Billson and Billson - [2014] FamCA 930

FAMILY COURT OF AUSTRALIA

BILLSON & BILLSON

[2014] FamCA 930

FAMILY LAW – SPOUSAL MAINTENANCE – Interim order – Whether lifestyle should be affected – Whether artificial division of expenses in financial statements should be slavishly adhered to – Orders made.
FAMILY LAW – INJUNCTIONS – Injunctions concerning access and use of income and property – Injunctions denied.

Family Law Act 1975 (Cth)

Mee & Ferguson (1986) FLC 91-716; (1986) 84 FLR 179; (1986) 10 Fam LR 971
Redman & Redman (1987) FLC 91-805; (1987) 11 Fam LR 411
Stein & Stein (2000) FLC 93-004
Strahan & Strahan (Interim Financial Orders) [2010] FamCA 423

APPLICANT:

Ms Billson

RESPONDENT:

Mr Billson

FILE NUMBER:

MLC

8915

2012

DATE DELIVERED:

31 October 2014

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

28 October 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Weil

SOLICITOR FOR THE APPLICANT:

Kennedy Partners

COUNSEL FOR THE RESPONDENT:

Ms Ben-Simon

SOLICITOR FOR THE RESPONDENT:

Farrell Family Lawyers

Orders

That paragraph 3 of the orders made by the Federal Circuit Court of Australia on 17 March 2014 is forthwith discharged.
That forthwith, paragraph 4 of the orders made on 17 March 2014 is discharged.
That each party provide to the other within 14 days, a list of documents that each wishes the other to provide for inspection and within a further 14 days thereafter, such documents be provided subject only to the issue of objections on the grounds of privilege.
That commencing on 28 October 2014, the husband pay to the wife by way of spousal maintenance, $4000 per week.
That the parties forthwith do all acts and things and sign all such documents that may be necessary to draw down the sum of $240,000 from the mortgage loan secured over the property at Suburb T and for those proceeds to be applied as follows:
(a)       $70,000 to the husband as a part-property settlement;
(b)       $170,000 to be paid by the wife towards all of her credit cards currently outstanding and upon such payments being made, to provide confirmation to the husband through his solicitor that such payments have been made into the credit cards;
(c)       For the purposes of (b) above $70,000 of the $170,000 referred to shall be deemed part property settlement in favour of the wife.
Upon the payment to the wife of $170,000 referred to in these orders, the husband’s obligation to pay spousal maintenance in the sum of $4000 per week is varied to $2600 as and from the next pay day after the $170,000 is paid to the wife.
To the extent that it is necessary to say so, the husband may sell the assets of Business O Limited provided that he provides:
(a)       the wife copies of all correspondence relating to proposed contractual arrangements for the sale prior to the completion of the contracts;
(b)       copies to the wife of all executed contracts;
(c)       the wife evidence of the deposit into the company’s account of the funds so received from the settlement of the sale; and
(d)       Copies of any demands for payment in respect of liabilities of the company; and
(e)       Open access to the wife (if necessary electronically) so that she may see movements of the company’s banking accounts.
Save as to any application in relation to costs, the application of the wife filed 9 September 2014 by the wife and the amended response thereto filed by the husband on 21 October 2014 are dismissed.

IT IS CERTIFIED:

That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Billson & Billson 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 8915 of 2012

