Baney and Baney

[2008] FamCA 1247

FAMILY COURT OF AUSTRALIA

BANEY & BANEY [2008] FamCA 1247

FAMILY LAW – SPOUSAL MAINTENANCE – Interim
FAMILY LAW – COSTS – Preliminary Costs
FAMILY LAW – INJUNCTIONS – Preservation of property

Family Law Act 1975 (Cth)

APPLICANT: Ms Baney

RESPONDENT: Mr Baney

FILE NUMBER: SYF 2852 of 2004

DATE DELIVERED: 22 October 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston JR

HEARING DATE: 22 October 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Millar

SOLICITOR FOR THE APPLICANT: Slade Manwaring Solicitors

COUNSEL FOR THE RESPONDENT: Ms Gillies

SOLICITOR FOR THE RESPONDENT: John Carmody & Co

Orders

1. That pending further order, the husband and the wife do all acts and things necessary in their capacities as officers of D Pty Ltd, ACN …, to cause such company to pay to the wife, by way of dividend, the sum equivalent to 60 per cent of the rent paid on the two leases to the B Company within seven days of the rent being received by the company.

2. That within 60 days, the husband cause the sum of $80,000 to be paid into the trust account of the wife's solicitors, to be utilised on account of the wife's costs and disbursements in these proceedings, including in relation to solicitors, counsel, accountants, valuers and other disbursements. 

3. That paragraph 6 of the wife's Application in a Case filed on 23 September 2008 is dismissed.

4. That by consent within 14 days the husband provide to the wife's solicitors by way of disclosure:

   (a)particulars of any moneys or assets received by him as beneficiary under his mother's will;

   (b)       a copy of such will; and,

   (c)       a copy of probate, if such can reasonably be obtained by him.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2852 of 2004

MS BANEY

Applicant

And

MR BANEY

Respondent

REASONS FOR JUDGMENT

1. These are interim financial proceedings, the parties to the proceedings being Ms Baney ("the wife") and Mr Baney ("the husband").  The matter that is immediately before the Court is an interim application by the wife, seeking relief in various heads. 

2. The first matter really falls within the broad description of spousal maintenance and the order sought is that, pending further order, the husband and the wife each do all acts and things necessary in their capacities as officers of D Pty Ltd to cause that corporation to pay to the wife, by way of a dividend, firstly, the sum equivalent to the rent paid on the two leases related to B Company from 15 July 2005 to date, within 14 days thereafter, and the sum equivalent to the rent paid on the two leases to B Company within seven days of the rent being received by D Pty Ltd. 

3. There is an application by the wife which falls within the broad description of an amount of funds sought by way of preliminary costs, to assist the wife with funds to be able to continue to be legally represented in the proceedings and undertake the preparation of the substantive proceedings.  The amount sought by the wife is $200,000, and that is sought to be payable within seven days. 

4. There is an application for an injunction to restrain the husband from dealing with proceeds of sale received in relation to the sale of the business which the parties have, which is known as T Business, from a nominated corporation, and, secondly, that the husband furnish to the solicitors for the wife, by way of financial disclosure, copies of all documents relating to the completion of the said sale.

5. I just pause to make the observation, insofar as the second part of that application is concerned, I understand that the husband is happy to provide to the wife any documentation that he has in respect of that sale.  There was another aspect to these proceedings today and that relates to disclosure.  Happily, the parties have been able to agree on the order which is sought by the wife, on the basis that certain details would be provided by the husband to the wife within 14 days.  That would be that, within 14 days, the husband provide to the wife, by way of disclosure, particulars of any moneys or assets received by him as a beneficiary under his mother's will and a copy of the mother's will. 

6. The husband opposes the orders sought by the wife and seeks orders to the effect that the wife's application be dismissed with costs. 

7. The brief background matters are that the husband was born in December 1950, the wife was born in March 1959.  The parties commenced cohabiting in early 1984, they married in May 1985 and they separated on 5 January 2004.  There are two children of the marriage, both now adults, a son who was born in November 1985, and a daughter who was born in June 1988.  The younger of those children, the daughter, as I understand it, still resides with the wife and I think a part of the wife's case is that she has to expend some level of funding for the daughter; I think it is the position that the daughter in fact works in the family's business, being T Business, to which I have already referred.

