Taylor and Nicholas
[2011] FMCAfam 1127
•21 December 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TAYLOR & NICHOLAS | [2011] FMCAfam 1127 |
| FAMILY LAW – Property – husband’s significant initial contribution found to attract a 25 per cent loading in his favour – section 75(2) factors found to attract a 25 per cent loading in the wife’s favour – consideration of add backs and the financial resource of the husband’s family trust – orders made for an equal division of the parties’ property – wife’s claim for spousal maintenance dismissed as court found neither a need or capacity to pay were established. |
| Family Law Act 1975, ss.72, 74, 75, 79 |
| Clauson & Clauson (1995) FLC 92-595 In the Marriage of Aleksovski (1996) FLC 92-705 Pierce and Pierce (1999) FLC 92-844 Stein and Stein [2000] FamCA 102 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 |
| Applicant: | MS TAYLOR |
| Respondent: | MR NICHOLAS |
| File Number: | MLC 3160 of 2010 |
| Judgment of: | Bender FM |
| Hearing dates: | 17, 18, 19 & 20 October 2011 |
| Date of Last Submission: | 20 October 2011 |
| Delivered at: | Melbourne |
| Delivered on: | 21 December 2011 |
REPRESENTATION
| Counsel for the Applicant: | Ms Stoikovska |
| Solicitors for the Applicant: | Berry Family Law |
| Counsel for the Respondent: | Mr Mort |
| Solicitors for the Respondent: | Berger Kordos Lawyers |
ORDERS
The husband pay to the wife the sum of $226,453.00 (“the payment”) on or before the 20th day of February 2012 (“the date”).
Contemporaneously with the payment:
(a)the wife do all such acts and things and sign all such documents as may be required to provide to the husband a withdrawal of the caveat registration no [omitted] lodged by her in respect to the real property situate at and known as [Unit 3] Property R [R] being the whole of the land more particularly described in Certificate of Title Volume [omitted] (“the real property”); and
(b)the husband indemnify the wife against all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
In the event that the whole of the payment has not been made by the date then the husband sign all documents and do all things necessary to transfer to the wife the real property to be held on trust for sale (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:
(a)firstly to pay all costs, commissions and expenses of the said trust transfer and the sale;
(b)secondly so much of the payment as is then outstanding together with interest thereon at the rate of 10.5 per centum per annum adjusted monthly from the date to the wife; and
(c)thirdly the balance to the husband.
Pending the payment or completion of the sale:
(a)the husband have the sole right to occupy the real property and during such right of occupation the husband pay all rates and taxes and like apportionable outgoings of the real property as they fall due;
(b)the parties hold their respective interests in the real property upon trust pursuant to these orders; and
(c)neither party encumber the real property without the consent in writing of the other party.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the real property being deemed to be in the possession of the husband);
(b)insurance policies remain the sole property of the owner named thereon;
(c)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
The wife’s application for spousal maintenance is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Taylor & Nicholas is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 3160 of 2010
| MS TAYLOR |
Applicant
And
| MR NICHOLAS |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter was initially listed in relation to both children’s and property matters. The parties were able to agree as to the living arrangements for their daughters [X] born [in] 2003 (“[X]”) and [Y] born [in] 2006 (“[Y]”) and final children’s orders were made by consent at the commencement of the final hearing of this matter. The consent orders provide for [X] and [Y] to live with the wife and spend four nights a fortnight and half the holidays with the husband.
The parties were unable to resolve property matters and it is the adjustment of the matrimonial assets that this judgment addresses.
The wife is seeking orders that she receive 75 per cent of the parties’ asset pool, including superannuation. She also seeks an order that if the court orders an adjustment of property such that she receives less than 75 per cent of the parties’ asset pool, the husband pay her the sum of $350.00 per week by way of spousal maintenance for no less than three years.
The wife argues that this is a just and equitable outcome because of her primary care of the parties’ daughters, the disparity in the parties’ earning capacity and the financial resource that is the husband’s entitlement in his parents’ Family Trust, the Nicholas Family Trust.
The husband is seeking orders that he retain 60 per cent of the parties’ assets, including superannuation. He also seeks that the wife’s application for spousal maintenance be dismissed.
The husband argued that his proposal is just and equitable because of his far greater financial contribution to the matrimonial assets at the commencement of the relationship, in that he owned unencumbered property at Property C, [C] (“Property C”), the sale of which funded the acquisition of the former matrimonial home. Further his family provided the parties with rent-free accommodation for the first six years of their relationship.
A further complication to the matter is the parties have vastly disparate views as to what constitutes the matrimonial pool.
The wife argues the pool should include an “add back” of $106,271.87 plus lost interest. The wife argues this figure represents the difference between the funds paid by the parties to the Nicholas Family Trust from the proceeds of sale of Property C and the actual costs of the land and construction of the former matrimonial home.
The husband disputes that there was any overpayment to the Nicholas Family Trust for the former matrimonial home and argues that such an “add back” should not occur.
The husband argues that the pool should include an “add back” of $49,000.00 that was paid to the wife’s brother from a term deposit held by the wife and her mother some four months prior to separation.
The wife argues that the funds in the term deposit held in the name of herself and her mother were monies held on behalf of her brother Mr M and that she had no interest in those funds. She therefore argues these monies do not form part of the matrimonial pool.
Background
The wife was born [in] 1972 and is 39 years of age. She is employed on a part-time basis as a [omitted] where she has been employed for 17 years. She currently works 12 hours per week earning $15,000.00 per annum. She lives with her parents and is otherwise engaged in home duties. She has not re-partnered.
The husband was born [in] 1969 and is 42 years of age. He is employed as a [omitted]. He has a base salary of $57,000.00, but with overtime earns approximately $70,000.00 per annum. He lives in the former matrimonial home. He has not re-partnered.
