Burton and Burton

[2019] FamCA 833

FAMILY COURT OF AUSTRALIA

BURTON & BURTON [2019] FamCA 833

FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks an order for interim spousal maintenance – When the wife had developed an app – Where the husband alleges she has delayed the launch of the app in order to advantage her position in these proceedings – Where the wife denied that she has done so and advanced alternate reasons for the deferred launch date – Where the husband does not have the means to provide the spousal maintenance sought – Application dismissed.

Family Law Act 1975 (Cth) s 72

APPLICANT: Ms Burton

RESPONDENT: Mr Burton

FILE NUMBER: WOC 307 of 2019

DATE DELIVERED: 12 November 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 8 October 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lawrence

SOLICITOR FOR THE APPLICANT: Maguire and McInerney Lawyers

COUNSEL FOR THE RESPONDENT: Ms Gillies SC

SOLICITOR FOR THE RESPONDENT: Hansons Lawyers

Orders

1. The application of the wife for an order for interim spouse maintenance is dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Burton & Burton has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: WOC 307 of 2019

Ms Burton

Applicant

And

Mr Burton

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Ms Burton and Mr Burton are parties to proceedings in relation to parenting and financial issues.  The application of the wife for an order that the husband pay to her by way of interim spouse maintenance a sum of $600 per week was listed for hearing on 8 October 2019.

2. The husband opposed this application. He contended that the wife failed to establish that she is unable to support herself adequately for the purposes of section 72 of the Family Law Act 1975 (Cth) (“the Act”) and, further, that he lacks the capacity to pay spouse maintenance.

3. At the interim hearing considerable attention was focused on a piece of online technology known as the B App, which the wife had begun to develop in late 2016.  Essentially, this app is a tool to assist in the health industry.  There was a dispute as to the extent of the husband's involvement in the development of this App, which does not require determination for present purposes.

4. The husband contended that the wife has delayed the launch of this App in order to advantage her position in these proceedings.  The wife denied that she has done so and advanced alternate reasons for the deferred launch date.  She maintained that the App is still in development stage and that the necessary work has not progressed because of her child-care responsibilities;  emotional toll upon her of the marriage breakdown and her need to engage only in part-time employment.

Background

1. The husband and the wife, who are both aged 44, began to live together in approximately May 1999 and married in 2004.  The parties separated under the one roof on 26 December 2017.  They both continued to live in the former matrimonial home until the husband arranged rental accommodation in February/March 2018.  Until approximately June 2018 the children remained in the former matrimonial home and the parties shared their care, with one parent staying in the rented premises for a proportion of each week.

2. There was a dispute between the parties as to the reasons why this arrangement broke down but, in July 2018, the wife rented a home.  The husband changed the locks at the former family home late in July 2018.

3. The parties are the parents of three children:

   ·X born in 2006 (13)

   ·Y born in 2008 (11) and

   ·Z born in 2016 (3).

   Currently the children live with the wife from Sunday to Thursday and with the husband for the balance of the week.

4. The husband is employed as a manager by D Company.  In his Financial Statement of 27 September 2019 the husband deposed that he receives a gross weekly salary of $2,867, plus a car and parking allowance of $650 per week.  A pay slip for the period 1 June 2019 to 30 June 2019 (page 41 exhibits to the husband's affidavit) stated that his total gross annual income is $203,500.  A Child Support Assessment dated 14 November 2018 attributed an annual income of $194,126 to the husband.

5. The wife has a history of employment in the health sector.  In a curriculum vitae which the she submitted to her current employer, "E Company" (pages 4-5 of the husband's Tender Bundle 1) the wife listed her academic qualifications:

Current	Graduate Diploma
2013	Cert IV Training and Assessment (upgrade)
2010	Completed Training and Accreditation
2003	Certificate in Workplace Training and Assessment
1998	Graduate Degree
1994-1997	Degree Bachelor Arts

1. In her CV the wife set her "Relevant Work Skills" as follows:

Small Business Owner: Program Development and Training

·    Developed training company

·    Developed and delivered specialised workshops in life skills, social skills, health and well-being skills, behaviour management and job search skills

·    Trainer and Assessor

·    Developed and delivered staff professional development training

·    Delivered training in Victoria on legislation changes

1. The wife set out her "Current Skills" in her CV as follows:

·    Life skills training to adults within different program settings.

