Wilson and Wilson
[2011] FMCAfam 1404
•16 December 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WILSON & WILSON | [2011] FMCAfam 1404 |
| FAMILY LAW – Interim spousal maintenance – limited hearing – no cross-examination – urgent circumstances – what is proper – husband self employed [omitted] – wife has previously provided book-keeping services for business – business operated by trust – income distributed between parties – husband has retained income following separation – wife currently not in paid workforce – wife claims legally entitled to distributions from trust – husband has been paying on-going matrimonial liabilities. |
| Family Law Act 1975, ss.72; 74; 75(2); 77 |
| Chapman & Chapman (1979) FLC 90-671 Ashton & Ashton (1982) FLC 91-285 Bevan & Bevan (1995) FLC 92-600 Redman v Redman (1987) FLC 91-805 |
| Applicant: | MR WILSON |
| Respondent: | MS WILSON |
| File Number: | ADC 4236 of 2011 |
| Judgment of: | Brown FM |
| Hearing date: | 7 December 2011 |
| Date of Last Submission: | 7 December 2011 |
| Delivered at: | Darwin |
| Delivered on: | 16 December 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Bowler |
| Solicitors for the Applicant: | Franklin Legal |
| Respondent: | Mr Heinrich |
| Solicitors for the Respondent: | Scammell & Co |
ORDERS
UNTIL FURTHER OR OTHER ORDER:
The husband pay spousal maintenance to the wife in the sum of one hundred dollars ($100.00) per week commencing on 16 December 2011 with the sum to be payable on each Friday thereafter by the husband to a bank account to be nominated to him by the wife.
The parties exchange appraisals or valuations of any items of property in dispute between them, both real and personal, and exchange all relevant financial documents pursuant to Rule 24.03(4)(1) of the Federal Magistrates Court Rules 28 days prior to the date fixed for conciliation conference including business activity statements; taxation returns; and superannuation information.
Further consideration of the matter is adjourned to 18 April 2012 at 9:30am.
IT IS NOTED that publication of this judgment under the pseudonym Wilson & Wilson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 4236 of 2011
| MR WILSON |
Applicant
And
| MS WILSON |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Wilson “the husband” and Ms Wilson “the wife” were married [in] 2003. They finally separated in mid-June of 2011. They are the parents of two children – [X] aged six and [Y] aged 3.
The husband commenced proceedings, in this court, on 9 November 2011. At that stage, he sought orders only in respect of care arrangements for the two children.
Specifically he sought both interim and final orders, which would see the children being parented on a shared care basis, moving between their parents’ respective homes on Monday of each week. The husband sought an urgent hearing of his interim application.
It is Mr Wilson’s position that Ms Wilson was initially open to this regime and in fact signalled her agreement to it.[1] However, more recently, it seems to be reasonably common ground between the parties that their parenting relationship has seriously deteriorated.
[1] See exhibit A to the husband’s affidavit filed 9 November 2011
The wife asserts that the husband has exposed the children inappropriately to his negative feelings for her, at the end of the parties’ marriage. The husband accuses the wife of being motivated by financial considerations in respect of the time she is prepared to allow him to have with [X] and [Y].
In particular, the husband deposes as follows:
“I say the mother’s current attitude is obstructive and punitive to the children … the mother continues to blackmail me and dictate the terms of when I should spend time with the children … I say I believe that the mother has reneged on the agreement because of the reduction of Centrelink and Child Support payments she receives due to a shared care arrangement. After separation I had paid the mother $200.00 per week to assist her with the children. I had done this voluntarily in addition to paying for both [X] and [Y]’s school and childcare fees.”[2]
[2] Ibid at paragraphs 12-13
The husband is a self-employed [omitted]. The business concerned, known as [omitted] is operated through a family trust The Wilson Family Trust. It apparently has employed other persons besides the parties themselves.
In common with many similar small family concerns, the husband has provided the necessary technical skills and expertise for the business, whilst the wife has been involved in its administration, although it also receives professional accounting advice and services.