When the parties commenced their relationship the husband was the registered owner of Property C, though he was not living in that property. Whilst there were two mortgages registered over Property C, it was the husband’s evidence that the mortgages had been paid out.
The wife disputes the husband’s evidence that the mortgages over Property C were paid out at the commencement of the relationship. She gave evidence that she believed mortgage payments were made during the relationship.
Neither party provided the court with independent evidence to support their evidence as to the status of the mortgages on Property C at the commencement of their relationship. When Property C was sold in 2007 there were no monies owing in respect to either of the mortgages.
In July 1994, the husband’s parents established the Nicholas Family Trust (“the Trust”). On 21 February 2000 the husband’s parents signed a Deed of Appointment making the husband the Appointor of the Trust and Nicholas Pty Ltd the Trustee of the Trust. The husband, together with his brothers Mr H and Mr C are the directors of Nicholas Pty Ltd. A Supplementary Deed of Trust was also signed at this time which provides that no assets of the Trust can be transferred or dealt with by the Trust without the consent of the husband’s parents.
At the commencement of the relationship, the Trust owned three units at Property M, [R] and property at Property R [R] (“Property R”).
It was the wife’s evidence that she and the husband commenced
co-habitation in May 2001 when she moved into the unit in which the husband was then residing at Property M, [R], a unit owned by the Trust. It was the wife’s evidence that she and the husband then moved to Property R in May 2002.
It was the husband’s evidence that the parties commenced co-habitation in November 2002 when the wife moved in with him at Property R.
The wife’s evidence as to the date of the commencement of cohabitation was much more compelling than that of the husband. She was consistent in her evidence and was able to accurately describe the Property M property. By contrast, the husband’s evidence was most inconsistent. He gave three different dates as to when he moved to live in Property R, all of which pre-dated his relationship with the wife. He could not explain how she was therefore able to describe the Property M property so accurately.
In these circumstances I preferred the evidence of the wife and find the parties commenced cohabitation in May 2001.
Whilst the parties lived in property owned by the Trust from the commencement of cohabitation until the transfer from the Trust to the parties of the former matrimonial home, the parties paid no rental to the Trust in relation to their living in Trust owned real estate.
From the commencement of cohabitation in May 2001 until its’ sale in 2007, the Property C property was rented out for only two years and otherwise remained vacant. Even though the husband was the registered owner of Property C, all rental received was paid to the Trust.
In August 2001, the wife opened a Bendigo Bank Ethical Account with a deposit of $16,000.00, being her settlement monies from her first marriage. She purchased $10,000.00 of [T] Shares in October 2001. She has retained those shares to this day.
It is the wife’s evidence that in 2001, at her mother’s request, approximately $40,000.00 was deposited into her Bendigo Bank Ethical Account by her mother on behalf of her brother Mr M.
In September 2002, the sum of $40,050.00 was transferred from the Bendigo Bank Ethical Account to a Bendigo Bank Term Deposit in the name of the wife and her mother (“the Term Deposit”). The wife’s mother also deposited further monies of her own into the Term Deposit. It is the wife’s evidence the funds in the Term Deposit belonged to her mother and brother Mr M and she obtained no benefit from that money.
In November 2005, the wife opened a Bendigo Bank Passbook Account (“the Passbook Account”). At this time the wife closed the Term Deposit and placed $51,026.00 from the Term Deposit into the Passbook Account. The balance of the Term Deposit was retained by the wife’s mother.
The wife and her mother were the authorised signatories for the Passbook Account. It was the wife’s evidence, which I accept, that her mother managed the Passbook Account and all transactions on this account were conducted by her mother.
In June 2006, the wife’s mother withdrew $20,000.00 from the Passbook Account. It was the wife’s mother’s evidence that she and her husband used this money to buy themselves a motor vehicle. On
5 August 2006, the wife’s mother deposited $10,000.00 into the Passbook Account. On 22 February 2008, the wife’s mother deposited $3,000.00 into the Passbook Account. In June 2008, the wife’s mother deposited $6,000.00 into the Passbook Account.
On 15 October 2009 an amount of $49,000.00 was withdrawn by the wife’s mother from the Passbook Account and paid to the wife’s brother Mr M. The Passbook Account was then closed by the wife’s mother.
In May 2002, the husband suffered a workplace injury and was unable to work for three and a half years during which period he received Workcover payments. He returned to work in September 2005.
The parties’ daughter [X] was born [in] 2003.
After [X]’s birth and during the period the husband was unable to work, the wife increased her hours at [E] so that she was working on an almost full-time basis. The husband, with his mother’s assistance, cared for [X] during this time.
In March 2005 the husband received a lump sum payment of $55,000.00 for pain and suffering arising from his workplace injury. After payment of legal costs, and some other expenses, the balance of these monies and some superannuation drawn down by the husband whilst he was off work were placed in a term deposit. At separation the value of the term deposit was $63,691.00. This amount was divided equally between the parties pursuant to orders made on 19 May 2010.
The parties’ daughter [Y] was born [in] 2006.
The parties married [in] 2007.
On 27 February 2007 Nicholas Pty Ltd signed a contract with [M] for the construction of two units at Property R to be built behind the existing house on that property.
In March 2007 the husband sold Property C for $400,000.00. From the proceeds of sale, being $399,408.43, the sum of $360,000.00 was placed into a term deposit in the name of Nicholas Pty Ltd and the balance was placed into the Nicholas Pty Ltd Commonwealth Bank of Australia cheque account.
After registration of a Plan of Subdivision, on 11 September 2008, Nicholas Pty Ltd transferred Property R [R] (“the former matrimonial home”) to the husband. The consideration shown on the Transfer of Land in relation to the transfer to the husband was initially shown as “an entitlement in equity”. After a requisition from Land Victoria, the Transfer of Land was amended to show the consideration to be $95,000.00. This figure reflected an estimate of the land’s value of between $95,000.00 to $110,000.00 provided by [omitted] Real Estate dated 23 April 2008.
