Bourke and Bourke

[2013] FamCA 226

FAMILY COURT OF AUSTRALIA

BOURKE & BOURKE [2013] FamCA 226

FAMILY LAW – INTERIM PROPERTY – injunctive orders – spousal maintenance

Family Law Act 1975 (Cth)

APPLICANT: Mr Bourke

RESPONDENT: Ms Bourke

FILE NUMBER: SYC 8051 of 2010

DATE DELIVERED: 12 April 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 28 February 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dura

SOLICITOR FOR THE APPLICANT: Clarkekann Lawyers

COUNSEL FOR THE RESPONDENT: Mr Blackah

SOLICITOR FOR THE RESPONDENT: Watson & Watson Solicitors

Orders

By consent it is ordered:

1. That pursuant to section 69W of the Family Law Act 1975, the parties sign all documents and do all things necessary to undergo an approved parentage DNA testing procedure to be carried out by a certified testing agency as agreed between the parties or, failing agreement, as nominated by the husband in relation to:

   (a)       B born on … October 1951

   (b)       C born on … July 1958

   (c)       D born on … November 1996

2. That each of the parties do all acts and things required of them to prosecute properly and expeditiously the proceedings numbered … in the Supreme Court of Queensland, provided that the husband arrange for payment of all costs and fees so incurred by each of them from monies under his control.

On the competing applications of the parties and having regard to the submissions on each of his and her behalf:

3.1      That the husband effect the sale of his shares in:

(d)       L Pty Ltd

(e)       M Pty Ltd

(f)       N Pty Ltd

(g)       O Pty Ltd

(h)       P Pty Ltd

(i)        Q Pty Ltd

(j)        R Pty Ltd

as soon as is reasonably practicable AND that he pay promptly to the wife the net proceeds of such sale.

3.2That the characterisation of such sale proceeds in the hands of the wife is reserved to the trial judge.

1. That the husband provide the wife with no less than 14 days written notice of all transactions in respect of the property situate at and known as E Street, Suburb F in the State of New South Wales.

2. That all other applications for interim orders are dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bourke & Bourke 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 SYDNEY

FILE NUMBER: SYC 8051  of 2010

Mr Bourke

Applicant

And

Ms Bourke

Respondent

REASONS FOR JUDGMENT

Introduction  

1. By an Amended Initiating Application filed on 1 February 2013 Mr Bourke (“the husband”), sought the following orders:

   1.That these proceedings be stayed pending the finalisation of Queensland Supreme Court proceedings file number … of which the Husband is the Second Plaintiff.

   2.That each of the parties do all acts and things required of them to      properly and expeditiously prosecute the Queensland Supreme Court proceedings referred to in the preceding paragraph to the achieve the best possible outcome.

   3.Pursuant to Section 69W of the Family Law Act 1975, the parties sign all such documents and do all things necessary to undergo an approved parentage DNA testing procedure (the Procedure) to be carried out by a certified testing agency as agreed between the parties, or failing agreement as nominated by the Husband (the Agency), in relation to the following:

   (a)B born … October 1951.

   (b)C born … July 1958.

   (c) D born … November 1996.

   4.That the Wife be and is hereby restrained from depleting, selling, transferring or causing to be transferred or encumbering or further encumbering any of the assets available for division as between herself and the Husband, unless with prior written consent of the Husband or otherwise by Curt order, including but not limited to her interest in:

   (a)The property at [G Street, H Town], Queensland, Australia.

   (b)The property at [J Street, K Town], United Kingdom.

   5.That the Wife be and is hereby restrained from dealing with the assets in her sole name, control or possession save as to preserve and/or enhance their value and save with the written prior consent of the Husband pending resolution of the matter by consent or otherwise by order of the Court.

   6.That Orders be made in accordance with paragraphs 1 and 3 of the Interim Orders sought in the Response to Initiating Application filed 6 June 2011. 

   7.That except as otherwise provided for by these Orders, the Interim Orders sought in the response to Initiating Application filed 6 June 2011 be dismissed.

