SHEA & HOOPER - [2011] FMCAfam 1305

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SHEA & HOOPER

[2011] FMCAfam 1305

FAMILY LAW – Spousal maintenance – application for spousal maintenance.

PRACTICE & PROCEDURE – Leave to institute proceedings – application for leave to commence proceedings out of time – hardship – whether hardship established.

Family Law Act 1975 (Cth), ss.44, 74
Federal Magistrates Act 1999 (Cth), s.39

In the Marriage of Althaus (1979) 8 Fam LR 169; (1982) FLC 91-233
Bevan and Bevan (1995) FLC 92-600
Frost and Nicholson (1981) FLC 91-051
Hall and Hall (1979) FLC 90-679
Howard and Howard (1982) FLC 91-234
M & M [2002] FMCAfam 140
Whitford and Whitford (1979) FLC 90-612

Applicant:

MR SHEA

Respondent:

MS HOOPER

File Number:

SYC 7461 of 2008

Judgment of:

Scarlett FM

Hearing date:

22 November 2011

Date of Last Submission:

22 November 2011

Delivered at:

Sydney

Delivered on:

5 December 2011

REPRESENTATION

Counsel for the Applicant:

Mr Wong

Solicitors for the Applicant:

Adams & Partners Lawyers

Counsel for the Respondent:

Mr Lethbridge SC

Solicitors for the Respondent:

Shepherds the Family Law Specialists

ORDERS

The Application in a Case filed on 24 March 2011 is dismissed.
The hearing dates of 8, 9 and 10 February 2012 for the Application filed on 7 June 2010 are vacated.
The Application filed on 7 June 2010 is transferred to the Family Court of Australia at Sydney under the provisions of s.39 of the Federal Magistrates Act 1999. It is requested that the matter be expedited and placed in the first available judicial docket.

IT IS NOTED that publication of this judgment under the pseudonym Shea & Hooper is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYC 7461 of 2008

MR SHEA

Applicant

And

MS HOOPER

Respondent

REASONS FOR JUDGMENT

Application

This is an application by the husband for leave under s.44(3) of the Family Law Act 1975 to institute proceedings for spousal maintenance in the sum of $1000.00 per week.
The wife opposes the application.

Orders Sought

In his Application in a Case filed on 24 March 2011 the husband seeks the following orders:
1. that pursuant to section 44(3) of the Family Law Act 1975 (“the Act”) leave is granted to the Applicant Husband to institute proceedings of the kind referred to in paragraph (c) of the definition of matrimonial causes in subsection 4(1) of the Act after the expiration of 12 months after the date on which the divorce order between the parties took effect.
2. That pursuant to section 74 of the Family Law Act 1975 (“the Act”), the Respondent Wife shall pay, or cause to be paid, including providing all necessary directions and authorities in her capacity as Director of the [Ms Hooper] Family Trust, to the Applicant Husband by way of spousal maintenance an amount of $1,000 per week.
3. That the Respondent Wife pay the costs of the Applicant husband of and incidental to this Interim Application.
By her Response to an Application in a Case filed on 30 June 2011 the wife sought these Orders:
1. That the Husband’s Application in a Case filed 24 March 2011 is dismissed.
2. That the Husband pay the Wife’s costs of and incidental to the proceedings herein.

Background

The parties separated on 6 December 2007 and were divorced on 4 March 2009. On 7 June 2010 the husband filed an Application for property orders. In that Application, he sought leave under s.44(3) of the Act to institute proceedings because the Application had been filed after the expiration of 12 months after the date on which the divorce order between the parties took effect. On 13 September 2010 the parties entered into Consent Orders granting leave to the husband to institute those proceedings.
The Applicant left the former matrimonial home at the time of separation in December 2007. He resided with friends for some time and then with his new partner in her mother’s home in [omitted]. He deposed in his affidavit affirmed on 20 June 2011 that he could no longer continue living with her and required accommodation of his own.[1] He later moved back into the former matrimonial home, although he and the wife have not reconciled.[2]
[1] Affidavit of Mr Shea 20.6.2011 at paragraph [8]
[2] Affidavit of Mr Shea 14.11.2011 at paragraphs [35]-[36]

