Seitzinger & Seitzinger - [2014] FamCAFC 244

FAMILY COURT OF AUSTRALIA

SEITZINGER & SEITZINGER

[2014] FamCAFC 244

FAMILY LAW – APPEAL – SPOUSAL MAINTENANCE – Where the wife sought interim spousal maintenance of $1,000 per week and her application was dismissed – Where the husband has a high income and the wife lives on social security and charity – The magistrate erred in finding the wife had worked full-time after the separation – The magistrate erred in finding that the wife had capacity to work despite medical evidence indicating she was suffering from depression – Merit found in other complaints – Application for leave to appeal allowed and appeal allowed in relation to this issue – Matter remitted for rehearing – Costs certificates granted for the appeal and rehearing.

FAMILY LAW – APPEAL – COSTS – Where the wife sought an interim lump sum payment of $50,000 for her legal costs or a “dollar for dollar” order in the alternative and her application was dismissed – The magistrate was correct in placing weight on the husband’s offer to assist the wife to obtain a loan secured over the unencumbered matrimonial home to cover her legal fees – Application for leave to appeal refused.

Family Law Act 1975 (Cth), s 72, s 79
Federal Proceedings (Costs) Act 1981 (Cth)
Family Law Rules 2004 (Cth), r 5.01, r 15.41

Harris and Harris (1993) FLC 92-378
Jess and Ors & Jess and Ors [2014] FamCAFC 227
Murkin & Murkin (1980) FLC 90-806
Strahan & Strahan (2011) FLC 93-466

APPELLANT:

Ms Seitzinger

RESPONDENT:

Mr Seitzinger

FILE NUMBER:

PTW

3309

2013

APPEAL NUMBER:

16L

2014

DATE DELIVERED:

24 December 2014

PLACE DELIVERED:

Perth

PLACE HEARD:

Perth

JUDGMENT OF:

Thackray J

HEARING DATE:

27 November 2014

LOWER COURT JURISDICTION:

Magistrates Court of Western Australia

LOWER COURT JUDGMENT DATE:

23 June 2014

LOWER COURT MNC:

[2014] FCWAM 107

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Ms Farmer

SOLICITOR FOR THE APPELLANT:

Siobhan M Vincent & Associates

COUNSEL FOR THE RESPONDENT:

Mr Berry SC

SOLICITOR FOR THE RESPONDENT:

Clairs Keeley

Orders

The appellant have leave to appeal against the dismissal of her application for interim periodic spousal maintenance.
The application for leave to appeal be otherwise dismissed.
The appeal against the order of Acting Magistrate De Maio made on 23 June 2014 dismissing the appellant’s application for interim periodic spousal maintenance be allowed.
The order of Acting Magistrate De Maio made on 23 June 2014 dismissing the appellant’s application for interim periodic spousal maintenance be discharged.
The appellant’s application for interim periodic spousal maintenance be remitted for hearing in the Magistrates Court of Western Australia before a Magistrate other than Acting Magistrate De Maio.
There be no order as to the costs of the appeal.
The court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by her in relation to the appeal.
The court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by him in relation to the appeal.
The court grants to each of the parties a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each of the parties in respect of the costs incurred by the appellant and respondent in relation to the rehearing of the application for interim periodic spousal maintenance.

IT IS NOTED that publication of this judgment by this court under the pseudonym Seitszinger & Seitzinger has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA
AT PERTH

Appeal Number: WA 16L of 2014
File Number: PTW 3309 of 2013

Ms Seitzinger

Appellant

And

Mr Seitzinger

Respondent

REASONS FOR JUDGMENT

Introduction

Ms Seitzinger (“the wife”) seeks leave to appeal and, if leave is granted, to appeal against an order made on 23 June 2014 by Acting Magistrate De Maio in the Magistrates Court of Western Australia.
The order dismissed the wife’s application for interim spousal maintenance and for funds to meet her costs relating to property settlement proceedings.
The appeal is opposed by Mr Seitzinger (“the husband”).

Background

The parties were married in 1982 and separated in June 2012. They have two adult children, who live in investment properties owned by the husband.
The husband is 55 years of age and is employed by a local government body. He has a salary package worth $244,218 per annum, and is now married to a work colleague who earns about $86,000 per annum.
The wife is aged 50 years. She worked one day a week before separation, but has not worked since February 2013, after becoming depressed. Her income at the time of the hearing below was a “sickness allowance” of $257 per week.
The wife is living in the unencumbered former matrimonial home. She has no savings and claims to be in debt to relatives who have helped meet her living expenses.
The husband and his new wife have borrowed over $800,000 to purchase a home. At the time of the hearing below, they were trying to conceive a child and the husband was paying $200 per week as his half share of IVF treatment.
Following the separation, the husband paid $1,400 per fortnight into an account for the wife. It seems the payments commenced in August 2012 and ended in April 2013. Insurance premiums were paid by direct debit from the account for the wife’s car, for her home and for landlord insurance for the husband’s two investment properties. The account was also the source of payments for private health insurance covering both the husband and the wife.
The husband asserted that the wife said she did not want his money, despite him telling her to use the money he was putting in the account. The wife explained that, after the deductions, there was “very little money for me to use for expenses, and I refrained from drawing from that account for my personal expenses, preferring to save the money in order to provide assistance to my children”. The wife accepted she used $9,000 from the account for the benefit of the parties’ adult daughter. When the wife eventually closed the account in October 2013, she withdrew the balance of $9,324. It was around this time that she engaged solicitors to commence negotiations with the husband’s solicitors.
On 20 January 2014, the wife filed an application seeking a division of assets 65:35 in her favour, with her keeping the matrimonial home. She also sought interim spousal maintenance of $1,000 per week and $50,000 to help meet her legal costs. She also sought interim orders for the payment of insurance, rates and security monitoring for her home; registration, insurance and servicing for her car; and her health insurance. She later amended her application to seek a “dollar for dollar” costs order (as an alternative to the $50,000 payment).
The parties attended an informal settlement conference in March 2014 after the husband agreed to pay $3,000 towards the wife’s costs of participating in the conference. The dispute was not settled, but the Magistrate was told that the parties planned to attend mediation in May 2014.
The application was listed for hearing on 13 March 2014, but the husband did not file a response until the day of the hearing. The response recorded the husband’s agreement to the wife keeping the home, but proposed an equal division of assets. It also sought the dismissal of the interim application.
The hearing was postponed to 25 March 2014. At the commencement of the hearing, having filed lengthy written submissions, the wife’s solicitor advised the court that her oral submissions should take five minutes. More than 100 pages of transcript later (and after an adjournment when the court ran out of time), the oral submissions of the wife’s solicitor were completed. After hearing from the husband’s solicitor, the Magistrate reserved her decision.

