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In this Federal Circuit and Family Law case we look at a case which involved a spousal maintenance application by the wife and how a Judge treated the wife’s expenses. It provides some interesting tips for spousal maintenance Applicants.
Facts
The parties involved had less than 2 years de facto relationship and had one child of the relationship born in 2021. The de facto wife was the primary carer of the child and the child spent some limited time with the de facto husband 3 nights in a fortnight. Both parties had professional jobs and the de facto wife had disclosed that she had various medical issues.
The de facto wife sought lump sum and periodic maintenance from the de facto husband. She argued that she was unable to adequately support herself while the child was under her care, and having health issues, which both factors would have an impact on her income.
The de facto husband opposed her request and argued that her expenses in her financial statement were not supported by evidence or sufficiently explained.
The de facto wife had filed four previous application for spousal maintenance between October 2021 and April 2023. The first application filed resulted in a payment to the de facto wife of $30,000 by consent. The second application have been dismissed due to lack of documentation; The third application was withdrawn as both parties wanted to go through mediation and the fourth application was amended by her current application.
Primary judge’s decision
There was no issue to whether the defacto husband could pay maintenance to the de facto wife, as he earned a significant income hence the issue was to what extent the de facto wife required the maintenance.
The primary judge, J Jenkins found the disclosed expenses of $1,348 by the de facto wife was reasonable. J Jenkins also found that that there was a deficit of $586 between the de facto wife’s income and expenses. However, the court considered that the defacto wife appears to be able to adequately support herself following the separation without the financial support from the de facto husband and that J Jenkins held that the evidence presented in court did not suggest that the de facto wife was at “subsistence levels” (a standard of living barely adequate to support life or a level of income that provides only enough money for basic needs).
J Jenkins also reiterated that the Court has no obligation to ensure that the de facto wife maintains the same standard of living that she previously enjoyed during the defacto relationship.
J Jenkins also found that the de facto wife reduced her working days and hence was not satisfied that she is exercising her true earning capacity.
J Jenkins was not satisfied as to the need of spousal maintenance in situations where the de facto wife appeared to have adequately supported herself after the separation without financial support from the de facto husband.
Hence the de facto wife’s application for maintenance was dismissed.
The de facto wife applied for an appeal (Review of this decision).
Appeal (Aldridge’s decision)
The Appeal court set aside J Jenkins’ decision.
It seems that the primary judge had failed to consider the de facto wife’s previous standard of living that she enjoyed during her de facto relationship when assessing her reasonable needs and that the reasonable needs of the de facto wife are not limited to subsistence level.
Justice Aldridge observed that the Appeal Book consisted of 1951 pages, including extensive affidavits by both parties. That evidence includes 648 pages of invoices, apparently in response to the respondent taking issue with the costs of the appellant’s claimed household supplies, clothing, shoes, cleaning and other necessary commitments.
The Appeal court was very critical of this approach by the Respondent. It held
“The approach of the parties, particularly it seems the respondent, in requiring precise proof of many ordinary everyday expenses when his expenses for the same were over four times as high, does not appear to be in accordance with their obligation under s 67 and s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCA Act”) to conduct the proceedings according to law and as quickly, inexpensively and as efficiently as possible. The evidence in what is supposed to be a summary procedure was more extensive than in some final property hearings. This approach is not to be encouraged.’
Justice Aldridge found that J Jenkins did not include rent in the expenses of the Wife because the appellant was living with her family and although it would be reasonable for her to have her own premises, she was not satisfied that the appellant “actually intends to rent a property” (at [41]). It followed that the application for lump sum maintenance for a bond and the first six weeks’ rent was also refused.
After finding that the appellant’s expenses exceeded her income by $586 per week, the primary judge noted that the appellant was able to support herself without increasing her liabilities since 2 February 2022 (at [27]).
Aldrige J was critical of J Jenkins’ approach who held that:
I also accept the [appellant] says that she has been cutting down her expenses, and that there are various items she has been unable to afford, but her evidence does not suggest she is at “subsistence level” as per Brown nor is the Court obliged to ensure she maintains the same standard of living that she previously enjoyed during the relationship.
This led to the finding that “the [appellant] appears to have been able to adequately support herself without additional support since February 2022” (at [29]).
Justice Aldridge found that there were a number of difficulties with these passages. Aldridge held at 25:
‘First, the primary judge is asking whether the appellant could adequately support herself at the time of the hearing. The answer to that question was ‘no’, because of the finding that her income, at the time of the hearing, fell well short of her expenses, none of which was rejected as unreasonable. How she had been able to manage previously was only indirectly relevant, if at all, particularly when the primary judge accepted that the appellant had reduced her expenses.
It was submitted by the respondent that the finding of the deficit was just the start in the reasoning process which culminated in the global finding that the appellant could adequately support herself because she had been managing to do so for some time without incurring debt. If that is so, the primary judge must have rejected the claims for expenses that gave rise to the deficit or not accepted the evidence of the appellant that these were, in fact, her expenses. If that was so, her Honour did not say so and there would appear to be an absence of relevant reasoning.
Secondly, however, the section focuses on the needs of the applicant for spousal maintenance. Whilst adequate needs can often be inferred from a person’s expenses, such expenses may not extend to reasonable needs. A person with no income and who cannot pay any expenses, still has need.
‘what are assessed to be ‘reasonable needs’ are to be assessed having regard to the parties’ previous standard of living. This was confirmed in Brown and Brown [2007] FamCA 151; (2007) FLC 93-316 where the Court said (at 81,455):
‘Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable.’
His honour found at 31:
‘Fourthly, the only sensible reading of [28] is that the appellant failed because she had not hit subsistence level. Reasonable means reasonable in all of the circumstances, not subsistence (Evans and Evans [1978] FamCA 23; (1978) FLC 90-435; Bevan and Bevan [1995] FamCA 95; (1995) FLC 92-600 and Mitchell and Mitchell [1995] FamCA 32; (1995) FLC 92-601).’
The other ground that was argued was that the Wife was not fully exercising her earning capacity by working for three days a week and not four.
The appellant’s evidence was that she had reduced her work to three days a week because of the stress of the proceedings and the need to preserve her health for the sake of the child.
Assuming that the primary judge was entitled to reject that evidence, what was the consequence? His honour Aldridge J found that:
‘The appellant’s Financial Statement showed her income from employment as $762 per week. If that is for three days as the evidence suggests, then it is a reasonable inference that the daily rate is $254. Working a fourth day would see that sum earned in addition to the existing $762, but it would not cover the shortfall. Taking it into account the appellant’s expenses would still exceed her income by $314 a week and the appellant would still be unable to support herself.’
If you want to discuss your spousal maintenance case with an expert Melbourne Family Lawyer, please contact Rowan Skinner at our office on 9995 9155. We also service clients in Melbourne Northern Suburbs, such as Northcote, Alphington, Carlton, Fitzroy, North Fitzroy, Kew and Heidelberg.
Qin & Donato [2023] FedCFamC1A 223 – Full Court (Aldridge)
https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FedCFamC2F/2023/1214.html
Rowan Skinner is a highly skilled family lawyer with over 35 years of experience across various legal roles and jurisdictions. Rowan specialises in resolving family law disputes such as divorce, financial settlements, child custody and domestic violence cases. Through his diverse and extensive experience, Rowan has a deep understanding of the complexities and nuances involved in family law. Rowan is a skilled negotiator and litigator who follows a compassionate and client-focused approach which prioritises helping you navigate what can be an emotional and challenging time.
