Principles for Spousal Maintenance

FEDERAL CIRCUIT COURT

OF AUSTRALIA

AT DARWIN

 

DNC 200 of 2020

 

MS YANG

Applicant

 

And

 

MR YANG

Respondent

 

REASONS FOR JUDGMENT

Ex-Tempore

1. These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.
2. This is an application for spousal maintenance.  There was some discussion about whether the application was made pursuant to s. 77 or s. 72.  The application was listed on the basis that the applicant said it was an urgent matter but after some discussion it seemed to be the agreed position that it was properly an application under s. 72.  As neither party sought to cross-examine and appeared to be content for the matter to proceed on the papers I think the application can properly be characterised as an application for an interim order pursuant to s. 72.
3. The applicant wife is 66 years old.  There are two children in the marriage, twins who are 15 years old, who live with the mother.  The mother has a qualifications and she is also a registered health care worker.  The evidence about that was scant but it appears that, notwithstanding her qualifications, she has never worked as a health care worker, although, as I have noted, she is qualified to do so.  In fact, the wife has not worked for the past 15 or 16 years.  She presently has no income apart from child support paid by the husband in the sum of $717 a week.  She lives in the former matrimonial home with the two children, which is owned outright by the parties free of mortgage, so she is not required to pay rent or a mortgage.
4. The husband is a professional employed full time by the Employer E.  He lives in rental premises or at least in premises he does not own but his mother is either assisting him with the rent or providing the premises rent free. 
5. The wife gave no evidence of having sought any employment since the separation of the parties in about November 2019 and her counsel confirmed to me that her client had not sought any employment since then.
6. I am not satisfied that the wife does not have some capacity for gainful employment, for example some years ago she was a professional.  I think it is possible she could obtain work tutoring or mentoring, for example, in the area of her related work.  I accept however that such work may not be immediately available to her and if available may not be full time.  The wife however has been absent from paid employment for many years and I accept that appropriate gainful employment for her is unlikely to be immediately available.
7. Counsel for the wife referred to an old case, Atwell & Atwell, and said that I ought to take judicial notice that the retirement age for women was 60 years old.  Apart from that submission being factually incorrect as there are few mandatory retirement ages for employment left these days, judges being one exception, the world has changed and many people continue to work into their seventies at least.
8. It was implied that the wife was required to remain at home to look after the children however they are both at high school and they are aged 15.  I do not accept that suggestion, if it was deliberately proposed, that that was the reason for her inability to seek employment.  No other reason was offered for the wife not being able to adequately support herself.
9. In terms of section 72, I accept that her capacity for appropriate gainful employment is limited by reason of her long absence from the workforce.  I accept that, at the moment, she is unable to adequately support herself.  The husband’s liability to maintain the wife in these circumstances is limited by the requirement that it is only to the extent that he is reasonably able to do so.
10. The husband is, as I have mentioned, employed as a professional with the Employer E.  He earns $2,040 a week after tax.  He pays for membership of a professional association, health insurance and superannuation.  Those amounts are deducted from his salary and after tax he receives $1,766 a week.  He pays $717 a week in child support to the wife leaving a disposable income after that of $1,049 a week.
11. He pays for the shortfall between the rent received and the mortgage outgoings on the two investments owned by the parties amounting to a $142 week shortfall.  In addition, he pays insurance on those properties and the former matrimonial home in the sum of $100 a week in total leaving, after those payments, about $807 a week.  There are other small deductions for car insurance and registration of $28 a week in total, leaving $779 a week.
12. The husband said that his personal expenses were $365 a week.  That claim was not criticised, leaving a balance of $414 a week.  The husband said he makes credit card payments on a credit card debt of $10,640.  The payments appear to be variable but the position that was put by his counsel, which reflected what was said in the financial statement, is that he makes average payments of $180 a month, which I equate to $45 a week for the purpose of this calculation, leaving a residue of $369.
13. The husband has offered to pay the wife $200 a week.  The wife has sought $420 a week.  I was informed about those positions in open court by counsel.  I should add that I notice there has been correspondence attached to an affidavit or affidavits between solicitors which I was told contained offers.  I have not read that correspondence as I was not satisfied it was appropriate for me to read that correspondence.  I did not know the nature of it and I did not know whether that correspondence may be subject to a negotiation privilege under the Evidence Act.  In any event I have not read that correspondence and I am referring to offers that were put in open court.
14. As I have said the wife is offered $200 a week.  The wife has sought $420 a week but she has apparently reduced her claim somewhat after certain apparently exaggerated claims were challenged.  Taking into account that the husband is likely from time to time to have some unforeseen expenditure and also having regard to the fact that his personal expenditure, as set out in his financial statement, appears to be reasonably modest, I consider that he is reasonably able to pay the wife the sum of $200 a week by way of spousal maintenance.

