Andrews and Andrews and Ors

Case •

[2013] FamCA 647

•

30 August 2013

FAMILY COURT OF AUSTRALIA

ANDREWS & ANDREWS AND ORS [2013] FamCA 647
FAMILY LAW – PROPERTY – Interim – Injunction – Preservation of property – Consent – Where the parties consent to orders in relation to the payment of the joint obligations of the parties – Where a single expert witness is appointed.
FAMILY LAW – SPOUSAL MAINTENANCE – Interim – Where the wife is no longer receiving an income from the family business – Where the wife is no longer receiving distributions from the parties’ joint shareholdings.
Family Law Act 1975 (Cth) s 114
APPLICANT: Ms Andrews
FIRST RESPONDENT: Mr Andrews
SECOND RESPONDENT: B Pty Ltd
THIRD RESPONDENT: C Pty Ltd
FILE NUMBER: BRC 6346 of 2013
DATE DELIVERED: 30 August 2013
PLACE DELIVERED: Brisbane
PLACE HEARD: Brisbane
JUDGMENT OF: Forrest J
HEARING DATE: 26 August 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Looney QC
SOLICITOR FOR THE APPLICANT: Cassandra Pullos Lawyers
FOR THE RESPONDENT: Mr Andrews in Person

Orders

IT IS ORDERED BY CONSENT UNTIL FURTHER ORDER

Certain Payment Obligations

  1. That the second respondent shall pay or cause to be paid, as and when they fall due, the lease payments, registration fees and comprehensive insurance premiums in respect of the motor car registration number … currently in the possession of the applicant (“the motor car expenses”).

  2. That the first respondent shall take all reasonable steps to ensure that the second respondent complies with order 1 herein.

  3. That the first respondent shall pay or cause to be paid from the rental income received for the rent of the real property situated at D Street, Suburb E (“the rental property”), as and when they fall due, the following amounts:

    (a)the principal and interest payments due to the National Australia Bank from time to time including any arrears currently outstanding (with any such arrears to be paid within 7 days of the making of these orders) in relation to the mortgage liability secured against the rental property being loan account number …; and

    (b)the local authority rates and water charges, including all and any arrears currently owing, interest on arrears and any costs associated with any arrears of such payments (with any such arrears, interest on arrears and costs associated with such arrears to be paid within 7 days of the making of these orders) in respect of the rental property.

Mutual Disclosure Obligations

  1. That for all of the months from and including July 2012 to and including August 2013 on or before the 10th day of September 2013 and thereafter monthly on or before the 10th day after the last day of each month:

    (a)       each of the respondents shall provide to the applicant:

    (i)a written account of all deposits to and withdrawals from any bank account (including loan accounts, lines of credit, credit card accounts and any other accounts whether of a credit or debit nature) operated by them (“the relevant bank accounts”);

    (ii)copies of statements issued by each relevant financial institution from each of the bank accounts held by each of the respondents for the relevant period;

    (iii)monthly management accounts;

    (b)except insofar as they are inconsistent with his duties as a director or trustee the first respondent shall take all reasonable steps to ensure that each of the relevant entities complies with order 4(a) herein as though that order was directed to each of them;

    (c)       the applicant shall provide to the first respondent:

    (i)a written account of all deposits to and withdrawals from any bank account (including loan accounts, lines of credit, credit card accounts and any other accounts whether of a credit or debit nature) operated by her (“the relevant bank accounts”);

    (ii)copies of statements issued by each relevant financial institution from each of the bank accounts held by her for the relevant period.

  2. That forthwith upon receipt of a written request by the applicant to provide a copy of any original cheque, cheque butt, invoice, receipt or other document recording or relation to a transaction recorded in a written account provided in accordance with order 4 herein such request having been made to the provider of the account:

    (a)insofar as the provider of the account was one of the respondents, such respondent shall provide such copy to the applicant at the applicant’s expense;

    (b)otherwise except insofar as they are inconsistent with his duties as a director or trustee the first respondent shall take all reasonable steps to ensure that the relevant entity provide such copy.

  3. That forthwith upon receipt of a written request by the first respondent to provide a copy of any original cheque, cheque butt, invoice, receipt or other document recording or relation to a transaction recorded in a written account provided in accordance with order 4 herein such request having been made to the applicant, the applicant shall provide such copy to the first respondent at the first respondent’s expense.

  4. That the first respondent shall provide to the applicant an accounting of any payments (whether by way of wages, salary, loan, dividend or any other payment) made by F Pty Ltd to each of the first respondent, G Pty Ltd (“G”) or any other entity or person on behalf of the first respondent or G (“the relevant payments”) during the period from 13 June 2013 until the date hereof on or before the 10th day of September 2013 and then, in respect of all such payments received on an ongoing basis,  monthly thereafter on the 10th day after the last day of every month.

