BESTON & WESTLAW

[2011] FamCA 742

FAMILY COURT OF AUSTRALIA

BESTON & WESTLAW [2011] FamCA 742

FAMIILY LAW – PROPERTY – Interim – Whether the wife is to remove caveats she caused to be registered over real property from which the husband continues to operate the business – Where reliance is not placed on any provision of the Land title Act 1994 (Qld) – Where the actual existence or not of the interest claimed to sustain the caveat is a triable issue – Court not satisfied that the balance of convenience pending trial requires removal of the caveats – Whether to issue injunctions restraining the husband from dealing with property pending trial – Where the caveats are akin to statutory injunctions – Court satisfied that failure to grant injunction would give rise to a real risk of further reduction of the property available for final division between the parties.

FAMILY LAW – SPOUSAL MAINTENANCE – Wife seeks interim spousal maintenance orders – Where the wife has not been in paid employment, by agreement with her and the husband, for many years – Finding that the wife has a need for spousal maintenance

FAMILY LAW – CHILD SUPPORT – Departure Order made to cover the period between now and the trial. 

FAMILY LAW – CHILDREN – Best interests – Whether the children should be returned to the schools from which they were removed earlier this year – Where the husband seeks the children’s return to the school is conditioned upon the removal of the caveats registered over the parties’ property – Court finds that this is a matter for the parties to decide once determined whether they will be able to meet the ongoing expenses and financial obligations.

Family Law Act 1975 s 90SM, s 90SL, s 114, s 66E
Child Support Assessment Act 1989 s 117

Baumgartner and Baumgartner (1987) 164 CLR 137; (1987) 11 Fam LR 915
Mullen and De Bry (2006) FLC 93,293

APPLICANT: Ms Beston

RESPONDENT: Mr Westlaw

FILE NUMBER: BRC 562 of 2011

DATE DELIVERED: 23 September 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 7 September 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms C Carew

SOLICITOR FOR THE APPLICANT: Cassandra Pullos Lawyers

COUNSEL FOR THE RESPONDENT: Dr  M Sayers

SOLICITOR FOR THE RESPONDENT: Harrington Family Lawyers

Orders

Until further order

1. That the respondent is restrained from causing the sale, transfer, further encumbrance or disposal by any other means of any of the following:

   (a)The real property situated at 1 K Street, L Town in the State of Queensland more particularly described as …, County M, Parish of N, title reference number …;

   (b)The real property situated at 2 K Street, L Town in the State of Queensland more particularly described as …, County of M, Parish of N, title reference number …;

   (c)Any other property, whether real or personal, in which he has an interest whether legal or equitable and whether held in his own name or the name of any company of which he is a director or shareholder or any trust of which he is the trustee or appointor, including any motor vehicle in which he has an interest, any interest he has in any superannuation fund, including any self managed superannuation fund, and any shares in the following companies:

   (i)O Pty Ltd;

   (ii)P Pty Ltd;

   (iii)Q Pty Ltd;

   (iv)R Pty Ltd;

   (v)S Pty Ltd;

   without the prior written consent of the applicant or further order of this Court.

2. That the respondent is restrained from drawing money or causing the drawing of money from any bank account or loan account facility save for the purposes of:

   (a)the day to day operation of the business operated through all or any of the companies listed in paragraph (1)(c) of these orders or any other entity controlled by the respondent; and/or

   (b)compliance with his obligations to make payments pursuant to these orders; and/or

   (c)for his own reasonable personal expenditure requirements; and/or

   (d)making the minimum monthly repayments required to be made in respect of any debts, secured or unsecured, including child support liability, that the respondent is liable for, or any of the companies or other entities controlled by him are liable for,

   without the prior written consent of the applicant or further order of this Court.

3. That on or before the 10^th day of October, 2011, the respondent shall provide to the applicant a written account providing detail of all deposits made by him, or any of the companies or other entities that he controls, to any bank account or loan account, and of all drawings made by him, or any of the companies or other entities that he controls, from any bank or loan account during the month of September, 2011, in addition to copies of statements from each of the bank accounts and loan accounts in his name, or the name of any company or other entity that he controls, covering the month of September, 2011, and same shall be provided by the respondent to the applicant in respect of the immediately preceding month, on a monthly basis thereafter, on or before the 10^th day of each month.

1. That after having received and considered the written account and monthly statements provided by the respondent pursuant to paragraph 3 of these orders, should the applicant require a copy of any original cheque, cheque butt, invoice or remittance effectively referred to, either directly or indirectly, in the material provided by the respondent, the respondent shall provide such copy or copies to the applicant at the applicant’s expense forthwith upon receipt of the applicant’s written request for same.

1. That the respondent pay or cause to be paid, as and when they fall due, the following expenses:

(a)the principal and interest payments due to the T Bank in relation to the mortgage liability secured against the real property situated at U Street, H Town being loan account number …;

(b)the local authority rates and body corporate fees and charges, including all and any arrears currently owing, interest on arrears and any costs associated with any arrears of such expenses in respect of the said real property situated at U Street, H Town and all and any such arrears, interest on arrears and costs associated with such arrears shall be paid by the respondent within 28 days of the date of these orders;

(c)the lease payments, registration fees and comprehensive insurance premium in respect of the motor car registration number currently in the possession of the applicant;

(d)the minimum monthly payments required to be made in respect of each of the two T Bank Visa cards held in the name of the applicant at the time of the separation of the parties;

(e)the minimum monthly amount, if any, that the applicant and the respondent may jointly or severally be able to negotiate with the ATO in respect of the debt currently owed to the ATO by the applicant.