I have been provided with the income statement for the Wilson Family Trust for the year ending 30 June 2010. This shows that the business had a net profit of $116,621.45, which was distributed so that the husband and wife each received $55,000.00 and the two children received $3,000.00 each.
After the parties’ separation, the wife moved into rented accommodation, at a weekly cost to her of $200.00, whilst the husband remained in occupation of the former family home at Property L. The husband continues to work in the business. The wife is currently engaged in studying [omitted] at TAFE.
As she is a full-time student, the wife is entitled to social security. She receives a parenting payment of around $300.00 per week. It is common ground between the parties that she has received no distribution from the Wilson Family Trust since the parties separated.
As he requested, Mr Wilson’s interim application was listed for hearing promptly. Its first return date was 23 November 2011. The wife filed her response on 18 November 2011. In this application, she raised issues to do with the settlement of matrimonial property issues between the parties. Importantly, in the context of the present proceedings, she sought an award of spousal maintenance in the sum of $800.00 per week.
The husband was not in a position to respond to this aspect of the proceedings on 23 November. Accordingly, the issue of spousal maintenance, together with other issues relating to the children, were adjourned until 7 December 2011. Prior to this latter date, the husband has filed additional material relating to his financial circumstances.
To the parties’ credit, they have been able to agree on arrangements, in the short term, for the parenting of the two children. It has been agreed that they will spend five nights per fortnight, in the husband’s care, during school terms and one half of each school holiday.
The parties have not been able to agree in respect of issues relating to financial matters between them. The husband’s position is that the wife’s application for spousal maintenance should be dismissed. These reasons for judgment are directed to the resolution of the wife’s interim application for spousal maintenance.
In addition, issues relating to the financial support of [X] and [Y] are controversial. It is common ground that Mr Wilson has ceased his voluntary payments to Ms Wilson of $200.00 per week. In lieu thereof, there has been an administrative assessment of child support.
The first child support assessment issued on 23 September 2011. It was based on a child support income of $58,123.00 for the husband and one of $60,288.00 for the wife. The wife is highly critical of the provisional income figure, which has been allocated to her. She believes that the husband has supplied the Child Support Agency with inaccurate information.
That is not an end to the controversy, between the parties, regarding child support issues. Other disputes have arisen regarding the level of care each parent was providing for the children. As a result of the information available to it, the Child Support Agency assessed
Mr Wilson to pay Ms Wilson child support for [X] and [Y] at a weekly rate of $83.02. It is the wife’s position that this sum is woefully inadequate and is based on incorrect information.
It is the wife’s case that she has applied to the Child Support Agency to re-assess the level of child support to which she is entitled. I presume that she is doing so on the basis that she is currently in receipt of social security and she is providing more of the care required for the two children.
In order to advance the parties’ competing claims for the settlement of matrimonial property, they have been referred to a financial mediation conference, with a registrar of the court, which is scheduled to take place on 26 March 2012.
The parties have also agreed to take part in a family dispute resolution conference, to discuss ongoing arrangements for the care of [X] and [Y]. This conference has been scheduled for 23 January 2012.
In the meantime, there has been little time for the parties to exchange information regarding their current view of their financial circumstances. In particular, it has not been possible for there to be gathered expert and independent evidence regarding the value of items of matrimonial property, particularly the family business.
In addition, on 7 December 2011, there was insufficient time available to the court to embark upon a detailed hearing, involving cross-examination, regarding controversial financial issues.
The major issue in dispute between the parties concerns the level of income available to the husband from the business and the legal implications of the trust deed which regulates the Wilson Family Trust.
It is the wife’s position that the business provides the husband with a comfortable level of income and she is legally entitled to her share of this income. This is the basis of her claim for spousal maintenance in a sum of $800.00 per week which equates to an annual income of $41,600.00.
It is the husband’s position that he is not in a position to provide this sum, as his current level of recurrent income from the business is around $62,000.00. From this sum, he is required to pay a number of joint matrimonial liabilities, which relate to mortgage payments and other jointly held loans. It is Mr Wilson’s position that his current liabilities exceed his level of recurrent income.