Evidence

The Applicant relied on the following:
a)his affidavit affirmed 7 June 2010;
b)his affidavit affirmed 14 November 2011;
c)his financial statement dated 14 November 2011.
The Respondent relied on:
a)her affidavit sworn on 29 June 2011;
b)her financial statement dated 29 June 2011; and
c)her affidavit sworn 16 July 2011.
It is the Applicant’s case that he had been receiving income from the [Ms Hooper] Trust from 1997 but since December 2010 he has not had any access to funds from the trust other than an amount of $4,700 in a superannuation account which he withdrew in early January 2011. He claims that the Respondent, along with her sister and brother-in-law, the other directors of the trust, had taken steps to cease any payments to him from the trust. In a letter to the Respondent’s solicitors dated 17 February 2011, the Applicant’s solicitors stated;
Your client was and remains aware that these monies were the sole source of income for our client. Your clients’ actions make it impossible for our client to financially support himself. This is particularly so given that our client has vacated the former matrimonial home and is required to rent at market rate.[3]
[3] Affidavit of Mr Shea 14.11.2011 Annexure “H”
The Applicant has deposed that up till December 2010 he received approximately $1,154.00 per week from the Trust and a rental allowance of approximately $1,000.00 per month. He is currently employed on a contract basis as a [omitted] for 20 hours per week at the rate of $45.00 per hour.[4]
[4] Ibid at [38]-[39]
He also deposes that as a result of a back injury sustained in November 2010 his capacity to obtain full time employment has been adversely affected.[5]
[5] Affidavit of Mr Shea 14.11.2011 at [43]-[46]
The Applicant was not required for cross-examination.

Submissions

It was submitted on behalf of the Applicant that he had not been able to draw any funds from the trust, had not had access to the accounts and has not been able to rely on the trust for payment of his credit card bills. He had historically received distributions from the trust. He originally moved out of the former matrimonial home but has since moved back. He is working as a [omitted] on contract. He is 52 years of age and had been relying on the income from the trust for the past 20 years.
Counsel for the Applicant submitted that he had been effectively “squeezed out” of an income source. The Respondent has control of the trust and the Applicant has nothing. The Applicant is seeking income, whether it is from spousal maintenance or from a property settlement is a matter for the Respondent. He had sought to live independently but is no longer able to do so. The Applicant relies on the decision of the Full Court of the Family Court in Whitford and Whitford[6], where leave was granted to the wife to institute proceedings for maintenance and a property settlement after the husband had stopped supporting the family, as he had done since the separation. The hardship in the Applicant’s case, Mr Wong submitted, is that he cannot live independently.
[6] (1979) FLC 90-612
It was further submitted that it was to the Applicant’s credit that he had been able to secure some contract work as a [omitted]. He had not just “sat on his hands”. Mr Wong drew the Court’s attention to paragraph [112] of the Applicant’s affidavit of 7 June 2010, where he deposed that negotiations between the parties had commenced in early 2009:
My former solicitor …acted on my behalf and engaged in a series of negotiations with [Ms Hooper’s] current solicitors between about February 2009 until about September 2009.[7]
[7] Affidavit of Mr Shea 7.6.2010 at [112]
The Applicant deposed that he retained other solicitors in October 2009 to carry on negotiations about “a resolution of the financial issues between [Ms Hooper] and I (sic)”.[8] Those negotiations continued until March 2010.
[8] Ibid
Senior counsel for the Respondent, Mr Lethbridge, submitted that there were two applications before the Court:
a)An application for leave to institute proceedings for spousal maintenance; and
b)The application for spousal maintenance.
There was no application before the Court to reinstitute the arrangements in the trust.
Mr Lethbridge referred to the decision of the Full Court in In the Marriage of Althaus[9] but submitted that it should be distinguished. It is unclear as to what part of Althaus should be distinguished, as the page reference given (77,277) was in fact a reference to another case, Howard and Howard[10] where Gun J referred to the decision of Evatt CJ in Althaus:
“Where hardship to the applicant is established, and there is no question of prejudice to the respondent the court should not seek to raise artificial barriers if the applicant has behaved in a reasonably diligent manner in prosecuting her claim.” (The italics are mine).[11]
[9] (1979) 8 Fam LR 169; (1982) FLC 91-233
[10] (1982) FLC 91-234
[11] (1982) FLC 91-234 at 77,277
The original application only sought property settlement, not spousal maintenance. In this case, there is no hardship on the part of the Applicant.
It was submitted that there was no evidence to show that the Applicant had made positive applications for employment. The Applicant does not say what steps he has taken to obtain employment elsewhere.
It was further submitted that the Applicant’s Financial Statements filed in these proceedings do not support his claim that he is unable to support himself adequately.
In the Applicant’s Financial Statement sworn on 14 November 2011, Part B shows a total average weekly income estimated at $1,309.00 and a total personal expenditure estimated at $976.00. This shows that the Applicant’s income exceeds his expenditure by $333.00.
The figure for the Applicant’s weekly expenses at Part N of the Financial Statement shows a total of “0”, however it is given as “$605” at paragraph 32 of the statement. The total figure for personal expenditure at part G in paragraphs 19 to 31 shows a total of $371.00, which, added to $605.00 would amount to $976.00, but, when added to “0” still only amounts to $371.00.
Mr Lethbridge also referred to the Applicant’s earlier Financial Statement, sworn 7 September 2011. That statement shows at Part B the Applicant’s total average weekly income as $117.00 and his total personal expenditure as $964.00.
The figure for the Applicant’s personal expenditure is derived from Part G of the Financial Statement, where the totals of paragraphs 19 to 31 amount to $109.00. The total of other expenditure at paragraph 32, being the total of the list at Part N, is shown as $605.00. The total of those two figures is given in paragraph 33 as $964.00.
When the list at Part N is considered, the total there is given as $427.00, not $605.00.
Mr Lethbridge went to submit that the Applicant’s Financial Statement shows that his total expenditure is not $976.00 at all, but $798.00. Thus, he has an excess of income over expenditure amounting to $511.00.
It was further submitted that, relying on the valuation that forms Annexure “D” to the Applicant’s affidavit of 7 June 2010, the cost of top of the range rental accommodation [omitted] area would be $465.00.
The submission is that the Applicant has not established that he is unable to support himself adequately. He has current employment. From the date of separation in 2007 until the middle of 2011 he resided outside the home, when the funds were cut off from the trust. He lived with his partner in her mother’s home. Therefore, the Applicant has the funds to accommodate himself and does not satisfy s.44(3) in respect of hardship. Further, even if leave were granted the Applicant would not be able to establish that he has a case for spousal maintenance, as he could not establish that he is unable to support himself.
Whilst the Applicant remains living in the former matrimonial home his income exceeds his expenditure by some $500.00 odd per week.
Finally, any order for spousal maintenance would have to be conditional on the Applicant leaving the former matrimonial home.

