Turnbull and Turnbull
[2006] FMCAfam 495
•3 October 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TURNBULL & TURNBULL | [2006] FMCAfam 495 |
| FAMILY LAW – Maintenance – spouse maintenance – application to discharge order – whether there is just cause to discharge the order – variation of maintenance order. |
| Family Law Act 1975 (Cth), s.83 |
| Turnbull & Turnbull [2005] FMCAfam 30 Lutzke & Lutzke (1979) 5 Fam LR 553; FLC 90-714 referred to Vakil & Vakil (1997) 21 Fam LR 508; FLC 92-743 referred to Corner & Corner (1978) 4 Fam LN 1; FLC 90-438 referred to Astbury & Astbury (1978) 4 Fam LR 395; FLC 90-494 referred to Taguchi & Taguchi (1987) FLC 91-836 referred to Janes & Janes [2003] FMCAfam 275 referred to |
| Applicant: | MARTIN TURNBULL |
| Respondent: | DEBRA JOY TURNBULL |
| File Number: | BRM 943 of 2005 |
| Judgment of: | Scarlett FM |
| Hearing date: | 19 July 2006 |
| Date of Last Submission: | 19 July 2006 |
| Delivered at: | Sydney |
| Delivered on: | 3 October 2006 |
REPRESENTATION
| The Applicant: | Appeared in person |
| Solicitors for the Respondent: | Quinlan Miller & Treston |
ORDERS
Order 7 made by the Federal Magistrates Court of Australia at Canberra on 8 February 2005 is varied by reducing the amount payable under the order to $100.00 with effect from 15 October 2006 and providing that the order will cease with effect from 31 December 2007.
That there be no order for costs.
That all other applications are dismissed and the matter is removed from the list of cases awaiting finalisation.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
BRM 943 of 2005
| MARTIN TURNBULL |
Applicant
And
| DEBRA JOY TURNBULL |
Respondent
REASONS FOR JUDGMENT
Application
This is an application by the husband, (now former husband, as the parties are divorced) to revoke an order made that he pay spousal maintenance to the wife in the sum of $200.00 per week.
The application will be treated as an application to discharge the order.
The respondent wife, by her response filed on 14th June 2006, asks the court to dismiss the application with costs.
Background
The maintenance order sought to be discharged was made on
8th February 2005 by Brewster FM in the Canberra Registry of this court. The orders were made as part of orders made for the settlement of the matrimonial property.
The relevant orders made at that time were:
a)an order dividing the proceeds of sale of the former matrimonial home between the parties, so that the wife received the sum of $168,461.00 together with 65% of any interest accrued and the husband received the balance;
b)an order that the wife transfer to the husband the jointly owned IAG shares;
c)an order in accordance with section 90MT(1)(b) of the Family Law Act 1975 that whenever a splittable payment becomes due from the husband’s interest in the Defence Force Retirement and Death benefits Scheme the wife would receive 50%;
d)the parties retained the chattels in their respective possession and the choses in action in their respective names; and
Order (7), which said:
That the husband pay spousal maintenance to the wife in the sum of $200.00 per week. This Order dates from today with the first payment to be made within 14 days.
The parties commenced to live together in 1976 and were married on 10th June 1978. They separated on 27th November 2003 but remained under the one roof until the applicant husband moved out on
22nd December 2003.
There are two children of the marriage. The parties’ daughter was born on 24th February 1984 and their son was born on 3rd November 1987. They are both adults.
In his reasons for judgment, Brewster FM assessed the various s.75(2) factors relating to the parties. He noted that the husband was in good health and found that there was no reason why he should not continue in employment. He found that the wife suffered from poor health:
She filed an affidavit from her treating rheumatologist,
Dr Kenneth Khoo. Dr Khoo states that he has been managing the wife for rheumatoid arthritis which has affected the joints in her upper and lower limbs. He reports that she suffered from breast cancer, which is in remission, that she suffers from asthma and cardiomyopathy and has diet controlled diabetes.[1]
[1] Turnbull & Turnbull [2005] FMCAfam 30 at [24]
His Honour went on to find:
My conclusion, having seen the wife and taking into account her history of medical conditions, is that her prospects of obtaining other than part time work are poor and her prospects of even obtaining part time work uncertain.[2]
[2] ibid at [26]
Brewster FM noted the wife’s medical costs and the fact that she received a carer’s allowance from Centrelink of $471.00 per fortnight because she was involved in the care of her disabled brother.
