· 2022-04-07T16:18:37+0000 · 664 posts

Wife Seeks Spousal Maintenance Order

Ferman & Lapham [2022] FedCFamC2F 415 (5 April 2022)

The de facto wife sought for the Court to make a lump sum spousal maintenance order. The husband sought a reimbursement to him for part of the single expert costs paid by him along the litigation pathway. The Court, in determining what relief to grant to the parties, assessed whether the parties’ respective contributions warrant an adjustment (if any) of their existing property and superannuation interests (‘the property pool’) and, if so, how that adjustment should be achieved.

Facts:

In 2011, the parties met on-line and struck up a relationship. In 2013, following the breakdown of his earlier relationship, the de facto husband says that a property settlement was achieved which left him with five parcels of real estate and superannuation interests. The same year, Lapham Holdings (‘LH’) as trustee for the Lapham Family Trust (‘the family trust’) purchased K Street, Town L (‘the farm’) for $1,350,000. After that, LH as trustee, entered into a deed of assignment with the vendors and Company X Pty Limited (‘Y).

The deed related to the assignment of the existing “growing contract” which facilitated the raising of livestock that were delivered to the farm by Y and after a certain period, the collection of the livestock for processing (‘the commercial livestock enterprise’). By late 2014, the parties commenced living together at the farm. In mid-2015, the de facto wife took her children and left the farm, staying with her parents. On 20 July 2015, a new contract was executed between the relevant parties that was reflective of the operational commercial livestock enterprise being conducted on the farm.

The parties separated on 25 June 2016. The wife sought to secure her financial future in circumstances where she held no legal interest in any significant assets. Both parties asked the Court to make property adjustment orders. The de facto wife asked the Court to make a lump sum spousal maintenance order (in lieu of her original application for regularised instalments) and there were consequential orders sought by the de facto husband pertaining to a reimbursement to him for part of the single expert costs paid by him along the litigation pathway.

Each party sought the tender of various documents, most of which were drawn from the documents contained within their bundles of documents marked respectively as “MFI-1” (the de facto wife’s tender bundle) and “MFI-2” (the de facto husband’s tender bundle). Counsel for the de facto wife argued that not all of the content within the 100+ pages contained within exhibits H3.12 to H3.44 were put to the de facto wife. Junior counsel for the de facto husband accepted that was the case. The de facto wife objected to the late filing of the de facto husband’s latest financial statement. Counsel for the de facto wife accepted that his objections to the de facto husband’s trial affidavit were sent over the weekend, but of course, this timing could not have been assisted by the de facto husband’s failure to comply with the trial directions of the Court.

The Court heard that neither Mr U nor Mr V, whose affidavits were sought to be relied upon by the de facto husband, were single experts despite the cover page to Mr U’s affidavit reading as “Affidavit of Single Expert Witness”, as did the cover page to Mr V’s affidavit. Nowhere in the de facto husband’s Amended Case Outline (‘exhibit H1’) is there a reference to a rule being relied upon to support the admission of the expert evidence of Messrs Mr U and Mr V, nor any application or affidavit in support of the requisite leave application.

The de facto wife continued to receive Centrelink benefits during the relationship without notifying Centrelink of her changed financial circumstances, namely her entering into a domestic relationship with a man earning over $100,000 in each of the four relevant financial years. The de facto husband denies that he coerced the de facto wife into staying on Centrelink benefits and says instead that he objected to her doing so and this caused fights between them.

The de facto wife says that the de facto husband told her to keep claiming the single parent’s benefit because she could then pay rent, allowing her to make a contribution towards the running costs of the H Street, Suburb J home and also increase the income stream received by the de facto husband. She says that she has now approached Centrelink to make it right.

On 5 February 2015, the de facto husband emailed his personal mortgage adviser, Mr Z saying that the de facto wife had been renting F Street, Town G (‘the F Street, Town G property’) for four years, something that was clearly misleading given that nowhere in the evidence is it suggested that the de facto wife lived in that property.

On 1 February 2022, various orders were made including that: the de facto husband’s application to have the court issue various subpoenae was dismissed; the de facto husband was permitted to issue a late subpoena; the de facto husband was permitted to request the de facto wife’s father, Mr M (‘Mr M’) produce his diary notes, failing which the de facto husband had leave to issue a subpoena for the production of same; and the de facto husband was given leave to file and serve his trial material the following day with a determination on the admissibility of such material to be an issue at trial.

The de facto wife sought relief proposing that the de facto husband pay her $711,238 by way of property adjustment; pending receipt of her entitlement, the de facto husband be restrained from further encumbering the three subject properties; the de facto husband pay $47,555.15 to the de facto wife by way of lump sum spousal maintenance; declarations pursuant to s 90SL for each party to retain their existing interests in the property they have power, possession or control over; and a superannuation splitting order of $173,450.50 in favour of the de facto wife.

The de facto husband sought relief proposing that the de facto husband pay $300,000 to the de facto wife by way of property adjustment; the dismissal of the de facto wife’s spousal maintenance application.; and declarations pursuant to s 90SL for each party to retain their existing interests in the property they have power, possession or control over.

Issue:

Whether the parties’ respective contributions warrant an adjustment (if any) of their existing property and superannuation interests (‘the property pool’) and, if so, how that adjustment should be achieved.

Applicable law:

Family Law Act 1975 (Cth) s 90SM - provides that in property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:

(a) in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or

(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;

including:

(d) an order requiring:

(i) either or both of the parties to the de facto relationship; or

(ii) the relevant bankruptcy trustee (if any);

to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 190 - provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

(a) according to law; and

(b) as quickly, inexpensively and efficiently as possible.

