BHATT & SANT

[2015] FamCA 12

FAMILY COURT OF AUSTRALIA

BHATT & SANT [2015] FamCA 12

FAMILY LAW – SPOUSAL MAINTENANCE – partial property settlement and injunctive relief.

Family Law Act 1975 (Cth)

APPLICANT: Ms Bhatt

RESPONDENT: Mr Sant

FILE NUMBER: MLC 8620 of 2014

DATE DELIVERED: 22 January 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 14 January 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Glezakos

SOLICITOR FOR THE APPLICANT: Le Brun Glezakos Lawyers

COUNSEL FOR THE RESPONDENT: Mr Barbayannis

SOLICITOR FOR THE RESPONDENT: Pearsons Lawyers Pty Ltd

Orders

1. That in addition to any extant injunction, the husband keep the wife advised of the progress of the sale of the business known as Business F including all offers, sale price proposed, expenses associated with such a sale and provide her with any copy documents so sought in respect of all of those matters.

2. That paragraphs 4, 5 and 6 of the interim orders sought in the initiating application filed 25 September 2014 are otherwise dismissed.

3. That the parties attend a conciliation conference on 1 April 2015 at 9.15am.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bhatt & Sant 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 MELBOURNE

FILE NUMBER: MLC 8620 of 2014

Ms Bhatt

Applicant

And

Mr Sant

Respondent

REASONS FOR JUDGMENT

1. Ms Bhatt (“the wife”) married Mr Sant (“the husband”) in November 2012 and they began to live together on that day.  Their relationship was short lived and they separated on a final basis on 15 August 2014.  During that period of the relationship, D (“(the child”).  The child D is the only child of the parties. 

2. Proceedings were begun by the wife on 25 September 2014 and a case assessment conference was allocated on 7 October 2014.  In her application, the wife sought orders in relation to the child but also relevantly for the purposes of the reasons I am about to determine, the following matters:

   (a)That the husband pay her the sum of $20,000 such sum to be characterised by the trial judge;

   (b)That the husband do all things necessary to enable the wife to collect her personal effects and jewellery from the former matrimonial home;

   (c)The husband make ongoing payment to the wife by way of spousal maintenance in the sum of $1000 per week;

   (d)The husband be restrained from disposing of or encumbering or further encumbering, any asset or financial resource to which he has any legal or equitable interest.

3. The response of the husband was filed by his solicitors on 22 October 2014.  Insofar as the financial orders sought by the wife were concerned, the husband simply sought that her application be dismissed.

4. There is some significance in what happened at that time.  The application having been filed on 5 September 2014, brought into communication, the lawyers for both parties.  On 3 October 2014, the lawyers acting for the husband wrote to the lawyers acting for the wife and said:

   I refer to our earlier conversation today and confirm that my client is agreeable to not disposing or dissipating any assets pending the adjourned hearing date.   

5. The wife now alleges that the husband has not only misled her but also the Court.  She asserted that the husband had both moved money around, misled the Court in relation to what monies he had or had disposed of and further, had put a business on the market for sale.  Having heard the submissions of both parties and read the affidavit material of each, I am satisfied that there is no evidence upon which I could make a finding that the husband was either dishonest or had misled the Court.  At its highest, I am prepared to criticise the husband for his lack of attention to detail in relation to discovery.  I am assured by counsel for the husband that that situation will now be rectified.  Unfortunately however, that lack of diligence led to the proceedings of an interim nature before the Court on 14 January 2015. 

6. I have mentioned the fact that there were parenting proceedings between the parties.  The Registrar at the case assessment conference adjourned the matter to the Judicial Duty List on 2 December 2012 where it came before Bennett J.  The file does not contain what happened but it was common ground that orders were made and her Honour heard from a family consultant.  It seems that the parenting issues were consequently resolved.  The difficulty however is that it is asserted by the wife that a mutual injunction was ordered.  I have no concept of what that order was and have been unable to ascertain its details.  Counsel for the husband candidly indicated that he was not present and did not know.  In many ways however, it does not really matter.

7. In relation to the injunction, the wife pointed to the fact that she had found that the husband had put the hospitality business on the market for sale with an organisation called “Gumtree” and that the asking price apparently was $125,000.  Through his counsel, the husband conceded that he had done that but only in recent days.  Notwithstanding the letter written by the solicitors for the husband in October, when the husband filed an affidavit in the proceeding later in October 2014, he said that the financial position of the business was precarious and that he would have to sell it.  That is exactly what he did.  According to the solicitor for the wife, when the matter came before Bennett J, her Honour made the mutual injunctive order but permitted disposal of assets in the ordinary course of business.  Whether or not that would permit the sale of the business is a moot point but in any event as counsel for the husband pointed out, there has been no sale.  The whole situation was somewhat unsatisfactory but I am not in a position to make a finding that the husband has done anything dishonest in relation to the sale of the business.  Counsel for the husband conceded that his client would have to agree to an order that kept the wife informed of any offers or sale.

