Baldwin and Baldwin

[2010] FamCA 1223

FAMILY COURT OF AUSTRALIA

BALDWIN & BALDWIN [2010] FamCA 1223

FAMILY LAW – PROPERTY – Interim

APPLICANT: Mr Baldwin

RESPONDENT: Ms Baldwin

FILE NUMBER: SYC 2792 of 2010

DATE DELIVERED: 23 December 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 13 December 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Levy

SOLICITOR FOR THE APPLICANT: Barkus Doolan Kelly

COUNSEL FOR THE RESPONDENT: Mr Gould

SOLICITOR FOR THE RESPONDENT: Gayle Meredith & Associates

Orders

1. That the wife lodge a written undertaking in terms of paragraph 3 of the husband’s Amended Initiating Application within one month of today’s date.

2. That the order made by Registrar Crawford on 4 August 2010 for the appointment of a single expert real estate valuer be suspended until the parties are informed of the date for a first day of these proceedings before a judge.

3. That within one month of the date of this order each party provide to the other a list of documents pursuant to rule 13.20 of the Family Law Rules.

4. That otherwise the Husband’s Application for Interim Orders filed on 25 November 2010 is dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2792 of 2010

MR BALDWIN

Applicant

And

MS BALDWIN

Respondent

REASONS FOR JUDGMENT

the proceedings

1. By an Amended Application filed on 25 November 2010 the husband, Mr Baldwin, sought several interim orders which can be summarised as follows:

   ·that the wife pay to the husband a sum of $500,000 by way of partial property settlement

   ·that, in default of such payment, the wife effect the sale of the property at E and that each party receive the sum of $500,000 from the net proceeds, with the balance to be retained in a controlled monies account

   ·that the wife be restrained from dealing with her interest in any real property without the husband’s written consent

   ·that the order for valuation of the wife’s real estate be suspended

   ·that the wife provide a list of documents pursuant to rule 13.20 within 28 days.

   The wife, Ms Baldwin, sought the dismissal of the husband’s application.

Background

1. The husband, who is 45, and the wife, who is 46, commenced cohabitation in June 1993 or September 1993 according to the husband and the wife respectively.  They married in 1994 and separated in July 2009 or 17 August 2008, according to Mr husband and the wife respectively.

2. The parties have four children:

   T born in March 1995 (15)

   N born in January 1997 (13)

   D born in October 1999 (11)

   J born in December 2001 (9)

   The children live with the wife in the former matrimonial home at E.

3. J is a child with special needs.  The wife describes his difficulties in these terms:  “[J] suffers health and behavioural difficulties including sensory processing disorder, severe language impairment, high anxiety, obsessive behaviour, he has low facial tone and dribbles incessantly and he appears on the autistic spectrum”.  She annexed to her affidavit of 2 August 2010 a medical report which described J’s difficulties in greater detail. 

4. During the parties’ relationship the wife received large amounts of money from her family in the United Kingdom.  Her evidence was that she received a total of $4,747,200 from her father, mother and stepmother.  In particular she deposed that she received a total of approximately $1,143,600 from her mother as follows:

   24 March 2000         $500,000

   July 2006                    $48,120

   5 July 2007               $595,481

5. The wife alleged that her mother advanced these funds as interest free loans repayable on demand.  She maintained that her mother requested repayment in April 2009, as the global financial crisis had weakened her financial position.  She annexed to her affidavit of 10 December 2010 a copy of a letter which her mother wrote to her in April 2009.  Inter alia, this letter stated:  “I am afraid I will have to ask you to repay the loans I lent you, in the near future.  …I had thought things would get better but my income has reduced considerably compared to a couple of years ago so if you can arrange something over the next twelve months it will be appreciated.  I hate having to ask this.”

6. The wife alleged that she made repayments to her mother as a consequence of this request.  The husband alleged that she made the payments in an attempt to frustrate his application for interim and final orders.

7. The husband is the sole proprietor of a business known as ‘M Pty Limited’.  There is a dispute as to its value, with the husband and wife alleging $275,000 and $400,000 respectively.  A single expert, Mr G, has been instructed to value the business.

The Husband’s Application for an Interim Lump Sum Payment of $500,000

1. The husband alleged that he requires payment of $500,000 to fund this litigation and to provide him with financial security, pending final resolution of the proceedings.  He alleged that his income is insufficient to meet his expenses.  He alleged, further, that the payments by the wife to her mother were not in response to any demand and had occurred “in suspicious circumstances”. 

2. The husband suggested that he is required to rent “large and comfortable accommodation in the Eastern Suburbs” so that the children can stay with him for part of each fortnight.  He said that he wanted a lump sum payment so that he could purchase accommodation rather than pay rent.

3. The husband deposed that he has so far managed to pay his legal fees from income.  He has been billed $19,605 and owes his solicitors $7,625.  He has been advised that his total costs up to and including a three day trial will be in the range of $125,000 to $190,000.  The husband relied on a provision in his costs agreement that his solicitors have the right to terminate the retainer if payments are not made as requested.

4. On behalf of the wife it was submitted that this evidence was inadmissible in the husband’s affidavit and should properly have been given by his solicitor.  That contention seems to be correct but, in my view, this leg of the husband’s case fails for two other reasons.