The wife is critical of the husband’s case in a number of areas. It is her position that Mr Wilson has failed to provide an accurate disclosure of his current financial circumstances and accordingly, the court should infer that he is concealing his true financial circumstances from it.
She is incredulous that Mr Wilson asserts that he is currently spending around $600.00 more than he purports to earn. It is her position that the family business is a successful concern, which produces a greater income than Mr Wilson has disclosed.
For his part, the husband asserts that the wife has been negligent in her previous oversight of the business’ financial affairs. He deposes that, following the parties’ separation, he has discovered that the wife has failed to pay a number of the business’ suppliers and mandatory superannuation payments in respect of the employees of the business.
As a result of these alleged irregularities, it is Mr Wilson’s evidence that he has lost confidence in the previous accountants, who have in the past provided financial documents for the family trust. In their stead, he has instructed fresh accountants to provide the necessary financial and taxation documents for both himself and the family trust.
For her part, the wife is critical of the husband for not more diligently preparing the necessary taxation and financial returns in respect of the financial year ending 30 June 2011. As previously indicated, it remains her position that she is legally entitled to a distribution from the business as she, jointly with the husband, is a trustee of the Wilson Family Trust.
The legal principles applicable
The provisions of section 77 of the Family Law Act deal with the making of spousal maintenance orders in circumstances of urgency. The section provides:
“Where, in proceedings with respect to the maintenance of a party to a marriage, it appears to the court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made, the court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable.”
The essence of any application made pursuant to section 77 is that it is made under circumstances of urgency or extreme financial emergency. This follows as a result of the expression immediate need utilised in the section. As such, applications for urgent spousal maintenance are invariably made in circumstances where it is not possible for detailed affidavit and/or financial data to be provided by the parties concerned.
Sometimes the degree of emergency is so extreme that it is appropriate for an application pursuant to section 77 to be made on an ex parte basis or pursuant to an oral application only. By necessity, an order made pursuant to section 77, is ad hoc in nature and intended to remain in place for a period of relatively short duration.
Such orders have been described as “stop-gap” orders.[3] They are intended to make financial provision for a party to a marriage to tide him or her over the period of emergency until such time as the court may make a more detailed examination of the prevailing circumstances, either on an interim or final basis. Accordingly, in such cases, because of their limited nature, the court’s discretion is wider.
[3] See Chapman & Chapman (1979) FLC 90-671
Because of these factors, an application for urgent maintenance is different in quality to an application for maintenance for a limited period. The latter type of application is made pursuant to the provisions of section 74 of the Family Law Act and demands a more thorough canvassing of the applicable evidence. It is intended to be in force for a period longer in duration than an urgent order, most usually until such time as competing applications for property settlement have been determined.
In Ashton & Ashton Nygh J said as follows:
“On an application for interim maintenance, the normal procedures relating to applications for maintenance under s. 74 must be observed and an application for maintenance can only be heard after each party has had the opportunity to adduce evidence, that is to say, the normal procedures for the filing of affidavits by both parties and the filing of financial statements must be observed.”[4]
[4] See Ashton & Ashton (1982) FLC 91-285 at 77,614
In my view, the circumstances surrounding the present case have some, but not all, of the necessary hallmarks, which pertain to an application for urgent maintenance. I accept that Ms Wilson finds herself in a situation of urgent and pressing financial need. This must follow as she is not currently in the paid workforce and is in receipt of social security payments.
In addition, at this juncture, it is not possible to delineate with precision what is the financial position of the Wilson Family Trust and the business which operates through it. I have not been provided with any current business activity statements in respect of it. In addition, its records have not been subject to any independent scrutiny.
Accordingly, although Mr Wilson has provided an answering affidavit and a statement of his current financial circumstances, which is on oath, the wife does not accept that these documents are necessarily accurate.
