Brandella and Brandella (No. 2)

[2008] FamCA 679

FAMILY COURT OF AUSTRALIA

BRANDELLA & BRANDELLA (NO. 2) [2008] FamCA 679

FAMILY LAW – PROPERTY – Applications to vary or discharge interim injunctions for periodic payments and occupation of former matrimonial home dismissed

APPLICANT: Ms Brandella

RESPONDENT: Mr Brandella

FILE NUMBER: MLC 10215 of 2007

DATE DELIVERED: 23 April 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 23 April 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr M. Wilson

SOLICITOR FOR THE APPLICANT: Adrian Abrahams Family Lawyers

COUNSEL FOR THE RESPONDENT: In person

SOLICITOR FOR THE RESPONDENT:

Orders

IT IS ORDERED:

1.   That the husband’s application in his Response filed 21 November 2007 in which he seeks a discharge of paragraphs 22 to 25 inclusive of the Orders made 26 September 2007 is dismissed.

2.   That the wife’s application, that the husband vacate the former matrimonial home at B and that she have conduct of the sale of the said property be dismissed.

IT IS ORDERED BY CONSENT:

3.   That by 5.00 pm on 22 May 2008 the husband do all acts and things necessary:-

a)To obtain a planning permit in respect of the swimming pool at the home at B;

b)To provide a copy of the planning permit to the conveyancer instructed to sell the said property and at the same time provide a copy of such planning permit to the solicitors for the wife.

IT IS FURTHER ORDERED BY THE COURT:

4.   That liberty is reserved to each party to approach Registrar Riddiford or my Associate, to request to have the matter mentioned before the Honourable Justice Bennett for the purpose of a determination of any urgent or interim issue which may arise between the parties in relation to the any of the following:-

a)   The vacant possession of the former matrimonial home in the event that completion of the contract of sale affecting the said property can be brought on earlier than the scheduled date of 12 August 2008;

b)     The vacant possession of the property in the event that the property can be rented out to the purchasers or otherwise pending completion of the contract of sale;

c)     In the event that an early release of deposit money can be obtained and there is a disagreement about the application of the net proceeds of same; and

d)     There is a dispute about a matter which could or would impede the completion of the sale of the said property and one party seeks orders against the other.  

5.   That the question of the costs of both parties of this interim hearing be reserved.

6.   That this matter be allocated a Conciliation Conference date before Registrar Riddiford not earlier than 20 August 2008 and not later than 20 September 2008 and in the event that the matter does not resolve in it’s entirety at the Conciliation Conference the Registrar make such directions as he considers he is able to make in relation to the future conduct of the matter.

7.   That any previous direction limiting the issuance of subpoenae by reference to number of subpoenae or time at which subpoenae can be returnable, be discharged.  Until further order, each party is at liberty to cause subpoena to issue returnable in any subpoena list until the final hearing or on any date appointed by Registrar Riddiford for the return of subpoenae. 

8.   That Registrar Riddiford appoint a telephone mention at least one month prior to the date upon which the Conciliation Conference is to be convened to discuss the availability of documentation relevant to the financial circumstances of the parties both at separation and currently.

9.   That the reasons for judgment this day be transcribed and when transcribed and settled copies be placed on the Court file and made available to the parties.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 10215 of 2007

MS BRANDELLA

Applicant

And

MR BRANDELLA

Respondent

REASONS FOR JUDGMENT

(ex tempore)

1. On 5 February 2008 I formed the view that this matter could not be accommodated in the usual judicial duty list and adjourned it for a hearing of two days duration[1].  There are two applications for me to determine and in respect of which I have heard evidence and submissions, an oral application by a business creditor to intervene in the proceedings and some comments I wish to record about appropriate management of this case into the future.

   [1]Reasons published as [2008] FamCA 275

2. The husband represents himself.  He is a self employed contractor by occupation.  He has had the benefit of a McKenzie friend who is a woman called Ms F who is his girlfriend and she has sat in court and been able to assist him in the presentation of his case and she has done for some days or weeks prior to the hearing.  The wife is represented by Mr Wilson of counsel. The wife is not employed outside the home.

Husband’s application to discharge obligations to make payments to wife

1. First, the husband seeks a discharge of paragraphs 22 to 25 inclusive of orders made on 26 September 2007 which provide as follows:-

   22.THAT the husband pay or cause to be paid to the wife any moving expenses incurred by her to a maximum of $500 and any bond required to secure rental accommodation (the characterization of such payments to be reserved to the Trial Judge).