His honour noted that the husband had been in employment since he left the Army and was earning $59,500.00 per annum in his current position. His Honour considered him to be a person who could easily obtain other employment if his current position did not prove to be permanent. His Honour also took into account these factors:
31 As an incident of his employment the husband will continue to have his employer contribute to his superannuation fund. There is no reason why he should not work many years into the future and accumulate a significant amount of superannuation by the time he leaves the workforce. The same cannot be said of the wife.
32 A[3] finished Year 12 in 2004. He plans to attend university in Albury in 2005. It is likely therefore that the husband will continue to be responsible for assisting him financially. On the other hand I take into account the fact that, to a degree, the money he would otherwise spend on A will, as a result of the decision I have made in relation to maintenance, go to the wife.
I have already taken account of the monies to be paid to the wife.
[3] The parties’ son
33 The husband has re-partnered. His partner is employed.
He therefore has the benefit of being able to share expenses such as rent with his partner and has the benefit of the economies of scale that apply in such a situation.[4]
[4] [2005] FMCAfam 30 at [31] – [33]
Brewster FM then considered the wife’s spousal maintenance application, turning first to the parties’ incomes. His honour considered the parties’ incomes in this way:
38 As a result of the split of the DFRDB pension the wife will have an income of about $9,800 per annum. She will also have available to her capital which, after paying various debts set out in her financial statement totalling $25,151, will total about $144,487. Invested at 5 per cent per annum this would return an income of $7,224 per annum. Her gross income will therefore be in the order of $17,000 per annum. I calculate that tax and Medicare Levy of about $2,000 would be payable on this which leaves a net income of about $15,000 per annum or about $300 a week.
39 As a result of the superannuation split the husband will receive a pension of about $9,800 and a salary of $59,500 making a total of $69,300 per annum. He will also have usable capital of about $45,239. Included in the debts I took off the wife’s property are legal fees of $15,000 so I will deduct the same amount. This leaves an amount of about $30,000 which at five per cent would return an income of about $1,500 per annum. This results in a gross income of about $70,800 per annum. I calculate the tax and Medicare payable on this would be approximately $21,000 leaving a net income of about $50,000 per annum or about $960 a week.[5]
[5] Ibid at [38] – [39]
His Honour assessed the husband’s reasonable expenses at $560 per week. He proceeded on the basis that the parties’ son would attend university and that his father would continue to be liable for his support. He stated that there was no basis for giving the wife priority over the son and allocated the surplus from the husband’s income equally between the two. In this way, Brewster FM assessed the husband’s capacity to pay at $200 per week.
In the final paragraph of his judgment, Brewster FM said:
I therefore propose to order that the husband pay spousal maintenance of $200 a week. I had considered making this for a closed period, perhaps three years until A completes his degree, and then to re-assess both the wife’s eligibility for continued maintenance on the one hand and quantum on the other.
However on balance I have decided not to do so. I will at any time after a reasonable interval entertain an application by the husband to the effect that the wife prove that she is still unable to support herself or an application by the wife in relation to quantum should circumstances change.[6]
[6] [2005] FMCAfam 30 at [46]
The applicant’s case
The applicant husband’s case is set out in two affidavits filed on
30th March and 19th June 2006. In his earlier affidavit he makes these assertions:
a)The wife has not complied with the order made by Brewster FM to transfer to him the jointly owned IAG shares.
b)He continues to support their adult son at university by paying fees and expenses when he requests it and pays approximately $1500 per year.
c)His domestic circumstances have changed in that his partner, Kaye Doherty, is no longer able to contribute to household expenses. She suffers from a depressive illness and had been unable to work since January 2006. The applicant annexed a copy of a letter from Dr Angela Harty, a consultant psychiatrist, to his affidavit. The letter, dated 16th March 2006, stated that Ms Doherty would be unlikely to be fit to resume work for “approximately two months”.
d)He had to undergo medical treatment between May and July 2005 which cost approximately $2,000, of which about $1,200 was not covered by Medicare.
e)He has enrolled in post-graduate studies to suit his current job role. The qualification will not increase his salary but will him greater security of tenure. The study cost $5,400 in 2005/06, of which $4,900 has been deferred to the Fee-Help system as a debt to the Australian Taxation Office.
