BOUIS & BOUIS

[2010] FamCA 325

FAMILY COURT OF AUSTRALIA

BOUIS & BOUIS [2010] FamCA 325

FAMILY LAW – INTERIM PROPERTY – purpose to fund legal proceedings
FAMILY LAW – SPOUSE MAINTENANCE – periodic payments in addition to specific expenses – reasonable expenditure

FAMILY LAW – CHILD SUPPORT – Departure Order – periodic payments in addition to specific expenses – reasonable expenditure

Family Law Act 1975 (Cth)

Child Support (Assessment) Act 1989 (Cth)

Bevan and Bevan (1995) FLC 92-600
Gyselman & Gyselman (1992) FLC 92-279
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166

APPLICANT: Ms Bouis

RESPONDENT: Mr Bouis

FILE NUMBER: SYC 790 of 2009

DATE DELIVERED: 28 April 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 22 March 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lethbridge, senior counsel

SOLICITOR FOR THE APPLICANT: Cameron Gillingham Boyd

COUNSEL FOR THE RESPONDENT: Mr Campton

SOLICITOR FOR THE RESPONDENT: Karras Partners

Orders

1. Pending further order:

   1.1.The husband pay to the wife within 28 days the sum of $146,780 less any amount the wife has already received pursuant to order 2.4 made 22 March 2010. 

   1.2.The sum referred to in order 2.3 made 22 March 2010 be released to the husband.

   1.3.If the husband has complied with order 1.1 made this day, prior to the wife receiving any monies pursuant to order 2.2 made 22 March 2010, then the husband shall be entitled to receive the sum referred to in order 2.4 made 22 March 2010.

   1.4.If the husband has partly complied with order 1.1 made today prior to the wife receiving any monies pursuant to order 2.4 of 22 March 2010, then the wife shall be entitled to receive a payment from the funds referred to in order 2.4 made 22 March 2010, so that the total amount received by the wife pursuant to order 2.4 made 22 March 2010 and this order is $146,780.

2. Pending further order, the husband pay spousal maintenance to the wife in the sum of $700 per week.

3. Pending further order, the husband pay by way of further spousal maintenance for the wife:

   3.1.Council and water rates for the C property;

   3.2.Gas and electricity for the C property;

   3.3.Maintenance costs, service costs, comprehensive premiums, green slips and registration charges in relation to the wife’s motor vehicle;

   3.4.Foxtel;

   3.5.Telephone/fax and internet for the C property (to a limit of $30 per week);

   3.6.Pool cleaning and gardening for the C property;

   3.7.The wife’s private health insurance with MBF.

4. By way of a child support departure order, until finalisation of property proceedings, the husband pay:

   4.1.The amount of $275 per week per child by way of periodic child support;

   4.2.Tuition fees in the sum of $110 per week;

   4.3.Private school fees and school uniform costs incurred in respect of the attendance of M, born … February 1999 at Y School and E born … May 2000 at L School.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 790 of 2009

MS BOUIS

Applicant

And

MR BOUIS

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. The wife sought orders for:

   1.1.interim spousal maintenance;

   1.2.interim property; and

   1.3.the departure from the administrative child support assessment.

2. The husband and wife were married for 12 years and there are two children of the marriage, aged 9 and 11 years. There is a shared parenting arrangement, where the children live approximately half time with each parent.

3. The husband owns a 65% share in B Company Pty Ltd, a construction and building company involved in the construction of commercial and residential projects, which has made very large profits in recent years.  The husband says that this company has more recently fallen on hard times.

4. Prior to any final hearing, the wife indicates she wishes to explore the interrelationship between the husband’s business activities and the Bouis Family Trust which the husband claims is solely controlled now by his father, notwithstanding the history of the control of the trustee company. There is an interrelationship of the Bouis Family Trust with both the K No 1 Unit Trust and AA Company Pty Ltd. The husband is a director in both the latter entities.  I am told the Bouis Family Trust holds substantial assets.

