WOODBRIDGE & WOODBRIDGE
[2014] FCCA 1401
•20 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| WOODBRIDGE & WOODBRIDGE | [2014] FCCA 1401 |
| Catchwords: FAMILY LAW – Property adjustment – marriage of modest length – considerations regarding contributions – considerations regarding “Robb argument” concerning care of the Mother’s child from an earlier relationship – application for spousal maintenance (dismissed as ‘need’ not made out) – significant health issues of Wife but her use of expensive medication considered by her own expert to be inadvisable – conflict between the evidence of one party and that party’s expert. |
| Legislation: Family Law Act 1975, ss.72(1), 75(2), 79(2) & (4) |
| Bevan v Bevan (2013) 279 FLR 1; (2014) 49 Fam LR 387; (2013) FLC ¶93-545 Eliades & Eliades (1981) FLC ¶91-022 Esposito v Coster (2013) 48 Fam LR 10 Mallet v Mallet (1984) 156 CLR 605 Pierce & Pierce (1998) 24 Fam LR 377; (1998) FLC ¶92-844 Robb v Robb (1994) 18 Fam LR 489; (1995) FLC ¶92-555 Sindel v Milton [2010] FamCAFC 232 Stanford v Stanford (2012) 247 CLR 108 Walters v Walters [2007] FamCA 324 Waters & Jurek (1995) 126 FLR 311; (1995) 20 Fam LR 190; [1995] FLC ¶92-635 |
| Applicant: | MR WOODBRIDGE |
| Respondent: | MS WOODBRIDGE |
| File Number: | CAC 767 of 2013 |
| Judgment of: | Judge Neville |
| Hearing dates: | 10 & 11 June 2014 |
| Date of Last Submission: | 11 June 2014 |
| Delivered at: | Canberra |
| Oral reasons delivered on: | 20 June 2014 |
REPRESENTATION
| Counsel for the Applicant: | Ms J Godtschalk |
| Solicitors for the Applicant: | Watts McCray, Canberra |
| Counsel for the Respondent: | Mr C Wilson |
| Solicitors for the Respondent: | Pogson Cronin, Lavington, NSW |
ORDERS
BY CONSENT, THE COURT ORDERS THAT:
Forthwith each party is hereby restrained from drawing funds from the (omitted) Bank loan account being account name "(omitted).", client number (omitted), save that the husband has liberty to pay the expenses associated with the Property S and Property G properties and the Property S Company Pty Ltd, including but not limited to interest due on the (omitted) Bank Loan, insurance and rates as they become payable from that account up to the limit of the loan facility.
The properties known as Property S and Property G be sold and that following the sale of those properties, after the deductions referred to in Order 3 below, the sum of $200,000 be placed in an interest bearing deposit to be used solely for the payment of school fees for the parties' son X, with the parties to be joint signatories for all withdrawals for this purpose, and in the event that the funds are not used for whatever reason, the balance will be withdrawn and divided equally between the parties.
THE COURT ORDERS THAT:
The net proceeds of sale of the properties known as Property S and Property G, in the State of New South Wales, be distributed as follows:
(a)To pay all costs, commissions and expenses of the sale;
(b)To pay the usual rates and conveyancing adjustments;
(c)To pay the amount required to discharge the joint (omitted) Bank loan account;
(d)To pay the amount required to discharge the joint (omitted) Loan;
(e)To pay the amount required to discharge the (omitted) Bank Chattel Mortgage being contract number (omitted) registered over the Toyota Prado motor vehicle (registration (omitted));
(f)To pay the amount required to discharge the (omitted) Bank Chattel mortgage being contract number (omitted) registered over the Toyota Landcruiser motor vehicle (registration (omitted));
(g)To pay the sum of $200,000 into an interest bearing deposit pursuant to Order 2 above;
(h)Of the balance then remaining, 68% to the Husband; and
(i)the balance be paid to the Wife.
