Armando & Armando
[2025] FedCFamC1F 57
•10 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Armando & Armando [2025] FedCFamC1F 57
File number(s): MLC 4450 of 2024 Judgment of: WILLIAMS J Date of judgment: 10 February 2025 Catchwords: FAMILY LAW – SPOUSAL MAINTENANCE – Interim proceeding – Whether the wife has a need for spousal maintenance – Whether the husband has the capacity to pay maintenance if a need is established – Order made for lump sum spousal maintenance. Legislation: Corporations Act 2001 (Cth) s 233
Family Law Act 1975 (Cth) ss 72, 74, 75, 79A
Cases cited: Brown & Brown (2007) FLC 93-316
In the marriage of Bevan (1995) FLC 92-600
Division: Division 1 First Instance Number of paragraphs: 56 Date of hearing: 7 October and 27 November 2024 Place: Melbourne Counsel for the Applicant: Dr Ingleby Solicitor for the Applicant: Pearsons Family Law Counsel for the Respondent: Mr Wraith (7 October 2024);
Ms Bryan (27 November 2024)Solicitor for the Respondent: Jonathan Kemp & Associates (7 October 2024);
Saunders Family & Estate Lawyers (27 November 2024)ORDERS
MLC 4450 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ARMANDO
Applicant
AND: MR ARMANDO
Respondent
ORDER MADE BY:
WILLIAMS J
DATE OF ORDER:
10 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The husband pay to the wife the sum of $75,000 by way of lump sum spousal maintenance, within 30 days from the date of this order.
2.Payment of the sum referred to in Order 1 be made to the solicitors for the wife on her behalf.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Armando & Armando has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILLIAMS J
INTRODUCTION
On 7 October 2024, when this matter was first before the Court for determination, the parties sought orders as set out in the wife’s Further Amended Application in a Proceeding filed 9 August 2024, and the husband’s Response to an Application in a Proceeding filed 16 August 2024.
The wife sought a suite of interim orders, specifically, an anti-suit injunction restraining the husband from pursuing an application in the Federal Court of Australia against B Pty Ltd, spousal maintenance, payment to her of $400,000 as litigation funding or alternatively as partial property settlement, and that she be authorised to obtain financial documents directly from the husband’s accountant because she asserted he refused to provide financial information to the single expert witness appointed to value the various corporate entities.
The husband resisted the wife’s applications and otherwise sought orders for the sale and distribution of the sale proceeds of a property situated at C Street, Suburb D (“the C Street property”), so that each of the husband the wife would receive $500,000 from the proceeds of sale.
Prior to the date fixed for interim determination of the competing applications, on 1 October 2024, the wife filed a Further Application in a Proceeding seeking to rely on two further affidavits, sworn and filed by her children, Mr E, and Ms F on 1 October 2024. The husband consented to the wife relying on the affidavits, provided he was also granted leave to rely on his further affidavit filed 4 October 2024. Accordingly, both the husband and the wife were permitted to rely on those affidavits. Both parties also consented to granting the wife leave to issue more than five subpoenas.
On 7 October 2024 counsel for both parties made extensive submissions about the merits of their respective applications. At the conclusion of the hearing, judgement was reserved.
On 24 October 2024, prior to delivery of reasons, the husband filed an Application in a Proceeding seeking leave to reopen the proceeding and to adduce further evidence. The wife filed a Response on 20 November 2024. The matter was relisted for hearing on 27 November 202to determine the husband’s further application.
On 27 November 2024, the Court was informed that the parties had previously entered into final property orders on 16 June 1994 (“the 1994 orders”) prior to reconciling, and finally separating some 24 or so years later. At the hearing on 7 October 2024, neither counsel was aware of the 1994 orders.
At the hearing on 27 November 2024, counsel for the husband informed the Court that the husband sought to rely on the 1994 orders to preclude the wife’s extant application for property settlement.