Ms Billson

Applicant

And

Mr Billson

Respondent

REASONS FOR JUDGMENT

In this interlocutory application, the wife seeks orders:
1.(a) That the husband pay spousal maintenance in the sum of $4000 per week to be reduced to $2948 per week when (b) is fulfilled;
(b)that both husband and wife drawn down $170,000 against the former matrimonial home mortgage and such sum be used to discharge the wife’s credit card liabilities;
(c)that an injunction issue restraining the husband and his servants and agents from transferring, disposing of, encumbering or otherwise dealing with:
i.any assets in his possession, custody and/or control including any assets owned by [F] Pty Ltd as trustee for the [Billson] Family Trust; and
ii.any income from the [F] Pty Ltd Trust except with the consent of the wife or to enable the husband to comply with his obligations relating to spousal maintenance;
(d)that an injunction ordered by the Federal Circuit Court concerning [F] Pty Ltd and bonuses received by the husband, be discharged; and
(e)if the husband sells the assets of a company known colloquially as [O Limited], the proceeds be used to pay taxes once the wife has consented to those payments and the balance otherwise be held in a trust account pending further order or agreement.
In the same proceedings, the husband seeks orders that:
(a)The husband and wife do all things to draw down $240,000 against the mortgage encumbering the former matrimonial home to pay:
i.    $70,000 to the husband as a part property settlement,
ii.     $70,000 to the wife but to be paid into her credit cards as a part property settlement.
iii.   $100,000 be paid to four specific credit cards (as an acknowledgment of a joint responsibility in respect of that $100,000 of liability) and then the credit cards not be further used by the wife;
(b)That the injunction imposed by the Federal Circuit Court that the husband “ensure” that the wife be paid £1000 per week as “consultancy” fees from [O Limited], be discharged;
(c)That the husband “ensure” that the wife is paid $2300 per week from “dividends” received by [F Pty Ltd] as trustee for the [Billson] Family Trust;
(d)That upon the sale of the assets of [O Limited], the husband pay all taxes and other outgoings of the UK enterprise and the balance be distributed in equal shares between the parties for the payment of their legal fees.
I have endeavoured to summarise the proposed orders of the parties (and perhaps not as eloquently as they put those matters). The application in a case filed by the wife on 9 September 2014 and the response by the husband to that application of 21 October 2014 sought different orders but I am determining this matter on the basis of the orders as outlined.

Two observations

Two observations must immediately be made;
(a)This was a hearing on the papers and without the evidence being tested; and
(b)There were significant arguments about what had actually happened with a lot of the money of the parties both as to capital and liabilities.
I am not therefore in a position to make any significant findings on the facts save as to where I otherwise indicate. This is an interim hearing and I have done the best I can with the evidence and no doubt any situation which is clarified at trial with comprehensive and tested evidence can rectify matters arising out of the absence of evidence at this stage.

The evidence

The controversial evidence was contained in two affidavits by the wife filed 9 September and 24 October respectively, an affidavit of evidence by the husband filed 21 October 2014 and the parties’ respective financial statements filed by the wife on 9 September 2014 and by the husband on 22 September 2014. In respect of the latter financial statements, I have largely accepted the expenses of the parties but I do not accept their income position. Whether the expenses components of those financial statements are reasonable in the circumstances of this interim spousal maintenance case is a matter to which I shall turn below.

The parties

The applicant was Ms Billson (to whom I shall refer as “the wife”) and the respondent was the husband Mr Billson (to whom I shall refer as “the husband”). It would seem that the husband has been the applicant in the substantive proceedings.

Background

The husband is 40 years of age and the executive director of a corporate entity and the wife is aged 37 years and appears to have limited experience other than in the retail and small business management area. At the moment she does not seem to be working.
The parties commenced living together in 1997, married in 2001 and finally separated in 2013.
The child of the marriage is X who was born in 2004 and who is currently aged 10 years. Pursuant to an order of the Federal Circuit Court, X spends her life on a week-about arrangement with her parents.
The wife has a daughter Y who was born in 1996 and is therefore 18 years of age. It will be evident from the chronology that the husband came into Y’s life when she was a very young baby and she has been a part of his household all of the way through. The unchallenged evidence of the wife is that the biological father of Y has had nothing to do with her. Y currently lives with the wife.
The simple details above belie the complexity of the case. The parties litigated in the Federal Circuit Court beginning in 2012. There were disputes over X, which have now been resolved with final orders. Since the file commenced, there have been numerous hearings before Federal Circuit Court judges including a three day interim maintenance hearing in March 2014. In June 2014, Judge Connolly transferred the proceedings to this Court. The case is contained in two cardboard boxes and there are almost 100 documents on the file.
The parties’ assets are not only finite but also dwindling. Counsel for the wife explained that a major stumbling block in the property proceedings related to two distinct but vastly different, valuations of property. How that is possible remains to be seen but in the course of pursuing their goals, each party has spent (and is yet to spend) thousands of dollars in legal fees. As I observed in early discussion, this has all the hallmarks of a Dickensian tragedy.
Despite the unresolved property issue, the two problems before me are of an interlocutory nature and relate to a holding position until the final hearing can be achieved.

