims this as part of her weekly costs. This evidence is not even in an affidavit.
The other additional expense sought by the applicant was the cost of attending the (omitted) clinic. The applicant says, in giving her lay opinion about a medical condition, upon which I place little weight, “I have difficulties with my back”. There is no evidence from any person with the appropriate qualifications to explain to the Court the basis upon which these costs are required or the nature of any medical condition suffered by the applicant that would affect her capacity for gainful employment. I have noted the costs after rebate are $90.00 or $58.00 and she continues to go as and when she feels the need. This evidence is also not in affidavit form.
The second reference about the applicant being unable to cope emotionally consists of her own self-serving opinion evidence. The applicant has said “I have continued not to cope emotionally well since the separation”. The applicant has said:
My sister and brother‑in‑law have spent time with me in Darwin to assist me for the past few months. They have primarily paid for my food expenses as I have not had sufficient moneys from Mr McCann after the reduction by him in my credit card limit and the reduced funds paid to me by Mr McCann since January 2015.
I have had assistance in expenses to travel and have travelled as follows to get away and recover from the separation.
The applicant lists out the destinations for her holidays taken up until June this year, namely:
a)(omitted), (omitted) 2015 to (omitted). Mr McCann booked and paid economy return airfares for me. During our relationship we travelled business or first class.
b)(omitted), (omitted) to (omitted) 2015
c)(omitted), (omitted) to (omitted) 2015
d)(omitted), (omitted) 2015 to (omitted) 2015 to see my parents, as my father has been unwell, and
e)a second trip to (omitted), (omitted) to (omitted)
The applicant has made an attempt to imply that she is a victim of family violence. The applicant also noted in the latest affidavit, “I left town as I knew Mr McCann was coming for the week”. There is not a shred of evidence that would suggest it is necessary for the applicant to leave town when the respondent travels to Darwin as suggested by the applicant in her material.[1] Her other self-serving evidence is that “I do not feel safe residing in Adelaide where I understand Mr McCann is now primarily based”. This opinion evidence of the applicant is devoid of evidence to support her having a reasonable basis to have any fear about the respondent.
[1] Affidavit of Ms Schofield filed by leave on 23/7/15 paragraph 27.
There are conclusions in the applicant’s material such as:
I say Mr McCann can be unpredictable and volatile. I observed his volatility in conduct with his, and reactions when finalising the property settlement throughout with his former wife. Mr McCann has been verbally abusive to me throughout the relationship. I have had a volatile relationship over the last couple of years.
Those self-serving opinions do not constitute evidence of anything other than the applicant’s conclusions. The suggestion that the applicant had to move interstate because of the respondent’s conduct is without foundation. Similarly, the assertion that the applicant has to leave town when the applicant travels to Darwin is without foundation.
The applicant is very happy to have the respondent organise and pay for accommodation for her children. The applicant has refused to vacate the Darwin property contrary to the wishes of (business omitted). The respondent has continued to pay credit cards and provide financial support, cost of a vehicle and the cost of accommodation for the applicant.
I am not satisfied that the applicant has in any way established that she is not to be able to support herself. The applicant has planned various holidays post-separation to (omitted), (omitted), (omitted) and (omitted). However, she has taken no steps to attempt to re-enter the workforce, or retrain.
The applicant is still at an age at 47 where she has many working years ahead of her. She has various types of work experience. She has been a (occupation omitted). In 2010 she obtained qualifications in (omitted) which the applicant maintains require her to do a refresher but which she has failed to do, saying she would have to travel to do this. The applicant has chosen however, to relocate post separation to live in Northern Territory, where she purports to say she has not done the required refresher. Clearly, the remedy lies in her own hands. This is not a case where the applicant has been in a long relationship raising children for many years and during the process of those years of raising children she has become unskilled. The applicant is still young enough to obtain employment again and is very well presented.
It is not until the applicant’s third affidavit when, for the first time, the applicant began to realise the issue of her unemployment and her ability to work and support herself ought to have been addressed. It was raised by the respondent and, in response, the applicant gave evidence that she has been unemployed since 2006 for the duration of the relationship. As I have previously said, she had her own (omitted) business and she was a (occupation omitted) for some months with a (employer omitted) in (omitted) 2005 when she started a relationship with the respondent. The applicant has worked as a (occupation omitted). As well, she has qualifications in (omitted). The applicant is not therefore without any experience or qualifications.
The third affidavit of the applicant fails to explain to the court why it is that she has done nothing about seeking any employment. It was only during the process of the matter coming before me and the hearing that such issues were even, it seems to me, contemplated by the applicant and those advising her.
I accept that the applicant has been out of the workforce for a period of time during the relationship. However, by seven months after separation, I consider the applicant ought to have made efforts to turn her mind to her own financial future and her ability to work and obtain an income as opposed to making plans for the next holiday. Having read all of the material it is not the case that the applicant has been without financial support since separation. In fact, there have been considerable funds directed to keeping the applicant housed, ensuring that she has a car and a credit card so that she is not left without funds.
