Family law: March 2022

SPOUSAL MAINTENANCE

Consent order (made as part of property orders) that husband pay wife’s mortgage could only be a maintenance order

In Thorpe & Stirling [2021] FedCFamC1A 86 (15 December 2021) the Full Court (Aldridge, McEvoy & Altobelli JJ) allowed an appeal from a decision of Judge Kemp where a final consent order required the wife to sell a property and provided that she receive $430,000 of the sale proceeds on the basis that the husband would be guarantor and pay mortgage payments on a future loan of up to $500,000.

The order provided that the husband would continue to pay the mortgage until its loan balance was discharged. The husband refused to pay after the wife re-married, contending that the order was a spousal maintenance order that had no effect upon re-marriage per s 82(4) of the Act.

Considering the order (‘Order 36’), the Full Court said (from [20]):

‘ … [T]he husband’s liability under the mortgage remains until it is paid out. … [T]hat liability could … exceed what the husband otherwise received under the … orders …

[26] … [P]roperty, as defined, is limited to existing property, whatever it may be (Stanford v Stanford [2012] HCA 52 … ), and does not extend to property that might be received in the future … [Section 79] does not empower the Court to make an order against property which does not presently exist but could be brought into existence by the exercise of borrowing capacity …

[36] … [H]is Honour found … the husband’s obligations under Order 36 “were likely to be paid out of the husband’s future income stream including his receipt of any … bonus payments” …

[37] Order 36 does not work an alteration of the interests of the parties in their property but rather creates an obligation which is separate to the division of that property.

[38] … [T]herefore, that Order 36 could not be an order made under s 79 of the Act …

[45] … Order 36 can be seen as being made as a spousal maintenance order …’