Within 14 days of the discharge of the Toyota Prado motor vehicle chattel mortgage pursuant to Order 3 herein, the Husband in his capacity as sole Director and shareholder of the company Property S Company Pty Ltd, do all things necessary to transfer the Prado motor vehicle being registration number (omitted) to the Wife.
The Respondent Wife's application for spousal maintenance be dismissed.
Unless otherwise specified in these Orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party at the date of these Orders;
(b)Money standing to the credit of the parties in any other bank account is to remain the property of the party in whose name such bank account is held;
(c)Each party forego any claims he or she may have to any other superannuation benefits belonging to or earned by the other;
(d)Insurance policies remain the sole property of the beneficiary named therein;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders or otherwise.
Absent any application filed within 7 days, each party is to pay their own costs.
IT IS NOTED that publication of this judgment under the pseudonym Woodbridge & Woodbridge is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT CANBERRA |
CAC 767 of 2013
| MR WOODBRIDGE |
Applicant
And
| MS WOODBRIDGE |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings.
At the outset, in accordance with the instruction of the High Court in Stanford v Stanford (and the even more recent discussion by the Full Court in Bevan v Bevan), for the detailed reasons that follow I am satisfied that it is just and equitable to adjust the property interests of the parties pursuant to s.79(2) of the Family Law Act1975 (“the Act”).[1]
[1] Stanford v Stanford (2012) 247 CLR 108 at [35] – [42] & [51]. In the latter paragraph, the plurality confirmed the importance not to merge the consideration of matters under s.79(2) and s.79(4). Such matters were further discussed in Bevan v Bevan (2013) 279 FLR 1; (2014) 49 Fam LR 387; (2013) FLC ¶93-545 at [57] – [89] (Bryant CJ & Thackray J), & at [155] – [170] (Finn J otherwise agreeing).
By way of brief overview: the Husband is aged 45; the Wife is aged 42. There is one child of the relationship (X) who is currently in year 8 at boarding school in Sydney. The Wife has an older child (Y) from a previous relationship; he is aged 22 and currently resides with his Mother. He pays half of the rental costs of their property leased.
The parties commenced cohabitation in (omitted) 1997. They married in (omitted) 1999, and separated in December 2012.
In (omitted) 2000, shortly after the child of the marriage was born, the Wife became ill and has suffered from ill-health for many years; indeed, significant ill-health has dogged her for quite some time.
In general terms, the Wife seeks a distribution of the net asset pool, 45 per cent to her and 55 per cent to the Husband. She also seeks an order for spousal maintenance of $600 per week until 31 December 2015. For his part, the Husband seeks orders whereby the net proceeds of the asset pool be divided 75 per cent to him and 25 per cent to the Wife. The detailed orders of both parties should be taken to be incorporated into these reasons.
The basic issues for the Court to decide concern the extent of the parties’ contributions to the acquisition and maintenance of marital assets, and what adjustments should be made, specifically to the Wife, pursuant to s.75(2) of the Act.
A number of matters, fortunately, have been agreed, most notably in relation to the establishment of a fund in the sum of $200,000 to cover the remainder of X’s education costs at boarding school. The second area where agreement has been reached relates to the distribution of capital gains tax. In relation to this, the significantly greater proportion of that sum will be borne by the Husband.
There is now also an agreed balance sheet which sets out the assets and liabilities of the parties; a copy of that was provided to the Court on the second day of the trial. It is set out here for convenience and clearly reflects the agreed asset pool.
