Wife set to receive $16,500,000 from her late father, asks for spousal maintenance from her wealthy builder ex-husband, High Court of Australia says NO.

On 8 June 2016 the High Court of Australia handed down its judgment in the case of Hall v Hall [2016] HCA 23. In this case the wife Mrs Hall appealed from the Full Court of the Family Court that her husband did not have to continue to pay spousal maintenance as had been determined by the lower Court because her late father had expressed a wish that the wife receive a voluntary annual payment from the family business which was controlled by the wife’s brothers. Legal Judgement

Spousal Maintenance is not an automatic right

Spousal Maintenance is the payment by one party of the marriage or relationship to the other party upon the separation of the relationship or marriage. However, where parties separate, spousal maintenance is not an automatic right, there are two criteria that needs to be satisfied before spousal maintenance, is even considered.

First criteria to be considered

The person seeking spousal maintenance must show that they are unable to support themselves because they have no employable skills, they are incapacitated or they are taking care of the children of the marriage or de facto (includes same-sex) relationship. In order to prove that a person is unable to support themselves they must show evidence to the Court or their ex-spouse or partner of this “need” criteria. Only if the Court is convinced that there is a need, does it then move to the second criteria.

Second criteria to be considered

If it is shown that one party of the marriage or relationship has a financial need, then the “liable” person has to have the financial capacity or ability to meet the needs of their ex-spouse or partner.

The central issue in Hall v Hall

The central issue in Hall v Hall was whether Mrs Hall had a financial need, given that her late father had given some consideration to her in his will. The primary judge had found that Mrs Hall had a financial need and that Mr Hall, who was a property developer, had the capacity to pay her $10,833 per month until the property matters were resolved. Mr Hall appealed the decision and argued that the wife had a financial resource being that the wife’s father left her payments under his Will. Mr Hall argued that although the payment that Mrs Hall was to receive was voluntary, she would have received the monies if she had asked her brothers for it.

The reason behind this was:

1. The Wife’s late father in his Will had indicated that the Wife should receive $16,500,000 on one of the earliest of the following events occurring:

(a) She is divorced;
(b) She reaches the age of 60;
(c) Upon the wounding up or selling of the late father’s businesses.

Until such time as any of the above occurred the Wife may receive $150,000 in annual payment.

2. The Wife had not asked her brothers for the $150,000 annual payment; and

3. The Wife’s brothers had provided her with 2 luxury motor vehicles and this indicated that the Wife had a good relationship with her brothers.

The High Court of Australia

The Justices of the High Court of Australia found that Mrs Hall had a “financial resource” that she could utilise and rely upon to support her. The High Court of Australia confirmed the definition that a financial resource is:

“ 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.”

Further a financial resource is something more than an expectation of benevolence on the part of another person. An example of a Financial Resource is the expectation of the beneficiary under a discretionary trust. Finally, in the case of Hall v Hall, the Wife lost her appeal and was ordered to pay costs in favour of Mr Hall.

Disclaimer: The information provided is not legal advice. If you require advice regarding any of Family Law Matters please contact us at info@cominoslawyers.com.au