1. That without derogating from the immediate obligation imposed upon the respondent by paragraph 5 of these orders, unless otherwise agreed in writing between the parties or further ordered by this Court, the respondent shall indemnify the applicant and keep her indemnified against any liability for any and all of the principal debts referred to in paragraph 5 of these orders that are at the time immediately prior to the making of these orders the sole liability of the applicant.

1. That the applicant is restrained from using either of the T Bank Visa card accounts held in her name at the time of the separation of the parties and shall, if the T Bank has not already suspended those credit card accounts, forthwith cause the T Bank to do so.

1. That the respondent is restrained from continuing to pay for private health insurance with any private health insurer unless he is paying for private health insurance cover for the applicant and the two children at the same time.

1. That the respondent shall pay to the applicant for her maintenance the sum of $500 per week, the first payment to be made within 7 days of the date of these orders and weekly thereafter by way of electronic funds transfer into an account nominated by the applicant. 

1. That the annual rate of child support payable by the father in respect of the children C born … 1999 and D born … 2003 be varied to $37,142 in respect of the child support period commencing on the date of these orders and ending on the date agreed between the parties in writing or as further ordered by this Court.

1. That by way of specific disclosure and without derogating otherwise from the husband’s  obligation to disclose:-

   (a)within 14 days of the date of these orders the husband shall provide to the wife the profit and loss statements and balance sheets for each of the companies and trusts he controls for the financial years ended 30 June 2006 to 2011, including but not limited to the following entities:

   (i)O Pty Ltd;

   (ii)P Pty Ltd;

   (iii)Q Pty Ltd;

   (iv)R Pty Ltd;

   (v)S Pty ltd;

   (vi)The Westlaw Family Trust;

   (vii)Any self managed superannuation fund of which the husband is a member;

   save for any such documents he has already disclosed.

   (b)within 14 days of the date of these orders the husband shall provide to the wife statements for all accounts (including but not limited to the T Bank accounts number … and …), whether debit or credit accounts, credit card accounts, store accounts or any other accounts in his own name or in the name of any company or trust he controls for the period from 1 July 2006 to the current time, save for any such documents that he has already disclosed.

2. That Mr V of Mr W Chartered Accountants is, subject to him accepting appointment, appointed as single expert for the purpose of providing expert evidence by way of report as to the valuation of the parties’ interests in the following entities:

   (a)O Pty Ltd;

   (b)P Pty Ltd;

   (c)Q Pty Ltd;

   (d)R Pty Ltd;

   (e)S Pty Ltd;

   (f)The Westlaw Family Trust;

   (g)Any self managed superannuation fund of which the parties are members.

3. That the firm, X Pty Ltd, nominate a person who is, subject to him or her accepting appointment,  hereby appointed as single expert for the purpose of providing expert evidence by way of report as to the valuation of the parties’ interests in the following properties:

   (a)U Street, H Town;

   (b)1 K Street, L Town; and

   (c)2 K Street, L Town.

4. That within seven days of the date of these orders the applicant’s solicitors provide to the solicitors for the respondent draft letters of instruction to the single experts and that within seven days of receipt of those draft letters, the respondent’s solicitors provide their comments as to the contents of those draft letters to enable the joint instructions to be finalised and provided to the single experts.

5. That the respondent pay both Mr W Chartered Accountants and X Pty Ltd’s fees in the first instance with the applicant’s share of those fees, if any, to be determined by the trial Judge and adjusted, if required, in the determination of property division between the parties on a final basis.

6. That for the purposes of the valuations, the respondent shall provide any documents and information requested by the single experts within five days of receipt of any such request and he shall provide the applicant with a list of all documents provided to the single experts and, upon written request by the applicant, he shall provide copies of any of the documents provided to the single experts within five days of receipt of such request.

7. That upon completion of their reports, the single experts should forthwith provide copies of their reports to the applicant and respondent.

8. All other interim applications are dismissed.

9. The proceedings are to be mentioned by a Registrar on a date and at a time to be fixed with a view to having the matter listed for a trial call-over as soon as it can be made ready for trial.

IT IS NOTED that publication of this judgment under the pseudonym Beston and Westlaw has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 562  of 2011

Ms Beston

Applicant

And

Mr Westlaw

Respondent

REASONS FOR JUDGMENT

1. Ms Beston and Mr Westlaw started living together as a couple in 1993. They separated in July, last year after 17 years of cohabitation as a de facto married couple. Their relationship produced 2 children, C, who is nearly 12 and D who is nearly 8.

1. During their relationship, Ms. Beston and Mr. Westlaw acquired some valuable property and Mr. Westlaw has operated a successful business. Sadly, since their separation, they have remained locked in conflict in respect of the parenting of their two children, the financial support of the family and the finalisation of the division of their property. They both turn to this Court for the resolution of the conflict that, on preliminary consideration, appears to be placing at risk all that they have worked together as a couple to achieve during the years of their relationship.