   8.That the costs order made by Registrar Campbell in favour of the Wife be set aside.

2. I did not understand why the husband sought orders in accordance with paragraphs 1 and 3 of the wife’s response filed on 6 June 2011.  These orders would have the effect of restraining him from dealing with his interest in “any of the assets available for division as between himself and the wife” including but not limited to number G Street, H Town (the “H Town property”) and J Street, K Town, United Kingdom (the “K Town property”).  These orders would further have the effect of restraining the husband from taking any further steps in relation to parenting orders concerning the parties’ son D born in November 1996.  I assume that the husband’s application sought these orders in error and note that no submission was put to me in respect of that part of his interim application.

3. By her Application in a Case filed on 18 October 2012 Ms Bourke (‘the wife”) sought the following orders:

   1.That subject to any other Order the husband be and is hereby restrained from depleting, selling, transferring or causing to be transferred or encumbering or further encumbering any of the assets available for division between himself and the Wife, unless with her prior written consent or otherwise by Court Order, including but not limited to his interest in:-

   (i)The property at [G Street, H Town], Queensland,   Australia

   (ii)The property at [J Street, K Town] United Kingdom

   (iii)The property at [G Street, H Town] in the State of New   South Wales

   2.That other than in relation to the Husband’s his [sic] wages and salary and entitlements relating to his employment, the husband be and is hereby restrained from dealing with the assets in his sole name, control and/or possession save as to preserve and/or enhance their value and save with the written prior consent of the wife pending resolution of the matter by consent or otherwise by Court Order.

   3.That other than to pay to the Wife any spousal maintenance payable to her by the Husband, the Husband be and is hereby restrained from dealing with any superannuation entitlements in his sole name, control or possession save as to preserve and/or enhance their value and save with the written prior consent of the wife pending resolution of the matter by consent or otherwise by Court Order.

   Spousal Maintenance

   4.That the Husband pay to the wife the sum of $1,000.00 $800.00 per week by way of spousal maintenance t [sic] be paid on a weekly basis thereafter pending resolution of property mattes on a final basis with the first payment to occur within 7 days of the date of these Orders and hereafter weekly by direct payment to the Wife’s bank account with the NatWest Bank PLC, [K Town] branch.

   Lump Sum

   5.That within 14 days of the date of these Orders the Husband pay to the Wife the sum of $30,000

   6.That the Wife apply the sum of $30,000 paid by the Husband to the Wife for the purchase of a motor vehicle and the carrying out of repairs to the property at [J Street, K Town] United Kingdom and for emergency expenses.

   7.The characterisation of the payment by the Husband to the Wife of $30,000 to be determined by the trial judge

   Transfer of [J Street, K Town] United Kingdom

   3.8.        That within 28 days of the date of these Orders, the Husband           shall do all acts and things and sign all documents as shall be necessary to transfer to the Wife free of any encumbrance all his right, title and interest in the property situate at and known as [J Street, K Town] United Kingdom to the effect that the Wife be the sole registered proprietor thereof and the Wife shall henceforth be solely responsible for and shall indemnify th3 Husbna dwith [sic] respect to all liabilities, outgoings and expenses concerning the said property.

   Queensland property

   9.That within 7 days of the date of these Ordes the Husbanfd [sic] sign all documents and do all acts and things required to irrevocably authorise the Wife to:

   9.1      appoint a firm of qualified real estate agents to lease the property located at [G Street, H Town], Queensland (‘[H Town] property’) at a rent to be determined by the firm of qualified real estate agents; and

   9.2to effect the lease and appoint an independent solicitor to act on the lease ot the [H Town] property.

   10.That the rent from the [H Town] property to be applied:

   10.1in meeting the reasonable costs, expenses and agents fees for   the rental;

   10.2     in paying any rates, taxes, insurance premiums or other    outgoings properly payable in respect of the property;

   10.3in paying any necessary expenses to keep the property safe             and in good repair.

   10.3    any balance up to $800.00 per week to be deposited into a      joint bank account in the name of the Husband and the Wife        and from that account an amount up to $800.00 per week to          be paid to the Wife pending the completion of the financial         and property matters in this Court.