For his part, the husband asserts that it would be unreasonable for the court to expect him to provide exhaustive financial records, in respect of the business, given the time available to him and his lack of accounting skills.
Accordingly, at this present stage, I have some financial information about the parties. This information has not been subject to any detailed scrutiny. In addition, I accept that the husband has not had a great deal of time to gather financial information. At this stage, in my view, I am unable to assign any sinister connotation to the level of financial disclosure provided by the husband.
However, the fact remains that the information before me is far from complete and has been hastily gathered against a background of considerable acrimony between the parties. In those circumstances, in my view, I must be cautious about any award for spousal maintenance made at this stage, which in any event is likely to be in place only for a limited period of time, pending final hearing.
In these circumstances, it is my view that the provisions of section 74 remain germane to the case and the ordinary principles which apply to the making of an order for interim spousal maintenance cannot be ignored. Accordingly, my discretion in respect of the order sought by the wife must be exercised by reference to the principles contained in the section and those enlivened by it.
Pursuant to section 74 of the Family Law Act 1975, the court may make such order as it considers “proper” for the provision of maintenance to the wife in accordance with the provisions of Part VIII of the Act. In particular, section 72 deals with the right of a spouse to maintenance and reads as follows:
“S.72(1) 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:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).”
Given the factual basis of this case, the relevant matters referred to in sub-s.75(2) are likely to be the following:
a)the age and state of health of each of the parties;
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;
c)whether either party has the care or control of a child of the marriage who has not attained the age of eighteen years;
d)commitments of each of the parties that are necessary to enable the party to support:
i)himself or herself;
g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
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;
k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
Pursuant to s.75(3) of the Act, the court is directed to disregard any entitlement of a party to the proceedings to an income tested pension, allowance or benefit. Accordingly, the fact that the wife is receiving a Centrelink benefit is not a relevant consideration in this matter.
The Full Court of the Family Court in Bevan & Bevan[5] determined that the approach to be taken in respect of applications for spousal maintenance involved a four step process as follows:
·a threshold finding under s.72;
·consideration of s.74 and s.75(2);
·no fettering principle that a pre-separation standard of living must automatically be awarded where the respondent’s means permit;
·the discretion exercised in accordance with the provisions of s.74 with “reasonableness in the circumstances” as the guiding principle.
[5] Bevan & Bevan (1995) FLC 92-600 at 81,981-2
In Redman v Redman[6] the Full Court of the Family Court considered the procedural and evidentiary requirements which attach to interim spousal maintenance proceedings. The Full Court said as follows:
“…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 section 83. …the most common purpose of an interim order is to make provision for the spouse and children pending the determination of the property settlement. …Another consequence is that on an application for interim maintenance the court conducts not as final or exhaustive a hearing as would be the case if one were hearing the matter finally. …The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of section 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under section 83.”
[6] Redman v Redman (1987) FLC 91-805 at 76,081
The wife’s evidence
The wife has no formal qualifications. She has worked in the past as a [occupations omitted]. Prior to [X]’s birth, she was [occupation omitted]. She has not worked since 2009.
During the parties’ marriage, it is her evidence that she worked up to twenty hours per week doing the book work for the parties’ [omitted] business. It is her view that the business is a profitable one, which has expanded and now includes [omitted].
It is the wife’s case that she is better off continuing her studies in order to improve her employability in future. She hopes to complete her [omitted] course at the end of 2012. Thereafter, she wishes to obtain employment as a [omitted].
It is the wife’s position that the husband has retained control of all of the parties’ significant matrimonial assets. In these circumstances, she acknowledges that she has withdrawn moneys from the parties’ mortgage account and utilised a joint credit card to finance her accommodation expenses. She is aggrieved that the husband has retained her taxation refund, in the sum of approximately $4,000.00, following the 2009/2010 tax year.