The applicant submitted that the respondent wife has had the opportunity to undergo retraining and re-enter the workforce in order to better her circumstances.
In his later affidavit, the applicant has made these assertions:
a)Ms Doherty returned to work on a part-time basis in May 2006. She works between one and three days a week as her health permits. She is not entitled to any benefits and has used all her leave.
b)Ms Doherty has accrued debts for medical treatment amounting to about $3,000.00. She is unable to contribute to the household expenses.
c)He has a spinal condition that has deteriorated.
The respondent’s case
The respondent wife opposes the order that the applicant seeks. In her affidavit that was filed on 14th June 2006 she makes the following assertions:
a)She assists the parties’ adult son by providing him with a clothing allowance of $200.00 per quarter and she also meets his miscellaneous expenses.
b)She still suffers from serious medical conditions. She receives a part disability pension in the sum of $240.95 per week. She annexed a copy of her income statement from Centrelink showing that payment. Without the spousal maintenance of $200, her weekly income is only $477.95.
c)She earned the sum of $3,731.00 during the financial year that ended on 30th June 2005. She annexed a copy of her Refund Notice from the Australian Taxation Office, confirming that her taxable income was $3,731.00 and showing that she received a refund of $261.00.
d)She received the sum of $161,461.00 from the property settlement in July 2005 but there is no money remaining from that sum.
e)She pays rent of $260.00 per week, but that is in arrears.
f)She has a credit card debt of $5,036.67, but that is in arrears.
g)
She provides the parties’ adult daughter with money for clothes, food, rent, medical and dental expenses and household items.
The daughter lives independently.
h)She cares for her brother who has brain damage, but receives no payment for that.
i)She has commenced taking dancing lessons for her health and also to obtain qualifications to teach.
j)Her weekly expenses are well above her income and she only survives by incurring further debt on a weekly basis.
k)Her health prevents her from returning to paid employment.
Variation of spousal maintenance
The law relating to modification of maintenance orders is set out in
s. 83 of the Family Law Act. Section. 83(1) gives the court power to:
a)discharge the order if there is just cause (s.83(1)(c));
b)
suspend the operation of the order, either wholly or in part
(s.83(1)(d));
c)revive a suspended order, either wholly or in part (s.83(1)(e)); or
d)vary the order by increasing or decreasing the amount to be paid (s.83(1) (f)).
Before making an order varying the amount required to be paid,
s.83(2) requires the court to be satisfied that:
a)there has been a change of circumstances;
b)there has been a change in the cost of living;
c)in the case of a consent order, that the amount ordered to be paid is not proper or adequate; or
d)material facts were withheld from the court.
Whilst the Family Law Act does not contain a definition of the words “just cause”, it has been held that the words must be interpreted in the context of the Act as a whole, and that a cause will only be a “just cause” if:
Having regard to the other provisions of the Act, particularly those relating to maintenance, it can be said that it is ‘right’ or ‘proper’ that the order should be discharged (see Lutzke & Lutzke (19790 5 Fam LR 553 at 559; FLC 90-714 at 78,832)
Whether an order should be discharged remains a matter of discretion, even if “just cause” is found to exist (Vakil & Vakil (1997) 21 Fam LR 508; FLC 92-743).
If a party is no longer in need of maintenance within the meaning of
s.72 of the Act, the court may discharge the existing order (see Corner & Corner (1978) 4 Fam LN 1; FLC 90-438, where it was held that both parties had an excess of income over outgoings, and Astbury & Astbury (1978) 4 Fam LR 395; FLC 90-494, where the Full Court of the Family Court held that the trial judge was correct in finding that it was reasonable, having regard to the circumstances of the parties, to expect the wife to engage in gainful employment).
It was held in Taguchi & Taguchi (1987) FLC 91-836 at 76,296 that there is an obligation on the recipient of spousal maintenance to exercise that person’s capacity to earn an income.