8. Dealing with the first matter, the position in relation to the wife is that the wife lives in the former matrimonial home.  Some of the cost involved in that is paid by the husband but it is still the case that the wife has expenditure in respect of that. The husband has been living for quite some time in separate accommodation; I think, in more recent times, in a unit which he purchased since the parties separated.  The parties are involved in a number of businesses and have been over the years and there is a financial structure through which these businesses are operated which has some level of complexity to it, in that there are corporations involved, including trustee corporations and trusts.  There are a number of items of real estate, including a farming property in the Tablelands.  The parties, through the relevant vehicles, sold a portion of the T business to associates of theirs some years ago and, under the arrangements in respect of that sale, part of the purchase price has been received by the relevant corporations or vehicles and there is still owing a significant sum, which, I think, on my quick calculation, came to somewhere between $700,000 or $800,000.  The parties have also been involved in the acquisition and leasing of a B Company business, which is at L, and that business returns income to the relevant vehicle. 

9. The wife has been working for some time, on a contractual basis, with the local Council, and this is in relation to a specific facility that that Council presents to the community.  The wife has a contract which I think involves her in receiving income through that activity for something like eight months of this year, and she has done this - I cannot remember on how many occasions but at least a couple of occasions and the wife is currently involved in doing that.  She earns income from that activity in the amount of about $900 or a little bit more per week but this year - and it may be the same case in the previous years - that contractual arrangement under which she receives income comes to closure, I think, for all practical purposes, in about November, so within a matter of weeks.  Then she does not receive any income from that activity.  As I say, the wife has been involved in that for some years; it is not clear to me, whether in fact she will be successful in a contract for the next year, which starts some months away in any event, if that was the case. 

10. The litigation between the parties has been ongoing now for quite a few years and, from my observation of the matter, it is somewhat unusual that the case has taken so long to proceed through the Court system.  But it was explained to me by the legal representatives that in fact the parties had been allocated trial dates on an earlier occasion but the matter had not gone ahead.  From what I can see of the case, it is nowhere near at a level of preparation where there could be any proper trial.  It is still some distance away from that, let alone having been ready on some earlier occasion.  I understand that the amount of property involved in broad terms is about 6.9 or perhaps 7 million dollars.  There are a number of outstanding issues and matters which need to be attended to in order to be able to present the appropriate material before the Court, to make precise findings about the value of property for the purposes of section 79 of the Act. 

11. It is said on behalf of the wife that the wife requires income, that she requires support, to assist her to meet her expenditure.  She says in her financial statement that she requires $2602 per week as her total personal expenditure.  That appears to include expenditure for the parties' adult child, their daughter.  This situation is somewhat complicated and it is probably not all that critical in terms of the Court making an interim determination but, interestingly, income from the Baney family trust, as set out in a statement of income and expenditure for that entity for the financial year ended 30 June 2007, shows a distribution of $50,000 to the parties’ daughter.  There is no evidence before me at the present time about whether that was income actually received by her or whether that was applied to meet some family expenditure or some other requirement but, in any event, learned counsel for the husband says that what the wife estimates is involved in her weekly expenditure is a considerable exaggeration.  I must say my own perusal of the figures led me to a similar view, but perhaps not in the same terms.  But I am satisfied that the wife has a need for a significant amount of income each week.  There was a strong submission put on behalf of the husband that the wife has had experience in various areas of employment, particularly managing businesses, over the years, that she has been able to undertake her present assignment under contract with the local Council and really there is no reason why she should not be able to obtain employment to assist her over that period, when her contract with the Council concludes for this year. 

12. I must say I do not hesitate in being able to make the relevant finding under section 72 of the Act that the wife reaches the threshold and especially in circumstances, when one considers the overall landscape of this case.  We are looking at a substantial amount of property, we are looking at what is at least to the extent that the Court is able to get a picture of it at the present time, a reasonably high standard of living by community standards of the parties over the years.  I am not persuaded that the Court would take an approach, certainly not at this interim stage, where it would require evidence on the part of the wife to show, for example, various job applications that she has made.  She has made a pretty good fist, with respect to her, of endeavouring to earn income in the circumstances that she has and, of course, that involves a lot of travelling for her.  Presumably, it is something that she also enjoys but at the end of the day I am satisfied, on the facts of this case, that the wife reaches the threshold requirement.  That is, that she requires an amount of support and that, in all the circumstances, it would be reasonable for the Court to make an order in a reasonable amount in her favour for that support. 

13. The other matter that I am satisfied with is that, despite protest and very vigorous submission on behalf of the husband, the husband has the capacity to be able to arrange his financial affairs one way or the other to be able to meet any reasonable or proper order by the Court.  It is said, in essence, the whole business arrangement and investments of the parties are arranged in such a way that it would be very difficult for the husband to be able to find a way to ensure that moneys are paid to the wife, and that is because the various income streams are required to service debt.  As I indicated, that is ultimately a matter for him.  He is the person who has been in charge of all of this over the years, he is the person who is in control.  As I indicated, ultimately, if some money has to be borrowed, or if something has to be done in terms of intercompany or trust loans, or, at worst, if some assets have to be sold in order to be able to achieve a reasonable level of payment for the wife, so be it.  In my view, that would be a proper application of the relevant provisions of the legislation. 