The Relevant Law

Subsection 44(3) of the Act requires a party seeking to institute proceedings for maintenance for a party to the marriage or an adjustment of property interests after the expiration of 12 months after the date on which the parties’ divorce order took effect to obtain either the leave of the Court or the consent of the other party.
Subsection 44(4) provides that the court shall not grant leave unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b) in the case of proceedings in relation to the maintenance of a party to the marriage – that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance of benefit.
I have been referred to a decision of mine from 2002, M & M[12], in which I considered the authorities as they were at that time. I have not been referred to any more recent authority. In my view, the following paragraphs are still relevant:
[12] [2002] FMCAfam 140
20.    The Full Court has made it clear that it is not necessary for a detailed hearing on the merits of the claim to be undertaken before the question of leave is to be decided. The court does not have to decide whether the substantive claim will succeed (In the Marriage of Althaus (1979) 8 Fam LR 169; (1982) FLC 91-233). Where the applicant establishes a claim proper to be heard, the court should generally be reluctant to refuse to allow the claim to proceed where the delay has been explained and there is no real prejudice to the respondent (Hall and Hall (1979) FLC 90-679) (see also Frost and Nicholson (1981) FLC 91-051).
21.    It is not necessary to show that the applicant is in penurious circumstances before hardship is established. In Bevan (supra)[13], the Full Court said at 81,981:
[13] Bevan and Bevan (1995) FLC 92-600
“However, we do not think that the law requires that a wife should deplete an already comparatively meagre capital sum, to enable a much higher earning husband to avoid his obligation to maintain a former spouse who is in financial circumstances such as those in which she finds herself”.
22. The Full Court considered the meaning of ‘hardship’ in s. 44(4) in Whitford and Whitford (1979) FLC 90-612:
“We consider that in subsec. 44(4) the word should have its usual, though not necessarily its most stringent, connotation. It is impossible to lay down in advance what particular facts may or may not amount to hardship in the relevant sense. As a general proposition it might be said that, the inability of an applicant to pursue a claim which in the circumstances of the applicant or a child of the marriage is trifling, will generally not cause hardship”.
23.    The Full Court went on to find that hardship would be caused to the wife and leave should have been granted as there was ample evidence that the wife was unable to support herself adequately, and there was evidence that the husband had available to him resources which would enable him to contribute to her maintenance.
24.   The question of hardship to the respondent is also a matter for the court to consider in exercising its discretion to grant leave. In Frost and Nicholson (supra)[14], Nygh J said (at 76,424):
“This leads me to the final question as to the exercise of my discretion, that is to say, whether in the circumstances the husband would suffer prejudice if leave to institute proceedings were granted to the wife. Prejudice here means that a party is faced with an action which he or she had no reason to expect or had been led to believe would not be brought. To give an extreme example, if after ten years a wife sought leave under sec 44(3) without ever having given any indication beforehand that she wished to seek a property settlement, leave might well be refused.”

