Tansley and Tansley
[2004] FMCAfam 371
•18 August 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TANSLEY & TANSLEY | [2004] FMCAfam 371 |
| FAMILY LAW – SPOUSAL MAINTENANCE – Variation of spousal maintenance order – where payor has re-partnered – where payor claims to have obligation to support new partner – where payor claims to have responsibility to support infant child of payor and children of new partner – priority of support obligations – financial circumstances of new partner. |
Family Law Act 1975 (Cth), ss.75(2), 83
Superannuation Act 1916 (NSW), s.10Q
In the Marriage of Soblusky (1976) – 77 12 ALR 699
Kennon and Kennon (1997) FLC 92-757
Kajewski and Kajewski (1978) FLC 90-472
| Applicant: | JILL BRIDGET TANSLEY |
| Respondent: | TREVOR LIONAL TANSLEY |
| File No: | PAM 3456/2002 |
| Delivered on: | 18 August 2004 |
| Delivered at: | Parramatta |
| Hearing dates: | 17 October 2003, 30 January 2004, 24 June 2004 |
| Final Submissions Received: | 26 July 2004 |
| Judgment of: | Raphael FM |
REPRESENTATION
| Counsel for the Applicant: | Mr R Battley |
| Solicitors for the Applicant: | Ian Bullock Partners |
| Counsel for the Respondent: | Mr M Connor |
| Solicitors for the Respondent: | Clinch Neville Long |
ORDERS
Husband’s application to revoke spousal maintenance order dismissed.
Parties to bring in short minutes quantifying arrears and ordering that the wife not be permitted to seek enforcement for a period of 2 years from 31 July 2004.
Husband to pay wife’s costs to be assessed pursuant to Part 21 Rule 21.02(2)(b) and Schedule 1 of the Federal Magistrates Court Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM 345 of 2002
| JILL BRIDGET TANSLEY |
Applicant
And
| TREVOR LIONAL TANSLEY |
Respondent
REASONS FOR JUDGMENT
These proceedings involve an application by the wife for enforcement of an order for spousal maintenance in the sum of the $350 per week made pursuant to consent orders entered on 31 October 2001. The wife also seeks arrears of payments since the 5 September 2002 at that rate. The husband has responded seeking that the order for spousal maintenance be revoked and the arrears forgiven. The husband and wife are both 61 years of age. They married in January 1969 and separated in January 2000. The husband has now re-partnered. On
27 June 2002 a son was born to the husband and his current partner. It is the father’s case that the son is profoundly disabled and that as a result he has responsibilities of the type set out in s.75(2)(d)(ii) of the Family Law Act 1975 (Cth) to support both the child and his partner. Because of the child’s disabilities his partner is unable to return to her work as an academic. In the course of the evidence of the husband he conceded that to a great extent his financial affairs were merged with those of his new partner and that he was the sole person bringing money into the house. His funds were used to pay not only the living expenses of himself, his partner and their child but also the three children of his partner.
In the wife’s affidavit of the 9 December 2002 she deposes to having received $140,000 pursuant to the property settlement of 31 October 2001. She paid $42,500 in legal expenses and $2,200 to a barrister. She received $95,300 net. She purchased furniture at a cost of approximately $25,000 and lent approximately $30,000 to family members. She claims she then had approximately $30,000 of her capital left. In her later affidavit of 17 June 2003 she deposes that she lent her sons $35,000 and has paid $15,000 for legal costs for the current proceedings. She has also spent money visiting her family in the United Kingdom.
The wife deposes to the fact that she has had a series of medical problems including panniculitis and experienced numbness in her left foot. She was diagnosed with a brain tumour and operated on to remove the same on 27 March 2003. She is currently living on a DSS pension of $221.50 per week and pays $140 per week in rent.
