Southers and Southers (No 3)

[2016] FamCA 356

FAMILY COURT OF AUSTRALIA

SOUTHERS & SOUTHERS (NO 3) [2016] FamCA 356

FAMILY LAW – PROPERTY – Interim – Spouse maintenance – Application by the husband to vary spouse maintenance orders – Where urgent spouse maintenance orders had previously been made– Where the wife has made efforts to obtain paid employment – Where the wife has demonstrated a need for financial assistance – Where the Court finds that husband has the capacity to pay – Order made for interim spouse maintenance pending further order – Order made that the wife provide to the husband evidence of her efforts to  obtain paid employment.

Family Law Act 1975 (Cth) ss 72, 74.

Stein & Stein (2000) FLC 93-004

APPLICANT: Mr Southers

RESPONDENT: Ms Southers

FILE NUMBER: SYC 689 of 2015

DATE DELIVERED: 3 May 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 3 May 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Christie

SOLICITOR FOR THE APPLICANT: Armstrong Legal

RESPONDENT IN PERSON: Ms Southers

Orders

1. Pending further order, by way of interim spousal maintenance, the husband pay to the nominated bank account of the wife the sum of $1,500 per calendar month such payment to be made on the nineteenth day of each calendar month.

1. Not later than the first day of each month the wife provide to the solicitors for the husband a list of job applications and job interviews made and undertaken by her for the preceding month together with a copy of any written job application and a copy of any response from a prospective employer.

1. The question of costs of and incidental to these proceedings is reserved.

1. The proceedings be listed for trial directions as soon as practicable after six weeks from today’s date.  [10.00 am on Monday 20 June 2016]

IT IS NOTED that publication of this judgment by this Court under the pseudonym Southers & Southers (No 3) 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 SYDNEY

FILE NUMBER: SYC689 of 2015

Mr Southers

Applicant

And

Ms Southers

Respondent

REASONS FOR JUDGMENT

1. These are proceedings in relation to interim maintenance.  The matter was heard this morning.  The wife was self-represented today and the husband represented by solicitor and counsel.  I indicated to the parties that I would give reasons for judgment and make orders this afternoon, but I excused them on delivery of judgment. 

2. The wife had some issues to do with collecting the children and at least the father’s counsel had another commitment later today.  There is no appearance now on behalf of either party.  I indicated that the orders would be sent to the parties and the reasons for judgment would be taken out.

3. The background involves a husband and wife who are 36 and 37 years of age respectively.  They were married in 2007 and separated on 1 January 2014.  I am not sure whether they are divorced.  In the chronology provided on behalf of the husband there is a reference to a divorce hearing on 15 September 2015 but no mention of whether the divorce was granted.

4. The parties have three children, B, C and D, who are eight, six and four years of age, respectively.  There are parenting proceedings between the parties.  I think the proceedings might have commenced in the Federal Circuit Court.  Interim orders have been made.  I think I was told some orders were made by consent in relation to the children during last year.  In fact, I think I heard an issue in the middle of last year involving allegations of sexual abuse made against the father.  There are also proceedings for financial relief.

5. The parties said to me today that there is effectively a shared care arrangement underway, pursuant to orders made in January by agreement.  I think I was told the father has the children for six days and four nights a fortnight and that otherwise the children live with the mother.

6. The matter came before the Court pursuant to the wife’s Application of 20 January 2016 seeking orders for urgent maintenance.  The Application sought orders for departure from child support and for spousal maintenance.  The matter came before Le Poer Trench J.  It was noted that the matter is in my docket but that I was not available at that time. 

7. Reasons for judgment were published on 15 February 2016 after a hearing on 8 and 10 February 2016. Le Poer Trench J made orders pursuant to s 77 of the Family Law Act 1975 (Cth) (“the Act”), that the husband pay to the wife’s bank account as nominated by her, the sum of $2,000 per calendar month, such payment to be made on the 19^th day of each calendar month.

8. Secondly, each party was granted liberty to apply to vary or set aside the s 77 order upon giving 14 days’ notice to the other party and to the Court.