The onus of establishing a “just cause’ is on the applicant for the discharge of the order (Astbury & Astbury (supra at 77,562; Lutzke & Lutzke (supra at 78,832; see also Janes & Janes [2003] FMCAfam 275 at [17] [21]).
Evidence
Neither party gave evidence. The respondent did not attend court, but was represented by her solicitor, Ms Francis. The applicant, who is unrepresented. The parties agreed that the application should proceed as a final hearing on the basis of submissions. The applicant relied on his affidavit and financial statement filed on 30th March 2006, and his affidavit filed on 19th June 2006. The respondent relied on her affidavit and financial statement filed on 14th June 2006.
For the respondent, Ms Francis told the court that the applicant had voluntarily entered into a new relationship and this had occurred by the time of the earlier hearing. The applicant did not have a legal obligation to support his new partner. The respondent, she submitted, had attempted to transfer the IAG shares to the applicant.
The applicant submitted that the judgment took into account the fact that the respondent could go back to work. He said that since January he had had a limited capacity to meet the payments. He also said that he had a moral obligation to support his partner. He also had increased medical expenses of his own, as he mentioned in his affidavit material.
The applicant also submitted that he was still supporting the parties’ adult son, as he set out in his affidavit material. He denied that the respondent had contacted him about transferring the IAG shares.
Conclusions
In my view, the first matter to consider is whether the applicant has made out his case for the spouse maintenance order to be discharged.
If I were satisfied that the respondent was no longer in need of maintenance within the meaning of s.72 of the Family Law Act, that would constitute “just cause” within the meaning of the section.
The applicant submits that the respondent “has had the opportunity, both in time and monetary terms, to undergo retraining and re-enter the workforce in order to better her circumstances and accept the responsibility to support herself”.[7] He has not, however, provided any evidence to show that she has the capacity to support herself, apart from the effluxion of time. The orders were made on 8th February 2005, and the application was heard on 19th July 2006, so only 17 months have passed.
[7] Affidavit of Martin Turnbull filed 30th March 2006, paragraph 12.
The respondent deposes that her health has not improved, saying:
10 I continue to suffer serious medical conditions. I have dilated cardiomyopathy, type two diabetes, systemic rheumatoid arthritis, asthma and have suffered from stage 2 breast cancer and have undergone chemotherapy, radiotherapy and surgery.
11 My health has not improved. I continue to visit my general practitioner regularly, have annual scans and mammograms for breast cancer, consult Drs Khoo, John Buckingham (cancer surgeon), Dr Elizabeth Anderson (cardiologist), have regular blood tests and continue counselling. I attend counselling at Lifeline on a regular basis for family and related reasons.[8]
[8] Affidavit of Debra Joy Turnbull filed on 14th June 2006, paragraphs 10 and 11
She goes on to say, at paragraph 22 of her affidavit:
My health prevents me from returning to paid employment, however, I am taking some steps to secure my future.
When considering the respondent’s situation in the original proceedings, Brewster FM reached the conclusion, having seen her and taking into account her history of medical conditions, “that her prospects of obtaining other than part time work are poor and her prospects of even obtaining part time work uncertain[9].” His Honour found it unclear why Dr Khoo in his report nominated a 12 month timeframe as a time for her to commence retraining for work, as he felt that there was nothing in the report to indicate that the respondent’s arthritis could be expected to improve.[10]
[9] [2005] FMCAfam 30 at [26]
[10] Ibid at [25]
That said, the respondent’s evidence does little to show that she has made any effort to obtain even part-time work or take other steps to support herself. Even taking the medical evidence at its highest, the respondent’s evidence does not show that she is incapable for part-time paid employment. Whilst the respondent suffers from various medical conditions, none of them seem to have worsened and she mainly recites what has happened to her in the past. Her current situation appears to be that she is consulting various medical practitioners on a regular basis, and having counselling at Lifeline.
None of this evidence shows an incapacity to work in paid employment. Indeed, the respondent has deposed that she has commenced dancing lessons in the hope that she “can obtain qualifications to teach which may provide me with an income, but this could take many years and is dependant upon my health. The income would not sustain me but would provide a casual income of enough to cover my dancing expenses”.[11] It is hardly a realistic proposal to support herself.