The husband is an academic. He is Dean of Physics at a university in the Sydney area. He currently earns $2038 per week. During the course of the hearing there was considerable cross-examination about the husband’s earnings. Some of the documents which were produced under subpoena from the university at which he is employed indicated that he had earnings of approximately $144,000 per annum whereas he considered that in the year ending 30 June 2002 he earned $112,000 per annum. I am satisfied that his explanations for the apparent discrepancies are correct. The husband was entitled to a substantial sum by way of long service leave. He ‘cashed in’ that long service in tranches. The first was used to make payment to his wife and the second was used more recently to make payments in connection with what he deposed to be requirements for his new family situation. This included a special van for his young son, a hydrotherapy unit, some tyres for the van and legal fees. He claims that there are approximately $15,000 of additional expenses on the van to equip it for wheelchair access needed.
It is unfortunate that the husband has been somewhat recalcitrant in filing a tax return. He admitted on the first day of the hearing that the last time he filed one was approximately five or six years ago. He stated in evidence that he had no income in 2002 or 2003 from sources other than the university. Under cross-examination he was questioned about the arrangements for his motor vehicle. This is an additional motor vehicle to the van previously referred to. The husband responded that he had converted his Dean’s allowance into a salary sacrifice for a motor vehicle. The salary sacrifice arrangements currently continued past the termination of his Deanship. I am satisfied that the situation regarding the motor vehicle was adequately particularised in his Form 12. It made no claim in respect of that vehicle as a deduction from his current salary.
What the Form 12 does show is that his current spending of $1914 on himself and $413 on his partner plus $359 on their child exceeds his gross income of $2,038 per week. The husband also claims that he spends approximately $381 per week on the three children of his partner.
Included in the expenditure of the husband is $466 per week by way of what is described as compulsory superannuation. There was some argument as to whether or not this could be reduced. The superannuation goes into a state scheme which will eventually give the husband either a lump sum of approximately $600,000 or a defined pension based upon the salary for the last three years of work. The arrangements which he made with his wife on 31 October 2001 also included a payment out of his superannuation fund when collected of $250,000 to the wife. The husband indicated that it was his present intention to keep on working.
A number of letters concerning the husband’s superannuation were tendered. Exhibit 3 dated 13 July 2000 states as follows:
“As a member of the state superannuation scheme you do not have to contribute for units that would increase your total contributions to more than 6% of your salary. Units that would increase your personal contributions above 6% of your salary are optional and you can elect to “abandon” them when you receive your annual review day notice.
You have the option if you are contributing in excess of 6% of your salary to elect on financial hardship to reduce your contribution to 6%. In order to reduce your fortnightly contribution to SSS we would require a written request from you…”
This led to a considerable amount of further evidence being brought in relation to the superannuation issue with which I shall deal later.
The husband’s partner, Ms Wilkes, gave evidence. From her evidence and that of the husband we learnt that she owns a house worth at least $700,000.00 in respect of which she has a secured overdraft account which is in debit approximately $8,000.00. She says that “we are going backwards” due to the fact that the husband’s salary does not manage to pay all the expenses of the entire household including her three children. She stated that she was not getting child support from her former husband, her children’s father. She does not appear to have taken many steps to enforce his obligations to provide for his own children. Ms Wilkes gets a carer’s allowance of $87.00 per fortnight. She had received some lump sums by way of tax refund and maternity leave payment from the university at which she also used to work.
Mrs Tansley gave evidence at the first adjourned hearing. She confirmed that she had received no payment from her husband pursuant to the consent orders since the last time the matter was in court but she had changed her address and had now gone to live with her daughter. She had agreed to pay her daughter the same amount by way of rent as she was paying in her previous apartment but in response to a question from me she confirmed that her daughter had agreed that this figure would include her food.
Mrs Tansley deposed to the fact that in January 2000 her Husband had told her that he intended to leave the marriage to live with his current partner and that this caused her to have a nervous breakdown and to be admitted to Westmead Psychiatric Ward for one month. She deposed to the fact that the applicant came to visit her in hospital and said words to the effect
“I’m going to have another child so that I no longer need to pay you any maintenance.”
