A recent family law case in which a multi-millionaire was ordered to pay for mobility upgrades to his ex-wife's home has highlighted the importance of carefully drafting spousal maintenance documents.
The Family Court ordered the man to pay $120,000 for upgrades to the home of his wheelchair-bound ex-wife, plus increase their spousal maintenance arrangement from $500 to $3000 per week. The decision was made a full nine years after the couple's divorce and asset settlement.
Although the couple separated in 1998 and formally divided their assets in 2000, the Family Court ruled in favour of the ex-wife's 2009 application for additional funds.
Jodylee Bartal, a Senior Associate in Lander & Rogers' Family & Relationship Law group said that "one of the reasons why the application was successful relates to the open ended nature of the original spousal maintenance agreement. This left the door open for the ex-wife to bring a new application for ongoing support based on her deteriorating medical condition".
When making the decision, the court took into account the ex-wife's deteriorating medical condition and the significant assets acquired by her former husband following their divorce.
The court heard that after their modest divorce settlement in 2000, the ex-husband received $5 million in redundancy payments and $4.7 million in superannuation. The ex-husband then remarried and purchased 'significant' investment properties in the name of his second wife. He also took on a new role that paid $1.7 million per year, and by 2011 his total taxable income was $5.8 million.
"When assessing new applications for ongoing support, the Family Court applies a two-part test. Firstly, the person making the application must establish a need and secondly, the respondent must have capacity to pay. In this circumstance, both were evident" said Jodylee.
"Another contributing factor to this case seems to be that the ex-husband didn't make a full financial disclosure" she added.
The fact that the ex-husband's appeal was wholly unsuccessful also meant that he was ordered to pay all of the ex-wife's costs of the proceedings which exceeded $330,000.
Craig Henderson, Co-Head of Lander & Rogers Family & Relationship Law group, said "In most cases it is possible to fully and finally resolve a former couple's spousal maintenance obligations. Due care needs to be taken in drafting settlement documents so as not to leave the door open for further applications. There are however, certain circumstances in which this may not be possible, particularly in cases where a party is in receipt of an income tested pension, benefit or allowance.