1. Both parties seek the immediate determination by the Court of a number of important matters pending the determination at trial of the many matters that are in dispute between them. In summary, these matters for immediate determination include:-

   (i)whether or not Ms. Beston should be ordered to remove caveats she has caused to be registered over real property at L Town from which Mr. Westlaw continues to operate the business;

   (ii)whether or not injunctions should issue restraining Mr. Westlaw from dealing with the L Town property or any other property pending trial;

   (iii)whether or not Mr. Westlaw use of funds generated by the business or available from existing lines of credit should be restricted pending trial;

   (iv)whether or not the family home in which Ms. Beston and the children live should be sold forthwith, before property settlement is finalised;

   (v)what, if any, financial support should Mr. Westlaw be providing to Ms. Beston by way of spousal maintenance and child support during this period leading up to trial of all the issues;

   (vi)whether Ms. Beston should return the motor car she has in her possession to Mr. Westlaw at this point in time;

   (vii)whether the children should be returned to the schools from which they were removed earlier this year;

   (viii)whether there is a need for further disclosure and ongoing accountability to Ms. Beston by Mr. Westlaw during this period leading up to trial of all the issues;

   (ix)whether single experts should be appointed to provide expert opinion evidence as to valuation of property.

1. I heard the competing applications in respect of these matters on 7 September, 2011 and reserved my decision. Both parties were represented by experienced counsel and solicitors. The matter had originally been listed for hearing by me in the judicial duty list on 17 June, 2011 and had not been reached that day due to the number of matters in the list. It took a number of hours to hear on 7 September and quite a few hours to read all the evidence that had been filed and relied on by the parties

1. Where parties are so locked in conflict over so many issues and the Court is required, on an interim basis without the forensic advantage that a trial usually offers, to make extremely difficult decisions that go to the immediate financial wellbeing of both parties and their children, in my view at least, a reasonable goal to be kept in mind is one of getting both of the parties through to the point of the trial and the final determination of their dispute with as much of their property as can be preserved until then being preserved as best that can be done. In striving to meet this goal, where the evidence makes concrete findings of fact on highly disputed issues difficult to make, in my view, it is entirely appropriate, at least where the parties living together as a couple is a matter that ended in the not too distant past, to have regard to the way in which the parties financially conducted their lives as a couple with children prior to their separation and, if appropriate, to make orders that support the maintenance of similar circumstances, albeit with the parties having separated, pending final determination of all of the matters in dispute. Along with application of the relevant statutory provisions and applicable legal principle to the facts presented in this dispute, that is what I intend to do.

Should Ms Beston be ordered to remove the caveats?

1. The evidence establishes that there are three real properties that fall into the pool of property of the parties or either of them that is currently available for division between the parties pursuant to s 90SM of the Family Law Act.  One of those properties is a property at H Town.  It is a residential house property and it is registered in the sole name of Ms Beston.  It is the home in which the couple and their two children lived together as a family for a number of years prior to their separation in the middle of last year.  Ms Beston and the children have lived in that property since separation. She wishes for them to continue living there at least until finalisation of the property division between her and Mr. Westlaw.

2. The other two properties are adjoining blocks in L Town on the southern side of Brisbane.  They are industrial properties.  On one of them is situated the commercial/industrial premises out of which Mr Westlaw operates a cooling tower installation and maintenance business. He has operated the business in through various entities throughout the course of the parties’ relationship.  The adjoining block is a vacant block which Mr Westlaw uses as a storage lot in respect of plant and equipment used in the business.

3. The L Town properties are registered in the name of Mr Westlaw as trustee for the Westlaw Family Trust.  Mr Westlaw in his capacity as trustee for the trust is not a party to the proceedings, neither having been joined as a second respondent nor having joined as an intervenor.  However, there is absolutely no dispute between the parties that Mr Westlaw controls the trust in the sense that such control has been considered authoritatively over the years to bring the assets of the trust within the reach of the Court’s powers.

4. All three real properties are encumbered by mortgages.  Those mortgages secure substantial debt.  Indeed, there does not appear to be any dispute that the H Town property is now, apparently due to a significant fall in its value, worth far less than the total debt that it secures. The undisputed shortfall is around $850,000.

5. The parties are rather more fortunate in respect of the L Town properties as the evidence establishes that they, although still encumbered, on current valuation estimates, contribute some $550,000 worth of equity to the property pool. 

6. In 2010, not long after separation, Mr Westlaw caused a caveat to be registered over the H Town property.  Presumably claiming an equitable interest in that property.  There is no evidence that this caveat has ever been removed.  At the beginning of this year, Ms Beston caused caveats to be registered over the two L Town properties, claiming an equitable interest in those properties pursuant to “an implied, resulting or constructive trust to the extent that [she] made financial and non-financial contributions to the acquisition, maintenance and improvement of the said land.” 

7. No doubt with a view to preventing the lapsing of the caveats under the provisions of the Land Title Act 1994 (Qld), Ms. Beston subsequently caused an amendment to be made to the final orders she is seeking in the property proceedings to include declaratory relief pursuant to s 90SL of the FLA to the effect that she does hold an equitable interest in the L Town properties.

1. Mr Westlaw argues for orders that Ms Beston cause the caveats to be removed, as I understand the position put for him by counsel at the hearing, on two bases.  Firstly, he argues that Ms Beston’s evidence does not support her claim of an equitable interest in the two properties.  As such, he says the caveats simply cannot be sustained.  Counsel for Ms Beston’s submissions in response was that Ms Beston would, on the evidence, be entitled to a declaration of a constructive trust in respect of the two properties after application of equitable principle to the facts of the case such as determined by the High Court in its decision in Baumgartner and Baumgartner (1987) 164 CLR 137; (1987)11 Fam LR 915.

