BOSTON & BOSTON

[2015] FamCA 421

FAMILY COURT OF AUSTRALIA

BOSTON & BOSTON [2015] FamCA 421

FAMILY LAW – PROPERTY – Interim Orders – where husband seeks sale of former matrimonial home and interest in unit trust – wife opposes application and maintains husband has failed to disclose significant assets – whether interim distribution is just and equitable – sale of property to reduce debt – orders for sale of unit trust interest with proceeds to be divided equally.

FAMILY LAW – INJUNCTIONS – Communication – where husband seeks to restrain wife from contacting the family of his current partner – where restriction on communication would hamper proceedings – not appropriate to make injunction.

Family Law Act 1975 (Cth) s 79

Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Mr Boston

RESPONDENT: Ms Boston

FILE NUMBER: ADC 1946 of 2012

DATE DELIVERED: 27 May 2015

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 27 May 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr J. Dillon

SOLICITOR FOR THE APPLICANT: C & F Lawyers

COUNSEL FOR THE RESPONDENT: n/a

SOLICITOR FOR THE RESPONDENT: In Person

Orders

1. Paragraphs 2 and 9 of the husband’s Application in a Case filed on 1 April 2015 are dismissed.

2. Within fourteen [14] days from today both parties file and serve an Affidavit of Documents setting out all relevant documents in their power, possession or control which have become available since the last Affidavit of Documents was filed and thereafter permit appropriate inspection as requested.

3. The husband is permitted to instruct a licensed valuer employed at Q Valuers to value the real property and improvements at I Street, Suburb K in the State of South Australia at the sole cost of the husband and for that purpose the wife is ordered to permit the said valuer to enter upon, view and inspect the property at a time during a week day as agreed between the wife and the valuer PROVIDED THAT the inspection takes place within thirty [30] days from today.

4. The wife shall on behalf of R Pty Ltd as trustee for Boston Trust take all steps to sell all the shares held in J Street Unit Trust at the best price available and if lower than SIX HUNDRED AND FIFTY THOUSAND DOLLARS [$650,000.00] only with the prior written consent of the husband and thereafter to pay the proceeds of sale on behalf of the trust:

   (4.1)in payment of all reasonable costs associated with the sale;

   (4.2)to discharge the ANZ mortgage number … known as the J Street Loan;

   (4.3)payment of SEVENTY FIVE THOUSAND DOLLARS [$75,000.00] to the wife;

   (4.4)payment of SEVENTY FIVE THOUSAND DOLLARS [$75,000.00] to the husband’s present solicitors for payment of husband’s debts to previous solicitors in such proportion as the husband shall direct;

   (4.5)balance to be retained by husband’s present solicitors in an interest bearing trust account to be retained pending further order.

5. The question of costs is reserved to be determined at the final hearing of the proceedings.

6. The husband’s Application in a Case filed on 1 April 2015 is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Boston & Boston 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 ADELAIDE

FILE NUMBER: ADC 1946 of 2012

Mr Boston

Applicant

And

Ms Boston

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The background to this matter is a history of acrimonious behaviour and ongoing litigation between the parties.  There are over a hundred documents on the file.  This Court has attempted to list the determination of the matters, but has not been able to conclude the overall litigation.  I am reserved on the children’s matters.  There are ongoing and outstanding allegations concerning the assets of the parties, the income and financial resources of the parties.  They are yet to be resolved.  Many contain serious disputes between the parties. 

2. The applications that are before me today are the Application in a Case filed by the husband on 1 April 2015 and the response to the Application in a Case filed by the wife on 22 May 2015.  The husband is represented by Mr Dillon of counsel today.  The wife is unrepresented. 

3. In the husband’s Application in a Case he seeks the orders set out in annexure A.  Paragraph 1 is that:

   The matter be made especially returnable to a date convenient to the Court.

4. Paragraph 10 is:

   Such further or other orders as this Honourable Court deems fit.

5. The specific orders sought are paragraphs 2 and 3 through to 9.  I shall deal with each of those as they arise. 

6. Similarly, the wife’s response to an Application in a Case seeks orders set out in the attachment.  Specifically they deal with the sale of the units in S Unit Trust and the disposal of the proceeds of sale. 

7. I have heard lengthy submissions from both the counsel for the husband and the unrepresented wife, have received an aide-memoir from the husband’s counsel and a further two exhibits from the wife. 