The total cost of the construction of Units 2 and 3, Property R [R] was $397,456.26. Unit 2 is a two bedroom property and Unit 3 is a three bedroom property. Upon being requested to do so by the husband for the purposes of this matter, [M] issued a costing statement for Unit 3 of $272,000.00.
The parties separated on 20 February 2010 when the wife and children left the former matrimonial home and moved to the wife’s parents’ home where they continue to reside. The husband remains in the former matrimonial home.
The Issues
Having heard the parties’ evidence, considered their proposals and heard submissions, I identified the issues requiring determination to be as follows:
a)What constitutes the property pool, and in particular:
i)Should $49,000.00, being the monies transferred from the Passbook Account in the wife’s name in October 2009 to her brother be deemed to be an asset of the wife and included in the asset pool?
ii)Should the amount of $106,271.87 plus interest of $23,091.00 (such interest calculated on the capitalised interest on the sum of $106,271.87 imputed at the relevant Reserve Bank of Australia Cash Target Rate) be included in the asset pool?
b)
What adjustment should be made for the husband’s greater initial financial contributions and the benefit to the parties of living
rent-free in accommodation owned by the Nicholas Family Trust and is this offset by the wife’s contributions as homemaker and primary carer of the parties’ children both during and after separation and the receipt by the Nicholas Family Trust of all rental earned on the husband’s Property C property during cohabitation?
c)What should the adjustment be for section 75(2) factors and in particular:
i)Is the Trust a financial resource of the husband and if so, what adjustment should be made in the wife’s favour?
ii)What adjustment should be made for the wife having the primary care of the parties’ children?
iii)What adjustment should be made for the disparity in the parties’ earning capacity?
d)Should the court make an order for ongoing spousal maintenance for the wife?
The legislation
Section 79 of the Family Law Act 1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)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.
The matters to be taken into account under section 75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(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; and
(e)the responsibilities of either party to support any other person; and
(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; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(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; and
(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; and
(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; and
(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; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(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; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(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; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The four-step approach
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four-step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
Assets and liabilities
The $49,000.00 transferred by the wife to her brother shortly before separation
As set out previously in this judgment, it is the wife’s evidence that during the course of the relationship, at the request of her mother, she held various funds for and on behalf of her mother and her brother
Mr M.
It was the wife’s evidence that her mother approached her with a request that she invest these funds on the basis that her brother Mr M needed assistance. It was her evidence that she made no further enquiries as to the necessity for that assistance as her family has a long tradition of offering each other help when called upon to do so.
It was the wife’s evidence that she made no contribution whatsoever to the various monies that were invested in her name or in the name of herself and her mother jointly and that at no time did she ever consider those monies or any interest earned on them to be her own.
It was the wife’s evidence that whilst the various accounts were in her name or in the names of herself and her mother, it was her mother who had the relevant authorities and was responsible for all transactions that were conducted in relation to these accounts.
It was the wife’s evidence that she was advised by her mother in 2009 that the issues involving her brother Mr M had resolved and it was at her mother’s direction that the Passbook Account was closed and the funds transferred to her brother Mr M.
It was the wife’s evidence that at no time did she put any money of her own or of the parties into those accounts and at no time did she receive any money or interest from any of the accounts.
It was the wife’s evidence that the husband was aware of the existence of these accounts during the marriage.
The wife’s mother Ms T swore an affidavit on 19 September 2011 and gave evidence at the final hearing of this matter in relation to the establishment and conduct of the accounts in the wife’s name and the accounts held jointly between herself and the wife.
It was the wife’s mother’s evidence that her son Mr M had developed a gambling problem and that he had requested that his monies be protected from his problem. Accordingly he had asked her to invest his savings such that he would not be able to easily access them.
It was the wife’s mother’s evidence that she had encountered difficulties with the Department of Family and Community Services (“the Department”) because she had received Centrelink payments at the same time that she was receiving Workcover payments. Because of this, the Department instituted proceedings that went before the Administrative Appeals Tribunal. The Administrative Appeals Tribunal ordered that she repay $30,000.00 to the Department.
It was the wife’s mother’s evidence that in these circumstances she was most concerned not to incur any further difficulties with the Department or Workcover and had asked her daughter to invest her son Mr M’s monies in her daughter’s name rather than it being invested in her name.
It was the husband’s evidence that at no time during the relationship was he aware of the existence of these accounts in the wife’s name.
It was argued on behalf of the husband that the transfer of $49,000.00 by the wife to her brother shortly prior to separation was done to ensure those funds were not included in the matrimonial pool. Counsel for the husband argued that it was open to the court to make a finding that upon resolution of property matters, those monies would be made available to the wife by her mother and/or brother for her use and benefit.
The wife strongly refuted the husband’s claims in this regard. As noted, it was her evidence that she made no contributions to these funds whatsoever and that all monies in those accounts were either those of her mother and/or her brother.
It is apparent from the evidence that neither party was earning a high income during the course of the relationship. The husband was employed as a [omitted] and the wife was employed on a part-time basis as a [omitted]. There was a period of three and a half years when the husband was unable to work because of the injury that he suffered and during this period he was on limited Workcover payments.
It is therefore very apparent that the parties, and the wife in particular, had no capacity to accumulate savings in the amount that was contained in the various accounts in either her or her mother’s name.
Further, there was no evidence whatsoever before this court of any intention by the wife’s mother to make substantial sums available to the wife post-separation or into the future.
In these circumstances, I am satisfied that the amount of $49,000.00 transferred by the wife to her brother shortly prior to separation is not an asset of the parties to be included in the pool of assets for division between them.