It is the wife’s belief that the husband will earn no less than $100,000.00 in the current financial year. In broad terms, this accords with the financial documents prepared in respect of the Wilson Family Trust for the year ending 30 June 2010. The husband does not agree. It is his position that the business will recoup approximately $94,000.00 for the financial year ending 30 June 2011.[7]
[7] See husband’s affidavit filed 6 December 2011 at paragraph 33
The wife’s major weekly expense is her rent of $200.00. She pays a credit card bill of $45.00 per week, which is the minimum payment permissible and pays insurance on her car. The wife has savings of $820.00. She values her household contents at $4,000.00 and has personal jewellery valued at $2,000.00. She has a modest amount of superannuation.
The father’s evidence
As previously indicated, the husband asserts that the Wilson Family Trust will distribute a net profit from the family business of around $94,000.00 for the year ending June 2011. The trust distribution statement indicates that this profit will be notionally allocated as follows: $50,745.00 to the husband; $37,000.00 to the wife; $3,300.00 to [Y]; and $3,300.00 to [X]. It seems certain that this distribution will be in purely nominal terms.
The profit and loss statement for the trust, which has been prepared by the new accountants retained by the husband, indicates that the business produced a gross profit of around $270,000.00 and had expenses of around $177,000.00 for the period in question. This latter sum includes wages of just over $87,000.00. It is unclear to me whether this figure includes any moneys directly advanced to the husband.
In any event, it seems relatively uncontroversial, at this stage, that the family business is a small concern which, until the parties separated, was operated under conventional lines. The husband provided the technical expertise and trade skills necessary for the business, whilst the wife was involved in administration.
Income from the business was allocated to each of the parties and their children through the aegis of the family trust. No doubt there were taxation benefits accruing from this division of the income stream. As previously indicated, it is the wife’s position, as advocated by her counsel Mr Heinrich, that the wife is legally entitled to her allocated distribution from the trust.
The notes prepared to the Wilson Family Trust financial statements, for the year ending 30 June 2011, show the business trades with an overdraft of $78,732 and has other liabilities. Mr Wilson deposes, in his affidavit material, that the business has debts, including to its suppliers, of $223,287.05.[8]
[8] See husband’s Affidavit filed 6 December 2011 at paragraph 29
The husband estimates the parties major items of property and the liabilities referable to them as follows:
Property L
$350,000
Property K
$147,000
Land at [S]
$146,000
Total
$643,000
Liabilities
Home loan on Property L
$88,500
Loan on Property K unit
$189,792
Loan on [S] land
$139,393
Total mortgage debt
$417,685
The husband also asserts that the parties own a number of motor vehicles worth around $40,000 in total. He is unaware of the value of the [omitted] business. I suspect that there will be considerable controversy as to the means by which the business is valued. It is also the husband’s view that the contents of the Property L home are modest in value.
The husband has deposed that he continues to pay the level of child support as currently assessed for [X] and [Y]. In addition, he pays $50.00 per week in respect of [X]’s school fees and private health insurance for both children at the rate of $174.00 per month.
The husband’s evidence, as yet unchallenged by the wife, is that he is personally struggling under a very significant load of debt. This debt relates both to the [omitted] business and the parties’ personal debt in respect of their three properties. It is Mr Wilson’s position that the parties do not have significant net worth.
The husband estimates his weekly mortgage payments to be $788.00. It is also his position that rates and charges in respect of the three properties amount to a further $118.00 per week. In the past, the Property K property has been tenanted. However, recently the tenant has left and this has exacerbated Mr Wilson’s cashflow problems. His other major recurrent financial liability relates to the business loan, which requires a weekly payment of $265.00.
Given these circumstances, it is the husband’s position that he has no capacity to pay spousal maintenance to the wife, certainly not in the quantum which she currently seeks. It is Mr Wilson’s evidence, arising from his statement of financial circumstances, that his outgoings exceed his recurrent weekly income at present.
The husband also disputes the wife’s assertion that the [omitted] business is as profitable as she maintains. It is his position that the business has struggled in the last twelve months for two major reasons. Firstly, there has been a downturn in business relating to solar panels, as government subsidies have been wound back. Secondly, he himself has been in poor health as a result of both a back condition and emotional stress, which he attributes to the parties’ separation and what he views as their parlous financial affairs.