Benson & Drury [2020] FamCAFC 303 - provides that the central question raised by this appeal is how a judge takes into account the contributions of one party, found to have been made significantly more arduous by the conduct of the other, when assessing contributions under ss79(4)(a)-(c) or ss 90SM(4)(a)-(c) of the Act.

Bevan & Bevan [2013] FamCAFC 116 - provides that the Court may rely on the factors set out within s 90SM(4) of the Act to inform its inquiry about the justice and equity of making property adjustment orders pursuant to s 90SM(3) of the Act.

Fields & Smith [2015] FamCAFC 57 - provides that the task is to consider the contributions holistically over the whole period from the commencement of cohabitation to trial, and the analysis requires the Court to weigh all of the contributions of all types prescribed by section 79(4) (s90SM (4) for my purpose) made by both parties across the entirety of the relationship until the time of Hearing, including the post-separation period.

Grier & Malphas [2016] FamCAFC 84 - where the trial judge adopted a broad-brush approach to the parties’ respective expenditure.

Hall & Hall [2016] HCA 23 - described the “gateway” requirement for consideration of a spousal maintenance application to be s 74.

In the Marriage of Weir (1992) 16 Fam LR 15 - provides that parties have an obligation to make full and substantive disclosure of their financial affairs.

Koch & Kest [2021] FamCA 408 - provided that it is necessary, in support of the contention that the contributions were rendered more arduous, to establish the incidence and effect of family violence and, as was said in Keating at [39], “an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make the relevant contributions”.

Pierce v Pierce [1998] FamCA 74 - provides that it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contributions.

Stanford v Stanford [2012] HCA 52 - held that there is a legislative pathway that the Court should follow and in doing so, the Court is obliged not to assume the parties’ rights to or interests in property should be different from those that now exist or that a party has the right to have the parties’ property divided in accordance with the statutory considerations.

Wallis & Manning [2017] FamCAFC 14 - provides that in assessing each party’s contributions, the length of the relationship is important, particularly when it is evident that capital contributions made early are a dominant feature of the assessment.

Analysis:

Both parties are capable of financial dishonesty which (at times) informed the weight that I gave to their evidence.

The wife was unnecessarily argumentative when asked questions about her son’s AA Bank account and her control over the account despite it not being in her name. Time was wasted on a line of questioning that was going to lead to the inevitable conclusion that the de facto wife had control of that account which contained funds directly attributable to the parties’ de facto relationship and this was ultimately conceded by the inclusion of the account in the joint balance sheet.

The husband engaged his current solicitor in October 2021 and had additional time to finalise his trial material because of his failure to comply with not one, but two sets of court orders regarding trial preparation. Despite this, the de facto husband’s latest financial statement filed on the Friday before the hearing was incomplete (on his oral evidence), with the potential to mislead.

The de facto wife submitted that a global approach be adopted with a consequential adjustment of the non-superannuation property pool in her favour of 25% and an equalisation of the parties’ respective superannuation interests to reflect the different contributions made pursuant to s90SM(4) (a) – (c) and the matters raised by 90SF(3).

The de facto husband submitted that a “two pool” approach be taken and that the payment of $300,000 to the de facto wife would reflect about a 10% adjustment of the property pool. Whilst the de facto wife made no significant direct financial contributions to the three properties, she did make other contributions towards the properties as she paid weekly ‘rent’, took on various administrative roles to support the ongoing tenancies of the three properties, carried out works to improve the H Street, Suburb J home, carried out maintenance at the D Street, Suburb E property, attended the F Street, Town G property on at least one occasion to clean up after a tenant had vacated the property, and continued to assist with the rental management of the three properties after moving to the farm.

The parties did not hold or acquire property in joint names. However, during the course of the relationship, their finances were intermingled insofar as, for example, they used the de facto husband’s rental income (deposited into CC’s account and otherwise called “the holiday account”) to pay for their travel.

Conclusion:

No later than 5 July 2022, MR LAPHAM (‘the de facto husband’) should pay to MRS LAPHAM (‘the de facto wife’) the sum of four hundred and eleven thousand, six hundred dollars ($411,400) by way of Joplin Lawyers Trust Account BSB.

In the event the de facto husband does not make the payment to the de facto wife in accordance with Order 1, the de facto wife is appointed as the sole trustee in relation to the sale of the properties at D Street, Suburb E (title reference ...), F Street, Town G (title reference ...) and H Street, Suburb J (title reference ... ) all in the State of New South Wales (‘the properties’).

Payment is ordered to the de facto wife an amount representing 15% of the property pool (including superannuation) by way of Joplin Lawyers Trust Account BSB ... Account ...87 plus any interest calculated from ninety (90) days from the date of the Orders until payment is received and to the de facto husband, the remainder of the balance.

The de facto husband is restrained and an injunction shall issue prohibiting him from further encumbering the mortgages on the properties at D Street, Suburb E, F Street, Town G and H Street, Suburb J all in the State of New South Wales until Order 1 or Order 2 is complied with . No later than 12 April 2022, the de facto wife receive the sum of forty seven thousand dollars ($47,000.00) from the joint monies held with Joplin Lawyers Trust Account.

Except as otherwise set out in these Orders, the de facto wife shall be solely entitled, to the exclusion of the de facto husband to all other property both real and personal in her ownership, possession and/or control. The de facto husband shall be solely entitled, to the exclusion of the de facto wife, to all other property both real and personal in his ownership, possession and/or control. Each party hereby forgoes any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these orders. 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.

#SpousalMaintenance

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