Tamberdun and Tamberdun

[2010] FamCA 11

FAMILY COURT OF AUSTRALIA

TAMBERDUN & TAMBERDUN [2010] FamCA 11

FAMILY LAW – REVIEW – Decision of Judicial Registrar – Spouse maintenance

APPLICANT: Mr Tamberdun

RESPONDENT: Ms Tamberdun

FILE NUMBER: SYC 6862 of 2008

DATE DELIVERED: 18 January 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cohen J

HEARING DATE: 9 December 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Levy

SOLICITOR FOR THE APPLICANT: Sommerville & Co Solicitors

COUNSEL FOR THE RESPONDENT: Mr Lloyd SC

SOLICITOR FOR THE RESPONDENT: Barkus Doolan Kelly

Orders

1. That the wife’s application in her Amended Response to an Application filed 23 April 2009 for spousal maintenance is hereby dismissed except to the extent that the husband has made spouse maintenance payments to the wife since 21 May 2009.

2. That the Orders of Judicial Registrar Loughnan made 21 May 2009 are hereby set aside except to the extent that they required spousal maintenance payments by the husband to the wife which have been made.

3. That costs are reserved.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6862  of 2008

MR TAMBERDUN

Applicant

And

MS TAMBERDUN

Respondent

REASONS FOR JUDGMENT

1. This appeal from a decision of a judicial registrar made on 2 May 2009 is limited to a claim of the wife for spousal maintenance. The applicant for relevant orders before the Judicial Registrar was the husband so he is the applicant on the rehearing before me. The application on which the husband now relies was filed on 19 May 2009. In it he relevantly seeks orders that he pay spousal maintenance by paying all periodic mortgage instalments and related charges due on the loan secured by the former matrimonial home and by paying all council rates and insurance premiums for that home plus $1000.00 per calendar month. Thus, it is submitted by counsel for the wife, Mr Lloyd SC, that the husband has conceded her need for maintenance.

2. Her most recent application is that she be paid spousal maintenance by the husband of $1446.00 per week plus the outgoings for the former matrimonial home on council rates, water rates and usage, electricity usage, telephone usage, Foxtel, internet usage and for home and contents insurance.

3. The Judicial Registrar’s orders are that the husband pay the wife $800.00 per week and, also by way of spouse maintenance, pay the mortgage payments and associated charges as they fall due and, for the same property, all council and water rates and usage charges, electricity, telephone and Foxtel  accounts and home and contents insurance premiums as they fall due. In addition, the husband, by the Judicial Registrar’s maintenance orders, is to pay to the wife all her motor car expenses within 7 days of receipt of the invoice for them.

4. The wife now seeks that I uphold the Judicial Registrar’s orders and order payment of arrears. The husband asked at the hearing that he pay no spousal maintenance but that any spouse maintenance payment I order be fixed to commence one week after the date the husband last made a spousal maintenance payment in order to overcome any complications about claimed arrears. The arrears the wife claims are $10,112, $7,133 of which is for reimbursement of the moneys the wife paid for extraordinary car repairs and for her home cleaning service.

5. The husband’s case, despite the burden of all the documentary evidence, is very simple and straightforward. It is that his income is exceeded by his actual and reasonable outgoings by $853.00. His income is $6124.50 per week and his average outgoings are said to be $6977.83 per week. He has no other source to fund any maintenance for the wife, having virtually no saleable property or savings. He says he has no way by which he can increase his income or reduce his outgoings. He says he cannot even afford to make any payments into his superannuation funds.

6. It is germane that the husband claims his gross assets to be worth $1,125,000 and superannuation to be worth about $458,600 and says he has liabilities of $154,065 (not $132,181 as is stated in the summary in Part B of the financial statement). He has only a little more than $4,500 in savings and owns a modest car. His major asset is the former matrimonial home in which the wife lives. This is valued by the husband at $1,100,000. His liabilities are mostly secured over the home, but $69,600 worth, approximately, are more pressing; about $41,000.00 being for unpaid legal fees and the balance being due to the Tax Department. Thus, the husband is in some financial difficulty if his disclosure to the Court of his position is a true reflection of reality.