It is certainly not conceded by the respondent that the applicant is unable to support herself and, as I have said, there is a distinct lack of evidence about why it is that the applicant has not sought any employment and is not seeking any employment. It seems to be a comfortable position adopted by the applicant that she will have her own period of “recovery” and that whilst she is doing this the respondent will continue to pay all of her living costs.
I do not accept that the applicant has satisfied the court that she meets the threshold issue which is to demonstrate to the court that she is not able to support herself, and if she is not able to support herself, why she is not able to support herself.
For the purposes of this interim application I consider that a period of time ought to be allowed to enable the applicant to reorganise her life and to conclude training or do refreshers. However, seven months later, the applicant has not done either.
The applicant has not given up a significant career to become the de facto wife of the respondent. She has given up her fledgling (omitted) business, but there is no explanation why this cannot be resumed. As I have said elsewhere, in 2010 she obtained (occupation omitted) qualifications but asserts that she needs to do a refresher. There is no evidence why this has not been attempted.
If the applicant chooses to live in Darwin that is a matter for her. However, I regard her occupation of the $3 million house with the significant monthly outgoings attached to that house noting the millions borrowed to purchase it, as being unreasonable in the circumstances. It is still open to the applicant to find alternate accommodation that is reasonable in all of the circumstances. Paying $13,500.00 per month for one person to occupy a home is not, in my view, reasonable, even noting the respondent’s wealth of some $15 million. The respondent, in comparison, is living in a rental home, which was the former home occupied by the parties in Adelaide, which costs about $1,000.00 a week.
In addition the respondent has now secured rental on a home at $480.00 per week plus outgoings so that the respondent’s children have somewhere to live, other than in the home which the respondent and his children occupy.
The respondent is of course not legally responsible to pay anything for the applicant’s children. That is a matter for herself and the children’s father, Mr D.
Given that the applicant is not able to pay anything towards the cost of maintaining the outgoings on the Darwin property and that the property is owned by a corporate entity, it seems to me to be unreasonable of the applicant to insist that she remain in sole occupation. Obviously the house is well beyond what could be reasonably required for one person to live in. The value at $3 million is, in my preliminary view, likely beyond what the applicant could receive by way of a property settlement, noting there are no children of this relationship and, at best, it is a seven year relationship in which the applicant has been fully supported and in which the respondent has introduced overwhelmingly the lion’s share of the current asset pool tentatively valued at around $15 million.
The applicant’s position is that she brought in to this relationship funds from her property settlement of around $380,000.00. In the scheme of the overall asset pool, this represents a very modest direct contribution to this property pool. She lists, interestingly, assets at the commencement as “I also owned a (omitted) business in (omitted) which I ceased, to relocate to Adelaide to live with Mr McCann”. In one breath the applicant appears to be seeking to have some value placed on a (omitted) business as a contribution, but now, at the end of the relationship, is not volunteering that this is the type of business that she could set up again nor does she suggest that she could obtain work in or around a (employer omitted).
The position of the respondent is that the work that (businesses omitted) were performing in Darwin under the special contract with the (omitted) has all but dried up and that the cost of maintaining that home is no longer commercially viable given the reduced amount of work which the company is now doing in Darwin.
As to the quantum of the applicant’s application, I accept the force of the submission that if the personal expenses referred to in the applicant’s financial material of $2,024.00 per week are correct and assuming that rental accommodation is being paid, it is difficult to understand the basis of this application which, despite the evidence of the applicant’s weekly expenses, the applicant seeks a further $8,000.00 per month together with an additional $5,000.00 per month. In other words the applicant seeks on the face of her material, another $13,000.00 per month by way of spousal maintenance. There is simply no evidence to support this aspect of her application.
I cannot help but conclude that the quantum application of the applicant, which as I have said has a reach beyond about $28,000.00 to $30,000.00 a month, is ill‑conceived.
If the court was to also include the amount that the respondent is paying to accommodate the applicant’s children, Mr Richards of Counsel for the respondent estimates that at a cost of around $28,647.00 per month this becomes an annualised amount of $343,763.00 after tax to be paid by the respondent. To achieve this would require pre‑tax earnings of the respondent in the sum of $615,000.00 per annum for spousal maintenance alone.
I accept the submission by Mr Richards of Counsel that on any view that is an excessive and unreasonable claim which exceeds the de facto husband’s reasonable ability to afford.
The applicant has not been left in any way destitute, far from it, she received regular and ongoing financial support post separation whilst she has lived in luxury accommodation. It seems to me the applicant is under the mistaken belief that she is going to maintain a lifestyle commensurate with the respondent’s wealth regardless of her limited contributions to the asset pool and the length of their relationship. The case law does not support this position.