The Magistrate’s reasons

The Magistrate commenced her reasons by identifying the relief sought by the wife. In doing so, her Honour described the application for payment of $50,000 as being by way of “part property settlement”. In fact, the application was framed as seeking lump sum spousal maintenance (albeit under a heading “Security for Costs”). It is unsurprising the Magistrate was confused about the head of power relied upon, given the scattergun approach adopted in the wife’s submissions, some of which did proceed on the basis that the $50,000 lump sum was sought pursuant to the power to adjust property interests contained in s 79 of the Family Law Act 1975 (Cth) (“the Act”).
Having discussed the legal principles relating to an application for “an interim property order” and those relating to the alternative “dollar for dollar” order, her Honour then turned to the principles relevant to spousal maintenance. After reciting s 72 of the Act, her Honour said (errors in the original in this and in all later citations from the reasons):
24In Bevan and Bevan (1995) FLC 92-600 the Full Court set out a process for assessing a maintenance claim (at 81,891 – 81,982) as:
“Taken together then, we would state the law as being that as award of spousal maintenance requires:
(1) A threshold finding under section 72;
(2)Consideration of s 74 and s 75(2);
(3)No fettering principle that a post-separation standard of living must automatically be awarded where the respondent’s means permit; and
(4) Discretion exercised in accordance with the provisions of s 74, with “reasonableness in the circumstances” as the guiding principle”
25In making an interim determination in relation to spousal maintenance, as the order is not a final order, it is permissible to take a “broader brush approach” than may otherwise be taken at a final hearing – Redman and Redman (1987) FLC 91-805.
26 As part of this assessment I adopt the approach of Nygh J in the case of Atwill and Atwill (1981) FLC 91-107 where the Court says that:
“I have defined inability to support oneself ….. as depending on the question of whether the wife can generate funds from her own resources or earning capacity to supply her own needs. This excludes consideration of social security entitlements of voluntary payments made by the husband.
‘Adequately’ imports relativity. Subsistence may be adequate for some applicants, but not for others. It must be viewed in light of para (g) of s 75(2) ‘a standard of living that in all circumstances is reasonable’…
The next question is whether there is any evidence that she lacks the resources to produce that income herself either through earning capacity or from her assets.”
Having recorded the payments sought, the Magistrate observed that “[t]he total amount of the wife’s claim is not fully appreciated by the Court as there does not appear to be any independent evidence provided as to the amounts that relate to [the components of the claim]”. Her Honour went on:
29… Although [the wife] submits that her current reasonable expenses [are] $595 per week (as per her material) she seeks $1,000 per week because that would give her a reasonable standard of living. The wife submits that I should compare the expenses of the parties and note that the difference between the two positions is $1391 this representing the disparity in their standard of living…
At [30], the Magistrate recorded the wife’s acceptance that the husband would have expenses associated with his work, including income tax. Her Honour also said it appeared the wife conceded that the husband was bearing the shortfall on the investment properties, and that while the wife was living in the matrimonial home, the husband had to “re-accommodate and currently pays a mortgage for his own accommodation along with his partner”.
At [31], the Magistrate noted that the “threshold question” was whether the wife was “unable to support herself adequately from her own resources or earning capacity”. Her Honour’s reasons for concluding that the wife had not satisfied this test are of vital importance, and are therefore set out in full below:
32The wife says that she is unable to support herself adequately. In relation to the funds the husband was contributing to the joint account she says that pride prevented her from using that money. She concedes however that approximately $9,000 over time was forwarded to the parties’ daughter [K] and that the balance remaining in the account of some $9,300 was forwarded to her lawyer in or about October 2013. Since that time she says she is been reliant on sickness benefits and monies forwarded to her by family including [K]. At part F of her form 13 financial statement she says that [K] pays $7.50 per week for monitoring the house alarm. She says that her sister [H] pays $300 per week for “house alarm, house insurance, maintenance and servicing of car, telephone bill, mediation, groceries, petrol.” She says that her mother [E] pays $400 a week for petrol and groceries. In the court’s view the wife has over exaggerated her expenses. In particular if the court takes the wife’s case at its lowest she suggests that she spends $400 a week for petrol and groceries and perhaps a further $100 for groceries and petrol provided by her mother and sister, totalling $500 per week. This amount in the court’s view is excessive and not reasonable.
33The wife concedes that despite the husband’s contribution into the joint account in the amount of some $1,400 per fortnight totally in excess of $18,000 by early 2013 she did not utilise these funds preferring to give about half to her daughter. It is open to the court however to suggest that the wife did not need the funds hence the reason she did not use them. To make any definitive finding the parties would need to be subject to cross examination however and that is not open to the court on an interim basis.
34 The wife says that presently she is in receipt of social security benefits. She receives sickness allowance not a disability support pension, her application for a disability support pension was not successful. She says that she suffers severe depression and is presently unable to work. During the marriage the wife was employed part-time as a shop assistant at [a retail store]. At paragraph 21 of her affidavit of 20 January 2014 she says that she has always worked as a shop assistant but cannot work as a shop assistant now because of her health issues. The wife accepts her work history and even when her income ceased from February 2013 still did not use them. Is that at separation she was working as a part-time shop assistant at [a retail store]. She worked for four months after separation from July 2012 until October 2012. From October 2012 to February 2013 she worked on a part-time basis at [the same store]. From this time she left and has not returned to any form of paid employment.