8. When the proceedings on 14 January 2015 began, the solicitor for the wife sought an order that the husband keep his client advised of the sale and only complete any such sale if she consented and that upon the settlement of such a sale, the proceeds be placed into the wife’s solicitor’s trust account.  The husband agreed to the first part of that three part order but not the others.  Notwithstanding his lack of diligence in relation to discovery, I could not be satisfied that he has done anything to thwart the entitlement of the wife arising out of the sale of the business.  In my view there is a basis for me to make an order that he keep the wife advised but not as she otherwise sought.

9. The other issue in relation to the injunction concerned the failure of the husband to disclose monies that he had received.  The evidence in this case was unclear and had largely arisen, from the wife’s perspective, from subpoenaed documents.  It was conceded by the solicitor for the wife that there were documents not yet provided by one of the banks.  Thus, I am doing the best I can with the evidence available to me. 

10. In his financial statement, the husband said that he owed the Commonwealth Bank $70,000 by way of a guarantee relating to a business that had been sold 12 months ago.  It was asserted by the solicitor for the wife that it was not a debt but in reality, an asset because the bank in respect of its guarantee, had taken a $70,000 term deposit as security.  That however was explained by the husband on the basis that whilst that had occurred, he had been lent the $70,000 from his brother in the first place.  No document was provided by either party to refute that although I note that the wife’s subpoenaed material should have had all of those documents to indicate whether or not the money went through the bank records.

11. Doing the best I can therefore, it seems that the husband did guarantee a loan and the bank required a $70,000 deposit by way of security and to enable that to be achieved, he borrowed $70,000 debt from his brother.  In his financial statement, the husband included the $70,000 due to his brother.  In my view, a careful analysis of each of those steps will indicate that there was no intention to mislead and that the position is quite simple.  That was not the end of the matter.  The solicitor for the wife indicated that as the earlier business had been sold, the bank had released the term deposit to the husband and over a space of two days, he had disposed $60,000 of it.  Counsel for the husband replied by saying that whilst that was true, he had paid $60,000 back to his brother who had generously allowed him to keep $10,000 because he was otherwise impecunious.

12. On the basis of not just the evidence but the most plausible responses in an incomplete financial picture, I accept the husband’s explanation of what has occurred.  No doubt that can be tested by further discovery and in due course, a trial if one needs to occur.  I am not therefore prepared to draw any adverse inference against the husband such as to justify the sort of injunctive relief that the wife was seeking.

13. I then turn to the other orders that the wife sought.

14. The wife sought an order that she be paid $20,000 by way of some form of settlement or relief.  The solicitor for the wife pointed to s 80(1)(h) as the power for the Court to make the order.  The power for the Court to make the order was not in dispute.  However, there is no indication in the substantive application or other documents just exactly what these parties have.  On any view however, whatever it is, it is extremely small.

15. It would seem that absent a finding that there was $70,000 of the husband’s money which belonged to the parties and on the evidence, I could not accept that, the only asset that the parties otherwise have is the interest in the business now conducted by the husband.  In 2013, that business was bought for $90,000.  The funding of that arrangement seems to have been borrowed money as well.  As such, the parties have a business which has no value known to the Court at this stage but it would seem that the husband is endeavouring on the internet to sell it without an agent for $125,000.  The wife was not in a position to say that that was the right or wrong value although she did concede that subsequent to its purchase, the husband had done some renovations.  However, the husband pointed to the fact that as a result of the poor returns in the business, he has had to work in a part-time position as a chef and for that sum he is paid a net wage of between $700 and $1200 net per fortnight.  That is, he might be earning somewhere between $350 and $600 per week. 

16. I have drawn an inference that on the basis that he is working outside of the business, the possibility of getting someone to pay $125,000 is optimistic.  That is not the answer.  If indeed the business sold for $125,000, there are liabilities two of which are to commercial organisations that would leave the husband $65,000 in hand.  Against that however, he deposed to the fact that he had an $18,000 credit card upon which he was living but that that sum had now blown out to $31,500.  Of that sum, he conceded some of the money had been paid towards his legal fees. 

17. On any view of the facts here, these parties have virtually nothing to argue about.  It may be that discovery will change that position although it would be hard to see how. 

