Seden & Kehoe
[2020] FamCAFC 294
•25 November 2020
FAMILY COURT OF AUSTRALIA
| SEDEN & KEHOE | [2020] FamCAFC 294 |
| FAMILY LAW – APPEAL – LEAVE TO APPEAL – PROPERTY – INTERIM SPOUSAL MAINTENANCE – Section 72 of the Family Law Act (Cth) met – Adequacy of reasons – Complaint about form over substance – Consideration of financial benefits received by applicant from testamentary trust – Where the primary judge concluded financial resources were available to the applicant which created a capacity to pay interim spousal maintenance – Where any failure to take into account evidence about the amount the respondent needed for rent was not material – Where the applicant had not established that the primary judge’s decision was attended by sufficient doubt to warrant reconsideration by the Full Court – and that substantial injustice would result if leave to appeal was refused – Application for leave to appeal refused – Application for a stay of any costs order dismissed – Costs ordered in a fixed sum. |
| Family Law Act 1975 (Cth) ss 72, 94AA, 117(2A) Family Law Regulations 1984 (Cth) reg 15(1)(a) |
| Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148 De Winter and De Winter (1979) FLC 90-605 Hall v Hall (2016) 257 CLR 490; [2016] HCA 23 Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 Redman and Redman (1987) FLC 91-805; [1987] FamCA 2 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Sun Alliance Insurance Ltd v Massoud [1989] VR 8 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Whisprun Pty Ltd v Dickson (2003) 200 ALR 447; [2003] HCA 48 |
| APPLICANT: | Mr Seden |
| RESPONDENT: | Ms Kehoe |
| FILE NUMBER: | SYC | 7833 | of | 2018 |
| APPEAL NUMBER: | EAA | 138 | of | 2019 |
| DATE DELIVERED: | 25 November 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney (via video link) |
| JUDGMENT OF: | Ryan, Aldridge & Watts JJ |
| HEARING DATE: | 11 September 2020 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 13 December 2019 |
| LOWER COURT MNC: | [2019] FamCA 989 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Richardson SC |
| SOLICITOR FOR THE APPLICANT: | Coleman Greig Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Kearney SC |
| SOLICITOR FOR THE RESPONDENT: | Pearson Emerson Family Lawyers |
Orders
The application for leave to appeal is dismissed.
The applicant pay the respondent’s costs of and incidental to the application for leave to appeal in the fixed sum of $30,262.
The applicant’s oral application for a stay of Order 2 is dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Seden & Kehoe has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 138 of 2019
File Number: SYC 7833 of 2018
| Mr Seden |
Applicant
And
| Ms Kehoe |
Respondent
REASONS FOR JUDGMENT
By Notice of Appeal filed on 18 December 2019 Mr Seden (“the applicant”) applied for leave to appeal, and if leave is granted appeals Order 1 made by the primary judge on 13 December 2019 which provides for the applicant to pay Ms Kehoe (“the respondent”), interim spousal maintenance of $1,000 per week.
The central controversy between the parties was whether or not it was open for the primary judge to infer that the applicant had a reasonable expectation of receiving distributions from the N Family Testamentary Trust (“the Testamentary Trust”) or other monies, by way of gift or loan on request from family members during the course of the orders under consideration.
For the reasons which follow, the application for leave to appeal should be dismissed.
Background
The applicant and respondent, both of whom were aged 35 at the time of the hearing before the primary judge, were married in D City in 2009. The parties separated on 7 December 2017 when the respondent returned to the United States of America (USA). At that time she was pregnant with the parties’ only child, X (“the child”), who was born in 2018 in the USA and remains there in the respondent’s care.
In March 2018, the respondent commenced proceedings in State B, USA, in relation to parenting and child support. The respondent says that these proceedings are currently in abeyance pending the outcome of the Australian proceedings.
In March 2018, the applicant commenced to make a payment of “financial support” to the respondent in the sum of $3,500 per month ($808 per week).
On 6 December 2018, the respondent initiated proceedings in the Family Court of Australia seeking an alteration of interests in property and spousal maintenance. The respondent’s Amended Application in a Case filed 30 August 2019 sought a payment of interim spousal maintenance in the sum of $2,600 per week.
Relevant to the application for leave to appeal and if granted to the appeal itself, is the interest that the applicant has in the Testamentary Trust established by the Will of his late father, and more generally his interest in the Seden Family Group (“the Family Group”). It was the applicant’s position before the primary judge that the estimated value of the Testamentary Trust was $11,700,000.