[11] Respondent’s affidavit paragraph 20
What is surprising is that the respondent deposes that she has managed to spend the entire proceeds of her property settlement in the space of a year. Brewster FM took into account the fact that, as a result of the property orders, the respondent would have an amount of capital which she would be able to use to gain an income for herself. His Honour calculated that the respondent would have a net income of about $15,000.00 per annum available to her. His Honour set out his calculations at [38]:
As a result of the split of the DFRDB pension the wife will have an income of about $9,800 per annum. She will also have available to her capital which, after paying various debts set out in her financial statement totalling $25,151, will total about $144,487. Invested at 5 per cent per annum this would return an income of $7,224 per annum her gross income will therefore be in the order of $17,000 per annum. I calculate that tax and Medicare Levy of about $2,000 would be payable on this which leaves a net income of about $15,000 per annum or about $300 a week.
The respond admits that she has none of the property settlement money left. In her affidavit at paragraph 16 she deposes that she received $161,461.00 in July 2005 but there is no money remaining. She has not, as Brewster FM envisaged, invested the money to earn an income. She sets out how she expended the capital:
a)A new motor vehicle and associated expenses at $28,200.00;
b)Household furniture including a new lounge at $3,000.00;
c)Two visits to Brisbane, one of which was a holiday; and
d)Money spent on her two children estimated at $16,000.00.
As for the rest of the money, the respondent deposes:
I have assisted all members of my family, including my sister and niece, and a few friends. In particular, I have supplied my children with new and necessary clothes, and other necessary items including paying their outstanding bills, dental and medical expenses, moving expenses and paid my own debts at that time.[12]
[12] Respondent’s affidavit at paragraph 16
The respondent’s debts were estimated by Brewster FM at $25,151.00. Accepting that the amount the applicant received, after legal costs, came to $161,461.00, the applicant is able to account for the following:
a) Motor vehicle
$28,200.00
b) Lounge
$3,000.00
c) Debts
$25, 151.00
d) Children
$16,000.00
TOTAL
$72,351.00
As the respondent actually received $161,461.00 in July 2005, she can only account for $72,351.00, which leaves $89,110.00 unaccounted for, apart from unspecified household furniture, two visits to Brisbane (from Canberra), along with assistance to her sister and niece “and a few friends”.
Now, the respondent claims to be providing the parties’ adult daughter, who lives independently, with money for “clothes, food, rent, dental, doctor’s bills and household items”.[13] What, if anything, is the daughter paying for herself, one might well ask. At the same time, the respondent deposes that her weekly expenses are well above her income. That is hardly surprising as the respondent has disposed of virtually all of her capital at the rate of more than $3,000.00 per week over a period of twelve months. An example of the respondent’s spending habits appears in paragraph 21 of her affidavit, where she deposes that she was “forced to reside at the Crown(e) Plaza for 14 days because of delay”.
[13] Ibid at paragraph 18
The respondent deposes that she continues to look after her brother who has brain damage but she is currently not getting paid to care for him. At the time of the original hearing, Brewster FM noted that the respondent was receiving a carer’s allowance from Centrelink of $471.00 per fortnight for being involved in the care of her brother. She no longer receives that allowance, but receives a part disability support pension of $481.90 per fortnight.
The Income Statement from Centrelink annexed to the respondent’s affidavit confirms that the respondent’s carer allowance of $94.70 per fortnight was cancelled on 27th April 2006. Apart from the Disability Support Pension, the respondent also received the following payments:
a)Pharmaceutical allowance $5.80 per fortnight
b)Rent assistance $100.60 per fortnight
c)Pension Basic Supplement $17.80 per fortnight.
This, of course, is not to be taken into account as an illustration of the respondent’s earning capacity, but it is evidence of the respondent’s vagueness about money in general.
The respondent has admitted that she has not transferred the IAG shares to the applicant as required by Order 2 and as deposed by the applicant in his affidavit filed on 30th March 2006. Her solicitor submitted from the bar table that her client had attempted to transfer the IAG shares, but provided no evidence in support of this assertion.
I see from the judgment of Brewster FM that the shares were valued at $1,658.00. This amount would have been included in the “usable capital” of $45,239.00 referred to buy his Honour when calculating the applicant’s gross income for the purposes of the spousal maintenance application. Clearly, the applicant has been denied the use of the shares for more than a year because of the respondent’s failure to comply with the Court Order.