Valuation of Parties’ real property and corporate interests

  1. That within 7 days of the making of these orders the applicant put to the first respondent by providing written notice thereof to the first respondent a panel of three forensic accountants, one of whom is to be appointed as a Court Expert to value the parties’ interests in the relevant entities.

  2. That within 7 days of receipt of the aforementioned panel the first respondent nominate one accountant from that panel by providing written notice thereof to the applicant’s solicitors and in default the applicant nominate one accountant from that panel by providing written notice thereof to the first respondent.

  3. That the parties provide a joint letter of instruction to the accountant within 14 days of the nomination and in default of agreement on the terms of the joint letter of instruction each of the applicant and the first respondent provide to the accountant a letter of instruction and provide a copy of that letter of instruction to the other.

  4. The accountant nominated pursuant to orders 8 and 9 hereof be appointed as Court Expert pursuant to Part 15 of the Family Law Rules 2004 to value the parties’ interest in the relevant entities (as to which see paragraph 14 (a) (ii) below).

  5. That H Valuers be appointed as Court Expert pursuant to Part 15 of the Family Law Rules 2004 to report on the value of the parties’ interest in the following property:

    (a)I Street, Suburb J in the State of Queensland more particularly described as Lot … on … County of K, Parish of L, Title Reference ...

  6. That for the purposes of the valuations, the respondents shall provide any documents and information requested by the Court Experts within 6 business days of receipt of any such request and shall provide the applicant with a list of all documents provided to the Court Experts and shall provide copies of the documents provided to the Court Experts upon written request by the applicant within 5 days of receipt of such request.

IT IS FURTHER ORDERED UNTIL FURTHER ORDER

Asset Preservation

  1. That except insofar as it is necessary for the first respondent to do so consistent with his duties as a director or trustee and then only to that extent without the prior written consent of the applicant or further order of this Court, the respondents be restrained from and from taking any steps towards:

    (a)selling, transferring, further encumbering or disposing or otherwise dealing, or doing any act, signing any document or doing anything to cause such sale, transfer, further encumbrance, disposition or other dealing of or in respect of:

    (i)the real property situated at I Street, Suburb J in the State of Queensland, more particularly described as Lot … on …, County of K, Parish of L, Title Reference 50180414 registered in the name of M Pty Ltd (“M”);

    (ii)any other property, whether real or personal, in which a respondent has an interest whether legal or equitable and whether held in his own name or the name of any company of which he is a director or shareholder or any Trust of which he is a trustee, appointer or beneficiary, including any motor vehicle in which he has an interest, any interest he has in any superannuation fund, including any self-managed superannuation fund and any shares or interests in the following companies and trusts:

    A.      B Pty Ltd;

    B.      G Pty Ltd;

    C.      N Trust;

    D.      O Pty Ltd;

    E.       F Pty Ltd;

    F.       M Pty Ltd;

    G.      M Unit Trust;

    H.      P Trust;

    I.C Pty Ltd (“the relevant entities”);

    (b)ceasing to trade, appointing a receiver, appointing a liquidator, winding up or voluntarily deregistering any company of which a respondent is a director or shareholder or any Trust of which a respondent is a trustee, appointer or beneficiary, including but not limited to the relevant entities;

    (c)trading in any capacity whatsoever other than through the relevant entities;

    (d)       assigning any income to any other entity;

    (e)drawing money or causing the drawing of money from any bank account or loan account facility held or operated by them or any of the relevant entities or incurring any liabilities;

    other than:

    (f)in the ordinary course of the ordinary business of the person, company or trust;

    (g)       in compliance with obligations pursuant to these orders.

  2. That except insofar as they are inconsistent with his duties as a director or trustee the first respondent shall take all reasonable steps to ensure that each of the relevant entities complies with order 14 herein as though that order was made in respect of each of them.

Spousal Maintenance and other Money related orders

  1. That the first respondent shall take all steps necessary to cause and ensure that the net salary/wages (howsoever described), after deduction of PAYE tax and any assessed or agreed child support liability of the first respondent for his children of previous relationships, that he is paid for his work with F Pty Ltd from the date of these orders is paid immediately upon receipt into a bank account in his sole name (“the income bank account”) and he shall forthwith inform the applicant in writing of the name of the bank with which such account is held, the description of the account and the BSB number and account number.

  2. That the first respondent shall take all steps necessary to cause and ensure that the distributions of income he receives from M Pty Ltd through the P Trust (howsoever described) are paid upon receipt into the income bank account.