The applicant is also a beneficiary of his own discretionary trust (which in turn is the beneficiary of another trust established by his father in 1982). The applicant operates a business, Business BB, which generates income for the applicant of $3,082 per week. The applicant is the sole registered proprietor of an apartment in Suburb E (“the Suburb E property”) in which he has an equity in excess of $700,000.
The primary judge found that the respondent satisfied the threshold test in s 72 Family Law Act 1975 (Cth) (“the Act”) by reason of the onerous responsibility of sole care of the parties’ young child. That finding is not the subject of challenge.
Proposed Grounds of Appeal
Ground 1.1 – The respondent’s reasonable needs
The applicant complains that her Honour erred in principle by failing to make any finding as to the extent of the reasonable needs of the respondent and of the respondent’s own capacity to contribute to those needs.
The applicant made no submission to the primary judge or on appeal that the respondent had any capacity to pay for her own needs. She was caring for an infant and, apart from the assistance she was receiving from her parents, the only money she was receiving was that which the applicant was providing to her. There is no merit to that part of Ground 1.1.
The applicant also complains that the primary judge failed to quantify the respondent’s needs and thus the order for $1,000 per week was “entirely arbitrary” (applicant’s Summary of Argument filed 24 April 2020, paragraph 16). The applicant argues that “an arbitrary nomination” of $1,000 per week cannot constitute a finding of fact or be a platform for a proper exercise of judicial discretion, even acknowledging a permissibly broad brush approach (applicant’s Summary of Argument filed 24 April 2020, paragraph 19).
As we have said, the respondent sought maintenance in the sum of $2,600 per week. In the respondent’s Financial Statement filed 12 April 2019, she contended that her total weekly expenses were $4,634 (Part G expenses being $1,824 and Part N expenses being $2,810). Of the Part N expenses, $1,230 was identified as referrable to the child, leaving a potential claim by the respondent for spousal maintenance of $3,404 per week. As the applicant was making a voluntary payment of $808 per week, the expenses attributable to the respondent reduced to $2,596.
It follows that the applicant’s assertion that the respondent transferred some of the child’s expenses into her claim for spousal maintenance cannot be sustained.
As part of the respondent’s Part G expenses, the respondent sought an allowance for rent in the sum of $978 per week. The respondent was living with the child at her parent’s home. The primary judge found that the respondent’s parents intended to move to State S in the near future (at [25]) and thus it was difficult to draw any reasonable conclusion as to the respondent’s proper accommodation costs (at [24]).
Further, the primary judge said:
33.It seems to me that the [respondent’s] alleged level of necessary expenditure is somewhat inflated and open to question, even on an untested basis. I have referred above to the difficulties with the evidence in relation to reasonable rental costs in [Y City]. A cursory examination of Part N of the [respondent’s] Financial Statement suggest an inflation or exaggeration of reasonable expenses. Examples include $155 for “clothing and shoes”, $195 for “entertainment/hobbies” and $180 for “holidays” per week.
34.As is often the case in determination of the quantum of orders for interim spouse maintenance, an element of arbitrariness enters into the exercise. As noted, the present situation is complicated by the unresolved proceedings in relation to child support in the [State B] Court and the lack of characterisation of the [applicant’s] voluntary payment to the [respondent] of A$3,500 per month.
35.I will order that the [applicant] pay to the [respondent] a sum of A$1,000 per week by way of interim spouse maintenance, on the basis that he will continue to provide an amount of A$3,500 per month. I would observe that it is the responsibility not of the [respondent’s] parents but that of the [applicant], to the extent that he is reasonably able to do so, to provide financial support for the [respondent] and the parties’ child.
It can be seen that the primary judge identified difficulties in relation to the amounts claimed by the respondent for rent ($978), clothing and shoes ($155), entertainment/hobbies ($195) and holidays ($180). Those four items total $1,508 per week. Even if the whole of those sums are excluded, the respondent’s expenses reduced to $1,088 per week ($2,596 minus $1,508).
It is implicit, given the discussion that precedes it, that at [35] the primary judge was satisfied the respondent’s reasonable weekly expenses were at least $1,000 per week. The primary judge also made it clear at [35] that in reaching this conclusion her Honour assumed that the applicant would continue the voluntary payment of $808 per week. That is consistent with the above figures.