I accept that the applicant has not acquired a legal obligation to support Ms Doherty which would override his obligation to pay the maintenance order for his former wife. However, Ms Doherty’s illness represents a change to the circumstances that were before Brewster FM when he considered the original application. His Honour said at [33]:
The husband has re-partnered. His partner is employed.
He therefore has the benefit of being able to share expenses such as rent with his partner and has the benefit of the economies of scale that apply in such a situation.
What has happened is that Ms Doherty was unable to work at all from January to May 2006, and was then able to return to work on a part time basis. She then had to deal with medical expenses of approximately $3,000.00. It is not the responsibility of the applicant to pay his partner’s medical expenses, but her commitment to paying these debts has left her unable to pay her share of the household expenses such as rent.
I have considered whether the circumstances are such that the applicant has demonstrated that there is “just cause” for discharging the order for spouse maintenance. The applicant has not demonstrated that the respondent no longer has a requirement for continued maintenance.
At the same time, the respondent’s dire financial situation appears to me to be largely of her own making. Her actions in disposing of over $89,000.00 that she received from the property settlement, which should have gone to give her a capital to provide her with an income, without being able to indicate with any particularity how the money was spent, appears to me to be highly irresponsible. The respondent has given vague explanations of bestowing this money on her adult children, her sister, her niece and “a few friends” without appearing to realise that she has given away more money in a year than most Australians earn. It is not the applicant’s fault that the respondent has wasted the money that she received.
The respondent’s plan to become qualified to teach dancing so that she can make enough money to pay for more dancing lessons appears to me to be quite unrealistic. Her health problems do not appear to me, on the evidence she has put before the court, to be sufficient to preclude her from the part-time workforce.
I am unable to understand why the respondent has chosen to spend an estimated $16,000.00 on her two adult children. Her estimate of the expenses she is paying for the parties’ daughter seems to cover the young woman’s total support.
Whilst I am not persuaded that a “just cause” has been made out to discharge the maintenance order, it is fair to say that I have given the matter serious consideration.
I am of the view, however, that the applicant has made out a change of circumstances, even if only a temporary one, that justifies a variation of the order in his favour. The reasons for this are:
a)The illness suffered by his partner, which has deprived the applicant from the benefit of assistance in rent and other expenses which were taken into account by the court in the maintenance proceedings;
b)The medical expenses incurred by the applicant and not covered by Medicare; and
c)The respondent’s failure to comply with the court order to transfer the IAG shares to the applicant.
It is for these reasons that I propose to make an order substantially reducing the amount of spouse maintenance to be paid. I note from the applicant’s financial statement that his rent stands at $270.00 per week. At the time, his partner was not working but she has returned to work on a part time basis. At this stage, I take into account that she has no ability to meet half the rent or any other part of it, and the applicant would appear to be out of pocket by at least $135.00 per week compared to what the situation was before, not to mention electricity, food, fares, motor vehicle and other expenses. From his figures, I would calculate that the cost to him has been well in excess of $200 per week. Nevertheless, as I am not satisfied that the maintenance order should be discharged at this stage, it is clearly inappropriate to reduce the amount payable to nil.
It is difficult to estimate when a further order should be made.
It will depend on the ongoing health of the applicant and his partner.
If the respondent ever complies with the order to transfer the jointly owned IAG shares to the applicant, in my view an amount of interest should be calculated from a period 28 days after the order was made.
I propose to order that the spouse maintenance should continue but be reduced to the sum of $100.00 per week with effect from
15th October 2006. I am of the view that the time has come to revisit the idea discussed by Brewster FM that the order should be for a closed period, as set out in his Honour’s decision at [46]. I consider that without imposing a time limit, the respondent will continue to take no steps to secure her own future, as her actions to date have demonstrated. Accordingly, the order will cease on 31st December 2007.
The applicant is not legally represented. The respondent is legally represented. Neither party has been entirely successful. I am mindful of the fact that the respondent has not complied with a court order which, if she had complied, would have put the applicant in a slightly better financial position than the one he finds himself in at present. I will make no order for costs.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Associate: S. Polley
Date: 3 October 2006
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