9. The husband brought the matter back pursuant to the leave granted to the parties in relation to that urgent maintenance order.  Although he has brought the matter back, in truth the hearing is really a hearing of the wife’s application for interim spousal maintenance.  Although, for today’s purposes, the matter was run as if the husband was the applicant, in fact, in technical terms, this continues to be the wife’s application for spousal maintenance orders.

10. Without objection on behalf of the wife, Ms Christie for the husband identified her material and made her submissions first.  Some other documents were relied on by the husband, then submissions were made for the husband, then by the wife, and short submissions were made in reply.

11. The obligations in relation to spousal maintenance arise under s 72 and 74 of the Act. In summary, spousal maintenance in this context is a right that arises as a result of marriage, where one party to a marriage, whether the marriage is on foot or not, can establish that they cannot adequately support themselves from their own resources for any adequate reason, then the other party can be called on to do so if they are reasonably able.

12. The first inquiry relates to the wife’s need for maintenance.  The wife’s Financial Statement says that her average weekly income is $1,343 a week, and that is made up of a single parent pension of $374.70, a Family Tax Benefit of $151.46, and child support paid by the husband at $817.27.  This is one of those many cases where the amount that one party pays is different to what the other party receives.  The husband says - and his document is dated March 2016 rather than the wife’s document which was dated January 2016 - that he pays $621 a week for child support and $462 a week for maintenance. 

13. The wife’s says she receives $817.27 a week.  She has answered that in relation to an item that is called maintenance and child support.  It might be that that is her calculation of the maintenance and child support she receives.  In my view, that problem will not matter - but there it is.

14. The legislation provides that an income tested benefit is to be ignored in the calculation of income in relation to a claimant for maintenance.  Therefore, the wife’s income is $817 a week.

15. She says that she spends $2,554 a week, made up of rent at $585 a week, motor vehicle insurance of $28 a week, health insurance $93 a week, home and contents at $8 a week, motor vehicle registration $41.50 a week, visa card minimum payments $154 a week, and a total of all other expenditure, broadly speaking, living expenses, at $1,644 a week.  That is made up, she says, of $504 for her own expenses and $1,080 in relation to children’s expenses or expenses that she apportions to the children.  For her support, she claims $504 a week.

16. There is a decision of Stein & Stein (2000) FLC 93-004which requires that the Court not conflate issues of child support and spousal support. So, for the purposes of identifying the balance of the wife’s weekly budget, I will ignore the expenses the wife incurs for the support of the children. That means she earns $817 a week and she spends – I mean, there is artificiality about that, of course, because some or all of the $817 is addressed to child support, but there it is. She receives $817 a week and she spends about $1,500 a week. As I say, that is calculated by deducting from all of her expenses about $1,080 a week in respect of the children. She earns $817 and spends $1,500. She is in deficit about $700 a week.

17. A very important part of the case argued before me this morning was, in effect, as to whether the wife is able to demonstrate that she cannot adequately support herself.  The wife’s evidence is, albeit not all of it forthcoming in a timely way, that when the parties met, hers was the greater income than the husband.  The husband trained during the marriage and is now practising in a professional occupation.  The wife ultimately had a job in the pharmaceutical industry.  From time to time, she had significant levels of income.

18. Her income earning capacity was interrupted by the birth of the children and a stint the parties did in Country I associated with the husband’s employment.  The wife asserts, without complaint, that she was precluded from engaging in paid employment during that period.  She says that she lost touch, to some extent, with the industry she had worked in.  She says that coming up towards the end of the marriage she had a car accident.  That affected her capacity to work – whether it was associated with the rehabilitation or not, she trained for and obtained a qualification.  The wife says the separation was in January 2014.  She says that in February of that year she obtained employment from an agency, that her salary or package was of the order of $130,000 a year and she says that she was sacked after her three-month review in the position.

19. She says, then, that she obtained employment with an organisation called J Pty Ltd in about June 2014, at about $120,000 a year and that at a six-monthly review she resigned, although she says that that firm kept her on, on a part-time basis to the start of 2015.  There is some controversy about all of that.  Where the wife says she was sacked after three months from the first employment there is in evidence produced today a resignation form by her and in relation to her departure from J Pty Ltd, she both indicated that she resigned and that she was sacked in different parts of her sworn evidence.