Her affidavit continues with the history of the financial relationship between the parties after the breakdown which appears to have been studded with defaults by the applicant requiring application for contravention orders until maintenance was reduced to $350 per week on 31 October 2001. The respondent then deposes to her ill health which included admissions to hospital for panniculitis, depression, a brain tumour, cystitis, and a requirement for back surgery.
The wife deposed to her current financial position. She received approximately $95,300 net from the lump sum property settlement which she used to pay for furniture and other necessities of life. She lent approximately $28,000 to her sons and paid some expenses in the United Kingdom where she went to visit relations prior to going into hospital. She claims she now has approximately $30,000 remaining of the settled sum.
The wife’s affidavit continues with details of the applicant’s financial position, as she knew it. Importantly there is at [28] and [29]:
“28. During the course of our 34-year marriage we have travelled extensively pursuant to the Applicant’s employment. He gave lectures overseas and attended various conferences. In 1980 we spent 15 months in Malaysia. In 1984 we spent 15 months in the United States of America. We also spent a further month in India. In 1993 we spent 1 month in Indonesia and in 1993 we spent a further 4 months in England. The other places we visited were Belgium, Germany, Holland, Hong Kong, Boston, Singapore, Perth, Melbourne, Adelaide and Canberra.
29. During each of these travel periods the Applicant’s salary was paid by Macquarie University. Over the last 5 years prior to the Applicant leaving me in January 2000, the Applicant and I had two trips per year each of 1 month duration to Bali where the Applicant would lecture. During each of these trips on every occasion he returned with approximately US$15,000.00 in cash in his suitcase as payment for the lecturing he had done there. This was in addition to the salary that he received at Macquarie University at the time. I do not accept that the income disclosed in his application and affidavit sworn 10 September 2002 is accurate. I believe his real income is at least $500.00 or more per week, more than that was disclosed.”
The respondent also made other allegations concerning cash payments received by the applicant. Much of the rest of the affidavit constitute matters of belief upon which there is no proof.
The respondent was cross-examined at some length on her affidavit and on her form 17. There is some dispute as to whether or not she gave $15,000 to her solicitors in 2003 when she was legally aided. She informed the Court that her legal aid only started recently (6 months ago) and it seems to be very possible that she did make that payment. She explained the loans to her sons which appeared to be without interest and repayable when they were able to make the repayments. She stated that she received $480 per fortnight from a pension. The respondent was cross-examined at some considerable length about the matters deposed to in paragraph 29. Although she could not recall the exact amounts of money she was confident the figure was an average of US$15,000 although it could have been as little as US$10,000. She said it was different each time. She said that she used to carry the money. It was divided between her husband and herself. He would give her money to carry back from the trips to Hong Kong and other places.
The respondent admitted that the matters which she deposed to concerning other extra payments received by the applicant came from her own belief but stated that her husband was always doing extra work outside the university.
Mr Battley has criticised these paragraphs [30]-[35] as expressions of mere belief. Regrettably his client does not move from a position of strength. He had not filed a tax return since about 1998 until just before the final adjourned hearing. It would be unrealistic to ignore the fact that people who have been married for many years frequently confide in each other their financial affairs. This is what the applicant says the respondent did. I found the applicant convincing in her cross-examination on paragraphs [29] and [30] and am left with the view that the respondent did, over the years he lived with the applicant, earn sums additional to his university salary. The fact that he had not filed tax returns could be said to indicate that he might well have a greater income than his group certificate would reveal. The difficulty which I have is putting a figure on that income for the years since 5 September 2002.
The husband has still not filed tax returns for the year ended 2001 and 2003 and I regret to say that I found his attitude towards these responsibilities somewhat grudging. Indeed, this was the tenor of most of his evidence. I took the opportunity to ask the husband about the allegations of him taking money from his lecturing duties outside of the country. His answers indicated to me that he was being paid directly by the institutions (or aid agencies on the institution’s behalf) for whom he was providing services. I did not regard the husband’s manner of responding to questions as frank and open and would prefer the evidence of the wife to this. However, it probably does not matter because the wife did not accompany him overseas during the period in respect of which he is in arrears of his payments and in the absence of any evidence that he even took such trips abroad during the relevant period I would not make a finding of undeclared payments.