2. Counsel for Mr Westlaw submitted, in response to a question from me as to the source of my power to order Ms Beston to cause the caveats to be removed, that reliance was not being placed on any provision of the Land Title Act 1994 (Qld) which would require application to be made to the Supreme court of Queensland for an order for the removal of a caveat, but rather on the in personam injunctive powers given to this court by s 114(2A) and s 114(3) of the Family Law Act.  I accept the correctness of that submission.  With respect, however, I am not persuaded by the submission that on an interim basis I could not be satisfied that the evidence discloses sufficient facts upon which a Baumgartner style constructive trust could be founded.  I am not persuaded that Ms Beston should be ordered to remove the caveats on the first of the grounds argued by Mr Westlaw.  In my view, there is sufficient evidence to satisfy me that Ms Beston has an arguable case for a Baumgartner style constructive trust to be declared and that the proper determination of that issue can only be made after a trial. 

3. The second ground upon which Mr Westlaw argues for an order that the caveats be removed is also factually based.  He argues that the existence of the caveats, having caused the T Bank to limit his access to finance facilities previously put in place before the registration of the caveats, is impacting upon the business in such a way that ‘balance of convenience’ considerations require their immediate removal.

4. A caveat registered over real property is nothing more than a statutory injunction.  The issue of whether such a caveat should be ordered to be removed on an interim basis, where the actual existence or not of the interest claimed to sustain the caveat is clearly a triable issue, as I have already determined, requires consideration of the second limb of the matters usually considered when the discretion to grant an interim injunction is being exercised, namely, where the balance of convenience lies.

5. I am, after considering all of the evidence and submissions made to me in this matter, satisfied that ‘balance of convenience’ considerations do not mandate the removal of the caveats.

6. In short, evidence put before the Court by Ms Beston raises serious concerns about Mr Westlaw’ use of funds borrowed against the security of all three real properties in recent years.  That evidence, I am satisfied, demonstrates reason for concern that if the remaining equity in the L Town properties is not protected by the caveats and/or an injunction that the pool of property for division between the parties at trial could be significantly less than is currently available. 

7. The evidence that is before me establishes that Mr Westlaw and Ms Beston agreed in very recent years to use the H Townr property that was already substantially encumbered by mortgage securing a debt that was used to buy the property in the first instance, to secure a bank ‘line of credit’ facility to a limit of $1.5 million, all of which has been used by Mr Westlaw in recent years including, at least in part, to fund very substantial share trading losses incurred by him.  Additionally, during the same period of time, Mr Westlaw has put in place further credit facilities utilising equity, but significantly less of it, held in the L Town properties.  It also appears, although it is not entirely clear, that those line of credit facilities are probably close to being, if not already, fully drawn.

8. For Ms Beston, it is submitted that these facts alone provide reasonable basis for concern that giving Mr Westlaw unfettered access to the remaining equity in the L Town properties would give rise to a grave risk of significant further reduction in that equity in circumstances where that equity appears, at least at the moment, to be the only likely source of just and equitable division in favour of Ms Beston after trial.

9. For Mr Westlaw, it is submitted that the evidence establishes an immediate need for the caveats to be removed so that he can have access to the credit facilities offered by the T Bank in order to allow the business to continue trading.  It was argued that the evidence supports a finding that the T Bank has, because of the registration of the caveats over the L Town properties, restricted access to the credit facilities and that same so detrimentally impacts upon the operation of the business that the caveats should be ordered to be removed forthwith.

10. Whilst there is evidence, curiously put before me by Ms Beston, in the form of an email to Mr Westlaw from an officer of the T Bank on 11 May 2011, nearly four months after the registration of the caveats, which supports a finding that the Bank has implemented some restrictions in respect of Mr Westlaw’ access to the previously available credit facilities, I do not accept that the evidence establishes all that I would need to be satisfied of if I was to accept the argument that balance of convenience considerations demand removal of the caveats.  The email certainly reflects a decision taken by the Bank to restrict Mr Westlaw’ drawing on four particular credit facilities, including an overdraft of $50,000, a bank guarantee facility of $100,000, a documentary letter of credit facility for $450,000 and a market rate facility of $650,000. 

11. There is no evidence as to the current balances of the first three of those accounts, whilst it is accepted that the late market rate facility is fully drawn. There is evidence that the Bank is prepared, in appropriate circumstances, to make some exception to these restrictions it has imposed, particularly with respect to the overdraft. There is also evidence that establishes the fact that Mr Westlaw has been able to operate the business by depositing business receipts into other bank accounts thus getting around the Bank’s “stop to debits” restriction by unrestricted access to the funds that he has put into those accounts. There is also evidence that his access to credit in the 1.5 million dollar facility secured by mortgage over the H Town property has not been restricted by the T Bank.

12. I am simply not satisfied for the purposes of this interim determination that Mr Westlaw should be given unrestricted further access to any credit remaining in those credit facilities secured by mortgages registered over the L Town properties or beyond them.  The evidence put before the Court by Mr Westlaw, on its face and without further forensic consideration, is supportive of findings that this business, like many others in recent times, has suffered downturn.  Whilst I acknowledge the difficulties presented to business operators in times of economic downturn, financial turmoil that often accompanies bitter conflict in the wake of relationship breakdown, does not create an ideal environment within which to provide unfettered access to the property of the parties or either of them whilst determination of just and equitable property division is pending.  Potential short term difficulties in the operation of a business must often be faced and accepted by both parties, in circumstances such as these, where provision of access to property to one of the parties alone, on an interim basis, could potentially deprive the other of just and equitable property division entitlements.

13. I am not satisfied to the sufficient standard required to determine that the balance of convenience pending trial requires removal of the caveats. There is sufficient room for optimism that Mr Westlaw and the Bank can continue to come to some interim accommodation and/or that Mr Westlaw can continue to manage the business through this difficult period in a manner that will sustain it until property division, without access to more of the parties’ equity in property. I will not order the removal of the caveats at this point.