The applicant further complains that the primary judge was not clear about how $808 per week was to be characterised, which it is said, creates difficulties for the court in State B, which is yet to determine the question of child support. There is no basis for that complaint for two reasons. Firstly, as indicated above, both the expenses claimed for the child ($1,230) and the sum of $808 were removed from the calculated claim for spousal maintenance. Secondly, the applicant did not categorise the $808 per week in any particular way and did not ask the primary judge to do so. It is somewhat trite to say so, but a judge cannot err by failing to make a finding they were not asked to make.
The most recent evidence as to how the applicant categorised that payment is contained in a letter from his lawyers to the respondent’s lawyers in the USA dated 11 July 2018, in which it is asserted that “[s]ince 15 March 2018, our client has provided child maintenance to your client in the sum of AUD$3,500 per month by way of direct bank deposit into her account in the USA” (Annexure “3” to the respondent’s affidavit filed 30 August 2019). Senior counsel for the applicant described that statement as infelicitous (Appeal Transcript 11 September 2020, p.15 line 12). Despite what might have been contained in correspondence, which had occurred at a significantly earlier time, this is the most recent categorisation by the applicant as to the nature of the payment of $808 per week as “child maintenance”.
There is no merit in Ground 1.1.
Grounds 1.2 and 1.3 –Adequacy of reasons as to the applicant’s capacity to pay
Grounds 1.2 and 1.3 assert that the primary judge erred in principle by failing to give adequate reasons for her Honour’s “determination as to capacity on the part of the [applicant] to pay maintenance as ordered”. The applicant complains that in determining that he had financial resources relevant to his capacity to meet the spousal maintenance order, her Honour failed to take into account or otherwise reveal how her Honour determined that the applicant could access those resources independently of the will of others who held independent discretions that he does not control.
Reasons will be inadequate if an appeal court is unable to ascertain the reasoning upon which the decision is based or justice is not seen to have been done (Bennett and Bennett (1991) FLC 92-191 at 78,266-78,267, quoting Sun Alliance Insurance Ltd v Massoud [1989] VR 8). The reasons should enable the parties to identify the basis of the judge’s decision and the extent to which their arguments have been understood and accepted (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 279). Reasons need not be “lengthy or elaborate in order to be adequate” (Thorne v Kennedy (2017) 263 CLR 85 at [61]).
Specifically in the context of an application for interim spousal maintenance, the High Court in Hall v Hall (2016) 257 CLR 490 (“Hall”) at [8] adopted the statement by the Full Court in Redman and Redman (1987) FLC 91-805 at 76,081: “‘[t]he evidence need not be so extensive and the findings not so precise’ as on an application for a final order”. No doubt informed by the weight of authority, the primary judge considered it was unnecessary to give full voice to evidence which spanned some 850 pages (excluding exhibits tendered at the hearing). Sensibly, the primary judge addressed the issues that had to be addressed and no more.
The applicant complains that the primary judge failed to determine how he would meet his own reasonable weekly needs and made no specific finding that the applicant had the capacity to pay either the amount sought or $1,000 per week as ordered.
At [19] the primary judge makes reference to the applicant’s personal exertion income. The applicant’s Financial Statement filed 9 July 2019 indicates that his annual taxable profit from Business BB, is $160,305 or $3,082 per week. In addition, he receives a small amount of dividends from shares and bank interest, increasing his overall weekly income to $3,107. The applicant asserts that his expenses were $3,339 (including his voluntary payment to the respondent in the sum of $808 per week and Part N weekly expenses in the sum of $1,100).
Whilst the primary judge did not explicitly deal with the applicant’s reasonable living expenses, there can be no doubt that the amount of expenses claimed by the applicant were met by his income from Business BB. The applicant claims he receives no personal benefit from the business apart from the running costs of his motor vehicle (items 11, 14 and 27 of the applicant’s Financial Statement filed 9 July 2019). There are obvious similarities in the applicant’s claim for reasonable living expenses to that claimed by the respondent. It should be inferred that the primary judge regarded both in the manner discussed at [33].
Before the primary judge, the applicant asserted he would not be able to pay the spousal maintenance claimed by the respondent from his business income. The ability of the applicant to meet his own needs and make the $808 weekly payment were not an issue. It follows that there can be no error nor was it a denial of justice to not expressly determine the reasonableness of the applicant’s claimed expenses.