In order to make a determination in relation to this application findings must be made on a number of financial matters. The first is the husband’s actual earnings from the time when he went into arrears of his consent arrangements of 31 October 2001. Exhibit A in these proceedings is a pay advice slip for the period ended 9 July 2003. It indicates that the husband is paid at an award rate of $105,264.00 per annum providing him a gross fortnightly pay of $4,069.32 from which there is deducted tax $1429.00, superannuation $931.47, union and staff deductions $44.37. This left the husband with a fortnightly net pay of $1,664.48, a weekly pay of $832.24. Exhibit C is a letter from the University dated 23 December 2003 which states that from 1 July 2004 his salary will be based on Level E Step 2 $109,474.00 per annum and that his fortnightly pay will be as follows:
Gross salary per fortnight $4196.21
Less SS vehicle 559.65
Sub total $3636.56
Less tax on reduced gross 1219.00
SSF superannuation 576.08
Net salary $1841.48
This represents a weekly after tax salary of $920.74. I accept that this is the current figure he is being paid and that the figure previously referred to was the figure he was being paid up to 30 June 2004 when he received an extra expense of office allowance as Dean. I asked the husband whether his position as Dean was being extended and he advised me that it was not. I must accept that evidence. But I also accept from the tax return that became Exhibit F that his income for the year ending 30 June 2002 was $144,175.00 due to the long service leave payment.
The next matter which I have to consider is the husband’s superannuation payments. This was the subject of considerable debate and evidence. The husband belongs to the State Superannuation Scheme controlled by the Superannuation Act 1916 (NSW). The evidence reveals that a contributor to the scheme must pay at least 6% of his or her annual salary into the scheme. It also reveals that a contributor is entitled to make a payment in respect of additional units in excess of 6% based upon what is described as his unit entitlement. Every year a member receives an annual review day notice which sets out his unit entitlement, the number of units for which he is currently contributing, the current fortnightly contribution cost based upon the number of units for which he is currently contributing, his salary, his new unit entitlement, the number of new units for which he must now contribute given his new salary (to the extent he is not already contributing that number of units) and:
“If the total of your current contributions and the cost of all new units would result in a new contribution greater than 6% of your salary, you may choose to abandon some or all of the excess units shown here.”
For the purposes of these proceedings and for a proper interpretation of the applicant’s rights and duties under the scheme it is necessary to read the annual review day notice in conjunction with s.10Q(2) of the Superannuation Act which states:
“10Q(2) A contributor may, within 2 months after the contributor’s annual review day in any half-year, elect to abandon any 1 or more of the optional units of pension in respect of which, but for the election, the contributor, would be required by this section to commence contributing to the Fund.”
The wife attempted to bring evidence as to the meaning of this section and in particular to provide the court with an understanding of the extent to which the husband was bound to make the rather high superannuation contributions which had been deducted from him in the past. It is always useful for the court to be given explanations of how these complicated schemes work but in the end it is a matter of interpretation either of a statutory scheme or of a trust deed and that is the responsibility of the court. I have therefore not had regard to the evidence I heard in relation to the scheme and have made my own interpretation of s.10Q.
I am satisfied that the statutory position is that upon the annual review day notice being received a member has a short period of time in which to abandon payment in respect of the number of units which represent a contribution greater than 6% of his or her salary but that if the option is not taken up within the required period of time the member is obliged to make contributions for the amount of units to which he or she is entitled. In the case of the husband in the year 2002 he would have been entitled to abandon 16 units (Exhibit 7). Each unit cost $3.79 per fortnight or $30.32 per week. In 2003 he was entitled to abandon 18 units at $3.79 per unit or $34.11 per week. No figures have been provided for 2004 but because the husband has lost his expenses of office allowance I cannot imagine the figure for abandoned units would be any greater. However, this is not the end of the matter because on the last day of the hearing evidence was adduced to reveal that the husband because of his age was able to reduce his weekly superannuation contribution by $178.00.