35In support of her claim that the wife cannot work she attaches medical reports the first being dated for July 2012. The report is from Dr [C] and it appears that the reason for the visit was as a result of the separation which the wife saw as sudden. The presenting complaint is registered as “reactive depression”. The medical report does not make any reference to her inability to work. Indeed at the time the wife was working on a full-time basis. The second report is dated 4 July 2013. Again the report refers to the presenting complaint as “reactive depression”. The report details that the wife has struggled to come to terms with the separation that was a year ago. She had been on antidepressant medication with only minimal response. The report refers to an incident of bullying at work at the end of 2012 which has “set her back a lot”. Again the report does not say anything about the wife’s inability to work. The next report from Dr [C] is dated 30 October 2013, however this report does not really assist the Court. There is no reference about the wife’s incapacity to work. A further report is provided from Ms [M], Clinical Psychologist, dated 8 July 2013. It is conceded that the report although dated July 2013 refers to consultations on 26 July 2012 and 9 August 2012. The report refers to the wife’s presentation in 2012 but at that stage the wife was working full-time in any event. The report indicates that a full assessment was not completed due to the level of the distress being experienced. The psychologist was of the view that the wife appeared to be experiencing a major depressive episode with anxiety symptoms, however, what is clear in the report is that the psychologist could not provide any up-to-date material as the wife had not been seen by her since August 2012.
36 A further report was provided from another Clinical Psychologist, Dr [T], dated 5 August 2013. It was agreed that this report had been provided in support of the wife’s application for a disability support pension. The husband argues that this report is not an assessment of the wife’s capacity to work but rather a letter in support of an application for ongoing social security benefits that differ to the benefits the wife is receiving. The wife is required to undertake an assessment for the purpose of a disability support pension and that application was not successful. I accept the submission of the husband that the report of 5 August 2013 does not satisfy an assessment of working ability or incapacity to work. A further report from Dr [T] is dated 20 October 2013. This report does not assist the court in determining the ability of the wife to earn an income to support herself.
37 It is relevant in the timeline that the wife has been employed since separation including up to February 2013. The court is not satisfied that the medical evidence supports a finding that the wife does not have a capacity to work and earn money from her own resources. The medical report suggests that the main stress of the wife is the breakdown of the marriage although the chronology shows that she was able to work despite the stress. There is no other identified event that would support a finding that the wife is not capable of earning an income from her own resources.
38 In addition the husband was providing her resources to the wife and she chose to dispose of a significant amount to her daughter and the balance to her lawyer. An alternative finding than the one presented by the wife is that the wife simply did not need the funds to maintain herself. It is also noted that the wife does not seek on a final basis continuing maintenance. I am not satisfied therefore that the wife has satisfied the threshold question and consequently her application for spousal maintenance must fail.
The Magistrate then turned to what she understood to be the application for part property settlement. In this discussion, her Honour expressed her view that the “threshold” in exercising the s 79 power on an interim basis “is a high one and should only be exercised in exceptional circumstances”. She went on:
40… The wife has failed to identify any source of funds to satisfy her claim [for a payment of $50,000] other than equity in property in which the parties themselves reside or the parties’ children reside. She does not suggest to sell either of the properties but seeks the husband borrowed funds. She does not identify any source of funds.
41 The husband suggests that he is made enquiry with his borrowing capacity and indicates to the court that he is not able to borrow funds by utilising his own assets. He does suggest that it may be possible to join with the wife to apply to the bank for a loan using the former matrimonial home. The husband proposes that the amount borrowed can include an amount to cover the interest payments for one year to facilitate the wife’s representation. The wife is opposed to the application and clearly states that she does not wish to place the [former matrimonial home] as security for any borrowings.
42 The husband is not opposed to the former matrimonial home being transferred to the wife’s name, however, the fact of this non-opposition on a final result is not sufficient of itself to persuade the court to exercise its discretion. Whether or not it will be the end result will depend on the evidence presented at a trial in the event this matter goes to trial. At this stage the husband makes no challenge to the wife’s occupation of the property and indeed has not made any such challenge from separation.
43 I have already commented on the amounts of funds available to the wife up to the end of 2013. In the court’s view in the context of the asset pool of the parties that amount left to the wife was substantial especially in circumstances where the husband is bearing the balance of the liabilities without any contribution from the wife.
44 The wife seeks an amount of $50,000 in circumstances where the parties had agreed to attend mediation style conferencing. It was submitted that the cost of mediation style conferencing would be $3,300 per day for the mediator and legal costs for each of the parties and their solicitors which were also estimated at $3,300 per day each. The husband submitted to the court that he would be prepared to pay the costs of the mediator at first instance.
45 The court is not satisfied that the proceedings between the parties are necessarily complex. There are no trusts or business enterprises that need to be valued. The husband claims that it was his understanding that the investment properties would benefit the children, however, at this juncture neither child has been joined to the proceedings and neither child makes a claim as to any of the assets of the parties. At this stage the husband says that the entire equity is included in the asset pool.
46 The wife says in her paperwork that she has been relying off “borrowings” from her family although concedes that over a period of 12 months she has gifted her daughter $9,000. There was no restrictions in her using this amount to pay for her legal fees.
47 I do not consider the wife has in those circumstances justified the amount she seeks as being necessary to displace the proposition that the court should exercise the power before a final hearing.
48The court is not satisfied that the circumstances of the case justify the granting of the wife’s application and it should be dismissed.