8. It is clear from the documents and the submission that the wife agrees to the sale of the J Street Trust shares, but not to the proposed distribution of the proceeds.  Otherwise, all of the matters sought in the applications are in dispute. 

9. The law in relation to interim orders by way of property settlement or interim distributions and injunctions are clearly set out in the Family Law Act1975 (Cth) (“the Act”). Section 79 was the principal matter to be considered when dealing with interim property settlement orders. The provisions of s 79 are those which I take into account including the reference to the provisions of s 75(2).

10. The High Court decision of Stanford v Stanford (2012) 247 CLR 108 clearly makes it necessary for the Court to be satisfied that making any order is just and equitable, and also to assess, using the provisions of s 79, what orders would be just and equitable.

11. The interim orders continue to be difficult to be determined especially because there are substantial disagreement about the assets, liabilities and financial resources of the parties.  Major factors in this case are the financial circumstances, income and earning capacity of the husband. 

12. The wife alleges the husband has millions of dollars of undisclosed assets which the husband denies.  The husband is currently claiming to be unemployed, but had a past involvement in businesses.  The husband alleges that the former matrimonial home is worth in excess of $3 million dollars, while the wife says that the property is worth approximately $1.8 million dollars. 

13. The husband maintains his assets and liabilities are such as to allow interim payment to him for payment of his debts, but he alleges that this would still permit final orders in the wife’s favour by way of final property settlement. 

14. The wife strenuously denies this and asserts that the husband’s hidden assets, (some of which are overseas) will mean she is deprived of just final orders if the interim distribution is made as the husband is seeking. 

15. The Court is unable to determine the truth of these allegations of the parties at this stage.  It must therefore make orders, if any, which are just and equitable taking into account the agreed facts and the considerable number of disputed facts. 

16. I turn then to the Application in a Case document at 103.  Paragraph 2, which I have not dealt with by way of mention before is:

    That the wife or any agent acting on the wife’s behalf be restrained from making any further written or verbal communication to [Ms F] or any members of [Ms F’s] family in the United States.

17. This is an order sought by the husband which appears to arise because of the letter (annexed to the affidavit material) from the wife to Ms F’s father or other family members.  The Court is told that Ms F, is the girlfriend or partner of the husband and is an American citizen.  It has been alleged by the wife that she is a very wealthy woman or part of a very wealthy and well-known American family. 

18. It is also alleged that Ms F’s father is an elderly gentleman, but there is a dispute as to his reaction to the letter sent by the wife.  The husband alleges that he was distressed and suffered ill-health as a result of the letter.  The wife alleges that he was pleased to receive the letter and is encouraging further communication. 

19. The significant factor is, however, that Ms F has been named as a potential witness for the husband.  It is clear from the documents already on file that the financial relationship between the husband and Ms F may well be relevant. 

20. The injunction sought is clearly not an injunction to protect the assets or income of either of the parties, but is one relating to the personal interaction.  I am concerned, however, that restricting communication would hamper the proper preparation of this matter for final hearing if the wife was continuing to maintain a significant financial relationship between the husband and Ms F.

21. It is important that any communication with any person be proper, not threatening, not libellous or otherwise illegal.  I am not satisfied, however, that it is appropriate or within the jurisdiction of this Court to make the orders sought by the husband in paragraph 2.  I dismiss that part of the application.

22. Paragraph 3 relates to:

    That the wife make disclosure on oath of all documents in her possession, custody or control relating to the party’s competing financial applications.

23. Paragraph 4 says:

    In addition to paragraph 3 hereof, the wife make disclosure of the following:

    a.  Financial Statements for [T Pty Ltd], [U Pty Ltd] and [V Pty Ltd] for the period 10 May 2012 to 31 March 2015;

    b.  Profit and Loss Statements for [T Pty Ltd], [U Pty Ltd] and [V Pty Ltd] for the period 10 May 2012 to 31 March 2015;

    c.  Tax Returns and Notices of Assessments for [T Pty Ltd], [U Pty Ltd] and [V Pty Ltd] for the period 10 May 2012 to 31 March 2015;

    d.  Business Activity Statements for [T Pty Ltd], [U Pty Ltd] and [V Pty Ltd] for the period 10 May 2012 to 31 March 2015.

