Badger & Badger

[2008] FamCA 950

FAMILY COURT OF AUSTRALIA

BADGER & BADGER [2008] FamCA 950

FAMILY LAW – SPOUSAL MAINTENANCE – Interim – whether wife able to adequately maintain herself having regard to the factors in s 75(2) of the Family Law Act 1975 – where parties’ adult son living with wife and working full time – whether son’s ability to contribute towards household expenses a financial resource of the wife – where wife’s expenses do not exceed her income – application dismissed.

FAMILY LAW – PROPERTY – Interim distribution – where husband would be required to borrow to meet any order for lump sum payment to the wife – application dismissed.

Family Law Act 1975 (Cth) ss 72, 75(2)

Harris & Harris (1993) FLC 92-378
APPLICANT:	Ms Badger

RESPONDENT: Mr Badger

FILE NUMBER: MLC 5032 of 2008

DATE DELIVERED: 12 November 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bryant CJ

HEARING DATE: 6 November 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Melilli

SOLICITOR FOR THE APPLICANT: Voitin Walker Davis

COUNSEL FOR THE RESPONDENT: Mr Dixon SC

SOLICITOR FOR THE RESPONDENT: Taussig Cherrie & Associates

It is ordered by consent until further order

1. That the wife have sole use and occupation of the former matrimonial home at D to the exclusion of the husband.

2. That within 7 days of this day the wife cause to be delivered to the husband’s business premises his personal chattels currently in the former matrimonial home together with a CD of photographs.

3. That forthwith the parties do all things and sign all documents necessary in order to draw down on the existing mortgage facility encumbering the former matrimonial home the sum of $100,000.00 to be applied as follows:- 

   (a)       $50,000.00 to be paid to the solicitors for the wife; and

   (b)       $50,000.00 to be paid to the solicitors for the husband;

   and such monies to be ultimately characterised by the trial judge.

4. That the husband by his servants or agents be restrained from altering any of the corporate structures, including directorships, shareholdings or other, without the written consent of the wife or order of the Court, provided that such consent will not be unreasonably withheld, and further the husband notify the wife in writing no less than 14 days in advance of any intended sale of any asset in his name or any company of which he is a director and / or shareholder and he not encumber any property in the name of that entity without giving 14 days’ prior written notice to the wife.

5. That the husband cause to be paid the fees of:

   (a)       Mr C in respect of the valuation of the parties’ business; and

   (b)       all property valuations being conducted by M Organisation.

6. That the husband forthwith provide to Mr C all documents of a financial nature requested by Mr C so as to enable him to complete his valuation.

7. That both parties forthwith comply with the obligation to make discovery in anticipation of the Conciliation Conference.

8. That the husband cause to be paid all interest due on monies drawn down in accordance with Order 3.

9. That the husband pay or cause to be paid current taxation liabilities of the wife and of M Badger and the husband in accordance with current taxation demands within 28 days, and such sum to be drawn down from the existing mortgage facilities encumbering the home.

10. That the husband cause to be paid all interest due on monies drawn down in accordance with Order 9.

11. That the wife have sole use and occupation of the houseboat “…” located at E from this day until 12.00pm on 14 January 2009 and thereafter the parties have sole use of the said houseboat as follows:-

    (a)the husband from 12.00pm on 14 January 2009 until 12.00pm on 28 January 2009 and each alternate fortnight thereafter;

    (b)the wife from 12.00pm on 28 January 2009 and each alternate fortnight thereafter.

12. The husband forthwith pay or cause to be paid the insurance premium relating to the houseboat until no earlier than March 2009.

It is further ordered

1. That the order sought for spousal maintenance in paragraph 3 of the interim orders sought and for partial property settlement being the order sought in paragraph 4 (as amended) of the interim orders sought in the wife’s application filed 3 June 2008 be dismissed.

