Ashforth & Ashforth (No 4)

[2010] FamCA 669

FAMILY COURT OF AUSTRALIA

ASHFORTH & ASHFORTH (NO. 4) [2010] FamCA 669

FAMILY LAW – SPOUSE MAINTENANCE – spouse maintenance for wife

Family Law Act 1975 (Cth)

APPLICANT: Ms Ashforth

RESPONDENT: Mr Ashforth

FILE NUMBER: MLC 9801 of 2009

DATE DELIVERED: 4 August 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Ainslie-Wallace

HEARING DATE: 21 July 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: S Thomas

SOLICITOR FOR THE APPLICANT: Newnhams Solicitors

COUNSEL FOR THE RESPONDENT: G Gould

SOLICITOR FOR THE RESPONDENT: Kennedy Wisewoulds

Orders

IT IS ORDERED:

1. That the Orders of Judicial Registrar Johnston made on 6 April 2010 be discharged.

2. That the husband pay to the wife the sum of $4,800.00 within 28 days of the date of this Order by way of arrears of maintenance.

3. That the husband pay to the wife the sum of $40,000.00 from the G Holdings account within 28 days from the date of this Order and that in the first instance the husband bear the cost of any division of that fund, the costs of such division to be taken into account in the resolution of the property matters between the parties.

IT IS ORDERED, PENDING FURTHER ORDER:

1. That save as provided for in Order 3 hereof the husband be and is hereby restrained from doing any act or thing or authorising anyone on his behalf to take any step to assign, encumber or otherwise diminish the funds in the G Holdings account.

2. That the husband be and is hereby restrained from doing any thing or taking any step or steps or authorising anyone on his behalf to do any act to sell, assign or alienate or further encumber any of the following properties:

   (a)       H property in the United Kingdom;

   (b)       B property in the United Kingdom; and

   (c)       P property in the United Kingdom;

3. That should the husband propose to take any step of the type referred to in Order 5 hereof then the husband must give to the wife 14 days notice before any such step or steps are taken.

4. That should the husband occupy the premises at P, United Kingdom, then he must forthwith on taking occupancy pay and continue to pay the mortgage instalments on that property.

IT IS NOTED that publication of this judgment under the pseudonym Ashforth & Ashforth is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  MLC9801 of 2009

MS ASHFORTH

Applicant

And

MR ASHFORTH

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before me for hearing are two applications for review filed by the parties.

2. Ms Ashforth (“the wife”) filed an Application in a Case on 17 April 2010 and Mr Ashforth (“the husband”) filed an Application in a Case on 30 April 2010.

3. Each party seeks a review of orders made by Judicial Registrar Johnston on 6 April 2010.

4. The wife further seeks orders for maintenance both as a lump sum and as a weekly amount.

Background

1. The husband was born in Australia in 1973.  He is employed by the British public service.

2. The wife was born in Australia in 1977 and currently lives in Australia.

3. The parties commenced cohabitation in December 2007 in England.

4. In 2008 the parties married.  Cohabitation and marriage took place in England.

5. There is one child of the marriage, E (“the child”) born in April 2009 in Australia.

6. In May 2009 the parties separated.

7. The child has lived with the mother for all of her life in Australia.

Applications

1. On 2 November 2009 the husband filed an Application for Final Orders at the Melbourne Registry of the Family Court of Australia.

2. On 26 November 2009 the wife issued a petition to which the husband is the respondent in the Family Division of the High Court of England and Wales at its Principal Registry in London.

3. In January 2010 there was preliminary argument as to the appropriate forum in which to determine the issues between the parties as a result of which orders were made restraining the wife from proceeding with her application before the High Court in England and transferring the husband’s application to be determined at the Sydney Registry of the Family Court of Australia.

4. On 21 December 2009 the husband filed an interim application for parenting orders.

5. On 22 December 2009 the husband sought orders providing for him to spend time with the child whilst he visited Australia.  Orders were made that enabled this to happen.

6. On 23 February 2010 the wife filed an Application in a Case seeking the following orders:

   “2.     That pending further order the husband pay direct to the wife by way of interim spousal maintenance the sum of $1,900.00 per week, the order to date from 9 December 2009  and the first payment, including any arrears, to be made seven (7) days from today’s date and weekly thereafter.…

   4.     That both parties do all acts and sign all documents necessary to withdraw the total amount currently invested with [G] Holdings including but not limited to:

   4.1.establishing an international business company (IBC);

   4.2.the payment of Euro 3,997 by the husband for the establishment of the IBC;

   4.3directing that the funds held by [G] Holdings be paid to the IBC;

   4.4directing that the funds then received by the IBC be paid to the wife by way of interim property settlement.”