  3. That the first respondent shall take all steps necessary to cause and ensure that the balance of rent received for the rent of the rental property, if any, after discharge of the obligations imposed upon the first respondent by paragraph 3 of these orders, is paid upon receipt into the income bank account.

  4. That the first respondent shall take all steps necessary to cause and ensure that any distribution of dividend income or distribution of profits generated by the business F Pty Ltd (howsoever described) that is received through the N Trust is paid upon receipt into the income bank account. 

  5. That the first respondent shall take all steps necessary to cause and ensure that any other income he earns from any source, including but not limited to any of the relevant entities, is paid upon receipt into the income bank account.

  6. That the first respondent shall be entitled to draw $510 from the income bank account each week for his own personal use.

  7. That the first respondent shall pay the applicant for her spousal maintenance the sum of $510 per week with the first payment to be made on Monday 2 September, 2013 and weekly thereafter, such payment to be made from the income bank account if the first respondent so chooses.

  8. That except as otherwise agreed between the applicant and the first respondent in writing or as ordered by this Court, the balance of the money in the income bank account, after withdrawal of the two amounts of $510 per week referred to in paragraphs 21 and 22 hereof, and after any amount agreed between the applicant and the first respondent to be paid to the applicant by way of child support for the child of their marriage or assessed by the Child Support Agency as being the first respondent’s liability for child support for the child of his marriage to the applicant is drawn and paid from that income bank account, shall be used only as follows and not otherwise:

    (a)To make payments due to the National Australia Bank from time to time including any arrears currently outstanding in relation to the mortgage liability secured against the real property situated at Q Street, R Town being loan account number …; and/or

    (b)To make payment of the local authority rates and water charges, including any arrears currently owing, interest on arrears and any costs associated with any arrears of such payments and insurance premiums in respect of the said R Town property; and/or

    (c)To make payments, in equal amounts only at the same time, towards each of the applicant’s and the first respondent’s outstanding liabilities to the Australian Tax Office for each of their 2012 personal income tax assessments; and/or

    (d)To make payments in equal amounts at the same time to each of the applicant and the first respondent.

  9. That apart from the payment of $510 per week spousal maintenance to the wife pursuant to paragraph 22 of these orders, all other payments made by the first respondent pursuant to these Orders shall be for the Trial Judge to assess, consider and characterise as that Trial Judge determines appropriate according to law.

Costs of the Experts

  1. That the applicant and the first respondent shall be liable in equal shares for the costs of the Court experts appointed pursuant to these Orders with each to pay their share of such costs as such costs are incurred with each of the applicant and the first respondent having liberty to apply to the Court for further orders to give effect to this order if necessary, with any such application to be heard by Justice Forrest if practicable.

Directions Hearing

  1. The application for substantive property adjustment orders is adjourned for mention before Registrar Coutts at 11:30 am on Thursday, 17 October 2013.

  2. The respondents shall file and serve on the applicant Notices of Address for Service and Responses on or before the 10th day of September 2013 and the first respondent shall file and serve on the applicant a Financial Statement on or before the 10th day of September 2013.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Andrews & Andrews has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 6346 of 2013

Ms Andrews

Applicant

And

Mr Andrews

Respondent

REASONS FOR JUDGMENT

  1. Ms and Mr Andrews married in 2004 and separated in June 2012. They had lived together for approximately ten years and they have one child who is 7 years old. He lives with his mother in the former family home in R Town and is in Grade 2 at a private school there. 

  2. Each party was married before and has children of a former relationship. One of the wife’s 18 year old twin daughters lives with her and the child of this marriage.

  1. The Andrews operate a wholesale and retail business through several corporate and trust entities. Two of those are the second and third respondents in these proceedings. They are also involved in a particular business in the industry with other persons who have an equal interest in it with them. Prior to separation and up until sometime this year, both parties worked in their business and received income by payment of wages and dividends and distributions from the various entities. The wife ceased working for the business after disagreement with the husband earlier this year and payment to her of any funds, by way of wage or otherwise ceased on 7 July 2013, at the husband’s unilateral determination.

  1. On 2 August, 2013, the wife filed an application in this Court seeking final orders for property adjustment and spousal maintenance. She also made application for a raft of interim Orders. Those include payment of liabilities on an ongoing basis, spousal maintenance, distribution of income from the business between the parties, asset preservation injunctions, disclosure, and the appointment of valuation experts to assist the parties and the Court.

