Maintenance claims – “I know my ex was paid a lot when we were together”

If a party can establish that they have the need for maintenance, the Court must then assess whether the other party (“paying party”) has the capacity to support them.

When the paying party is employed

The obvious consideration for the paying party’s capacity to pay maintenance is their income. If they are an employee, then usually it is a matter of considering their payslips, employment contract and their tax documents.

If the paying party is a sole trader, a closer attention will likely need to be paid to their income tax returns both before and after separation to determine their earning capacity.

For example, if a sole trader frequently travels or takes extended breaks from work post-separation, resulting in reduced income, it would be essential to consider the paying party’s taxable income over several years to determine what their actual income earning capacity is.

When the paying party is ‘unemployed’

In more complex cases, where the paying party says he or she is “unemployed” or has “no income”, the Court does not necessarily take those statements at face value.

In Hall & Hall (2016), the Court held that the paying party’s capacity to pay maintenance is assessed not only on their current income, but after an assessment of the paying party’s property, financial resources and earning capacity.

For example:

• In Brewer & Brewer (2018), the husband resigned, citing medical reasons. The Court held that his medical condition did not justify his resignation, and therefore assessed his ability to pay maintenance based on his earning capacity not what he was earning at the time of the application.
• In Seden & Kehoe (2020), the husband said he had no income but he was a beneficiary of a testamentary trust worth $11,700,000.

The Court held that the husband had a reasonable expectation of receiving distributions from the testamentary trust, or receiving other monies by way of gift or loan if he requested them from his family. On this basis, the Court made an order for maintenance.

To determine whether a person has a reasonable expectation of receiving distributions from a testamentary trust, it is essential to consider the structure and history of the trust, how it fits within the business group and the benefits which the person has already received from such a trust.

In Seden the Court found that the husband had previously received distributions from the trust and he was on good terms with his mother (who was part of the company’s board). The Court concluded that, had the husband made a request to the corporate trustee for a distribution, he would have received it.

• In Maroney & Maroney (2009), the Court held that a maintenance entitlement can be paid from a capital or borrowings against assets.
• In Goncharova & Goncharova(2021), the husband was unemployed. The Court husband was ordered to pay the wife $55,000 as an interim lump sum maintenance (in addition to $180,000 as partial property settlement). The Court held that if the husband failed to make these payments, then the property in which he was residing was to be sold to meet these obligations.

Main takeaway

Deliberately ceasing work or reducing the working hours will not remove the person’s obligation to support their spouse, as the Court can look at the paying party’s income, earning capacity, their financial recourses and property (and ability to borrow against such property, if necessary).

Disclaimer

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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