The Magistrate then discussed the “dollar for dollar” order, which she explained meant that for “every cent that the husband pays for his legal representation he pays the same amount to the wife’s solicitors”. Her Honour said:
50 The court accepts that the husband is in a better financial position however only in relation to his earning capacity. He continues to bear the expenses associated with the investment properties which form part of the pool of assets for division. I accept that he bears those expenses without any contribution by the wife and that those expenses exceed the income the husband receives from the properties. In the circumstances the court is not convinced that there is a gross disparity in the financial circumstances of the parties.
51The wife had an opportunity to pay for her expenses and legal fees by the provision of money into the joint account. On both parties cases there was some $18,000 that went through that account and was available for the wife’s sole use. She chose not to utilise those funds. Of the funds that she retain when the account was closed it appears to be these were provided to her solicitor. According to the costs notification provided those funds have been spent. The wife says she now relies on loans from family and friends, however, there is no suggestion that those loans are now required to be repaid and no evidence that that source of borrowing has effectively dried up for the wife. She could borrow funds from her family to cover her legal expenses which at this stage in proceedings include the modest amount for mediation style conferencing.
Her Honour dismissed the interim application and stayed the proceedings on the basis that the parties could relist after they had been to mediation. I was informed that they have still not attended mediation.

Leave to appeal

The order under appeal being interlocutory, the wife required leave to appeal.
The test to be applied in considering an application for leave to appeal has recently been discussed in Jess and Ors & Jess and Ors [2014] FamCAFC 227. Neither counsel had an opportunity to consider that decision as it was handed down just as their oral argument was about to commence. Both were content for the present case to be determined on the basis of the test traditionally used in this court, namely that the wife had to demonstrate an error of principle and/or that substantial injustice would result if leave to appeal was not granted.
Counsel for the wife submitted there had been errors of principle and that there would be substantial injustice if the wife was left without maintenance to support herself and unable to meet her legal fees while the husband could meet his.

The Grounds of Appeal

The application for leave and the appeal were argued cognately. In deciding whether leave should be granted, I will assess the merit of the wife’s original grounds of appeal. But before discussing them, I will address an important complaint which emerged only in the course of oral argument.

Additional ground of appeal – Error of fact about the wife’s employment

During the hearing, and without resistance, I gave leave to the wife to amend her grounds of appeal to challenge factual findings made by the Magistrate.
This complaint was expressed in the following terms:
The Acting Magistrate erred in her assessment of the Appellant’s work history and experience by
(a)not accurately identifying that the wife did not work full time during the marriage
(b)not identifying that the wife did not work immediately following separation to October 2012
(c)not considering in those circumstances the capacity of the wife to support herself from her own resources
and consequently falling into error in determining the wife had failed to establish an inability to support herself.
It was common ground that the wife had worked only on a part-time basis during the marriage. Surprisingly, however, the wife failed to mention in her affidavit that she had only regularly worked one day a week. Ultimately, it was the husband who revealed, albeit obliquely, that she worked only on Saturdays.
Although the very limited extent of the wife’s work during the marriage may have been worthy of mention when assessing her future working capacity, it cannot be said her Honour erred in stating the facts, since it can be seen from [34] that she recognised the wife had only worked part-time.
Where the Magistrate fell into error was in her findings relating to the wife’s work after separation. Her Honour found at [34] that the wife: “worked for four months after separation from July 2012 until October 2012. From October 2012 to February 2013 she worked on a part-time basis at [a retail store].”
The implication to be drawn from the way these findings were expressed is that the Magistrate understood that the work from July 2012 until October 2012 was not “part-time”. That this is the proper inference can also be seen from what her Honour said at [35] when explaining why she felt the medical reports did not demonstrate the wife was unable to work. At two different points at [35], her Honour expressly said the wife was working “full-time” after separation.
Unfortunately, her Honour misunderstood the extent of the wife’s employment post-separation. The information available to the court was that the wife did not work at all from July 2012 to October 2012, and then resumed work on a part-time basis until February 2013, when she stopped altogether. Her Honour could be forgiven for confusing these facts, since the wife had failed to give any details about her work after separation. The only evidence touching on this topic was that contained at [23] of the wife’s affidavit from which it could be implied that she had ceased work at some unspecified time due to her “severe depression”. She did not say when she stopped, or what hours she had worked prior to doing so.
The only additional information on this issue was that conveyed by the wife’s solicitor from the bar table (Transcript, 7 April 2014, p 32 and following). This was presented in a haphazard fashion, with the solicitor initially claiming that the wife had not worked at all since separation. After the husband’s solicitor interjected, the wife’s solicitor, without further objection, eventually made it tolerably clear that the wife did not work from July 2012 to October 2012, and then worked part-time before giving up work altogether in February 2013.
The significance of the Magistrate’s misunderstanding of what she had been informed can be seen from the remarks at [35] and [37] of the reasons, which suggest that much weight was placed on what her Honour understood to be the wife’s capacity to work full-time, even when suffering from severe depression. This error alone, in my view, is sufficient to render unsafe her Honour’s conclusions about the wife’s capacity to work.