ASSETS Ownership Description Agreed Value 1 H&W Property S and Property G Properties (including plant, machinery and Hilux ute) (estimated) $2,100,000.00 2 W (omitted) Bank account no.(omitted), including addback $29,642.00 3 W Toyota Prado Model (omitted) $39,300.00 4 H Toyota Landcruiser Model (omitted) $27,700.00 5 W Funds from Maurice Blackburn trust account $1,295.30 6 W Family Tax Benefit $8,138.53 TOTAL $2,206,075.83 LIABILITIES Ownership Description Agreed Value 7 H&W (omitted) Bank Mortgage (joint) $789,433.00 8 H&W (omitted) Bank (joint) $41,089.00 9 H&W Landcruiser Loan (Property S) $9,651.77 10 H&W Prado Loan (Property S) $31,975.00 13 H&W Estimated costs of sale of properties $71,500.00 14 H&W Interest on (omitted) Bank mortgage (due end June 2014) $26,000.00 TOTAL $969,648.77 SUPERANNUATION Member Name of Fund Agreed Value 15 H (omitted) Fund $15,500.00 SCHOOL FEES FOR X 16 H&W Funds placed into trust for school fees $200,000.00 NET TOTAL ASSETS (including superannuation) $1,051,927.06
Detailed Factual Background
As already indicated, the parties commenced cohabitation together with the Wife’s son from an earlier relationship at the property known as Property S. The Husband had a one-third share in a partnership in this property. Upon the parties commencing co-habitation in January 1997, the Wife left full-time employment.
In 1998 the full title to Property S was transferred to the parties. In early (omitted) 2000 the child of the relationship, X, was born. In 2001 a property known as Property C (a property owned by the family trust of the applicant Husband’s parents) was sold from which the parties received $320,000. These proceeds were applied to a mortgage over Property S. The outstanding liability under that mortgage was thereby reduced to $75,000.
In 2003 the parties purchased an adjoining property known as Property G for $503,000. They borrowed $125,000 from the (omitted) Bank and $300,000 from the Husband’s Father.
Pursuant to a joint decision between the Husband and Wife, the Wife’s son, Y, boarded at (omitted) College in (omitted) between 2005 and 2009. The costs of this were borne by the parties.
In 2005 the Wife received a gift from her Father of approximately $100,000. In the same year the Husband received an inheritance of some $77,000 following the death of his aunt. In July 2007 the Husband’s Father forgave the parties’ loan of $300,000 to which I have earlier referred.
In 2008, the Wife travelled to (country omitted) to obtain medical treatment. She holidayed with her sister in (country omitted); her chronic fatigue syndrome improved somewhat. It might be noted here that the basic travel costs for this came from the parties’ own funds. The Wife’s Father paid for an upgrade on some of the travel.
In 2011 the Wife applied for a position on the (employer omitted) , and in 2012 she completed a (omitted) course with the (omitted) Trust. She then applied for the position of (omitted) of the (employer omitted).
As already noted, the parties separated on 2 December 2012. In January 2013 the parties’ only child, X, commenced boarding at (omitted) College, in Sydney.
On 15 February 2013 the Wife withdrew the balance from the joint (omitted) Managed Fund of $31,252 and paid it into her own (omitted) Bank account. On 20 June 2013 livestock from both farms were sold. It realised in net terms $218,000 which sum was put towards the (omitted) Bank loan.
The Evidence
In general terms, factually there was very little in dispute between the parties. Both of them were briefly cross-examined. The matters on which they were questioned related to, for example, in the Husband’s case, whether or not there was any documentation, other than that which was annexed to his trial affidavit, to confirm that funds were used to discharge, or to pay down, debts owing by the parties. In particular, he was cross-examined in relation to annexures A and C to his affidavit filed on 19 May 2014.
It was put to him in different ways that the sum referred to in the letter from (omitted) to the parties dated 17 July 2001, namely $320,000, could otherwise have been paid to discharge or to lower debts owed, for example, by his brother. The Husband clearly and firmly rejected such a proposition.
