Taggart and Bartlett

[2016] FCCA 864

FEDERAL CIRCUIT COURT OF AUSTRALIA

TAGGART & BARTLETT [2016] FCCA 864

Catchwords:
FAMILY LAW – Maintenance – interim spousal maintenance – wife unable to support herself adequately – husband’s failure to disclose financial benefits received personally from his business – husband’s capacity to pay interim spousal maintenance – order that husband pay interim spousal maintenance.

Legislation:

Family Law Act 1975 (Cth), ss.72(1), 74(1), 75(2)

In the Marriage of Bevan (1995) FLC 92-600
In the Marriage of Mitchell (1995) 120 FLR 292; (1995) 19 Fam LR 44; (1995) FLC 92-601

Applicant: MS TAGGART

Respondent: MR BARTLETT

File Number: PAC 4544 of 2011

Judgment of: Judge Newbrun

Hearing date: 21 August 2015

Date of Last Submission: 21 August 2015

Delivered at: Parramatta

Delivered on: 21 April 2016

REPRESENTATION

Solicitors for the Applicant: Smallwoods Lawyers

Solicitors for the Respondent: Cheryl Orr Solicitor

ORDERS

1. Pending further Order, the husband shall pay to the wife spousal maintenance in the sum of $150 per week.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 4544 of 2011

MS TAGGART

Applicant

And

MR BARTLETT

Respondent

REASONS FOR JUDGMENT

Introduction

1. This was the hearing of the wife’s application for interim spousal maintenance of $500.00 per week. (Failing an award of interim spousal maintenance, the applicant seeks an order of spousal maintenance under section 74(1) of the Family Law Act 1975 (“the Act”)).

2. Section 72 of the Act provides:

   (1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

   (a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

   (b)by reason of age or physical or mental incapacity for appropriate gainful employment; or

   (c)for any other adequate reason;

   having regard to any relevant matter referred to in subsection 75(2).

   (2)The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.

3. Section 74(1) of the Act provides:

   In proceedings with respect to the maintenance of a party to a marriage, the court may make such orders as it considers proper for the provision of maintenance in accordance with this Part.

4. In the decision of Bevan & Bevan (1995) FLC 92-600, it was confirmed that there is no fettering principle that the pre-separation standard of living must automatically be awarded and reasonableness in the circumstances is the guiding principle.

5. The wife has the onus of establishing her right to an order for spousal maintenance.

6. The husband seeks an order dismissing the wife’s above applications; he does not concede that the wife is unable to support herself adequately by reason of any of the matters referred to in section 72, and further, and in any event, the husband submits that the evidence demonstrates that he has no capacity to pay spousal maintenance.

Material Relied Upon

1. The wife relied upon her Case Outline document dated 18 August 2015, Affidavits of the wife dated 15 December 2014, 28 January 2015 and 30 July 2015, Affidavits of the husband dated 20 May 2014 and 13 April 2015, Financial Statements of the wife dated 15 December 2014 and 3 August 2015, and Financial Statements of the husband dated 20 May 2014 and 13 April 2015.

2. The husband relied upon his Case Outline dated 20 August 2015, the Response filed 13 April 2015, Affidavits dated 13 April 2015 and 21 August 2015, and Financial Statement filed 21 August 2015.

The Parties’ Contentions

1. The husband disputed the wife’s entitlement to interim spousal maintenance pursuant to section 72(1) of the Act. The husband submitted in any event that he has no capacity to pay interim spousal maintenance.

Chronology

1. The wife is aged 47 years and the husband is aged 48 years.

2. The parties were married in 1996, they separated in July 2011 and finalised property settlement by consent in May 2012.

3. The wife received some $220,000 by way of property settlement together with a car valued at $20,000.

4. The parties had three children, born in 1997, 2002 and 2006. The three children are now aged 18 years, 13 years (turning 14 years on (omitted) 2016) and 10 years.

5. In October 2013, the husband commenced living with Ms D at (omitted); he pays board of $200 a week.

6. Consent parenting orders were made on 6 November 2013. The wife has the primary care of the three children.

7. In March 2015, the wife commenced employment with the (employer omitted). That employment was terminated in April 2015.