SHORT CHRONOLOGY

1. The husband was born in 1970, and is currently aged 40 years.

2. The wife was born in 1972, and is currently aged 38 years.

3. B Company Pty Ltd was registered in 1993.

4. The parties married and commenced cohabitation in 1996.

5. The husband purchased the matrimonial property at C on 4 August 1998. It was transferred into joint names in February 2002 when a mortgage was taken out with the husband and Bouis Holdings as mortgagees.

6. M was born in February 1999. He is currently aged 11 years and attends Y Private School.

7. E was born in May 2000. She is currently aged 9 years and attends L School.

8. The Wife suffered depression after the birth of E.

9. The Bouis Family Trust was established in January 2002.

10. The wife suffered a nervous breakdown in February 2002 and was hospitalised for two weeks in April.

11. The husband transferred 6,000 of his 25,500 shares in B Company to his brother P Bouis on 22 April 2005 for no consideration. The husband now owns 65% of the shares in the company.

12. The parties separated on 26 January 2008 but continued to live under the same roof until 7 April 2008 when the husband left. The children live half time with each parent.

DOCUMENTS RELIED UPON

1. The Wife relied on the following documents:

   17.1.Application in a Case filed 11 January 2010

   17.2.Wife’s Financial Statement sworn 12 May 20009

   17.3.Wife’s Affidavit sworn 10 March 2010

   17.4.Husband’s Financial Statement 13.02.09

2. The Husband relied on the following documents:

   18.1.Husband’s Response to an Application in a Case 18.03.10

   18.2.Husband’s  Affidavit sworn 18.03.10

   18.3.Husband’s Financial Statement filed 18.03.10

   18.4.Wife’s Affidavit sworn 06.01.10 – paragraphs 52, 39 and 41

INTERIM PROPERTY

1. The wife sought the husband pay to her $146,780 by way of interim property order, for the purpose legal costs and disbursements. Up to the date of trial, the wife owed $59,123 in legal fees, as outlined in Exhibit G.

2. The husband sought instead that he transfer to the wife his Porsche vehicle, so that she may sell it and deposit the entirety of the sale proceeds into her lawyer’s trust account for legal costs. At trial, counsel for the husband altered his position.  The car was to be sold and the proceeds applied as follows:

   20.1.Payment of the costs associated with the sale;

   20.2.The cost of the valuation of the husband’s interest in B Company;

   20.3.Payment of $20,000 to the trust account of the husband’s lawyers pending the outcome of this judgment; and

   20.4.The remainder into the trust account of the wife’s lawyers for legal fees and disbursements.

3. Interim orders in those terms were made on 22 March 2010.  The husband opposed an order for the full amount of $146,780 to be paid to the wife, as sought by the wife. 

4. The legal principles relevant to this issue are most recently and convenient set out in Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166. The partial/interim order is made pursuant to s 79 of the Family Law Act 1975 (“FLA”). A detailed inquiry is not required, however there needs to be some assessment of s79 factors. The Court must consider whether the position of financial strength of the respondent, the capacity of the respondent to pay for their own litigation, and the inability of the applicant to pay their litigation costs would justify the interim property order being made. An interim order of this sort should only be made if the final outcome of property settlement will be comfortably above that awarded in the interim.

5. There is no real issue that the wife would be entitled to receive more than $147,000 by way of alteration of property.  Counsel for the husband indicated that the property pool is currently in excess of $2.2 million, including real estate worth approximately $2 million.

6. The question is whether or not the husband currently has the ability to fund a payment to the wife of $147,000 taking into account monies received from the sale of the Porsche. 

7. The husband controls a company in which his interest is valued at $621,448 in his most recent financial statement. This value is significantly lower than the $2,138,902 he claimed his interest was worth in his financial statement of 13 February 2009. The husband says more recent estimate of value is based on the advice of an insolvency expert (which he has engaged for advice; not to liquidate). The husband claims the downturn is a result of the continuing global financial crisis and that his business lacks a focus on ‘green construction’. The husband claims the business is being kept afloat by the government’s financial stimulus program. The husband asked me to look at the recent trend of losses in the company.  The most recent figures are dated at September 2009 (Exhibit E). In September there was a surplus in the company of $1,493,078 million. He claims the company is in an even more dire situation than it appears on those figures, because the downward trend has continued in the past six months. The husband points to a first half year trading loss in 2009/2010 of $365,012.50. He therefore disputed that the company still had the $1.5 million in liquid assets that it did at September 2009. The husband said that his livelihood, as well as the children’s and wife’s was funded out of company income. He submitted that the liquid assets in the company were not available to pay out the $140,000 to the wife because using them for that purpose would threaten the company’s ability to pay its creditors and maintain solvency.