The more serious challenge advanced under these grounds is that there are no findings which support her Honour’s conclusion that, in addition to meeting his own reasonable weekly needs, the applicant had the capacity to pay $1,000 over and above the voluntary $808.
This requires consideration of her Honour’s findings concerning the structure and history of the Testamentary Trust, how it fits within the Family Group and the benefits which the applicant received from it.
At [7]–[11] of the primary judge’s reasons for judgment, her Honour describes the structure and control of the Family Group after the death of the applicant’s father. By his Will, the applicant’s father created six testamentary trusts, one for each of his children. At [8] of the primary judge’s reasons, her Honour observes that there is a dispute between the parties “as to the characterisation of the applicant’s interest in the [Family] Group”.
The Testamentary Trust has a corporate trustee, the directors of which are the applicant and his mother. The beneficiaries of the trust were the applicant’s mother, the applicant and the applicant’s children. This trust is governed by the Seden Family Group Rules (“the Group Rules”), contained in a Deed dated 20 January 2014 to which the applicant is a party, as managed by the Seden Family Board (“the Board”). The applicant was not a member of the Board.
As part of the group structure, the applicant also had a family trust which was a discretionary beneficiary of the Q Seden Family Trust. The latter trust was established in 1982 by the applicant’s father. Distributions to the applicant’s family trust were also governed by the Group Rules as managed by the Board.
At [18], [29] and [32], the primary judge said:
18.On 26 June 2019 the [applicant] and his mother held a meeting of directors of [J] Pty Limited, as trustee for the [Testamentary Trust]. They resolved to distribute 100% of the income of the trust to [the applicant’s mother] (Exhibit 5), to the complete exclusion of the [applicant]. This resolution was in contrast to the position in 2015, 2016 and 2017, when the whole of the income of the trust was distributed to the [applicant].
…
29.The true level of the [applicant’s] actual and potential income is difficult, if not impossible, to determine in the circumscribed context of an interim hearing. In my view, however, a safe inference can be drawn that the [applicant] and his family have elected to take steps to ensure that he received no trust income in the 2019 financial year and, apparently, a markedly reduced amount in 2018.
…
32.In all of these circumstances it seems to me that an inference reasonably can be drawn that financial benefits which traditionally have flowed to the [applicant] from the [Family Group] have become unavailable since his separation from the [respondent]. I infer that this previous pattern of income distribution to the [applicant], together with recent changes in 2018 and 2019 to bring about a converse result, provide convincing indications that financial resources are available to the [applicant] within the [Family Group]. Accordingly, I find that the [applicant] “is reasonably able” to maintain the [respondent] for the purposes of section 72 of the Act.
(Emphasis added)
In Hall, the High Court said:
54.The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
55.Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
(Footnotes omitted)
For the purposes of this application, the respondent did not assert the applicant’s interest in the Testamentary Trust was property, but rather that it was at least a financial resource being “something more than an expectation of benevolence” and something short of absolute control. References were made to rights that the applicant had under the Group Rules to cash-in his family interest at 75 per cent of its then market value on certain conditions. It was not suggested those rights needed to be explored in the context of the interim spousal maintenance hearing.
Senior counsel for the applicant conceded that by inference, the primary judge was satisfied that there was a reasonable expectation that the trustee of the Testamentary Trust would exercise the trustee’s discretion in favour of the applicant and also conceded that the Testamentary Trust constituted a financial resource of the applicant. This is because the applicant is a potential discretionary object of that trust. However, senior counsel argued that what the applicant had was a financial resource which was controlled by others and thus it could not be relied upon as a basis to form a conclusion that the applicant had a capacity to pay spousal maintenance.
Clause 2 of the applicant’s father’s Will directed the trustees of the Will to ensure that the applicant’s mother is financially secure for the extent of her lifetime (Clause 2(a)(ii)) and have regard to the ongoing needs of any children (which included the applicant) or grandchildren (which included the child of the parties) to ensure that they are adequately provided for (Clause 2(a)(iv)).
Whilst, as acknowledged by the primary judge at [7], the applicant’s father’s Will requires the Family Group to first consider the needs and wants of the applicant’s mother, the applicant’s mother did not give evidence that her needs and wants were not being properly met nor was the primary judge invited to reach any such conclusion.