The shortfall between the land and construction costs of the former matrimonial home and the net proceeds of sale of Property C
As noted earlier in this judgment, the husband owned a property at Property C, [C] at the time of the commencement of cohabitation. It was the husband’s evidence, which I accept, that whilst this property had two mortgages registered against it, they were paid when the parties commenced cohabitation.
Property C was sold by the husband in March 2007 for $400,000.00 and the net proceeds of sale of $399,408.43 were placed into the Nicholas Family Trust.
As noted, the Trust owned property at Property R [R]. In 2007 that property was subdivided and two units were built behind the existing house where the parties had been living since 2002.
On 11 September 2008, Unit 3 of the subdivision was transferred to the husband. The Transfer of Land showed a consideration of $95,000.00 for the land.
The total cost for the construction of Units 2 & 3 at Property R was $397,456.26.
The Trust utilised the proceeds of sale from Property C, together with borrowings of $50,000.00, to pay for the subdivision, stamp duties, registration fees and construction costs for the two units.
It was argued on behalf of the wife that when the cost of the land ($95,000.00) and the cost of the construction of the unit ($198,728.13 being 50 per cent of the total cost for the construction of both units) is subtracted from the sale price for Property C of $400,000.00, there is an amount of $106,271.87 remaining. It was submitted on behalf of the wife that the parties should have had the benefit of those monies, rather than the husband’s parents’ Family Trust, and that accordingly such amount should be added back to the property pool.
It was further submitted on behalf of the wife that if the parties had had the benefit of that amount, it would have earned a nominal interest of $23,091.00 from the date of payment to the Trust to the trial date, such interest being calculated on the Reserve Bank of Australia Cash Target Rate. It was therefore submitted that that nominal interest amount should also be added back to the pool.
This argument was completely rejected by the husband.
It was the husband’s somewhat simplistic evidence that, after discussion with his family, he paid the Trust the sum of $400,000.00, being $100,000.00 for the land and $300,000.00 for the unit and in return he received a brand new unit which now has an agreed value of $460,000.00.
It was further submitted on behalf of the husband that the basis upon which the wife calculated the costs of the construction for the former matrimonial home were in error. It was argued that Unit 3 was a more expensive structure than Unit 2, as Unit 2 is only a two bedroom home and Unit 3 is a three bedroom home. It was further submitted that the finish and fixtures to the Unit 3 property were more expensive than those in Unit 2, as the parties made specific alterations to those fixtures and fittings to reflect their requirements in relation to their home.
Annexed to the wife’s trial affidavit sworn and filed
19 September 2011, were copy documents in relation to the construction of the units at Property R from the builders of the units, [M]. The first of these documents headed “Costing Certificate” dated 6 September 2010 shows the cost of the construction of Unit 3, Property R to be $272,000.00. That document purports to reflect the initial agreed construction cost of $209,004.74 plus the costs of the agreed variations to the original design of $62,995.26. This document was provided to the wife’s solicitors by the husband as part of the discovery process.
Further annexed to the wife’s trial affidavit however was copies of documents she obtained by subpoenaing the records of [M]. In a document dated 11 September 2008 headed “Progress Claims Certificate”, the variations to the original contract price of both units of $349,000.00 are shown to be $48,556.26, totalling the agreed final construction costs of the units of $397,456.26.
In the documents subpoenaed from [M], the variations listed to the original design are identical to the variations listed in the document provided to the wife’s solicitors as part of the discovery process. However in the latter document, the variation costs are shown to be $62,995.26 whereas in the subpoenaed document they are shown to be $48,556.26.
In addition, not only did the costs of the variations shown in the two documents from [M] differ, the document produced by the husband attributed all the variations to Unit 3 only. The subpoenaed documents clearly showed that the listed variations related to both Units 2 and 3 as well as costs attributable to the common property of all three units.
Whilst it was the husband’s evidence that all he did was ask the [M] to provide him with documentation as to the costs of the construction of Unit 3, as the wife had sought such information by way of discovery, he was unable to offer any explanations as to why the document he provided differed so markedly from the original source documents that were subpoenaed from the [M].
Whilst the court makes no finding that the document produced by the husband as to the costs of the construction of Unit 3 subsequent to separation has been altered to inflate the cost of that construction, the bottom line is that the court is not in a position to make a finding as to the actual construction costs in relation to that property given the discrepancy in the documentation and the absence of any independent evidence to explain that discrepancy.
It was the husband’s evidence that in addition to the cost of the land and the construction costs of the unit, there were additional costs arising from the payment of stamp duty, architectural fees, subdivision costs and other council expenses to which the parties had an obligation to contribute as the owners of Unit 3. The husband was unable to provide the court with any documentation that would enable the court to quantify what those costs were.
It was the husband’s submission that there was no shortfall between the proceeds of sale of Property C and the costs of the purchase and construction of the former matrimonial home, and that in those circumstances there should be no notional add backs in the sums sought by the wife or at all.
As noted, it is not possible to determine the actual cost of the construction of the former matrimonial home. Common sense would suggest that it would be more expensive to build a larger unit with superior fittings than a smaller unit, and that accordingly the wife’s basis for the calculation of the cost of the construction of the former matrimonial home is somewhat flawed.
Further, the wife’s argument makes no allowance for the additional costs arising from the subdivision including stamp duty, registration fees, council charges and architectural costs.
It is not possible to determine with precision if the amount received by the Nicholas Family Trust from the proceeds of sale of Property C exceeded the total costs of the land and unit, and if it did by what amount. However I am satisfied that the total costs for the former matrimonial home exceed the figure of $293,728.13 posited by the wife.
In all these circumstances I am not satisfied that there should be any amount included in the asset pool for division between the parties that represents some notional differential between the land price and construction costs of the former matrimonial home and the proceeds of sale of Property C.