18. As there are also creditors according to the husband, the Court cannot simply ignore them in circumstances where the wife was not able to say they were not genuine creditors of the husband and where she is seeking the sum of $20,000 as living expenses. In my view it would not be just and equitable to make an order because it would not be possible for the husband to claw that back if indeed it was paid to the wife and so used. Not only would it be unjust and inequitable to the husband but it may also put the creditors in a position where they were not to be paid. Whilst it is not the function of the Court to become a debt collector for the parties, the Court is obliged to contemplate such matters by virtue of the provisions of s 79(10) of the Family Law Act 1975 (Cth) (“the Act”).

19. On the basis that I am unclear just what there is to divide and there is a risk that the creditors may not be paid, I could not find any basis to use the two steps referred to in Strahan and Strahan (interim property orders) (2011) FLC 93-466.

20. The wife then turned her attention to spousal maintenance.  It is not necessary for me to deal with this in detail because counsel for the husband sensibly conceded that the wife could not adequately support herself without maintenance.  She is currently a pension recipient and has no other income than what she has received from the husband by way of limited child support.

21. In her application, the wife sought $1000 per week.  In support of that application, she pointed to her financial circumstances.  I have little doubt that she needs that sort of money although it is not clear from the document why it would be $1000 a week bearing in mind that much of her expenses are associated with the child D.  This argument however revolved around the question of the husband’s capacity to pay.

22. Having to determine the matter on the papers, I am dealing with the submissions of the parties without the evidence being tested.  The solicitor for the wife pointed to the fact that the husband’s bank statements (not all of which had been provided), showed that he was receiving money from “[Company B]”.  That indicated however that there was another source of funds but not necessarily income.  The solicitor asked me to infer that the “[Company B]” was a source of income.  Counsel for the husband explained that source as being his client’s brother’s business and because of the husband’s impecuniosity, funds were regularly provided through the brother’s business which happens to be a Company B store.

23. The solicitor for the wife then pointed to the fact that notwithstanding the husband said that he was an employee of an organisation in his financial statement, he was receiving in his bank account more than the sum that he was disclosing in his financial statement.  That too was explained by counsel for the husband on the basis that he was receiving money at varying rates because he was working part-time in the hospitality industry but whatever he was receiving was net after tax.  That gave rise to the estimate of counsel for the husband as earning from the chef’s position somewhere between $350 and $600 net per week.  Counsel was quick to point out that there was not sufficient evidence to indicate that I could conclude that the husband was receiving the $600 on a regular basis. 

24. Even on the basis of somewhere in that range, the husband’s reasonable living expenses must be taken into account.  There is no evidence before me that he is able to pay a number of expenses including a motor car and other debts out of his business.  However on any view, he is paying food, vehicle expenses, rent, health insurance, car insurance, and child support.  Because of the orders made by Bennett J on 3 December 2014, he is now obliged to have a supervisor who is paid whilst he has time with the child.  That amounts to approximately $100 per week when it is averaged out.  It is not surprising that the husband is working outside of the business to cover his expenses.  I am satisfied that his basic expenses amount to $540 per week before any of his other obligations of a discretionary nature such as repaying family are covered.  I am satisfied therefore that the husband does not have the capacity to pay any maintenance at all.

25. The third issue raised by the wife related to making available for collection by the wife her personal effects and jewellery from the former matrimonial home.  There is scant evidence about this but at its highest, it would seem that the parties have had to involve the police because of family violence issues and there seems to have been some exchange of personal items through the police department.  Just exactly what items are outstanding, I am unable to say and in any event, those are matters about which a trial in the future can be concerned. 

26. It is very sad to see the parties having to litigate at an expense such as that which I have encountered in this case.  I queried with the parties why it was that the proceedings were even issued in this Court bearing in mind what was involved.  The solicitor for the wife indicated that the issue had been raised by Bennett J who said that she would not transfer the proceedings to the Federal Circuit Court because of the argument in the parenting case that the wife was alienating the child from the husband.  Even if that is so, the dispute between the parties is modest and they would do well to deal with experts in relation to child development and sort out their personal relationship.  They cannot afford to continue these proceedings at their own expense.  It is clear from the discussions I had with the relevant practitioners, neither party is assisted by legal aid. 

27. The parties asked me to make an order for the appointment of a conciliation conference with a registrar and having regard to what I have said about the nature of the financial position, that should occur but only at a time when all of the relevant discovery has occurred.  As I observed, the spotlight will be on the husband to make sure that he has comprehensive discovery prior to any formal conference.  He cannot adopt a process of saying near enough is good enough.

28. For the reasons just articulated, I do not propose to make any orders other than those that I have indicated. 

I certify that the preceding Twenty Eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 22 January 2015.

Associate: 

Date:  22 January 2015