We accept the submission by senior counsel for the respondent that the applicant’s needs would include fulfilling obligations that are legally imposed upon him to support the respondent.
Senior counsel for the applicant pointed out that under the arrangement pursuant to which the Testamentary Trust had been established and the Group Rules, the discretion of the trustee of the Testamentary Trust was subjugated to that of the Board and more specifically, to the applicant’s mother who was a member of the Board.
There is no issue in this case that the applicant did not control his receipt of income from the Testamentary Trust.
Before us, it was uncontroversial that were the trustees of the Testamentary Trust to indicate that it would never distribute funds to the applicant in the future, that would be a breach of a term under which the trust was created.
It was open to the primary judge, based upon the intent behind the applicant’s father’s Will, the amount of the father’s estate, and the assumption that the applicant was on good terms with his mother and brothers, to draw an inference that the applicant would have received a significant distribution from the Testamentary Trust if he had asked the Board of the corporate trustee for a distribution. This inference is reinforced by the fact that the applicant has been able to receive monies with the approval of his mother by way of cash funds and from the Family Group by way of loans, as discussed below.
The inference that the respondent could obtain a distribution if he sought one, is more readily drawn given the failure by the applicant’s mother and brothers to give contrary evidence that future distributions would not be made. It is a fair inference from the failure to advance this evidence that it would not have assisted the applicant’s case.
Senior counsel for the applicant speculated that the Board’s decision not to distribute monies to the applicant may be as a result of the Board taking the view that, consistent with the respondent’s allegations, the applicant was squandering money on brothels, drugs and alcohol. No such suggestion was made before the primary judge nor did the primary judge make any such finding. Neither the applicant’s mother nor the applicant’s brother mentioned those matters as affecting any decisions they have made in respect of the distribution of monies from the Testamentary Trust. The submission should be rejected.
In Hall, the High Court at 505 observed that “the brothers were at least under a moral obligation to honour their father’s wish that the wife receive the payments from the Group… and there was no evidence to suggest morality or personal animus on the part of any of the three brothers”. The same can be said of the applicant and his relationship with his mother and brothers.
There can be no doubt that evidence disclosed that the applicant’s interest in the Testamentary Trust involved something more than an expectation of benevolence on the part of his mother and brothers.
Apart from distributions from the Testamentary Trust, there was focus on three other particular sources of payments to the applicant, namely:
a)monies received by the applicant from the Testamentary Trust from an unpaid present entitlement account;
b)monies received from a cash account in the Testamentary Trust; and
c)borrowings from the Family Group.
Senior counsel for the applicant commented that the applicant’s unpaid present entitlement account had been exhausted by the time the matter was before the primary judge without saying when it was exhausted. At the end of the 2017 financial year, the unpaid present entitlements were approximately $319,000 owing to the applicant. That had been reduced to nil by the end of the 2018 financial year. Of that sum, at least $102,000 was said to be paid to the applicant by way of cash and for living expenses.
In respect of the cash account, in the period between 29 June 2018 and 27 June 2019 the applicant drew about $126,000 from the bank account of the Testamentary Trust inferentially with the consent of his mother.
The applicant says that about $52,588 of this amount was incorrectly paid into this account by his brother for work that Business BB had done (the amount presumably should have been paid to his business account). The applicant asserts that the balance of the $126,000 was drawn against his “unpaid entitlement to distribution” (applicant’s affidavit filed 4 October 2019, paragraph 30), but as senior counsel for the respondent pointed out, this cash account had nothing to do with unpaid entitlements as the evidence of the Family Group accountant was that unpaid entitlements had been expended by the end of the 2018 financial year. There were no 2019 financial statements before the primary judge.
In respect of applicant’s ability to borrow from family members, the primary judge records:
20.[The applicant’s brother] deposed on 26 September 2019 that the [Board] resolved to advance funds to the [applicant], by way of loan, “to assist him in relation to defending the two court proceedings that [the respondent] filed being these proceedings and the parenting proceedings in a District Court in State B, United States ..., as [the applicant] could not afford to do so from his business income alone.” [The applicant’s brother] deposed that there is no written agreement and that the [applicant] “At present is not receiving any distributions from either the [Q Seden] Family Trust or the [Testamentary Trust] as determined by [the Board].”
