Spousal Maintenance is possibly one of the most expensive applications in terms of legal costs and often commented upon by Judicial Officers as the cost being higher than the gain. One such saga played out recently in the matter of Raymond & Raymond.
The first round of those proceedings, Raymond & Raymond [2023] FedCFamC2F 1396, came before Judge Carty in Division 2 of the FCFCoA on competing interlocutory applications where the Husband sought to restrain the Wife’s solicitors from acting and the Wife sought an Order for interim spousal maintenance. The Husband’s application was dismissed and the spousal maintenance aspect was heard. Both parties were relatively young at 45 (H) and 40(W) but, notwithstanding this, had been in a relationship of 20 years which produced 4 children, 3 of whom were under 18 years of age at the time of the hearing. 18, 17, 15, 5. One of the children had special needs and received assistance by way of an NDIS plan.
There was a modest pool of assets, the total of both non-super and super being around $525,000. The hearing was initially allocated a 2 hour slot but ultimately took some 2.5 days and included cross examination, with both parties represented by solicitor and counsel. Prior to separation the parties had been income splitting from a company that they owned/operated. Post separation the husband set up a new company and essentially stripped the assets from the prior company and moved them to the latter, thereby cutting the wife off both financially and in terms of access to financial information. The husband was also not paying any child support other than school fees for one of the four children. On 23 October 2023 the Husband was ordered to pay the Wife $685pw and the Court raised concerns as to the cost v benefit analysis.
The next round – the Husband was unhappy with that outcome, for many reasons. He filed an appeal and the matter came before Austin J, as a single Division 1 Justice on 28 March 2024 and again both parties were represented by solicitor and counsel. The appeal was successful, in part, because at the initial hearing the Judge had under calculated the Husband’s income tax and so he had less available funds with which to pay the ordered spousal maintenance. However, in another inexplicable decision the refused the option of Austin J re-exercising discretion and insisted on a re-hearing. His Honour noted, at p69 of his judgment:
The error made by the primary judge could easily be corrected by the re-exercise of discretion, taking into account the proper amount of tax the husband would incur on future income. However, the husband refused to take that course, insisting on his right to adduce updated evidence (Allesch v Maunz (2000) 203 CLR 172 at 183 and 191–192), which he did not have available for use at the appeal hearing. Accordingly, subject to variation as to the amount payable in the interim, the periodic spousal maintenance order (Order 3(b)) is set aside and the wife’s application for periodic spousal maintenance is remitted for rehearing.
The Husband was Ordered to pay the Wife $545pw as in interim measure and the matter was then remitted for re-hearing.
The final round – the matter then came before Judge Kearney on 26 June 2024 with the Husband now self-represented. By this time another of the children had attained the age of 18 years and so only two remained minors. The Wife had also vacated the former family home, of which she had previously been granted sole occupation, and that property had now been sold, with settlement due the week of the hearing. The Husband sought that if the Wife was to receive any spousal maintenance at all then it should be capitalised and paid as a non-characterised lump sum from the sale of the property. The decision of the Court was to effectively reaffirm the decision of Austin J and require the Husband to pay to the Wife the sum of $545pw.
It is unclear if either party sought an Order for costs, although costs had been reserved, or any information as to the amount incurred by the parties but one would imagine that with solicitor and counsel available for at least 4 Court days then those costs would likely be in the vicinity of $35,000 for each party.
In other circumstances the Court may choose to Order an amount by way of lump sum spousal maintenance, even as part of a fleet of Final Orders, as in Manetta & Casano [2024] FedCFamC2F 1133, although the facts of this case were quite complex and, unusually, involved a lot of addbacks.
The Husband had been unco-operative throughout the entirety of the proceedings and appeared self-represented at the final hearing, some two years after the Wife had commenced proceedings. The final hearing had already been adjourned once to enable the Husband to obtain legal representation, which he did not do. The Husband did not file any trial documents and had not provided full and frank financial disclosure, making the task of finalising a Balance Sheet quite difficult. The result of all of this non-compliance was that on the adjourned date the hearing proceeded with only the Wife’s evidence. But for the Husband’s eventual attendance at Court, late on the first day of the hearing it would have been an undefended hearing. Once in attendance the Husband applied for a further adjournment, which was denied. After the hearing commenced the Husband was afforded short adjournments throughout the day to prepare his case and cross-examination of the Wife and after only perhaps two hours of Court time the matter was adjourned to the following morning.
The Husband was again late to Court on day 2, and so the Wife’s Counsel commenced final submissions which were coming to a conclusion when the Husband arrived at 10.43am. He then responded to those submissions and sought leave to re-open the evidence so that he could cross-examine the Wife. That application was refused.
The parties had accumulated a significant asset pool of approximately $6.7 million. However, that was the best that the Court could do by way of a Balance Sheet because of the Husband’s failure to make full and frank disclosure and engage in the proceedings.
The Husband was an extremely high earner, at times well over $1m per annum, and there had been interim orders in place for him to pay spousal maintenance, school fees and child support, much of which he simply did not pay or disposed of joint assets to do so. Unusually, the Wife sought that these amounts be included on the Balance Sheet as an addback, a notional asset to which the Husband had already had the benefit as he had divested himself of assets post separation where he had the ability to pay those amounts from his post separation income. The total amount, including both paid and arrears, totalled $231,459 (including more than a year of child support arrears in the amount of $59,618.81) at the time of the hearing. The calculation of that amount was a little complex. It included amounts already paid, arrears resulting from the previous Interim Orders for spousal maintenance and school fees, and paid arrears of child support by way of a lump sum resulting from previous Orders. The Wife’s argument was that to not do so would mean that she would in effect be contributing a percentage to those amounts that she had or was to receive given that there would have been an increased asset pool if the husband had not divested himself of assets. The Court accepted this argument and included this notional amount on the Balance Sheet.
The Wife also sought Orders in respect of both a capitalisation of future child support to be paid as a lump sum, and future school fees, on the basis that the Court could have no confidence that the Husband would meet his child support obligation, The Court agreed in respect of school fees but the Wife was unsuccessful in respect of a capitalisation of future child support.
Interestingly, in what may or may not have been an error, having ‘added back’ the child support arrears the Court then did not make an Order for the Husband to pay those arrears but rather left it to the Wife to seek enforcement through Services Australia – hopefully the Wife quickly applied to Services Australia for a charge against any monies that the Husband was to receive by way of property settlement.