The Husband confirmed that he had only one loan at that time with that bank. In fact, it was stressed by Counsel for the Husband that (a) the documents found at annexure C to that same affidavit and, in particular, a letter is addressed to the parties jointly, that is, to both Mr and Ms Woodbridge, dated 17 July 2001, which (b) confirmed that the sum of $320,000 “was used to permanently reduce your facility limit.” Emphasis was placed on the wording in this letter that it was a joint loan, as opposed to a loan to some other entity, with particular reference to the words (emphasis added):
to permanently reduce your facility limit.
In the absence of any other evidence, the letter from (omitted) to the parties dated 17 July 2001 must be taken, as I do, as conclusive evidence of the use made of the $320,000. It follows that I accept the Husband’s evidence in this regard, as I do more generally in relation to the other very brief matters canvassed with him.
In relation to the Wife’s evidence, her cross-examination was, in large part, confined to matters relating to the state of her health and wellbeing, such as the evidence of one of her experts, Dr W regarding her need for certain medication, and the costs associated with her ongoing treatment. In this regard a table of medications for the current financial year became Exhibit E.
The affidavit evidence of Dr W, which confirmed (as did Dr J, a psychiatrist for Ms Woodbridge) that the Wife’s health will improve, albeit without specifying a time-frame for it, or to what degree it will improve. The same evidence from Dr W also indicated that she should not use the medication Nexavir. Contrary to this evidence, Ms Woodbridge said that this drug helped her considerably. The inconsistency between the Wife’s evidence and her expert was explored further in submissions.
For my part, both parties gave their brief evidence candidly within the very limited confines and scope of the issues before the Court.
Initial Contributions
I accept the following submissions on behalf of the Husband.
At the commencement of cohabitation in January 1997, the Husband had a one-third share in Property S (its historical valuation was provided at trial and became exhibit C). That valuation shows that, as at January 1997 through to August 1998, the value of the property was some $670,000. He had some savings and minimal superannuation.
For the Wife’s part, by way of initial contributions, she owned a car; she also had minimal savings and some superannuation. She also had a HECS debt of between $10,000 - $12,000, which was paid off during the marriage.
In terms of financial contributions during the marriage, I also largely accept, because it was essentially not disputed save for some tinkering with figures, the submissions put by the Husband. Thus, in 1998 the full title to Property S was transferred to the parties, at which time there was equity in the property of $284,912.
The parties also received the stock and plant of Property S, which was valued at $241,000 (stock) and $27,847 (plant). I also accept, again because it is not disputed, that in 2001 another property of the Husband’s family was sold (Property C) from which the parties received $320,000 on 4 July 2001, which reduced the Property S mortgage, as I have previously indicated, to $75,000. In 2003 the parties purchased the adjoining property, Property G, for $503,00. To assist this purchase the Husband’s Father lent the parties $300,000 at a very low interest rate.
I have already noted that in 2005 both parties received significant sums of money, with the Wife receiving $100,000 from her Father and the Husband receiving $77,000 from his aunt’s estate. These moneys were put towards the mortgage on Property G. On 10 July 2007 the Husband’s Father forgave the $300,000 loan that had been provided in 2003 for the purchase of the adjoining property, Property G. It should also be noted that the Wife did not engage in any paid employment during the marriage, for reasons that I will come to in due course. In saying this, it is not in any way a criticism of Ms Woodbridge.
In relation to non-financial contributions to the marital assets, I accept the further submissions made on behalf of the Husband (again because most of it was not challenged) whereby the Husband worked the farms and received a wage from the family trust. There is no doubt that the Wife was able to contribute to some of the farm work and home duties from January 1997 until the beginning of 2000, just after the birth of X on (omitted) 2000.
I further accept the submission on behalf of the Husband, which was essentially confirmed in evidence from the Wife in the course of cross-examination, that she was severely incapacitated and regularly, if not significantly, confined to bed for large periods of time between 2000 and 2006, and perhaps beyond. During these periods of incapacity, the Wife was cared for by the Husband. Subject to what is said later, he also cared for X and for the household.
I have already noted that she went to (country omitted) in 2008 to consult a specialist further in relation to her chronic fatigue. The cost of this was in the order of $10,000 in relation to airfares and spending money.