14. In my view, clearly, the wife has established a need.  I do not accept that the need is in the terms as drafted in the order but I can understand, with respect to those representing the wife, why it would have been done in that way.  I would regard it as reasonable for an order to be made in fairly similar terms to paragraph 2 of the application in a case but without the retrospective operation that is involved in that and reduced to the amount of 60 per cent of those sums of rent paid on the two leases B Company.  That would, in my view, provide the wife with a sufficient level of funding in all the circumstances in respect of her support at this time, and bearing in mind that, hopefully, we will be able to move the case to a hearing date in the first half of next year.

15. So far as the preliminary costs application is concerned, as I have said, the wife seeks an order to the effect that, within seven days, the husband pay the sum of $200,000 to the trust account of the wife's solicitors.  When I read the relevant material in the case I could not help but think that a very considerable amount of money had been spent on the wife's costs, certainly, compared with most matters that I see coming before this Court.  The position is that, even to this point, the wife has expended an amount in the vicinity of about $111,000, which, at this point, struck me as being somewhat at the high end.  However, it was explained to me, firstly, that the wife had been endeavouring to prepare for a trial some time ago but it was also submitted, on the wife's behalf, that she has had a great deal of difficulty getting relevant material from the husband.  It is a case where there is at least one, probably more, single experts.  There is somebody appointed to endeavour to undertake an exercise in valuing the business and there are other valuation matters being attended to.  It is said by learned counsel on behalf of the wife that she has been endeavouring over a long period to obtain relevant accounts for the businesses and the corporations and the trusts, which represent the framework of the financial affairs of these parties, and that, even at this point, that has not occurred.  The other side - that is, those representing the husband - have indicated that the husband has been asking his accountant to provide the accounts for the last financial year, that is that concluded on 30 June 2008, and I am sure I was told that his understanding is that his accountant would provide those to him within a period of about 14 days, so they could then be on-forwarded to those representing the wife.  Hopefully, that would then enable the work to be done to ascertain the value of the property in its totality, which, hopefully, would then enable the parties to have some realistic settlement negotiations. 

16. I was surprised at the estimate of a further $200,000 required for the wife because that would make an overall total of about $311,000 to run this trial, which is an amount, which I must say causes me some concern.  I am far from persuaded that anything like $200,000 would be required.  I was urged not to strike the amount at too low a level, on the basis that, I was cautioned that it would not really be helpful for the wife to have to come back on another application.  It was said on behalf of the wife that, in any event, to the extent that the Court might have over-struck the amount, ultimately that can be adjusted in the contest of the substantive proceedings.  Of course, with respect, that must be the case. 

17. On the other hand, there was a very strong submission - again on behalf of the husband - that he would have difficulty finding any amount, let alone an amount of $200,000, for the reasons that I have already said.  But the reality of the situation is that this family needs to be extricated from this financial situation or conundrum that they are in.  They have been a long time in the system.  It is a matter that involves some level of financial complexity.  It is only going to be able to be unravelled if a considerable amount of work has been put in and it would be essential, in terms of the interests of the parties, that this is done sooner rather than later. 

18. Clearly, it is the husband, to use the language of the highly respected - sadly, deceased - former Nygh J of this Court in Poletti's case, it is the husband who is in charge of the patrimony of this family.  He is the only one who is in a position to be able to assist in this way.  There is a very considerable amount of property involved, as I have said, there is a level of complexity, there is a further need for legal work. 

19. In my view, in all the circumstances, it would be appropriate at this stage for the Court to order a sum in the amount of $80,000 to be paid by the husband to the wife’s solicitors to assist her to fund the preparation of her case.  So I propose to put in place such an order and, again, it will be a matter for the husband to be able to arrange the financial circumstances to be able to produce such an amount.  I accept that seven days is not a reasonable period, in all the circumstances, to find those funds and that is probably even more the case at the present time, in the broad context of what is happening in the financial markets and financial industry.  I propose to enable a period of 60 days for the husband to come up with that amount of funds. 

20. I have not spoken about the injunction but, in my view, the injunction application fails.  It is not an application, in my view, which would really be required for the purposes of preserving property, in the sense that this is a case where there will be sufficient other assets to be able to fulfil a proper order of the Court under section 79.  In all the circumstances, in my view, the wife has not made out her case for that injunction.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Judicial Registrar W P Johnston.

Associate:     

Date:              11 May 2009