·    Cert III and IV in Trainer/Assessor – delivery of training in classroom settings, workplace based training.  Writing of resources and assessments, undergone validation processes (ensure assessments produced were valid, reliable, sufficient, current and authentic).

1. The wife outlined her employment history in her affidavit of 12 June 2019.  She deposed to a series of full-time roles until 2006 and to contract work between 2010 and 2016.  She conducted a business known as "F Business" between 2006 and 2016, from which she derived an annual income which ranged from $6,500 to $74,000.

2. The wife contended that she is "unable to commit to full time employment" because of her responsibility to care for the child Z.  She deposed that Z attended day care for four days per week between January 2018 and September 2018 but that he now remains at home with her on Monday, Tuesday and Wednesday each week.  The wife alleged that she reduced the child's time in day care because she observed a deterioration in his behaviour in approximately August 2018.

3. The husband deposed that he has made no similar observations in relation to the behaviour of Z, noting that the children spend equal time with him and the wife.  No mention was made by the wife of any behavioural difficulties in her application for Z to be enrolled in day care on 27 November 2018 (Exhibit 3).

4. The history of the development of the B App was set out in the Case Outline document of 3 October 2019 submitted on behalf of the husband and in a summary attached to Tender Bundle 2.  This chronology was supported by documents tendered in Bundle 2 to the exhibits to the affidavit of the husband.

5. The chronology in relation to the development of the App may be summarised as follows:

   ·    on 15 June 2017 the wife entered into an agreement with the company G Company for development of software for the App.  The contract price was $39,997.

   ·    late in 2017 the wife "pitched" the App to the company H Company, with revenue forecasts of $288,000 for the first year and $144 million by year five

   ·    between March and May 2018 the wife communicated with H Company personnel, the App advisory committee and a marketer (Ms J), with a view to a launch on 3 July 2018

   ·    on 17 May 2018 a firm of trademark attorneys issued an invoice to the wife for registration for a patent for the App

   ·    during June 2018 the wife's emails to Ms J, G Company and H Company demonstrated an eagerness on her part to launch the App on 3 July 2017.  For example, on 9 June 2019 the wife emailed H Company "It would be great if you could help push this along for me".  On 12 June 2018 the wife emailed G Company "hope to have this all sorted asap as we are nearing our July 3^rd launch day!"

   ·    on 13 June 2018 a G Company representative emailed to the wife inter alia "we need to establish a completion date up front to help with our go-to-market, this little beauty MUST launch in July."

   ·    on 25 June 2018 the wife emailed the marketer Ms J:

   Last week was not a good week at all for me ... personal stuff as you can imagine.  Lots starting to happen.

   Lets touch base soon over the phone to see where things are at.  I have an advisory board meeting Weds at 1pm and I will be discussing with Ms K and Mr M the possibility of a soft launch without all the bells and whistles, emotionally I just can't take this on right now.  I am thinking to go live once the subscriptions are built in, focus on social media marketing for a month or so and when the time is right to have a media launch. What do you think?

   ·    on 2 July 2018 the wife emailed B App advisory board member Ms K as follows:

   …

   Sorry guys however I need to change up the agenda for tomorrow's meeting unfortunately.  I need to scrap the usual content and ask if you could both spend some time helping me re a decision I need to make re launching the business.  As you both are aware I am going through a separation (which is not fun and I'm not designed for) which will soon lead to mediation and property settlement.  I will provide more details around this tomorrow however the business has come up and documents requested.  I need to have a tactical approach towards this and need your help as my advisory board – don't feel I can make these decisions on my own ...