7. On 6 April 2010 Judicial Registrar Johnston heard the wife’s Application in a Case filed 23 February 2010 and made the following orders:

   “1.That the wife’s Application in a Case filed 23 February 2010 be dismissed.

   2.That within 35 days the husband shall pay to the wife the sum of $40,000.00.

   3.In the event that the husband fails to comply with the above order both parties shall do all acts and sign all documents necessary to withdraw the total amount currently invested with [G] Holdings including but not limited to:

   a.establishing an international business company;

   b.the payment of €3,997 by the husband for the establishment of the international business company;

   and directing that the funds held by [G] Holdings be paid to the international business company and directing that $40,000.00 of the funds received by the international business company to be paid to the wife and the balance paid to the husband.”

8. On 17 April 2010 the wife filed an application for review.  She sought orders reviewing orders made by Judicial Registrar Johnston on 6 April 2010 and that they be discharged.  The wife also sought the following orders:

   “…

   3.     That within fourteen (14) days from the date of this order, the husband pay to the wife by way of lump sum spousal maintenance the sum of $7,920.00.

   4.     That pending further order the husband pay direct to the wife by way of interim spousal maintenance the sum of $664.00 per week, the first payment, to be made seven (7) days from today’s date and weekly thereafter.

   …

   6.     That both parties do all acts and sign all documents necessary to withdraw the total amount currently invested with [G] Holdings including but not limited to:

   6.1.establishing an international business company (IBC);

   6.2.the payment of Euro 3,997 by the husband for the establishment of the IBC;

   6.3directing that the funds held by [G] Holdings be paid to the IBC;

   6.4directing that the funds then received by the IBC be paid to the wife by way of interim property settlement.

   …

   13.That the husband do all acts and things to forthwith withdraw the funds invested by him in the NS&I PB and pay the total amount of that investment to the wife by way of interim property settlement.

   14.In the alternative to Order 13 above and pending further order the husband provide statements to the wife as and when they become available and otherwise account to the wife on a monthly basis in relation to the 14,000 pounds invested by the husband in NS&I PB and provide details on a monthly basis, commencing from the date of the investment, of any monies received by him as a result of that investment.

   15.That pending further order the husband be restrained from doing any act or thing that would cause the termination of any rental agreement or tenancy arrangement relating to [P property] and otherwise be restrained from occupying the said property.

   16.That the amounts paid to the wife be taken into account by the Trial Judge at the final hearing of these proceedings in such manner as the Trial Judge determines to be fair and equitable.

   17.That the husband be solely responsible for the payment of the costs of any single expert valuers appointed by the parties in these proceedings.”

9. The wife also sought orders regarding the sale of a property in England and that rents received from other properties in England be paid to reduce mortgages on those properties.

10. On 30 April 2010 the husband filed an application for review of the orders made by Judicial Registrar Johnston on 6 April 2010.  He sought an order that “the Application filed by the Wife on 23 February 2010 be dismissed to the intent [sic] that Orders 2 and 3 of the Orders made by Judicial Registrar Johnston on 6 April 2010 be discharged”.

11. On 10 June 2010 Cohen J made orders with the consent of the parties (other than as to Order 2.4) as follows:

    “1.     That both parties do all acts and things and execute all documents necessary to sell the property at [L], United Kingdom (“the [L] property”) by private treaty at a price agreed between the husband and the wife or failing such agreement at a price equivalent to the mean of two (2) valuations one obtained by and at the expense of the wife and one obtained by and at the expense of the husband, such valuations to be made not more than two (2) weeks apart from each other and in particular:

    1.1place the [L] property with [M Agency] for the sale of the property;

    1.2execute all documents for the sale of the [L] property;

    1.3pay to the agents equally any sums requested for advertising expenses;

    1.4give instructions to Messrs Bishop & Sewell Solicitors for the preparation of an appropriate contract and other documents as are necessary for the sale of the [L] property;

    1.5co-operate in every way with the agents and the tenants of the property, including making a key available, arranging for inspection of the property at times requested by the agents and ensuring that the property is in a neat and clean condition at the time of inspection by prospective purchasers;

    1.6execute the contract of sale; and

    1.7execute all other documents necessary to complete the sale of the [L] property.