  2. The interim application came on for hearing before me in the judicial duty list on Monday 26 August, 2013. The wife was represented by Mr Looney QC and solicitors. The husband appeared without any legal representation and without having filed any Response, any Affidavit or any Financial Statement. He also appeared for the Second and Third Respondent companies, each of which he is a director, without having filed any material. However, notwithstanding those facts, the husband conceded he had been in possession of the wife’s material for a couple of weeks and did not oppose the wife’s application for interim orders being heard and determined. He did not even oppose the granting of leave to the wife to file an affidavit of evidence in chief that she had sworn on Friday 23 August, the most essential parts of which included some schedules of income received by the parties in the 2013 financial year and received by the husband since July 2013 that were prepared after the inspection of financial records recently produced under subpoena.

  1. Mr Looney QC handed up a draft of the Orders he submitted should be made on the wife’s application, along with written submissions. He also made oral submissions. The husband was then taken carefully through some of the evidence, particularly as to the income the wife asserted had been received by the parties in recent times, as well as the draft of the Orders the wife sought. His responses were sought and he gave them.

  1. It became clear that the husband agreed that some of the Orders sought by the wife could be made. I will make those Orders and the effective consent of the parties will be recorded on them. The husband also made it clear that if disclosure Orders were to impose obligations on the wife as well as on him, he would not oppose them. The wife, through Mr Looney QC, agreed to that. I will make those Orders too, with the consent of the parties being recorded on them.

What were the Orders sought by the wife that were opposed upon which decision is required?

  1. The wife seeks an Order that the Husband pay or cause to be paid:

    (i)Principal and interest payment to the NAB on loans secured by mortgages over the parties’ R Town property and Suburb E rental property;

    (ii)Local authority rates and water charges, including any arrears, in respect of both of those properties; and

    (iii)The sum of $752 per week pursuant to a payment plan between the wife and the ATO on account of the debt owed to the Commissioner of Taxation by the wife.

  2. The wife also seeks an Order that the Husband pay her 50 per cent of payments he and various of their business entities have received from 13 June 2013 and that they continue to receive from here on. She also seeks an Order that the husband pay her spousal maintenance on a monthly basis in the amount, if any, by which the sum of $18,768 exceeds the amount he pays her as 50 per cent of the payments he receives.

  1. The wife, effectively, also seeks injunctions restraining the husband (and the Second and Third Respondents) from dealing with property, real or personal, and from ceasing to trade, appointing a receiver or liquidator, winding up or deregistering any of the companies or trusts, trading other than through one of the entities, assigning income to any other entity and drawing money or causing money to be drawn from any bank account or loan facility other than in the ordinary course of business, in compliance with the Orders that are made, in payment of legal fees in relation to these proceedings, in meeting his own reasonable personal expenses and in making minimum repayments required in respect of any debts.

  1. In respect of the appointment of single valuation experts, although the husband made it clear he did not oppose that, he did make clear his opposition to the wife’s application that he pay the fees of these experts in the first instance, asserting that they should be shared equally.

What is the evidence relevant to the determination of these opposed applications?

  1. The parties are the joint registered owners of two real properties. They own D Street, Suburb E and Q Street, R Town. These properties are both mortgaged securing debts to the NAB.

  2. The Suburb E property is rented out. The evidence, as I understand it, is that the rent received is $870 per week and that the mortgage repayment (which is interest only) is around $487 per week and that the rates are $29 per week. On that basis, it appears that there would be no difficulty with compliance with an Order that the principal and interest repayments on the loan secured by that mortgage, in addition to the local authority rates in respect of that property, continue to be paid on an interim basis. Indeed, there appears, on those figures, to be $355 per week remaining to meet other expenses associated with that property as well as to contribute towards the family’s other expenditure requirements.  

  3. The parties’ R Town property, in which the wife lives, is encumbered by mortgage. The wife’s evidence is that the debt associated with the purchase of that property is $1,630,000. Her most recent evidence (put together after reviewing loan account statements produced by the bank under subpoena) is that the repayments on that loan fluctuate as they are interest only and range from around $7,000 to $8,000 per month. Although, not under oath, the husband also said from the bar table that the repayments are made on an interest only basis and that they vary between $7,500 and $8,000 per month. That is $1,730 to $1,846 per week. Of course, there are rates and insurances to pay for this property too. The wife deposes to these being $67 and $22 per week respectively.

  1. I note at this point too, that each of the husband and the wife acknowledged, before me, that both of these real properties that they jointly own will have to be sold as part of the settlement of their financial affairs and that process of sale should begin sooner rather than later.

  1. There is evidence that the wife incurred a liability to the Australian Tax Office in respect of the 2012 tax year in the amount of $18,971.  The wife entered into a payment plan with the ATO in July this year to pay off that liability in the amount of $752 per week with the final payment due to be made in mid-January 2014. 