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

LIST OF HUSBAND’S CHATTELS

Framed Roman Soldier Artefact

Document signed by Pope

Original family tree

Wooden box of old letters (from when the husband was a child) - ? if found

Specific DVD of family reunion in Malta 2004

Video of photos (as discussed)

Framed acknowledgement to husband’s grandfather – but not frame

Personal Papers eg birth certificate – to look for

Husband’s Year 12 Photo Album (in specie) – to look for

Husband instructs that:

• Wooden box is located in main bedroom, in walk-in wardrobe, on the top left shelf and the wife asserts that as at this date she has been unable to locate the said box.

• Personal papers in a black concertina file in walk-in wardrobe on right side.

• Year 12 album – in cabinet below videos in study.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 5032 of 2008

MR BADGER

Applicant

And

MS BADGER

Respondent

REASONS FOR JUDGMENT

Introduction  

1. In the course of property proceedings, the wife sought a number of interim orders.  Some of them were resolved by negotiation, but two issues remain.  The first is the wife’s application that the husband pay to her spousal maintenance in the sum of $2,000.00 per week, inclusive of her current salary of $1,144.00 per week, or alternatively her current salary together with

   a)utilities for the D property, being power, gas and water;

   b)rates for the D property;

   c)Foxtel for the D property;

   d)home phone for the D property; and

   e)petrol, registration, repair and insurance costs for the wife’s car.

2. Matters agreed between the parties to be paid pending the finalisation of proceedings are:

   (1)that the wife have sole use of the former matrimonial home at D;

   (2)that both parties be entitled to draw down on the existing mortgage facility encumbering the former matrimonial home the sum of $50,000.00 each, and the husband to meet the interest on the borrowings;

   (3)the husband be restrained from altering any of the parties’ interests in corporate and trust entities pending the determination of proceedings;

   (4)the husband pay any current tax liabilities of the wife and M Badger with the payment necessary to be drawn down from the mortgage facilities encumbering the former matrimonial home, with the husband again paying interest on the borrowings;

   (5)that the use and occupation of the parties’ houseboat located at E be divided between the husband and wife at particular discrete periods; and

   (6)the husband pay insurance premiums relating to the houseboat until March 2009.

3. The wife also seeks the sum of $30,000.00 by way of part property settlement.

The wife’s case

1. The parties were married in April 1980 and they separated in April 2007.  They have three adult children, one of whom, V Badger, and his daughter, live with the wife.

2. Prior to separation, the husband and wife conducted a business known as N Business.  That company employs no less than 24 people full time and the wife has been actively involved in the running of the company.  The parties also conduct their financial affairs through the Badger Family Trust, of which the corporate trustee is F Pty Ltd, and the husband and wife are directors and shareholders.  They are also directors, shareholders and secretaries of five other companies in conjunction with the husband’s business partner and his wife.

3. Following their separation, the husband maintained the status quo in relation to the financial arrangements.  Both parties continued to draw a net income of $1,144.00 per week and initially all personal household outgoings were paid for by the business.  That came to an end when the husband changed banks and the wife no longer had signing rights on the accounts. 

4. The accounts to which the wife previously had access were used to pay the running costs of the family vehicles, fuel, repairs and maintenance, and other direct debits including health insurance, telephone, life insurance, car payments and other necessary payments were drawn on the business general account.

5. In April this year the husband changed the arrangements for payment of utilities, including electricity and gas, and those payments are no longer being paid on behalf of the wife through the business entities.

6. Whilst there is no finally agreed value for the assets, the wife’s counsel asserted that the business had a value of about $4 million and the parties’ interest in a number of commercial properties was between $16 million and $17 million.  These assertions were not put in issue by the husband and whilst I accept that they were not put forward as a final and accurate valuation of the parties’ assets, they were asserted to indicate that the parties have significant assets and have enjoyed a very comfortable lifestyle.  These assertions were not contested.

7. The wife’s case in essence is that the payments now sought by her in addition to the salary she receives reflect payments being made both prior to and after separation for her support including the running of the household.  The household includes the parties’ son V and his daughter, and the wife asserts that her expenses include the contribution to assisting in her maintenance.  She has no borrowing capacity and her income is solely the salary she is receiving.