24. Paragraph 5 says that:

    In addition to paragraph 3 hereof, the wife make disclosure of the following:

    (a)     Tax returns and Notices of Assessment for the period 10 May 2012 to 30 June 2014;

    (b)    Bank Statements in relation to all accounts in the wife’s own name or accounts held for the wife’s benefit for the period 10 May 2010 to 31 March 2015.

25. The parties have already been the subject of orders made in relation to disclosure, and are under ongoing obligations to provide up-to-date disclosure and discovery of all relevant documents. 

26. The wife maintains in her affidavit that the entities described as “T Pty Ltd”, “U Pty Ltd” and “V Pty Ltd” are simply domain names which she has established, and that there are no businesses. 

27. The current situation is that the parties have not filed affidavits of discovery recently.  There is therefore likely to be updated material to be provided by both parties.  Both parties should therefore prepare and file an updated list of relevant documents. 

28. If the wife does not have documents under her power, possession or control then such documents, of course, cannot be and need not be produced.  The documents must, however, be provided if they are under the husband’s power, possession or control or under the wife’s power, possession or control.  Both parties should update their discovery. 

29. The orders will therefore be that within 14 days from today both parties file and serve an affidavit of documents setting out all relevant documents in their power, possession or control which have become available since the last affidavit of discovery was filed, and, thereafter, permit appropriate inspection as requested. 

30. In paragraph 6 of the Application in a Case the husband seeks a valuation of personal property.  It is worded in this way:

    That the wife do all things necessary to facilitate the access of valuers appointed by the husband for the purpose of an inspection of the property located at [I Street, Suburb K], NOTING THAT following inspection of the same the husband will at his own expense obtain a written valuation in relation to furniture and effects.

31. I, therefore, interpret this to be an application by the husband to have a valuation of the personal property contained in I Street, Suburb K. 

32. In submissions by the wife it appeared that O Valuers have carried out a valuation of the personal property situated at I Street, Suburb K pursuant to previous orders of this Court.  There is no basis in the husband’s affidavit for any new orders sought in relation to that personal property. 

33. By way of oral application from the husband’s counsel I considered the application by the husband to obtain a valuation of the real estate of the former matrimonial home at I Street, Suburb K.  The wife did not agree to this.  The wife has previously obtained her own valuation of the real estate property.  The husband has obtained appraisals not valuations.  The wife has been critical in her documents of the steps taken by the husband to obtain these appraisals.  There are ongoing steps being taken by the wife with other entities about her concerns.  The wife maintained that these appraisals were not independent. 

34. The husband has previously sought to nominate two valuers to the wife in correspondence.  The wife maintains, however, that she is not in a position to determine if those other valuers would be appropriate and independent.  If an issue as to the independence or bias arises then that is a matter which can be dealt with at trial. 

35. The husband claims dire financial circumstances, but seeks to obtain leave to pay for his own valuations. 

36. I balance all of these factors. 

37. The significant issue is, however, procedural fairness.  That procedural fairness should require the husband to obtain a valuation of the significant remaining asset of the parties which is the subject of considerable dispute.  The parties have not complied with the previous orders concerning a single expert, and taking into account the ongoing inability of the parties to these proceedings to agree even on the most basic procedural matters, I consider that procedural fairness must permit the husband to obtain his own valuation so that if there is expert disagreement about the actual value that can then be determined at the final hearing of this matter. 

38. Therefore, I propose to give the husband permission to instruct Q Valuers to value the party’s interest in I Street, Suburb K, at his own cost. 

39. The order will, therefore, be that the husband is permitted to instruct a licensed valuer employed at Q Valuers to value the real property and improvements at I Street, Suburb K, at the sole cost of the husband and for that purpose the wife is ordered to permit the said valuer to enter upon, view and inspect the property at a time during a week day as agreed between the wife and the valuer provided the inspection takes place within 30 days from today.

40. Paragraph 7 and 8 of the husband’s application are as follows:

    That by way of partial property settlement, [J Street Pty Ltd] as trustee for [J Street Unit Trust] pay forthwith all monies currently as at the date of making this order held by them to Trust Account of C & F Lawyers.  (The husband’s lawyers).

41. Paragraph 8 states:

    That in the alternative to paragraph 7 hereof, and by way of partial property settlement, such funds be divided equally between the parties and made payable in the case of the husband to the Trust Account of C & F Lawyers and in the case of the wife to the wife direct.