Conclusions

In this case, the Applicant sought leave to commence property proceedings by means of an Application filed on 7 June 2010. The Respondent consented to leave being granted by means of Consent orders made on 13 September 2010. He did not seek leave to commence proceedings for spousal maintenance until his Application in a Case filed on 24 March 2011.
In my view, it does not assist the Applicant to state, as he does in his affidavit of 7 June 2010, that negotiations to resolve property issues between the parties commenced in February 2009 and continued until March 2010. That is an explanation as to why he did not commence property proceedings within time, but that issue has been resolved by the consent orders of 13 September last year.
The reasons why the Applicant has decided to seek an order for spousal maintenance appear to be:
a)the fact that he is no longer able to reside with his partner at her mother’s home, for which he has given no explanation; and
b)the fact that his access to funds from the trust has been cut off.
In order for the court to grant leave, the Applicant must satisfy one of the requirements under s.44(4) of the Act, namely:
(a) That hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b) In the case of proceedings in relation to the maintenance of a party to the marriage – that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The Applicant has not shown, or sought to show, that he met the requirements of s.44(4)(b) as at 3 March 2010, the last day when he could have instituted proceedings for spousal maintenance without the leave of the Court.
What the Applicant claims is that hardship would be caused to him at this time if leave to institute those proceedings were not granted.
In my view the Applicant has failed to show that hardship.
True it is that he no longer receives income from the trust, but he has obtained other employment, even if not as lucrative as the income he formerly received from the trust. He has moved back into the former matrimonial home, for which he appears to be paying nothing by way of rent. He may well find it uncomfortable living in the same residence as his former wife, as no doubt does she, but there is no application before the Court for exclusive occupation of the premises. There is evidence that the wife sought assistance from the Police to remove the Applicant from the former matrimonial home when he first moved back in, but this was unsuccessful and there is no evidence of any current activity in this regard.
At this stage, the Applicant appears to be able to live rent-free in the former matrimonial home for the immediate future, at least until the property proceedings between the parties are finalised.
The Applicant’s two most recent Financial Statements, those sworn on 7 September and 14 November 2011, do not support his claim that he is unable to support himself adequately. They appear to be most inaccurate documents upon which no reliance can be placed. The September Financial Statement shows the Applicant’s total average weekly income as only $117, but by the November Financial Statement his weekly income appears to have jumped to an estimated $1,309.
The total personal expenditure in each Financial Statement appears to be quite unreliable. The September figure in Part B is $964, but this appears to be made up of $427.00 in Part N (not $605, as shown in paragraph 32) which has been added to:
a)Health Insurance  $44
b)Motor Vehicle Insurance       $13
c)Motor Cycle Insurance           $11
d)Motor Vehicle Registration        $18
e)Credit Card repayments         $23

This amounts to a total of $109 which, when added to the Part N figure of $427 (a figure concede by the Applicant’s counsel to be correct), arrives at a total of $536.
The November Financial Statement, which shows an estimated income weekly income of $1,309, gives an estimated personal expenditure of $976. However, this expenditure is made up as follows:
a)Total income tax  $E222
b)Health Insurance  $44
c)Motor Vehicle and Motor Bike Insurance    $24
d)Indemnity Insurance  $8
e)Registration  $18
f)Credit Card payments  $55
This amounts to a total of $371 which, when added to the Part N figure of $0, would remain a total of $371. However, this total is still referred to as “$605” in paragraph 32 of the Financial Statement. This figure seems to have been carried over from paragraph 32 of the September Financial Statement, and it was quite clearly incorrect then.
The Applicant’s two most recent Financial Statements do not show that the Applicant is unable to support himself adequately. In my view, they are clearly inaccurate and unreliable. It will not do for a party to file Financial Statements that clearly cannot be relied upon, especially where that party is seeking to establish a claim for spousal maintenance.
It is, of course, not necessary for a detailed hearing on the merits of the claim to be undertaken before the question of leave is to be decided. The Court does not have to decide whether the substantive claim will succeed. However, in this particular case, the Applicant has not provided evidence to show that he is unable to support himself adequately; on his own evidence, the Applicant’s claim would not succeed.
I am not satisfied that the Applicant has shown that hardship would be caused to him if leave to institute proceedings were not granted. Consequently, leave is refused.
The parties’ counsel conceded at the hearing that the property proceedings were such that they should be transferred to the Family Court. In my view, the issues to be decided and the evidence that will need to be led will be of such complexity that the proceedings would be unlikely to be completed within four hearing days. I propose to transfer the proceedings to the Family Court under the provisions of s.39 of the Federal Magistrates Act 1999.

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Scarlett FM

Date: 5 December 2011