    2.     That the parties do all acts and things and execute all documents necessary so that upon the sale of the [L] property, the proceeds of sale be paid in the following manner and priority:

    2.1in payment of the amount required to discharge the mortgage registered on the title of property;

    2.2in payment of agent's commission and expenses if any due on the sale;

    2.3in payment of legal costs of the sale;  and

    2.4the balance to be transferred into the trust account of Messrs Newnhams Solicitors and then to be deposited into a controlled moneys account in the joint names of the parties.

    4.     That pending further order the husband and the wife do all acts and things so as to ensure that all rents received from:

    4.1[H property] in the United Kingdom;

    4.2[B property] in the United Kingdom;

    4.3[P property] in the United Kingdom;

    4.4[L property] in the United Kingdom,

    be paid in reduction of the mortgages secured over each of the abovementioned properties and then in payment of any outgoings or expenses in respect of each property.

    5.     That within one month from the making of these orders and then monthly thereafter, the husband account to the wife for the rental income received in respect of the properties referred to in order 4 herein, the mortgage repayments in respect of each property, the expenses and outgoings paid in respect of each property, and the net balance received by the husband.

    6.     That either party have liberty to restore the matter to the list on seven (7) days notice in relation to any issue that arises regarding the sale of the [L] property.”

12. The matter was listed before me for hearing on 21 July 2010.  The remaining interim issues between the parties (all of which the husband opposes)[1] are:

    [1]“Wife’s Minute of Proposed Order” - Exhibit B

    “1.     That the orders made by Judicial Registrar Johnston on 6 April 2010 be reviewed and otherwise discharged.

    2.     That within fourteen (14) days from the date of this order, the husband pay to the wife by way of lump sum interim spousal maintenance the sum of $7,920.00.

    3.     That pending further order the husband pay direct to the wife by way of interim spousal maintenance the sum of $464.00 per week, the first payment, to be made seven (7) days from today’s date and weekly thereafter.

    …

    5.     That both parties do all acts and sign all documents necessary to withdraw the total amount currently invested with [G] Holdings including but not limited to:

    5.1.establishing an international business company (IBC);

    5.2.the payment of Euro 3,997 by the husband for the establishment of the IBC;

    5.3directing that the funds held by [G] Holdings be paid to the IBC;

    5.4directing that the funds then received by the IBC be paid to the wife by way of interim property settlement.

    6.     That pending further order the husband be restrained from doing any act or thing that would cause the termination of any rental agreement or tenancy arrangement relating to [P property] and otherwise be restrained from occupying the said property.

    7.     That the husband be solely responsible for the payment of the costs of any single expert valuers appointed by the parties in these proceedings.

    8.     That upon the husband selling the Tourag motor vehicle the husband be restrained from in any way dealing with the net proceeds of the said sale other than to have those funds deposited into the trust account of Messrs Newnhams Solicitors pending further order.

    9.     That pending further order the husband and the wife be restrained from doing any act or thing so as to further draw down on any loan facility, further mortgage, sell, transfer, encumber, deal with or adversely affect his interest in or in relation to the encumbrances upon the properties at:

    9.1[H] UK;

    9.2[B] UK;

    9.3[P] UK.”

Financial background

1. At the time that the parties commenced living together, the wife was working in London.  She was retrenched in about April 2008 and received a series of redundancy payments amounting to about £44,300.00.  The wife did not resume working before the birth of the child.

2. The parties jointly purchased a property in the United Kindgom in L.  That is to be sold and after payment of the mortgage and other expenses of sale, there will be little, if any, net proceeds remaining.

3. During the marriage, the husband converted an endowment fund established by him some years before and invested the funds in G Holdings, an offshore investment. The initial investment was in the order of €25,437.00 and presently stands at about €41,524.00.

4. The husband had a number of properties at the date of the marriage.  Each is presently tenanted and the rents paid against the mortgages of each.

5. It appears that the husband has other assets, for example, an entitlement to a pension from the United Kingdom government, that will be considered in later proceedings between the parties.

6. After the parties separated the husband paid between $2,900.00 and $2,600.00 per month to the wife, the amount varying with the exchange rates from time to time. These funds, referred to by the husband as “Interim Financial Arrangements” were paid until November 2009.