8. In the absence of further evidence, I have no better snap-shot of the company’s value than the September 2009 figures. I cannot speculate about the company’s likely value at this point in time.

9. Appearing as an asset on the B Company’s balance-sheet as at 30 September 2009, tendered as exhibit E, is a loan to Bouis Pty Ltd of $1,971,397. In his affidavit sworn 18 March 2010 (at paragraph 57), the husband simply states that the loan has been repaid with interest. I was told from the bar table that that sum of about $2 million was entirely expended for trade creditors in the last six months.  Assertions of non disclosure by the husband about this payment were withdrawn in a letter by senior counsel for the wife dated 1 April 2010.  

10. On the face of Exhibit E, there is sufficient equity in the company (about $1.5 million) for the husband to make the payments sought.

11. I find that it is just and equitable to make an order for the payment of $146,780 by the husband to the wife within 14 days, less any amount the wife has already received pursuant to the interim order made on 22 March 2010 relating to the sale of the Porsche.

SPOUSAL MAINTENANCE

1. In her Application in a Case filed 11.01.10 the wife sought that the husband pay her $1,800 per week by way of spousal maintenance. This was an increase of $800 from the amount sought in her Response to Initiating Application of 10 June 2009. Senior counsel for the wife indicated that the figure of $1,800 per week should be taken as the request by the wife for a weekly payment for spousal maintenance of $1,000 per week and child support of $800 per week combined for both children. In his Response to an Application in a Case, the husband seeks to pay $451 per week, should I find that the wife cannot adequately meet her own needs. At trial, counsel for the husband suggested the wife should have adequate funds if she received the amount she had earlier been paid as a wage from B Company, which was close to $540 net.

2. In addition to periodic spousal maintenance, both parties have agreed that the husband would continue to pay the following expenses for the wife upon receipt of invoices:

   31.1.Council and water rates for the C property;

   31.2.Gas and electricity for the C property;

   31.3.In regards to the wife’s motor vehicle, the maintenance costs, service costs, comprehensive insurance premiums, green slip and registration charges.

3. In his Response to an Application in a Case, the husband also offered to pay the following expenses (which he claims he has been paying anyway):

   32.1.Foxtel;

   32.2.Telephone/fax and internet (up to $30/wk);

   32.3.pool cleaning and gardening for the C property; and

   32.4.the wife’s private health insurance with MBF.

4. Spousal maintenance orders are made under s72 of the Act if one party is unable to support themselves and the other party is reasonably able to pay. The Court may make such order as it considers proper under s74(1) of the Act, taking into account the matters in s75(2).

5. I note that the parties’ relationship was of 12 years duration. During that time the wife took on primary housekeeping and childrearing responsibility, allowing the husband to expand his business, which had been established before the commencement of the relationship. I also note that the parties enjoyed a medium to high standard of living, which the husband says cannot continue due to the difficult circumstances in his business B Company.

6. Bevan and Bevan (1995) FLC 92-600 says that interim property orders must be taken into account before interim spousal maintenance is calculated. However, the order for $146,780 is earmarked to be used by the wife to help her prepare for a final hearing in relation to any s 79 application that she is making.

Wife’s Needs

1. The first issue is considering what the wife’s needs are. In this interim hearing, the wife’s evidence in relation to her medical condition is such that it satisfies me that the wife has a mental health condition which would mean that she would find it very difficult to obtain employment.  This may be an issue which is more fully tested at the final hearing.

2. In addition, on an interim basis I am also prepared to accept that the wife’s work history, as disclosed in her affidavit, is such that would indicate she would not easily be able to re-enter the workforce. 