Should injunctions issue restraining Mr Westlaw from dealing with the L Town properties or any other property pending trial?

1. As I have already noted, the existence of the caveats registered over the L Town properties is akin to statutory injunctions being in place.  Notwithstanding the existence of those caveats, Ms Beston still seeks express injunctive relief from this court.  The caveats registered over the title of the two properties at L Town effectively prevent the registration of any further dealings in respect of the properties that would take priority over the caveatable interests claimed.  As has already happened, the existence of registered caveats can also cause the holder of an existing security interest in the properties to modify their behaviour and attitudes in respect of the requirements of their security.  Notwithstanding this fact, Ms Beston still seeks an actual injunction to be issued by the Court on an interim basis expressly restraining Mr Westlaw from any further dealing with the land that might be prejudicial to her interest in obtaining a just and equitable property division, as well as restraining his dealing with any other property. 

2. In considering this part of the application, I am mindful of the decision of the Full Court of this Court in Mullen and De Bry (2006) FLC 93,293 in which the Full Court determined that part of the focus of the enquiry, when the court is exercising jurisdiction to grant interlocutory injunctions under its statutory jurisdiction derived from s 114 of the Act, should be consideration of the risk of defeat of an order in favour of the applicant party in the substantive proceedings if the injunction is not granted. The Full Court also held that there is no prescribed fundamental or threshold question as to whether a scheme to defeat such a judgment exists before the injunction preserving property can be granted. The Full Court highlighted the fact that the statutory jurisdiction is one that may be exercised in any case “in which it appears to the Court to be just or convenient to do so”.

3. Having regard to the matters of fact emerging from the evidence that was before me in this case, that I have referred to above in the context of determining whether to order the removal of the caveats, I am at the same time satisfied that failure to grant the injunction that Ms Beston expressly seeks in this case would give rise to a real risk of further reduction and, potentially, complete dissipation of the property available for final division between the parties and that balance of convenience issues also favour the granting of the injunction that Ms Beston seeks at this point in time. 

Whether or not Mr Westlaw’ use of funds generated by the business or that may be available through existing lines of credit should be restricted pending trial.

1. Ms Beston seeks further injunctive relief on an interim basis restricting Mr Westlaw from drawing money generated by the business or that might still be available through the lines of credit other than for the proper day to day purposes of the business, the repayment of existing debt, his own personal support and the financial support of her and the children.  Having particular regard to the following specific matters:-

   a)Ms Beston has no income, has not been employed for income during the entire period of the relationship and has the care of the two children of the relationship which restricts her earning capacity;

   b)Ms Beston has debts arising from pre-separation expenditure and arrangements that were made in respect of asset structure that were for the benefit of the entire family (eg; mortgage debt, body corporate debt and rates debt due to her being the sole registered proprietor of the H Town property which was put in place for asset protection purposes solely);

   c)the only income currently available to support the entire family and to pay all pre-existing debts and ongoing liabilities incurred in respect of assets put in the wife’s name and possession pursuant to pre-separation agreement between the parties is only accessible, without more, to Mr Westlaw; and

   d)the goal of preservation of as much property of the parties or either of them as is possible to be preserved pending final property division;

   I am satisfied of the need, in this case, to make orders that prioritise how the funds that only Mr Westlaw has access to should be spent.  I intend to make orders that provide for that restriction and prioritising of expenditure.

Whether the H Town family home should be sold forthwith, before property settlement is finalised

1. Mr Westlaw asks the Court to make orders that provide for the immediate sale of the property at H Town.  He argues that its sale will facilitate immediate discharge of substantial debt and reduce his outgoings on an immediate basis so as to provide greater prospects of the business being able to make it through the current difficult times.  I immediately observe that Mr Westlaw seeks such orders in the following circumstances:

   a)acknowledgment that a sale would put Ms Beston and the two children out of a home and in need of accommodation;

   b)Mr Westlaw seeks no order in the interim proceedings nor makes any offer in his evidence to pay either rent for Ms Beston and the children to obtain alternative residential premises or spousal maintenance to Ms Beston that would include a reasonable amount for such rent;

   c)Mr Westlaw presents a case in which he acknowledges that the H Town property is likely to have negative equity of around $850,000 and where there is only some $550,000 of equity in the other two remaining properties, giving rise to circumstances where, at least in my view, it is most unlikely that the T Bank would agree to discharge its mortgage over the H Town property on a sale, thus preventing such sale in any event;

   d)Mr. Westlaw’ bald assertion in evidence that he had a private buyer apparently prepared to pay well over current estimated market value without more.

2. In these circumstances, I do not accept that matters are compelling enough for me to order on an interim basis the immediate sale of the H Town property.  I acknowledge however, that the H Town property could very well have to be sold as part of any final property division, although I cannot determine at this point without any knowledge of the value of the business the certainty of that.  Whilst I do not consider at this interim stage that imposing a sale of the property upon Ms Beston is required, acceptance by her of the fact that the property might very well have to be sold to effect final property division might very well be a matter that leads her to agree with Mr Westlaw for an orderly sale of that property in the meantime in any event. That is, I consider at this point, a matter for the parties and their advisers.

What, if any, financial support should Mr Westlaw be providing to Ms  Beston by way of spousal maintenance and child support during the interim period?