8. In April 2015 the wife filed a Statement of Claim against the husband (not in this court) for payment of child support allegedly owing in the amount of $16,801.

9. In May 2015 the wife commenced a small business. The wife’s Financial Statement filed 3 August 2015 states that her current occupation is “(occupation omitted)” and that she is self-employed. The business is named “(business omitted)”.

10. The wife’s Financial Statement filed 3 August 2015 states that she receives an average weekly income of $789. This amount includes a sum of $50 per week from the wife’s business, Newstart benefit of $286 and a Family and Education benefit of $330. The Financial Statement asserts that the husband is required to pay $256 per week in child support but that the wife only receives $118 per week.

11. The wife’s asserted personal expenditure in her Financial Statement filed 3 August 2015 states that her weekly expenses are $784 made up as follows:

    a)Mortgage, (omitted) Bank - $228;

    b)Rates - $58;

    c)Other insurance premiums (car and house) - $48;

    d)Total all other expenditure - $450.

12. The wife states that she owns a property at (omitted) valued at $450,000. She has a (omitted) Bank offset bank account with $12,480. She owns (omitted) shares valued at $3,700. She owns a 2007 car valued at $8,000 and house contents at $3,000.

13. The wife states that her mortgage liability is $248,000.

14. As to the breakup of the above figure of $450, part N of the wife’s Financial Statement states:

    a)Food - $120;

    b)Gas - $25;

    c)Electricity - $15;

    d)Telephone - $30;

    e)Motor vehicle - $45;

    f)Fares/car parking - $8;

    g)Clothing and shoes - $20;

    h)Children’s activities - $5;

    i)Entertainment/hobbies - $40;

    j)Education expenses - $40;

    k)Chemist - $45;

    l)Repairs - $10;

    m)Gifts - $12;

    n)Hairdressing, toiletries - $20; and

    o)Other necessary commitments - $10.

15. Part N further states that of the total average weekly expenses of $450, the wife’s expenses are $254 and the children’s expenses are $196.

16. This was an interim hearing and there was no cross examination.

17. The reasonable expenses of the wife are assessed in sum of $254 per week.

18. The husband’s Financial Statement filed 21 August 2015 states, inter alia, that the husband’s income per week is $795 from his 50% interest in a (omitted) business. His weekly personal expenditure is stated to be $889, including child support payments of $164, and “total of all other expenditure”, referred to in Part N of $352.

19. As to the husband’s property, in his above Financial Statement he states, inter alia, that he owns a 2010 motor vehicle valued at $25,000, and his 50% interest in the (omitted) business valued at $160,000.

20. The husband states in his above Financial Statement that he has liabilities including, inter alia, a bank loan of $25,000, a credit card debt of $5,200, his 50% share of a business liability of $12,000, a further credit card debt of some $22,000 and a credit line debt of some $2,437. He does not disclose any “Financial Resources” in Part L of the above Financial Statement.

Section 75(2) Considerations

(a) age and state of health of parties;

1. The wife is aged 47 years and the husband 48 years. The wife’s affidavit filed 15 December 2014 states that she is in good health. She has been diagnosed with an adjustment order with anxiety and depressed mood (see the wife’s Affidavit filed 30 July 2015, Annexure B). The husband adduces no significant evidence as to his health.

(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; 

1. The Court refers to its discussion above as to these matters.

2. In the wife’s Affidavit filed 28 January 2015, she states, inter alia, that given her responsibilities to the children, when she finds employment she can only work between school hours (6 hours a day) and 3 to 4 days a week, at a rate of between $18-$22 per hour given her lack of professional skills and 16 year history in lowly paid (employment omitted).

3. In the wife’s Affidavit filed 30 July 2015, she states, inter alia, that she is again actively seeking employment through specified employment agencies for either part-time or temporary work up to a maximum of 3 days per week. She refers to her lack of success over the past 15 months, having applied for over 200 jobs, in securing appropriate employment. She refers to her dependency upon government welfare payments and proceeds of a loan to meet her living costs each week.