7. A careful examination of the husband’s financial statement of 21 October 2009 discloses nothing to indicate the husband has misstated or distorted his situation. At best, despite the assets he holds, he should be regarded as being in very modest circumstances despite what might seem to be a very comfortable gross income if this financial statement is accurate.

8. The husband’s counsel submitted that the husband is not liable to pay the wife spousal maintenance because he is not reasonably able to do so. (see s72(1) Family Law Act). It is the wife’s case in response to the husband’s defence based on s72(1) that I should not be satisfied that the husband has made a candid disclosure of his financial circumstances.

9. The first matter the wife’s counsel points to is what he says is a wide and irreconcilable variation in the 4 statements of financial circumstances filed by the husband. He filed these in 2009 on 18 February, 20 April, 25 July and 22 October. It is said that each differs to an irreconcilable extent in relation to the husband’s income and assets. This does not appear to me to be the case after analysing the basic figures. These are:

Gross inc.	Outgoings	Net inc.	Gross assets	Liabilities	Net assets	Home value
February	$4,035	$6,457	-$2,422	$1.54m	$57,804	$1.487m	$1.3m
April	$4,035	$6,498	-$2,463	$1.545m	$64,757	$1.480m	$1.3m
July	$6,313	$7,040	-$727	$1.31m	$195,500	$1.114m	$1.1m
October	$6,124	$6,977	-$853	$1.125m	$154,000	$971,000	$1.1m

1. A major reason for asset valuation reduction is the lowering of the value attributed to the former matrimonial home. Over the period of these statements the husband has made mortgage payments and made payments for or on behalf of the wife and the wife has drawn funds from the husband’s account which add up to $221,450 and a further $32,000, approximately, has been paid by the husband by way of maintenance payments since he was ordered by a judicial registrar to make them in May 2009. I can discern no significant inconsistencies in the statements of financial circumstances. He has, prima facie, complied with his duty to disclose.

2. The next argument put forward on behalf of the wife is that since September 2008 the husband has received $588,600 in cash yet has not explained where this money has gone. $384,786.00 of the sum is said to be his gross income from 23 September 2008 to 9 December 2009. The Court had the benefit of his tax returns for 05/06 to 07/08 financial years. His average taxable income has been about $136,000 per annum. His ’09 tax return has not been done, but in 07/08 his taxable income was approximately $172,000 and his tax etc liability on it was about $59,000, leaving him with $113,000 net of tax. His situation now is that his gross outgoings exceed his gross income, so the whole $384,786 and more has been explained. With another $135,000 received, the husband has fully explained the whole of his expenditure of it. $488,400 has been explained if one accepts that the husband’s expenditure exceeded his income by up to $2450 per week in 2009. For a year at an average of $1500 per week, another $75,000 would be explained. One cannot conclude, on balance, that the husband has failed to explain what has happened to this income. His explained expenses are $589,000, his income is $584,000.

3. The next point made on behalf of the wife is that the husband is a 50% shareholder and a director of T Pty Ltd. It is said he has failed to properly value his interest in that company and has not disclosed its books and records, so has not shown that it does not hold undeclared profits for him or have an undeclared loan from him. It is said that he has even failed to value its shares or has provided inconsistent values.

4. In his 4 statements of financial circumstances the husband has declared in 2 that his interest in the company is not worth anything and has left the space provided for a valuation of it blank in the other 2. He has not declared any debt owed by the company to him. Although there has been strict adherence to the form in only two of the statements in this respect, overall I think there has been substantial compliance. He has, after all, filed 4 statements in only 9 months. The wife’s obligation to disclose is at the same level as that of the husband. She has, prima facie, been less compliant, so is in no position to be too rigid about the husband’s adherence to any strict term for disclosure.

5. Once the husband has prima facie complied with his obligation of candid disclosure the onus is on the wife to prove her case to the contrary. The wife has an onus to produce the evidence to prove her case that the husband has actually not disclosed his true situation. She could have subpoenaed and tendered the company’s financial records. She did not tender them. I do not know if she subpoenaed them. She has not discharged her onus. At this stage in the proceedings, it cannot be said that the husband has, by not producing the company’s records, failed to disclose, despite a request from the wife to do so. The wife cannot just sit back and rely on the husband’s failure to produce documents and say that this is proof on balance that the husband has failed to disclose his true position.