(As per the original)
The applicant recorded in his Financial Statement filed 9 July 2019 that he had a “[p]ersonal family loan” in the sum of $150,348. The applicant obtained a loan from the Family Group in order to pay the respondent $125,000 pursuant to orders made on 10 July 2019. As at 27 September 2019, the loans that the applicant had obtained from the Family Group total $413,000. So much is uncontroversial.
There is said to be an understanding that the applicant would repay loans “in the future as against any future distributions that [the applicant] may receive as a beneficiary of the Q Seden Family Trust” (applicant’s brother’s affidavit filed 27 September 2019, paragraph 8).
It can be reasonably inferred that the applicant had requested he be provided monies in the cash account and by way of loan and that these monies were made available following that request being made.
The primary judge discussed the applicant’s interest in the Suburb E property at [12]–[17]. The applicant has the sole legal and equitable interest in the Suburb E property which he estimates to have a value of $1.8 million.
Whilst the original mortgage between the applicant and his father evidenced a principal borrowing of $1,040,000 on 22 July 2009, the title search of the Suburb E property would indicate that that mortgage, if ever registered, was now discharged. The title search indicates only one mortgage dated 7 October 2015 between the applicant and the Australian and New Zealand Banking Group Ltd. The mortgage on the Suburb E property supports a limited recourse guarantee originally entered into at the request of the applicant’s father. The applicant’s individual guarantee and indemnity under these arrangements is limited to $1,080,000. Consequently, on the applicant’s own estimate, he has equity in the Suburb E property in excess of $700,000. There has not been any call on the guarantee he has given to the Family Group.
In addition to the Suburb E property and the interest in his business, the applicant had cash at bank in excess of $40,000, shares, Crypto currency and a motor vehicle.
The primary judge’s reasons for judgment are not required to mention every matter relevant to an issue (Whisprun Pty Ltd v Dickson (2003) 200 ALR 447 (“Whisprun”) at [62]). The reasons of the primary judge are economical and do not attempt to engage with the evidence by way of extensive analysis of the voluminous material. The evidence more than supports the primary judge’s finding at [32] that the financial resources available to the applicant provided a basis to conclude that the applicant was reasonably able to maintain the respondent for the purposes of s 72 of the Act.
Grounds 1.2 and 1.3 have not been made out.
Ground 1.4 – The order in which the primary judge set out the reasons for judgment
In Ground 1.4, the applicant complains that the primary judge dealt with the applicant’s capacity to pay before dealing with the respondent’s reasonable needs or the amount of the proposed order. Whilst it is the more usual approach to deal firstly with the reasonable needs of an applicant for spousal maintenance and then deal with the respondent’s capacity to pay, it is not an error to examine whether or not the applicant had the capacity to pay the order as sought by the respondent (that is, in the sum of $2,600 per week) and then turn to consider whether or not the order as sought was an amount that was necessary for the adequate support of the respondent. This ground is no more than a complaint about form over substance.
There is no merit in Ground 1.4.
Ground 2 – Asserted error in inferring that the applicant and his family took steps to reduce his income
This ground challenges the basis of the inference drawn by the primary judge in the second sentence of [29].
It is convenient to repeat what the primary judge said at [29]:
The true level of the [applicant’s] actual and potential income is difficult, if not impossible, to determine in the circumscribed context of an interim hearing. In my view, however, a safe inference can be drawn that the [applicant] and his family have elected to take steps to ensure that he received no trust income in the 2019 financial year and, apparently, a markedly reduced amount in 2018.
The submission is based on the applicant’s assertion that the applicant’s inability to control the Testamentary Trust makes the inference unavailable and irrelevant and if the conclusion from the inference is the fact that the funds will not be available, then it does not provide any assistance in reaching a conclusion that the applicant has the ability to contribute.
For reasons already discussed, it was safe for the primary judge to draw the inference which is the subject of the complaint in this ground.
Ground 2 fails.
Ground 3 – Failure to take into account evidence provided as to rental costs in the affidavit of [Mr CC] sworn 9 August 2019
Ground 3 is:
Her Honour’s discretionary decision miscarried as a consequence of the failure to take into account relevant facts, namely the evidence provided as to rental costs in the [a]ffidavit of [Mr CC] sworn 9 August 2019.