   10.4    any amount paid to the Wife from the rental is to reduce pro   rata the Husband’s obligation to pay the Wife spouse     maintenance.

   10.5any balance in excess of $800.00 per week to be deposited and held in a controlled monies account pending resolution of property matters on a final basis.

   11.That within 28 days of the date of these Orders the Husband sign all documents and do all acts and things to authorise the Wife:

   11.1to offer for sale the [H Town] property

   11.2to sign all documents and do all acts and things s as to:

   11.2.1.          Appoint a firm of qualified real estate agents to                      market the [H Town] property for sale by auction

   11.2.2.          Instruct a firm of qualified lawyers in Queensland to   prepare a contract for the sale of the land for the [H Town]       property;

   11.2.3. List the reserve price for the [H Town] property at such price as the parties shall agree in writing or, where no agreement is reached in writing within 3 days prior the date appointed for the auction, at $1,100,000 or such other reserve as recommended by the appointed real estate agents;

   11.2.4. Execute all documents requested by the agent and the           solicitor for the sale of the [H Town] property;

   11.2.5Execute all other documents necessary to complete                the sale of the [H Town] property.

   12.In the event that the bidding at the auction does not reach the reserve price, the Wife may negotiate with the highest bidder or any other interested person and effect a sale of the [H Town] property for a price which is not more than 5% below the reserve price.

   13.On settlement of the sale of the [H Town] property, the proceeds of sale shall be paid in the following manner and priority:                 

   13.1All costs and expenses incurred on the sale including legal costs and disbursements, agents’ commission, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties).

   13.2The amounts required to:

   13.2.1Pay all Council and water rates outstanding with respect to the [H Town] property

   13.2.2The amounts required to pay any other outstanding fees and charges with respect to the [H Town] property

   13.3The balance to be held in an interest bearing account in the name of the Wife’s solicitor or in the name of the conveyancing solicitor for payment:

   13.3.1of any order for costs or any other award made against the Wife in the Queensland litigation currently before the Queensland Supreme Court being file number … ; and

   13.3.2pending resolution of these proceedings on a final basis or otherwise further order of the Court

   14.The Wife shall keep the Husband informed as to the steps she is taking pursuant to Order 13 and seek the view of the husband and she is to have regard to such views but the method and process of sale is at the Wife’s sole discretion.

   15 The Wife shall have the carriage of the leasing and sale of the [H Town] property and this order shall of itself operate as authority for the Wife to provide all such instructions, do all such things and sign all such documents as might be necessary to effect each.

   Interim Orders sought by the Husband

   16.That the Order sought by the Husband in his Amended                 Initiating Application for these proceedings to be stayed pending finalisation of the Queensland Supreme Court proceedings file number  … be dismissed

   17. That the Order sought by the Husband in his Amended Initiating Application that each of the parties do all acts and things required of them to properly and expeditiously prosecute the Queensland Supreme Court proceedings file number … to achieve the best possible outcome to be dismissed.

   18. That the Order sought by the Husband in his Amended Initiating Application that the Wife be and is hereby is hereby restrained from dealing with the assets in her sole name, control or possession save as to preserve and/or enhance their value and save with the written prior consent of the Husband pending resolution of the matters by consent or otherwise by order of the Court be dismissed.

   19. That the husband shall indemnify the wife and keep her indemnified in respect of all actions, suits, claims, demands that may be made against her in relation to any liability she has or may have arising in connection with her being the First Plaintiff in the Queensland Supreme Curt proceedings file number …

   20.  That in the event that the husband fails to sign any document referred to in these orders, a Registrar of the Family Court of Australia shall sign such document or documents on his behalf pursuant to s 106A of the Family Law Act 1975 (as amended).

4. At the hearing of the interim applications on 28 February 2013 I was informed that the orders for parentage testing could be made by consent.  I enquired of Counsel for the wife how I could order the sale of the property E Street, Suburb F (“the Suburb F property”) when its co-owner, a brother of the husband, is not a party to the proceedings.  That application was then abandoned by the wife.