In order to address possible jurisdictional problems, on 29 November 2024 the wife filed an Initiating Application (“the s 79A Application”) in Division 2 of the Federal Circuit and Family Court of Australia (“FCFCOA”), which was transferred to this Court by an order made the same day. The wife’s s 79A Application is opposed by the husband, who contends the parties should remain bound by the 1994 orders, notwithstanding his prior consent to anterior procedural orders and the interim orders recently sought by him.
Accordingly, until the determination of the s 79A Application, this Court cannot determine the various extant interim applications originally pursued by both parties. As agreed by both counsel, no such impediment precludes the determination of the wife’s spousal maintenance application.
For the reasons that follow, I have determined the husband should pay the wife spousal maintenance in the lump sum quantum of $75,000.
BACKGROUND
The wife is presently aged 74 and is employed part-time in administration by B Pty Ltd, and earns approximately $80,000 per annum gross income.
The husband is aged 82 years. He operates several businesses and is a director and shareholder of numerous corporate entities. In his Financial Statement filed 25 July 2024, the husband deposes to a weekly income of approximately $863.
The parties commenced living together in 1980 according to the wife, and 1982 according to the husband. They were married in 1984. Their marriage broke down in or around 1994, and proceedings were issued in the Family Court of Australia. Final parenting and property orders were subsequently made by consent in 1994. Approximately 18 months after the final orders were made, in or about 1996, the parties reconciled and recommenced living together.
They again separated in October 2020 as a result of an Intervention Order issued by the wife against the husband, and lived separately until approximately early 2021, when the husband resumed living in the former matrimonial home. From early 2021, the wife asserts the parties lived separately under the one roof until 27 February 2024, when the husband again vacated the matrimonial home. The parties remain married.
They have one daughter of their relationship, Ms F (“Ms F”). The wife has an adult son from a previous relationship, Mr E (“Mr E”), and the husband has three adult children from a previous marriage, including his son, Mr G, with whom he is financially intertwined.
They have a significant asset pool which the wife estimates to be around $28,000,768 and which the husband estimates around $14,000,000.
Prior to cohabitation, in 1979 the wife started an allied health business, H Business, with her then partner which operated from premises situated at C Street, Suburb D (the C Street property).
In 2009, B Pty Ltd was incorporated and is now the proprietor of the allied health business started by the wife. The directors of B Pty Ltd are Ms F and Mr E. J Pty Ltd owns a 50% share of B Pty Ltd. The husband and his son, Mr G, are directors of J Pty Ltd and the husband is a shareholder of J Pty Ltd. Ms F and Mr E own the remaining 50% shares in B Pty Ltd. It is common ground the wife seeks a transfer to her of the husband’s interest (held via J Pty Ltd) in B Pty Ltd.
In March 2024, the wife’s solicitors first wrote to the husband and/or his solicitors seeking financial disclosure. According to the wife, upon receipt of that letter, the husband ceased making payments of spousal maintenance to her, in circumstances where he had previously paid $1,300 per fortnight for groceries, together with payment of all bills and outgoings associated with the former matrimonial home.
According to the wife, on 5 April 2024 the husband caused J Pty Ltd to issue a Notice of Default and Demand to B Pty Ltd, alleging that B Pty Ltd had underpaid rent for the C Street property and sought to terminate the lease of the premises. The issue ultimately resolved.
On 18 April 2024, the wife filed an Application for Final Orders in Division 2 of the Federal Circuit and Family Court of Australia (“FCFCOA”), seeking an adjustment of matrimonial property between herself and the husband.
In mid-2024, J Pty Ltd instigated oppression proceedings in the Federal Court of Australia against B Pty Ltd, Mr E, and Ms F pursuant to s 233 of the Corporations Act 2001 (Cth).
The relief sought in the Federal Court proceeding is for J Pty Ltd to purchase the shares held by Ms F and Mr E, so the husband’s company, J Pty Ltd, would wholly own and control B Pty Ltd or alternatively, that B Pty Ltd be wound up.
On 5 September 2024, the wife’s Application in a Proceeding was listed for hearing before a judge of Division 2 of the FCFCOA. On that day, orders were made transferring the proceeding to this Court.