20. On 14 January 2015 the husband agreed – and there is evidence in an email between the parties – that he would provide the wife with $5,000 a month by way of maintenance.  The document indicates that the husband did not intend that the payments would be indefinite.  He wrote:

Just to let you know, I’ve been paid and I’ve transferred 5000 into your account.  I understood that you thought this amount would cover your costs for you and the kids.  Given that you are not working and my dad is helping me at the moment, it is my intention in good faith to pay this amount to you monthly for the immediate future.  Given our situation, I have to say that is on a without prejudice basis and without incurring a legal obligation to make payments of this amount to you in the future.

For me now this amount is fine but dad is not going to help me out forever, although he has said he would for a year from two months ago, I think it was.  I want to help very much, particularly while you don’t have an income.  I don’t want you or the kids, of course, to struggle and will help.  Please do let me know if you have unexpected expenses which the $5000 will not cover.  I genuinely want to support you and in a way you are comfortable with. 

1. The wife says that in May 2015, the husband ceased the direct debit payments, which affected school fees, among other things.  She says that for the year January 2015 to Christmas Day 2015 the children were with her full-time and after that time, they spent two nights a week overnight with their father, by agreement.  In October 2015 the husband wrote to say that he was going to reduce the payments.  The wife was unemployed from January 2015 until late February and then had some work.  She took over, she says, a franchise as a and leased business premises in Suburb E.

2. The wife says the husband later stopped the payments.  She made applications through Centrelink from February 2015 but only achieving the single parent payments from October. 

3. It is the wife’s evidence that she bought a personal training franchise, paying something of the order of $16,000 plus some other requirements.  For reasons that I do not really understand, she bought the franchise and operates it through a company that her mother created.  The wife told me something about the fact that she had given a power of attorney to the husband and she was worried about something he might do under the power of attorney.

4. She could not explain to me why she did not simply cancel the power of attorney.  The gist of her evidence is that she bought the franchise on a time payment, $1,000 every four weeks – that that was done in about March 2015 and that she has missed a number of payments.  I think the evidence would be that she has paid about $10,000 of the debt and still owes several thousand dollars.  She was asked to produce the agreement under which she bought the franchise and initially refused on the basis of some sort of commercial-in-confidence claim.  She finally produced the agreement more than a year later and on the eve of this hearing.

5. The agreement indicates that, in addition to the purchase price, there was to be a payment of some 2.5 percent of turnover, in relation to the franchise.  In trying to make sense of the mother’s financial statement, where there is no disclosure of business income or outgoings is the mother’s contention that the payments that are required under the purchase agreement are greater than the income that she has received.  It has been necessary, in effect, to take her on faith about that.  She has belatedly produced some bank statements showing payments in and payments out.  As learned counsel for the husband indicated, there is no possible way of the husband meeting that information or satisfying himself that the assertions the wife made orally about those statements are borne out.

6. The wife said things about certain payments being payments back to the owner of the franchise – the vendor – and that other payments are payments to somebody for services.  The gist of it is:  the wife now says her attempt to earn an income through the business franchise has been unsuccessful to date and I think, for immediate future and she would say that she is not going to be able to make that into a profitable business.  There is still a debt associated with it and she has still to meet her obligations under the agreement.  The other side of the coin is the wife’s efforts to earn income somewhere else.  She provided disclosure of examples of job applications she made and, as is pointed out on behalf of the husband, for the best part of a 12-month period there was only one job application.

7. The wife explains that in two ways.  She says she did make other applications for jobs and either they were made online or were otherwise not in writing and, in any event, she did not keep any records to evidence her efforts to seek employment.  In her latest affidavit she has attempted to remedy that situation.  She has provided a table of applications made.  The table covers the period 27 January 2016 to 2 May 2016, and the wife’s evidence about that table is at paragraph 9 of this affidavit sworn yesterday and filed yesterday.  She deposed:

   Unfortunately, I’ve thus far been unsuccessful in my attempts to secure employment.  Annexed hereto and marked C is a schedule of the employment applications I’ve recently made and interviews I’ve attended over and above the volume of applications I tendered to the Court on 10 February 2016, and those are made via corporate online career portals.

