WALDEN & WALDEN

[2016] FamCA 420

FAMILY COURT OF AUSTRALIA

WALDEN & WALDEN [2016] FamCA 420

FAMILY LAW – PROPERTY – Interim – Wife’s application for the parties to join in paying for an expert report – Where that application is opposed by the husband – Where the Court is of the view that it is not a proper joint expense – Where the wife is granted leave to adduce evidence of an expert that she retains.

FAMILY LAW – SPOUSAL MAINTENANCE – Interim – Application for leave under s 44(3) of the Family Law Act 1975 (Cth) to commence proceedings for spousal maintenance out of time – Consideration of s 44(4) – Where the wife has not established a case for hardship – Application for leave under s 44(3) is dismissed.

Family Law Act 1975 (Cth) ss 44(3), 44(4)

APPLICANT: Ms Walden

RESPONDENT: Mr Walden

FILE NUMBER: SYC 2270 of 2013

DATE DELIVERED: 16 May 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 16 May 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lethbridge SC

SOLICITOR FOR THE APPLICANT: Blanchfield Nicholls Partners

COUNSEL FOR THE RESPONDENT: Ms Clifford

SOLICITOR FOR THE RESPONDENT: York Law Family Law Specialists

Orders

1. The costs of Blanchfield Nicholls in relation to an appearance today are reserved.

1. Leave is granted for the issue of those costs to be restored to the list on seven days’ notice.

1. Leave is granted to the wife to rely on the evidence of an expert in relation to the building condition and the cost of necessary work to rectify and repair to a fit, proper and safe condition all defects, structural and otherwise in the dwelling at B Street, Suburb C and all services connected to that property.

1. Orders are made in terms of paragraphs 1 and 2 of the Response to an Application in a Case filed by the husband on 16 May 2016, as set out hereunder:

1.      That within seven (7) days from the date of these Orders the Parties do all acts and things and sign all documents necessary to release from the Mr Walden and Ms Walden ATF D Trust bank account with ANZ Business Premier Saver account #... the following:

1.1the sum of $150,000 to the Wife by way of partial property settlement;

1.2the sum of $150,000 to the Husband by way of partial property settlement;

1.3the sum of $30,000 to the Wife with such payment to be characterised by the Trial Judge at the Final Hearing;

1.4the sum of $30,000 to the Husband with such sum to be characterised by the Trial Judge at the Final Hearing, and

1.5the sum of $25,000 which sum is to be characterised by the Trial Judge at the Final Hearing with the said sum to be dealt with as outlined in Order 2 hereunder.

2.      That the sum paid as per Order 1.5 above be applied as follows:

2.1In payment of the children’s school fees and incidental education expenses at G School and H School for the balance of 2016 school year with such costs to be paid upfront within 7 days from date of compliance with Order 1.5;

2.2The balance to be retained by the wife and applied to meeting the children’s extra-curricular and medical expenses including: violin tutoring, debate expenses, maths tutoring, E speech and drama expenses, swimming lessons expenses, E coaching fees, E [sports] expenses, F’s psychiatrist expenses and doctor’s visits.  

1. The wife’s Application for leave to be granted under s 44(3) Family Law Act 1975 (Cth) in relation to the wife applying for spousal maintenance out of time is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Walden & Walden 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 SYDNEY

FILE NUMBER:  SYC2270 of 2013

Ms Walden

Applicant

And

Mr Walden

Respondent

REASONS FOR JUDGMENT

1. These are interlocutory proceedings.  There are parenting and property settlement proceedings on foot.  The matter was before me recently for the first day of the final hearing.  That was a day when the matter came out of the pool of cases where it has been waiting and is allocated to a judge to make trial directions.  That usually involves orders for expert evidence and the evidence of lay witnesses and so on.  That issue has been adjourned to 30 May but I have asked the parties to think about whether we could deal with those issues today.  There is agreement on behalf of the wife and the husband’s counsel is getting some instructions.

2. The remaining issues were raised in an Application that was filed on 29 April 2016, and this is the return date given to that Application. In the application the wife seeks a payment of partial property settlement; an order about an expert report; leave under s 44(3) of the Family Law Act 1975 (Cth) (“the Act”) to commence spousal maintenance proceedings out of time; and if leave is granted, an interim order for spousal maintenance in the sum of $500 a week. She also seeks her costs of the Application.