The primary judge said:
24.The [respondent] submitted emails from a real estate agent in [State B] (Exhibit 8 and 9 to the [respondent’s] affidavit of 29 August 2019), in an attempt to support her assertion that she requires some $978 per week to rent a suitable apartment for herself and the parties’ child in Y City. The [applicant] disputed this suggestion and purported to rely upon an affidavit of a family lawyer in [State B], Ms [U], as to the cost of appropriate rental accommodation. Neither of these purported pieces of evidence was of much assistance. Ultimately, I found it difficult to draw any reasonable conclusions as to the [respondent’s] proper accommodation costs.
25.I accept that the [respondent’s] parents intend to sell their home in [State B], where she and the child currently live, and move to [State S] in the near future. The [applicant] conceded that he has been aware of this plan on the part of the [respondent’s] parents for some time.
The applicant complains that whilst the primary judge specifically considered the evidence of the respondent in relation to rental costs, which she rejected and, for good reason, criticised the utility of the evidence of a family lawyer from the USA, offering her opinion as to rental costs, her Honour failed to make any reference to the applicant’s evidence from Mr CC, a real estate agent with extensive property leasing experience, practising in State B for 17 years.
Without making reference to the actual rental figure, the applicant submitted to the primary judge that Mr CC’s affidavit filed 23 August 2019 “provides some evidence as to rental accommodation” (Transcript 24 October 2019, p.14 lines 35–36). At paragraph 10 of his affidavit, Mr CC opines that average rental costs are $579.29 per week. Mr CC also provides evidence of a range of accommodation that was available at higher and lower weekly amounts.
Initially senior counsel for the respondent submitted that Mr CC’s evidence needed to be considered in the context of an objection being maintained but not dealt with and there being no application made by the applicant pursuant to Pt 15.5 Family Law Rules 2004 (Cth) for leave to rely upon that evidence. In oral argument, senior counsel for the respondent conceded that given the objection was not dealt with, the evidence was properly before her Honour.
The primary judge took a broad brush approach and found that no “reasonable conclusions” could be drawn as to the rental costs of the respondent (at [24]). Again, whilst her Honour did not make reference to Mr CC’s evidence, it is not to say that her Honour did not take it into account (Whisprun at [62]).
If the primary judge had made a finding that reasonable rental costs were in accordance with that assessed by Mr CC, the respondent’s claim for rent would have been reduced by $399 ($978 minus $579). Such a finding would have had no effect on the level of spousal maintenance which was ordered, remembering that the respondent’s claim was reduced by the primary judge by $1,600. Accordingly, even if it is accepted the primary judge failed to take into account Mr CC’s evidence, that failure is not material (De Winter and De Winter (1979) FLC 90‑605 at 78,092) and the error complained of does not demonstrate the decision to be plainly wrong.
There is no merit in Ground 3.
Conclusion
Leave is required to appeal the primary judge’s interlocutory order for spousal maintenance (s 94AA of the Act; reg 15(1)(a) of the Family Law Regulations 1984 (Cth)). Senior counsel for the applicant submits that there will be a substantial injustice if leave to appeal is not granted because the applicant will be left with an accruing order continuing against him that he has no capacity at the present time to comply with. The application for leave to appeal should be dismissed as the applicant has not demonstrated that both the primary judge’s decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court, given that there is no merit in any of the proposed grounds of appeal, nor that a substantial injustice would result if leave were refused, given that the interlocutory order is being made in the context of competing and substantial applications for a property settlement order and, in this interlocutory hearing, the applicant’s assertions as to his current financial circumstances have not been accepted (Medlow & Medlow (2016) FLC 93-692 at [57]).
Costs
In the event that the applicant was unsuccessful, the respondent sought costs at scale fixed in the sum of $30,262. The applicant resisted a costs order based upon the applicant’s current financial circumstances and in addition, made an oral application that, if any costs order was made against the applicant, that order be stayed pending the outcome of the property settlement proceedings. The applicant makes no criticism of the quantum claimed by the respondent. The applicant has been wholly unsuccessful (s 117(2A)(e) of the Act) and his assertions about his financial circumstances have not been accepted (s 117(2A)(a) of the Act). An order should be made that the applicant pay the respondent’s costs of the application for leave to appeal fixed in the sum of $30,262. It seems the application for the stay of any costs order was based upon the assertions made about the applicant’s current financial circumstances and that application shall be dismissed.
I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Aldridge & Watts JJ) delivered on 25 November 2020.
Associate:
Date: 25 November 2020
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