5. I was informed that the wife was prepared to consent to order 2 as sought by the husband in relation to the Queensland litigation, provided that her costs therein were met from matrimonial funds as is the case with the husband’s legal fees.  The husband agreed to this proposal and did not press his application for a stay of the present proceedings pending the outcome of the Queensland litigation.  The outstanding issue in relation to the Queensland proceedings was thus whether the husband should be required to provide the wife with an indemnity in respect of that litigation.

6. The husband’s interim application also sought the discharge of an order for costs made by Registrar Campbell on an unspecified date in an unidentified amount.  In circumstances where I was taken to no evidence and provided with no submissions in respect of this part of the husband’s application, I can take this matter nowhere.

The Queensland Proceedings

1. Both parties are Plaintiffs in litigation in the Supreme Court of Queensland, which is an action for negligent advice against a firm of solicitors.  The wife attempted to suggest that she entered into this litigation as a result of pressure exerted by the husband but I have no reason to accept her word over his in that respect.  The fact is that she is a party to those proceedings as a result of her own actions.

2. Obviously, the parties both embroiled themselves in the failed real estate project which led to this litigation.  They jointly and willingly commenced proceedings against their solicitors.  I am of the view that there is substance to the submission on behalf of the husband that he should not be required to provide the blanket indemnity sought by the wife in circumstances where he “has no control over her conduct”.  I will not make such an order for indemnity.

3. If the conduct of one of the parties results in adverse financial consequences in terms of the Queensland litigation, that issue can be canvassed during the final hearing of these proceedings.  In my view it would thus be premature to require at this stage that the husband provide a far-reaching indemnity in favour of the wife.

Injunctive Orders

1. Each of the parties sought orders to restrain the other from dealing with “any asset available for distribution between them”.  Neither party proffered an undertaking as to damages. 

2. In my view neither party established a basis for the exercise of discretion in favour of interim injunctive orders to restrain the other from dealing with assets.  I am certainly not prepared to grant an injunction to restrain either party from dealing in general terms with unidentified assets. Realistically, therefore, the parties’ respective applications for injunctive relief must be confined to the H Town and K Town parcels of real estate; the husband’s superannuation, shares and bank accounts and his interest in the F Town property. 

3. It was common ground that the parties are joint owners of both the H Town and K Town properties.  In ordinary circumstances, therefore, neither party could enter into any dealings in relation to these properties without the consent and active participation of the other.  As appears below, I am of the view that the husband has acted appropriately and responsibly in his use of assets in his name since the parties’ separation.  Nothing in the affidavit evidence or submissions on behalf of either party persuaded me that I should exercise discretion in favour of granting injunctions in respect of any of these assets.

4. The husband’s interest in the Suburb F property is held jointly with at least one other person and is subject to an application for probate.  It seems to me to be unreasonable and inappropriate that the husband be restrained from dealing in any way with his interest in this property.  It may well be that he is obliged to take certain steps in relation to this property in the course of the administration of his late mother’s estate.

5. The husband offered to provide the wife with fourteen days notice of any proposed transactions in relation to the Suburb F property and to provide full particulars.  I am not prepared to make any other orders in respect of this property. 

Spouse Maintenance and the Husband’s Superannuation, Shares and Bank Accounts

1. The wife sought an order that the husband pay to her the sum of $800 per week by way of spouse maintenance.  I will assume for present purposes that she established a need for spouse maintenance.  The issue, therefore, is whether the husband has the capacity to provide any greater financial support than the payments which he currently makes on a voluntary basis for the benefit of the wife and the parties’ son.

2. The husband is a professional who is employed by a company based in Europe.  He earns EUR4,800 per month and receives a net amount of EUR2,503 after payment of tax.  In his affidavit sworn on 16 October 2012 the husband deposed that he makes the following voluntary payments for the benefit of the wife and D:

   ·Cash payment of ₤1,000 per month, equating to AUD$1,500 per month (exchange rate of 1.5).