The financial background

Unfortunately, it is important to understand the context of this interim financial dispute. In 2001, the parties moved to the United Kingdom following the husband’s employment. The wife commenced a website relating to recreational interests and that enabled a business to be commenced to which reference has been made earlier. In 2003, the husband’s employment ended when he resigned. Initially, the recreational business was extremely successful and the parties were able to purchase the former matrimonial home in Suburb T, albeit with the assistance of a first mortgage loan.
In 2005, the parties returned to Australia where the home to which I have just referred was tenanted and in need of renovation. They moved into rented accommodation. Staff in the United Kingdom continued the operations of the business.
The husband then began working in a transport company culminating in a very tax-effective arrangement which still subsists. Whilst the evidence is somewhat unclear, it would seem that the husband is paid partly by way of salary and partly by way of franked dividends. The franked dividends go into a family trust which then makes distributions. A number of expenses are deducted from the profit of the trust which leaves a net profit. Those expenses appear to relate to a motor vehicle, overseas travel and indeed, as the husband would have it, payments to the wife. It took some time to make clear, but as I understand it now, the husband’s proposed maintenance payments would come through the trust because that would be tax-effective if the franking credits on the dividends were then passed on to the wife.
The business in the United Kingdom seems to have had significant financial problems to the point that in the Federal Circuit Court, it seems the wife was saying it had no value. One of the disputes now is its sale. The husband, who was granted an order by a Federal Circuit Court judge in March 2014, has absolute control subject to providing the wife with information. The husband has now found a buyer with whom he is negotiating. The wife through her counsel, complained bitterly about not being kept informed of the contract details but I am not in the position to make any finding about that discovery point. I will endeavour to rectify that for the purposes of the future trial.
Having obtained an order from the Federal Circuit Court that the husband should have control, he then went to the United Kingdom and on his view, there was a financial mess. Through his counsel, he submitted that since he took over in March 2014, he has resurrected the business to the extent that it can now be sold. What is not clear to me is how that will occur because the evidence does not assist. Doing the best I can, the husband’s position is that he will be selling the business but not the corporate entity and as such, whatever amount is obtained from a purchaser, will go into the company’s balance sheet. It was the husband’s evidence that there will be expenses although he was not at all clear about their detail. It was his view that there would be money left over. The wife’s position however was that she estimated that the tax liabilities of the entity would exceed whatever the sale proceeds would be. I am not in a position to make a finding about that material at all. What does occur to me however is that the parties have been using an artificial arrangement whereby the wife is deemed to be a consultant to get around the employment law requirements of the United Kingdom.
It was the husband’s submission that the wife’s income should include for the purposes of the spousal maintenance application, the sum of almost $1800 per week because that is what she has been receiving from the United Kingdom company. Indeed, she has been receiving £1000 per week. The husband’s position was that that would continue.
Having regard to the dispute between the parties about just what money will be over and what control the wife would have, not to mention any tax ramifications, I have no confidence that there will be an ongoing ability of the company to pay the wife if its core business is sold and liabilities including taxation in the UK have to be paid. I do not understand whether it would be income that would be providing the source of the proposed payment or capital. Either way, that position seemed to fade away from the husband’s proposal as I have earlier outlined.

