Principles for Lump Sum Spousal Maintenance

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA
PAC 5587 of 2017
MR BARTLETT
Applicant
And
MS DENNY
Respondent

REASONS FOR JUDGMENT
Introduction
1. These are the Reasons for Judgment in relation to the wife’s interim applications for lump sum spousal maintenance and interim property provision.  She also made an interim application that the husband pay, by way of spousal maintenance, 50 per cent of mortgage loan instalments with A Bank.
2. Ultimately, during the course of the interim hearing held on 18 February 2020, the wife sought $50,000, to pay legal fees, by way of interim property provision, and a further sum of $50,000 representing lump sum spousal maintenance.
3. She also maintained her interim application that the husband pay, by way of further spousal maintenance, 50 per cent of mortgage loan instalments with A Bank.
4. As to the sum of $50,000 sought for lump sum spousal maintenance, the wife contended that this lump sum was made up of the children’s estimated 2020 school fees, $5,000, the need to purchase a musical instrument, $5,000 to $7,000, and to meet her weekly shortfall of expenditure over income of $262 until the final hearing of the property proceeding.
5. The husband opposed the making of the above orders.  
6. The wife is aged 43 years.  The husband is aged 54 years.
7. The wife works full time on a permanent basis as a manager at the Employer B at Town C, where she has been employed for about 20 years.  
8. The husband works as a health professional for Employer D at Town C, where he has been employed for 20 years.  
9. The parties married in 2001 and separated in about September 2016.  There are two children of the relationship:  X aged nine years and Y aged seven years.
Materials
10. The parties’ materials relied upon in this interim hearing were:  
(a) The wife relied upon her Amended Application in a Case filed 17 February 2020 (although, ultimately, the wife’s proposed orders at this interim hearing were as set out above); her affidavit filed 11 October 2019; her affidavit filed 17 February 2020; and her Financial Statement filed the same date.
(b) The husband relied upon his Response to Application in a Case filed 31 January 2020; his Financial Statement filed 17 February 2020; and his affidavit filed 31 January 2020.
11. The parties also relied upon a joint balance sheet dated 22 January 2020, marked exhibit A;  Notice of Orders made in Court Es dated 28 January 2020;  and A Bank home loan statement of account for the period from 3 June 2019 to 2 December 2019.
The wife’s spousal maintenance application 
Legal principles
12. The Court refers to the helpful recitation of legal principle relating to spousal maintenance applications by McCelland J in Uzunlar & Uzunlar [2017] FamCA 111.
Is the wife unable to support herself adequately as contemplated by section 72 (1) of the Family Law Act 1975 (Cth) (the Act)?
13. The following discussion takes into account relevant criteria under section 75(2) of the Act.  
14. The wife’s Financial Statement filed 30 October 2019 indicates that the wife’s total average weekly income is about $2,333 and her total weekly personal expenditure is about $2,595, resulting in an excess of weekly expenditure over weekly income of some $262.
15. The Court observes that the wife’s affidavit filed 11 October 2019 (paragraph 52 and 53) refers to total weekly expenditure of $1528 for the wife and children which matches the wife’s weekly credit card payments of $500 (item 30 in her Financial Statement) and item 32 in her Financial Statement, being $1,028 per week for “total of all other expenditure.”
16. Whilst the wife’s nil balance for her credit card (item 51 of the wife’s Financial Statement) and her assertion in item 30 of her Financial Statement that she spends an estimated $500 per week on her visa credit card are arguably inconsistent, the Court observes that the wife’s Visa account balance, as per annexure K of her affidavit filed 11 October 2019 (page 96), is stated to be $2,080.94 as at the date of that affidavit (see paragraph 49).
17. In this context of shortfall, the Court observes that, from the wife’s Financial Statement filed 11 October 2019, she had bank savings of about $31,066, whereas by the date of the parties’ joint balance sheet, 22 January 2020, exhibit A, the wife’s bank account savings had reduced to some $19,530, carrying the significant suggestion that the wife has had resort to such funds to meet her weekly shortfall.
18. Nevertheless, the wife’s total bank balances of some $19,530 are available for her to resort to meet the shortfall of $262 per week for some time; $19,530 divided by $262 per week would permit about 74 weeks of $262 being met. In this context, the Court observes that there could well be a waiting period for a final property hearing of 18 months (78 weeks).
19. Accordingly, the wife’s application for lump sum spousal maintenance based on the $262 per week shortfall is not made out.  
20. The wife is and has been the primary carer of the children.  
21. The husband spends one night a fortnight with the children on alternate weekends.
22. The parties’ health appears to be reasonable. 
23. At paragraph 48 of the wife’s affidavit filed 11 October 2019, she states under the heading, “My Financial Needs”, that she estimates that she needs an amount of $100,000 by way of interim spousal maintenance for her to pay:
(a) Children’s estimated 2020 school fees payable in January 2020; $5,000.
(b) Eight-day cruise with the children during summer holidays; $9,202.
(c) Church donation during Christmas; $2,000.
(d) Musical instrument; $7,000.
(e) Khalil Family Lawyers’ estimated legal fees; $60,000.
(f) Harb Lawyers amount outstanding $38,938 (the Court interpolates here that exhibit B indicates that Harb Lawyers are owed $27,539 pursuant to a judgment in Court E).
24. The Court was informed by the wife’s counsel that the eight-day cruise was paid by the wife’s extended family; accordingly, that sum falls away as it were.
25. The proposed church donation during Christmas 2019 falls away, as it were, as it cannot be stated by the wife that she is unable to support herself adequately by reason of such proposed payment.
26. As to the school fees owing of $5,000, this is a reasonable financial need of the wife, and quarantining, as it were, the wife’s bank funds of $19,530 for the shortfall of $262 per week, the wife is unable to adequately support herself by reason of this required payment pursuant to section 72(1) of the Act.  
