Taylor and Tyson
[2011] FMCAfam 1038
•29 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TAYLOR & TYSON | [2011] FMCAfam 1038 |
| FAMILY LAW – De facto relationship – interim maintenance – consideration of justice of making an order where applicant allegedly gambled a large sum of money withdrawn from joint mortgage account – consideration of vicissitudes of life when respondent and partner expecting baby. |
| Family Law Act 1975, ss.90SB, 90SD, 90SF |
| Applicant: | MS TAYLOR |
| Respondent: | MR TYSON |
| File Number: | MLC 8693 of 2010 |
| Judgment of: | Lapthorn FM |
| Hearing date: | 2 September 2011 |
| Date of Last Submission: | 2 September 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 29 September 2011 |
REPRESENTATION
| Counsel for the Applicant: | N/A |
| Solicitors for the Applicant: | Ms Taylor in person |
| Counsel for the Respondent: | Mr Williams |
| Solicitors for the Respondent: | Harwood Andrews |
ORDERS
The Amended Application in a case filed 15 June 2011 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Taylor & Tyson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 8693 of 2010
| MS TAYLOR |
Applicant
And
| MR TYSON |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Taylor and Mr Tyson lived in a de-facto relationship between 2002 and 2010. They are unable to agree as to a property settlement and currently have proceedings before the court for final property orders. I have been asked to determine an interim maintenance application brought by Ms Taylor pending the determination of their property dispute. The hearing of that dispute is set down for a three day hearing commencing 19 March 2012.
Ms Taylor by her amended application in a case filed 15 June 2011 seeks orders that would provide for Mr Tyson to pay her the sum of $500.00 per week by way of periodic maintenance, meet the mortgage repayments on the former relationship home and pay the sum of $1,937.00 which she alleges remains outstanding from bills the parties acquired during their relationship. The issue of the outstanding bills was not canvassed in any detail at the hearing and is more appropriately dealt with at the hearing of the property application. The respondent in his response to the application in a case filed 31 May 2011 sought the application be dismissed with costs on an indemnity basis.
Background
The applicant is 36 years of age. She lives on an acreage property in [Suburb E] which was the home the parties shared prior to separation. I shall refer to this property as the ‘former relationship home’. Ms Taylor currently receives Work Cover payments. She has been on Work Cover for most of her relationship with Mr Tyson although there was a period of 2 years where she did not receive any payments. After legal proceedings the payments resumed including a lump sum for the period of time when no payments were made.
The respondent is also 36 years of age and has recently moved into a rental property in Melbourne with his partner. He works as a [occupation omitted] for [company omitted] in [Suburb A] and commutes daily by public transport as his driver’s licence is currently suspended. He and his partner are expecting a baby in 2012.
The parties commenced their relationship in early to mid 2002. They became engaged in February 2003 but never married. They separated on 23 June 2010. They do not have any children from their relationship.
Evidence
In support of her application the applicant relied on:
a)Her affidavits filed:
i)10 February 2011; and
ii)31 August 2011; and
b)Her financial statement filed 31 August 2011.
The respondent relied on:
a)His affidavit filed 27 May 2011: and
b)His updated financial statement also filed 27 May 2011.
Both parties were cross examined.
During the hearing the applicant raised issues in relation to the lack of corroboration of the respondent’s evidence and in particular his evidence of becoming engaged and his partner expecting a baby. Leave was given, upon the request of the respondent for his partner to be available for cross-examination even though she had not provided any evidence by way of affidavit and it was not intended that she give oral evidence-in-chief. The applicant availed herself of the opportunity to cross-examine the respondent’s partner. At the respondent’s request and with the consent of the applicant I did not require his partner to disclose her surname and address. She gave her first name as [omitted].
A number of documents were tendered into evidence.[1]
[1] Exhibit R1: Applicant’s Bank Statements June to December 2010
I have had regard to all of the written and oral evidence as well as the tendered documents.
Throughout these reasons I will refer to a number of facts. Any such reference should be regarded as a finding of fact unless a contrary intention is clear from the context.
In July 2003 the parties purchased the land on which the former relationship home was erected. The property was registered in the applicant’s name only. They relocated a home to the site and the parties worked on the building before moving into it in 2005. The purchase of the land was financed by way of bank mortgage with security over the property and another property held in the applicant’s name. This later property is located at [Suburb B] and is also registered in the applicant’s name. The parties lived there until they relocated to the former relationship home.
The parties dispute the facts surrounding the ownership of the [Suburb B] property. The respondent maintained the property was gifted to the parties but the applicant said she holds it on trust for her father who has intervened in the substantive proceedings. That issue will be determined at the final hearing.
In June 2010 the respondent discovered that the applicant had withdrawn $72,000 from the mortgage account without his knowledge and a further $5,000 from his bank account. They separated soon after this discovery. The applicant gave evidence of using the money to pay her lawyers, some medical expenses, rates, home maintenance, day to day living expenses, alcohol and gambling. The respondent does not accept the applicant’s case as to how the money was used.
The applicant has had a number of medical issues throughout her life. She received a liver transplant in 1991 when she was 15 years old. In the course of her employment as a [occupation omitted] at [company omitted] she encountered two incidents of aggression from [clients] in 2002. She was subsequently diagnosed with an agitated depression reaction and started seeing a psychiatrist regularly. She ceased work in March 2003 and has not returned. Dr E’s medical report prepared for the purposes of the applicant’s Work Cover claim suggests the applicant has a Major Depressive Disorder and Panic Disorder with Agoraphobia. I make no finding as to the extent of her medical condition as the medical evidence was not tested given the nature of these interim proceedings however I am prepared to accept that the applicant has been out of work for 8 years and is unlikely to return to work at least in the short term.
Prior to separation the respondent had arranged for a direct debit in the sum of $1,000 to be paid each fortnight from his savings account to the mortgage but this was subsequently cancelled by the applicant at separation. The respondent then arranged for $571 to be paid each fortnight towards the mortgage from July 2010 until he cancelled the direct debit in March 2011. He has not made any contributions to the mortgage since that date.
Credit
Counsel for the respondent invited to court to find that the applicant had been less than honest in her evidence and submitted I should make an adverse finding as to credit. In particular he argued that the court would not accept the applicant’s explanation as to how she utilised the funds withdrawn from the mortgage account of the parties and that I would reject her assertion she is only a part owner of a motor vehicle along with her brother.
I found the applicant to be quite emotional in her presentation but I take into account she was representing herself in these proceedings. Family law proceedings are always difficult for parties and I accept many will be nervous and some will find the whole process overwhelming at times. I formed the view the applicant struggled at times to overcome her nerves but was able to articulate her case nonetheless. At times however I found her to be avoiding answering questions and I had to warn her on occasion to focus on the task at hand. I did not consider this was always attributable to her nervous presentation.
The applicant did not produce any corroborative evidence to support her assertions as to how she used the funds withdrawn from the mortgage account. On 7 June 2010 the applicant withdrew $72,300 from the mortgage account and opened an account in her name at the [Suburb B] branch of the Commonwealth Bank depositing the whole sum. She transferred the sum of $72,585.24 a month later, and after the parties had separated, into another account in her name this time with the Commonwealth Bank at [Suburb C]. There were a number of significant sized withdrawals within the next month including a withdrawal of $20,000 on 16 July and a further withdrawal of $20,000 3 days later. I do not accept the applicant’s evidence that she withdrew these large amounts to save her going to the bank often. In the ten days between transferring the money into her account and making the first withdrawal of $20,000 she had been to a branch and withdrawn large sums of money on 5 different occasions. A week after the second withdrawal of $20,000 she again attended the bank to make withdrawals every few days. By 23 September she had overdrawn the account.
I do not accept her evidence that she gambled a lot of this money and would go to venues with $20,000 in her pocket. Her evidence was that she started to gamble in June 2010 and had stopped doing so by the end of August. Whilst I note Dr E reported in his medical report for the purposes of the applicant’s Work Cover claim dated 30 August 2010 the applicant told him she had gambled $50,000 until she ran out of money in mid-late August I find it hard to believe the applicant had a short lived but expensive interest in gambling.
The applicant said she did not use all of the money on gambling but also used it to pay her lawyers, some medical expenses, rates on the former relationship home, some home maintenance, the purchase of alcohol and general day to day living expenses. The bank account records show that the applicant had withdrawn money at supermarkets, petrol stations and one hotel between July and August 2010. These sums were modest in comparison with the majority of the withdrawals although it appears that on 13 August the applicant withdrew $412.41 from the account at a supermarket in [Suburb B] and three days later withdrew another $433.84 at another supermarket in [Suburb D]. I do not have any evidence as to whether these sums included cash withdrawals.
The applicant has not provided any evidence of paying accounts with lawyers or medical practitioners to support her assertions notwithstanding being served with a notice to produce. No receipts for the payment of rates or work done around the home were forthcoming. The applicant denied using some of the money to assist her brother who was building a home at the time and that she had withdrawn the money to ensure the respondent did not have access to it when the property settlement is determined. I make no finding as to the whereabouts of the sum of money withdrawn but I do not accept her evidence as to its dispersal. On balance I find the applicant has had access to the funds withdrawn for her own use and as a consequence of the withdrawal the mortgage has been significantly increased and higher interest charges have been incurred.
On 10 November 2010 the applicant received $27,641.60 into her account recorded as [omitted Payroll] and two days later another sum with the same recording of $4,889.20. There is no evidence of how these sums were utilised but there was a withdrawal on 17 November in the sum of $16,500. The applicant did not provide any evidence of what this sum was used for.
At the hearing the applicant told the court she was part owner of a motor vehicle with her brother however when it was put to her that on three prior occasions she had given evidence in her financial statements that she solely owned the vehicle she said she just signed those documents at the request of her solicitor. I do not accept her evidence and find that she was attempting to minimise her financial position by suggesting she did not own the vehicle herself.
Overall I found the evidence of the applicant to be unreliable.
I found the respondent gave his evidence to the best of his ability and in an honest and forthright manner. Where their evidence differed I preferred the evidence of the respondent.
Legal approach
The Court has power to make orders in relation to property and maintenance in respect of former de-facto partners subject to a number of requirements being satisfied. Section 90SD of the Family Law Act 1975 requires the Court to be satisfied that either or both of the parties to a de-facto relationship were ordinarily resident in a participating jurisdiction when the application for the order was made and that either or both of them were ordinarily resident during at least a third of the de-facto relationship or an applicant had made substantial contributions during the relationship in one or more States or Territories that are participating jurisdictions. In this case both parties resided and continue to reside in Victoria during the relationship and as Victoria is a participating jurisdiction I am satisfied that the geographical requirement has been established.
The Court must also be satisfied that the parties’ relationship was in existence for a total of at least two years or that there is a child of the relationship.[2] Their relationship was of 8 years duration.
[2] S90SB
Having been satisfied as to the geographical and duration requirements I am able to consider the application.
The Court has power to make such order as it considers proper for the maintenance of one of the parties to a de-facto relationship in accordance with Division 2 of Part VIIIAB. In determining what order if any should be made for maintenance the Court must consider a number of factors set out in s.90SF:
(1) In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a) only to the extent that the first-mentioned party is reasonably able to do so; and
(b) only if the second-mentioned party is unable to support himself or herself adequately whether:
(i) by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii) for any other adequate reason.
(2) In applying this principle, the court must take into account only the matters referred to in subsection (3).
(3) The matters to be so taken into account are:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); 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 de facto relationship 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 (4), 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) 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
(i) 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 de facto relationship 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 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; 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
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; 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
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.
(4) In exercising its jurisdiction under section 90SE, a court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
Discussion
This application is for interim maintenance pending the determination of the final property application. Therefore the determination is of limited scope and time frame. Notwithstanding that, the court is required to consider all of the factors set out above so far as they are relevant.
The Court is required firstly to consider whether the applicant has a need for maintenance. If the need is established the Court must then look to see whether the respondent has the capacity to pay any or all towards that need.
Has the Applicant established a need for maintenance?
The applicant receives $496 per week by way of Work Cover payments. I am satisfied, at least at this stage, even though she is 36 years of age, she is not able to obtain gainful employment because of long standing health issues. Due to her receipt of Work Cover payments she would not be entitled to any form of social security or benefit from a superannuation fund.
The applicant has not re-partnered nor does she have the responsibility for the care of another person including a child.
In her financial statement she claimed to have personal expenditure of $1,233.80 per week. I do not accept her reasonable expenditure to be that high.
She claimed to spend $100 per week on petrol because she travelled long distances to see her treating medical professionals including her general practitioner who has his practice more than 100km from her home. The applicant has attended upon this general practitioner for many years, is comfortable seeing him and is uncomfortable with the thought of seeing a new doctor. Her evidence was that she travelled this distance once a week to see her GP as well as seeing other specialists each fortnight. Whilst a person may wish to see a general practitioner of their choice even if that involves travelling significant distances the costs associated with that travel are unreasonable if it is expected that a former partner is to contribute to it especially when there are other doctors closer as was conceded by the applicant. Attending on medical specialists may require some travel however.
I find $100 per week to be excessive given the applicant’s evidence that she is not working and apart from attending medical appointments and shopping she does not travel. I find a reasonable allocation for petrol would be in the sum of $50 per week.
The applicant gave evidence of having $150 per week in unspecified expenses. She said she had a number of outstanding bills including for legal fees. She did not provide any evidence to support this assertion and I reject that amount.
I do not consider the $150 per week spent on food each week to be excessive. The other expenses set out in her financial statement are also within the reasonable range.
Counsel for the respondent argued that the amounts allocated to medical of $100 per week and pharmaceutical of $40 per week were not reasonable and that the applicant had not provided any evidence to support the claims. There is no dispute the applicant has a lengthy history of medical problems but I am not satisfied she has established an expenditure of $100 per week on medical needs outside of what is covered in her private medical insurance. I am however satisfied her pharmaceutical expenses fall within the reasonable range.
When I take those findings into account I would reduce her expenses by $300 per week. Her expenses therefore exceed her income by $437 per week.
Does the Respondent have capacity to pay maintenance?
The respondent is 36 years of age and in gainful employment. He moved in with his new partner the week this matter was heard. They are expecting their first child in 2012. His partner currently works as an [occupation omitted] but will be taking maternity leave prior to the birth of the child. He does not have responsibility to care for any other person including a child.
Counsel for the respondent conceded that he had a greater income than expenses. At the hearing the respondent updated his financial statement. He gave evidence that his income averaged $2307 per week and his expenditure amounted to $2118 per week which would mean he would have capacity of $189 per week. It was urged upon me however to consider that sum as necessary for the vicissitudes of life.
Before I consider the question of whether I ascribe any excess of income over expenses to the vicissitudes of life it is necessary to consider whether figures claimed as personal expenditure are reasonable in the context of a maintenance application. I consider the expenses claimed in relation to food, household supplies, gas, electricity, telephone, pharmaceutical, gifts, dry cleaning, hairdressing and books to be reasonable. His clothing and shoes was estimated at $60 per week. He was not challenged on this and although I consider this to be on the higher end of a reasonable range I take into account he would need to present well in his employment and therefore I accept that figure. His education and holiday expenses were also reasonable.
I do not accept it is reasonable for the respondent to claim $100 per week for entertainment and hobbies. I note he also puts gym membership separate at $10 per week. Whilst the gym membership is modest I consider $60 per week for entertainment a more reasonable amount.
I accept his evidence that he has rent expenses of $500 per week. He has agreed with his partner to pay all the rent as he does not have any furniture and she will be responsible for the setting up of their new home. His partner will also be taking maternity leave from December. The applicant put to the respondent that he could have obtained another rental property closer to [Suburb A] where he worked and thereby have a lower rental expense each week as well as lower commuting costs. Whilst understanding the applicant’s argument I do not accept that it would be reasonable to expect the respondent to do so given his partner is now expecting their child and she would like to be close to her family after the child is born.
As a consequence of the respondent living in the Melbourne area he has high commuting costs. He claimed $160 per week in fares. Although he will not have to pay for fares when he regains his driver’s licence he will then have to pay a similar sum in petrol.
