Walsh and Walsh and Anor

[2012] FamCA 133

FAMILY COURT OF AUSTRALIA

WALSH & WALSH AND ANOR [2012] FamCA 133

FAMILY LAW – SPOUSAL MAINTENANCE

Family Law Act 1975 (Cth)

APPLICANT: Ms Walsh

RESPONDENT: Mr Walsh

INTERVENOR: Mr W

FILE NUMBER: MLC 11616 of 2011

DATE DELIVERED: 29 February 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 28 February 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Robinson

SOLICITOR FOR THE APPLICANT: Westminster Lawyers

COUNSEL FOR THE RESPONDENT: Mr Hannan

SOLICITOR FOR THE RESPONDENT: Mills Oakley Lawyers

COUNSEL FOR THE 2^ND
RESPONDENT: Mr Bloch

SOLICITOR FOR THE 2^ND RESPONDENT: Hughes Legal

Orders

1. That the husband pay to the wife by way of spousal maintenance the sum of $880 per week, the first of such payments to be made on Friday 2 March 2012 and weekly thereafter.

2. That the application of the wife for:

   (a)  spousal maintenance; and

   (b)  the sale of real property,

   be otherwise dismissed.
   IT IS CERTIFIED:

3. That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Walsh & Walsh and Anor 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 MELBOURNE

FILE NUMBER: MLC 11616 of 2011

Ms Walsh

Applicant

And

Mr Walsh

Respondent

And

Mr W
2^nd Respondent

REASONS FOR JUDGMENT

1. By her application filed 22 December 2011, Ms Walsh (the wife) sought a variety of interim orders against her husband Mr Walsh (the husband).

2. On the return date of the application, the parties were not able to agree and at their request, I adjourned the outstanding interim applications to 28 February to accord the husband's parents procedural fairness because the wife was seeking the sale of a business in which the husband's parents are acknowledged as having an interest.

3. On 28 February, I heard counsel for the husband and wife and for the parents and reserved judgment. These are the reasons for the orders that I have just pronounced.

4. The wife sought that the husband pay her $1,100 per week by way of spousal maintenance. In submissions for the wife, it was made clear that if the husband could not afford to pay maintenance, the business should be sold.

5. In his response filed 23 January 2012, the husband did not specifically address the maintenance issue. In submission, his counsel argued that the husband had already been paying a variety of expenses and giving the wife money for her rent. His position was that there was no money to pay.

6. The position of the husband's parents was to oppose a sale of the business property at this stage because there is a possible windfall in the offing but which is some months away. I indicated that their position was only immediately at risk if the husband could not pay the maintenance.

7. The facts of this case are not simple.

8. The parties began their relationship almost 20 years ago. In 1992, two corporate entities acting as trustees of family trusts acquired the freehold and business which is now the relevant business/business property. To enable the entities, or more importantly, the husband, to complete the purchase, his parents contributed funds and then executed an agreement which gave them a 10% equitable interest in the freehold and business. The wife does not seem to dispute that transaction.

9. The parents lodged a caveat in 2001 against the real property to flag their equitable interest and it now seems that a mortgage has also been executed to secure their interest. With the recognition by the wife of the interest, it remains open to the parties to simplify the proceedings by not involving the parents in costs and unnecessary expense if the business is to be sold.

10. In addition to their initial financial contribution, the parents have also been significant financial contributors if the records annexed to the husband's father's affidavit are correct. It is asserted that in the last 10 months, something in the vicinity of $150,000 has been "put into" the business by the parents. The breakdown of that sum includes mortgage payments, a valuation, stock, wages and then lump sums into the corporate trustees' accounts. It is asserted by the parents that they want those back.

11. The husband's position as I understand it, is that the business could not have functioned without that financial assistance and his drawings are now negligible. Despite that, the husband said that he had been paying $880 per week in rent for the wife, her car expenses, mobile telephone and school fees. There may be some dispute about the school fees of $350 per week because it is a private school and I was told by counsel that the husband's father had been paying those in the latter part of 2011.