The husband’s evidence is that his income from the business currently stands at $1,200.00 gross per week. He refutes any suggestion that there are undistributed sums of cash available to the trust to be distributed between him and the wife.
This is in marked contrast to the submissions of Mr Heinrich, who points to the recent accounting documents for the trust, which indicate significant beneficiary loans to Mr Wilson. In my view, at this juncture, in the absence of more detailed evidence, this is an issue which I am unable to resolve.
Mr Wilson acknowledges that the wife is currently engaged in a course of study and provides a significant level of care to [X] and [Y], who are of tender years. However, it is his view that Ms Wilson enjoys good health and is capable of obtaining some level of employment to provide financial support for herself. He concedes that this employment may have to be on a part-time basis.
Conclusions
I have not received any extensive evidence regarding how income from the trust was divided, in practical terms, prior to the parties’ separation. I accept however that the parties’ recurrent financial liabilities, in the form of the various mortgage loans and other debts relating to the business amount, at the very least, to somewhere in the vicinity of $1,000.00 per week.
Even if income was divided actually, in even portions between the parties, which seems to be unlikely, necessity would have dictated that Ms Wilson’s share of the trust profits would have had to have been significantly allocated towards the payment of the parties’ recurrent debt. It was not her income to do with as she pleased. It was family income.
It is incontrovertible that, following the parties’ separation, Mr Wilson has resumed sole responsibility for the payment of these debts, notwithstanding the legal mechanism constituted by the trust remains in place. In addition, he is the only spouse who is contributing towards the ongoing operation of the trust and its business endeavours in practical terms.
At this juncture, it seems highly likely that the circumstances surrounding the parties’ separation represent a significant financial misfortune for them both. It is trite but true nonetheless that two families cannot live as cheaply as one. In addition, the mechanism of the trust, which was attractive whilst the parties were married, has now outlived its utility given the parties’ radical change of circumstances.
In my view, at this stage, it would not be proper for the wife to receive a significant proportion of the profit from the trust, regardless of her legal status as both a trustee and primary beneficiary, as she makes no contributions whatsoever to the parties’ significant on-going financial liabilities.
Such an outcome would be both fundamentally unfair to the husband and unworkable given that the evidence currently available to me does not indicate that the business has the potential to earn anything significantly more than between $95,000 to $100,000 per annum and a large proportion of this sum is required to service the parties’ joint debts.
I acknowledge that Mr Wilson’s current financial circumstances has not been subject to any significant level of scrutiny and the financial documentation pertaining to the trust is both incomplete and, as with the husband himself, has not been subject to audit. However, I cannot conjure an income stream for Mr Wilson, on the basis of the wife’s suspicions alone.
At the present juncture, the parties have agreed to share the care of [X] and [Y] so that Mr Wilson has substantial and significant care of both children. I acknowledge that Ms Wilson will remain significantly burdened by having the care and control of the parties’ children, who are of tender years. However, the fact remains that the husband will be directly responsible for providing for the children, in a financial sense, for a significant portion of each fortnight. The burden will not be on the wife alone.
I also accept that for valid reasons, the wife is engaged in a course of study. However, the issue of Ms Wilson’s capacity to undertake appropriate gainful employment was not thoroughly canvassed in these proceedings. It would seem likely to me that Ms Wilson has some capacity for employment, particularly given the agreed care arrangements for the children.
One significant feature of this case is that, prior to the fairly recent deterioration in the parties’ post-separation relationship, Mr Wilson was voluntarily paying Ms Wilson a sum of $200.00 per week to assist her in the financial maintenance of her household. This election, on his part, was prior to the inauguration of the formal administrative assessment of child support, which is for a significantly lesser sum.
I am told that this administrative assessment is subject to challenge by the wife. It also may be altered by reason of the recently agreed arrangements for the children to spend time with each of their parents. It may also alter if the husband elects to bring to the attention of the Agency, if he has not already done so, details of non-agency payments which he is currently making and which benefit the children directly.