4. The wife used to work in the (omitted) industry for a considerable period being some 16 years. She feels unable to continue with (employment omitted) work, in particular as she has lost the drive and passion for work in that area. She has sought to retrain herself in, inter alia, (employment omitted) with a view to earning a greater income to support herself and the children financially in the future.

5. The wife worked full-time in early 2015, in an (occupation omitted) job. Her contract was terminated after 4 weeks as she was unable to deliver the quantity of work required. The wife was stressed and anxious working full-time and she found it difficult to adjust to office work given that she had not worked in an office for over 17 years. The wife, despite her best efforts, has been unable to secure paid part-time employment (see paragraphs 10 and 11 of her Affidavit filed 30 July 2015).

6. The husband asserts in his Affidavit filed 13 April 2015 that his estimated gross taxable income for the 2014 financial year was $36,109, with an estimated taxable income of $15,614.

7. In Exhibit B, the husband’s 2014 personal tax return shows a gross annual income of $32,550. His deductions, including work-related car expenses of $16,226, amount to a total of $20,495. His taxable income is stated to be $15,614, and this is confirmed by his Notice of Assessment for the 2014 financial year. The Court notes that the husband’s Notice of Assessment for the financial years 2012 and 2013, disclosed taxable incomes of $13,282 and $12,635 respectively.

8. The wife submits that the husband’s taxable income reported in his personal tax returns from 2012 to 2014 are not reflective of the true income of the husband.

9. The wife submits that the husband has derived significant and substantial financial benefits from his business during the tax years ending 30 June 2011 to 2014 that are not reflected in his personal tax returns, nor in his Financial Statements filed in these proceedings.

10. Again, the Court notes that in the husband’s Financial Statements filed 21 August 2015, he states his total average weekly income as being $795 per week (or $41,340 per annum).

11. The evidence before this Court at this interim hearing establishes that the husband has received financial benefits from the (omitted) business which are not disclosed in his Financial Statements in these proceedings.

12. The Court refers to paragraphs 39 and 40 of the wife’s Affidavit filed 30 July 2015. The essence of those two paragraphs is the wife’s assertion that the husband, in addition to his wage of $795 per week from the (omitted) business, received numerous personal benefits paid for by the business in the financial years 2013 and 2014.

13. The wife asserts in paragraph 39, inter alia, that the identifiable benefits received by the husband from his business are substantiated in the husband’s business’ (omitted) Cheque Account (omitted) and a (omitted) Bank account numbered (omitted) (also of the husband’s business). In this context, the wife refers to those accounts being referred to in Annexure E of the husband’s Affidavit filed 20 May 2014.

14. In the view of the Court, there is some substance to these assertions by the wife. For example, the Court notes certain “American Express (omitted)” debits in the Business Cheque Account of the (omitted) business which have a direct correlation to the credits in the same numbered American Express credit card account of the husband, statements of which are contained within Exhibit B.

15. Further, by way of example, the Court notes at page 28 of the husband’s Affidavit filed 20 May 2014, being a bank statement of the (omitted) Bank account of the (omitted) business, which shows a debit to that account on 4 March 2014 being a transfer to the wife of $200.

16. The Court notes, in Exhibits B and D, the (omitted) Bank account numbered (omitted) of the (omitted) business, bank statement number (omitted) showing on 16 April 2015 an Internet withdrawal from the account in a sum of $320 for “Family Law”.

17. By way of further example on the same (omitted) Bank account, statement number (omitted), referred to in Exhibits B and D, it refers to an Internet withdrawal debit on that account on 27 April 2015 in a sum of $2,000 for “Cheryl Orr”, being the husband’s family law solicitor in these proceedings. There is a further debit on 7 May 2015 in the sum of $770 on that account for “Family Law”. In statement number 187 on that same account, there is a debit on 4 June 2015 in a sum of $605, again for the husband’s family law solicitor.