As to the remainder of the asset pool, the parties provided the court with an agreed joint sworn valuation in relation to the former matrimonial home of $460,000.00.
It was also common ground that a Commonwealth Bank Term Deposit, which consisted of the monies received by the husband for pain and suffering in relation to his work injury as well as a proportion of drawn down superannuation from the husband’s entitlement totalling some $63,691.00 should be included in the pool. It is noted this amount was divided equally between the parties by agreement in 2010.
Additionally, it was agreed that the [T] shares that the wife had purchased from the settlement monies received by her from her first marriage, currently worth $9,694.00, were to be included in the pool as well as the husband’s 1991 Holden Commodore motor vehicle valued at $1,000.00.
At separation, the wife had the benefit of approximately $18,000.00 of the parties’ joint savings. It was her evidence that she had utilised these funds partly in the payment of living expenses for herself and the parties’ children. She also paid $8,000.00 towards her legal costs from this amount.
It was conceded that the amount expended on the wife’s legal costs was to be added back to the asset pool.
It also came to light during the hearing of the evidence that the wife had been allocated a small number of [E] shares worth approximately $400.00 and that this amount too is to be included in the asset pool.
In the material provided by the husband, he sought to include as a joint liability of the parties a Commonwealth Bank Visa account of $4,142.68. The husband was asked to produce proof of the Visa debt in order to establish it was a joint debt of the parties. He failed to do so. Accordingly it was conceded on his behalf that such liability was not to be included in the asset pool.
In these circumstances, I find that the matrimonial asset pool consists of the following:
Assets:
[Unit 3] Property R [R] $460,000.00 CBA Term Deposit divided between the parties $63,691.00 [T] Shares (wife) $9,694.00 [M] Shares (wife) $400.00 1991 Holden Commodore (husband) $1,000.00 Add back of joint savings expended by wife on legal costs $8,000.00 Total $542,785.00 Superannuation:
[1] (wife) $24,994.96 [2] (husband) $35,237.71 Total $60,232.67
Contributions
It was submitted on behalf of the husband that he had made by far the greater contribution to the parties’ matrimonial asset pool.
It was argued on the husband’s behalf that at the commencement of cohabitation he had an unencumbered interest in Property C.
The wife disputed Property C was unencumbered at the commencement of cohabitation, claiming mortgage payments were made during the relationship. Neither party provided the court with any independent documentation showing regular mortgage payments being made and I am satisfied that Property C was unencumbered at the commencement of cohabitation.
Whilst there was no evidence of the value of Property C at the commencement of cohabitation, it is common ground that it was sold in 2007 for $400,000.00 and it was this amount that enabled the parties to acquire the former matrimonial home.
It was further argued on behalf of the husband that it was not possible for the wife to argue that she had made any contribution at all in relation to Property C. It is common ground that the parties never lived in that property and that during the course of the relationship there was no capital improvements whatsoever made in relation to it.
The Full Court in the matter of Pierce and Pierce (1999) FLC 92-844 held at page 85,881:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution… regard must be had to the use made by the parties of that contribution.”
It was submitted on behalf of the husband that in this matter it is quite apparent that the totality of the proceeds of sale of the husband’s
pre-cohabitation asset formed the only basis upon which the parties were able to acquire the former matrimonial home.
It was further submitted on behalf of the husband that until the transfer of the former matrimonial home in 2007, the parties lived rent-free in properties owned by his parents’ Family Trust. Whilst conceding that the rental from the Property C property earned during the period of cohabitation went to the Family Trust, it was argued that Property C was only rented for a period of two years whereas the parties lived rent-free for a period of six years.
In those circumstances it was the husband’s argument that he made a further contribution as a result of the benefit obtained by the parties from their capacity to live rent-free in property owned by his parents’ Family Trust.
It was further submitted on behalf of the husband that the monies received by him as a result of his award for pain and suffering arising from his workplace injury should also be considered a financial contribution by him to the benefit of the parties.
The Full Court in the decision of In the Marriage of Aleksovski (1996) FLC 92-705 held as follows:
“in most cases, a damages award arising from a personal injury claim, whenever received, is a contribution by the person who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighed and considered at the same time.”
It was submitted on behalf of the husband that the award received by him was for pain and suffering and whilst it may, in part, be offset by the homemaking and parenting contributions required of the wife during this period, his should be seen as the greater contribution by way of the damages award.
It was therefore argued on behalf of the husband that given almost the entirety of the parties’ property pool arises directly from contributions made on his behalf, an appropriate adjustment for contributions would be 30 per cent in the husband’s favour.
Whilst conceding that the husband had made the greater initial financial contribution to the parties’ assets as a result of his ownership of the Property C property, it was submitted on behalf of the wife that such contributions had been offset over the course of the relationship by a number of significant factors and that accordingly, the weight to be given to that initial contribution should be considerably reduced.
It was firstly argued that the wife had made by far the greater contribution as both homemaker and parent. Because of the husband’s injuries which resulted in his incapacity to work for some three and a half years, it was the wife’s submission that she had borne an even greater burden than would otherwise have been the case for the responsibilities for the care of the household and of their young family.
It was further argued that in addition to her increased responsibilities as homemaker and parent during this period, the wife was required to return to almost full-time employment to financially support the family, thereby assuming the major income earning responsibility for the family.
It was also argued that post-separation, the children have lived in the wife’s primary care and that the agreement reached between the parties in relation to the living arrangements for the girls would mean that she would continue to bear that responsibility into the future.
It was further argued on behalf of the wife that the diversion of the rental income from the Property C property to the Trust had meant that a potential source of income to the parties had been lost and that they had been denied the benefit of that income.
In these circumstances it was therefore submitted on behalf of the wife that whilst there should be an adjustment in the husband’s favour for his greater initial contribution, such adjustment should be 10 per cent in his favour.
