SLADE & SLADE

[2015] FamCA 86

FAMILY COURT OF AUSTRALIA

SLADE & SLADE [2015] FamCA 86

FAMILY LAW – INTERIM – SPOUSAL MAINTENANCE – Order made

Mitchell & Mitchell (1995) FLC 92-601
Brown & Brown (2007) FLC 93-316

Bevan & Bevan (1995) FLC 92-600
Freestone & Freestone [2013] FamCAFC

APPLICANT: Ms Slade

RESPONDENT: Mr Slade

FILE NUMBER: BRC 9976 of 2014

DATE DELIVERED: 19 February 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 2 February 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kirk QC

SOLICITOR FOR THE APPLICANT: Barry.Nilsson Lawyers

COUNSEL FOR THE RESPONDENT: Mr Richardson SC

SOLICITOR FOR THE RESPONDENT: Harrington Family Lawyers

Orders

IT IS ORDERED UNTIL FURTHER ORDER

1. The Husband pay to the Wife, by way of spousal maintenance, the sum of $646.00 per week with the first payment to be made on Friday, 20 February 2015 and, thereafter, on each Friday by deposit into a bank account nominated by the Wife.

2. The amount payable pursuant to Clause (1) shall be adjusted on 1 July each year in accordance with Consumer Price Index (the adjusted amount) and the Husband shall pay the adjusted amount from 1 July in each year.

AND IT IS FURTHER ORDERED

1. In the event that a party seeks an order that the other party pay the costs of and incidental to the Application for interim orders heard on 2 February 2015:

   (a)the party seeking an order for costs shall file and serve brief written submissions in support of such application for costs within fourteen (14) days of today;  and

   (b)the party from whom costs are sought shall file and serve any brief written submissions in answer to the submissions filed and served by the party seeking costs within a further fourteen (14) days thereafter;  and

   (c)the party seeking costs shall file and serve any brief further written submissions,  strictly in reply to the submissions served by the party from whom costs are sought, within seven (7) days of its service,

   and any such application for costs shall be determined in Chambers.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 9976 of 2014

Ms Slade

Applicant

And

Mr Slade

Respondent

REASONS FOR JUDGMENT

1. The parties married in 1976 and separated finally in November 2012. They have four adult children, the youngest of whom[1] lives with the wife while she undertakes tertiary studies. It is sufficient for the purpose of disposing of the current Application to record that the value of the property of the parties is somewhere between $8,000,000.00 and $9,000,000.00.

   [1]          25 years old.

2. The husband is a medical professional.  His personal taxable income for the 2013 tax year was $738,737.99. The wife is also a health professional. She earns $150,000.00 per year gross from her current employment.

3. The wife seeks a payment of $960.00 per week from the husband by way of spousal maintenance and that such amount is adjusted on 1 July each year in accordance with the Consumer Price Index. Given that the parties sensibly resolved the issue of the ongoing payment of insurance policy premiums, this remains the only aspect of the wife’s Interim Application which requires determination.

4. The husband opposes the making of any order for spousal maintenance.

Principles

1. The husband is liable to maintain the wife to the extent he is reasonably able to do so if and only if she is unable to support herself adequately by reason of age, or physical or mental incapacity for appropriate gainful employment or for any other adequate reason.[2] If satisfied of such inability and that the husband has capacity, reasonably, to maintain her, the Court may make such order as it considers proper for the provision of maintenance to the wife.[3] In exercising jurisdiction under s 74 of the Family Law Act 1975 (Cth), the Court shall take into account only the matters referred to in s 75(2) of the Act.[4]

   [2]          Family Law Act 1975 (Cth) s 72(1)

   [3] s 74(1)

   [4]          s 75(1).

2. The husband contends the Court will not be persuaded the wife has discharged her onus of establishing that she is unable to support herself adequately.

Is the wife unable to support herself adequately?

1. The wife receives $2,656.00 per week (net) from her employment. She quantifies her reasonable expenses at $3,616.00 per week, leaving a deficit of $960.00 per week.

2. On 20 December 2013, the wife received a bonus from her employment, in respect of her service from 2008 until 2013, of approximately $84,712.00 (net). Her evidence that she considers it unlikely she will receive a bonus this financial year or in the foreseeable future[5] was not the subject of challenge. 

   [5] Affidavit of Ms Slade filed 30 January 2015 at [12].

3. The wife owns real property, valued at $1,400,000.00, in B Town. Whilst encumbered only to an amount of $86,500.00[6], the wife’s ability to further encumber it or dispose of it was, until the morning of the hearing[7], prevented by the existence of a caveat lodged by the husband. The wife has not been responsible for any repayments associated with the borrowings secured by the property.

   [6]Associated with a guarantee provided by the wife to assist one of the parties’ children to purchase his first home.

