XUEREB & XUEREB

[2015] FamCA 479

FAMILY COURT OF AUSTRALIA

XUEREB & XUEREB [2015] FamCA 479

FAMILY LAW – INTERIM – interim spousal maintenance – where wife has primary care of children – where wife’s income is less than expenses – where discretionary spending can be reduced – where husband has capacity to pay –pending final property proceedings

Family Law Act 1975 (Cth) ss 72, 74, 75

Brown and Brown (2007) FLC 93-316
Clauson and Clauson (1995) FLC 92-595
Curnow and Curnow (Unreported, Sydney 28 April 1997)
Eliades and Eliades (1981) FLC 91-022
In the Marriage of Bevan (1995) FLC 92-600, (1993) 19 Fam LR 35
N & N (1997) FLC 92-782
Nutting and Nutting (1978) FLC 90-410
Robinson and Willis (1982) FLC 91-215

APPLICANT: Ms Xuereb

RESPONDENT: Mr Xuereb

FILE NUMBER: PAC 3910 of 2014

DATE DELIVERED: 23 June 2015

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Hannam J

HEARING DATE: 14 April 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Cantrall

SOLICITOR FOR THE APPLICANT: Mr Eid of Regency Lawyers

COUNSEL FOR THE RESPONDENT: Mr Othen

SOLICITOR FOR THE RESPONDENT: Ms Bevan of Sarah Bevan Family Lawyers

Orders

1. That pending further order on the first Friday following these orders and each Friday thereafter the Husband shall pay to the Wife the sum of $400 per week, by way of spousal maintenance, with such sum to be paid to the following account:

   (a)       Account Name: Ms Xuereb

   (b)       BSB: …

   (c)       Account Number: …

IT IS NOTED that publication of this judgment by this Court under the pseudonym Xuereb & Xuereb 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 PARRAMATTA

FILE NUMBER: PAC 3910  of 2014

Ms Xuereb

Applicant

And

Mr Xuereb

Respondent

REASONS FOR JUDGMENT

Introduction

1. In her Response to proceedings initiated by her former husband Mr Xuereb (“the husband”), Ms Xuereb (“the wife”) seeks interim maintenance from the husband. She also initially sought an an order that her costs in the proceedings be paid by the husband, but this order was not pursued in submissions.

2. The wife was born in 1978 and is currently 37 years of age. The husband was born in 1979 and is currently 36 years of age. The parties commenced living together in 2005 and married in 2006. After an almost eight year marriage the parties separated on a final basis in December 2013. Initially, both parties remained in the family home. In about November 2014, the husband vacated the family home and moved to another property owned by him.

3. There are three children of the marriage, B who is eight, C who is five and D who is four (“the children”). Interim parenting orders for the children were made by consent in March 2015, providing that the children live with the mother and spend time with the father on alternate weekends from after school/pre-school Friday until 6pm Sunday, overnight midweek in the alternate week, and half of school holidays. Property proceedings are still ongoing.

4. Until commencing casual work recently, the wife had not worked since the birth of the parties’ second child in May 2010. From that date, the husband was the sole income earner. The husband is a proprietor of a business and works five days a week and sometimes Saturday mornings.

5. The wife’s position is that her income is less than her reasonable expenses and she seeks orders requiring the husband to pay $800 per week by way of spousal maintenance. The husband says that the sum the wife seeks is beyond his capacity to pay and that her expenses are not reasonable. He seeks that the application be dismissed.

6. The question for me to determine is whether it is appropriate for an order to be made that the husband pay maintenance to his former wife.

Background

The wife’s circumstances

1. At the date of marriage the wife was employed as a travel consultant and was earning approximately $50,000 per annum. As indicated above, the wife ceased employment after the birth of the parties’ second child in 2010.

2. Although it is not clear exactly when the wife resumed working on a casual basis, as I understand it, she has been working since at least January 2015.