18. There are further payments for the husband’s legal fees, in the sums of $2,000 (on 1 April 2015 from the husband’s business’ (omitted) Bank account numbered (omitted)); $770 (on 3 July 2015 from the husband’s business’ (omitted) Bank account numbered (omitted)); $211.75 (on 14 July 2015 from the husband’s business’ (omitted) Bank account numbered (omitted)); and $385 (on 25 July 2015 from husband’s business’ (omitted) Bank account numbered (omitted)).

19. By way of further example, statement number (omitted) for the Business Cheque Account of the (omitted) business, being account number (omitted), shows a debit on that account on 15 September 2014 in a sum of $117 payable to the husband’s American Express account. Similarly, statement number (omitted) for that account shows a debit to the account on 2 December 2014 for the husband’s American Express account in the sum of $241.

20. By way of further example, there is a debit to the above Business Cheque Account on 5 January 2015 in the sum of $442 payable to the husband’s (omitted) Credit Card  ((omitted)); the corresponding credit to the husband’s said account ((omitted)), Exhibits B and C, refer to the credit payment of $442.

21. In respect to the (omitted) Credit Card  ((omitted)), the husband asserts on page 4, paragraph 7, of his Affidavit filed 21 August 2015, that the indebtedness of $21,953 for that credit card is a liability of the business. In oral submissions, the husband submitted that this credit card was purely used for business expenses of the (omitted business). However, his Financial Statement filed 21 August 2015, paragraph 54, does not state that that same credit card is a business liability but rather it is his personal liability, stating, “Your % share 100”.

22. Further, a glance at some entries for that credit card clearly shows that the credit card is used for personal expenses of the husband; e.g. 6 October 2014 “(omitted) $360”. There are other entries, for example, for Indian take away food, (omitted) jewellers.

23. The Court is satisfied a this interim stage that that credit card liability is a personal liability of the husband, the repayments for which he has received financial assistance from the business.

24. The Court notes that in the husband’s Financial Statement filed 21 August 2015 he does not disclose any benefits from his business other than $795 in weekly income. He does not disclose expenses paid by others for his benefit. He does not disclose any financial resources.

25. The husband submitted that Annexure D to the wife’s Affidavit filed 30 July 2015 (pages “7” and “13” of the Annexures) showing a credit in her (omitted) Bank offset account of $12,480 as at 27 May 2015 and 23 July 2015 shows she has available funds and is not in dire need. However, as the wife asserts in paragraph 15 of her Affidavit, these are funds remaining from her $250,000 (omitted) bank loan obtained on 29 July 2013; they represent a capital sum. The wife should not have to resort to capital to support herself in the circumstances. This submission of the husband is rejected.

26. Similarly the Court rejects the husband’s submission that the wife should, acting reasonably to support herself, resort to other capital, namely her townhouse (which the wife purchased in part with her property settlement) and sell it to maintain herself. (See, for example, In the Marriage of Mitchell (1995) 19 Fam LR 44 at 60.2).

27. On the evidence before the Court, the Court is comfortably satisfied that the wife, pursuant to sections 72(1)(a) and (c) of the Act, is unable to support herself adequately at this time.

28. Further, the Court is comfortably satisfied that the husband has failed to disclose in his Financial Statements in these proceedings the full extent of his financial benefits received from the (omitted) business.

(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

1. The wife has the primary care of the children. Despite the consent parenting orders of the court on 13 November 2013, the husband has not spent time with the children in accordance with those orders. This is because the majority of his work commitments as a (occupation omitted) occur on weekends. The husband spends time with the two youngest children each alternate Sunday.

2. The two youngest children are aged almost 14 years and 10 years.

(d) commitments of each of the parties that are necessary to enable the party to support: (i) himself or herself; and (ii) a child or another person that the party has a duty to maintain;

1. The Court refers to its discussion above in relation to the respective Financial Statements of each party. The Court notes that the husband provides some financial assistance to the two eldest children in relation to, inter alia, telephones and a motor vehicle.