   ·    the Minutes of the advisory board meeting on 3 July 2018 stated inter alia as follows:

   1.        Business discussion

   ●Personal issues:

   ·    Discussion around Ms Burton's current personal situation and impact on the business from a mental perspective

   ·    Given the distractions she feels she's currently experiencing, we need a decision on whether to proceed with launch or not.  There's a real risk of failure if not given the properly [sic] attention and focus required

   ·    Do need to understand what the legal entitlement is from a worst-case scenario.  This could have a significant impact on future planning, investment and execution

   ·    Outcome was to await Ms Burton's legal advice on what the worst case scenario could be and make a decision on next steps

   ·    on 24 July 2018 the wife emailed a G Company representative as follows:

   ...  As you are aware I am going through a marriage separation and have just commenced legal proceedings which is a very trialling time for me both emotionally and mentally.  After discussion with my advisory board (Mr M and Ms K) I have decided to put the launch on hold until I am ready to give it my full attention again ...

   …

   I apologise that I have not been as actively involved as I usually am however my focus right now is on my children and ensuring they are well supported throughout the separation.  I also need to ensure I am giving the legal stuff my full attention.

   ·    on 26 July 2018 the wife emailed the marketer Ms J as follows:

   …

   Just wanted to touch base and let you know I've put the business on hold for a few more weeks.  I need to get through the mediation process and property settlement before I proceed with anything.  I would like to chat with you soon though re helping me create a list of things to blog about.  I would like to work on social media content whilst I'm idle so when we’re ready to go we can roll it out ..."

   ·    in an email on 30 July 2018 to Mr L at H Company, the wife wrote:

   I am wondering if you could please do me a favour.  I need you to send me an email confirming I have not been successful at this stage in securing investment funds.  As you are aware I'm going through legal proceedings now and need this confirmed in writing ...

   ·    on 31 July 2018 the wife emailed her accountant as follows:

   I Need to chat with you re this.  Due to my personal situation I have been forced to put the day to day stuff of the business on hold and won't be starting up again until all this legal stuff is finalised

   ...

   I'm in a position where I can't afford the monthly costs so is there an arrangement we can come up with?  I am happy to chat with you or Mr P re what I am going through right now to hopefully give you a better idea of my situation.  Let me know what your thoughts are.  I do apologise however my situation has escalated and I've had to make some pretty tough decisions re the business ...

   ·    on 16 August 2018 an H Company representative emailed to an investment representative inter alia as follows:

   "Ms Burton – B App – going through separation – all her finances is being looked at.  Won't be looking at funding from the N Fund for now."

   ·    on 22 October 2018 the wife emailed to her accountant inter alia as follows:

   … my preference is not to be issued an income through B App (no [sic] even a small one if this can be avoided) ...

   ·    on 2 October 2018 the wife's accountant emailed to her:

   The reason we ask about the Centrelink payments is just that we don't want to increase your income from B App if this will affect any income tested payments ...

   ·    on 26 April 2019 the wife emailed to the marketer Ms J inter alia as follows:

   Thanks for letting me know re the website and yes that's all good.  Let me know passwords etc and I'll reactivate when needed.  It's a real shame I have not been able to launch my business, hopefully things will change within next 12 months

   ·    on 30 April 2019 the wife emailed to her accountant inter alia as follows:

   I've been thinking this last week that I should probably close the B App business account until matters are resolved (could take 12 mths or more sadly)...

6. In my view, it is significant that this information was obtained from documents subpoenaed by the husband and not by way of disclosure by the wife.  As deposed by the husband, the wife required him to enter into a "Confidentiality Agreement" and to assign to her all rights and intellectual property in the B app, before she would provide documents requested by his solicitor.  Further, the wife objected to seven subpoenas which the husband issued in order to obtain documents relating to the App, only to withdraw on the day of that hearing.

7. The husband raised suspicions as to whether the wife is currently in a romantic relationship with Mr M, who is a member of the B App advisory board.  I cannot be satisfied as to the nature of this relationship and I am unable to conclude that the wife obtains any financial benefits from Mr M.

Consideration

1. In my view an inference is open, on the basis of the material set out above, that the wife has elected to delay the launch of the App for tactical reasons related to this litigation.  It may be that a part of the reason for this delay is the wife's emotional reaction to the breakdown of the marriage but the fact is that the parties separated in December 2017 and she pursued the launch of the App enthusiastically for several months thereafter.

2. Close examination of the records of the wife's employer (husband Tender Bundle 1) indicate that she is electing not to take up all opportunities available to her for paid work.  A series of text messages from the wife to personnel at her current employer "E Company" appeared at pages 8 to 23 of the husband's Tender Bundle 1.