3. The wife’s income consists of wages from her casual employment, payments from Centrelink and child support payments. According to her Amended Financial Statement filed on 1 December 2014, she had at that time no income other than $369.25 by way of Centrelink payments. She has not filed an updated Financial Statement but states in an affidavit dated 16 March 2015 that she has “recently” commenced casual employment at a retail outlet.

4. The wife’s payslips indicate that she earns $26.41 per hour and that her income varies from week to week.  In her affidavit of March 2015, she states that she had not “been provided a shift that month and another shift was not scheduled in April”. This appears to reflect that she is employed under an extremely casual arrangement and is called on short notice when other rostered staff become unavailable. Payslips produced to the Court indicate that during one fortnight in January 2015 she received $475.37 net and during another fortnight period at the end of January she received $581.02. For the first fortnight period in February she earned net $827.17 (Exhibit 1). Her average fortnightly income over this six week period was therefore $627.85 or an average of $313.93 per week. According to the husband’s Amended Financial Statement filed 8 April 2015, he pays $81 to the wife as child support payments.

5. Given that, pursuant to s 75(3) of the Family Law Act 1975 (Cth) (‘the Act’), the Court is to disregard any entitlement to an income tested benefit, the wife’s income may be said to be highly variable but is, on average, $313.93 per week, and $394.93 per week including child support payments.

6. The wife currently resides in the former matrimonial home in Suburb E (“the Suburb E property”) which is registered in the her name and subject to a mortgage. It is common ground that the wife and husband each pay 50 per cent of the mortgage repayments on the Suburb E property. However, the amount of these repayments is not quantified in the wife’s Amended Financial Statement. Any mortgage repayments for the Suburb E property are also absent from the husband’s expenses in his Amended Financial Statement filed 8 April 2015, so the extent of this expenditure is unclear.

7. The wife’s Amended Financial Statement of December 2014 sets out her weekly expenditure as $744.80 for herself and $787.10 for the children, being a total of $1531.90 per week. This figure includes discretionary expenditure such as $250 per week for holidays for herself and $85 per week for herself on hairdressing. If this discretionary spending is excluded, the wife’s expenditure for herself is just over $400 per week on herself and just over $950 per week including the children’s expenses.

8. The wife’s personal expenses therefore exceed her average income by almost $100. The wife’s total expenses, without mortgage repayments, exceed her average income including child support payments by around $470.

The husband’s circumstances

1. As noted above, the husband is a proprietor of a concrete trucking business. In his Amended Financial Statement of 8 April 2015, he set out that his weekly income was $1000 and his personal expenditure was $1019.  The husband appears to have very minimal discretionary expenses.

2. The husband resides at the parties’ other property in Suburb F (“the Suburb F property”) which is registered in his name and subject to a mortgage. In the husband’s Amended Financial Statement he identifies that he pays $320 per week in mortgage repayments, which makes up part of his personal expenditure of $1019.

3. According to the draft expert valuation of the husband’s business, the business also owes a loan of $294,389 to the husband, which is therefore an asset of the husband (Exhibit 4). It is unclear what amount, if any, the husband receives from the company in loan repayments.

4. It is submitted on behalf of the wife that the husband has failed to make the relevant disclosures, has underestimated his income for the purposes of the proceedings and his true position is not before the Court.

5. In particular, the wife submitted that the husband is in control of three bank accounts, and has disclosed an incomplete record. In the disclosures made of the CBA Credit Card account, there were no statements for January 2014-June 2014 and after January 2015 (Exhibit 2). Similarly, for the ANZ Business Advantage account there is no information before July 2013 (Exhibit 3). It was also submitted on behalf of the wife that no records have been produced for the period prior to February 2014 and from May-August 2014 in relation to an ANZ Access personal account. It is submitted on behalf of the husband that the disclosures reveal a complete picture for the purposes of this application and there is no evidence of the husband wilfully withholding them.

6. The wife also submits that there are inconsistencies between the husband’s bank records and his financial statements and concerns regarding the husband’s contentions arise from the documents. A number of payments totalling $150,000 were made from the ANZ Business Advantage account to the husband’s father, who the husband’s says is an employee of the business since July 2013. This included a payment of $85,000 on 12 March 2015. It is submitted on behalf of the wife that the Court would question the veracity of these payments as a salary to the husband’s father and the husband’s limited capacity to pay spousal maintenance. It is submitted on behalf of the husband that there is no evidence of arrangements between the husband and his father, and that these proceedings were the first time such allegations had been made.