7. In November 2009 the husband applied to the Child Support Agency (“CSA”) for an assessment of his child support for the child.  The husband was assessed and has made payments to the CSA in accordance with that assessment.  According to an email from the husband to the wife[2], the payments were to cease because he believed that it was “not uncommon” for women in developed countries to return to work between three and six months after the birth of children and the payment of money to the wife to November represented the seventh month after the birth of the child.

   [2] Annexure B, Husband’s Affidavit sworn 22.02.10

8. Despite applications for work, the wife did not secure employment until April 2010.  In the time before that the wife was supported in her daily living expenses through loans from her parents and sister.  The wife sold a diamond ring and directed the proceeds, some $13,000.00, to be paid to her parents in partial repayment of the loan from them and has diamond earrings presently offered for sale but not yet sold.  The wife has no other assets or sources of funds other than her income and what loans may be advanced by her parents from time to time.

9. While the husband was working overseas he received additional income to reflect the circumstances of his posting.  The husband is presently posted in the UK and does not expect to be returned to an overseas posting.  The husband believes that his present accommodation, which is heavily subsidised by the government employer but which is designated for married staff, will not continue to be available and proposes to occupy one of the properties owned by him in P.

10. Since the separation of the parties, the husband has increased the mortgage on one of the properties owned solely by him in the amount of £12,000.00 and borrowed a further amount of £25,000.00.  He sold his car for £18,000.00, the proceeds of which he paid to his legal advisors together with £15,000 from the money borrowed.  It seems undisputed that about £10,000.00 was paid against his visa card account.  The husband says that he has borrowed to his capacity.

11. The husband’s net weekly salary is about $1680.00 before the payment of child support.

12. From 12 April 2010 the wife has secured employment with a Bank.  Her remuneration package is comprised of salary, superannuation and an entitlement to bonuses. I am satisfied that she has no present entitlement to a bonus as one might expect given that she started her employment in April 2010.  The salary component is $104,545.00 and her net weekly income is $1475.00.

Spouse maintenance

1. Section 72 of the Family Law Act 1975 (Cth) (“the Act”) provides that a party to a marriage is liable to maintain the other party to the extent that the first is able to do so and if and only if the party seeking support is unable to support him or herself adequately by reason of defined circumstances and which are well known. There are then two bases on which an order for maintenance of a party depend; need of the applicant, and ability to pay by the respondent. If an applicant cannot establish a need for that support then a maintenance order may not be made.

2. The extent to which a party is able to support him or herself adequately is determined by reference to the matters in s 72(5). Adequacy is not synonymous with subsistence but at a level reasonable in all the circumstances including (but not limited to) the assets and resources that were available to them in common during the course of the relationship. I also bear in mind that there has been no division of property between the parties.

Weekly maintenance

1. In this case the wife claims a shortfall of her weekly expenses against her income of $464.00 and seeks a weekly sum in that amount.

2. The wife filed a Financial Statement on 22 December 2009 in which she set out her expenses amounting to $879.00 per week apart from the expenses relating to the child.

3. Counsel for the husband went through the wife’s claimed expenses to demonstrate that they were either unnecessary or extravagant.

4. There was some argument during the hearing about the cost of accommodation rented by the wife.   After separation, the wife was renting a one bedroom flat in an inner suburb for her and the child.  As the child grew, it became apparent that she needed her own room and the wife secured a flat, again in the same suburb, for $500.00 per week.  It was argued that the wife need not have sought accommodation in that suburb, it being said that it was an expensive suburb in which to live. The wife’s evidence was that the husband’s present accommodation is spacious and pleasant.

1. I see no reason why the wife who has the care of the child should have a living arrangement less pleasant than that of the husband.

2. No suggestion of comparable but cheaper accommodation was made.  I do not find that it is unwarranted or extravagant for the wife to choose to live in the inner suburb nor that the rent she is paying is unnecessarily high.  There was no evidence put to the Court to the contrary.

3. The resolution of what is or what is not an appropriate expense is somewhat impressionistic.  There are items which, in my view, while consonant with a comfortable style of living and which, no doubt, the wife enjoyed during the marriage should not be included in determining reasonable living expenses for the present purposes.  They are amounts allocated to: charitable giving;  subscriptions;  DVD;  CD purchases;  restaurant meals;  Reiki therapy;  gym membership;  home decoration;  gifts (as to $35.00);  books and magazines (as to $30.00).  These amounts when deducted leave the wife reasonable weekly expenses of $658.00.  When considered with the expenses referred to in her Affidavit of June 2010 (leaving out those that relate to the child’s share of expenses) amount to $1,266.00 each week.  There is, in the result, no shortfall between her weekly expenses and income.  I make this finding understanding that by excising  expenses as I have done, I have reduced the wife’s standard of living below that to which she may have been accustomed but I am satisfied that it will not render her standard of living to subsistence level.