8. She goes on:

   My attempts to find a place in the industry that previously supported me have seemed to become more difficult following my unsuccessful attempts to resurrect my career in 2014.

9. Now, the table refers to applications apparently made in the health area, marketing jobs, and also sales manager, marketing manager jobs in the personal fitness space, some receptionist applications, and so on.  The mother’s level of disclosure is far from satisfactory.  She has not only not provided adequate evidence to enable the husband to test what efforts she has made, but she has failed to respond adequately to formal requests for disclosure and discovery.  That certainly applied to the arrangements in relation to the fitness franchise. 

10. She was obliged at all times to discover the agreement she struck in March 2015 and, in any event, she was obliged to answer the various requests for disclosure.  The matter really comes down to this: the right to claim maintenance is not lost through bad behaviour and litigation.  These are serious rights and serious obligations.  It seems to me, that in the broad, the wife should be accepted as having made reasonable efforts to obtain paid employment. 

11. Relevant to this decision are the matters that are taken up in s 75 of the Act.

12. The marriage had an impact on the wife’s capacity for paid employment.  There were periods of confinement in relation to the children.  There was a period where the wife was out of the paid workforce necessarily because of the husband’s employment overseas.  During an intact marriage, the wife does not have to explain why she would embark on a new career after having a successful career in another field.  The former was obviously likely to be less remunerative than the latter. 

13. The evidence – none of which has been tested, of course – points to some indulgences by both of the parties, in terms of giving away their employment, pursuing other opportunities, the husband studies to better fit himself for a new career, and so on.  Of course they were quite entitled to make those choices.  The wife showed her intent to return to paid employment by the two attempts she made to return to the pharmaceutical industry in early 2014.  The fact is that she took up contracts with two employers, and underwent the probation periods.  Those are unlikely to have been actions taken by the wife solely to discharge her obligation to appear to seek paid employment. 

14. We do not live in times of full employment.  You cannot just return to a high level after being out of the industry for some years.  The fact of marriage breakdown does not better fit you for paid employment – quite the contrary.  The wife has acted on her own account and has understandably not done a good job in that regard and perhaps another judicial officer could take a different view about these circumstances, but I have an obligation to try as best I can to identify what really was happening.  These are interim proceedings, of course, and one is permitted something of a broad brush in relation to them, but in my view, I should be satisfied that the wife is seeking to fully exercise or to better exercise her earning capacity and that, for the time being, she has found herself unable to adequately support herself from her own resources. 

15. She can point to a short fall of the order of $700 a week.  We then turn to the husband.  In his Financial Statement, he declares that he pays the wife $462 a week.  That is his calculation of the $2,000 a month payment.  In the same Statement he shows a deficit of about $348 a week.  He shows an income of $6,661 a week, and he shows outgoings of a bit over $7,000.  Thus it is his evidence that he is meeting the obligation that was set for him in the urgent maintenance orders, but he has a deficit of $348 a week. 

16. As to his updated evidence the effect of it was that his income is up by about $99 a week.  On the other hand his provision for health insurance is up by $5 a week, motor vehicle expenses by $10 a week, and required credit card payments by $41 a week.  He also has his incurring costs associated with the interest he owes on a debt that he has raised with his father.  Therefore the husband is a little bit better off.  He has $56 a week in more expenses, but nearly $100 a week in greater income. 

1. The wife’s case is that there are some things in the husband’s disclosure that would give way to her need for support, and she refers particularly to his claim for child minding at $18 a week.