   23.THAT until further order or the payment of monies to the wife pursuant to order 16d. hereof, whichever is the earlier, the husband pay or cause to be paid the wife’s periodic rental to a maximum of $260 per week as and when the same falls due (the characterization of such payments to be reserved to the Trial Judge).

   24.THAT until further order the husband pay or cause to be paid to the wife the sum of $400 per week (the characterization of such payments to be reserved to the Trial Judge) and in the event that a child support assessment issues such payment be offset against any child support assessment.

   25.THAT until further order the husband pay health insurance premiums with respect to the wife and the children at their present level (the characterization of such payments to be reserved to the trial judge).

2. It appears to me that the husband is not required to seek a discharge of paragraph 22 because he has already complied and does not seek a refund.  It is common ground that that $500 and bond has been met by him out of certain lump sum payments he has otherwise been required to pay. 

3. Paragraphs 23, 24 and 25 provide that the husband pay the wife's rental as and when it falls due, pays her $400 per week in cash, with provision for parts of those payments to be offset against child support which is actually paid and health insurance premiums for the family.  All of the moneys are referred to as payments in respect of which "the characterisation [of] be reserved to the trial judge". 

4. At the commencement of the hearing, I raised the issue that the payments could not be looked at as spousal maintenance orders.  They certainly were not urgent child support orders and they were not expressed to be interim or partial property orders.  Counsel for the wife is content to frame them as mandatory injunctions made pursuant to section 114, which relevantly, provides as follows:-

   (1)In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection (4), the court may make such order or grant such injunction as it considers proper with respect to the matter which the proceedings relate, including:

   (a)an injunction for the personal protection of a party to the marriage;

   (b)an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;

   (c)an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;

   (d)an injunction for the protection of the marital relationship;

   (e)an injunction in relation to the property of a party to the marriage; or

   (f)an injunction relating to the use or occupancy of the matrimonial home.

   (2)In exercising its powers under subsection (1), the court may make an order relieving a party to the marriage from any obligation to perform marital services or render conjugal rights.

   (3)A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.

5. Mr Wilson, counsel for the wife, says that is either section 114(1)(e) or alternatively, section 114(3). He informs me that he favours the latter description but says that nothing turns on the distinction vis a vis whether the order should be discharged.  Counsel for the husband made no submissions to the contrary.

6. I approach the matter on the basis that the payments for $400 a week rent and health insurance payments should be discharged if I am satisfied that the order requiring the husband to meet those payments has:-

   a)ceased to be proper, or

   b)ceased to be convenient or just or necessary.  I include "necessary" because courts do not make injunctions unless they are necessary and I think that is an overarching test.  There were no submissions by the husband to the contrary.

7. In the context of the application of the husband to discharge the mandatory injunctions, I accept the submission of counsel for the wife that in looking at assessing the propriety, necessity or the justice and equity of the mandatory injunctions, I ought to look at what they are designed to achieve on a practical basis.  I have no doubt that from the wife's point of view, they were designed to achieve money with which she could support herself and the children and be accommodated.  On the husband's part, they probably serve the same purpose but they also served the purpose of him at that point escaping what would otherwise have been called a spousal maintenance order.

8. I have heard evidence extensively over the last two days in relation to the wife's need for periodic support and the husband's income from which such support could be paid.  I have heard extensive evidence of use by the wife of credit cards since separation.  It appears that this was a family which, whilst intact, used credit cards and marginal lending to a high degree and since separation, the wife has continued that.

9. It is not possible on the evidence of either party for me to be satisfied to what level of the wife's high credit card indebtedness is attributable for the period prior to separation and the period post-separation.  The husband has in my observation been consistently confused about the wife being able to have access to credit card facilities.  He seems to consider that her having had access and drawn upon them, she has had moneys with which to support herself and therefore did not need the money that he was required to pay under the order.  That is simply not right.  There is nothing in the evidence of the wife, including the extensive cross‑examination by the husband, which persuades me that the wife has not needed the moneys to which she was entitled under the orders made on 26 September 2007.  That includes the fact that the wife has had access to certain amounts of capital.  She has received something in the vicinity of $32,000 on her sale of shares which she refers to variously as the children's shares in Colonial Mutual and then in evidence before me to shares over which she has a complete or an absolute entitlement.  Nonetheless, she has had that $32,000 or thereabouts.  She has also had $9000 on the sale of some shares in Qantas.  Of the larger sums, she paid about $26,000 to her solicitor.  These applications of capital will no doubt be significant in a final alteration of property interests but nothing satisfies me that she has not needed the money that the husband was ordered to pay.  The husband cannot succeed with his application on the basis that the wife is not in need of the money he was ordered to pay.