She improved somewhat after that trip but, on her own evidence (which I also accept), she confirmed that she remained, and remains to this day, not insignificantly incapacitated. This necessarily led to questions being put to the Wife, amongst other things, to the effect that the Husband not only worked on the family farms, but also, apart from some brief home care of two to three hours each week provided by external sources (and then only for a couple of years), the Husband was also responsible for much of the care of his Wife and, not insignificantly, the care of the parties’ only child, X. There was also some care obviously provided by the Husband to the Wife’s older child, Y, who was living with the parties at that time. This contribution, recognised by the Full Court in the long-standing authority of Robb v Robb,[2] will be taken into account under s.75(2)(o), discussed later in these reasons.
[2] Robb v Robb (1994) 18 Fam LR 489; (1995) FLC ¶92-555.
I accept the Wife’s evidence to the effect that later in the marriage when she slightly improved in health she would do what she could around the home in terms of preparation of meals in the morning, which were then finished off by the Husband in the evening. I also accept her evidence regarding the care of X which, in the early years, significantly fell to the Husband, but at an earlier than usual time X was put into day-care before starting school and then, as I have already noted, he is now at boarding school in Sydney.
Notwithstanding her level of incapacity, the Wife commenced university study part-time in 2005, and she has been able to continue to pursue those studies at the (university omitted), albeit in a very slow and truncated form because of her ongoing ill health. She is pursuing a (course omitted) through the university. As earlier noted, she completed a (omitted) course in 2012.
In terms of post-separation contributions, the parties equally share the holiday and weekend time of their son, X. However, apart from parenting contributions, in my view it is clear that the Wife has made no post-separation contributions. In fact, since July 2013 she has been paid an allowance of $750 per week from the Property S account. The Husband has not been paid drawings from the farm since July 2013. Moreover, he has solely maintained the rural properties since separation.
By way of summary, the contributions brought into the relationship favour the Husband significantly. Throughout the relationship, allowing something for the Wife in the first few years when she was well and not incapacitated, and then much more modestly during her on-going malaise, the financial and non-financial contributions also favour the Husband. And for the reasons earlier given, the post-separation contributions also favour the Husband. In percentage terms, in my view, the contributions overall favour the Husband in an amount of 35%.
Section 75(2) Considerations
There are a number of principles which I must bring to mind or recall here.
First, in the Full Court decision in Waters& Jurek Fogarty J set out some important basic principles, which are always important to recall, in relation to considerations under s75(2):[3]
In most marriages, there is a division of roles, duties and responsibilities between the parties. As part of their union, the parties choose to live in a way which will advance their interests ¾ as individuals and as a partnership. The parties make different contributions to the marriage, which the law recognizes cannot simply be assessed in monetary terms or to the extent that they have financial consequences. Homemaker contributions are to be given as much weight as those of the primary breadwinner.
On separation, the partnership, and the division of roles and responsibilities which it produced, come to an end. Individually, the parties are left largely in the personal situations that the marriage has assigned to them. However, the world outside the marriage does not recognize some of the activities that within the marriage used to be regarded as valuable contributions. Home-maker contributions, for example, are no longer financially equal to those of the breadwinner. Post-separation, the party who had assumed the less financially rewarded responsibilities of the marriage is at an immediate disadvantage. Yet that party often cannot simply turn to more financially rewarding activities. Often, opportunities to do so are no longer open, or, if they are, time is required before they can be accessed and acted upon.
When the marriage ends, especially where that marriage has been a long one, one cannot separate the parties as individuals from the people they became in the context of the marriage relationship, and the allocation of roles, duties and responsibilities which it entailed. In some cases, an adjustment is called for because it would be unjust for the roles and activities of a party, which were recognized until separation, and which largely determined or influenced the personal development of that party and the arrangements between the parties, to suddenly count for little, while those of the other party, which were of equal significance during the marriage, to now have a far greater financial impact outside the home ¾ in circumstances where it was the joint decision of the parties that that be the way in which they would conduct their affairs, and where that decision was made in the expectation of the relationship continuing.