There is no doubt that absent the husband’s ownership of the Property C property, the parties’ unencumbered interest in the former matrimonial home would not have come into being.
Further, the manner in which the parties treated Property C, in that they did not live in it, made no capital improvements to it and, I am satisfied, were not required to meet other than the most basic of expenses of Property C, being rates and insurances, it is difficult to disagree with the husband’s argument that the wife’s contribution to that property was minimal.
I am also satisfied that during the course of the relationship the wife was the primary homemaker and bore the greater responsibility for the care of the parties’ children. This was particularly so whilst the husband was laid low by his workplace injuries. I note the husband and his mother did care for [X] whilst the wife was working during this period.
I am also satisfied that the parties benefitted from the provision of
rent-free accommodation provided by the husband’s parents’ Family Trust. Whilst the Trust was in part compensated by its’ receipt of some rental income from the Property C property, such rental was for two years of the cohabitation period only and the provision of the rent-free accommodation for six years was of real assistance to the parties, particularly during the period that the husband was not in employment and the income into the parties’ home was accordingly restricted.
The Full Court in Pierce and Pierce (supra) noted that when considering the weight to be attached to a party’s initial contribution:
“regard must be had to the use made by the parties of that contribution.”
The husband’s initial greater contribution, being 100 per cent equity in Property C, was utilised in its’ entirety by the parties towards the latter part of their relationship to acquire the former matrimonial home. The former matrimonial home constitutes 85 per cent of the current realisable asset pool for division between the parties.
Further, the husband’s receipt of monies for pain and suffering that constituted a large proportion of the $63,691.00 term deposit divided equally between the parties by agreement post-separation is also a contribution attributable to the husband. This contribution however is offset to some degree by the greater homemaking and income earning responsibilities shouldered by the wife during the three year period of the husband’s incapacity.
Having considered the respective contributions of the parties, I am satisfied that the husband’s contributions are such that there should be an adjustment in the husband’s favour of 25 per cent.
Section 75(2) factors
It was submitted on behalf of the wife that there should be a considerable adjustment in her favour on the basis of section 75(2) factors.
It was firstly argued on the wife’s behalf that there was a considerable disparity between the parties’ income earning capacity.
The husband returned to full-time employment in 2005. His pay slips, which were placed into evidence before the court, for the six months preceding the final hearing indicated that he not only worked full-time, but also undertook considerable overtime.
Whilst the husband’s current base salary is $57,000.00 per year, he has consistently in the last five years earned an amount in excess of his base salary through overtime such that he has averaged an annual income of approximately $70,000.00 per annum.
By contrast, the wife is in part-time employment with [E], currently working 12 hours per week earning $15,000.00 per annum. It was her submission that given she has the primary responsibility for the children of the marriage who are only aged eight and five, and given her desire to continue to be available to the children it was unrealistic for her to be able to return to full-time employment.
It was the wife’s evidence that she has made enquiries of her employer as to the availability of additional work to encompass those periods when the girls were with their father and that she has been advised that given the current economic circumstances, they were not in a position to offer her any additional hours at this time.
It was her evidence that even if she were able to obtain full-time or close to full-time employment, she would not generate the same level of income as the husband. Furthermore, it was argued that given the wife has no formal qualifications or training, as well as the difficulties with her eyesight (the wife has impaired vision such that she is unable to drive), there was and is a real disparity in the parties’ income earning capacity.
It was also strongly argued by the wife that the court should make a finding that the husband has a considerable financial resource as a beneficiary of the Nicholas Family Trust.
As noted previously in this judgment, the Trustee of the Nicholas Family Trust is Nicholas Pty Ltd. The husband is one of the three directors of that company. Further, he is the Appointor under the Supplementary Trust Deed.
Whilst it was not argued by the wife, and might I suggest appropriately, that the husband has an interest in the Trust’s property such that it should be considered a matrimonial asset, it was the wife’s position that the husband’s discretionary interest under the Trust should be considered a resource.
The wife argued that the primary beneficiaries of the Trust are the husband’s parents, the husband and his two brothers.
It was argued that the Trust assets comprise of real estate with a value of at least $1,500,000.00, and that upon his parents’ deaths, the husband and his two brothers will be in a position to divide the Trust assets between themselves.
It was submitted on behalf of the wife that the husband’s evidence confirmed that other than his parents, he is the only one in the family who has made a direct financial contribution to the Trust assets, being the monies the Trust received from the sale of the Property C property, as well as the monies by way of rental from the Property C property historically.
Evidence was also given that since separation, the Trust has purchased a blue station wagon and that it is the husband who has the primary benefit of driving this vehicle. It is this vehicle he uses at all times when he collects the girls to spend time with him and it is this vehicle that was seen parked out the front of the former matrimonial home when the valuation was conducted.
Whilst the wife questioned whether it is the husband who actually owns this vehicle rather than the Trust, it was argued that if the vehicle’s owner is the Trust, the husband’s use of the vehicle is another example of the benefits that the husband receives through the Trust.
It was therefore submitted on behalf of the wife that an appropriate adjustment in her favour pursuant to section 75(2) factors was 35 per cent.
It was submitted on behalf of the husband that the Nicholas Family Trust is not a financial resource in his favour.
It was submitted on the husband’s behalf that the Nicholas Family Trust is a discretionary Trust and that he is only one of several beneficiaries who may or may not benefit from that Trust.
It was the husband’s evidence that he has never received a distribution from the Trust and that the Trust was established primarily to provide support for his brother Mr C who suffers from severe mental illness such that he is unable to work in any capacity. He submitted that perusal of the Trust records would show that Mr C has been the only beneficiary to have received distributions of income. The Trust’s financial records confirmed the husband’s evidence in this regard.