3. In the husband’s Response filed today, he too seeks orders in relation to an interim distribution of funds by way of partial property settlement and by way of other payments, some of the payments to do with child support; that the wife’s Application for leave to bring proceedings out of time be adjourned to the final hearing; that the issue of the expert’s report be adjourned for determination after a single expert’s valuation report has been provided; orders about letters of instruction to the single experts in relation to the valuation of real estate, of a trust and a superannuation fund; an order for the sale of the former matrimonial home and disbursement of proceeds; and for costs.

4. Ultimately, the issue about interim distribution of funds, in accordance with the husband’s proposal, is agreed so I do not need to say much more about that.  The parties agree that a distribution of $150,000 to each of them is to be characterised as property settlement.  They seek that a $30,000 to each of them be a matter to be characterised by the trial judge.  As to a further $25,000, it is clear that the parties intend that that be applied to children’s expenses.

5. There were no oral submissions made about the instructions for the two experts and I understood from something said to me that no Court intervention is required on that issue.

6. The husband’s application to sell the home is not pressed at this stage.  That deals with this Application. 

7. Turning to the wife’s Application, her first prayer for relief is for a payment, and that has been addressed in the parties’ agreement about interim property settlement.  The second prayer deals with an issue of an expert’s report.  It was my recollection that that had been raised and dealt with by me on a previous occasion.  There may be some doubt about that.  What is sought by the wife is for the parties to join in paying for a report into what building work or rectification work is required at the former matrimonial home at Suburb C.  That relief is opposed, as I have indicated, on behalf of the husband, until after the single expert report as to the value of the property has been provided. 

8. In my view, this would not be a proper joint cost.  I was told on the last occasion that a large part of the wife’s motivation in seeking such a report was so that she knew what the import would be of her Application that she retain that property on a final basis.  In my view, that is not a proper joint expense.  The wife had a fall-back position, and that is that she be allowed to adduce the evidence of her own expert in relation to that issue.  That is not opposed on behalf of the husband and I will grant that leave.  I give leave to the wife to adduce the evidence of an expert in the substantive proceedings in relation to a building condition report and costing of work identified in that report, being work necessary to rectify and repair to a fit, proper and safe condition, all defects, structural and otherwise, in the dwelling constructed at the property B Street, Suburb C in the State of New South Wales, and all services connected to that property.

9. Next there is the Application for leave under s 44(3) of the Act. Section 44(3) says, in effect, that where parties have been divorced, they need leave to commence proceedings, inter alia, for spousal maintenance, if the proceedings are commenced after the expiration of 12 months from the date on which the divorce took effect. I think the parties’ divorce took effect on 8 August 2013, which would mean the period within which an application for spousal support could be brought without leave ended a year and a day after that. Leave is not needed if the parties agree; but they do not agree. The Court can grant leave for the proceedings to be brought. Section 44(4) says:

   The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:

   (a)that hardship would be caused to a party to the relevant marriage or a child if leave were not granted;  or

   (b)in the case of proceedings in relation to the maintenance of a party to a marriage—that, at the end of the period within which the proceedings could have been instituted without leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.

10. I think probably the family tax benefits fall into that definition.  They are income tested public benefits.  Certainly a Newstart allowance or single parent pension would fall into that category.  Just dealing with that last issue first, it is not possible to say whether the wife would have been unable to adequately support herself without an income-tested benefit a year and a day after the divorce became effective.  She has not specifically addressed her circumstances at that time in her evidence.  In any event she has a problem in that she says that she has a right to income from a trust.  She gives no evidence about the quantum of that income or of any significant attempts to have the income paid.  I am not permitted to invent that evidence. 

11. The wife gives some evidence that at one stage she applied for a Newstart allowance and was refused.  That might not exclude the possibility that she needed an income-tested benefit but I could not make such a finding on those facts. No finding was pressed on me in submissions.  That leaves the wife to demonstrate hardship.  The authorities have it that the hardship the legislation is dealing with is the inability to make a valuable case.  If there is a valuable, worthwhile, significant, substantial claim that could be made then there it would be a hardship if she was prevented from seeking that relief.  The wife does not have to make the case that she wants to make; she just has to point to it. 

12. Spousal maintenance is a remedy in this instance, available to parties to a marriage whether the marriage is on foot or not, whereby if one party can demonstrate that they cannot adequately support themselves from their own resources for any proper reason, the other party can be called on to provide that support to a reasonable extent.  So the first issue relates to the wife’s capacity to support herself.  The wife’s evidence is that until recently she has paid her day to day living expenses, although with some difficulty, without the benefit of any spouse maintenance order or periodic payment from the husband. 