10. Next I look to the husband's capacity to pay.  Quite frankly, even after 2 days of hearing, I have not got much of an idea of his capacity to pay.  It is common ground that he entered into the order by consent.  He says that, at the time, he thought he could pay.  He now says he cannot pay.  There is no evidence however which demonstrates what his ability was, in fact, as at 26 September 2007.  He says today that:

    “Yes, I have had no idea what I have been earning since separation.”

11. The parties separated, on the husband's version, in late August 2007; on the wife's version, on 14 August 2007. 

12. The husband has not demonstrated to me a change in the circumstances between his ability to pay at the time he entered into the orders, by consent, and now.  He has not demonstrated what his capacity was, as at September 2007.

13. I certainly have concern about the husband's credibility in circumstances where he comes to court knowing that he must demonstrate a lack of capacity to pay, but has no documents with which to do so.  As he is self employed, it is not surprising that counsel for the wife called for his diary.  The husband produced a diary which is a work diary that stops shortly before he came to court on the first occasion in 2008.  At that point he faced an application for lump sum  payments in satisfaction of arrears of the payments he had failed to pay to the wife.  He says that at the beginning of the year, which I take to be the early days of January, he wrote himself a note, reminding him that he should write into his diary what he does each day.  He certainly has not done that since February 2008 and did not do it significantly before that time.

14. The husband gave evidence that there was no purpose to be served by him recording commitments in his diary because he keeps it in his head and he has changed to a billing system which does not involve having to provide details of each site visit.  I have difficulty in accepting the husband’s assertion that at the beginning of the year he wrote that reminder to himself to keep his diary up to date in circumstances where there would be no good purpose in recording what he did each day.  I do not accept as credible his evidence that he remembers “in my head” everything that he has to do in a day.  From the financial documents upon which the husband was cross‑examined, it appears that his enterprise is quite busy.  He invoices on certain days in respect of work done on other days but it is a high-volume turnover in terms of addresses which have to be visited. 

15. Mr Wilson put various matters to the husband which I will mention briefly here and which I have taken into consideration in forming my view that the husband has not made out any case of an inability to pay. 

    a)Exhibit “W7” is a printout of a summary of invoices created for the husband's business from 11 September through to 23 October 2007.  It amounts to some $76,766.  The invoices were written over a six-week period.  I accept that the work was not performed over a six-week period, but very few of the addresses appear more than once and there is some 60 or so entries.  It is a lot to keep in one's head without keeping a note.

    b)If one looks at the six-week period and divides the total fees, one comes up with a weekly average of something like $12,794 which Mr Wilson then said ought to be multiplied by 48 weeks of work and would then illustrate that the husband earns some $614,000 a year.  I am satisfied that that is a highly artificial exercise.  There was no evidence upon which I could form the view that those weeks were representative or that there is only 48 of them in a year to be worked, but I am satisfied that it is a high-volume turnover.

16. Having heard the husband give evidence and be cross examined, I do not accept that he has given evidence or discovered documents fully and frankly in relation to his capacity to comply with the orders for payments to the wife.

17. The further documents upon which the husband was cross‑examined were profit and loss statements.  I seem to recall, although I have not read them, in my reasons for judgment in February 2008 I referred to the fact that there is a very significant change in the husband’s business profitability, that the business returned for the family a much higher retained profit in 2006 when the turnover was $362,000 than it did in 2007, when the gross income was $515,000.  It is common ground however that the wife submitted the documents for preparation of the 2006-07 taxation returns.

18. The further financial material upon which the husband was cross‑examined was an extract from the business's Westpac banking account ending with the numbers 3258.  That showed deposits between 28 November 2007 and 24 February 2008 of $42,432.  That equates to an average weekly income of something like $9500 which, again, Mr Wilson says is not out of line with the 2007 gross income of $515,041.  As no-one disagrees about the income in the financial year 2006-2007, the relevant issue will be the expenses and the profitability of the business.  However, that is a matter on which I can make no finding given the unsatisfactory evidence before me today.