1. In her Further Amended Initiating Application filed 17 May 2011 Ms Beston seeks an order that Mr Westlaw pay her interim spousal maintenance in the sum of $1,804 per week.  She set out her reasonable weekly expenditure requirements in her Form 13 Financial Statement that was filed on 28 January 2011.  For her own personal requirements, they total $1,649 in addition to minimum monthly payments of $115 and $40 in respect of credit cards that, on the evidence, I infer are at their limit and are not otherwise available to her to use in meeting any of those other weekly expenses. 

2. There was no challenge to the reasonableness or accuracy of Ms Beston’s claimed expenditure requirements made on behalf of Mr Westlaw.  It was argued that Ms Beston has some earning capacity that she is not exploiting to contribute to her own reasonable expenditure needs.  However, as I have already noted in these reasons, Ms Beston has not been in paid employment, by agreement between her and Mr Westlaw, for many years.  When she was, she worked principally as a medical receptionist.  During the duration of cohabitation after the children of the parties were born, again by agreement, Ms Beston has devoted herself principally to caring for the children and managing the household for the benefit of the entire family, including Mr Westlaw.  All of those factors lead me, on an interim basis, to a determination that even if Ms Beston could get work it would not be such that would generate much in the way of a contribution towards her own reasonable weekly expenditure requirements, not to mention those of the children that rank no less in importance to her own.

3. I readily find that Ms Beston has a need for spousal maintenance that she is unable to meet herself from her own assets, income and earning capacity, particularly having regard to her ongoing parenting obligations.

4. In the circumstances of this case, the issue that is more difficult to determine on the evidence before me is Mr Westlaw’s capacity to contribute towards Ms Beston’s reasonable weekly expenditure needs pending finalisation of all financial matters between them. Clearly, Mr Westlaw asserts that he does not have that capacity.  His evidence and the evidence of the accountant is that he is paying himself from the business a gross salary of $88,000 per year, which is equal to $1,692 per week.  But attached as Annexure C to the affidavit of the accountant, Mr Y, filed 9 June 2011, is an accounting and tax forecast for the financial year ended 30 June 2011.  By that document, the business was forecast to generate a profit, after allowance for the salary of $88,000 per annum being paid to Mr Westlaw, of $151,462.  In addition, an allowance for approximately $82,000 in depreciation was included.  By that evidence, considering the depreciation allowance as money not actually spent, Mr Westlaw was forecast for the 2011 financial year to have available to him some $321,452 gross.  That is equal to a gross weekly amount of $6,181. 

5. I note in paragraphs 147, 148 and 149 of Mr Westlaw’s affidavit filed 1 April 2011 that he sets out his weekly expenditure.  Therein he says he actually must meet from his income expenses of $5,442 per week which includes rent on his own residential accommodation of $680 per week, an amount of $404 for income tax, $234 for life insurance premiums, and $1,609 being weekly repayments to Z Bank in respect of loans taken out by him throughout the years of cohabitation to fund investments in the now failed managed investment scheme provider, AA Pty Ltd, made for the principal purpose of minimising tax obligations.  There is no evidence before me that those liabilities to Z Bank are secured. 

6. A quick consideration of the matters listed in paragraph 147 by Mr Westlaw causes me to find that which Mr Westlaw spends on his own reasonable weekly needs, such as food, gas, electricity, petrol, clothing and shoes, medical, dental, optical, hairdressing and gifts for his children, equals $494.  On this interim basis, I am prepared to find that Mr Westlaw does have a capacity to contribute towards the financial support of Ms Beston during the period pending the trial to an amount of a similar order.  I intend to order that Mr Westlaw pay Ms Beston $500 per week towards her maintenance.

7. In respect of child support Mr Westlaw said in paragraph 147 that he was paying child support for the two children in the sum of $376 to the Child Support Agency for payment to Ms Beston.  In evidence before me as Exhibit 1 was a letter from the Child Support Agency to Ms Beston in which the Child Support Agency informed her that for the assessment period 18 March 2011 to 30 June 2011, Mr Westlaw’ child support liability was indeed assessed at $369.58 per week.  But further in evidence before me as Exhibit 5 was a bundle of documents provided by the Child Support Agency to Mr Westlaw which showed that the child support amount assessed as his liability for the month of August 2011 was $2,149.17.  Further, those documents and other evidence established that Mr Westlaw claims credit against that liability for allowable ‘non-agency payments’ that he makes and has made in the form mortgage payments in respect of the H Town home and other expenses such as utility expenses.  The maximum credit he is allowed to claim for those NAPs is some 30 per cent which reduced the amount that he actually had to pay in respect of the August period of his assessment to $1,504 or $347 per week. 

1. Of course, pursuant to s 66E of the Family Law Act I have no power to make a child maintenance order in this case.  Ms Beston seeks however, on an interim basis, child support departure orders pursuant to the provisions of the Child Support Assessment Act 1989.

2. Ms Beston seeks orders in the special circumstances of the case and given that she and Mr Westlaw are parties to other applications pending in this court, that there be a departure from Mr Westlaw’ child support assessments and that his child support be fixed from the date of the order to the date that each child turns 18 in the sum of $489 per child per week.  Further, she seeks orders in addition that Mr Westlaw be ordered to pay school fees for the two children at the private schools they attended prior to being withdrawn from those schools earlier this year. I can say immediately I will not be making orders in those terms although I will be making a departure order to cover the period between now and the trial of all matters in dispute.

3. There was no opposition to the application for child support departure being heard by me at the same time as hearing the other applications.  Not much was said in submissions about the child support departure application.  In fairness, I acknowledge the case of Mr Westlaw simply to be that he has no capacity to pay any greater child support than is currently being paid pursuant to the administrative assessment regularly determined by the Child Support Agency. 