2. The husband asserts that whilst the Child Support Assessment dated 26 March 2015 providing for ongoing child support he is required to pay a sum of some $351 per week, he is in the process of disputing the current Child Support Assessment. Again the Court notes that the husband is presently paying some $164 per week in child support payments.

(e) the responsibilities of either party to support any other person;

1. Not relevant.

(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under: (i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party;

1. The wife’s present receipt of social security benefits are discussed above. However, the Court notes the provisions of section 75(3) which provides:

   In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.

1. The wife states that she is currently dependent on government welfare payments and proceeds of a loan (she refers to monies retained in a loan offset account) to meet her living costs.

(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;

1. The parties during cohabitation enjoyed a comfortable life style. The wife’s evidence indicates that her standard of living has decreased to some degree post separation, considering that she is now, for example, supplementing her groceries for free food at food banks run by charities, churches and not-for-profit organisations three times per week. She is also shopping for clothes at opportunity stores around Sydney to conserve her cash for her mortgage, children’s expenses and other living costs.

2. The husband put on no express evidence relating to his current standard of living. It is noted that he drives a (omitted) motor vehicle (the court notes again that the husband works as a (occupation omitted)) and lives with his girlfriend. Again, he asserts that his weekly expenses are some $352.

(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;

1. Again, the wife’s evidence is that she is actively seeking employment through employment agencies seeking work up to a maximum 3 days per week. She states that over the past 15 months, she has applied for over 200 jobs, completed a (omitted) course at TAFE, a (omitted) course and back to work educational course. She set up her new small business in May 2015 which she conducts mostly on weekends at local markets around Sydney. Her new business has incurred costs of some $1,306 and made income of some $1,125. The wife states that she aims to have her business provide a small income to assist in the support of herself and the children.

(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;

1. Not relevant.

(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

1. The wife, during the marriage, was the primary carer of the children. She also worked part-time 3 days a week. Her primary care of the children during the marriage enabled the husband to work full-time in the (omitted) industry.

(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

1. The marriage was some 15 years. During this time the wife’s part-time work was limited to work in the low paid (omitted) industry. She has limited experience in office work.

(l) the need to protect a party who wishes to continue that party’s role as a parent;

1. The wife is the primary carer of the children and wishes to work in part-time or temporary employment, working up to a maximum of 3 days per week.

(m) if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;

1. The husband is residing in the residence of his girlfriend and pays $200 board.

(n) the terms of any order made or proposed to be made under section 79 in relation to: (i) the property of the parties; or (ii) vested bankruptcy property in relation to a bankrupt party;

1. The Court refers to its discussion above in relation to property settlement. The former matrimonial home was sold for $443,000 and the wife received some $220,000.

(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage;

1. The husband asserts that whilst the Child Support Assessment dated 26 March 2015 providing for ongoing child support he is required to pay a sum of some $351 per week, he is in the process of disputing the current Child Support Assessment. Again the Court notes that the husband is presently paying some $164 per week in child support payments.

2. Again, the wife has issued a Statement of Claim against the husband for alleged outstanding child support payments in the sum of some $1,680. A defence has been filed to this claim by the husband.

(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

1. Not relevant.

Conclusion

1. The Court refers to its previous findings. The wife has established that she is unable to support herself adequately pursuant to sections 72(1)(a) and (c). The husband has failed to fully disclose the financial benefits he receives from the (omitted) business of which he is a joint proprietor. In these circumstances, the Court rejects his submission that he has no capacity to pay interim spousal maintenance.

2. This Court has identified non disclosed financial benefits received by the husband from the (omitted) business, including benefits relating to payment of certain personal credit card expenses, payment of legal fees and day-to-day living expenses. Having regard just to the husband’s non-disclosed receipt of monies for his legal fees paid by the business over the period from 1 April 2015 to 25 July 2015, a total of some $7,061, the husband was receiving non-disclosed additional benefits from the business of some $415 per week. Doing the best it can at this interim hearing, in all the circumstances and taking a conservative approach, the Court is of the view that it is proper that there be an order that the husband pay to the wife interim spousal maintenance of $150 per week.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Date:     21 April 2016