On 7 October 2024, the hearing proceeded before me by way of submission from both counsel.
The husband’s Application in a Proceeding filed 24 October 2024, was heard by me on 27 November 2024. Apart from agreeing the Court had jurisdiction to entertain the wife’s spousal maintenance application, there were no further submissions made by either counsel pertaining to that application and I therefore rely on the submissions pertaining to spousal maintenance made by both counsel on 7 October 2024.
DOCUMENTS RELIED UPON BY THE PARTIES
The wife relied upon the following documents:
(i)Further Amended Application in a Proceeding filed 9 August 2024;
(ii)Affidavits of wife filed 9 August 2024 and 1 October 2024;
(iii)Affidavit of wife’s solicitor filed 9 August 2024;
(iv)Wife’s financial statement filed 29 April 2024;
(v)Affidavit of Ms F filed 1 October 2024;
(vi)Affidavit of Mr E filed 1 October 2024; and
(vii)Case Outline filed 2 September 2024.
The husband relied upon the following documents:
(i)Response to an Application in a Proceeding filed 16 August 2024;
(ii)Financial Statement of husband filed 25 July 2024;
(iii)Affidavits of husband filed 16 August 2024 and 4 October 2024;
(iv)Affidavit of Mr L filed 4 September 2024; and
(v)Case Outline filed 2 September 2024.
Turning now to the wife’s application for spousal maintenance.
SPOUSAL MAINTENANCE
The wife seeks an order for the husband to pay her $75,000 as a lump sum spousal maintenance, or in the alternative, $1,400 per week periodic spousal maintenance.
The husband opposes the application and asserts the wife is able to support herself adequately, and he has no capacity to pay.
Legal principles
Section 72(1) of the Act provides:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
In In the marriage of Bevan (1995) FLC 92-600, the Full Court set out what it said was required for the Court to make an order for spousal maintenance at [81982] to [81983] as follows:
(l) a threshold finding under s 72;
(2) consideration of s 74 and s 75(2);
(3)no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
(4)discretion exercised in accordance with the provisions of s 74, with “reasonableness in the circumstances'’ as the guiding principle.
In Brown & Brown (2007) FLC 93-316 at [161], the Full Court referred to the applicable principles:
•The word “adequately” is not to be determined according to any fixed or absolute standard.
•The idea that “adequate” means a subsistence level has been firmly rejected.
•Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
•In some circumstances it may be reasonable for the parties to live at a higher standard than previously enjoyed.
•It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
•However, an applicant is not entitled to live at a level of considerable luxury or comfort merely because the other party is very wealthy.
Section 74 of the Act empowers the Court to make orders as it considers proper for the provision of maintenance of a party to a marriage.
I will firstly address the threshold issue, whether the wife is unable to support herself adequately.
As to the wife’s capacity to support herself, the wife relies on her Financial Statement filed 29 April 2024, wherein she deposes to a shortfall between her income and expenses of $1,357 per week. She receives a gross weekly income of $1,538 and pays tax of $348, which leaves a weekly net income of $1,190. Her weekly fixed expenses include outgoings referable to her rates ($94), home insurance ($46), health insurance ($121), and car insurance ($53). The expenses claimed at Part N amount to $2,233 per week.
Other than relying on the bare statements and assertions included in the husband’s Case Outline and affidavit that the wife is able to support herself, the husband’s counsel did not make oral submissions challenging the income nor extent of expenditure in her recent Financial Statement, nor submit the wife had failed to satisfy the threshold issue. A closer examination of the expenses claimed at Part N, absent supporting documentation, may have established some exaggeration of expenses, such as expenses for children’s activities of $108 per week, although generally speaking the expenses claimed were not overly excessive.
Primarily relying on the wife’s Financial Statement, which demonstrates the wife’s expenses significantly exceed her current income and absent any specific challenge to those expenses, I am satisfied the wife is unable to support herself adequately from her own resources and has therefore met the required threshold.
Turning now to consider the husbands capacity to pay, and the relevant s 75(2) factors.