Grounds 1 to 3– Wife’s capacity to support herself

The merit that I have identified in the complaint discussed above feeds into the first three grounds of appeal which were expressed in the following terms:
1.The Acting Magistrate erred in law in failing to recognise the Applicant’s incapacity to support herself adequately from her own resources in that she:
(a)failed to recognise the Applicant’s incapacity for appropriate gainful employment;
(b)failed to have proper regard to the receipt of social security (sickness) benefits by the Applicant;
(c)failed to have proper regard to the receipt by the Applicant of financial support from her family members and to appropriately disregard those payments;
(d)found that the Applicant had a capacity for gainful employment but then failed to assess whether that employment would be adequate to support the Applicant adequately;
(e)failed to recognise that any level of spousal maintenance should not be a mere subsistence level and the Applicant is entitled to a standard of living that is in all the circumstances reasonable;
(f)failed to properly identify the expenses of the Applicant and incorrectly assessed them as a comparison to those of the Respondent.
2. The Acting Magistrate erred in fact in:
(a)failing to identify a present source of income available to the Applicant to maintain herself;
(b)failing to identify an ability to obtain gainful employment as asserted when considering the Applicant’s age, employment history, skills and state of health;
(c)considering then failing to properly assess the capacity of the Applicant’s family to continue to assist in the financial support of the Applicant;
(d)presuming that the Respondent was making payments into a joint account by way of voluntary interim spousal maintenance for the Applicant whilst failing to take into account the Respondent’s use of that account for his own purposes (and assuming the monies were for the Applicant’s sole use) and as a consequence fell into error.
3.The Acting Magistrate erred in placing inappropriate weight upon the payment of funds by the Applicant to the parties’ daughter from the joint account in suggesting that the Applicant did not need funds (and by extrapolation did not need spousal maintenance now).
Although these grounds are multi-faceted, the most significant issue concerns the way the Magistrate dealt with the documents written by the wife’s doctor and two clinical psychologists. These were introduced into evidence, without objection, by the wife’s affidavit sworn 14 January 2014, where the wife said:
23.Currently, I suffer severe depression. Annexed and marked with the letter “C” are the most recent medical reports obtained by me clearly indicating that it is unlikely that I will have the ability to return to even part-time employment for a period of approximately 24 months.
The documents comprising Annexure “C” were the following:
·A Mental Health Treatment Plan prepared by the wife’s doctor dated 4 July 2012. This noted that the wife had “reactive depression” after the husband left her six weeks previously. It also noted: “Not eating, has lost 10 kgs. Not sleeping, might doze for an hour or two on the couch from 7am.” The Plan proposed an urgent referral for the wife.
·Another Mental Health Treatment Plan dated 4 July 2013 (i.e. exactly one year after the first Plan) prepared by the same doctor. It noted that the wife had been on “anti-depressant medication with only minimal response”. It also recorded that:
there was an episode of bullying at work at the end of last year which has set her back a lot. [The wife] has been eating poorly, not sleeping and generally has little interest in life at present … I feel she would benefit from some counselling.
·A letter from the wife’s doctor to Dr T, a psychologist, dated 30 October 2013 thanking her for seeing the wife again and enclosing a Mental Health Care Plan in which it was recorded that whilst the wife’s progress was satisfactory, she “needs further psychotherapy”.
·A report dated 8 July 2013 from Ms M, another psychologist, noting she had seen the wife on 26 July 2012 and 9 August 2012. This recorded that (original emphasis):
Results of [a scaling test] found [the wife] was experiencing symptoms within the extremely severe range for depression, anxiety and stress. She was experiencing extremely disturbed sleep, extreme loss of weight and loss of appetite. She had isolated herself and had become very dependent upon her family. She had been experiencing these symptoms over a period of at least four weeks at the time of our contact. A full assessment was not completed due to the level of distress being experienced.
The report went on to note that the wife appeared to be “experiencing a Major Depressive episode with anxiety symptoms”, which Ms M understood had been managed under the care of the wife’s doctor, as she had not seen the wife after 9 August 2012.
·A report dated 5 August 2013 from Dr T addressed to “Whom it May Concern”, noting that:
[The wife] has been seeing me this year for therapy for depression resulting from a sudden separation and divorce. [The wife] has not been coping with her situation and has had difficulty functioning. I believe it is unlikely that she will be able to return to work within a 2 year period … I support her application for the [Disability Support Pension].
·A report dated 20 October 2013 from Dr T to the wife’s doctor, in which she noted that she had six sessions with the wife and that:
Intervention has mainly involved supportive psychotherapy. [The wife] is going to make an appointment to see you soon for a review of her [Mental Health Care Plan] and discuss an extension of sessions. She would like to continue with therapy.
The husband’s affidavit did not put in issue anything said in these documents; however, the husband did draw attention to the fact that the last report was from October 2013 and he claimed the wife was still a healthy weight despite her weight loss.
No objection was taken at the hearing before the Magistrate concerning formalities associated with the medical evidence, which in my view is fatal to the attempt of counsel for the husband to invoke r 15.41 of the Family Law Rules 2004 (Cth) (“the Rules”) on the hearing of the appeal. Had the point been taken below, it would have been open to the wife to seek dispensation of the Rules, or alternatively, to seek an adjournment to have the evidence adduced in a more satisfactory form.
It is true, as the Magistrate found, that a number of the reports did not comment on the wife’s ability to work. However, in my view, it ought to have been apparent that most of the reports were designed to deal with the management of the wife’s health rather than commenting on her capacity to work. In my view, read together, the reports could lead only to one conclusion, namely that the wife had continued to suffer from debilitating depression, notwithstanding she had been taking medication and receiving therapy for more than a year.
It is also true, as the Magistrate found, that Ms M was unable to provide up-to-date evidence about the wife’s health because she had last seen the wife in August 2012; however, the wife had seen Dr T thereafter and nothing Dr T said in her reports indicated any basis for optimism that the wife’s condition was improving.
Furthermore, I consider that her Honour erred in finding that the report of 5 August 2013 did not “satisfy an assessment of working ability or incapacity to work”, since it clearly states Dr T’s opinion that it was “unlikely that [the wife] will be able to return to work within a 2 year period”. That report was only a few months old when the wife filed her application. There was no evidence her health had changed since the time of the report, or any reason for inferring there had been any improvement in her condition.
I consider her Honour also erred in placing weight on the fact that Dr T’s report was provided “in support of an application for ongoing social security benefits that differ to the benefits the wife is receiving”. Whatever its purpose, the report contained an unambiguous statement of the author’s opinion about the wife’s capacity to work. The fact the application for a pension was unsuccessful does not say anything about the wife’s capacity to work in circumstances where she continued to receive a “sickness allowance”.
I have earlier dealt with the Magistrate’s misapprehension that the wife had been able to work full-time even when she was “experiencing symptoms within the extremely severe range for depression, anxiety and stress”. It is difficult to resist the conclusion that her Honour would have viewed the medical evidence in a different light had she correctly understood the chronology of the wife’s employment in the months after separation.
Having concluded that her Honour erred in assessing the wife’s capacity to earn income, it becomes unnecessary to consider the remaining complaints. However, as similar arguments are likely to be mounted at the rehearing, I propose to deal with what I consider was the erroneous treatment of the wife’s refusal to use the funds the husband provided in the months after separation.
The first thing that should have been noted about the husband’s willingness to hand over $1,400 per fortnight for the wife’s benefit is that it constituted prima facie evidence of his belief that she needed the funds in order to survive. In my respectful view, that concession ought to have been given significant weight.
Secondly, the wife’s refusal to use the money should have been considered in light of the circumstances of the separation, especially the fact that the wife was severely depressed and claimed not to be eating at the time.
Thirdly, the wife’s decision to close the account and use the remaining funds (and then to commence negotiations and, later, to commence proceedings) should have been seen as acceptance by the wife that she could not survive without the husband’s support, notwithstanding her earlier refusal to use the money he had given her.
Fourthly, it was not reasonably open to the Magistrate to conclude that the wife did not need the husband’s support in the absence of any evidence as to how she could support herself other than from social security payments (which ought to have been ignored if she was receiving them at the time) and from money she was receiving from her family. It is true the wife gave $9,000 of the money from the husband to their daughter, but she had also borrowed $15,000 from relatives in order to meet her own living costs.
Her Honour properly acknowledged that a “broader brush approach” can be taken when dealing with interim maintenance applications. Such an approach ought to have led to a conclusion that the wife had no apparent means of support other than social security or charity. And as Nygh J said in Murkin & Murkin (1980) FLC 90-806 at 75,081, “[a] woman who is dependent on payments of social security benefits, voluntary payments by a former husband or by friends and relatives is not able to support herself”.
I also find merit in the part of the complaint that draws attention to the Magistrate’s failure to make a finding as to what income the wife needed in order to live. In this context, it will be recalled that her Honour found:
29… Although [the wife] submits that her current reasonable expenses [are] $595 per week (as per her material) she seeks $1,000 per week because that would give her a reasonable standard of living. The wife submits that I should compare the expenses of the parties and note that the difference between the two positions is $1391 representing the disparity in their standard of living…
Contrary to a view expressed by the Magistrate during the hearing (Transcript, 7 April 2014, p 42) and alluded to again at [29] of her reasons, the prescribed Financial Statement did not require the wife to state her “reasonable expenses”; rather, it required a statement of her current expenditure. It was therefore legitimate for the wife to state, as she did in her affidavit, that she needed more money than she was spending in order to maintain a “reasonable standard of living”. In advancing her case, I consider it was also entirely proper for the wife to seek to demonstrate what this standard might be by reference to the claimed level of expenditure of the husband.
It was necessary for the Magistrate to determine what the wife’s reasonable needs were before she could be in a position to determine whether the wife could adequately maintain herself. Having determined the level of her reasonable needs, the Magistrate would then have needed to determine whether the wife could meet those needs from her own resources or earnings. While the Magistrate found the wife’s claimed level of expenditure was “excessive and not reasonable”, she did not make a finding about what was reasonable. This omission was important because it was common ground the wife would earn only about $30,000 per annum even if she worked full-time.