The credit card problem

There was little dispute between the parties that each of them has lived an extremely affluent lifestyle. There has been much travelling internationally for business purposes but it would also seem for pleasure and each has enjoyed a good lifestyle here in Australia. That however seems to have caused a variety of credit cards to be extended to almost unimaginable levels. The concession by the husband was that of the wife’s $170,000 or thereabouts outstanding on a variety of credit cards, probably $100,000 might be attributable to the marriage in some way. That evidence has not been tested and I am not in a position to make any finding. However, the wife’s evidence was that when she returned to Australia after the separation had occurred, she was not permitted to move back into the former matrimonial home so she had to obtain rental accommodation and furnishings. In addition, she had no source of income sufficient to satisfy her living expenses and therefore used credit cards. All of that can be the subject of discovery and the wife’s lifestyle can be examined. The husband’s unashamed position was that the wife had a problem bordering on an addiction. He alleged that she shopped for very expensive items without consideration of how they were to be paid. He pointed to orders made by the Federal Circuit Court in March 2014 under which money was to be drawn from the proceeds of the sale of another property owned by the parties and money was to be used as capitalised spousal maintenance and legal fees. As the wife observed however, that money has now gone. Since that time, further monies have been used and according to the husband, the wife continues to shop.
In my view, whatever may have occurred up until now, I am satisfied on the evidence that the wife does not have sufficient funds to support herself adequately and that enables the Court to examine whether a spousal maintenance application is appropriate, notwithstanding the husband’s argument that there was a capitalised maintenance payment in March 2014. I am satisfied on the wife’s evidence that the money so categorized by the judge was used to reduce debt so the question of her entitlement to maintenance arises again.

Two important concessions

The first of two concessions was made by the husband. After much discussion, counsel for the husband conceded that the wife satisfied the requirements to which I shall turn in relation to spousal maintenance. That is, he conceded that she could not adequately support herself without maintenance. In my view, that was a very sensible concession to make.
The second concession was made by the wife. When I observed that the Court needed to examine the capacity of the husband to pay spousal maintenance, I indicated that my view was that the wife’s entitlement to spousal maintenance would have to be taken into account as a priority over the private school fees of the parties’ child. In this case, the private school fees were $335 per week. Those fees are being paid by the husband or some entity on his behalf. In my view, as a matter of public policy, the Court should not permit those expenses normally to be paid ahead of a spousal maintenance entitlement if there is a clash between the two. In this case however, the wife conceded that she did not want the child removed from the school and therefore the concession was made that it should be taken into account and as I shall show below, I have done so.
Before turning to the vexed area of the expenses of each of the parties, I set out the basis upon which I am determining this matter.

26.Section 72 of the Act provides that to establish an entitlement to spousal maintenance the applicant must show an inability (relevantly here)“to support herself adequately”, by reason of one or more of the factors identified in the section.

The first of those factors relates to “having the care and control of a child of the marriage who has not attained the age of 18 years”. The second relates to “age or physical or mental incapacity for appropriate gainful employment” and the third relates to “any other adequate reason” provided it affects the ability of the wife to support herself.
There may an overlap between the three categories of factors. In this case, the husband’s concession obviates any issue there. In addition, the Federal Circuit Court ordered that the wife have spousal maintenance (albeit in a lump sum) in March 2014. Nothing I heard suggested that the basis for that order had altered.
The wife relied upon her financial statement as did the husband and, as I have indicated, the finer details of the expenditure by each could not be tested. The wife differentiated between expenses which were personal to her and those which she asserted to be expenses referrable to the child X and also Y. There was a very distinct artificiality about that. For example, counsel for the husband submitted initially but later did not pursue the point, that rental should be divided into three parts for three occupants. The wife had done that for electricity, food and similar expenses. Whilst that is an appropriate approach, at interim level, it is difficult to be too proscriptive about it because the evidence could not be tested as to who used what food or electricity. Where also should the line be drawn about the wife’s obligation to provide a roof over the head of and also clothing for, X?