All these circumstances indicate to me that there remains a need to be cautious and avoid making a precipitate award of spousal maintenance, particularly given the uncertainty surrounding child support matters and also given I accept, albeit on the basis of provisional and untested evidence, that Mr Wilson is currently under a significant level of financial pressure and remains solely responsible for all the parties’ debts.
At present neither party has access to any significant liquid assets. The husband deposes that he has no savings. The wife deposes that she has $820.00 in a bank account. As such an interim award of spousal maintenance cannot be satisfied from capital.
The husband’s immediate financial circumstances may change if he is able to rent out the Property K unit. In the past, the rent received from this unit has been $200.00 per week. The receipt of such a sum would go some way to relieving the immediate financial pressure currently on the husband.
However, if and when the property is likely to be tenanted is unknown to me. I am also unaware of any tax advantages, which may arise through the manner in which liabilities arising from the property are set off against income received from it.
The dilemma represented by this case is easily stated. During their marriage, the parties’ current financial affairs were predicated on the basis that they lived in the same household and shared common goals. In such circumstances, the allocation of financial resources could be finely calibrated. Unfortunately, it would seem to me, at least on a provisional examination of their affairs, that there was no margin for error calculated into these arrangements to deal with any unforseen exigencies, certainly not one as dramatic as marital separation.
I accept, at this stage, Mr Wilson’s evidence regarding his capacity to pay the wife $800.00 per week in spousal maintenance. It would appear to me that he does not have anywhere near the capacity to pay this sum, which seems to be in the nature of an ambit claim. In my view, it would be neither reasonable nor proper to make an award of spousal maintenance, which the husband has no way of satisfying.
However, I acknowledge that Ms Wilson herself is in straitened financial circumstances, as a result of the end of the marriage between the parties. I am not entitled to refer to her entitlements to social security. As such, the fact remains that, even on the husband’s disputed figures, there is a vast discrepancy in the level of income coming into the parties’ respective households.
It is also the case that, during the parties' marriage, the wife shared in this income and has a legal expectation of continuing to do so, whilst the trust remains in force. The end of the parties’ marriage necessarily means that the husband and the wife must endure a period of financial privation. To some extent, it is the court’s responsibility to ensure that there is some level of equality in how this privation is shared.
This is not an easy exercise. In all the circumstances, I have come to the conclusion that at this stage it would be proper for the court to make a cautious award of spousal maintenance, in the sum of $100.00 per week in the wife’s favour.
I reach this conclusion because in the fairly recent past Mr Wilson acknowledged that he had the capacity to pay a sum of around $200.00. As such, I have calculated the present award by reference to the current child support assessment.
As I have already indicated, the child support assessment is subject to review. I do not know what the outcome of that review will be. In addition, the parties are due to attend a financial mediation conference, which I hope will be of assistance to them in resolving these difficult issues.
The conference is approximately fourteen weeks away. The award of spousal maintenance will take the parties to the period following the conference, following which it may be subject to revision if either party should so seek. I think it proper that there be some modest assistance provided to the wife by the husband given the obvious current level of privation in her household.
As I have earlier indicated, I anticipate that the process of valuing the parties’ business is likely to be both controversial and potentially expensive. I have not been provided with any evidence as to how either party proposes to approach this issue and how any valuation is to be funded. In addition, neither party has made a formal application in respect of the issue.
In those circumstances, I will make standard orders requiring the parties to exchange valuations or appraisals of all items of property, both real and personal, which are in dispute between the parties together with copies of all applicable documents as specified in Rule 24.03(4)(1) of the Federal Magistrates Court Rules. The documents specified in this rule include business activity statements; taxation returns; and superannuation information.
I will list the matter for directions at 9:30am on 18 April 2012 on which date the matter will be fixed for final hearing if the issues in dispute between the parties remain unresolved.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of Brown FM
Date: 16 December 2011
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