It was further argued on behalf of the husband that the Trust assets consist solely of properties owned by his parents at the time of the creation of the Trust in 1994.
Whilst the husband conceded that he is the Appointor and one of the directors of the Trustee of the Trust fund, he argued the reality is that the Trust is the vehicle of his parents and its’ operation is at the direction of his parents.
It was the husband’s evidence the blue station wagon was purchased by the Trust to be used to transport items such as motor mowers used to maintain the Trust properties. It was his evidence the whole paternal family use this vehicle. This evidence was not particularly convincing given the Trust already owns a small truck. Whilst the Trust may well “own” the blue station wagon, I am satisfied the husband has the benefit of the use of this vehicle.
It was therefore argued on behalf of the husband that the Trust is not a financial resource in his hands.
The husband conceded that there is some level of discrepancy in the parties’ current income, but strongly challenged the wife’s argument that she was limited in the level of employment that she could pursue, particularly given that from 2012 both [X] and [Y] would be at school. The husband pointed to the period that the wife returned to almost full-time employment, whilst he was unable to work as a result of his injury, as indicative of her capacity to earn an income much greater than that which she is currently earning.
It was further conceded on behalf of the husband that the wife has the greater responsibility for the care of the parties’ children.
Given the husband’s greater earning capacity and the wife’s primary care of the children, it was submitted on behalf of the husband that there should be an adjustment in the wife’s favour pursuant to section 75(2) factors, but that such adjustment should be 20 per cent.
It was apparent from the husband’s evidence that he is not a sophisticated man. Whilst he is the Appointor and one of the directors of the Trustee company of the Nicholas Family Trust, it is clear that the decisions in relation to the Trust and its’ assets and income are made by his parents and in particular his father. This is borne out by the Supplementary Trust Deed in which it is stated that there are to be no distributions from the Trust without the consent of the husband’s parents.
It was also apparent from the husband’s evidence that any decisions that are made in relation to the family’s finances are made as a family with the husband, his parents and brother Mr H all sitting down to discuss the decisions that are made. This was very much how the decisions for construction of the units at Property R took place.
I accept that the husband is only one of several beneficiaries to the discretionary Trust that is the Nicholas Family Trust. However, I am also satisfied that once property matters are finalised as between the parties to these proceedings, the Nicholas Family Trust and the Nicholas family will be a resource available to the husband to assist him to move forward into the future.
It is for this reason that I am of the view that the Trust should be considered a financial resource of the husband pursuant to section 75(2).
Accordingly, given the husband’s greater income earning capacity, the wife’s primary care of the parties’ young children and the husband’s financial resource of the Nicholas Family Trust, I am of the view that there should be an adjustment pursuant to section 75(2) in the wife’s favour of 25 per cent.
Just and equitable
It was the wife’s submission that there should be an adjustment of the parties’ assets, including superannuation, on the basis that she retain
75 per cent of same and the husband retain 25 per cent of same.
It was the husband’s submission that there should be an adjustment of the parties’ assets, including superannuation, such that he retain 60 per cent of same and the wife retain 40 per cent of same.
I am satisfied, having considered the relevant factors under the legislation, that a just and equitable adjustment of property matters between the parties is that there be an equal division of their assets. I believe this balances the husband’s greater initial financial contributions and the wife’s greater section 75(2) factors.
The parties are in agreement that, if possible, the husband is to retain the former matrimonial home. In order for him to do so, given my determination, the husband shall pay the wife an amount of $221,453.00 and the parties shall otherwise retain all realisable assets that are currently in their possession.
In relation to the parties’ superannuation entitlements, in order to equalise the parties’ superannuation there should be a splitting order in the wife’s favour in the sum of $5,121.38.
The court was not advised if the husband’s superannuation fund has been accorded procedural fairness or whether it would agree to an order being made for a split of such a relatively small amount. In these circumstances, rather than making a super splitting order, it will be ordered that the husband pay to the wife an additional sum of $5,000.00 (this slightly lower amount reflecting the immediate cash payment).
Wife’s application for spousal maintenance
It was the wife’s application that in the event that she received less than 75 per cent of the asset pool, then the husband should pay to her an amount of $350.00 per week by way of periodic spousal maintenance for a minimum period of three years.
The Full Court in the matter of Clauson & Clauson (1995) FLC 92-595 considered an appeal against a determination of a judge at first instance in relation to a claim by a wife that the judge had erred firstly in the exercise of his discretion in the division of the matrimonial assets between them and secondly in failing to consider her application for lump sum spousal maintenance.
When determining that appeal, the Full Court observed that in order to determine whether the wife had an entitlement to spousal maintenance, it first had to determine the outcome of property matters and proceeded to do so. In that instance, having determined property matters, the court was of the view that the wife was unable to substantiate her application for maintenance.
Whilst not specifically submitted, it is assumed the wife’s position is that any amount awarded her less than 75 per cent of what she deemed to be the matrimonial asset pool would leave her in a position of not being able to adequately support herself.
The manner in which the court is to approach an application for the division of matrimonial property is completely different to the way in which the court approaches an application for spousal maintenance. The former is governed by the provisions of section 79 of the legislation whereas an application for spousal maintenance is determined pursuant to section 72 and section 74 of the Act.
Section 72 and section 74 of the Act provide as follows:
Section 72
Right of spouse to maintenance
(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 of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.
Section 74
Power of court in spousal maintenance proceedings
(1)In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
(2) If:
(a)an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and
(b)either of the following subparagraphs apply to a party to the marriage:
(i) when the application was made, the party was a bankrupt;
(ii) after the application was made but before the proceedings are finally determined, the party became a bankrupt; and
(c)the bankruptcy trustee applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the bankrupt's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the bankruptcy trustee as a party to the proceedings.