6. There is, in the husband’s affidavits of 22 October 2009 and 24 July 2004, a disclosure that he gains income from T Pty Limited. However the husband, in each affidavit, refers to the income from this company as “Directors loan repayments” but says they are “income derived from a profit share agreement.” The details of the income are provided in schedules annexed to each affidavit. In these, the income is called “commission”. As I have said generally, I am not, in this specific instance, satisfied that the terminology used by the husband proves, on balance, that there is any significant lump sum of capital due to the husband as a result of any loan account or similar device he has with T Pty Limited.

7. The wife has not filed an up to date financial statement. She relies on one filed on 11 December 2008 together with affidavits updating her situation which were sworn on 22 April 2009, 20 May 2009, 27 July 2009 and 4 December 2009. These documents are unsatisfactory because they are insufficient to inform the Court of her overall up to date situation. Yet they reveal a very disturbing state of affairs.

8. The wife had, by 4 December 2009, a little more then $41,750 in cash and no other assets of substance apart from a car worth $25,000. She had already paid $137,527 to her solicitors and owed them about $2,700 and was contemplating a bill for a further $100,000, approximately, to finalise all the family law litigation between the parties. I have not been told if she has paid any more to her solicitors between July and the date of hearing. One would expect an up to date statement of financial circumstances, at the very least, to have been done in the light of those fees. What appears to be the only basis for suggesting the parties have more assets and resources than the husband has disclosed would be in the books of T Pty Limited. The attempt to claim the husband is hiding funds by using the company without tendering the records of the company infers they have not been subpoenaed or inspected on behalf of the wife. Surely this should have been done before accumulating the wife’s costs to their present level notwithstanding that there is also a dispute about the parties’ children. The only way to justify the litigation over money would be to at least attempt to verify any reason to believe the husband has understated his financial situation to a significant extent in view of the funds likely to be available for division. Either the wife has been incompetently advised or has not taken the advice she has been given.

9. The wife is not in paid employment and is unlikely to return to paid employment. She has not had a paid job since 1995, is 52, claims to have poor health, expects that she will not re-enter the workforce and believes she should be a full time mother to the parties’ younger child, V, who is 10 years old. Her income is claimed to be $50 per week. It is a carers allowance. She cares for her mother. She failed to inform the Court that she also receives $240 per week for child support for V.

10. The wife claims to have outgoings of $2,949 per week. None of these is for business expenses or mortgage payments. All are said to be for ordinary living expenses; $1,738 for herself, $657 for V and $560 for J, the parties’ 18 year old son. It is strange that the wife claims no outgoing which she must meet for her mother who lives with her, yet her mother contributes $320 per week to the household. One would expect, in view of the outgoings by the wife for herself, her mother’s outgoings to exceed $320 per week. Her mother, despite the document which is annexure 5 to the wife’s affidavit of 23 April 2009, has no interest in the former matrimonial home; in particular, no tenancy for life. What she may have is a personal right as against the wife to live with her in the wife’s home, wherever or whatever it is, for life. If she wishes to claim a greater right she will have to become a party to the property proceedings. The wife should give her formal notice of the proceedings to ensure she has the opportunity to do so.

11. V now spends 5 nights in 14 with the husband and J does not live with the wife at all. The only information on the wife’s expenditure on the children is 12 months old. I cannot be satisfied it is still the situation. I can gain little comfort from the fact that the wife was not challenged about her expenses on them, because what is provided is not her current expense on them but is her expense about 1 year ago. She has failed to provide any up to date information, so there is nothing for the husband to challenge. Yet again, it is remarkable that there is this deficit in an essential part of her evidence in support of her application for spousal maintenance in view of her legal costs. I am prepared to accept that she does spend a small sum over the $240 in child support she receives for V on both children, say $150. That reduces the wife’s actual weekly outgoings to be about $1888 and the difference between her income and outgoings to $1838 per week. As she is a full time housewife, in the circumstances and despite having a high standard of living including overseas holidays before separation, I cannot accept that a cleaner should be employed at $100 per week or a gardener and that the cost of lawn mowing should be $50 per week. Other expenses, too, seem too high. It seems appropriate that she should spend about $1700 to meet the reasonable needs of herself and the children.