19. I will dismiss the husband's application for a discharge of the orders that he pay certain moneys to the wife.  Those mandatory injunctions, contained in paragraphs 23 to 25 (inclusive) of the Order made 26 September 2007 will continue in full force and effect. 

Wife’s application for husband to vacate former matrimonial home

1. Second, there is what the wife described as a sole use and occupation application. The wife’s application is that the husband forthwith vacate the former matrimonial home at B, and the wife have conduct of the sale of that property and be at liberty to allow the purchasers early occupation on a rental basis.  The former matrimonial home was sold on 12 April 2008 with a settlement to occur within 120 days.  It is common ground that the purchasers sought that time in order to arrange finance. 

2. There is agreement that the husband has to do all things necessary to obtain a planning permit in respect of the swimming pool on the property and that he has to provide the planning permit to the conveyancers with the handling of the sale.  The issue of whether or not the husband ought to be required to forthwith vacate the home would fall squarely under section 114(1)(f) and also under subsection (e) and then section 114(3).  I do not characterise this as a sole use and occupation application because, whilst the wife initially said that she would move back into the property with the two dependent children of the marriage, she now says she will not move back in, she just wants the husband to move out.  She proposes that the husband leave now and, if she can, she will arrange to either bring the settlement of the sale to an earlier date or to have the purchasers occupy the property on a paid rental basis.

3. It seems to me that the relevant considerations for the wife’s application for the husband to vacate the home have little to do with principles applicable to sole use and occupation of the parties, which is generally at the convenience of the parties.  More appropriately, I should look at the propriety of the situation and whether this is a step by which assets or property of the parties can and should be preserved. 

1. The wife alleges that there was significant delay in placing the property on the market for sale in the first place.  I am not satisfied that the husband was necessarily at fault or acted unreasonably in preparing the property for sale.  Much is made of the fact that it should have been sold last year.  It was not auctioned until April.  A certificate of occupancy which the husband said he would obtain on 5 February 2008 was the subject of an inspection at about that time.  In evidence there is a certificate dated 2 April 2008.  The husband says that it was the second such certificate.  Mr Wilson says that it was a certificate which was not issued until the husband asked for it and delayed in asking for it.  I am not satisfied that Mr Wilson's contention is supported by evidence.

2. What the parties need to do in order to be able to complete the sale of the house is to provide a planning permit for the pool.  The pool sounds like a very elaborate structure.  It is a highly reinforced structure which the husband says is in no risk of damage, even though it sits in the ground unfilled, so it is essentially acting as a retaining wall. 

3. There is disagreement between the husband and the wife as to the reasonable expectation of the incoming purchasers about what the pool is going to look like immediately prior to settlement of the sale.  However, what is agreed is that the husband will get the planning permit within 30 days and provide it to the conveyancers so that it can be sent on to the purchasers.  That will then have the effect of making the contract to sell the property unconditional and capable of completion.

4. The urgency of the matter is that both parties recognise that until there is a planning permit for the pool, they will not be in a position to request an early release of any deposit moneys which have been paid under the contract of sale.  It may be that at some point the parties are in a position to seek an early release of the deposit.  However, just because they seek it does not mean that it will be granted and it seems to me that there might be sufficient third party interests noted on the certificate of title to the property such as would give the purchasers some disquiet about releasing the deposit moneys early. 

5. The wife also says that notwithstanding a planning permit, she would like to rent the property out to the purchasers and turn it into an income-producing asset.  It sounds like a good idea but it was apparent from cross‑examination of the wife that renting out the home is nothing more than speculation on her part.  It does not mean to say that it cannot happen in the future, but there is no evidence that it is viable or an alternative at this stage. 

6. I am not satisfied that it is necessary to require the husband to vacate the former matrimonial home at this time so as to preserve the property of the parties to the marriage or because it is more convenient or because there is a balance of convenience which favours the wife.  I am not satisfied that it would be a proper order to make or a just order to make, so I refuse the wife's application in that respect.

7. I also refuse at this point the wife's application that she have sole conduct with the sale of the former matrimonial home.  If one thing does not seem to be poor in this case, it is the ability with which both parties can access the conveyancer and the purchasers if they wish to.  They can continue, as they have been able to do up to now, to contact the conveyancer and purchasers.  The conduct of the sale should remain with them both, if not jointly. 