4. Pursuant to s 117 of the Assessment Act, before a departure from the administrative assessment is ordered, I need to be satisfied that one or more of the grounds for departure mentioned in sub-section (2) of s 117 exists and that it would be just and equitable as regards to the parents and the children and otherwise proper to make such an order.

5. I have no doubt that Ms Beston’s case was brought on the basis that the grounds for departure provided for in s 117(2)(c)(ia) and (ib) are made out.  Having regard to the evidence I have already referred to as to the forecasted income for Mr Westlaw for the 2011 financial year and the evidence in Exhibit 1 and Exhibit 5 that suggests his current assessed liability is based on an income far less than that, I am, at least on an interim basis, satisfied that the exception provided for in that sub-section does exist.  I am satisfied that the amount of income actually available to Mr Westlaw is indeed greater than that upon which his current assessment is administratively determined.

6. Section 117(4) of the Assessment Act provides that which I must have regard to in determining whether it would be just and equitable as regards the children and the parents to make a particular order for departure.  I will not set out all of the listed consideration.  Suffice to say that I accept the mother’s unchallenged  evidence that the reasonable weekly expenditure requirements in respect of the children are as set out in her financial statement dated 28 January 2010.  I do not include the sum of $580 in that amount though as that was a figure that apparently provided for the payment of their school fees at the two schools they were previously attending.  In lieu thereof, I would allow some amount for the current education expenses that the mother is bearing.  Accordingly, the total weekly expenditure requirements for these children clearly exceed $1,000.  The mother has no income or any meaningful earning capacity at this moment.  To impose a situation upon her where she is forced to meet the principal obligation to provide practical and financial care for the children in such circumstances where, on the other hand, the father has sole access to substantial income is, I determine, unjust and inequitable and could only result in hardship to the two children.  Accordingly, I determine that it is just and equitable to depart at this interim stage from the current administrative child support assessment.

7. Section 117(5) of the Assessment Act provides that which I must have regard to in determining whether it would be otherwise proper to make a departure order.  Without setting those matters out, I am satisfied that it is otherwise proper to make the departure orders that I intend to make. 

8. Conscious of all of the other orders that I intend to make in this matter, I appreciate that Mr Westlaw will still be entitled to be credited with approved non agency payments up to 30 per cent of the total of that amount which is ordered to be the liability pursuant to the departure order that I make.  In all the circumstances of this interim determination, I consider it just and equitable and otherwise proper that Mr Westlaw be contributing an actual amount, after maximum crediting of non-agency payments, of $500 per week to the support of the children.  In order to achieve that, the amount that I determine should be set pursuant to the departure order should be equal to $714 per week in total for both of the children so that after crediting of an amount equal to 30 per cent of that, $500 per week will be the amount actually payable by Mr Westlaw directly to the Child Support Agency for payment to Ms Beston to assist her in supporting the two children.  I intend to make orders that provide for same.

9. I am also satisfied in all the circumstances that Mr Westlaw has the capacity to continue to pay the mortgage repayments as they fall due in respect of the H Town property, the local authority rates and body corporate fees and charges in respect of that property, the minimum monthly payments on the two T Bank Visa credit cards held in Ms Beston’s name at the time of separation of the parties and the minimum monthly amount that Mr Westlaw and Ms Beston either jointly or severally are able to negotiate with the Australian Taxation Office in respect of the liability of Ms Beston to the Tax Office.

10. All of these expenses are expenses that were being met by Mr Westlaw from the income that he was generating for the family prior to separation.  I am not satisfied that circumstances have changed so dramatically since the separation of the parties that he no longer has that capacity.  Even if I am wrong in respect of that conclusion, then what is required is a balancing of priorities and payments such that the family is supported and gives Ms Beston and the children, as well as Mr. Westlaw, a chance of maintaining a lifestyle similar to that which they maintained until separation, at least until finalisation of property division matters between the parties.  I do not consider that there is justice and equity in leaving Mr Westlaw in a situation where he can simply prioritise the payment of other non-secured creditors to his own advantage ahead of his obligations to support his former partner and children where he is simply able to do so because of the historical fact that the family’s asset structuring decisions made prior to separation put assets such as the family home, in particular, in Ms Beston’s sole name for nothing other than asset protection purposes. 

11. I intend to make orders, pending trial and finalisation of property matters between the parties, that Mr Westlaw indemnifies Ms. Beston against all liability for the debts that are in Ms Beston’s sole name that were in existence at separation or arise as a result of pre-separation family decisions about asset structuring.  In that way, there is far less risk that Ms. Beston will be, rather unfairly in all the circumstances, sued by a creditor as she already has been in respect of the body corporate fees at H Town and left in a position where she alone is susceptible to consequences such as bankruptcy, whilst Mr. Westlaw remains untouched and relatively unaffected by such problems.

12. I will, however, provide Mr Westlaw with some protection in respect of the obligation I intend to place upon him to make minimum monthly repayments on the two credit card debts that were in existence in Ms Beston’s name at separation by making an order restraining Ms Beston from continuing to use those credit cards if the bank has not already stopped her access to credit on them. 

Should Ms Beston return the motor car she has in her possession to Mr Westlaw at this point in time?