In Mee & Ferguson (1986) FLC 91-716; (1986) 84 FLR 179; (1986) 10 Fam LR 971, although a matter relating to child maintenance, the Full Court (Asche ACJ, Fogarty and Cook JJ) noted (at Fam LR 976):
... the essential first step is to ascertain in financial terms the needs of the child in question. This will obviously vary with the circumstances of the individual case, taking into account amongst other circumstances the age and sex of the child, the relevant standard of living and any special factors applicable in that particular case.
Thus, if the expenses of a child can be taken into account, one must be wary of simply dividing numbers on an assumption of equal household member use. Much of the tentative nature approaching this particular part of a spousal maintenance claim comes from the fact that child support legislation now makes clear what the appropriate amounts are for the support of children. That is supposed to take into account the concept of children enjoying the benefits of the largess of their parents depending upon what their parents have. In such a limited interim hearing, I am not satisfied that I have to be too concerned about the overlap of expenses and the importance lies more in the reasonableness of the expenditure.
Section 72 of the Act requires the Court to examine s 75(2) and the obligation to support children appears there. Nevertheless there must be some evidence to get a sense of what is needed in the wife’s household and I consider it is available to the Court here.
In Redman & Redman (1987) FLC 91-805; (1987) 11 Fam LR 411 the Full Court dealing with an interim hearing for spousal maintenance said it was not necessary at that stage to split off definitively the costs of the children. The Court went on to say that one should not lose sight of the fact that it was an interim arrangement which could be revisited. That is, the evidence need not be so extensive and the findings not so precise. Having said that, in Stein & Stein (2000) FLC 93-004, the Full Court (Kay, Holden and Dessau JJ) concluded that the trial Judge had erred in determining a claim for interim spousal maintenance by reference to the expenses referrable to the claimant and the children of the marriage in her care. That case involved significant wealth and perhaps could be distinguished here.
In any event, I think there is little doubt that phrases used in the Act such as the wife’s “commitments” “necessary to enable” her to support herself and a child who she has “a duty to maintain” indicate that the Court should be conscious of the overlap dilemma but not insist on artificiality.