12. The husband’s outgoings result in a deficit over his income of $853 per week. These include payments for spousal maintenance which average about $1,490 per week. Without a spousal maintenance obligation, he would have $637 to spare after paying his other ordinary expenses. The husband claims to have total non-business outgoings for himself of $800 for general needs, $802 for rent, $360 for life insurance and $395 for the children not including the child support payment of $240. Except for the life insurance payments and rent which is very high, these amounts seem to be appropriate. The continuation of life insurance and the high rent, in the circumstances, seem to me to be unjustifiable. With the assessed child support, the husband seems to need about $2,000 per week to meet his reasonable needs including rent assessed at an appropriate level, at $600 per week as well as those of the 2 children. His current outgoings including child support are $2,597 per week for himself and $1,490 for the wife, a total of $4,087 of which he can afford to pay $3,234 ($4,087 - $853).

13. The husband pays the mortgage instalments on the former matrimonial home of $93 per week. If the wife were to pay rent, her accommodation costs would be much higher. If the wife is to be liable for the mortgage payments, one could properly regard her needs as increased to $1800 and those of the husband reduced to $1,900 per week for as long as the former matrimonial home is maintained.

14. The parties combined reasonable needs are about to $3,700. The husband can pay all but $466 ($3,700 - $3,234). I cannot see why, prima facie, the deficit should not be distributed about equally between the parties, providing them with about $1,600 each to meet their needs which, in the husband’s case includes payment of $240 child support to the wife and, in the wife’s, the payment of home mortgage instalments.

15. However, there are two matters which are of concern to me. One is related to the wife’s lump sum holdings. The other is that the husband actually owes about $38,000 to his lawyers after having already paid $86,226. They estimate he will need another $82,000 to complete the matter. Thus, his fees are likely to be about $210,000 and those of the wife about $250,000, all in a relatively simple children’s case and a property case where the evidence establishes assets of approximately $1,100,000 net and no proper attempt that I can discern has been made to justify any claim that the husband is hiding assets or income. Proper steps should have been undertaken by the wife to collect convincing evidence that the husband has been hiding assets before the wife incurred the legal costs she seems to have accumulated in the property and children’s proceedings. The way the matter seems to be progressing, neither party will ultimately be able to purchase a modest home without borrowing most of the cost. The costs in both the children’s and property proceedings are disproportionate to the net assets which have been shown to be available.

16. Pertinent to s75 of the Act the Court must take certain matters into account. These are:

    a)The parties’ ages and states of health: The wife is 52 and the husband 55. There is no credible evidence before me to suggest either is not in good health. In any event, as the wife does not have paid employment and considers herself as bound to stay at home to care for V and her highly dependent mother, her state of health, as it is relevant to her earning capacity, is of little relevance. Nevertheless, she needs dental work which she claims will cost $9,800.

    b) The parties’ income, property and financial resources: These have been canvassed above. The husband does not seem to have any impediment to his ability to undertake gainful employment. The wife, too, seems to have the physical and mental capacity for gainful employment but her history and perceived and actual obligations to care for her mother and children are very significant impediments to her ability to undertake paid work. The husband has superannuation worth more than $450,000 which will not be available to him to fund any spousal maintenance payments for some years.

    c)Care and control of children: Both parties have care and control of V, of which the wife has her care for about two thirds of the time.

    d)Commitments: I have referred to the commitments of each of the parties to support themselves and V as well as J. The wife’s obligation to support her mother is not a legal duty. The agreement, if it is one and I doubt whether it is because it was made without consideration passing from each to the other, already referred to does not require the wife to support her mother financially. I accept that the wife properly feels an obligation to support J although he is an adult at law.