4. I accept the submission of counsel for the husband that to the extent that the child’s expenses are included in the wife’s Affidavit of June 2010 they should not be taken into account for the purposes of making a determination of whether the wife is in need of maintenance from the husband.

5. I have, in the result determined that the wife has no need of weekly financial assistance.

6. It was argued that the husband has not made a complete disclosure of his bank accounts.  The basis for this submission is found in the tracing of the £25,000.00 borrowed by him.  Counsel for the wife pointed to an account into which £15,000.00 of that was deposited, an account which had not been disclosed in any financial statement by the husband.  There was no doubt that the account was not disclosed by him, but there is no evidence before me on which I could find that it was an account held by him or of which he was the beneficial owner. 

7. I have considered the husband’s Financial Statement filed 29 March 2010, as well as the Amex statements tendered in evidence during the hearing.  Adopting the same approach to his claimed expenses as I have with those of the wife, I am satisfied that he has the capacity to meet an order for maintenance in favour of the wife in the order of about $200.00 per week (excluding his claimed costs of spending time with the child, which in itself would permit of further funds to be available to the wife).

Lump sum maintenance

1. The wife sought a lump sum amount of $7,920.00 which is calculated by reference to the maintenance paid to her by the husband until November 2009 (less his assessed child support) for the period from November 2009 until two weeks after she commenced employment.

2. Before starting her present employment and after the husband stopped making payments to her, the wife’s income comprised payments from Centrelink and financial support from her parents.  Her financial statement discloses a clear shortfall between her income and reasonable expenses.

3. I have no difficulty finding that at that time she was unable to provide adequately for her own support.  I do not regard her parents’ loans to her as obviating any obligation on the husband to provide for her support should he have such a capacity.

4. I am further satisfied that, by reference to the husband’s financial statement, he had (and continues to have) a capacity to make maintenance payments to the wife.  I will order that the husband pay to the wife the sum of $4,800.00 being $200.00 per week over 24 weeks, referrable to that period.

Contingency provision

1. Although I have found that the wife does not have an immediate need for maintenance, it is clear that she has limited resources on which she can draw pending the resolution of the property matters with the husband.  I will make a modest order for payment to her of a lump sum from the G Holdings account, such sum to be accounted for in the final resolution of financial matters between the parties. I will also order that the balance of the funds in that account be not dealt with pending further order of the Court.

Injunctions

1. It is clear that since the order of the Judicial Registrar that required the husband to make the payment to the wife of $40,000.00, he has drawn from various sources about £38,000.00 which he has paid to his lawyers and to other expenses.  He says that he has no further capacity to borrow funds.

2. The wife sought injunctions restraining the husband from further encumbering or otherwise dealing with the three properties in his name.  The husband’s counsel argued that there was no reason to restrain the husband since it had not been shown that he had dissipated assets.  While there is insufficient evidence on which one could find that the husband had dissipated assets or embarked on a scheme the purpose of which is to frustrate any future order, this Court has power pursuant to s 114(3) to:

   “…grant an injunction…in any case in which it is just or convenient to do so…”

3. Ultimately, each case will involve an overall assessment of a number of factors to determine the just or convenient result.

4. The husband has since the order of the Judicial Registrar increased his indebtedness and increased the mortgage on one property.  There is little in the way of assets from which any property order in the wife’s favour could be made.  I am satisfied that it is just and convenient to order, pending further order, that the husband be restrained from further encumbering or otherwise reducing his equity in those three properties.

5. The husband said that he proposed to move into the P property.  The wife seeks that he be restrained from so doing.  Clearly, the effect of his actions will mean that the rent otherwise paid on the property will be lost and that has been applied against the mortgage on the property.  It was not suggested that if he moved into that property he will not otherwise pay the mortgage on the property and it is appropriate that he do if he has the benefit of living in it and I will order he continue to pay the mortgage.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ainslie-Wallace

Associate: 

Date:  4 August 2010