The wife is aged 74 and has experienced multiple and significant health problems. She was diagnosed with a medical condition in 2002, another medical condition in 2004, and a thirdmedical condition in 2005. Because of her considerable health issues, the wife was thereafter unable to continue to solely manage B Pty Ltd. Whilst the wife was receiving treatment for her medical issues, her children, Ms F and Mr E, commenced assisting her with the management of B Pty Ltd. There was no evidence adduced about the current state of the wife’s health, although she does depose to returning to part time administrative employment, which provides her with the income referred to in her Financial Statement. She also has the use of a motor vehicle provided by her employer.
The wife lives at K Street, Suburb M, Victoria (“the K Street property”) which is unencumbered and valued by her at $1,500,000. In June 2024 the property was independently valued at $1,930,000. She also has modest bank accounts of around $15,000 and superannuation of $68,000. She has no liabilities.
Counsel for the wife submitted that the following factors are relevant to determination of the wife’s application for spousal maintenance:
(a)The duration of the parties’ relationship was approximately 40 years, and the contributions of both husband and wife, including financial and non-financial;
(b)The husband has the ability to pay spousal maintenance given that prior to separation, the husband gave the wife $1,300 a fortnight to pay for groceries, which is not challenged by the husband. In addition, he also paid all bills and outgoings, until he received a letter seeking financial disclosure from the wife’s solicitors;
(c)The husband paid the wife’s private health insurance of $121 per week until 21 August 2024, when he ceased payments, contrary to his Outline of Case wherein he claims he “has continued to and will until the matter is resolved pay the wife’s private healthy insurance in the sum of nearly $500 per month”.
(d)In the husbands Financial Statement filed 26 April 2024, he deposed to a weekly income of E$5,965 which is E$310,128 per annum. In his affidavit filed 16 August 2024, (paragraph 23) he deposes to his personal annual income as E$877,402.
(e)The husband received income from his business activities of $1,386,346.18 between January 2023 and May 2024, which was not disclosed by the husband. The extent of the husband’s income during that period was ascertained by the wife upon inspection of documents produced by N Bank in response to a subpoena.
(f)The husbands’ weekly expenses of $3,529 include alleged payments to his son, Mr G, of $300 per week, which is disputed by the wife as this amount does not appear in the husband’s bank statements.
(g)Exhibit W-1 demonstrates on 30 June 2024, J Unit Trust paid the husband’s son’s company, O Trust (“O Trust”), $300,000 for which there has been no fulsome disclosure by the husband.[1]
(h)In the context of a $25-30,000,000 alleged pool of assets, the wife’s expenditure as deposed in her Financial Statement is not “laughably extravagant”.[2]
[1] Transcript 7 October 2024, p. 18 lines 1-14.
[2] Transcript 7 October 2024, p. 21 line 30.
The husband is aged 82 and deposes to being in poor health as a result of contracting a rare disorder in or about mid-2020. Whilst in remission, he asserts that this has impacted upon his overall health, and he is currently waiting to undergo treatment for another medical condition. The husband currently lives with his ex-wife in a suburb near Brisbane.
As to his capacity to pay, the husband relied on his Financial Statement filed 25 July 2024, in which he deposes to a shortfall between his weekly income and personal expenditure of $1,913.
Counsel for the husband submitted the wife’s application for spousal maintenance should be dismissed for the following reasons:
(a)The husband is 81 years old, in poor health, and living temporarily with his ex-wife.
(b)Per the husbands Consolidated Income Statement for the Armando Group for the year ending 30 June 2024, (Exhibit MA-1 to his affidavit of 16 August 2024) the annual income for the entities associated with the husband is $877,404, and the total expenditure after adjustments for normalisation are $832,532. The net profit figure calculated before tax is $44,873, which provides a weekly income of $863. This amount is set out in the husbands Financial Statement filed 25 July 2024.
(c)The Consolidated Income Statement demonstrates that the husband has an estimated weekly disposable income surplus after tax and before payment of living expenses of a deficit of $613.
(d)Since the date of the calculation of the Consolidated Income Statement, as a result of Mr E and Ms F withholding the distributions to which B Pty Ltd is entitled, the consolidated income to date of the income earning entities will be reduced by $305,735.