Payment already made by the husband for the wife

1. I note the fact that aside from proposed periodic spousal maintenance, there is an agreement between the parties that the husband pays certain expenses. The estimated value of these expenses are as follows:

W’s expenses paid by husband
For Wife	For Children	Total
Council and Water Rates	$19	$28	$47
Gas	$10	$20	$30
Electricity	$24	$46	$70
Telephone [willing to pay up to $30/wk]	$25	$5	$30
Foxtel	$10	$20	$30
Car insurance	$14	$26	$40
Contents insurance	$10	$10	$20
Motor vehicle registration and green slip	$5	$9	$14
Motor Vehicle Maintenance	$14	$26	$40
Internet	NK
Pool cleaning	$7	$13	$20
Gardening	NK
Wife’s MBF insurance	NK
TOTAL	$341 at least

Wife’s Expenses

1. In her Affidavit at annexure F, the wife claims that she pays the following in personal expenditure:

Wife’s Personal Expenditure
Food	$160
Household supplies	$37
House Repairs	$10
Gas	$10
Electricity	$24
Telephone	$25
Motor vehicle petrol	$35
Motor vehicle maintenance	$14
Fares/car parking	$5
Clothing and shoes	$57
Medical, dental and optical	$200
Entertainment/hobbies	$50
Holidays	$44
Chemist/Pharmaceuticals	$50
Cleaning – fish tank	$9
Cleaning – pool	$7
Repairs – furnishing and appliances	$4
Dry-cleaning	$5
Books and magazines	$5
Gifts	$50
Hairdressing/toiletries	$20
Foxtel	$10
Veterinary costs	$14
Mowing	$5
Dog grooming	$12
TOTAL	$862

1. It can be seen that the husband is already paying some of the payments claimed by the wife. 

2. Some of the wife’s expenditure seems a little excessive. 

   41.1.For example, the wife’s assertion that she spends $70 per week on bread and milk.

   41.2.The wife may be able to find savings on cleaning the fish tank and washing the dog.

   41.3.The wife’s expenditure of $50 per week on gifts may be high.

   41.4.Although criticised by the husband, I do not feel the wife’s expenditure on shoes and clothing, or her ‘entertainment’ expenditure is particularly excessive.

   41.5.The wife’s medical, dental and optical expenses of $200 per week combined with her chemist expenses of $50 per week are substantial. I find these expenses are, without testing, probably reasonable given the wife’s alleged health complaints:

   41.5.1.migraines resulting from neck and back problems, requiring regular chiropractic, physiotherapy or massage treatment, analgesics and migraine medication;

   41.5.2.depression and anxiety requiring anti-depressant medication and sleeping aides;

   41.5.3.stomach ulcer; and

   41.5.4.Anaemia resulting from iletis (an inflammatory disease of the intestine)

3. Upon removing the items that the husband pays and discounting the wife’s expenditure to some degree, I calculate the wife’s reasonable expenses to be $700 per week.

Husband’s capacity to pay

1. The husband’s financial statement puts his income (sourced from employment, business income and super contribution) at $7,738 per week (or $402,376 per annum) before tax. 

2. Counsel for the husband says that this income has been paid from retained profits in the company and that those profits have been expended. He therefore claims that such income which was the basis of the husband’s 18.03.10 financial statement can no longer continue.  My conclusion though, is there is sufficient income on the financial statements to indicate the husband can make the payment as sought by the wife.  In addition to the income stream, the husband has capital.  The husband has a 65% ownership in one company and shares in two others. Despite the husband’s claims regarding the down-turn in his construction business, I find that he, on an interim basis, has the income and/or capital to be able to pay spouse maintenance in the sum assessed as the wife’s need.

3. I therefore find that a reasonable payment of spousal maintenance paid by the husband to the wife is $700 per week.

CHILD SUPPORT

1. In his Response to an Application in a Case filed 18 March 2010, the husband seeks a departure from the current child support assessment in terms that the husband pay the private school fees and the uniform costs of the children. The husband opposed any change to the administrative assessment.

2. As indicated, the wife sought a departure order in the sum of $400 per week per child.

3. The Child Support (Assessment) Act 1989 (“CSAA”) states at s116 that:

   (1)(b)  A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if both of the following apply:

   (i)  the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;

   (ii)  the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case.

4. The husband did not dispute the fact that we could deal with the matter under s 116 of the CSAA and I am satisfied that it is in the interest of both parents to consider the respective child support applications at this time.