8. As far as the lump sum is concerned, she seeks a modest amount to enable her to meet expenses over the Christmas period and to allow her some back-up financial support including the holding of a 50^th birthday party..

The husband’s case

1. The husband does not contest the factual background, however he asserts that in addition to both parties drawing down the same salary each week, the wife’s credit card payments are also being met.  Secondly, he contends that there is a conciliation conference to be held in December and the wife’s application is premature given the proximity of that conference, and the wife has no need for spousal maintenance within that short period.

2. Thirdly he contends that the wife has not satisfied the threshold test that she is unable to maintain herself, in particular he contends that it would not be unreasonable for the parties’ son V, who is living with the wife, to make a payment towards household expenses and that that is a resource available to the wife, of which she is not presently availing herself.  Finally, the husband asserts he is running the business, has rationalised the bank accounts, is meeting interest on draw downs and has no capacity to pay any further sums to the wife.  He also points to expenditure on shoes, clothing, hobbies and education which appear to be overstated.

3. In relation to the lump sum sought by the wife, the husband contends that he has no savings from which such a payment could be made, and the wife cannot demonstrate that he has the capacity to meet a lump sum.  He contends that it would not be reasonable for the husband to be required to draw down and borrow to meet a payment to the wife.

4. The husband contends that the wife is receiving an extra $20,000.00 per annum.  The wife had not had an opportunity to respond to that allegation but the wife through her counsel denied it and accordingly as I have no capacity in these interim proceedings to determine this matter I propose, as I informed the parties, that I will not pay any regard at this stage to that assertion which is denied.

The law

1. The right to spousal maintenance is contained in s 72 of the Family Law Act 1975 (Cth) which says as follows:

   (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).

   (2)The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.

2. Thus the first matter to be determined is whether the wife is unable to support herself adequately, which is qualified by the matters referred to in s 75(2). Section 75(2) says as follows:

   (2)      The matters to be so taken into account are:

   (a)      the age and state of health of each of the parties;

   (b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

   (c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

   (d)commitments of each of the parties that are necessary to enable the party to support:

   (i)       himself or herself; and

   (ii)a child or another person that the party has a duty to maintain;

   (e)the responsibilities of either party to support any other person;

   (f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i)any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party;

   (g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;

   (h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;

   (ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and

   (j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

   (k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

   (l)the need to protect a party who wishes to continue that party’s role as a parent;

   (m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation;

   (n)the terms of any order made or proposed to be made under section 79 in relation to:

   (i)       the property of the parties; or

   (ii)vested bankruptcy property in relation to a bankrupt party;

   (na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (p)the terms of any financial agreement that is binding on the parties.

3. If the Court determines that the wife is unable to adequately maintain herself, having regard to any relevant matter referred to in s 75(2), then the husband has a liability to maintain her to the extent that he is “reasonably able to do so”. In considering whether a party is unable to support themselves, the Court is required to consider the income, earning capacity and financial resources of that party, and their reasonable expenses, having regard to the matters in s 75(2).

The evidence

1. The wife relies upon an affidavit and financial statement filed 3 June 2008.  The husband relies upon an affidavit and financial statement filed 25 July 2008.

2. The wife’s financial statement indicates that she receives a weekly income of $1,548.38 (this is a gross annual salary of $80,000.00 which the husband previously agreed to pay).  She deposes to the fact that her son V earns $865.00 per week.

3. The wife sets out her expenditure as being $394.46 on income tax and $1,144.00 on food, entertainment and personal expenses.  Her expenses include utilities including gas, electricity, telephone and motor vehicle expenses, which she is presently seeking be paid by the husband.  Her expenditure includes expenditure on entertainment, hobbies, holidays, education expenses for children, books and magazines, gifts, hairdressing and toiletries. 