Posted in: Derek Legal Blog at 29 June 20

Court Intervention in the Sale of Matrimonial Home

REASONS FOR JUDGMENT

Introduction

1. These reasons for judgment explain why orders have been made refusing an interim application made by the applicant husband for an injunction to restrain completion of a contract of sale relating to the parties’ former matrimonial home in M Street, Suburb N (M Street, Suburb N property).
2. In substance, I have concluded that the applicant has not demonstrated he has a sufficiently arguable case for the grant of an injunction and that the balance of convenience does not favour such relief.  It is fundamental to the law that legally binding and concluded contracts should be upheld and enforced according to their terms.  In Tanwar Enterprises Pty Ltd v Cauchi,[1] Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ confirmed that while an enforceable contact of sale is on foot, a breach or threatened breach by the vendor will be restrained.  By extension, the court will strive to uphold the parties’ contract.  In the present case, there is nothing in the conduct of the vendor or the purchaser which supports a conclusion that completion of the contract should be restrained.  The applicant’s conduct does not support a contrary conclusion.

Consideration

41. From the applicant’s perspective the only issue arising for consideration before me was whether an injunction should be granted to restrain completion of the sale of the M Street, Suburb N property.  From the respondent’s perspective, she sought orders to facilitate completion of the sale, contending that the applicant had secured an urgent hearing of the application in circumstances where he had not disclosed, as the evidence now shows, that he had, in substance and effect, consented to the sale. 
42. Understandably, the respondent relied upon those considerations, including non-disclosure of material facts, as powerful factors which would militate against the grant of relief.
43. While the applicant contends that he wishes to purchase the property, his desire to do so is to be seen in the context that it was originally jointly owned by the parties and (at least on his case), some twelve months after separation he transferred his interest in that property to the respondent.  In addition, the evidence demonstrates he has been actively informed of, and consented to, many of the steps which culminated in the sale.  I am quite prepared to treat the letters sent by his former solicitor recording his instructions as having been sent with his knowledge and approval.[2]
44. While the applicant has asserted he now wishes to purchase the property, I am satisfied that the applicant consented to the sale and was aware of the negotiations which ultimately culminated in execution of the contract.  In addition, the position of third parties must be considered.  Having entered into and executed a contract for the sale of the property, the purchaser now has an equitable interest in the M Street, Suburb N property.  The court is not free to disregard that interest, particularly where the evidence indicates the purchaser fully intends to complete the contract: Ascot Investments Pty Ltd v Harper.[3]  Despite fair warning given to the applicant, no steps have been taken to join the purchaser to the proceeding in order that his interest might be represented.  Viewed in isolation or cumulatively, those factors also militate in favour of the conclusion that the court cannot grant the relief sought.
45. For the foregoing reasons, I am not satisfied that the applicant has demonstrated that he has a sufficiently arguable case to support his claim for an injunction.  It remains to consider the balance of convenience.
46. In addition, while the applicant maintains that he has the ability to purchase the property, I am less than satisfied he is able to do so.  There is substance in the respondent’s submissions that, the applicant and his former lawyers have, for some time, made vague, unparticularised and incomplete assertions respecting his ability to finance a purchase.  Moreover, on the evidence of the respondent (supported by the parties’ long-term accountant), there is very real reason to conclude that neither party has the ability to purchase the property for $950,000.  The lodging of a loan application on 9 April 2020 does not advance the matter.
47. For those reasons, the application should be refused.  The respondent is entitled to substantially the relief sought.  I have made such orders as I consider are required to address the position at present.

Conclusion 

48. While the applicant supports the making of orders for mediation, from my review of the matter, it would be premature for mediation to occur.  More preparation is required for mediation to be of any particular use at this stage.  There is some evidence that the parties also have other litigation to address in relation to one or more of their corporate entities.  In addition, some forensic accounting, which the applicant seeks to undertake, may need to be undertaken.  At a point the parties will and should recognise that there may not be as much to dispute as they had first thought.  They would be well advised not to diminish their asset pool by pursuing avenues which are not of any particular use.
49. I note the respondent’s evidence that supports a conclusion she will have incurred costs exceeding $25,000 as a result of the matters described above.  There may be considerable force in the submission that the applicant should bear those costs or a part of them.  Given the urgent circumstances in which the application was made, it is necessary to reserve those costs until a more fulsome investigation of the facts has been undertaken. 
50. Should it be necessary for the respondent to seek further relief from the court in order to achieve completion of the sale without further objection or interference by the applicant, it may be entirely appropriate for orders to be made, including orders dealing with the question of costs.