An order under s. 79 would be unjust and inequitable in its operation if it failed to address the manner in which the value of the parties' roles, adopted in the course of, and for the purposes of, the marriage, can be altered by the fact of separation. Those roles can be instantaneously converted into liabilities. The equality of the parties' positions is terminated.
[3] Waters & Jurek (1995) 126 FLR 311; (1995) 20 Fam LR 190; [1995] FLC ¶92-635, at Fam LR 199 – 200.
Secondly, in general terms I recall the comments of Wilson J in the High Court in Mallet v Mallet in relation to the object of s.79, which is to effect a just and equitable distribution of property only in so far as such is authorised by the legislation and the path duly followed by the Court in the light of the evidence.[4] In the words of later cases, it is not to effect some form of social engineering.
[4] Mallet v Mallet (1984) 156 CLR 605 at p.638.
Thirdly, there is authority for the proposition that, out of the 17 different categories set out in s.75(2), the Court need only deal with and make findings in relation to those matters that are arguably relevant in the circumstances of the case at hand.[5]
[5] See, for example, Walters v Walters [2007] FamCA 324 at [46].
The issues here may be summarised in the following terms.
The parties are still relatively young and, therefore, have, all things considered, a significant life expectancy. The Husband has no health issues. The Wife has significant, and seemingly on-going health issues. This general observation must be qualified, however, by the expert evidence provided by the Wife, firstly from Dr J (a psychiatrist), who states (emphasis added):
Ms Woodbridge’s adjustment disorder would have an impact in terms of employment in the initial employment period, but would not have an overall impact in the longer term. The adjustment disorder may impact on her chronic fatigue, which could, therefore, reduce her general employability in an initial employment period (page 2, paragraph 1.5 of Dr J’s report).
Understandably, and very reasonably, Dr J recognises that prominent triggers for her current condition are the strain of the current proceedings and the divorce, as well as the general financial strain on her post-separation, and Y’s health issues, to which the Wife generally referred in her evidence. The Court may infer, in the absence of any other relevant evidence, that at least some of these factors will abate in time. It was, perhaps understandably, a vacuum in the Wife’s case that there was no evidence from Y either as to his own health issues, which are set out in the Wife’s affidavit, but also that the Court was told in the course of the hearing that he had recently become employed on a full-time basis.
The other expert relied upon by Ms Woodbridge was Dr W. He considers that the chronic fatigue syndrome from which she suffers will slowly improve. One curious aspect of the evidence here (already noted) is that Dr W recommends that Ms Woodbridge not take the expensive medication Nexavir, the cost of which is set out in Exhibit E, whereas Ms Woodbridge says that when she is on this medication it helps her significantly. Therefore, the Court is in a position where an expert relied upon by Ms Woodbridge provides evidence which not only does not assist her, but to some degree undercuts one relatively small plank of her argument of the need for the Court to take into account the extensive medical costs, because her own expert says that she does not need it.
The Husband submits that what is significant is that Ms Woodbridge has applied for senior positions, such as with the former (employer omitted) and made applications for positions such as (position omitted) in 2011, and as (omitted) in 2012. Thus, it was submitted that her ill health is such (or likely to be so) as not to be as debilitating in the future as her history would otherwise suggest.
Further, she deposed in her affidavit that she applied for a very wide range of positions, a number of which related to not insignificant manual labour, such as (positions omitted). It was submitted by the Wife that she did this out of desperation and also in her candour to provide the fullest picture for the Court.
Be that as it may, it would appear an exercise in supreme optimism that she would be able to pursue any such “manual labour jobs” of these kinds given her current state of ill-health and fatigue.