    e)Responsibilities: Each party properly regards herself or himself as having a responsibility to support their adult but still dependent child. The wife regards herself as having a responsibility to support her mother to the extent that she says, inferentially, that she tries to conserve her mother’s assets because of the need her mother will have for them to fund her care as she becomes more infirm and, therefore, the wife spends her own funds on meeting some of the mother’s living costs. I shall take the parties’ expense in meeting these responsibilities into account. I do not accept that the wife is entitled to conserve her mother’s assets at the expense of the parties’ assets on the support of her mother. I do not know what the wife spends on her mother or J. I do not accept she spends as much on J as she states in her December 2008 affidavit because he does not live with her. I accept that the husband spends $225 per week on him. I regard that as quite reasonable. After all, it is less than the wife is paid for child support for V although V only lives with her for 9 days in 14 and is only 10 years old.

    f)Pensions etc: The wife gets a carers allowance. I have already referred to it.

    g)The parties’ standard of living: This seems to have been much higher while they were living together. On the evidence before me, the maintenance needs of each must be at a level where each will have to significantly reduce their standard of living.

    h)Enhancement of earning capacity: There is no suggestion that the wife will increase her earning capacity as a result of receiving spousal maintenance.

    ha)Creditors benefit: This is not relevant.

    j)The wife’s contribution to the husband’s earning capacity and the parties’ assets: Before separation, the wife cared for the children full time, clearly allowing the husband to develop his income earning potential and accumulate property and financial resources. The value of the former matrimonial home may have been increased because the wife’s mother gave her $146,000 in 2001. It was used to create a granny flat and office in the former matrimonial home. I do not accept that this gift to the parties justifies the conservation by the wife of her mother’s remaining assets to the detriment of the parties’ assets and that this cannot play a part in deciding what is proper spousal maintenance. I regard this as a matter which must principally be considered under s79 at the final hearing.

    k)Duration of the marriage: The marriage lasted about 16 years before separation. The wife has not worked for wages for many years because she gave it up in order to care for the children and home. Her earning capacity has been substantially reduced by having done so.

    l)Protection of parenting role: The wife reasonably wishes to continue to be a homemaker and parent. It is a pity that the husband does not have enough income on the evidence before me to permit the Court to protect the wife in her wish to remain at home as a full time mother yet maintain the same standard of living she enjoyed before separation.

    m)Cohabitation: Not applicable.

    n)Property orders: Not applicable.

    naa)De facto property etc orders: Not applicable.

    na)Child support: I have already referred to husband’s child support obligations.

    o)Other relevant facts: There is an aspect of which I have mentioned some of the essential facts but not so far discussed and which I regard as of critical effect in these proceedings. It is the implications of the wife’s cash reserve of $41,750. She seems to have assumed that she is entitled to retain it and have the husband maintain her. In this instance, I do not regard her as having that entitlement. An examination of the real nature of the fund seems to be necessary for the situation to be understood by the wife and those advising her. I should record that one of the husband’s counsel’s submissions; that to the effect that the wife can draw on the $41,750 to maintain herself, made it perfectly clear to me that those advising the husband have an understanding about this that seems to have evaded the wife’s advisers. That $41,750 is capital currently held by the wife. If it is diminished or if, for example by being used to pay her future legal costs as they accrue, it will be regarded as notional capital available for division between the parties under s79 of the Act. It will be regarded as having been advanced to the wife as part of the pool of net assets to which she is found to be entitled. It will be regarded as part of the property divided between the parties. Depending on the exigencies of the situation, if it is not diminished, it could wholly or partly go to either party in order to achieve the proportional share of net assets to which the orders make them entitled. If it or any part is not wasted and is spent properly for, say, one or both parties’ maintenance, it will, to the extent it has been so spent, not be available to be included in a s79 division. There is no principle to the effect that this money cannot be spent on ordinary maintenance, although a Court, in proper circumstances, could make orders which quarantine all or part of it in order to save it for capital division. There is no rule which makes its present possession and control by the wife rather than the husband or both or in part by each significant. Possession merely gives control over it to the party in whose possession it is held in if there is no order limiting that control. There is no reason why it should not be available to meet either party’s need for weekly maintenance. It could, for example, be used to meet the wife’s dental costs and her other reasonable maintenance needs. If it is, it will meet the latter for more than 21 weeks at the rate of $1,000 per week.

    p) & q)Financial agreements: Not applicable.