5. Firstly, it was submitted correctly on behalf of the wife that there was no evidence that the husband’s solicitors have any present intention to terminate their retainer.  There was no evidence even of a warning to the husband that they may do so unless he pays a particular sum of money.

6. Secondly, careful consideration of the husband’s income and expenses would suggest that his financial position is somewhat rosier than he would have the wife and the court believe.  He is the sole director and shareholder of the company “M Pty Limited” and, obviously and appropriately, its financial affairs are arranged to achieve optimal benefit for him.  The reality of the husband’s financial position is, however, relevant for present purposes.

7. As would be expected the profit and loss statement of the company includes expenses from which the husband derive the sole benefit, for example, entertainment of $1,186 and motor vehicle costs of $23,363. More significantly, the balance sheet shows accumulated profits of $53,278 as at 30 June 2010.  He is entitled to withdraw this money, subject to the availability of cash and proper business practices.

8. A rough analysis of the husband’s current financial position can be gleaned from his 2010 income tax return, which the wife annexed to her affidavit but which was not provided by him.  His taxable income for the 2010 was $155,421 and he received a refund of $14,165.  His total income on a weekly basis is thus approximately $3,260.  His current fixed expenses would thus be:

Tax	Nil
Rent	$895
Health insurance	$31
Loan repayment	$870
Child support	$471
Total:	$2,357

which leaves a weekly surplus of approximately $900.  In his Financial Statement the husband deposed to a weekly child support liability of $870.  He updated this figure in his affidavit sworn on 24 November 2010 to $471, which is consistent with a Child Support Agency which he annexed.

1. The wife annexed to her affidavit copies of the husband’s credit card statements, which show payments to his lawyers between August 2009 and June 2010.  The husband advanced no reason why he is unable to continue to pay his lawyers, at least in part, by credit card.

2. For these reasons I am not satisfied that the husband requires a partial property settlement to fund this litigation.  His other justification for a lump sum payment was the necessity for him to have financial security pending resolution of the property proceedings.  He also relied on the “suspicious circumstances” in which the wife remitted money to her mother.

3. The husband’s preference to purchase accommodation rather than pay rent, while understandable, is one which would be shared by many litigants who must await final resolution of their disputes before they receive liquid funds.  I do not regard this preference as a justification for a partial property settlement, particularly when this step would deprive the children of their home.

4. As noted, the husband claimed that the payments by the wife to her mother were made “in suspicious circumstances”.  It was suggested that she chose to make these payments in the absence of any demand on the part of her mother.  As noted above, however, the mother certainly requested the wife to return the money and gave a valid reason being the weakening of her financial position after the global financial crisis.

5. The bank statements which the husband annexed to his affidavit show that these payments began in August 2009.  His credit card statements establish that he was consulting his current lawyers from at least August 2009.  The husband gave no explanation as to why he took no action to restrain the wife from making further payments to her mother until November 2010.

6. The husband pointed to no existing fund from which the wife could pay $500,000 to him.  He thus sought an order for the sale of the former matrimonial home in E.  This property was purchased entirely from funds provided by the wife, by way of a gift of $1million from her father and proceeds of sale of property which she owned prior to the marriage, plus a small bridging loan which she repaid in full.  The wife is the sole registered proprietor of this property. 

7. It is of concern that the husband seeks an order which would have the effect of depriving the children of their home and leaving the wife with only $500,000 to establish alternate accommodation for them.  The wife alleged, and I accept, that the loss of his home would cause great distress and upheaval to J because of his special needs.  I am not prepared to deprive the children of their home for the sole purpose of placing the husband in funds.

8. The wife has recently caused formal valuations to be carried out of three properties which she owns, being:

   E property   $3,250,000

   C property   $750,000

   B property   $700,000

   On this evidence, therefore, the wife owns real estate with a total value of $4,070,000.  By way of final order, the husband seeks that she pay to him a sum of $2,750,000.  The fact of the repayment of $1,390,000 by the wife to her mother would not thus defeat the final orders sought by the husband even assuming that there is a real prospect of such a result.

9. It may be that the repayments by the wife to her mother have frustrated a partial property settlement, pending final orders.  The fact is, however, that the husband took no steps to restrain the wife from making these payments.  He now seeks orders only for the sale of the former matrimonial home and not the wife’s two other real properties.  As indicated, I am not prepared to deprive the children of their home for the sole purpose of providing money to the husband.

10. For all of these reasons I am satisfied that the husband failed to make out a case for a partial property settlement to him by way of a payment of $500,000.  I will dismiss this part of his application.

The Injunctive Relief Sought by the Husband

1. Through her counsel the wife offered a written undertaking in terms of the orders sought by the husband.  I will order that she lodge such an undertaking within one month.

The Suspension of the Order for Appointment of a Single Expert Real Estate Valuer

1. On behalf of the husband it was suggested that valuation of the wife’s real estate should be delayed until the parties are given a date for a first day before a judge.  It is common knowledge that there are very significant delays in this registry and that proposal seems to me to have merit.  Otherwise, there will be a need for updated valuations at unnecessary expense. 

The Husband’s Application for an Order that the Wife Provide a List of Documents to Rule 13.20.

1. On behalf of the wife it was submitted that this order should be mutual.  I was given no reason why this obligation should be cast upon the wife alone and I will make an order in mutual terms.

I certify that the preceding twenty nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 23 December 2020.

Associate: 

Date:              23 December 2010