   ·Paying the mortgage at the K Town unit occupied by C and D (the Unit) of ₤170 per month, equating to AUD$255.00 per month.

   ·Service charge of the Unit of ₤91.67 per month, equating to AUD$139.68 per month.

   ·Phone/internet at the Unit of ₤30 per month, equating to AUD$45.00 per month.

   ·Electricity charges for the Unit of approximately ₤$60 per month, equating to AUD$90.00 per month.

   ·Rates for the Unit (K Town) of ₤137 per month, equating to AUD$286.60 per month.

   ·Water rates for the Unit of approximately ₤450.00 per year, equating to AUD56.25 per month.

   ·Insurance on contents for the Unit of ₤6.16 per month (₤74 UK per year), equating to AUD$8.24 per month.

   ·Car insurance for motor vehicle used by C of ₤14.14 per month, equating to AUD$21.22.

   ·UK road tax for car used by C of ₤11.25 per month, equating to AUD$16.87 per month.

   ·TV license for the Unit of ₤12.08 per month, equating to AUD$18.12 per month.

   ·Cash payment to D of ₤86.66 per month (₤20 per week), equating to AUD$130.00 per month.

   ·UK Stakeholder Pension for D of ₤240 per month, equating to AUD$360.00 per month.

1. The husband’s uncontradicted evidence was that these payments account for all but for AUD$4 per month of his net income (paragraph 16 of the husband’s affidavit sworn on 11 February 2013).  He meets his own periodic living expenses by resort to capital, including a one off draw down of $150,000 from his superannuation account.

2. On behalf of the wife it was submitted that the husband could pay an additional sum of $800 per week from his bank savings totalling approximately $93,000 and the proceeds of his sale of shares. It was further submitted that the husband could generate funds to pay spouse maintenance to the wife by way of rental income from the H Town property; the proceeds of its sale and by realisation of his interest in the Suburb F property via proceedings pursuant to s 66G of the Conveyancing Act (NSW).

3. The husband objected to the proposal that his savings be applied to payment of spouse maintenance. He maintained that the parties require access to this money to fund the Queensland litigation.  As noted, the wife is a plaintiff to these proceedings.  Ultimately, she agreed to an order that each of the parties do all things necessary to prosecute this litigation expeditiously, provided that her costs as well as those of the husband are met from matrimonial funds.  The application of the husband’s savings to payments of $800 per week as spouse maintenance would affect the use of those funds to finance the Queensland litigation. 

4. It seems to be to be inappropriate that there be an order for the husband’s savings to be applied to pay spouse maintenance rather than to fund the Queensland litigation.  One way or the other, this litigation needs to be finalised before these proceedings can be set down for trial.  Otherwise, the nature and value of the net pool of property will remain in a state of uncertainty.  As noted, if it appears that the conduct of either party in relation to the Queensland litigation resulted in wastage of assets, that issue can be raised at the trial of these proceedings.

5. The husband gave uncontradicted evidence that he withdrew one lump sum of $150,000 from his superannuation fund, which he used to meet living expenses at the rate of $5,000 per month.  In circumstances where almost the entirety of his income is expended on voluntary payments for the benefit of the wife and the parties’ son, it seems to me that the husband had no other realistic choice.  In my view, he was and is entitled to meet his own living expenses and his use of superannuation funds for that purpose in a responsible manner constitutes no basis for the injunction sought by the wife.

6. On behalf of the wife, it is submitted that the husband should commence proceedings pursuant to s 66G of the Conveyancing Act (NSW) to “realise his half share” of the Suburb F property. An annexure to the husband’s Financial Statement sworn on 14 February 2013 set out that the husband in fact holds a 12.5 percent share of his deceased’s mother 25 percent interest in that property. The husband estimated that his total inheritance will amount to approximately $240,000 if there is no successful challenge to the provisions of his late mother’s will as a result of the proceedings which his brother may commence pursuant to the Family Provision Act (NSW).