In this matter, in terms of interim spousal maintenance, I am not satisfied that there is evidence to support the threshold issue establishing the basis of the extent to which the applicant is unable to support herself. The applicant is in her 40’s, she has in the past set up her own (omitted) business, she holds qualifications obtained through the (course omitted) in Adelaide obtained in 2010. There is no satisfactory evidence why the refresher course to update has not been completed in the 7 months since separation. The applicant is able to travel as demonstrated by her various holidays post separation.
It is unreasonable for the applicant to continue to occupy the Darwin home rent free as she has been doing since separation. The applicant has no means of paying the significant monthly repayments and maintenance costing over $13,000.00 a month. I am satisfied that it is appropriate to enable the sale of this home as sought by the owners. The property is currently listed for sale and I intend to ensure that orders issue to enable this to occur. I note also the applicant’s refusal to allow (businesses omitted) to recently occupy their property for the purpose for which they say it was intended and that has caused (businesses omitted) to incur costs of around $10,000.00 to house staff who would have otherwise been occupying that home.
I intend to make orders providing for the applicant to vacate the home pursuant to the terms of any contract for sale of the home by the legal owners. In other words, the applicant is to give vacant possession pursuant to a contract for sale upon request of the owner of the Darwin property. In the meantime, the applicant should comply with all requests by selling agents or the owners of the Darwin property, to inspect the property and the applicant will do all acts and things to assist with an early sale.
Interim Costs Order
As I have referred to elsewhere, the applicant is seeking a costs order of $50,000.00 for interim costs. This is a poorly prepared application. There is no evidence of the estimate of costs as the matter progresses at various stages of the litigation or how the $50,000.00 is to be spent. There is no evidence from a partner of the firm acting for the applicant, that the firm could not carry this matter without a pre-payment. There is no evidence at all of the type of expert evidence which is required to prepare the applicant’s case and no expert has sworn an affidavit deposing to what is necessary to prepare the applicant’s case either before or after a mediation or for a trial. There is no evidence of what expert reports are specifically required to be funded by the applicant or what it would cost.
There is evidence that the respondent has volunteered to pay for a financial expert, who has been retained in the past to assess the value of the company in the respondent’s earlier litigation with his former wife. There is evidence of the respondent agreeing to pay the full cost of that report. This offer has been made with a view to reducing the cost of experts to value the structure of companies and trusts in which the respondent has an interest.
Interim costs orders are not intended to cover costs already outlaid. I do not even have any evidence about the costs of the forthcoming mediation for the applicant, however, I note that the costs of the mediator is being paid for by the respondent initially.
The applicant asks for costs of her Darwin solicitors to fly to Adelaide for either a mediation or if the matter is transferred to Adelaide. I do not regard this as being anything other than the costs of legal representation and if the applicant chooses to engage lawyers from the Northern Territory as opposed to Adelaide in the event that the matter is transferred, that is a matter and expense for her, not the respondent.
I had the impression during the hearing that the applicant may not be fully cognisant of the fact that costs paid to her by way of an interim order may very well be characterised simply as an interim payment and will form part of her percentage at the final trial. It is for this reason I encouraged the applicant to consider very carefully the issue of obtaining a second valuation of the respondent’s companies.
Based on the evidence I have before me, I intend to allow a sum of $15,000.00 to be paid by the respondent to the applicant as an interim costs order noting that this amount will be finally characterised by the trial judge. Doing the best I can on the limited material I have, I consider this is sufficient funds to enable the applicant to be properly represented at the proposed mediation.
Forum
The parties have lived throughout their relationship in Adelaide albeit they have spent short periods staying in Darwin. The respondent and his brother who each have significant involvement in the (businesses omitted), each live in Adelaide, the applicant’s children remain living in Adelaide, as do the respondent’s.
The single expert preparing a valuation of the properties and companies together with the head office of (businesses omitted) are in Adelaide. The mediator appointed is in Adelaide. The property owned in Darwin by (businesses omitted) will be sold in the foreseeable future. There is little connection to Darwin. I do not understand why this matter was initially filed in the Darwin registry. I do not regard the decision post-separation of the applicant to relocate to Darwin as a compelling factor. The balance of convenience in terms of the aforementioned matters in my view, overrides any suggestion that a final trial of this matter may occur earlier in Darwin. I am satisfied there will be considerable savings at a final trial if the matter is conducted in Adelaide. I intend to make orders transferring the matter to the Federal Circuit Court of Australia in Adelaide. I dismiss the application to pay the airfares of the applicant and her legal advisors to fly to Adelaide each time they are required to personally attend Court.
Procedural Orders
I intend to make the procedural orders that have been forwarded to me in terms of discovery and reports.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of Judge Willis
Associate:
Date: 18 November 2015
0
3
2