For these reasons, I find merit in the first three grounds.

Ground 4 – Absence of a final application for maintenance

By this ground it was asserted that:
The Acting Magistrate erred in noting that the Applicant had not sought continuing maintenance on a final basis in assessing her need for interim spousal maintenance (and did not consider the way in which the Applicant had framed her final orders by effectively capitalising her section 75(2) entitlement).
This complaint relates to [38] of the reasons, which suggests the Magistrate placed weight on the fact that the wife had only sought interim maintenance – i.e. there was no application for maintenance on a final basis.
The argument before me proceeded the basis that the wife had been denied procedural fairness because the Magistrate had not given notice of an intention to invoke r 5.01, which provides that an interim application cannot be made in a cause of action unless a final order is sought in the same cause of action.
In my view, this argument reads more into her Honour’s comment than was intended. When [38] of the reasons is read in context, her Honour appears to have relied on the wife’s failure to seek a final order for maintenance as further evidence of the fact that the wife did not need money from the husband to maintain herself. However, this magnifies the error which I have earlier identified, as it demonstrates a failure to appreciate that the wife may have been expecting to receive enough funds in the property settlement to meet her needs.
Notwithstanding the absence of any argument put to the Magistrate based on r 5.01, counsel for the husband sought to invoke it in supporting the Magistrate’s decision. In my view, it is not open to him to do so. Had the point been taken below, the wife would inevitably have applied for dispensation of r 5.01, or alternatively, applied to amend to seek a final order for maintenance.
For these reasons I also find merit in this complaint.