   [7]           See Exhibit 4 for the terms of the Undertaking offered by the Husband.

4. The wife also owns a carpark, valued at approximately $60,000.00 and used by the husband, and 129,178.00 shares, valued at $622,646.00, in the privately owned company which operates the business in which she is employed. No challenge was made to her assertion that the nature of the company makes the sale of her shares problematic. No submission was made to the effect that either the carpark or the shares should be sold.

5. Instead, Senior Counsel for the husband focused upon the $56,831.00 held by the wife in various bank accounts. He submitted the existence of these funds, representing about 0.7 per cent of the lower value attributed to the property of the parties, is fatal to the wife’s Application because it represents a source from which she can meet any deficit between her weekly income and her weekly expenditure and, thus, scotches any suggestion she is unable to support herself adequately.

6. However, authority clearly establishes that a party is not required to exhaust his or her assets and/or capital in order to satisfy the requirement to establish an inability to self-support adequately.

7. For example, in Mitchell & Mitchell[8] the Full Court said, at page 80-995:

   Thus, the question whether the applicant can support herself "adequately" is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in s. 75(2) and more specifically the paragraphs of that sub-section identified above.

   Nor is that question to be determined upon a "subsistence" level, as earlier cases under State maintenance legislation suggested. In Nutting and Nutting (1978) FLC 90-410 at 77,094 Lindenmayer J said:-

   ``        By sec. 72 of the Act, the husband is liable to maintain the wife only to the extent that she is incapable of supporting herself adequately, and again "adequately" imports a standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.''

   It is also necessary in determining this issue to have regard to the standard of living of the parties and the financial circumstances of the other person: s. 75(2)(b) and (g). The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself "adequately". Where the line is to be drawn will depend upon the circumstances of individual cases.

   [8] (1995) FLC 92-601; see also: Brown & Brown (2007) FLC 93-316 at par 161.

8. In the circumstances of this particular case, I am not persuaded by the existence of the funds, held by the wife in various bank accounts, that she has failed to discharge the onus of establishing she is unable to support herself adequately.

9. I am also not persuaded that the fact the wife was able to accumulate savings for periods after separation means that she has failed to demonstrate she is ‘unable to support herself adequately’. It appears uncontroversial that, for at least some of the period during which the wife was able to accumulate savings, various expenses – such as her rent in an amount of $700.00 per week – were paid on her behalf by the husband. Whilst immediately acknowledging the difficulty in arriving at any firm finding of fact about disputed matters in an interim proceeding such as this, it is not inconceivable that the requirement to meet this rental expense since about June 2014 has, of itself, resulted in a diminution in the wife’s cash reserves.

10. I am not persuaded that the wife’s decision to repay $63,080.00[9] borrowed from an unnamed friend to assist with the payment of her legal expenses amounts to the creation of circumstances now relied upon by her as the basis for her claim for spousal maintenance.  It seems to me to be perfectly understandable that such person may wish to eliminate the prospect of any involvement in the ongoing litigation between the parties.

    [9]          Affidavit of Ms Slade filed 18 January 2014 at [77(a)].

11. Whether the wife has acted in a disingenuous manner as suggested by Mr Richardson SC will, no doubt, be the subject of further investigation if the parties are unable to arrive at a negotiated resolution to their dispute. The quantum of the property of the parties the subject of this dispute is clearly more than sufficient to enable any adjustment thought necessary to take into account any established manipulation or disingenuousness on her part.

The quantum of the wife’s reasonable needs

1. In determining what is appropriate to the circumstances of this particular case, I acknowledge that there is no general rule that the wife’s pre-separation standard of living should be maintained simply if the husband can afford to do so.[10]  Clearly, a proper assessment must be made to determine whether, in the circumstances of the case, the expenses claimed are reasonably necessary for the wife’s support.

   [10]         Bevan & Bevan (1995) FLC 92-600. .

2. The husband takes issue[11] with the wife’s asserted expenses for loan repayments which relate to the wife’s shares, her payment of rent, the cost of barge fees to travel to the B Town property, the cost of car parking, the manner in which the wife has accounted for educational expenses, holiday costs, dental expenses and counselling expenses. He asserts that the wife has overestimated her weekly expenses by an amount of $1,296.00 per week. If I accept this submission, it follows that I would not be persuaded the wife is unable to support herself adequately.

   [11]         Affidavit of Mr Slade filed 28 January 2015 [45]-[70].

3. The explanations proffered by the wife in answer to the challenge maintained about her rent, the B Town barge fees, car parking, educational expenses and dental work do not seem to me to be inherently implausible or unbelievable. It is not difficult to accept that she may pay for some of these expenses by cash rather than by using a credit card or that she may have paid her rent in lump sums rather than on a weekly basis.