1. Prior to the separation of the parties, by arrangement between them, Ms Beston was provided with a motor car, the acquisition of which was provided for by way of lease that I understand was organised through the business.  That was her family car, used to drive the children around as required by busy family life. Like all other business and private family expenses, the lease payments, registration payments, insurance payments and running costs were paid for by funds generated by the business.  Since separation of the parties, Mr Westlaw unilaterally ceased making any of those payments.  He argues, consistently with his case in respect of most of the financial aspects of these interim applications, that he simply cannot afford to continue to meet those payments.  I am not satisfied that he has discharged the burden of convincing me of that fact.  At the same time, he makes application for the return of the motorcar to him saying that he would provide Ms Beston with a less valuable motorcar. 

2. Comparatively, Mr Westlaw has had the use of a sports car which was also under lease, which he apparently no longer drives. The evidence establishes that it has a reasonable amount (that could be as much as $50,000) of equity in it after the final payment to the leasing company is paid. That equity, realizable on sale, is available to Mr. Westlaw.  The evidence is that he has acquired a new sports car and is driving that. 

3. I am not convinced that there is compelling reason to order Ms Beston to return the motor car to Mr Westlaw on an interim basis, although its ultimate return to Mr Westlaw might be another consequence of final property division in this matter.  Further, on an interim basis, I am confident that Mr Westlaw has the capacity, again, after properly prioritising his expenditure requirements, to meet the lease payments, the registration and insurance payments in respect of the motor car that remains in Ms Beston’s possession.  I will make orders that provide for that

Should the children be returned to the schools from which they were removed earlier this year?

1. Since the children have been attending formal schooling, C has been at BB School at CC Suburb and D has been at the CC Suburb School.  On the evidence, both of those schools are very expensive places to educate children.  Of course, that is not to say that they do not provide quality education in return for the fees that are paid.  Prior to separation Mr Westlaw and Ms Beston were always able to meet those expensive school fees.  Clearly, they did that by agreement in circumstances where Mr Westlaw was generating the income that supported the family and paid those fees. 

2. Not long after separation Mr Westlaw began to complain that he could not continue to meet those school fees.  Things came to a head in this regard in March this year when Mr Westlaw unilaterally wrote to each of the schools advising them that the children would be withdrawn from each of the schools respectively.  He did that on the asserted basis that he was unable to pay the expensive school fees any longer.

3. Sometime thereafter, Ms Beston did indeed withdraw the children from the schools and subsequently enrolled them at another, far less expensive, school.  That is not surprising, particularly given the circumstances of her having no income and suffering significant financial detriment following the separation.

4. Curiously, Mr Westlaw now seeks an order from the Court that the two children be returned to BB Schhol and the CC Suburb School conditioned upon the removal of the caveats registered over the L Town properties.  In seeking such an order, Mr Westlaw asserts that on the release of the caveats he will be able to access the credit facilities so that he can afford to pay the fees so that the children can return to those schools. 

5. I cannot even begin to comprehend how Mr Westlaw considers that he would now be able to afford to pay for those very expensive school fees in circumstances where he otherwise argues he cannot even pay for the most basic expenditure requirements of Ms Beston and the two children.  Although Ms Beston indicated a desire, if possible, to have the children returned to BB School and the CC Suburb School, I have no hesitation in dismissing Ms Westlaw’s application in the circumstances, considering it far more in the best interests of the children to make orders that provide for them to be able to remain in the family home, have a registered and insured motorcar at their mother’s disposal to drive them around in and to provide for their most basic maintenance requirements in circumstances where their father is the only parent generating an income at the moment.  If, after all of the matters that Mr Westlaw will be obliged to attend to pursuant to these orders are met, the parties consider that the children should be returned to their previous schools and the parties are able to satisfy the schools that they will be able to meet the ongoing expenses in addition to all of the other financial obligations they will have, then that is a matter for them to agree upon.

Whether there is a need for further disclosure and ongoing accountability to Ms Beston by Mr Westlaw during the period leading up to trial.

1. Ms Beston comes to the Court complaining of lack of disclosure by Mr Westlaw as well as unexplained and unwarranted expenditure on his part to her prejudice in the property division.  She seeks disclosure orders that I did not understand to be in serious dispute at the hearing.  Accordingly, I will make such orders.

2. Further, she seeks orders that require Mr Westlaw to keep her informed as to his use of funds on a regular basis between now and the trial.  In all the circumstances, I do not consider that to be unreasonable or that it imposes any unreasonable impost insofar as time or expense is concerned upon Mr Westlaw.  I will order accordingly.

The appointment of single experts

1. By her application, Ms Beston also sought orders in respect of the appointment of single experts to provide valuation opinion to the parties in respect of their real properties and business assets.  Again, I did not understand there to be any serious dispute in this regard save that Mr Westlaw argues against the order sought by Ms Beston that he pay the costs of such experts in the first instance with Ms Beston’s share of those fees to be determined by the Trial Judge and adjusted in the calculation of the final property settlement.

2. Again, I simply cannot understand the basis for opposition to that order in circumstances where only Mr Westlaw generates income and he is clearly aware of the fact that Ms Beston has no income or other assets that would somehow facilitate her meeting half of the, no doubt, significant costs of single experts in the first instance.  Indeed, if I was to make an order requiring her to do so I would expect significant delays in  bringing this matter to trial would be caused by an inability to get the expert opinion from the single experts.  Accordingly, I will be ordering in accordance with the application of Ms Beston in this regard.  Mr Westlaw’s position in respect of the requirement for Ms Beston to share equally in the cost of same is clearly reserved by such order to the trial.  That is completely reasonable in the circumstances. 

3. For all of the reasons set out herein I make the orders set out above.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 23 September 2011.

Associate:

Date:  23 September 2011