Ground 5 – Lump sum payment for legal fees

By this ground the wife complained that:
5.The Acting Magistrate erred in assessing the monies sought by the Applicant for legal fees in the manner that she did in that:
(a)she failed to address the disparity between the income of the Respondent and the Applicant (including any presumed income given her finding that the Applicant had a capacity for employment);
(b)she failed to adequately address the asset disparity between the Applicant and the Respondent, notably that the vast majority of the assets of the parties was held by the Respondent;
(c)she failed to address whether or not the Respondent was able to meet his legal fees and as a consequence had an advantage over the Applicant;
(d)she considered the amount sought (including quantum) in the context of the agreement to attend mediation-style conferencing and that the Respondent had agreed to pay those costs in the first instance;
(e)she considered that the proceedings were not necessarily complex (despite the Respondent's assertion that real estate should be held on trust for the children of the parties, apparently asserting constructive trusts, which was not agreed by the Applicant);
(f)she considered that the Applicant was borrowing money from her family
and in doing so fell into error in dismissing the Applicant's application which was inappropriate and a denial of justice.
There was no ground of appeal directed to the Magistrate’s understanding that the application for payment of a lump sum was made pursuant to s 79, notwithstanding it was framed as an application for lump sum maintenance and/or an application for security for costs. In the absence of complaint, I will proceed on the basis that her Honour did not err in assuming she had been invited to apply s 79.
There was also no ground of appeal directed to her Honour’s statement that the threshold in exercising the power to make a partial property order “is a high one and should only be exercised in exceptional circumstances”. This understanding of the law harks back to what was said in Harris and Harris (1993) FLC 92-378 at 79,929, namely that the power to make such an order “should be confined to cases where the circumstances presented at that time are compelling”.
In her submissions to the Magistrate, the wife’s solicitor made repeated reference to Harris and Harris as authority for the proposition that the exercise of the power to make an order for partial property settlement “should be confined to cases where the circumstances presented at that time are compelling, or urgent situations where it is necessary to avoid an injustice”. Regrettably, her Honour’s attention was not drawn to the fact that Harris and Harris was effectively overruled by the Full Court in Strahan & Strahan (2011) FLC 93-466 at 85,645, where the plurality (Boland and O’Ryan JJ) said:
132.… in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
Her Honour’s statement that the power to make an interim property order can be exercised only in “exceptional circumstances” is therefore inconsistent with authority. However, given the absence of complaint, I propose to overlook this departure from what should now be taken as settled law.
In considering the complaints that were advanced, it is important to keep in mind that the wife requires leave before being able to appeal the dismissal of her application for $50,000 to cover her legal fees. In light of the husband’s proposal to make provision for those fees (recorded at [41] of the reasons), I am not prepared to grant leave, since the proposal provides an entirely plausible and appropriate method by which the wife could meet her costs.
While the wife may not want to have the former matrimonial home used as security for borrowings to cover legal expenses, the property is unencumbered and is the logical security for any borrowing. It should also be recognised that, prima facie, each party should bear their own costs until such time as the court determines that there is some reason for an order for costs to be made.
Although the husband does have a much greater income than the wife, and has demonstrated a capacity to meet his own fees, this does not necessarily mean that it would be appropriate for him to be obliged to find money to meet the wife’s legal costs. This is especially so in circumstances where:
·the wife provided no evidence to show why $50,000 was an appropriate amount;
·there was no evidence that the husband could provide such an amount without himself borrowing; and
·the husband gave evidence that he had made enquiry and was unable to borrow funds by utilising his own assets.
If the wife takes up the husband’s proposal described at [41] of the reasons and the money to cover her fees is not forthcoming, either because of a lack of cooperation by the husband or refusal by the proposed lender, it would be open to the wife to renew her application for the husband to help meet her legal costs. This was conceded by counsel for the husband in his submissions before me (Appeal transcript, 27 November 2014, p 62).
In deciding that leave to appeal this part of the Magistrate’s decision should not be granted, I have not overlooked what I accept is merit in the wife’s complaint about her Honour having apparently placed weight on the fact that the parties were planning to attend mediation, and that the husband had volunteered to pay the costs of the mediator.
Although it could be hoped the parties might resolve their dispute at mediation, the wife would nevertheless incur costs associated with the process, and the husband was not offering to meet those. Furthermore, there could be no guarantee that the matter would be resolved at mediation, and her Honour had made very clear that she would not entertain a further application for payment of a lump sum for costs (Transcript, 7 April 2014, p 66). Thus, in considering the wife’s claim, the Magistrate ought to have turned her mind to the difficult position in which the wife might find herself if the mediation did not result in a settlement of the dispute.
It should also be recorded that her Honour did not make clear the significance of her finding at [45] that the proceedings were not “necessarily complex”. Even assuming the accuracy of that proposition, which I do for present purposes, it could only have relevance to the quantum of costs that might be appropriate, since it is difficult to see how the wife would be able to conduct the proceedings without legal representation in her current state of health, even if they were not “complex”.
Notwithstanding these misgivings about her Honour’s reasoning, I do not consider leave to appeal should be granted for the reasons I have given earlier.