42. As I previously indicated, the wife agrees to the sale of the shares, but not payment of the monies received to the husband or his solicitors.  The shares in the S Unit Trust are owned by R Proprietary Limited as trustee for the Boston Trust.  This is a family trust and company created by the parties.  The evidence suggests that the wife controls the trustee and is the appointer for the trust and that both parties are possible beneficiaries of the trust. 

43. There is significant dispute as to how the shares in J Street Unit Trust were acquired.  The husband says from the sale of a X Street property.  The wife says from borrowed moneys now represented by the ANZ mortgage account number ...  There are several mortgages over the former matrimonial home at Suburb K and the one which the wife says relates to the J Street property has a debt of approximately $352,000 owing on it.

44. There have been no recent financial statements or tax returns prepared for R Pty Ltd, the trustee of the trust, nor for the Boston Trust.  Therefore it is not at all clear what, if any, are the creditors or any possible assets of this trust. 

45. It would appear, however, from the material currently before the Court that the J Street Unit Trust shares are the only significant assets and that the only liabilities of the company and trust would appear to be the ANZ mortgage if that is indeed a debt of the trust.  It is clear from the evidence that it is possible that the wife has been paying debts in relation to the company, trust and J Street Unit Trust, but also receiving the income, although there is a dispute as to the amount of monies received by the husband in the past and how that has been dealt with by him and his brother.

46. I am satisfied that R Pty Ltd and the Boston Trust and their rights and interests should also be considered in any event. 

47. The husband and wife, or one of them, have incurred debts.  It would not be appropriate, nor just and equitable to distribute all of the proceeds of the sale of the trust shares to the husband.  It is necessary, however, to do justice to ensure that some of the mortgages on the former matrimonial home are paid from the substantial funds likely to be received from the sale of shares.  There will be no disadvantage to the husband if one of the mortgages, being the mortgage described by the wife as the J Street mortgage, is discharged.  If the shares are sold for approximately $670,000, their current value, then there will still be substantial funds left.

48. The husband has pressing debts.  The wife has use of the significant asset, the former matrimonial home and its contents, and motor vehicle.  The wife has been responsible for the children’s expenses and there are substantial monies which she has also borrowed. 

49. Weighing up all of the factors, including the difficulty in ascertaining at the present time the husband’s assets, financial resources and earning capacity, I consider it appropriate, just and equitable for there to be an order and for that to provide sufficient funds to make some payments to the husband’s previous lawyers on the basis that the wife also receive a similar sum and retain the balance in a trust account in the husband’s solicitor’s name, which will be an interest-bearing trust account, to be retained pending the resolution of the proceedings and for the assessment of the possible tax consequences of the sale of the shares and the taxation liabilities of the company and trust, which are yet to be determined.  They will, no doubt, need to be determined when proper accounts were prepared, after proper disclosure and investigation, and the moneys will be held back to cover these possibilities.

50. The balance needed for payment of some of the pressing debts of the husband and the need to retain the funds needs to be considered.

51. Paragraph 9 of the application by the husband dealt with the delivery up of a motor vehicle states:

    That the applicant wife deliver forthwith to the respondent husband for his personal use one of the four motor vehicles in the possession of the applicant wife.

52. The wife says that she uses one of the motor vehicles, that her daughter uses one of the motor vehicles, that one of the motor vehicles is used by her father and the other motor vehicle is currently not operative.  This is information the truth of which is not possible to determine at this interim stage and bearing in mind the difficulties associated with the other matters in dispute concerning the parties’ assets and financial resources, it is not considered appropriate to make an interim property settlement order at this stage for the delivery up of any motor vehicle.

1. The wife’s response to the Application in a Case dealt with the sale of J Street shares and the disposal of the proceeds.  I have to a certain extent already dealt with that in the orders that I have made providing for the sale of those shares, save and except that I have provided for the monies to pay out one of the mortgages and some distribution to the parties, leaving the payment of the balance to be determined at a later stage. 

2. Any costs of the applications are not appropriate to be dealt with because of the difficulty in determining the financial circumstances of the parties.  Taking into account the various orders that I have made, I will leave the question of costs reserved to be determined at the final hearing of the matter.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 27 May 2015.

Associate: 

Date:  5 June 2015