7. It seems to me to be unrealistic and unreasonable for the wife to expect the husband to commence proceedings in the Supreme Court for the purpose of obtaining funds to pay spouse maintenance.  There was no evidence as to the progress of the administration of the estate of the husband’s late mother.  The impact of such proceedings on that process is a matter of pure speculation.  As well, the husband would have to finance any such proceedings and the wife is opposed to him accessing capital for any purpose other than payments for her direct benefit. 

8. On behalf of the wife it was further submitted that the husband should join in the lease and subsequent sale of the H Town property to generate funds to provide her with spouse maintenance.  The husband seeks orders which would constitute him the sole owner of this property as part of a final financial settlement.  He is now sixty one years of age and will have to retire from all employment in his profession in four years.  He swore that he intends to retire to the H Town property and I see no good reason to remove that option now for the purpose of payment of more spouse maintenance to the wife.

9. The wife offered no independent evidence as to the likely rental income which could be generated from the H Town property or the probability that the parties could find suitable tenants.  An affidavit from a H Town Real Estate Agent with this knowledge would have assisted her case.

10. In his affidavit sworn on 17 October 2012 the husband deposed that the property is currently occupied by a friend of his who is attending to its maintenance.  It thus seems that the husband is taking appropriate steps to preserve this property pending a final settlement.  If the H Town property is tenanted, the resulting rental income will increase the husband’s tax ramifications.

11. It seems to be that the husband is currently contributing as much as he is able to the financial support of the wife and the parties’ son.  I am not persuaded that I should resort to liquidation of the parties’ assets to increase the amount of spouse maintenance received by the wife.  I am not prepared to order that the husband join in the rental of the H Town property in the absence of evidence and to the impact on his income and tax situation.  Additionally, the husband has taken appropriate steps to conserve an asset which he wishes to take in a final property settlement.

The Wife’s application for payment by the Husband of the lump sum of $30,000

1. The wife sought that the husband pay to her a lump sum of $30,000 to enable her to purchase a motor vehicle and carry out repairs to the K Town property.  The husband has already paid $40,000 and $20,000 into the trust account of the wife’s solicitors on 18 May 2012 and 24 May 2012.  It seems that this money has been expended almost entirely on her legal fees. 

2. There was no independent evidence to the effect that the wife requires a new car or of any pressing need for repairs to be carried out to the K Town property.  According to the wife’s Financial Statement sworn on 15 November 2012 she holds a total of about $8,400 in three bank accounts.  The wife proffered no reason why she is unable to resort immediately to these funds to effect any urgent repairs to the K Town property.

3. In his Statement of Financial Circumstance sworn on 14 February 2013 the husband deposed that he holds shares to the value of A$37,078.65.  There was no suggestion that he is dependent in any way on these shares to maintain himself or to make voluntary payments for the support of the wife and the parties’ son.  In circumstances where the wife holds relatively little capital, I will order that the husband sell these shares and pay the proceeds to her.  I will order that this payment await characterisation by the trial judge.

The wife’s application to transfer the K Town property to her on an unencumbered basis

1. The wife sought an order that the husband now transfer the K Town property to her on an unencumbered basis.  On her behalf, it was suggested that this action is necessary to quarantine the property from a potential costs order against the parties in the Queensland litigation. 

2. It seems to me that this proposition is at best speculative, particularly when the wife swore in her affidavit of 8 December 2012:

   22.I agreed with [Mr Bourke] to seek Counsels advice.  I said to [Mr Bourke] words to the effect:

   “I will agree to seeking Counsel’s advice.  I do not waive legal   privilege over the advice…”

23.      We obtained advice from Keith N Wilson, Senior Counsel.  I do not   wish to waive legal privilege over the advice and I have not   reproduced the advice in exhibit JB2.

1. In my view, it fell to the wife to establish that there is a realistic prospect of an adverse order for costs in the Queensland proceedings and she failed to do so.  I consider it inappropriate that there be a substantial adjustment to the parties’ interests in the K Town property at this stage of the proceedings for no compelling reason.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 12 April 2013.

Associate:

Date:  12 April 2013