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Spousal maintenance

Interim spousal maintenance – Applicant wife working part-time and caring for two children – Respondent had capacity to pay, where he had redrawn loan facility and controlled a trust – Capital of a trust not “sacrosanct” and can be applied to meet a spousal maintenance order

In Noble [2014] FCCA 421 (7 March 2014) Judge Brown considered an application for interim spousal maintenance where the applicant wife worked part-time and earned “$349.00 per week by way of wages [and received] social security and rent assistance to the value of a further $354.00 per week” (para 47). She was the primary carer for the children who spent alternate weekends and mid-week time with the father (para 6). The husband paid $185.00 per week child support such that the wife had “coming into her household in gross terms a sum of $888.00 per week” (para 48). She claimed recurrent expenses of $1,096 per week, none of which “appear exceptional, exorbitant or inherently unreasonable” (para 50).

The husband said “his expenditure in total comes to around $1,504.00 per week and his income to $1,511.00 rendering it impracticable for him to make any payment of spousal maintenance to Ms Noble” (para 56).

Judge Brown said that “the wife does not quibble with the husband’s various expenses apart from one discrete issue which relates to the Trust” (para 57). That being that upon a sale of a property, the husband “used $194,000 [of sale proceeds] to pay out the funds owing on [a] mortgage … on the former matrimonial home … [but then] drew back these monies of $185,000 against the home loan facility” (see para 61). The Court said (from para 62):

“It appears to be the case that the mortgage payment made by the husband in the sum of $256.00 per week, services the redraw of the (omitted) Bank mortgage. It is the wife’s position that the redraw was not necessary and therefore, ipso facto, it demonstrates that the husband has the capacity to meet her application for spousal maintenance.

[65] What happened to this sum of $185,000.00 is not specifically stated [in his solicitor’s correspondence, however] it is suggested that the sum was paid into the Trust, leaving a balance which was similar to that which prevailed on 30 June 2013. As such it was said the transaction “was for an appropriate purpose, which does not adversely affect your client, as the net overall position remains the same.”

The Court continued (from para 81):

“I accept that the liability to the (omitted) Bank exists and the husband must pay it. However, it is unclear to me whether if the monies had remained outstanding to the Trust, the husband would have been liable to pay interest at market rates. As I say, I have not been provided with any specific loan agreement.

[82] It is also unclear to me as to what was the husband’s specific rationale for re-drawing the monies available from the (omitted) Bank. To my mind, the reason provided namely that the loan facility would be closed, does not appear to be a particularly compelling one in the circumstances of the case. However, I concede that this issue has not been examined in detail.

[83] In addition, there has been no detailed examination of the affairs of the Trust. It is conceded that it controls assets of significant value and these are available to the husband. However, the nature of its loss relating to the property at Property N is un-delineated. Does the property generate any income? How is the apparent shortfall met by the husband? These questions remain outstanding.

[84] At the end of the day, pending trial, the amount of maintenance sought by the wife is around $6,600.00. I fear that the parties have expended more monies than this arguing about it. …”

Judge Brown said (from para 100):

“In Kiesinger & Paget [[2008] FamCAFC 23 at [26]-[27]] the Full Court said:

‘In our view, the concluding words of s 72(1) direct attention to each of the provisions of s 75(2) which the Court, in the exercise of the wide discretion conferred by s 74, considers relevant in determining whether or not a spouse is able to support himself or herself adequately. The reference is not merely, for example, to s 75(2)(b) which directs the court to consider the “income, property and financial resources of each of the parties …” The Court would be entitled, for example, to have regard to s 75(2)(j), which directs the Court to consider “the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party”.

In our view, it was well open to her Honour to consider that the stark imbalance in the capital resources of the husband and the wife after a lengthy relationship was a relevant consideration in determining that the wife was entitled to look to the husband for periodic support pending the final hearing, rather than having to deplete her investments, which represented only a minute proportion of the wealth of the family.’

[103] … Ms Noble is engaged in the paid workforce. She is also studying. The evidence indicates there is a shortfall between her income and her recurrent level of need. In these circumstances, although she has got by up to this stage, I do not consider that she is currently able to support herself adequately.

[109] In my view, the evidence which indicates that Mr Noble’s expenses and income come close to equilibrium is not the end of the matter. Rather, the court as best it can, is required to conduct an objective assessment of his overall financial circumstances to determine whether it is reasonable that he provide some form of interim recurrent financial support to Ms Noble.

[110] In this regard, it is highly relevant that Mr Noble controls a trust with assets of around one million dollars in value. As such, his financial resources must be considered to be grossly disproportionate to those of Ms Noble. This is putting aside the uncertainty regarding the circumstances surrounding the re-drawing of the (omitted) Bank mortgage funds, in preference to those available from the Trust and the lack of clarity regarding the Property N investment.

[111] In this context, the considerations engaged by section 75(2)(b) are highly relevant. The property and financial resources controlled by Mr Noble are far superior to those available to Ms Noble who is living in rented accommodation whilst claiming social security benefits.

[112] In my view, as was indicated in Kiesinger & Padget, the imbalance in capital resources of the parties is a relevant consideration in determining whether it is proper that an award of spousal maintenance be made particularly for a defined period of time pending final hearing.

[113] In all these circumstances, I consider that it is reasonable that Mr Noble provides a recurrent form of maintenance to Ms Noble for her personal support. In addition in my view, given the very different financial circumstances, it also proper in the sense of what is correct and in conformity with societal norms that spousal maintenance be assessed.

[114] Mr Noble has indicated through his counsel that the only means by which any award for spousal maintenance can be satisfied is through the capital resources of the Trust. I accept that this is so. However, in the context of these proceedings, particularly the likely extent of the order in question and given its potential quantum, that the capital of the Trust cannot be regarded as sacrosanct in this regard.”

An order was made for the husband to pay interim spousal maintenance of $200 per week.

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