(e)Whilst there is significant capital wealth, the income available is not reflected by the assets such that he could not afford any extra expenses over and above his current living expenses.
In reply to the submissions of counsel for the husband, the wife’s counsel succinctly summarised the husband’s case as to his asserted financial position.
In November 2023, whilst the parties were living separated under the one roof, the husband unilaterally drew down a loan facility of $4,742,500, the proceeds of which were paid to the husband’s son, Mr G, or to his corporate entities, including P Group, as deposed to by the husband in paragraphs 25 – 28 of his affidavit of 16 August 2024, and to O Pty Ltd, as submitted by his counsel (Transcript 7 October 2024, p.49 lines 36-39). The husband’s case in opposing the wife’s lumpsum spousal maintenance application is that his consequential interest obligations for this loan and another loan from N Bank of around $2.8 million preclude him from paying the wife. The interest on these loans for the year ended 30 June 2024 is referred to in the CIS (Exhibit MA-1 to his affidavit of 16 August 2024) as $325,608 and $194,822 respectively.
The husband’s counsel agreed,[3] albeit in the context of seeking to have the loans discharged from the proceeds of sale of the property situated at C Street, Suburb D, the interest had been paid and serviced and there was no suggestion the lender of the funds was seeking a reduction of the capital borrowings. He did submit that if B Pty Ltd failed to provide the husband with an anticipated dividend of $305,000 there may be a future deficiency of funds.[4] Despite the husband deposing to the payment from B Pty Ltd being due in July 2024 and not having been paid, (paragraph 17(b)(iv) of his affidavit of 16 August 2024), as at the date of hearing, his counsel did not submit the loan was in arrears.
[3] Transcript 7 October 2024, p.51 lines 5 – 11.
[4] Transcript 7 October 2024, p.50 lines 16 – 17.
I do not accept the husband’s submissions that his obligations to pay interest on these loans should take priority over his obligations to pay spousal support to the wife, in circumstances where the wife was not consulted about the loans nor the disposition of proceeds of the loans. Counsel for the husband did not provide any cogent reason why that should be so.
Furthermore, I do not accept the husband’s jumbled attempt at explanation of his own document, Exhibit W-1, and the lack of candour surrounding the document and in particular the 30 June 2024 transaction. Exhibit W-1 is a schedule of advances made by J Unit Trust to O Trust, Mr G’s company, and some nominal repayments, between 22 July 2019 and 19 July 2024. Attempts were made to characterise the sum of $300,000 advanced by J Unit Trust to O Trust on 30 June 2024, as a “book entry” and not an actual bank transfer, without production of any corroborating bank statements or documentation. The documents and affidavits relied upon by the husband raise many questions about his actual financial position, but do demonstrate he has had until at least 30 June 2024, substantial financial resources at his command and disposal. In particular, Exhibit W-2, which is a list of documents required by Q Company, the valuer appointed to value the corporate entities, prior to the husband’s reliance on the 1994 orders, demonstrates significant deficiencies in provision of financial documents produced by the husband to enable the valuation of the financial position of the corporate entities.
After consideration of the evidence and the submissions of both counsel, I prefer and accept the submissions of counsel for the wife. It is clear from the wife’s Financial Statement there is a deficiency in the wife’s ’s income to meet her reasonable expenses and that she has limited financial resources. I am also satisfied that the husband has the capacity to pay a lump sum amount of $75,000 taking into account the matters outlined above. I also accept the submissions of counsel for the wife, that the wife may face future difficulties in enforcing an order for a periodic weekly amount of spousal maintenance.
There were no submissions by counsel for the husband, why a lump sum order should not be made, other than the husband’s financial inability to pay, which I have rejected. There were also no submissions about a time frame for payment by either counsel. I consider 30 days to be an appropriate timeframe for payment.
I consider the lump sum quantum of $75,000 in accordance with the wife’s proposal to be appropriate.
I will make orders accordingly.
I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 10 February 2025
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