I find that in respect of the husband his ability to increase his weekly income by reducing his superannuation payments were for the year 2002/2003 $30.32, for the year 2003/2004 $34.11 and for the year 2004/2005 $178.00.
The next question to be asked is the husband’s liabilities. He has put his personal maintenance costs at $373.00 a week per his Form 12 filed 17 October 2003. There was little cross examination on these figures and, with the exception of fares of $10.00 per week I would accept them. The reason I do not accept the fares is the husband has a car for which he pays a salary sacrifice and there is another car in the family as well. The husband’s expenditure is therefore $363.00 per week.
The husband claims that he pays $259.00 per week for the support of his disabled child F. This consists of medical expenses and dental care including home help, medications, consumables and special equipment. In addition he pays $53.00 respite care and $71.00 baby needs. The evidence is that at the moment the husband’s de facto partner is not at work because she is looking after the child. However, the de facto partner does have an earning capacity as she is herself an academic.
The husband claims the sum of $413.00 per week for the support of his de facto partner. As noted at [9] hereof she has assets in excess of $700,000.00 and receives a carer’s allowance of $87.00 per fortnight. No evidence was given as to whether she was entitled to any other government payments. The figures in the Form 12 in relation to the sum of $413.00 are not unreasonable. There is a figure of $94.00 for medical and dental. Ms Wilks does not appear to have been cross examined about this.
Finally it is suggested that the husband has responsibilities for Ms Wilks’ three children in the sum of $381.00 per week. There was no serious cross examination of the figures although the liability to maintain these children is strongly disputed by the wife.
Although the wife has spousal maintenance orders made by consent and therefore does not have to justify her claim for arrears it is important to recall the facts about her current situation set out [3] of these reasons. On the view which I have come to about the husband’s earnings and the findings which I have made in relation to superannuation it would appear that from the 2004 financial year there will be a small amount of income available, approximately $50.00 from which to pay spousal maintenance if there is excluded from the husband’s expenditure the moneys paid out on behalf of his de facto’s three children. In the period up to this July the husband had a small deficit even though he had not made the spousal maintenance payments. What the court is faced with is a priority question. It is clear that the husband has an obligation under s.75(2)(d)(ii) to support his severely handicapped child who is now just over 2 years of age. But he could provide that support and still pay the spousal maintenance he contracted to pay if his obligation to support his de facto partner was considered less of a priority than his obligation to support his former wife. I am satisfied that given the state of his former wife’s health there can be no question but that she would have priority over any obligation he may have to support the children of his de facto partner.
But it is not just a question of priority. The court must also look at s.83(2) of the Family Law Act:
“The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied:
(a) that, since the order was made or last varied:
(i) the circumstances of a person for whose benefit the order was made have so changed;
(ii) the circumstances of the person liable to make payments under the order have so changed; or
(iii) in the case of an order that operates in favour of, or is binding on, a legal personal representative—the circumstances of the estate are such;
as to justify its so doing;
(b) that, since the order was made, or last varied, the cost of living has changed to such an extent as to justify its so doing;
(ba) in a case where the order was made by consent—that the amount ordered to be paid is not proper or adequate;
(c)that material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false.”