12. The reason why the husband and his parents resist the sale at this time is that the business property has sub-divisional potential and there is a council meeting shortly which might move the proposition along to the extent that it will provide an avenue for a sale and a windfall. The focus of the parents apart from obtaining a return of their recently lent money is that they say the investment in the business was a major asset for them and they want to maximise their entitlement in their retirement.

13. The money involved is not small. It was asserted by counsel for the wife without demur from other counsel that at present, the property may be worth about $2.8 million but after payment of debts including the recently-lent parents' money, there would be about $1million left over which would then be divided between the parties including the parents. Thus, the ultimate amount is much smaller when divided and the parties cannot afford to waste their entitlements.

14. The hearing was conducted on the papers and as such, I am not able to make findings of fact other than where the evidence is largely uncontroversial and where obvious conclusions can be drawn.

15. Having regard to the position of the parents in desiring to retain the property for the short term for their asset protection purposes, much more focus falls upon the evidence relating to the spousal maintenance. It must not be lost on the parties however that the parents' financial contributions have been much greater than the sum required and sought by the wife for the support of herself. It was also evident that there is a philosophical problem here because the wife is supporting herself and the children on a pension at the taxpayers' expense whilst the parents prop up a business to endeavour to protect their own futures and at the same time pay private school fees for their grandchildren at the rate of $350 per week.

16. As I made clear, I would determine the matter on the evidence.

17. Jurisdiction was not an issue here but the power to make orders was disputed.

18. Section 72 of the Family Law Act 1975 (Cth) (“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 whether by reason of having the care and control of a child of the marriage who has not attained the age of 18 years; or by reason of age or physical or mental incapacity for appropriate gainful employment; or for any other adequate reason having regard to any relevant matter referred to in s 75(2) of the Act.

19. The wife's affidavit filed 22 December 2011 was largely unhelpful. It was directed to the wife's needs based upon her perception of a way of life.  The wife described her financial position as "dire" because the husband did not pay into her account the sum she had been paid and was needing. The obligation of the husband only arises if the threshold test is established that the wife is unable to support herself.

20. Over the summer period, the wife had some work but it seems it has ended. The husband's evidence was that the wife was qualified in a trade and could obtain work as such. In his evidence, the husband said that the wife had made no attempt to work to her capacity but went further and alleged that she was working for cash in hand. Leaving aside the wife's obligations to Centrelink and to the Court about honesty (which will no doubt be revisited in the further hearing of the matter), no evidence was presented that would enable me to draw the conclusions that the wife was capable of supporting herself having regard to past history of doing what he said should now be happening.

21. The wife's position was better set out in her second affidavit where she said that she had been employed in the hospitality industry but that her "back injury" prevented her employment as a tradesperson. In addition, the wife has the responsibility of two children who are 12 and 10 years respectively. There is no evidence in the wife’s affidavit material that would satisfy a court about a back injury.

22. Section 72 of the Act mentioned above is wide in its purview and where the circumstances are clearly short term, there is no reason why the Court should not accept that where the wife has not been in the workforce for some time because of homemaker and parent type roles and has to adjust to a new life after leaving the parties' home environment, that is an adequate reason justifying the threshold being satisfied.

23. The threshold test has to be examined in the context of the amounts asserted as the wife's "needs" bearing in mind all of the factors set out in s 75(2) of the Act.

24. However, the second arm of the examination must be on the husband's capacity to pay any and if so what amount towards the wife's claimed amount in the context of s 75(2) factors that also apply to him.

25. Here, the wife relied upon a financial statement which was largely artificial. Although the challenge by counsel for the husband was mostly about items such as holidays, he conceded that much of what was there was reasonable. That had to be so having regard to the lifestyle that the husband was maintaining as described in his financial statement.