The wife’s financial position

If the wife does not receive the £1000 per week to which she is currently entitled under the Federal Circuit Court’s order but which I consider unreliable with an impending sale, then her income is non-existent. To the extent that I am wrong about that, the husband has control and could always retain the income if he is so confident that the sale will not affect its availability. The evidence does not support any conclusion that that is likely to change in the foreseeable future and even if the wife was to obtain some form of employment, nothing the husband said would suggest that she could seriously meet the expenses she is currently facing.
The wife’s financial position is, as I have indicated, set out in her financial statement. Her rental however has now increased to $1203 per week. She has insurances of $80 per week and she claimed living expenses of $1634 per week. Those expenses included medical, dental and optical expenses of $370, entertainment and hobbies of $100 per week, holidays $100 per week, cleaning $100 per week, repairs $50 per week, hairdressing and toiletries $100 per week and “exercise/fitness” $200 per week.
Whilst those sorts of expenses as set out may be justifiable in a lifestyle to which the parties were accustomed and could afford, the evidence of both parties would suggest that things have changed rapidly. If nothing else, the parties have two households and their accommodation expense has almost doubled. Whilst there was some suggestion that the wife’s rental accommodation should not be entirely allowed, in my view, having regard to the fact that she has the part-time obligation for the child X leaving aside assisting 18 year old Y, she should have the opportunity to live in accommodation equivalent to that of the husband. As I earlier indicated, there is overlap in respect of the expenses for both X and Y in respect of gas, electricity, telephone, chemist and so forth. In my view that would be an artificial delineation of those costs.
Having regard to the fact that the wife should not have to alter her lifestyle substantially if the husband does not do likewise, it is useful to compare the expenses that he incurs. The husband too broke up his expenses in something of an artificial way as can be seen in his gas, electricity, heating fuel, clothing, medical and dental expenses along with chemist and pharmaceutical.
On an interim basis, it is my view that there is no evidence to justify the wife’s claim for $370 per week for medical, dental and optical expenses nor the $200 for exercise/fitness. In respect of the husband, there should be a reduction in his entertainment and hobbies from $245 down to what the wife expends on herself and similarly a reduction in his holiday expenditure for $202 down to what the wife expends as $100 per week. Whilst that may be seen to be subjective, I observe that there is little evidence as to why, other than a lifestyle, those expenses are necessary in the circumstances. Because of the overlap to which I earlier referred, I would add to the wife’s total expenses of $1634 per week a further $150 of being expenses associated with the fulfilling of her commitment to the responsibilities of the child X drawn from the artificially divided estimates but I would then remove the exercise/fitness and the medical expenses. I find therefore that the wife’s reasonable expenses total $2497 which I will round off to $2500.
The husband’s income is approximately $5900 per week. That is before any consideration is given to what he has control of in respect of the trust. In his affidavit, the husband said that for the financial year ended 30 June 2015, the trust was likely to receive a maximum of approximately $160,000 in dividends along with dividends in the amount of approximately $20,000 from its other interests in related entities. Against that, the husband asserted that the trust had various “operating expenses” associated with the “management of investments” held by the trust. Although there were suggestions that figures had been handed to the wife, counsel for the wife maintained that at no stage had the wife been given any figures and in any event, she disputed that the operating expenses were as high as alleged by the husband. The husband’s evidence was that he estimated that $30,000 was needed to be retained in the accounts for operating expenses over the ensuing three months and to maintain a reasonable cash balance. He said the operating costs of the trust were around $20,000 for the quarter ended 30 September 2014 which was an indicator that the operating costs of the trust for the current quarter would be also around that amount. There is currently $55,000 sitting in the account of the trust as a result of the injunctive orders made by the Federal Circuit Court in March 2014. On any view, the husband was asserting that the expenses of the operation of the trust would be something in the vicinity of $80,000 per year. If he was not able to make distributions to the wife in a tax-effective way and had to draw money in his own hands through the trust, there would no doubt be tax. However in his case, the tax would not be payable except at the end of the financial year if not later and, accordingly, the tax is a matter that can wait for trial. What is therefore unclear to me is exactly how much the trust is receiving and what its operating costs are.
The wife’s position in relation to the trust was set out in her second affidavit in which she disputed that the operating costs were as indicated by the husband on the basis that she had not received any documentation to establish that. Having said that, the wife pointed to evidence which she said came from the husband’s own sources indicating that in the period from 1 July 2013 to January 2014, the gross receipts of the family trust amounted to $278,287. She said, but did not indicate her source, since January 2014, the family trust had received investment income totally $147,528 for a period of nine months.
Having regard to the absence of any corroborative evidence, it seems that the wife’s assertion is more likely to be accurate as it has apparently been drawn from source documents. There are clearly expenses associated with operating the trust but I am not prepared to accept that they would be in the vicinity of $80,000 per year. I say that because there was a dispute about the nature of the “expenses” put through the trust. They certainly do not sound like administrative costs nor entirely expenses associated with earning the income of the trust. A proper testing of the evidence will clear that up. I think however I can take a conservative approach and presume that the husband has access to $2700 per week taking into account the wife’s estimated receipts and the husband’s estimated operating expenses. I am satisfied that the husband has access to something in the vicinity of $140,000 per year. Some comfort can be drawn from that estimation from the fact that $55,000 is still in the account despite the husband having had the capacity, by virtue of the orders of the Federal Circuit Court in March 2014, to pay operating expenses which are very much disputed by the wife.
On any view therefore, the husband has an income stream of something in the vicinity of $8600 per week.
Offset against the husband’s income however, allowances must be made for tax, his mortgage, the school fees and his living expenses. Those were set out in his financial statement. For the reasons I have already outlined, I would reduce his holidays and entertainment to that of the wife. In my view his reasonable expenditure should be set at $5350. That being the case, the husband has access to $3250 per week and I have found the wife’s reasonable expenses to be $2600. On that basis, the husband has the capacity to pay $2600 per week.
I have made no provision for the wife to pay credit card expenses on the basis that in my view, it is reasonable to expect that on the basis of the husband’s proposal, a drawdown of $240,000 on the Commonwealth Bank mortgage would pay out all of the credit card expenses.
The husband although not initially seeking a part-property settlement, asked the Court to make an order that he have $70,000 of the $240,000 proposed drawdown. Although he did not seek that, I see no reason why he should not have access to that on the basis that there was little dispute that the power of the Court to make the order lay in s 79 of the Act.
It was not argued that the exercise of that power at least in respect of the wife was not appropriate and that the relevant considerations were present (see Strahan and Strahan (Interim Financial Orders) [2010] FamCA 423). Even with the disputed valuation of assets, there seems to me to be ample equity in assets that would enable an adjustment to be made later in relation to both parties. The Court had the benefit of sufficient evidence to say that it was just and equitable to make an order and there was evidence of the parties’ respective positions about contributions which was not significantly controversial. I intend to consider s 79(4)(e) and s 75(2) later. On that basis it seems just and equitable that each should have the sums suggested by the husband.