7. This wife also contends that $320 per week which the husband claims he pays for the mortgage is actually paid by the business. The ANZ Business account shows $320 periodic transfer by the company described as “loan payment” (Exhibit 3).

8. Lastly, the husband’s individual tax return of 2014 states that the husband received a gross salary of $52,000 from the business, and an additional “supplement income”, for a total gross taxable income of $62,871(Exhibit 5). The source of this supplement income is not evident and is not referred to in the husband’s financial statement.

9. In my view, for the purposes of these interim proceedings, the husband appears to have greater income than the $1000 per week specified in his financial statement.

The Law

1. The Court must consider the spousal maintenance claim in accordance with the assessment process identified by the Full Court In the Marriage of Bevan[1] which requires:

   a)A threshold finding under s 72

   b)A consideration of the factors in ss74 and 75(2)

   c)No fettering principle is to apply so that any pre-separation standard of living must not automatically be awarded where the respondent’s means permit; and

   d)The Court to exercise its discretion in accordance with provisions of s 74 with ‘reasonableness in the circumstances’ as the guiding principle

   [1] (1995) FLC 92-600 at 81,981-81,982; (1993) 19 Fam LR 35 at 42.

2. Section 72 of the Act provides as follows:

   (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).

3. It is not in issue that the wife has the care and control of three young children. The questions in issue are whether the wife is unable to support herself adequately and whether the husband is reasonably able to pay maintenance.

4. The test of ability to support one’s self in s 72(1) was interpreted in Eliades and Eliades[2] as:

   [N]ot identical to the test of whether one is in need but means whether the applicant is in a position to finance himself or herself from his or her own resources. That is to say, the test is whether by reason of earning capacity, by reason of capital or other sources of income which have accrued independently to the applicant, the applicant is in a position to look after herself …

   [2] (1981) FLC 91-022 at 76,232. See also Clauson and Clauson (1995) FLC 92-595.

5. The recipient of maintenance is entitled to be maintained ‘adequately’. The word ‘adequately’ was interpreted by Lindenmayer J in Nutting and Nutting[3] as:

   A standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.

   [3] (1978) FLC 90-410 at 77,094.

6. The Full Court agreed with this interpretation in In the Marriage of Bevan (supra). The Full Court also said that a court is not bound by a principle that an applicant is entitled to the same standard of living as was enjoyed prior to separation whenever the respondent is able to pay.

7. The respondent’s capacity to pay is considered on income, property, financial resources and earning capacity. Capacity to pay is assessed by determining the respondent’s “surplus” after paying their necessary commitments.

8. In Curnow and Curnow[4] Ellis J said:

   In my judgment, a party is only liable to maintain the other party to the extent that the first-mentioned party is reasonably able to do so. In determining whether a party is reasonably able to support or contribute to the support of another party, one should have regard to the income of the first-mentioned party and then the unavoidable, non-discretionary expenses of that party, including his or her reasonable living expenses. After that exercise, one can consider the amount, if any, from which the first party may be able to contribute to the maintenance of the other party.

   [4] Unreported, Sydney 28 April 1997.

9. Section 74(1) further provides that in proceedings with respect to maintenance the court may “make such order as it considers proper”. The meaning of “proper” was considered in Robinson and Willis[5] where Asche SJ said:

   An order which is either insufficient or excessive in the circumstances, is not “proper”. In the former case because the burden of support may be thrown on the public; in the latter because an excessive order will result in inability to pay the accumulation of impossible arrears and, again, ultimately a probably recourse to the public purse.

   [5] (1982) FLC 91-215 at 77,157.

10. The Full Court in Brown and Brown[6] considered the meaning of “proper” and “adequate”, at paragraphs 91-92 and 94-95:

    Similarly, we think that what is meant by ‘proper’ in s 74 is circumscribed by the provisions of the Act relating to maintenance.