  2. The husband told the Court, again from the bar table, that he also was repaying the Australian Tax Office by way of  payment plan in respect of his tax liability for the 2012 tax year.  There is evidence that his tax liability for that year was around $18,811. The husband asserted that his repayment commitment was the same amount per week as the wife. If that is correct, and given the evidence about of his liability, I consider it is probably correct, that takes their combined periodic liability to the ATO to $1,500 per week.

  1. As to her expenses, the wife deposes to paying $225 per week on her Visa credit card and $300 per week towards the support of her adult daughter who lives in Sydney. She sets out in Part N of her Financial Statement that she has total other weekly expenditure requirements (not including for motor vehicle and mobile phone) of $4,031 of which $2,715 is for her, $778 is for the parties’ 7 year old son and $538 is for her adult daughter who lives with her.

  2. The most significant parts of those expenses claimed by the wife that were solely relating to her, were expenditure for clothing and shoes $300 per week, for medical, dental and optical $500 per week, for entertainment and hobbies $400 per week, holidays $300 per week, cleaning the house and pool $271 per week, gifts $100 per week and hairdressing and toiletries $260 per week.

  1. In her affidavit of evidence filed 2 August 2013 the wife deposed (at paragraph 76) to receiving a “wage” of $812 per week from B Pty Ltd, use of a motor car provided by B Pty Ltd and a mobile phone provided by B Pty Ltd. She also deposed to receiving a “wage” from F Pty Ltd paid in two parts into two different accounts of $528 per week and $651 per week. Those amounts total on an annual basis $103,532. 

  1. However, copies of the 2012 individual tax returns for the husband and the wife were put into evidence by the wife attached to her affidavit filed on 26 August 2013. They reveal that the wife received income in that year by way of wages or salary paid to her from F Pty Ltd (in which the husband and wife have an interest with other parties and which is a wholesaler) in the gross sum of $32,303 and from B Pty Ltd (in which the husband and wife are the only interested parties) in the gross sum of $25,200. They also reveal that the wife received distributions of income from the N Trust (that the husband and wife control and are beneficiaries of) in the gross sum of $85,715. This money is sourced from the income of the N Trust which, I accept, on the evidence, comes from dividends paid to G Pty Ltd (the corporate trustee of that N Trust) from the profits of F Pty Ltd (in which G Pty Ltd owns half of the shares). They also reveal that the wife also received income by way of distributions form the P Investment Trust in the gross sum of $38,361. That trust is also controlled by the husband and wife and is one of four unit holders of the M Unit Trust that, on the evidence, appears to own, through its trustee, M Pty Ltd, the real property at D Street, Suburb E out of which F Pty Ltd trades and for which it pays rent to the Unit Trust.

  1. The wife’s total taxable income for that 2012 year was declared at $175,000.

  2. Those same returns reveal that the husband received gross income by way of wages paid from F Pty Ltd in 2012 of $161,536, gross distributions from the N Trust of $90,041 (originating from profits of F Pty Ltd) and gross distributions from the P Trust of $40,399 (originating from profits of the Unit Trust that owns the Suburb J property). The husband’s taxable income for that 2012 year was declared at $284,613. The husband agreed that all of those figures were correct. Accordingly, the husband and wife together had gross taxable income of approximately $460,000 in the 2012 year upon which they each were left, only a few months ago, with total tax liability still to be paid of approximately $36,000.

  1. In the wife’s latest evidence, put together from bank records produced pursuant to subpoena, she deposes to the husband receiving his gross salary of $161,000 from F Pty Ltd for the 2013 year. The wife also deposed to having determined that the gross sum of $251,190 was paid into the parties’ joint bank account by way of distributions from the N Trust (profit distributions from the F Pty Ltd business) in the 2013 financial year. Her evidence deposes to that being received by payment into their joint bank account of $6,440 per week from October 2012 to December 2012 and then $10,734 per week from March 2013 until the end of June 2013.

  1. The wife also deposed to having determined that the gross sum of $58,200 was also paid into the parties’ joint bank account by way of distributions from the P Trust (profit distributions from the Suburb J property Unit Trust) in the 2013 financial year.

  1. The total of the gross salary received by the husband and the other gross payments received into the parties’ joint account for 2013 was then $470,390, which, without even taking into account the wages or salary that the wife was paid in that year from B Pty Ltd and F Pty Ltd, was a slightly greater amount than they received in total during the previous financial year. The husband did not dispute any of these figures either.