Cancellation of the credit cards

I understood the submission of counsel for the husband to be that once the credit cards were paid out, they should be cancelled. The dilemma with that situation is that it would leave the wife with no capital and only a regular payment of spousal maintenance which would cover living expenses. What I am very concerned about is the wife’s capacity to engage lawyers having regard to the nature of this dispute. The husband does not seem to have any problem about paying for his lawyers and there should be a level playing field. On that basis, I would anticipate that the wife would use the credit cards for the payment of legal fees but to the extent that she otherwise spends significant sums, she could hardly expect that those matters would be taken into account in her favour in any ultimate trial.
Section 79(4)(e) for the purposes of a property settlement requires the Court to consider the matters in s 75(2) of the Act. Those same considerations are required to be considered by the Court as a result of an application under s 74 relating to spousal maintenance. I have set out the mathematics above.
For the purposes of s 75(2) of the Act, I find the following:
·The parties are of an age where both are capable of employment and neither has any significant health problems;
·The income rests entirely with the husband and the property and financial resources of the parties is limited;
·Neither of the parties has any difficulty about obtaining gainful employment but there is a significant difference about the level to which each could aspire;
·The wife has clearly the responsibility for the care of X and while I am unsure as to what her legal duty is in relation to Y because the evidence remained unclear. Just what the husband’s obligation is to Y also remains unclear bearing in mind that although the technical position is that he is her step-father, he has been the only father she has known since birth;
·There are no responsibilities of either party to support any other person;
·Neither party is in receipt of Commonwealth benefits or superannuation;
·The circumstances in relation to the standard of living has been factored in to my determination above and in my view is reasonable;
·It is not suggested in this case that a maintenance order would enable the wife to obtain access to a course of education or training but simply to live adequately until the trial of the property proceedings;
·There is little doubt in this case that the wife has contributed significantly to the parties’ financial position with the acquisition of property;
·This is a relatively long marriage and the wife has worked through significant portions of it;
·Both parties are caring for X so the question of any desire to fulfil a full-time role as a parent is not relevant;
·Neither party is cohabiting with any other person;
·The issues of property remain unresolved;
·Child support is not an issue at the moment save that the husband is paying all of the relevant school fees.