1. The husband says that one of the reasons he cannot afford to pay the spousal maintenance is that he owes his solicitors $38,611 and does not have the funds to pay that bill and presumably any further bills for work to be done and needs to save the necessary funds. He asks that no order to maintain the wife be made so he can do so. One must realise in relation to this claim that the wife has already paid her solicitors an amount which seems to me to be outrageous in all the circumstances of the property and child dispute between the parties; $137,527. The husband has also paid what appears to be a very high figure; $86,226. I cannot say whether this appalling level of costs has been incurred as a result of the attitude of one or both of the parties and/or because of poor advice and over servicing, but I can say there does not seem to be any reason why the husband should not be able to pay his lawyers for the work to date considering it has cost $51,300 less than the wife’s lawyers have been paid by the wife who is nearly up to date in her indebtedness to her lawyers. Fairness demands a level playing field in litigation. When one party is inhibited by inability to pay outstanding debts to lawyers for litigation and the other is not or is significantly less so, the Court should attempt to make the situation fairer. One way would be to allow the whole $41,750 which is held by the wife to be used to pay the husband’s lawyers. I might have done this but the husband did not request that course. He simply asked to be able to save so he can pay his lawyers. He will be able to attempt to do this if the $41,750 held by the wife is used for her maintenance. This can be done if I largely dismiss the wife’s application and set aside the orders made by the Judicial Registrar.

2. To merely dismiss the wife’s application will probably create a further dispute between the parties over the mortgage instalments on the former matrimonial home. It is likely that the home will eventually have to be sold. Yet the mortgage is so low that the parties may benefit if the home is not sold yet. The wife will probably have to pay higher rent than the mortgage instalments if the home is sold. It is for the parties to decide whether or not to attempt to force the sale of the former matrimonial home before the s79 proceedings are completed. I do not regard it as appropriate to make any order for payment of the mortgage instalments. If either party wishes to avoid sale of the home he or she will make the mortgage payments. They may even agree to contribute equally to them. After all, ultimately the identity of the party who pays will not affect the pool or assets remaining or what he or she receives from it.

3. The husband asks that I back date the effect of any order I make if I reduce the spouse maintenance he is required to pay in comparison to that which he has been required by the Judicial Registrar to pay from 21 May 2009. The current arrears are $10,112.65. As I have decided to set the Judicial Registrar’s spousal maintenance orders aside and have based that decision on the current situation which includes the fact that the husband has made some payments in performance of the May 21 Orders but not others, there is no justification for making the husband pay any so called “arrears”. The wife has met her needs so far but has acted on the basis that she is entitled to the spousal maintenance the Judicial Registrar ordered. Any payment by one party to the other would merely shift capital from one holder to the other. I think justice requires me to leave the situation as it currently stands with regard to monies paid by the husband in compliance with the Judicial Registrar’s orders and to so called “arrears”. To ensure there is no dispute over them, I shall excuse the husband from any obligation to pay any sum alleged to be owing to the wife for arrears. I shall specifically discharge the Judicial Registrar’s orders from the date to which the spousal maintenance ordered by the Judicial Registrar has been paid. The payments the husband has made should stand, so I shall not discharge the orders of the Judicial Registrar for those payments.

4. Although I am of the view that the wife should be able to resort to the cash she holds to meet her need to maintain herself, I am not of the view that I should restrict her use of the cash fund. In my assessment she should be able to use it as she pleases and should suffer the consequences of its use for purposes other than to maintain herself at a reasonable rate. If she does not use the fund appropriately for her maintenance and depletes it, this may count against her in any further application she might make for spousal maintenance. I take this view because this puts her in the same situation and with much the same freedom of choice on how to use her funds as the husband is in and has.

5. The Orders I shall make are:

   1.That the wife’s application in her Amended Response to an Application filed 23 April 2009 for spousal maintenance is hereby dismissed except to the extent that the husband has made spouse maintenance payments to the wife since 21 May 2009.

   2.That the Orders of Judicial Registrar Loughnan made 21 May 2009 are hereby set aside except to the extent that they required spousal maintenance payments by the husband to the wife which have been made.

   3.That costs are reserved.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen.

Associate:     

Date:              18 January 2010