    Adequacy is the key concept in determining whether the threshold set by s 72 has been crossed. But that concept is not left behind once the step into s 74 enquiry as to what is ‘proper’ is taken. Though application of the factors set out in s 75(2) may, in a given case, lead to a generous interpretation of needs that are ‘adequate’ and of what is ‘proper’, the nexus between ‘adequate’ and ‘proper’ must remain. As Ache J said in Robinson and Willis (1982) FLC 91-215:

    ‘An order which is either insufficient or excessive in the circumstances is not ‘proper’

    …

    The choice of the form of maintenance here involved in the identification and ‘weighting’ of factors militating against or favouring one form or the other. Weight could only be expressed in qualitative terms, such as ‘important’ or ‘serious’.

    In contrast, in the calculation of a specific sum, the opportunity was available to disclose the weight given to relevant factors in a quantitative manner by the attribution of a monetary amount. A failure to do so is likely to make demonstration of the nexus between the award and ‘adequacy’ or ‘appropriate in the circumstances’ more difficult to identify.

    [6] (2007) FLC 93-316.

11. Mullane J in N & N[7] stated that:

    [T]he interpretation of the expression “unable to support herself or himself adequately” is subject to the words “having regard to any relevant matter referred to in subsection 75(2).

discussion

Section 75(2) factors

[7] (1997) FLC 92-782 at 84643.

Age and state of health of each of the parties

1. The wife is 37 years of age and the husband is 36 years of age. Both are, so far as I am aware, in good health.

Income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate employment

1. The wife is reliant on her income from her casual employment, which on average is $313.93 net per week. Her reasonable personal expenses, excluding discretionary matters, therefore exceed her average income by $95. She is also required to pay mortgage repayments in an unspecified sum. Her total expenses exceed her average income including child support payments, by $470, although it is expected that this figure is actually higher when the wife’s mortgage repayments are included.

2. Although the wife ceased working when the parties’ second child was born she recently commenced casual employment. One of the children has not yet started school and the other two children are in primary school. The mother accepts shift work to fit around her parenting responsibilities. She is, in my view, appropriately employed given the circumstances.

3. The husband’s income is in dispute but at the very least he has an income of $52,000 per annum and there are some indications that he has access to other financial resources through his business.

Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years

1. Interim parenting orders for the children made by consent in March 2015 provide that the children live with the mother.

2. The orders also provided for the children to spend time with the father on alternate weekends from after school/pre-school Friday until 6pm Sunday, overnight midweek in the alternate week, and half of school holidays.

3. The mother is clearly bearing a much greater burden of the care of the parties’ children.

Where the parties have separated or divorce, a standard of living that in all the circumstances are reasonable

1. During cohabitation, after the birth of the parties’ second child in 2010, the husband was the sole income earner maintaining the household. It may be inferred that the parties enjoyed a comfortable lifestyle. From the wife’s stated expenditure, it appears that she expects that following separation she will be able to have a lifestyle which includes spending that goes beyond a standard of living that is reasonable in the circumstances. The parties have now separated and maintain two households.

The wife’s ability to adequately support herself

1. Having regard to the relevant matters in s 75(2) above, I am of the view that the wife is unable to support herself adequately.

The husband’s capacity to pay

1. On the analysis above, even if it were accepted that the husband’s income is $1000 per week, he has at least a surplus income of $300 per week taking into account that his company appears to be making his mortgage repayments. Further, I am of the view, on the available evidence, that his income and resources are likely to be somewhat greater than $1000 per week. In these circumstances he has a capacity to pay spousal maintenance, albeit in a sum less than claimed by the wife.

2. Taking all of the relevant matters into account, I am of the view that a proper sum to be paid by the husband to the wife for her to adequately support herself, and which he has capacity to pay, is $400 per week.

3. For the foregoing reasons I made the orders set out at the forefront of this judgment.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 23 June 2015.

Legal Associate:

Date:  15 June 2015