27. As to the musical instrument, the wife asserts that she is a member of a musical group and regularly plays at events. She states that in order to continue performing at these events, she has to practice on a musical instrument. She asserts she intends to purchase a musical instrument to assist her with her performances.
28. Under section 75(2) of the Act, the Court, inter alia, is required to take into account, where the parties have separated, a standard of living that, in all the circumstances, is reasonable.  The wife asserts, above, being a member of a musical group that she needs a musical instrument to continue performing at events.  The wife’s participation in such events would appear to be part of her usual standard of living.  Further, and in this context, it is reasonable to take into account the husband’s payment of $53,000 for his vehicle post-separation.  
29. As to the musical instrument, allowing $6,000 for its prospective purchase, the Court is of the view that the cost of the musical instrument is a reasonable financial need of the wife and she is unable to adequately support herself by reason of such proposed payment pursuant to section 72(1) of the Act.  (Again, the Court would quarantine, as it were, the wife’s bank funds of $19,530 for the shortfall of $262 per week).
30. The wife maintained her interim application that the husband pay, by way of further spousal maintenance, 50 per cent of mortgage loan instalments with A Bank. In this context, the wife is presently paying a sum of $351.50 each week to A Bank by way of interest-only payments. This weekly payment is reflected in the $262 per week shortfall previously discussed in these reasons; again, quarantining, as it were, the wife’s bank account balances of some $19,530 to meet the shortfall of $262 per week over the next approximate 74 weeks, the wife is not unable to adequately support herself by reason of meeting this payment pursuant to section 72(1) of the Act.
Husband’s capacity to pay spousal maintenance
31. The Court has considered relevant section 75(2) criteria. 
32. The husband’s Financial Statement indicates that his weekly income exceeds his weekly personal expenditure.
33. As to both the 2020 school fees and musical instrument cost, it is reasonable and appropriate that the cost of these items be met by way of lump sum payments by the husband.  The total figure for these amounts of school fees, $5,000, and musical instrument costs, $6,000, are $11,000. 
34. By reference to item 37 in the husband’s Financial Statement, his bank balances, he has the capacity to pay the sum of $11,000.
35. The husband has the capacity to meet the wife’s reasonable need to pay school fees and purchase a musical instrument with the total cost being $11,000.
Interim property provisions
36. The wife sought $50,000 to pay legal fees, by way of interim property provision.  This application was opposed.
37. The wife’s Financial Statement and the joint balance sheet both indicate the wife’s legal fees at $40,000.  (The Court observes that the joint balance sheet was dated 22 January 2020.  This is considerably later than the wife’s affidavit of 11 October 2019 where she asserted estimated legal fees to her current lawyers of $60,000, and an amount owing to Harb Lawyers being some $38,938, with the Court noting that the below-mentioned judgment debt against the wife in favour of Harb Lawyers for $27,539 is dated 28 January 2020.
38. By reference to the Court’s previous Reasons, the Court is not satisfied that the wife has an ongoing ability to save funds as contended by the husband;  again, there is a significant suggestion that the wife has been eating into, as it were, her bank savings, resulting in her bank balances reducing from about $31,066 to, presently, $19,530.
39. The Court refers to relevant legal principle in Strahan & Strahan [2009] FamCAFC 166; see the helpful reference to Strahan’s decision and relevant principle in the decision of Foster J in Gillim & Gillim [2019] FamCA 897 at paragraphs 33 to 40 in particular.
40. The parties’ property pool is set out in the joint balance sheet, exhibit A (with the Court noting that the husband’s counsel informed the Court that item 5 in exhibit A, being one of the husband’s Westpac Bank accounts, now has a bank balance of some $135,000).
41. The wife has a judgment debt against her for past legal fees owed to Harb Lawyers in the sum of $27,539.  The Court would assess, having regard to its above Reasons, again quarantining, as it were, the bank balance funds of the wife presently in the sum of about $19,530 to meet her weekly shortfall of expenditure over income of $262, that presently she is unable to meet such judgment debt.
42. The Court is of the view that it will be appropriate and in the interests of justice that there be interim property provision in favour of the wife to meet such judgment debt.
43. Again, the wife seeks interim property provision for legal fees of $50,000; deducting $27,539 from $50,000, the sum of $22,461 is reached and, in the view of the Court, it will be appropriate and in the interests of justice to make an order for interim property provision to the wife for this sum.
44. In the view of the Court, it is not necessary for the wife to adduce evidence that her estimated legal fees payable to her present lawyers are presently “due and payable”; it is sufficient for her to adduce evidence that she has engaged lawyers and who have provided her with a cost disclosure and costs agreement estimating legal fees payable prospectively. There is no contention made by the husband that the wife’s solicitors’ legal fees estimate of almost $60,000 is unreasonable.
45. The Court is of the view, by reference to the parties’ evidence relating to relevant contributions under section 79 of the Act, and by reference to the property pool in exhibit A, that interim property provision to the wife of $50,000 will not prejudice the parties’ respective property applications.
46. Accordingly, the Court will order:
1. That by way of interim lump sum spousal maintenance pursuant to section 72 of the Family Law Act 1975 (Cth), within seven days, the husband shall pay or cause to be paid to the wife the sum of $11,000, by way of direct deposit into a bank account nominated by the wife forthwith in writing to the husband’s solicitors.
2. That by way of interim property provision, within seven days, the husband shall pay to the wife the sum of $50,000 by way of direct deposit into a bank account nominated by the wife forthwith in writing to the husband’s solicitors.
I certify that the preceding forty six (46) paragraphs are a true copy of the reasons for judgment of Judge Newbrun
Associate:  
Date:  25 March 2020

Posted in: Derek Legal Blog at 22 April 20