26. The wife calculated that she spent $1348 per week absent rent which I understood was $380 per week. Of the $1348 however, some expenses could be said to be high having regard to her lack of employment. I am satisfied that about $1000 per week including rent is closer to the reality. It must be so taking into account what she currently receives from the husband and Centrelink on the assumption that she has no personal debt other than a $6000 personal loan. In other words, she is living within her means.

27. I am concerned not to blur the boundary between child support and spousal maintenance but at the moment, and certainly since separation, the parties have worked on a single payment concept rather than working out a specific child support arrangement. That must have satisfied Centrelink whom I would have expected to insist upon the wife seeking a child support assessment.

28. Because of the parties' private arrangements, I have presumed that it is the wife who is paying for the support of the children from whatever sum she has and in those circumstances, I can assess the wife's expenditure as including an obligation to support the children.

29. I am satisfied that the amount of $1000 is reasonable for the wife's expenses having regard to all of the matters set out in s 75(2). The evidence of health by both parties is scant as it is about the wife's employment. It is however clear that at least for the moment, the wife has the greater parenting responsibilities. The commitments of the wife in relation to those matters are set out in her financial statement but they also include her obligations to the children for whom she has a duty at law to maintain. Whilst there is argument in the affidavit material about lifestyle, I am satisfied that neither party is on strong grounds here having regard to the fact that they have conducted a business with corporate structures and vehicles owned by those structures accordingly which presumably provides them with benefits which other members of the community do not have. In addition, the parties have been content for their children to attend private schools so their means cannot be seen as impecunious completely. All of those matters go to the question of a reasonable standard of living now having regard to that which they have very recently been accustomed.

30. I turn then to the husband's financial position. He set out his circumstances in his financial statement which disclosed that he was receiving no income and most importantly, no distributions or dividends from the two entities I have mentioned above. That may very well be right because of the evidence of his parents showing a significant financial contribution which they say went into the business. The husband's counsel had a taxation return that supported the contention that he was impecunious.

31. However, counsel for the husband said that his client was paying $880 per week by way of support for the wife and children in such forms as school fees, mobile telephone, medical insurance and car expenses. Some of those were clearly not paid on a weekly basis and others such as those relating to the car are presumably business deductions because I was told that the car was a company asset. It is inconceivable therefore that the husband is impecunious if he is making those payments. How he is doing it is unclear other than the good graces of his parents in putting money into the companies. If that is so for the purposes of protecting assets, it is inappropriate for the taxpayers of Australia to be paying what they are.

32. I am satisfied that the husband has the capacity to pay $880 per week on his own admission.  

33. Section 75(2) also applies to the husband and I have no evidence to show that the husband cannot support himself if the payment of $880 is met. If nothing else, he has the benefit of very generous parents.

34. What then is the appropriate amount of spousal maintenance? The power to make a spousal maintenance order lies in s 74 of the Act. That provision requires the Court to make an order which is proper. S 75(3) requires that when exercising its s 74 power, the Court must disregard any entitlement of the wife to an income tested pension, benefit or allowance. I therefore ignore what the wife is receiving from Centrelink.

35. The wife has no income now on the evidence and her expenses at present I have found to be about $1000 per week. I have found the husband can pay $880 per week towards the wife's expenses.

36. It is proper therefore to make an order that forthwith, the husband pay $880 per week with the first payment to be made on 2 March 2012.

37. I note that otherwise there are parenting disputes to be determined by the Senior Registrar within about 2 weeks but in respect of the extant interim applications, I otherwise dismiss the spousal maintenance application.

38. The remaining application of the wife concerned the sale of the business. There is no urgency about that having regard to the position adopted by the husband and his parents about asset protection. The power to make an order for sale lies in s 114 of the Act but to do so, the Court would have to find such an order proper in all of the circumstances. I could not find that at this stage because of the argument of the parents of the husband.

39. However, if the spousal maintenance payments were not made and the wife's financial position prejudiced by the husband and his parents' pursuit of a greater value for the land, the matter could be revisited by further application.

40. I order accordingly.

I certify that the preceding Forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 28 February 2012.

Associate: 

Date:  29 February 2012