There is no doubt in the current circumstances, where the Husband is earning an income now of approximately $74,000 plus various allowances that the he has reliable and significant income whereas the Wife has neither.
As noted earlier in these reasons, there is agreement that the only child of the relationship will continue to reside at boarding school, and spend equal but still quite limited time with both parents.
The Court was reminded that the Wife still has access to funds that were withdrawn from the (omitted) Managed Fund in February 2013. Those funds currently stand, the Court was told, at approximately $27,000.
The final matter to note here, which would be under s.75(2)(o), is the fact of the Husband’s contributions to the care and welfare of the Wife’s child Y. For this so-called “Robb-contribution” I would allow the Husband a further 5%, although there might be some who would allow a greater percentage.
In general terms, having regard to the evidence and the matters put before the Court, some allowance under s.75(2) should be granted in the Wife’s favour, particularly in relation to issues of age, health, income disparity and general prospects. In percentage terms, I would allow her an adjustment of 9%. This figure might otherwise be somewhat higher because of her health, however the Court has, or has been apprised of -
(a) expert evidence, provided by the Wife herself, that her health will improve. Indeed, according to one of her experts, Dr J, her health would not have an overall impact in the longer term regarding employment;
(b) that she has continued (albeit very slowly) with various studies during the marriage even while unwell;
(c) that she has applied for quite senior positions in the not too distant past (I discount her applications for waitressing and the like), and
(d) that she has her son Y living with her, who pays half the rent, and who is now working full-time. Unfortunately, there is no evidence from Y.
Summary & Disposition
By way of summary, having regard to the all financial contributions - on an initial basis, during the relationship, and post-separation contributions - those factors must weigh very significantly in the Husband’s favour.
In the light of the Full Court authority in Pierce the approach the Court must take is to weigh these contributions rather than look at them in terms of their “erosion” over time.[6] It becomes a question of weighing or evaluating the contributions before, during and after the relationship ended.
[6] Pierce & Pierce (1998) 24 Fam LR 377; (1998) FLC ¶92-844.
In relation to future needs, or more accurately a consideration of the relevant factors in s.75(2), in my view, there can be little dispute that those factors favour the Wife to a significant degree due to her ill-health and her lack of income. Her prospects – in relation to employment and income, among other things – are quite opaque.
Indeed, as I have earlier noted, one of a number of difficulties is that the experts upon whom the Wife relies say that she will improve in her health, but as to when and how and to what end is not able to be prescribed in any detail at all. The necessary task of crystal-ball- gazing undertaken by the Court, according to the relevant provisions of the Act to which I have referred, is even more difficult here in circumstances where so many aspects of the Wife’s health are presently quite unclear. I stress, this is not said in any critical or negative way directed to the Wife.
Two other matters must also be mentioned.
First, there is the application of principle articulated in the Full Court decision in Robb, to which I have already referred. This argument relates to the care provided to the Wife’s son from a prior relationship that was provided voluntarily by the Husband in the course of the relationship between the parties.
In that case, the Court distinguished between the provision of assistance which arises from a legal obligation (in this case the aid provided by the Mother to her son, Y), in contrast to the voluntary contributions provided by the Husband to the Wife’s child from her former relationship.
The Court said:[7]
Accordingly, in contributing to the support of these children, the Wife was merely honouring a legal obligation which she owed to the children, whilst the Husband, in making his contribution, was acting essentially as a volunteer assisting the Wife in the discharge of her legal obligations. Upon that basis, whilst we consider the justice of the case clearly required the Husband’s contribution to be taken into account under section 75(2)(o) the same cannot be said of the Wife’s contribution. In making that contribution the Wife was in no way discharging or assisting to discharge any legal obligation of the Husband.”
[7] Robb (1994) 18 Fam LR 489 at p.500 (emphasis in original text).