2. The children currently spend two nights a week in the husband’s care.  During this time, D attends long day care, the costs for which are itemised separately.  Mr Southers’ father collects the children from school on the three afternoons a fortnight required by the current schedule of care.  The inference is that there is not a need for child minding at $18 a week.  Nextly, the wife points to a claim by the husband for taxis at $46 a week.  She says that Mr Southers’ work-related expenses are reimbursed.  He includes costs to maintain his car and a motor scooter.  There is also a $36 a week claim for public transport.  The submission is that he does not need to use taxis. 

3. Nextly, he claims gifts at $58 a week.  Again, the wife submits in general terms, that the item would give way to necessity in relation to her need for funds.  She points out that he is claiming clothing and shoes at $92 a week.  She points that the children only spend two nights a week in his care and arrive at his house in clothing and shoes; that she has provided school uniforms; and she asserts that that claim could be reduced by $12 a week.  In relation to psychologist appointments which are claimed at $144 a week, the wife asserts that both B and the husband are entitled to a deduction for 12 appointments a year under the mental health provisions of Medicare; that she obtained and provided a plan to the agency that the parties have consulted in relation to B, Relationspace. 

4. She points out that the husband has private health insurance which should reduce the cost, and the assertion is that there could be a saving of $114 a week.  The wife says that the claim for medical, dental and optical for the husband is exaggerated.  She says that there is no evidence to the extent that he has any special healthcare needs.  She notes that he uses glasses, but says that his fund has a no gap option for that, as it does for dental services, and the wife says a more reasonable estimate would be $20 a week, saving $28 a week. 

5. The wife has identified in those paragraphs $276 a week in savings, which virtually accounts for the shortfall in the husband’s budget, noting that he has had a net $47 odd a week improvement in his net income.  The complaints made on behalf of the wife were not addressed directly on behalf of the husband.  I suppose, taken in the broad, one can say this.  Of the parties, the husband is on a very significant income and, of the parties, thereby he necessarily has more flexibility than the wife.  These are interim proceedings.  I cannot make a finding of fact on a disputed issue of fact without evidence that excludes one version or wholly supports another.  There has not been timely disclosure by the wife but I note comments made by Le Poer Trench J in relation to the husband’s disclosure which his Honour found unsatisfactory in relation to the husband’s income and other things.

6. This is not a case where all of the problems rest with the wife.  As I said before, these are interim proceedings.  The Court is permitted a broad brush.  There is a bit more need for care in this case than there might be otherwise in the situation because the parties have virtually no assets, so any mischief that is done in terms of making a mistake in the balance of need for support and capacity for support may not be able to be addressed in a property settlement.  It is possible that the financial aspect of this case is going to be limited to the questions of spousal support.

7. The wife said something to me in submissions that she wanted to obtain employment, that she was assiduously looking for employment.  She understood that her claim for spousal maintenance only existed while she did not have an adequate income of her own.  It seems to me that without being specific about any of the claims of the wife, but certainly in relation to gifts, it would not be unreasonable in the short term for proper support to be provided to the wife.  There is always some capacity for trimming expenses and better arrangements can often be made in relation to expenses.

8. Often there is a level of comparison between the expenses claimed by the parties.  Here, the husband says he spends $200 a week on his own food.  The wife spends $50 a week on her own food.  The husband spends $65 a week on household supplies.  He is the only occupant of his house for most of the time.  The wife spends $5 a week on those supplies.  The husband spends $13 a week on gas; wife, $10.  The husband, $45 on electricity; the wife, $27.  The wife spends a bit more than he does on telephone:  $42 against $28.

9. The husband spends more on petrol, more on car maintenance, much more on car parking, more on clothing, less on children’s activities, but, as I say, the children are with him for much less time.  The wife spends a bit more on hobbies and holidays, but we need to remember that I need to shave more than $300 a week from her budget to get her to anything like the amount she is claiming, let alone to a balanced budget.  Her shortfall is $700 a week.  So it seems to me that there is scope in the husband’s expenses for a trimming.

10. It is not possible to be exact about these things. I think the justice of the case requires that there be a contribution from the husband to the wife. I think his Honour in the earlier proceedings under s 77 of the Act very much took a figure. In my view the justice of the case would have the husband contribute $1,500 a month to the wife.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 3 May 2016.

Associate: 

Date: