Tomlin and Tomlin

[2014] FamCA 204

FAMILY COURT OF AUSTRALIA

TOMLIN & TOMLIN [2014] FamCA 204

FAMILY LAW – PROPERTY – SPOUSAL MAINTENANCE – Interim – Where the Wife has established threshold requirement – Where the Husband has the capacity to meet the Wife’s reasonable needs pending the sale of the former matrimonial home

Family Law Act 1975 (Cth)

Bevan & Bevan (1995) FLC 92-600
M & M (2006) 36 Fam LR 97
Nutting & Nutting (1978) FLC 90-410
Redman & Redman (1987) FLC 91-805
Saxena & Saxena (2006) FLC 93-268

APPLICANT: Ms Tomlin

RESPONDENT: Mr Tomlin

FILE NUMBER: BRC 5337 of 2013

DATE DELIVERED: 1 April 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 24 March 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Carew QC

SOLICITOR FOR THE APPLICANT: Barry Nilsson Lawyers

FOR THE RESPONDENT: In person

Orders

it is ordered until further order

1. That pending the Wife’s receipt of $1050.00 as provided for in paragraph 3(c) of the Consent Orders made on 24 March 2014, the Husband pay or cause to be paid to the Wife by way of spousal maintenance the sum of $850.00 per week commencing on and from the date of these Orders.

2. That within fourteen (14) days the Husband pay or cause to be paid to the Wife by way of spousal maintenance the sum of $2,550.00 being $850.00 per week for the three (3) weeks from the date of filing by the Wife of her application for spousal maintenance to the date of these Orders.  

3. That pending the settlement of the sale of the former matrimonial home at V Street, Suburb U in the State of Queensland the Husband pay or cause to be paid the mortgage repayments as and when they fall due in respect of the mortgage to the National Australia Bank Limited secured over the former matrimonial home.

4. That the Husband forthwith do all acts and things reasonably required, including making payments or arranging refinancing, so as to cause the … Jaguar … motor vehicle (registration …), currently in the possession of the Wife to be retained by the Wife and available for her continued use.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Tomlin & Tomlin has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 5337 of 2013

Ms Tomlin

Applicant

And

Mr Tomlin

Respondent

REASONS FOR JUDGMENT

1. Ms Tomlin (“the Wife”) and Mr Tomlin (“the Husband”) are engaged in substantive property settlement proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).

2. By an Application in a Case filed on 11 March 2014 the Wife sought orders for:

   a)Spousal maintenance in the sum of $850 per week;

   b)The payment by the Husband of certain outstanding household accounts;

   c)An order for the Husband to meet mortgage repayments in respect of the former matrimonial home at V Street, Suburb U (“the Suburb U property”);

   d)Payments in respect of the Jaguar motor vehicle in the possession of the Wife to enable the Wife to continue to have the use of that vehicle;

   e)Adult child maintenance;

   f)A “dollar for dollar” order in respect of payment of the Wife’s legal costs;

   g)Authority for the Wife to release certain documents to the Child Support Agency.

3. By his Response filed 21 March 2014 the Husband agreed to payment of the outstanding accounts (they had in fact been paid by the Husband by then); and agreed to the “dollar for dollar order” in respect of the Wife’s legal costs. The Husband opposed the other orders the Wife sought. He also sought other orders. In particular the Husband sought orders for the sale of the Suburb U property.

4. On the return date of these competing interim applications on 24 March 2014 the parties were able to negotiate resolution of many aspects. That resolution is reflected in the consent orders I made on 24 March 2014. Of particular relevance for present purposes is that the parties agreed to orders for the sale of the Suburb U property with, in summary, the property being listed for sale by private treaty for a period of six months and if not sold by the end of that period, to proceed to sale by auction.

5. The parties also agreed orders with respect to the dispersal of the sale proceeds of the Suburb U property which, relevantly for present purposes, would see the Wife receiving $1050 per week from the invested net sale proceeds with the characterisation of such payments to be made at the final trial.

6. At the hearing I was informed by Ms Carew of Queen’s Counsel for the Wife and by the Husband who was self-represented that the issues remaining for my determination were:

   a)Spousal maintenance;

   b)Mortgage payments with respect to the Suburb U property pending its sale;

   c)Payments required for the Wife to continue using the Jaguar motor vehicle.

Spousal Maintenance

1. The order now sought for interim spousal maintenance is now predicated upon the sale of the Suburb U property in that the time during which any such order would operate expires upon the Wife commencing to receive the payment of $1050 per week provided for in the consent orders from the invested sale proceeds of the Suburb U property.

2. Obviously enough, the time frame may be very short if the Suburb U property can be sold quickly. It would seem unlikely that any order would be effective much beyond the period of about six months given that being the time frame for an auction of the Suburb U property if it does not earlier sell by private treaty.

3. The hearing before me proceeded “on the papers” in that neither party was cross-examined as to disputed issues of facts. Given that and the limited time frame in which any order for spousal maintenance will operate it is to be noted that in Redman & Redman (1987) FLC 91-805 the Full Court observed at 76,081 that:

   …[t]his was an interim orders. Whilst we agree with the view expressed in Ashton that in principle such an order is one under s 74, to which the principles of s 72 or s 73 may be applicable, as the case may be, the very fact that the order is limited in time imports certain different considerations. One of these is that such an order is intended to be reconsidered, quite apart from a variation under s 83.

4. Section 72(1) of the Act provides that:

   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…

5. Section 72(1) sets out the three circumstances which may cause the need for maintenance to arise and, relevantly here, provides in sub-paragraphs (a) and (b):

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

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

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

6. In Bevan & Bevan (1995) FLC 92-600, the Full Court of this Court set out the process for assessing a spousal maintenance claim as:

   Taken together then, we would state the law as being that an award of spousal maintenance requires:

   1. A threshold finding under s 72 [now s 72(1)];

   2. Consideration of s 74 and s 75(2);

   3. No fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit;

   4. Discretion exercised in accordance with the provisions of s 74, with ‘reasonableness in the circumstances’ as the guiding principle.

7. The first question is whether the Wife is unable to support herself adequately.

8. In Nutting & Nutting (1978) FLC 90-410, Lindenmayer J interpreted “adequately” within the meaning of s 72 of the Act as importing:

   A standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.

9. In Saxena & Saxena (2006) FLC 93-268, Coleman J set out the four steps that the Court should follow as:

   1. To what extent was the Wife unable to support herself?

   2. What were the Wife’s reasonable needs?

   3. What capacity did the Husband have to meet an order, if one were made?

   4. If steps 1 to 3 favoured the Wife, what order would be reasonable having regard to s 75(2) of the Act?

10. The Full Court of this Court, in M & M (2006) 36 Fam LR 97, addressed the threshold proposition in the following terms:

    [31] …The question whether an applicant can support his or herself “adequately” is not to be determined by reference to any fixed or absolute standard but by having regard to the matters referred to in s 75(2): Mitchell (above at Fam LR 59; FLR 306; FLC 81,995).

    [32] The question is not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances: Mitchell (above); Evans and Evans (1978) FLC 90-435; Brady and Brady (1978) FLC 90-513 at 77,701; Gamble and Gamble (1978) FLC 90-452; Wilson and Wilson (1989) 13 Fam LR 205; FLC 92-033; and Bevan and Bevan (1993) 19 Fam LR 35; (1995) FLC 92-600.

    [33] It is not necessary for an applicant for maintenance to use up all of his or her assets and capital in order to satisfy the requirement that he or she is unable to support him or herself “adequately”: Mitchell, above.

11. Counsel for the Wife contended that until October last year the Wife had, since the parties’ separation on 21 February 2013, been receiving approximately $1000 per week from the Husband together with the payment of mortgage, utility and rates expenses in respect of the Suburb U property.

12. It was further contended that in October last year, when one of the parties’ children, B, was involved in a student exchange, the weekly sum reduced to $800 per week and on 17 February 2014 the cash payments ceased altogether.

13. The Wife claims that notwithstanding her commencement of employment the $620 average net per week she derives from that employment (approximately) is insufficient to meet her reasonable needs. She contends, by reference to her sworn material as to her reasonable expenses, that given that these significantly exceed the claimed amount of $850 per week that such amount reflects her reasonable weekly needs, unmet from her employment earnings.

14. At the hearing the Husband contended that the weekly sum for the Wife ought be $300 and that he would pay that sum together with the sum of $200 per week directly to B.

15. In his material, in challenging the Wife’s claimed weekly needs; the Husband (a business professional) undertakes something akin to an audit of the Wife’s claimed expenses and sets out in a schedule to his affidavit his analysis of what he asserts to be the Wife’s reasonable weekly expenses.

16. Without resorting to a detailed analysis of each and every item, on a line by line basis, of the Husband’s assessment it is an approach which seems to be reflective more of a “subsistence” approach, rather than an “adequate” approach to the assessment of the reasonable needs of the Wife.

17. For example, the Husband reduces the Wife’s claimed electricity cost from $116.00 to $20.25 per week, contending that the Wife’s claim includes the children of the marriage living with the Wife. Yet his own claim for this expense, as a single man, is not $20.25 but $50 per week. A further example is the Husband reducing the Wife’s claims for petrol and motor vehicle maintenance expenses from a combined $150.00 to $68.20 per week, yet his own claim for such items totals $240 per week. He describes the Wife’s claimed expenses for entertainment/hobbies and holidays at $250 in total per week as “extremely high” yet his own claim for the same expenses is more than double that, at $550 per week. He rejects the Wife’s claim for parking expenses and fares of $50 per week on the bare assertion that this is “extremely high” because the Wife works at the inner suburb of Suburb C and lives at the inner suburb of Suburb U. He allows nothing for this expense.

18. In his affidavit in support of his application that an interim order be made for the Suburb U property to be sold (now agreed as per the consent orders) the Husband describes the property as being on a “large block” and that as a consequence of substantial renovations the home is a “…substantial 5 bedroom, office, entertaining area, several living areas, 3 ½ bathrooms presented to a very high standard” accommodation. He positively asserts that the “current cost of keeping the house” is prohibitive. Yet in his analysis he allows nothing for the Wife’s claims for house cleaning (when she works) or pool cleaning or gardening/lawn mowing.

19. I prefer the Wife’s sworn evidence to the Husband’s assertions and I am satisfied that $850 is a reasonable assessment of the Wife’s unmet reasonable needs for maintenance within the meaning of the legislation and the authorities to which I have referred.

20. As to the Husband’s capacity, his existing capacity will shortly be enhanced given that settlement of the sale of the property situate at I Street is due to be effected on 2 April 2014 for a sale price of $1.4 million. Those proceeds are to be applied in debt reduction as per the consent orders reached and obviously this means that $1.4 million in debt will no longer need to be serviced.

21. The history of payments made by the Husband from separation until October last year is demonstrative of his capacity to meet the Wife’s reasonable needs. Whilst the Husband sought, via a report attached to his affidavit, to demonstrate some reduction in the profitability of his professional, it is the fact that no current or up to date figures were provided and, moreover, the seemingly complex financial affairs of the Husband (given the number of entities involved) is soon to be canvassed in a single expert report, yet to be completed.

22. The Husband elects to make payments equating to $15,000 per annum in net terms to the person described as his “girlfriend” and $9,000 per annum in net terms to his sister and parents. He chooses to rent accommodation costing $1050 per week and as Counsel for the Wife highlighted; his post-separation lifestyle has included overseas trips taken last year as well as a significant amount (as per Exhibit 1) of what may be described as discretionary expenditure.

23. Turning to the matters referred to in s 75(2) of the Act I am satisfied that the Wife’s present earnings reflect her capacity for appropriate gainful employment for the foreseeable future and for the likely period any order for spousal maintenance will be effective, prior to the sale of the Suburb U property. I am satisfied that even if it be accepted that the Husband’s professional practice suffered a downturn historically in the 2011 financial year with the sudden departure of the Husband’s then-partner, the Husband has a demonstrated capacity to derive significant earnings from his professional practice.

24. I accept that the Wife has commitments for the support of B, the parties’ 15 year old daughter. I do not accept that whatever commitments or responsibilities the Husband has or assumes concerning his girlfriend, that these take priority to his obligation for the support of the Wife.

25. In circumstances where the parties married in 1991 and the marriage has produced three children now currently aged 20 years; 18 years and 15 years respectively and the parties did not separate on a final basis until 21 February 2013, the Wife has contributed to the income, earning capacity, property and financial resources of the Husband.

26. I am thus satisfied that an order of spousal maintenance of $850 per week is reasonable having regard to the s 75(2) matters of primary relevance to this case. That ought be payable for the date the Wife filed her application.

Mortgage Repayments

1. Whilst in her Application in a Case filed on 11 March 2014 the Wife sought an order for the Husband to be responsible for mortgage repayments on the Suburb U property as part of her claim for spousal maintenance that was prior to the agreement being reached as to the interim sale of the Suburb U property. Moreover, it is more in the nature of preservation of an asset the subject of the substantive property proceedings that is involved in the mortgage payments being met, rather than this being an issue as to the Wife’s interim spousal maintenance. Preservation of the equity in that property is to the advantage of both parties, given the substantive property proceedings.  

2. For reasons already discussed, I am satisfied that in the relatively short term during which such an order would operate it is reasonable that, pursuant to the injunctive powers under the Act, the Husband be ordered to meet mortgage repayments on the Suburb U property pending its sale and I propose to so order.

Wife’s Motor Vehicle

1. The financier for the vehicle offered the option of either paying out the balloon payment or re-financing the loan.

2. I have earlier referred to the complexity of the Husband’s financial affairs. Given the substantial share portfolio held by one of the entities and the financial interests of the entities overall, as presently indicated, it ought be possible for the Husband to negotiate finance that would see the Wife retaining her present vehicle. I have already referred to the fact that settlement of the sale of the I Street property will reduce the debt situation by some $1.4 million and agreement has now been reached on the sale of the Suburb U property which will likewise substantially reduce debt when that sale is effected.

3. In these circumstances I am satisfied that whether framed as an order for spousal maintenance or as an injunctive order to preserve assets it is reasonable to order the Husband to do all such things as may be reasonably required to ensure the preservation of motor vehicle for it to be available for the continued use by the Wife. As to how the Husband achieves that will be a matter for him.

Orders

1. For these reasons I make the orders set out at the commencement of these reasons. 

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 1 April 2014.

Associate: 

Date:  1 April 2014