In regard to the wife the circumstances have changed in that her health has deteriorated and the possibilities of her obtaining employment decrease due to her age (she was 60 as at 17.6.03). She had left the paid workforce in 1996 at her former husband’s request. Those are her income circumstances. In regard to her capital circumstances she had, at the time of the making of the order, a right to a payment of $140,000. The orders took into account this payment. There is not very much of this capital left, although approximately $35,000 is represented by loans to her sons. She is now living with her daughter. On this evidence there is nothing to persuade the court that the orders should be vacated or in any way altered. It is therefore necessary for the court to be satisfied that the circumstances of the husband have so changed as to justify the making of the orders. The only way in which the circumstances of the husband have relevantly changed is that he has now accepted responsibility for his infant disabled child and for his partner. This is a factor under s.75(2)(e) of the Family Law Act and s.75(2)(m). In regard to s.75(2)(e) the Full Court in In the Marriage of Soblusky (1976) – 77 12 ALR 699 at [728] said:
“It was argued that insofar as his commitment related to the support of Mrs Newman that circumstance ought to be disregarded or at least treated as secondary to the primary obligation of the husband to support his wife. Section 75(2)(e) requires the court in exercising its power in respect of maintenance to have regard to “the responsibilities of either party to support any other person”. This provision is couched in wide terms and ought to be given a broad interpretation.… A court is required under par (e) to consider in a realistic way the fact that a party has assumed a responsibility to support another person, and the weight to be given to that fact depends upon the circumstances of each individual case. To adopt a view that in every case the responsibility referred to in that paragraph must be subjugated to the responsibility of the party of ? [to] his or her spouse is in our view to unduly restrict the scope of par (e) and may in particular circumstances produce a result which is unrealistic in the circumstances.”
In Kennon and Kennon (1997) FLC 92-757 Fogarty and Lindenmayer JJ said at [84,292]:
“Spousal maintenance is essentially concerned with issues of need and capacity.”
No one can argue with this broad statement which was made in the circumstances of a decision concerning conduct and I do not think it assists me to decide whether or not the needs of the wife in this case, which were clearly accepted as existing when the original order was made and which have in no way diminished, should be given priority over the needs of the new partner who is currently not working in order to look after a disabled child. There is only a finite amount of the husband’s income to go around. He appears to have the capacity to support one or the other or each of them partially. To the extent that the husband fails to provide either of these persons with adequate support they may have recourse to the state but this court cannot take that into account: Kajewski and Kajewski (1978) FLC 90-472.
In these circumstances I think that what the court should do is to take into account the total financial circumstances of the two claimants. Although the wife in her written submissions complains that there is very little evidence about the circumstances of Ms Wilks this is not the case. It is know that she has a house worth at least $700,000 and a very small mortgage upon it. It is know that she is an academic who has a reasonable earning capacity. It is known that she has three children by her previous marriage to support but that she has rights to receive child support from the father of those children. In regard to the wife it is know that she has no real property assets, some furniture and a debt due to her from her children. She may have some free funds left over from the property settlement but these would not, from the evidence, seem to be worth more than approximately $10,000 and she obviously has legal fees to pay.
This analysis would tend to indicate that the priority should lie with the wife. Her overall financial position is less secure than that of Ms Wilks. I would therefore dismiss the application insofar as it relates to a request that the orders for spousal maintenance be vacated. The wife is seeking arrears. I have not been provided with a calculation of exactly what these are but they were certainly around $10,000 at the commencement of these proceedings which have regrettably taken a year to complete. Whilst I believe that the wife is entitled to the arrears she has lived through the period during which the husband made no payment and has managed not to incur any significant debts. I would propose that the parties bring in Short Minutes which identify the total amount of the arrears to 31 July 2004 and contain an order that without leave of the court the wife not be permitted to seek enforcement of the order for a period of two years. The purpose of this moratorium is so that Ms Wilks can continue to care for the child herself until he is four years of age when she may well be able to return to the academic workforce. The husband is required to resume payments of spousal maintenance at the previously ordered rates from 1 August 2004.
The husband failed in his application. He has obtained a concession in relation to the arrears but that should not benefit him when considering the question of costs. I would order that the husband pay the wife’s costs to be assessed pursuant to Part 21 Rule 21.02(b) and Schedule 1 of the Federal Magistrates Court Rules.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Raphael FM
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