  1. As I have already noted, the wife has not received a periodic wage or salary payment (as she used to do) from any of the entities since 7 July 2013. She did, however, depose to having determined that the husband has continued to receive a periodic salary from F Pty Ltd since that date. On 8 July he received $1,724 and then between 16 July and 5 August he received five payments of $2,594. The wife also deposed to the husband having received from the Suburb J property Unit Trust payments of $100,000 on 11 July, $4,850 on 12 July and $4,850 on 9 August.

  2. The husband said from the bar table that he is now receiving a salary of $230,000 gross per annum from F Pty Ltd.  It appears that amount now represents a combination of that which used to be paid to the wife as well as that which used to be paid to the husband. In other words, it appears the wife’s salary is now simply being paid to the husband as his, whilst the wife receives none.

  1. The total of that salary is equal to $4,423 gross per week, nearly $2,000 more than the periodic payments he has received into his account in recent times.  It is not clear what is deducted from the $4,423 before it is paid into the husband’s account, whether it includes more than just PAYE tax instalments or not. The husband says he pays the ATO his repayment of $752 per week from his salary and other bills. They included their son’s private school fees and $150 per week for each of two of his other children (total $300).

  1. Having regard to the evidence of the distribution from the Unit Trust to the parties through P Trust in the 2013 year being $58,200 (the equivalent of $4,850 per month) and there being monthly distributions of that amount to the husband in July and August of this year, it would seem reasonable to determine that there is a continuation of monthly distributions of income from the Unit Trust arising from the payment of rent to the Unit Trust by the business, F Pty Ltd for the Suburb J premises. I am, on all of the evidence, satisfied that is likely to continue to be received by the husband on a monthly basis at least in the foreseeable future.

  1. As to the $100,000 lump sum received on 11 July, the husband said that it was a “dividend” payment. He did not say it was a loan. Having regard to the profit distributions to the parties from the business, F Pty Ltd in 2012 and 2013 and what the husband said from the bar table in Court, I consider it most likely that the $100,000 is payment to the husband in respect of profit generated (or to be generated) by the business, F Pty Ltd in this 2014 financial year. Having regard to the amounts received by the parties in total from the N Trust (from profit distributions from F Pty Ltd) in 2012 and 2013, it is reasonable to expect that there is potential for more such payments during the course of this financial year. However, the husband was anxious to assert from the bar table that there is absolutely no certainty that such payments will continue to be received.

  2. The husband said from the bar table that he had deposited that $100,000 into an account that he alone operates (related to the retail business operated by the parties at Suburb S) and that he has been using that money to pay creditors of the parties’ businesses, particularly B Pty Ltd, since then. He said that he could not tell the Court what the current balance of that bank account was as he simply did not know.

  1. Another important piece of evidence in the matter is the evidence that the wife took $120,000 from the parties’ joint account on 21 June and transferred it into an account that only she could access. She deposed to having left $16,250 in the joint account, but that the husband transferred that into his own account that same day.

  1. The wife deposes, in her affidavit filed 2 August, to spending $39,000 of that $120,000 on her legal fees in this matter and approximately $20,000 on living expenses for her and the parties’ 7 year old son and the wife’s adult daughter since she has had sole access to that money. She also deposed to spending $5,000 of that in part-payment of her taxation liability for the 2012 financial year and expecting to pay $5,000 more for the cost of surgery that she was due to have on her legs in the week commencing 5 August. That would have left a balance of approximately $51,000. I expect in the period of almost 4 weeks since the wife deposed to that she has spent somewhere between $10,000 to $20,000 of that on living expenses as well.

  1. The husband said, from the bar table, that the money the wife took from their joint account was money that they were using to pay bills and to prop up the B Pty Ltd business that he asserts has been making a loss. Indeed, he went as far as asserting that he wants to shut that business down for that reason.

What findings do I make that are relevant to the matters I must decide?

  1. On the husband’s own admission, seemingly supported by the evidence of the wife determined by her from the subpoenaed documents, the husband is continuing to receive a gross salary of $4,423 per week from F Pty Ltd. The weekly amount of $2,594 is being deposited into the husband’s account. As I have said, I do not know exactly what is being taken from the husband’s gross payment but on my own understanding of current tax rates, I expect that the deposited amount represents the net payment after PAYE tax is paid on a gross income of $230,000, less approximately $300. That might represent the $300 per week the husband said he pays in child support for two other children of his. Whilst the Court be certain about that, I am satisfied it is more probably right than not.

  2. I am satisfied that the husband is also going to continue receiving into his account the payment of $4,850 per month through P Trust.  Annualised and then calculated as a weekly amount, that equals $1,119. Accordingly, with those amounts, the husband, I am satisfied receives $3,713 per week at least.