Posted in: Derek Legal Blog at 17 June 20

Issues in Relation to Overseas Travel

Issues

39. As stated, the discrete issue for the Court to determine relates to whether there ought to be additional pre-conditions implemented on international travel by the children with either party. More specifically, the following questions require determination:

• Subject to consent, whether the current international travel restraint (and the Family Law Watchlist) should remain;
• Whether any international travel by the children with the father should be restricted to one period each year;
• What period of notice should be given by the travelling parent to the non-traveling parent prior to any international travel with the children; and
• Whether the mother should be permitted to accompany the children on the relevant airline flights for their overseas journeys with the father, or not.

Law and Discussion

Overview

55. All parenting proceedings are governed by the provisions of Part VII of the Act. Parenting orders are defined in section 64B of the Act, and deal with issues relevant to this dispute, including issues relevant to the time and circumstances that a child spends with one of his or her parents. Parenting orders also deal with the allocation of parental responsibility.

56. Section 60CA of the Act provides as follows:

In deciding whether to make a particular parenting order in relation to a child, a Court must regard the best interests of the child as the paramount consideration.

57. Section 60CA through section 60CC deals with how the Court determines the best interests of children.  This is sometimes referred to as the ‘legislative pathway’.  The most relevant to this discrete issue would be the primary considerations in section 60CC(2), and the additional considerations in section 60CC(3), where relevant.

Primary Considerations:  Section 60CC(2)

58. Section 60CC(2)(a) requires the Court to consider the benefit to the child of having a meaningful relationship with both of the child’s parents. The Full Court considered this provision and concept of “meaningful relationship” in McCall & Clark [2009] FamCAFC 92.  In summary, what the Court is required to do is consider and weigh the available evidence and determine (assuming the Court is satisfied that it is in the child’s best interests) how and what orders can be framed in order to ensure that a child has a meaningful relationship with both of his or her parents, and by implication extended family.

59. That said, the Court must also consider section 60CC(2)(b) of the Act – the need to protect the child from physical or psychological harm and being subjected to, or exposed to, abuse, neglect or family violence.

Relevant case law

70. I note at this point in my reasons that there is no specific provisions in the Act relevant to international travel, save for Subdivision E of Division 6 of Part VII – being the obligations under parenting orders related to taking or sending children to Australia.  That said, there are a large number of cases that have considered the issue of international travel.  In particular, the Full Court’s decision of Kuebler and Kuebler (1978) FLC 90-434 and Line & Line (1996) 21 Fam LR 259; (1997) FLC 92-729. I note that the father referred to both of these cases in his case outline document and during oral submissions.

71. The case law would suggest that the Court should examine the following questions: 

• The length of the proposed stay out of the jurisdiction.
• The bona fides of the travel application.
• The effects on the child of any deprivation in spending time with the other non-travelling parent. 
• Any threats to the welfare of the child and the circumstances of the proposed environment of travel.
• The degree of satisfaction the Court may have in the travelling parent’s promise to return to the jurisdiction.
• Whether a financial security is appropriate.
• Hardship issues.
• Whether the country of proposed travel is a member of the Convention on the Civil Aspects of International Child Abduction 1980 (“the Hague Convention”).

Posted in: Derek Legal Blog at 27 May 20

Power to Alter Overseas Maintenance Orders

Jurisdiction

20.             The following is submitted on behalf of the father:

a)             The City A Orders are an overseas maintenance liability for the purposes of section 4 of the Child Support (Registration and Collection) Act 1989 (Cth) (‘CRSC Act’) as they are ‘a maintenance order made by a judicial authority of a reciprocating jurisdiction’.

b)            The United States of America (‘USA’) is a reciprocating jurisdiction as set out within Schedule 2 of the Regulations. Pursuant to reg 38(2) of the Regulations, any order made by the Family Court of Australia will be a final order.

c)             The City A Orders are a registrable maintenance liability as defined in section 18A of the CSRC Act as ‘a liability of a parent…of a child to pay a periodic amount for the maintenance of the child’ and ‘an overseas maintenance liability’.

d)            The City A Orders have been registered, and pursuant to section 30(1) of the CSRC Act the amounts payable pursuant to those Orders are debts due to the Commonwealth of Australia and the Child Support Registrar is entitled to collect them.

e)             Section 110(2)(c) of the Family Law Act 1975 (Cth) (‘the Act’) provides the Court with the following power for ‘the making of orders…for the variation, discharge, suspension or revival of maintenance orders registered in accordance with regulations under this section’.

f)             The City A Orders are a registered overseas maintenance liability as defined in reg 24A of the Regulations, namely ‘a registrable maintenance liability under section 18A of the Child Support (Registration and Collection) Act 1988’.

g)            Pursuant to reg 36 of the Regulations, a party in Australia may apply to have the orders varied, suspended, revived, or discharged. That regulation reads as follows:

Party in Australia may apply to vary etc overseas maintenance order, agreement or liability

(1) This regulation applies to:

(a) an overseas maintenance order or agreement registered in a court before 1 July 2000; and

(b) an overseas maintenance entry liability or a registered maintenance liability.