(3)If a bankruptcy trustee is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the bankrupt party to the marriage is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
(4)The court must not grant leave under subsection (3) unless the court is satisfied that there are exceptional circumstances.
(5) If:
(a)an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and
(b)either of the following subparagraphs apply to a party to the marriage (the debtor party ):
(i) when the application was made, the party was a debtor subject to a personal insolvency agreement; or
(ii) after the application was made but before it is finally determined, the party becomes a debtor subject to a personal insolvency agreement; and
(c)the trustee of the agreement applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the debtor party's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the trustee of the agreement as a party to the proceedings.
(6)If the trustee of a personal insolvency agreement is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the party to the marriage who is the debtor subject to the agreement is not entitled to make a submission to the court in connection with any property subject to the agreement.
(7)The court must not grant leave under subsection (6) unless the court is satisfied that there are exceptional circumstances.
(8)For the purposes of subsections (2) and (5), an application for an order under this section is taken to be finally determined when:
(a) the application is withdrawn or dismissed; or
(b)an order (other than an interim order) is made as a result of the application.
In the matter of Stein and Stein [2000] FamCA 102, the Full Court succinctly summarised the process necessary for the court to determine whether a party should pay spousal maintenance. In paragraph 55 of that judgment, the Full Court held:
55.Spousal maintenance is ultimately governed by the provisions of ss 72 and 74, namely there being no right to spousal maintenance unless there is a capacity to meet it and an inability by the claimant to meet the claimant's own self-support.
The Full Court in Stein (supra) considered the proper application of section 75(2)(d) when determining the question of spousal maintenance. Their Honours held that when determining the level of spousal maintenance payable, the claimant’s obligation to maintain her children could not be said to be a necessary element of the amount of support she needed for herself.
In the wife’s Financial Statement sworn 20 September 2011 and filed 21 September 2011, the wife deposed that the amount required to support herself on a weekly basis was $285.00. Quite properly, the husband agreed that this was a very modest amount and that it was an accurate reflection of the amount needed by the wife to maintain herself.
It was submitted on behalf of the wife that this figure is as small as it is because she currently resides with her parents and she is not required to pay them any form of rental or board.
It was the wife’s submission that upon the finalisation of this matter, she was hoping to find independent accommodation for herself and the parties’ children and that this would of itself necessitate a much higher level of expenditure than she currently incurs as she would be required to either meet mortgage payments or rental costs, together with utilities and other expenses.
It was the wife’s evidence that she currently earns $264.00 per week before tax by way of her current employment and that she was unable to increase her income at this time, firstly because of the lack of availability of any increased hours with her employer [E] and secondly because she was loath to increase her hours because of her obligations to care for the parties’ daughters aged eight and five.
It was therefore argued on her behalf that she has a need for ongoing spousal maintenance.
It was further submitted on behalf of the wife that the husband has an annual income of somewhere between $70,000.00 to $80,000.00 per annum, which equates to an income of approximately $1,500.00 per week. In the husband’s Financial Statement sworn and filed
5 October 2011, he deposed to a weekly expenditure of $1,315.00.
It was therefore argued on behalf of the wife that the husband has a clear capacity to pay spousal maintenance and orders should be made for him to do so accordingly.
It was argued on behalf of the husband that the wife had not established her need for ongoing spousal maintenance as the wife’s current income was commensurate with her current personal expenditure and as such she had no requirement for spousal maintenance.
It was further argued on behalf of the husband that whilst the wife currently chose to work 12 hours per week, she had a clear capacity to work increased hours such that she would be able to generate income more than adequate to meet her personal needs.
The husband argued that the wife’s obligations to care for the parties’ children would be measurably decreased when [Y] starts school in 2012. Further he pointed to the wife’s history of almost full-time employment during the period that he was unable to work because of his work injury as proof of her capacity to do so into the future.
It was also argued on behalf of the husband that in order for him to satisfy any orders of this court in relation to the division of property as between the parties, he would have to obtain a mortgage over the former matrimonial home in order to satisfy those orders. Accordingly, his current living expenditure would be measurably increased by his obligations to service that mortgage.
It was therefore argued on behalf of the husband that his capacity to pay any spousal maintenance into the future would be impacted by the outcome of the property proceedings currently being determined by this court.
The wife is seeking an order of this court that she be paid ongoing periodic spousal maintenance. She has an obligation to satisfy the court that she is unable to adequately support herself.
There is no doubt the wife is living frugally and is, on her current level of income, only just managing to meet her weekly commitments. She argues that with the resolution of these matters she will be seeking to reaccommodate herself and in so doing will incur the additional expenses associated with independent living for herself and the parties’ children.
However, she will have the benefit of a reasonable capital payment to assist in this regard. Further, it is apparent that the wife has a much greater earning capacity than that which she is currently choosing to exercise. She has historically been able to work on an almost full-time basis, and whilst she may not wish to return to full-time or near
full-time employment because of her obligations to care for the parties’ young children, there is no doubt that she does have the capacity to be working many more hours than she does at the moment, even within the constraints of her obligations to care for the children.
Further, it is necessary to establish whether the husband has the capacity to meet any orders made for the payment of spousal maintenance. Whilst it was argued on behalf of the wife that he has a considerably larger income than she, the reality is that the husband is not a large income earner, albeit he is in a stronger financial position than the wife. Further, in order to satisfy the orders of this court in relation to property matters, the husband will incur considerable borrowings which he will be obliged to repay into the future.
In all these circumstances, I am not satisfied that the wife has established either the need for spousal maintenance or that the husband has the capacity to make spousal maintenance payments to the wife into the future.
Accordingly, the wife’s application for spousal maintenance is dismissed.
I certify that the preceding one hundred and eighty-six (186) paragraphs are a true copy of the reasons for judgment of Bender FM
Date: 21 December 2011
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