The second consideration under section 75(2)(o) is the general position that was confirmed to the Court in the course of the trial, namely that the Wife’s son, Y, who currently resides with his Mother, pays half of the rent on the property used by Ms Woodbridge and Y. Thus she receives some financial assistance from her son.
One final matter needs to be addressed which relates to the Wife’s application for spousal maintenance.
It was conceded by the Wife’s Counsel in the course of the trial that, in the event of a property settlement which would result in her receiving a sum in excess of $300,000 (or thereabouts) as a minimum, the aspect of “need” and being able to adequately support herself, under s.72 of the Act, would no longer be satisfied.
The process and circumstances that give rise to an order for maintenance are set out in s.72(1) of the Act. That section provides that there is entitlement to maintenance if (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 adequate reason, having regard to any other relevant matter referred to in s.75(2).
The test, of course, in relation to the application of s.72(1) is not whether one is in need but whether the applicant is in a position to finance him- or herself from his or her own resources. As it is put in cases such as Eliades, the question is: ‘can the applicant by reason of his or her earning capacity, capital or other sources of income look after him or herself?’[8]
[8] Eliades & Eliades (1981) FLC ¶91-022.
It is made plain in other authority that if this threshold issue is not able to be overcome and show a need for maintenance, then the application should be dismissed.
In this case, in circumstances where it is not contested that the Wife has been drawing a sum of $750 per week from the resources of the parties since mid-2013, and where it is also not disputed that she has withdrawn funds which currently stand in the sum of $27,000, in my view, the threshold issue of being able to support herself either through earning capacity or through capital or other sources of income, she is able to look after herself financially, albeit, in somewhat difficult circumstances. Added to this, of course, is the fact she has her son living with her who, the Court was told, although not by way of formal evidence, is now in fulltime employment, and who was already contributing (and continues to contribute) half the rent for the residence the Mother and son occupy.
In such circumstances, in my view, the threshold test is not satisfied and therefore the spousal maintenance application cannot succeed and must be dismissed.
Finally, I remind myself that, under s.79(2), the Court is required to make orders that are just and equitable in all of the circumstances and in the light of the evidence before it. In the recent discussion by the Full Court in Esposito v Coster it was confirmed that the trial Court needs “to stand back” from its preliminary determination and re-consider whether the orders proposed are just and equitable. Indeed, the Full Court endorsed comments made in an earlier decision of that Court to which if referred to the effect that, in ‘standing back’ from its preliminary determination(s), it may require a re-consideration of the impact of s.79(4) and s.75(2) factors, and result in a different outcome.[9]
[9] Esposito v Coster (2013) 48 Fam LR 10 (Coleman, Thackray & Ainslie-Wallace JJ) at [89].
As part of this final review, so to speak, I note again that I am conscious of, among other things, the Husband bearing much more of the capital gains tax between the parties, and that the $200,000 for the fund for X’s education comes “off the top” of the property pool. And to note again, the Father is in secure employment, with some benefits in addition to his salary. All this said, I am also conscious of the Wife’s still somewhat precarious health, notwithstanding the quite positive opinion of her own experts. She has been out of the paid work-force for a significant period of time.
In my view, (a) having regard to the instruction of the authorities to which I have referred (including ‘standing back’ or pausing to consider the impact of the earlier consideration and discussion of the sections mentioned), and (b) in the light of all the evidence addressed in these reasons, the orders generally sought by the Husband should be made. The net proceeds of sale of Property S, and any other marital property that is to be sold, should be divided 68% to the Husband and 32% to the Wife. In my view, such a distribution is just and equitable in all the circumstances. It is unnecessary to make any other adjustment as contemplated by the orders sought by the Husband.
For completeness, I accept the submission made at trial about the necessity in this case to refer to percentages (rather than dollar amounts), primarily because the actual size of the pool is not currently known, and will not be known, until the real estate is sold.
The Court formally makes the orders indicated. Absent any application within 7 days, each party should bear their own costs.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Judge Neville
Date: 20 June 2014
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