(2) Application may be made to a court having jurisdiction under the Act for an order discharging, suspending, reviving or varying an order, agreement or liability to which this regulation applies.

(3) An application may be made by:

(a) the person for whose benefit the order or agreement was made, or for whose benefit the liability was created; or

(b) the person against whom the order was made or the person who is liable to make payments because of the agreement or the liability; or

(c) the Secretary, on behalf of a person mentioned in paragraph (a) or (b).

(4) The law to be applied to determination of an application is the law in force in Australia under the Act.

21.             The Court accepts that it has jurisdiction to make the Orders sought by the father. The correctness of the submissions is confirmed by Full Court authority in the Family Court of Australia which considered reg 36 in two reported decisions, being Child Support Registrar & Vladimir and Anor [2017] FamCAFC 56 (‘Vladimir’) and Child Support Registrar & Higgins and Anor [2016] FamCAFC 2 (‘Higgins’).

22.             The Family Court of Australia has varied American overseas maintenance orders pursuant to regulation 36 in Pitney & Pitney [2018] FamCA 996. Justice Forrest discharged an American child maintenance order on the father’s application. In so doing, the Family Court:

a)             set out the regulation 36 requirements;

24.             In ADG & VO [2007] FMCAfam 818, a variation of a child maintenance order made in Texas was made. The Court found, after review of the relevant legislative provisions, that the Federal Circuit Court had the power to vary the order pursuant to reg 36 as the Texan order was ‘an overseas maintenance entry liability or a registered maintenance liability’ and the father was a party in Australia making the application.

25.             A recent decision of Justice Wilson in Membrey & Hall [2019] FamCA 857 canvasses the history of child maintenance relations between Australian and the USA. His Honour set out the legislative scheme for enforcing overseas maintenance orders particularly relating to the USA. His Honour found, following previous decisions of the Full Court and the Family Court, that:

a)             the USA orders were properly characterised as an ‘overseas maintenance liability’ for the purposes of section 4 of the CSRC Act;

b)            the USA Orders were a ‘registrable maintenance liability’ for the purposes of section 18A of the CSRC Act; and

c)             upon registration of those orders the amount recorded in the orders became a debt due to the Commonwealth of Australia, amenable to collection by the Agency;

d)            the Applicant was entitled to make his application to discharge the USA Orders pursuant to regulation 36 of the Regulations; and

e)             the law to be applied is the law in force in Australia under the Act, being the Family Law Act 1975 (Cth.).

26.             The applicant noted the Federal Circuit Court (and the Federal Magistrates’ Court) has varied American child maintenance orders pursuant to reg 36 in three other decisions.[9]

27.             The Child Support Registrar also confirmed in submissions that this Court has jurisdiction to make the Orders sought.

[9] Klein & Wright [2007] FMCAfam 360; Imago & Imago [2010] FMCAfam 411; Newbeld & Newbeld and CSR & Newbeld [2007] FMCAfam 465.

Posted in: Derek Legal Blog at 20 May 20

Considerations in Aboriginal Children's Matters

Custody of — Relevance aboriginality to welfare of child — Admissibility of expert evidence

Held, that expert evidence of the difficulties faced by Aboriginal children raised in a non-Aboriginal background is a relevant issue for the determination of what is in the best interests of an Aboriginal child. It is the role of a separate representative to present such evidence to the court in an appropriate case. Consideration of the issues involved.

Cultural heritage — Aboriginality — Relevance to welfare of child — Expert evidence

Held: Expert evidence of the difficulties faced by Aboriginal children raised in a non-Aboriginal background is a relevant issue for the determination of what is in the best interests of an Aboriginal child. It is the role of a separate representative to present such evidence to the court in an appropriate case. Consideration of the issues involved.

Duty — Where evidence favourable to party

Held: A trial judge erred in limiting evidence adduced by a separate representative of the child to evidence that could not be led as part of one of the parent's case. The separate representative had a duty to ask questions relevant to the welfare of the child and it did not matter that the separate representative supported, or was perceived to support, one parent.

Posted in: Derek Legal Blog at 13 May 20