High Court rules no maintenance for wife

High Court rules no maintenance for wife

Hall v Hall [2016] HCA 23 (8 June 2016)

The following is annotated.

Family law – Family Law Act 1975 (Cth) – Spousal maintenance – Conditions for making or discharge of interim spousal maintenance orders – Interim spousal maintenance order in favour of wife – Application to discharge by husband – Where wife’s father’s will expressed wish that wife receive voluntary annual payment from family business controlled by wife’s brothers – Meaning of “financial resources” under s 75(2)(b) – Whether confined to present legal entitlements – Whether finding open on evidence that wife able to support herself adequately – Whether just cause for discharge of spousal maintenance order.

Courts and judges – Procedural fairness – Whether party on notice of possibility of factual finding being made – Whether party denied opportunity to lead further evidence.

Words and phrases – “financial resources”, “source of financial support”, “support himself or herself adequately”.

The conclusion was correct

49. The Full Court’s finding that the wife would have received the annual payment of $150,000 from the Group if she had asked her brothers for that payment led directly to the Full Court’s conclusion that just cause had been shown for the discharge of the interim spousal maintenance order, on the basis that the evidence demonstrated that the wife was able to support herself adequately and that the threshold requirement of s 72(1) therefore was not met.
50. To the extent that the wife’s challenge to that conclusion is that the Full Court’s finding of fact did not demonstrate that the wife was able to support herself adequately, the challenge has an air of unreality. Having found that the wife would have received the annual payment from the Group if she had asked her brothers for that payment, it was unnecessary, and would have been wholly inappropriate given the paucity of the evidence before it, for the Full Court to attempt to form any subsidiary conclusion as to the detail of the timing and mechanics of any such payment.
51. The burden of the wife’s challenge is to the conclusion that the Full Court’s finding that the wife would have received the annual payment from the Group if she had asked her brothers for it was not of a fact which fell within any of the matters referred to in s 75(2), relevantly in either s 75(2)(b) or s 75(2)(o), with the consequence that the fact found was incapable of being factored into the s 72(1) analysis. That aspect of the challenge must also be rejected. The finding was of a matter within both s 75(2)(b) and s 75(2)(o).
52. The wording of s 72(1), it has been noted[18], seems to imply that each party should attempt to support himself or herself where that is reasonable having regard to the matters referred to in s 75(2).
53. The matters referred to in s 75(2)(b) are matters which bear on the practical ability of one party to support the other, and of the other party to support himself or herself. Hence the concluding reference is to the matter of “the physical and mental capacity of each of them for appropriate gainful employment”. Hence also the opening reference to the matter of “the income, property and financial resources of each of the parties” cannot be confined to the present legal entitlements of the parties.
54. The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”[19]. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation[20].
55. Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
56. Here, on the Full Court’s finding of fact, the annual payment from the Group was a financial resource of the wife so as to be a matter within s 75(2)(b). The payment was available to her if she asked for it. The availability of the payment was the subject of specific provision in the father’s will. The making of the payment was at least a moral obligation of the wife’s brothers, who were in any case well-disposed towards her.
57. Section 75(2)(o) plainly extends to any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account as showing that a party to the marriage is or is not able to pay spousal maintenance or is or is not able to support himself or herself. The paragraph has accordingly long been correctly interpreted by the Family Court as permitting consideration by a court of “all of the financial matters which are relevant to [a] particular case”[21]. Nothing in the language or structure of s 75 prevents a fact or circumstance which falls within s 75(2)(o) being also a fact or circumstance which gives rise to a matter under another paragraph of s 75(2), including s 75(2)(b).
58. Because it bore centrally on the ability of the wife to support herself adequately, the availability to the wife of the annual payment from the Group was also a fact or circumstance in respect of which it was open to the Family Court to form the opinion that the justice of the case required that it be taken into account. The analysis of the Full Court shows that it formed that opinion. There was thus, in addition to a matter within s 75(2)(b), a matter within s 75(2)(o).

Order

59. The appeal should be dismissed with costs.

60. GORDON J. The Full Court of the Family Court of Australia discharged an interim spousal maintenance order in favour of a wife (“the ISM Order”) by inferring “from the evidence”, and finding, that “if requested, the wife would receive that benefit“[22] (emphasis added). The “benefit” was the “wish” of the wife’s late father that the wife receive an indexed annual payment of $150,000 net of income tax from the V Group, a group of companies the father controlled. The wife’s father died in 2009. The wife and her husband separated in September 2013. After her father died, the wife did not learn of her father’s “wish” for more than four years and never received the so called “benefit”. For the reasons that follow, it was not open to the Full Court to draw the inference and make the finding. The Full Court should not have discharged the ISM Order.
61. The spousal maintenance provisions of the Family Law Act 1975 (Cth) (“the Act”), the history of the proceedings before the primary judge and of the application for leave to appeal to the Full Court and a summary of the issues in the appeal to this Court are set out in the reasons for judgment of the other members of the Court.
62. It is unnecessary to repeat or amplify that analysis except to the extent necessary to explain why these reasons for decision reach a different conclusion on the second issue in the appeal to this Court – whether the Full Court correctly discharged the ISM Order based on that single inference and finding.

Conclusion

90. For those reasons, the inference and finding were not open “from the evidence”. The inference and finding were the sole basis for the Full Court concluding that the wife was able to support herself adequately. As a result, the appeal against the refusal of the primary judge to discharge the ISM Order should have been dismissed.
91. Consistent with authority, the “financial resources of each of the parties”[36] are not confined to the present legal entitlements of the parties and extend to include “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”[37]. However, it cannot be said that the father’s wish (for an annual payment to the wife, which had not been effected by the brothers or the V Group in the more than four years since the father’s death) was a source of financial support which, if the wife requested, the wife could reasonably expect would be available to her to supply a financial need.
92. Her father (by the will) asked that an annual payment be made to the wife, but it had not been made. The wife had no right to a payment. Why would the wife asking for a payment be more pressing and persuasive than her late father’s formally recorded wish? In the face of unwillingness by the brothers even to provide the will to the wife, there is no basis to infer that the wife’s request would probably tip the balance.