3. On 17 August 2018 the wife texted that she needed “paid work" and would be open to "any office based work and/or support worker/in".  The wife texted further "I really need some work so what ever you have I'll happily take!".

4. Nonetheless, the wife did not accept an offer of work in October 2016 due to "a lawyer appt".  She declined a further offer of work in October 2018 due to "an appt".  Similarly, the wife declined offers on the basis of "another commitment" and unavailability on two occasions in October 2018.

5. The wife declined work due to "mtg with my lawyer" on 5 November 2018 and "a bday dinner" on 10 November 2018.  In November 2018 the wife did not take up an offer of ongoing fortnightly work on Saturdays.  The wife indicated in February 2019 "I only have Thurs and Fri at this stage.  I look after my two year old on Mon - Weds".

6. On another occasion in 2019 the wife declined to work on the basis "I'm sorry not this week as I have commitments".  On 25 February 2019 the wife did not take up work on the basis "I have my son" and, on another occasion "Sorry got kids and running around with activities".

7. On 13 March 2019 the wife confirmed that she would accept work only on Thursdays and Fridays.  On 28 March 2019 the wife stated that she was unavailable for the first week of the school holidays.  On 27 May 2019 the wife declined an offer of the work on the basis "Sorry for late notice but just found out I need to be in Vic next week so can't work Thursday 6^th or 7^th".

8. For these reasons, it seems to me that the wife has a capacity to engage in gainful employment which she elects not to exercise, at least in part, at the present time. Additionally, I conclude that an inference is open that the wife has delayed the launch of the App for tactical reasons relating to this litigation. Accordingly, I find that the wife failed to establish that she is unable to support herself adequately for the purposes of section 72 of the Act.

9. Further, it seems to me that the wife's asserted level of necessary expenditure is open to challenge.  For example, she elects to pay rental of $700 per week.  The wife's Financial Statement of 27 September 2019 showed a shortfall of income over expenditure but also a bank account credit balance of $3,000.

10. Additionally, I am not satisfied that the husband is reasonably able to support the wife for the purposes of section 72 of the Act. In his Financial Statement of 27 September 2019 the husband deposed to a gross weekly salary of $3,517, which includes $650 for parking and car allowance. This figure equates to approximately $182,884 per annum. As noted, the husband's pay slip for the period 1 June 2019 to 30 June 2019 referred to a gross annual income of $203,500.

11. The husband has the following fixed weekly expenses:

    1.        income tax  $1,157

    2.        mortgage repayments              $313

    3.        child support  $531 (page 38 husband Tender Bundle 3)

    4.        bank loan repayments             $400

    5.        rates  $45

    6.        health insurance  $78

    7.        home insurance  $61

    Total  $2,585.

12. In addition to these fixed expenses, the husband pays the cost of day care for the children and medical expenses which are not covered by health insurance.  Day care fees are $250 per week and the husband's Financial Statement indicated that he spends $98.50 per week on telephone expenses and subscriptions for the children.  The husband also voluntarily meets gap medical expenses for the children, which he estimated at $135 per week in his Financial Statement.

13. For these reasons, I am satisfied that the husband has reasonably incurred recurring weekly expenses in a total amount of approximately $3,069.  Accordingly he has a surplus of income over expenditure of about $448, from which he is required to support himself and the children for half of their time.

14. The husband took out a loan of $70,500 with O Pty Ltd in June 2019.  He deposed that he has fully drawn down on this loan and that he has borrowed additional funds from his parents.  In his Financial Statement the husband deposed that he has liabilities of $70,500 and $19,800 to O Pty Ltd and his mother respectively.

1. The husband deposed to bank savings of $2,276 in his Financial Statement of 27 September 2019.  It appears that a total of $291 is held by the husband upon trust for the parties' children.  Accordingly, the husband has no realistic recourse to a lump sum from which he could service an order for periodic spouse maintenance.

2. For these reasons, I will dismiss the application of the wife for an order that the husband pay periodic spouse maintenance for her benefit.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 12 November 2019.

Associate: 

Date:  12 November 2019