4. She also asserts in paragraph Part H of her financial statement that of entertainment and living expenses, $572 per week is spent on her three children, granddaughter and mother.  It is not clear what portion of the household expenses specifically relate to her son V and granddaughter who live with her, and whether any of the expenses the wife claims for utilities and the running of the household generally are contributed to directly by her son.  I infer from the evidence available, namely that the wife spends $572 of her weekly expenses on other members of the family, that she is meeting some of these expenses, if not all of them, without any contribution.  Certainly she does not indicate in her financial statement that she is receiving any contribution to the household expenses from her son, who is working full time.  I find that this is a financial resource available to her to assist in meeting some of the household expenses.

Conclusion

1. The wife has a gross income of $80,000.00 per annum, or $1,548.38 per week. Her weekly expenses, including her income tax, are $1,538.46. Thus she has demonstrated no shortfall of expenditure over income which would satisfy the test in s 72 that she is unable to support herself adequately, having regard to the income that she receives. She does not assert in her affidavit that her standard of living is suffering as a result of these arrangements. She has the capacity to meet payments she has sought from her own income, whilst maintaining a standard of living that in all the circumstances that is reasonable (s 75(2)(g)). I draw the inference from her financial statement, in addition, that there is a capacity for her son V to contribute to household expenditure, were it necessary, and that a portion of the payments being paid by the wife are for the support of others for whom she has no legal obligation. Thus the wife has not established that she cannot support herself adequately and thus that any further order for spousal maintenance should be made. I do not need therefore to consider whether the husband has the capacity to pay spousal maintenance.

2. As to the wife’s application for a lump sum, by way of partial property settlement, while such an application does not appear unreasonable, given the lifestyle and assets of the parties, that alone is not the only consideration.  I cannot be satisfied on the material filed to date that the husband has the capacity to meet this payment without further borrowings thereby increasing existing liabilities.  That would require him to meet further interest payments, and in the absence of any evidence that there is any other fund from which such a payment could be made, I am not satisfied that the wife’s need for such a payment is such that the husband should be required to borrow to meet that payment.  In Harris & Harris (1993) FLC 92-378 from 79,929 to 79,930 the Full Court discussed matters to be considered in exercising the power to make a partial property order.

   We do not doubt that the Court has power in a proper case in s. 79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing. We do not consider that it is necessary to draw a distinction in terminology between an ``interim'' order and a ``partial'' order.

   But in the exercise of that power the following matters need to be considered:—

   (1) The exercise of the power should be confined to cases where the circumstances presented at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s. 79 proceedings. However, circumstances may arise before there can be a final hearing which dictate that some part of the property of the parties should be the subject of orders. A common example is where both parties agree to the disposal of some assets pending the trial. However, we do not consider that it is confined to cases where the parties consent. Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.

   As to the position in England under the Matrimonial Causes Act 1973 in relation to an interim property order in opposed proceedings and as to the matters to be taken into consideration in the exercise of that discretion including the ``overriding grounds of individual or family welfare'' — see the discussion in Barry v Barry [1992] 3 All E.R. 405.

   (2) It is an exercise of the s. 79 power. Consequently it must be performed within those parameters. Since it is not the final hearing the Judge is unlikely to have the final findings, but the exercise must fall within that general framework and the material available at that time.

   (3) Of necessity it is likely to be a somewhat imprecise exercise. Consequently, it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so. It is for this reason that we doubt whether the distinction which Nygh J drew between interim and partial orders is necessary or desirable.

1. The wife has not demonstrated the “compelling” circumstances referred to by the Full Court.  I am also mindful of the fact that the parties will be attending mediation in December and will have the opportunity to further discuss appropriate financial arrangements pending the disposition of the matter.   Accordingly, in addition to the orders that I must make by consent, there will be orders dismissing the wife’s application for spousal maintenance contained in order 3 of her application for interim orders and the order sought (as amended) in order 4 of that application filed 3 June 2008.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Chief Justice Bryant

Associate: 

Date:  12 November 2008