4. Given the serious assault to which the wife was subjected in early 2014, it is not at all difficult to accept her explanation for the need for ongoing and additional dental work. However, the wife took no real issue with the husband’s contention that she had most recently entered into an arrangement to have work done at a cost of $7,500.00 – which would amount to a weekly expense of about $144.00 rather than the $269.00 per week (or nearly $14,000.00 per annum) she asserted.

5. In the absence of any further particularisation by the wife as to the manner by which she arrived at the calculation of $269.00 per week as a measure of her reasonable need for dental and prosthetic work, I am persuaded to accept the documents proffered by the husband in this respect. Consequently, it seems to me to be reasonable to allow a weekly expense of $144.00 for dental and prosthetic work in substitution for the $269.00 claimed by the wife.

6. I note, also, that the wife accepts that the barge fees should be $101.00 per week rather than $130.00 per week she asserted.

7. In answering the husband’s contention that she does not need funds for counselling because she has only attended upon her counsellor on two occasions in the current financial year, the wife accepts she has only attended infrequently. She advances this occurred, in part at least, because of the ongoing cost of attendance. She says that, due to her increasing stress levels associated with the proceedings, she has recommenced regular attendance and intends to continue to do so in the future. Her evidence is to the effect that it is her intention to continue in counselling at a frequency of approximately two visits per month at a cost of $150.00 per visit. I accept that the expense of regular counselling is, in the circumstances of this case, reasonable and the weekly cost of $70.00 shall be substituted for the $230.00 per week claimed by the wife for counselling and physiotherapy expenses (the latter being an expense of an adult child rather than the wife).

8. I do not accept the husband’s contention that the wife’s reasonable expenses should be arrived at by deducting the entirety of the amount attributed to meeting entertainment and hobby and holiday expenses, especially given that he asserts his own reasonable weekly expenditure for these categories is as follows:

   a)entertainment and hobbies: $250; and

   b)holidays: $500.

9. On the basis of the adjustments referred to above, I consider the wife’s reasonable weekly needs, representing a standard of living which is “reasonable in the circumstances”, are quantified in the amount of $3,560.00. As she has $2,914.00 to meet these reasonable weekly needs, the extent to which she is unable adequately to support herself is quantified in the amount of $646.00 per week.

The husband’s capacity to pay

1. The husband is liable to maintain the wife only insofar as he is reasonably able to do so.[12] The husband’s Financial Statement, filed 28 January 2015, asserts that, as his estimated personal weekly expenditure is $15,310.00 and his estimated total average weekly income is $15,049.00, he does not have the capacity to maintain the wife.

   [12]         Freestone & Freestone [2013] FamCAFC at [32] and [33].

2. I do not accept this assertion. The payment of $338.00 per week made to assist some of the parties’ adult children is not an expense necessary for the husband’s own support. Similarly, the asserted expenses for holidays and entertainment and hobbies and gifts are in amounts that are not reasonably necessary for his own support: a more reasonable allowance for these items is, I consider $250.00, $125.00 and $125.00 per week respectively. Additionally, I think there is significant force in Mr Kirk’s submissions that there is likely to be some double-counting of the husband’s weekly expenses given the $2,307.00 per week credit card expense.

3. My findings as to the reasonable quantum of just the expenses discussed above establishes that the husband clearly has the capacity to meet an order for spousal maintenance in the amount of $646.00 per week. Given this, it is unnecessary for me to make further findings about the reasonableness or otherwise of other components of the husband’s weekly expenses.

4. Whilst Mr Richardson SC submitted that the husband will soon crystallise his obligation to pay about $240,000.00 in taxation payments, the burden of meeting the same does not seem to have curbed the quantum of the husband’s weekly expenses on purely discretionary matters such as holidays, gifts and hobbies and entertainment. I accept that, as he has seemingly been able to do in the past, the husband will be able to enter into an arrangement with the Australian Taxation Office so that he can meet his obligations as a taxpayer.

What order is proper for the provision of maintenance to the wife?

1. As used in s 74 of the Act, the word ‘proper’ should be read as meaning ‘appropriate to the circumstances.’[13]  Given my findings that:

   a)the wife is unable to support herself adequately; and

   b)the husband has capacity to more than meet an order for spousal maintenance in the amount I have determined is necessary to ensure that the wife’s reasonable weekly needs are met,

   I consider it proper, in all the circumstances of this case, that the husband pay the wife an amount of $646.00 per week by way of spousal maintenance.

   [13]         See, for example, Brown & Brown (supra) at par 87.

Costs

1. As the wife seeks an order that the husband pay her costs of and incidental to the Application, the parties will have the opportunity to provide written submissions directed to this issue. If received, any application for costs will be determined in Chambers.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 19 February 2015.

Associate:                 

Date:    19 February 2015