Ground 6 – The “dollar for dollar” order

The wife’s complaint about the dismissal of her “dollar for dollar” application was expressed in these terms:
6.The Acting Magistrate erred in the alternative when considering the “dollar for dollar” order sought by the Applicant in that:
(a)she assessed financial circumstances of the parties as not having a “gross disparity” and note [sic] that the Respondent paid for the investment properties over and above their income (without taking into account that the Respondent was only seeking a low rent from the parties’ children in the case of each property) and without noting the actual cost that the Respondent is said to meet, and further therefore putting the declared interest of the children as a higher importance than proper financial support for the Applicant;
(b)she considered that the Applicant could continue to borrow monies from her family to cover legal expenses (without evidence as to whether that arrangement could continue)
(c)she did not consider whether it was appropriate that there be a “level playing field” in terms of the ability to meet appropriate legal costs;
(d)she failed to recognise the characterisation of those funds in the final orders of the matter (but rather presumes that the Respondent would ultimately be paying the Applicant’s costs);
(e)she failed to note the benefit to the Respondent of sharing his expenses with his new wife and being able to continue to acquire property which are benefits not open to the Applicant
and as a consequence fell into error in assessing and dismissing the Applicant’s alternate application.
I consider it would be inappropriate to grant leave to appeal against this part of the decision for the same reason I said I would not grant leave to appeal against the order relating to the lump sum. If the wife is successful in making an application for a loan to cover her legal fees using the matrimonial home as security, she would not need the “dollar for dollar” order.
In declining to grant leave, I have once again not overlooked the merit in some of the wife’s complaints. In particular, with respect to her Honour, I accept that the analysis of the parties’ financial positions was inadequate. Their respective positions were compared at [50] of the reasons in only the broadest of terms, prior to her Honour announcing that she was not convinced that there was “a gross disparity”, notwithstanding the husband had a base pay in excess of $200,000 per annum, while the wife had just $257 per week.
The only factor her Honour identified to support this conclusion was the fact that the husband was meeting the shortfall on the investment properties. Although counsel for the husband sought to defend the finding on the basis of other expenses of the husband, her Honour did not refer to these in arriving at her conclusion. The only reason given for the finding was the fact the husband was meeting the shortfall on the two investment properties. However, the husband’s Financial Statement disclosed that the rental income for the two properties exceeded the mortgage payments by $46 per week. It is true that the husband claimed to be also meeting the rates, taxes and maintenance of the two properties, but her Honour made no finding concerning the dispute as to whether these were as high as the sum of $236 per week claimed by the husband. However, in my view, even if the expenses were as high as the husband claimed, his obligation to meet them did not make the disparity between the positions of the parties anything other than “gross”.
Although not mentioned by her Honour in this context, I accept the husband was required to meet the cost of his accommodation while the wife had the benefit of residing in the matrimonial home. On the other hand, her Honour made no mention of the fact that the husband’s new wife was also responsible for their accommodation costs and had an income of about $86,000 per annum.
I have also not overlooked what I accept is merit in the complaint that there was no evidence to support the finding that the wife could borrow more funds from her family to cover her legal expenses. On the contrary, she had given evidence that her family “cannot afford to continue to advance sums to me by way of living expenses”. The inference would have to be that her family would also not be in a position to contribute toward her legal costs.
I do not consider there is any merit in the wife’s complaint that her Honour erred in her treatment of the fact that the two children were not paying commercial rent. The wife cannot complain about this issue now when it formed no part of her case at the hearing below. Indeed, her own evidence was that the children were paying commercial rent.
For these reasons, I do not propose to grant leave to appeal against the dismissal of the application for a “dollar for dollar” order. Like the application for a lump sum, this application can be renewed if the wife is unable to borrow funds to meet her legal costs using the matrimonial home as security.

Application to introduce further evidence

On the day before the hearing of the appeal, the wife sought to file an application to rely upon further evidence, notwithstanding such an application should have been made at least 14 days prior to the hearing.
The additional evidence comprised two more reports from Dr T, dated 4 May 2014 and 9 November 2014. These stated that the wife is still suffering from “severe anxiety … and severe depression”. Both reports state that the wife is struggling to function everyday [sic]” and is unfit for work. The later report also records that the wife has “suicidal thoughts”.
Given that I have already concluded that the Magistrate ought not to have found the wife was capable of working full-time, I propose to receive the evidence as further confirmation that the decision was erroneous. The explanation for the delay in providing the evidence was not compelling, but no submissions were made to show how the husband would have been able to cast any doubt on the evidence if he had received the requisite 14 days’ notice.

The outcome and costs

For the reasons given, there is merit in the wife’s complaints about the dismissal of her application for periodic maintenance. That dismissal has resulted in a substantial injustice, as the wife has been left dependent upon social security and/or the charity of her family. I therefore propose to grant leave to appeal against that part of the decision and to allow the appeal.
Although there may have been errors of principle relating to the dismissal of the two applications concerning legal costs, I am not persuaded there is substantial injustice to the wife, given the option for her to borrow money on the security of the home. I therefore propose to dismiss the application for leave to appeal dealing with those parts of the wife’s application, noting that it will be open to her to bring such an application again in the circumstances discussed above.
The question now arises whether I should re-determine the periodic spousal maintenance claim or whether the application should be remitted. Both parties want to adduce further evidence and I consider that the preferable course is to remit the matter to a Magistrate other than Acting Magistrate De Maio.
Counsel for the wife sought an order for costs in the event the appeal succeeded in whole or in part, but if no order for costs was made, she sought costs certificates under the Federal Proceedings (Costs) Act 1981 (Cth). Counsel for the husband opposed any order for costs and also sought certificates.
I do not consider there is any basis for ordering the husband to pay the wife’s costs, especially as some of the errors I have identified can be seen as the product of the unsatisfactory presentation of the wife’s case. However, there were errors of law made by the Magistrate, and I am satisfied costs certificates should be granted to both parties for the appeal and for the rehearing.

I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thackray delivered on 24 December 2014.

Associate:

Date: 24 December 2014