  1. As to the profit distribution from F Pty Ltd, received by the parties through the N Trust, the husband has apparently already received what would be about 10 weeks’ worth of such payments at the previous weekly rate. That period would expire at the end of the first week of September. However, I cannot be satisfied that such payments are guaranteed to be paid and, consequently, I will not make Orders that are based on a finding that they will. The Orders that I will make will provide for how any such payments received are to be distributed between the parties on an interim basis.

  1. Expenses that clearly have to be paid from the $3,713 per week (and any profit distribution received by the parties from F Pty Ltd and any balance of rental income received from the Suburb E rental property after the mortgage repayments and rates are paid) are:

    The mortgage repayments, rates and insurance
    premiums for the R Town property     $1,819

    The tax repayments for each of them   $1,504

  2. Those payments themselves total $3,323 per week. Payment of those would leave $390 (without any further amounts being received from F Pty Ltd or the balance of the rental income from Suburb E). That is clearly not enough for the husband and the wife to support themselves and their son, before they even consider the cost of his private school fees.

  1. Clearly, unless the parties receive profit distributions from F Pty Ltd on a continued basis, their expenditure has to be seriously prioritised. Debts to the Tax Office and to the bank may not be able to be paid whilst the parties’ actual support takes immediate priority. As each of the parties clearly recognised that the R Town and Suburb E properties must be sold in the near future so as to realise the equity in both (which on the wife’s evidence is currently estimated to be around $600,000), it seems that they would both understand that prioritising their immediate personal expenditure requirements over payment of the outstanding tax and R Town mortgage repayments is necessary. Urgent sale of the two properties appears to be a critical necessity if the tax liabilities and mortgage payments are not to become unbearable financial millstones around the parties’ necks. Only receipt of further profit distributions from F Pty Ltd, which the husband says cannot be guaranteed, may provide some relief to them.

  2. I am satisfied that the wife’s ongoing reasonable weekly expenditure requirements for herself that should be prioritised on this interim basis are as follows:

    Food    $150
    Household Supplies   $40
    Gas and electricity   $45
    Home phone and internet   $30
    Clothing and shoes   $100
    Medical, dental and optical                 $100
    Chemist and pharmaceutical                 $15
    Maintaining the parties’ pets                 $30
    Total   $510

  3. The husband has no obligation to contribute towards the maintenance of the wife’s adult daughters of her previous relationship.  His child support obligations in respect of their son will, according to law, be determined pursuant to the child support legislation, if the parties cannot reach agreement about that. No application by the wife for urgent child support is before the Court. The payment of the private school fees in respect of the child’s schooling falls within the purview of the child support system and the parties will have to make some serious decisions about that if no further dividend payments are forthcoming from F Pty Ltd.

  1. Of all of the other expenses the wife sets out in her Financial Statement and particularises with evidence in her affidavit, some are discretionary and I do not find that I can prioritise them in the way that I intend to in the Orders that I will make. The balance of those expenses, although perhaps not discretionary, again I do not give priority to as I have with the others.  The wife still has some of the cash sum of $120,000 that she withdrew that she may choose to use for some of these needs as she prioritises.

  2. I am satisfied that the wife, due to her commitments in parenting their child and the circumstances under which she has very recently been excluded from working in their businesses, is unable to meet these ongoing weekly expenditure requirements. I am mindful that she still has some of the money she withdrew from the parties’ joint account, but she is not obliged to draw on that capital until depletion before the husband is required to contribute towards her maintenance, particularly on an interim basis.

  1. What I have determined I will do in this matter, is to make Orders that require the husband to deposit all income payments that he receives, in whatever form and howsoever described, into a bank account in his sole name. I am satisfied that he at least continues to receive $3,713 in payments on an average weekly basis. That money will be required to be deposited to this bank account. The Orders will, however, also catch any further profit distributions that are received by the husband from F Pty Ltd too in the interim period up until finalisation of the property adjustment proceedings.

  1. I will permit the husband to draw from that bank account the first $510 for his own needs and I will order him to pay to the wife $510 described as spousal maintenance for her which he can take from this bank account if he chooses.  I have not seen any evidence of what the husband’s own reasonable personal expenditure requirements are but I am prepared, at this point in time, to accept that what I have assessed as being appropriate for the wife’s prioritised needs ought to be allowed for the husband as well.

  1. That will leave at least $2,693, which is not enough to pay their current periodic tax liabilities, the R Town mortgage payments, the private school fees and any child support assessment for their son, let alone anything else.