13. She did that from loans received from her parents and from capital.  She had the expectation, she says, that the use of capital to meet her living expenses would be supplemented by income distributions from D Trust.  She says, “As I experienced increasing financial pressure I believe that as I do not work and have no immediate income earning capacity” she would be eligible to receive government allowance such as Newstart.  She now knows that that is not the case because of her assets and other things and the income credited but not paid to her by the trust.  She says, “I have not been in paid employment other than for the … business operated by the husband and me during the marriage, since 2003 when [F] was born.” 

14. I should say the parties were married in 1999, separated in May 2011 and divorced in August 2013.  They have two children – [F] and E, who are 12 year of age and nine.  She says that she has a Bachelor and Diploma degrees in science although she has not worked in that field since 1998 and she would require further training if she was to return to work in a science-based position.  The parties moved to the UK in 1999 and until just before F’s birth, the wife was employed in various administrative roles.  She is prepared to undertake some retraining in the future.  She has been unable to pay for a course. 

15. At this stage she says her priority is to take care of the children.  E might be doing an opportunity class test for year five.  That could result in a change of schools.  The wife is conscious that retraining might cause further disruption for the children when she thinks they need to be in a stable situation.  She has extensive commitments associated with school and extracurricular activities.  The husband travels a lot and he is not available to take up the slack, and that is the evidence.  Again what we are missing is anything to do with the wife’s income through the trust. 

16. I have got no idea whether that is $1 or $50 a week or $100 a week or what it is.  The wife has expenses as you would expect and there is no significant challenge to her claimed expenses.  There is nothing obvious to challenge and I accept that if she does not have any income then she has expenses that would account for there being a shortfall.  The problem is even if one accepts that the circumstances she has identified would be adequate to explain no earning capacity from paid employment, there is the problem of what other income she might be entitled to, and what other capital she might be entitled to. 

17. Parties are not expected to live on their capital if that is not necessary but capital can produce income.  If for example the wife’s loan account with the trust stands at $900,000.  Then some income may be achievable through that.  If the wife gets over that hurdle we come to the second part of the equation which is the husband being required to provide support to a reasonable extent.  He earns $3,846 a week and spends $3,917 a week.  Included in that is $730 a week for rent. 

18. Mr Lethbridge on behalf of the wife says that when the property settlement is achieved, he will not need to pay rent.  Well, it is not always the case that people are content with the property that they can afford to buy once their property settlement is provided.  There can be costs associated with that and there are costs associated with accommodation in any event.  That is unknown but the same imponderable issues apply to the wife.  If the parties have assets of $6 million and I do not know what the arguments are in the substantive proceedings but if she was to receive $3 million and she was to apply less than $2 million to her accommodation then she would have some money that could use to earn an income. 

19. Otherwise, there is nothing in his claimed expenses that should be ignored.  He has a child support obligation but the husband points out, that increases by $60 or so in September.  There is nothing said to me about him not fully exercising his earning capacity.  Like the wife, he has borrowed from his mother in relation to legal expenses.  He makes provision for, as has been pointed out, holidays at $80 a week.  That is less than the provision the wife makes in her documents.  That would give way to necessity but perhaps not as a reasonable contribution to the wife, remembering that the capacity to provide support is to a reasonable extent. 

20. It seems to me that a case is not made for hardship.  There is no exploration here of what the wife’s income earning capacity is.  From the evidence before me, there is a bald assertion on both sides that the parties have income owing to them from a trust and they have not cooperated in drawing it.  Even if it was not the wife’s responsibility to cause income to which she was entitled, to be paid – and I think there is an argument for that – she should at least say what it is.  If she overcame that problem, there is no evidence of the husband’s capacity to pay.

21. Without a finding of hardship the discretionary matters do not come into it. 

22. The authorities have it that the inadequacy of an explanation for delay is not critical.  It certainly would be outweighed if there was a significant hardship identified.  The wife says she did not think there was a problem.  She thought there was no barrier to her bringing spousal maintenance proceedings, her having commenced property settlement proceedings  She says that up until about September 2014 when the parties underwent a conciliation conference, she thought she was going to be able to adequately support herself.  That might account for it.  She does not say what happened immediately after that.  She says that an order was made that she was not allowed to bring further proceedings without leave. 

23. It is her case that nobody said to her that they thought that was a barrier to this particular bringing an application. There is no real prejudice to the husband being forced to face this Application late but in my view there is no hardship is established. Therefore the Application for leave under s 44(3) is dismissed.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 16 May 2016.

Associate: 

Date:  25 May 2016