The sale of O Limited

Neither party suggested that O Limited’s business should not be sold. The wife sought orders that if the husband sold the business, then the proceeds should be applied in a particular way. In my view, that is unnecessary because neither party really has any understanding of what the expenses will be. It was also suggested that the net proceeds, after the payment of liabilities, be paid into an interest bearing account on behalf of the parties pending further order. Having regard to the wife’s position that it would be unlikely that there will be any amount of money over because of the taxation in the United Kingdom, the prospect of money being paid into a solicitor’s trust account would seem also unlikely. Most importantly, as it seems this is corporate money, it will have to be reflected by the accountant in the balance sheet of the company which I understand the husband is not selling. It is only the business that is being disposed of in which case the necessary asset of the company will appear in the balance sheet. Under the circumstances, even if the company is the alter ego of the husband, the property belongs to the entity and should be properly recorded. The wife should have access to those records. This is a discovery issue and both parties should be aware of their obligations under Chapter 13 of the Family Law Rules 2004.
The wife also sought orders that the husband be restrained as I have indicated earlier relating to not only all of his assets but also the assets of FPty Ltd as trustee of the Billson Family Trust. In my view, there is no justification for such an order bearing in mind the limited number of assets that the parties have. Whilst the wife’s evidence was that the husband had taken unilateral action in a variety of ways, nothing I read indicated that the husband was taking deliberate steps to thwart the orders of the Court or to prevent the wife from receiving her entitlement. The power to make an order of the nature sought by the wife lies in s 114 of the Act. As the fundamental principle in s 114 is that the Court may make such order as it considers proper, I do not consider it appropriate to make an order restraining the husband from disposing of assets in the wide description proposed by the wife.
The wife also sought an injunction relating to the income received by F Pty Ltd as the trustee of the trust. The husband was restrained by the order of Judge Riethmuller in the Federal Circuit Court in March 2014. In my view, there is no basis for that injunction any longer because the husband will no longer be arranging the payment of the wife’s £1000 once the sale of O Limited occurs and as I have indicated earlier, he will need the income from the trust to pay spousal maintenance. To the extent that he uses other income from the trust for expenses that he refuses to disclose to the wife or discuss with her, those are matters that he may face problems about at the trial if a trial judge deems his action unilateral. Similarly, if deductions are made for “operating expenses” which do not seem to the Court to be appropriate deductions for tax purposes in relation to the trust’s earning of income, he may also find that the papers are referred to the Australian Taxation Office for consideration. In the circumstances, the proper order is to simply discharge the existing order to allow the husband to use the income of the trust as he, in his capacity as the trustee of the trust, considers appropriate. I do not have the benefit of the trust deed but to the extent that the husband acts inappropriately, he may face the problem of beneficiaries taking action against him.
Another order sought by the husband was that the maintenance be paid effectively through the trust. In my view that is not an appropriate order for the Court to make because it is manipulating the taxation system. The husband and wife do not agree on any form of taxation minimisation in this case and therefore the Court should simply make the order personal to the husband and how he pays that, is a matter for him.

The timing of the maintenance payment

The wife sought an order that the payment at the lower rate commence once the credit cards had been discharged by the drawdown of the mortgage loan against the home. I agree that is appropriate in the circumstances and the efficacious implementation of that order will no doubt benefit the husband. The problem is what to do in the meantime. The wife sought an order of $4000 per week. She can justify that on the basis that, in addition to the costs and expenses to which I have already referred, she currently has to service the credit card payments. The income of £1000 per week will stop but that will still be in the husband’s hands. That will continue until he disposes of the O Limited business. In my view, he should pay $4000 per week until such time as the credit cards are paid out and then, the payment will drop to $2600 per week.

Discovery

Each party accused the other of recalcitrance in relation to discovery. I am appalled that this case has been through the court system for two years including a variety of hearings one of which appeared to have been a final hearing in relation to property matters, only to find that discovery is still a disputed issue. For that purpose, I propose to make an order that each party provide to the other within 14 days, a list of documents that each wishes the other to provide for inspection and within a further 14 days thereafter, such documents be provided subject only to the issue of objections on the grounds of privilege. Once the parties have satisfied each other as to discovery, they can then make an approach to the Court for the purposes of having the matter listed into the trial list.
There will be orders accordingly.

I certify that the preceding Fifty Seven (57) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 31 October 2014.

Associate:

Date: 31 October 2014