  1. The wife is currently not receiving any amount of child support from the husband for their seven year old child who continues to live with her. There is evidence that she made application for child support to the Child Support Agency, but no evidence of any liability yet being assessed against the husband. Having regard to the need for the child to be maintained by his parents, whether they agree to continue sending him to the same school he is currently attending or not, my orders will deal with the balance of the income received by the husband, $2,693 weekly average, as well as the balance of the rental income received on the Suburb E property (after mortgage and rates payments), only after any child support (as agreed between the parties or as may be determined by assessment) is deducted and paid to the wife.

  2. My orders will provide for the husband to determine to pay the balance either towards the mortgage on the R Town property and/or the rates and insurance premiums on that property and/or equally towards each of their 2012 personal income tax liabilities, and/or equally between him and the wife but not otherwise without the written agreement of the wife or further order of this Court.  In that way, the Orders will ensure that each party shares equally in the income that they are receiving on an ongoing basis from their joint business endeavours, one way or another, at least until the finalisation of their property adjustment.

  1. If the husband chooses not to draw any of the balance of the funds in the only way that will be permitted, as I have set out in the previous paragraph, the money will simply accrue in the account to both parties’ benefit and, if agreement cannot be reached on how that money is to be best utilised to the equal benefit of both parties, the wife can make a further application to the Court.

  1. I am satisfied that I have the power to make such orders relying on the injunctive powers contained within s 114 of the Act. That section gives the Court the power to make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate including, relevantly, an injunction in relation to the property of a party to the marriage. Money, in the hands of the husband, whether received by way of income or taken from capital, is property and therefore, in my view, subject to this injunctive power.

  1. I am quite satisfied that the orders I intend to make in respect to how the money that comes into the husband’s hands on an interim basis is dealt with are proper. Just how the expenditure of such money, apart from the spousal maintenance component that I have determined to prescribe in the Orders, is to be considered in any final contested property adjustment proceedings will be a matter for the Trial Judge who hears any such proceedings. 

Should interim injunctions for asset preservation be granted?

  1. As to the interim injunctions the wife seeks for asset preservation, I am quite satisfied that they are necessary in this case and that it is proper to make them. Indeed, the husband informed the Court that the only part of the asset preservation injunctions sought by the wife that he actually opposed was that directed at B Pty Ltd. That is the company through which the parties operate a business.

  2. The husband said, from the bar table, that the company made a $211,000 loss for the 2013 financial year and that it might have to be shut down or be put into liquidation. In evidence was a copy of a draft profit and loss statement that the wife had obtained that also reflected that $211,000 loss. Mr Looney informed the Court that the wife was just not in a position, at this point in time, to accept that the draft truly reflects the actual position or that the business is “insolvent” as the husband was asserting. Of course, that is one of the matters that a Court expert, appointed by the parties, will be considering in the very near future. The Court is not in a position at this point in time to properly determine whether the claims of the husband are correct. In circumstances where the evidence supports findings that the husband (and the wife) have acted unilaterally in accessing and dispersing large amounts of money in the last few months since their conflict increased without even keeping the other party informed about that, I am quite satisfied that directing the interim injunction to include B Pty Ltd at this point in time is appropriate.

  1. The husband should, as a director of that company, not take any steps to cause the company to cease trading, put it into receivership or liquidation, or to divest itself of assets without the prior written consent of the wife or further order of this Court. The injunction that will be put in place will restrain him (and the second and third respondents) from doing any of those things.

Who should pay the costs of the Court Experts?

  1. The wife seeks an Order that the costs of the Court experts to be appointed be paid, in the first instance, by either the husband or B Pty Ltd. I am simply not satisfied that there is sufficient income or money available to the husband or B Pty Ltd to support and justify such an Order. Having regard to the large sums of money both the husband and the wife recently unilaterally accessed and not being satisfied that those amounts have all been spent, as well as the Orders I intend to make in respect of the ongoing income that is received by the husband, I consider it appropriate, and just, to order each of the husband and the wife to equally contribute to the costs of the appointed Court experts. I will give each of them liberty to apply to the Court in respect of this issue, if necessary, with the matter to come back before me in particular if further Orders are sought. Clearly, if one of the parties’ conduct in respect to this point is found to be unreasonably causing delay because experts are not being paid in a timely fashion, costs consequences might reasonably be expected to follow.

  2. I will also list the matter to the Registrar for further mention on a date in October this year, whereby the valuations should have been obtained and many more matters such as the process of sale of the two real properties, progress of meeting liabilities, and the timetabling of mediation should have started to crystallise.

  1. I make the Orders set out at the commencement of these reasons.

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 30 August 2013.

Associate:

Date:  30 August 2013

Key Legal Topics

Areas of Law

  • Family Law

  • Civil Procedure

Legal Concepts

  • Injunction

  • Costs

  • Remedies

  • Procedural Fairness

  • Consent

  • Discovery

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