The applicant was also critical of the respondent taking out a loan for the purchase of a new vehicle requiring him to pay $114.35 per week in repayments. The respondent’s partner gave evidence of having an unreliable two door car and she had agreed with the respondent that it would be better to have a more reliable and bigger car given their baby was on the way. I accept that evidence and I am satisfied the purchase was not excessive and the loan repayments modest in the circumstances.
When I take those findings into account I reduce his expenditure by $40 per week giving him an excess of income over expenditure of $229 per week.
Should a maintenance order be made?
Having found that at least at first glance the applicant has a need and the respondent has some capacity I now turn my mind to the respondent’s submissions that the applicant has not come to the court with clean hands and that it would be inequitable and unfair for the respondent to pay maintenance. He argued the applicant had not adequately explained how she utilised the funds withdrawn from the mortgage account. I have already found the applicant’s explanation to be unreliable. He also argued that as a consequence of her actions the parties have incurred a higher interest impost and mortgage expenses.
Section 90SF(3)(r) requires the court to take into account any fact or circumstance which, in the opinion of the court, the justice of the case requires. The applicant’s use of the withdrawn funds is a significant issue that will require consideration at the hearing of the property application to determine whether the funds withdrawn should be added back into the pool of assets. Even though that issue will be considered at the final hearing the issue is a relevant consideration in these proceedings. I have rejected the applicant’s explanation as to how she dissipated the funds. I can not be confident that the applicant still does not have access to the funds or that they have been completely dissipated. For that reason I am satisfied that justice would not be served by allowing her application for maintenance pending a determination of the property application.
It was further submitted that the applicant had other options given her circumstances including selling a motor vehicle and the former relationship home. The second motor vehicle in the applicant’s possession is not currently registered. The applicant gave evidence of it not being worth much because of a compliance problem making it un-registrable. Although the respondent works in the [omitted] industry and gave evidence of the compliance problem being easily rectified I am not satisfied there is enough evidence to enable me to make a finding in relation to that issue. In any event a party is not required to exhaust their assets before establishing a need for maintenance.
The applicant submitted that if she sold the former relationship home she would still be required to pay rent in a similar sum as the mortgage repayments. I have no evidence of what rental properties would be available or how much rent would likely be charged for a suitable property for the applicant but given her mortgage payments are $301 per week I am prepared to accept her rental expenses would be of a similar nature. The respondent argued the applicant could live in her other home at [Suburb B] with her father. The applicant denied this. Although the parties had previously lived in that property I do not have sufficient evidence to make a finding that it would be available for the applicant at this point in time. Whilst it seems inevitable that the former matrimonial home will need to be sold to meet a just and equitable outcome of the parties’ property application, forcing a sale at this stage would not in my view rectify the applicant’s need for maintenance.
Counsel for the respondent argued that if I was not persuaded to dismiss the application on the basis of the justice of the case I should in any event dismiss the application because even though at first glance it appears the respondent has capacity to pay maintenance I should take into account the vicissitudes of life and conclude he does not have that capacity. The respondent is setting up a new home with his partner and will be bringing a new baby into their life in the next 6 months. If I make an order for maintenance there is a risk that the respondent may not be able to meet expenses that arise from time to time such as repairs to motor vehicles or appliances and expenses associated with the care of a new born baby. I accept the evidence of the respondent’s partner that she will continue working until December this year and use her income towards setting up their new home with furniture. Once she goes on maternity leave however they will live on the respondent’s income only. When I take these considerations into account I am persuaded that the respondent will need the $229 per week I have found he has after expenses to meet the vicissitudes of life. Accordingly I would find that, although at first glance the respondent has capacity to pay some money towards maintenance, overall I am persuaded he does not have any capacity.
My findings as to the respondent’s capacity and the justice of the case lead me to conclude that the applicant’s application should be dismissed.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of Lapthorn FM
Date: 29 September 2011
Exhibit R2: Residential Tenancy Agreement for Respondent 26 August 2011
Exhibit R3: Respondent’s PAYG payment summary 30 June 2011
Exhibit R4: Printout of Respondent’s Bank Statement August 2011
Exhibit R5: Printouts of various bank accounts
Exhibit R6: Respondent’s [M] superannuation balance statement 1 September 2011
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