8. It does seem to me appropriate, however, to provide the parties with some ability to bring the matter back to court urgently to quell any dispute which could impact on the parties’ ability to complete the contract to sell the former matrimonial home.  I will reserve liberty to apply in the event that the completion of the contract of sale can be brought on at an earlier time; that the purchasers indicate that they will rent the property as tenants prior to the completion of any contract or in the event that the parties obtain an early release of the deposit moneys, in this case the deposit moneys would be about $90,000, those moneys will not however be available to the parties in their entirety.  I would expect that the estate agent would want their account sales met.

9. I will also reserve liberty to apply in the event that there is a dispute between the parties or either of them and the purchasers which is an impediment to completion of the sale.  Here, I am thinking principally of what counsel for the wife says is the purchaser's reasonable expectation in relation to the pool, but it could cover any number of things.

Credit: the parties as witnesses

1. I should make some comment on the credit of the parties as witnesses.  It is not every family law case in which credit findings have to be made.  In interim matters it is rare to do so because evidence is necessarily circumscribed and it usually preferable to avoid controversy and look to the non-contentious facts.  However, in this case, I heard extensive evidence from both parties.

2. I would have to say though, having seen the wife in the witness box, that I formed the view that she was a significantly unsatisfactory witness.  She is currently pregnant.  She appears to be somewhat agitated and she is under the care of a psychiatrist, presumably she is medicated.  At times, her answers were careless.  Her answers were peppered with self-justifications and self‑serving statements.  I found her evidence to be largely unhelpful.

3. I do not assess the husband as a witness in the same negative terms as I have assessed the wife.  That may be because there has not been as extensive evidence given by him as there was by the wife. Much of what the husband says is just bald assertion which will stand to be proved or disproved when documents are obtainable or other evidence can be put before the court.

Case management

1. This is a case which in some respects may look time consuming and complicated.  I think one has only to look at the amount of the assets and the amount of the debts to know that the complication is not going to involve dividing a great deal of money between the husband and the wife after all the creditors are paid.  I had originally been requested to consider whether or not moneys which could be obtained by an early release of the deposit might be dealt with in orders made today.  I think that would lead to a serious miscarriage of justice for one or either of the parties at this stage.  I made that preliminary view known to the parties and no-one pressed me to determine the matter otherwise.  However, once the sale is completed, it seems to me that the matter should be heard and determined, on a final basis, as quickly as possible. 

2. The parties, particularly the wife, are in a serious financial predicament.  She has no income.  The husband is not paying money under the existing orders, although he says that he will pay when he can.  It is a matter which I would be prepared to accord priority in my docket but I do not speak for other judges in the event that it does not come back to me.

3. In order for the matter to be ready for final hearing, I suspect that there would need to be fairly extensive documentary evidence from creditors which shows the level of indebtedness at the time of separation and how that indebtedness has increased to the time of the final hearing.  The husband says the wife has documents relevant to that issue, the wife says the husband has documents. Both complain that the other is withholding documents.  It does not matter for today's purposes, but at a final hearing, the relevant documents should be collated and exchanged and easily accessible to everyone.  For that purpose, if the matter was to remain with me, it would be managed by a registrar of the court.

Proposed intervention of A Pty Ltd (a business creditor)

1. Finally, I should record that on the first day of the hearing, a Mr Phillip Barravecchio, solicitor of De Marco Lawyers, appeared and acts for an entity called A Pty Ltd.  He did not know the registered number of the company.  The principal of the company is Mr A.  It is asserted on 4 February 2008, the sum of $17,719.04 was paid into the business account of the husband in error.  It was destined for a glass company but someone at A Pty Ltd pressed the wrong key on the computer and paid it instead to the husband’s company.  Apparently it is not the first time that it has happened.

2. Mr Barravecchio sought to make an oral application for leave to intervene.  I heard his application to make an oral application but then declined it.  He filed a notice of address for service.

3. From the balance of this hearing, including the evidence of each of the parties, it does appear common ground that these moneys were paid in, in error, and ought to be repaid to A Pty Ltd.  Mr Barravecchio said that he had a proposal for the parties whereby they could each sign a charge over their interest in the former matrimonial home which would see the moneys repaid at settlement.  Neither party was apparently prepared to do that without the other doing so first.  There was no cross‑examination or evidence-in-chief by either party in relation to that but this is another aspect looming in this case. My concern is that Mr Barravecchio and A Pty Ltd are likely to be the first of many creditors who come forward in these proceedings seeking payments out of the pool of assets divisible between the parties.

I certify that the preceding forty two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett

Associate: 

Date:  15 August 2008