1. In Gyselman & Gyselman (1992) FLC 92-279 the Full Court outlined a three-step approach:

   50.1.assess whether in the special circumstances of the case a ground of departure has been established;

   50.2.assess whether it is “just and equitable” to make the proposed order; and

   50.3.assess whether it is “otherwise proper” to make the order. 

2. The husband also did not dispute that there was an appropriate ground under s117(1) CSAA and s117(2)(c)(ia) and (ib) CSAA. The special circumstances in this case allowing a departure from the administrative assessment is that the husband in his most recent financial statement says he has an income of approximately $400,000 but his assessment is capped at an income level of $141,063 a year. In addition, the wife is currently unable to work due to her psychological vulnerability.

3. In consideration whether a departure order is just and equitable, the considerations in s117(4) and their corresponding explanatory provisions in s 117 of the CSAA must be taken into account. The reduced income earning capacity and financial resources of the wife are explained earlier in this judgment, as are the financial resources of the husband. I note that the husband has committed himself to make payments to the wife for the children and herself, in addition to periodic child support payments, which cover the children’s school costs among other expenses.

4. The costs of maintaining the children are discussed below. Similar to his argument in relation to spouse maintenance, the husband argues that the amount the wife claims is excessive and therefore is not just and equitable. The husband claims the children’s costs amount to about $500 per week when they are in his care.

5. The wife says that she pays the following amounts in relation to the children:

Children’s Expenditure
Food	$300
Household supplies	$63
House Repairs	$10
Gas	$20
Electricity	$46
Telephone (husband will pay $5 per week)	$20
Motor vehicle petrol	$35
Motor vehicle Maintenance	$26
Clothing and shoes	$200
Children’s activities	$110
Medical, dental and optical	$0
Entertainment/hobbies	$100
Holidays	$86
Education expenses, including season levies	$10
Chemist/Pharmaceuticals	$10
Cleaning – fish tank	$16
Cleaning – pool	$13
Repairs – furnishing and appliances	$6
Books and magazines	$0
Gifts	$20
Hairdressing/toiletries	$5
Foxtel	$20
Veterinary costs	$26
Mowing	$5
Pocket money/lunch money	$40
Dog grooming	$13
TOTAL	$1,174

1. I note that the children are with their mother only one in every two weeks.

2. I next note, as I did in relation to spouse maintenance, that the husband already pays, or has agreed to pay the following expenses which should therefore be removed from the children’s expenditure for the purposes of periodic child support determination:

   56.1.The children’s educational expenses, including tutoring, which the wife has listed in ‘children’s activities’ (see Part N of husband’s financial statement filed 18 March 2010 “Tuition fees: $100pw”)

   56.2.Gas;

   56.3.Electricity;

   56.4.Telephone (part);

   56.5.Foxtel;

   56.6.Motor vehicle maintenance;

   56.7.Pool-cleaning; and

   56.8.Gardening.

3. I believe some of the wife’s expenditure on the children is excessive.

   57.1.I find the wife’s food expenditure of $300 each week for the children to be excessive, particularly when she has the children only one week in each fortnight and child support is calculated weekly. If her calculations were accurate, the wife would be spending $600 per week on the children when they are in her care.

   57.2.Expenditure on children’s clothing at $200 a week is high.

   57.3.Children’s entertainment was estimated to account for $110 each week, or $220 each contact week, which I consider excessive.

4. Upon removing the items that the husband pays and reducing excessive expenditure on the children, I conclude that it is reasonable and otherwise proper to alter the current child support assessment of $232.59 per week.  I find for reasons already stated, that the husband has a capacity to pay an amount, which I find to be just and equitable and otherwise proper, in the sum of $550 per week for the two children by way of child support.

5. I intend this child support departure order to be in effect only until the completion of property proceedings between the parties. I expect that at the final hearing for property orders, a more extensive assessment will be available based on the tested evidence regarding the financial positions of the parties.

FURTHER DIRECTIONS

1. I note this matter is listed for a future court event before Stevenson J on 31 May 2010. 

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts.

Associate: 

Date:  28 April 2010