CALDER & POCA

[2010] FamCA 1280

FAMILY COURT OF AUSTRALIA

CALDER & POCA [2010] FamCA 1280

FAMILY LAW – PROPERTY – Interim Consent Orders – Sale of property – Distribution of sale proceeds to parties

FAMILY LAW – SPOUSE MAINTENANCE – Interim – Parties subject to considerable ongoing costs of maintaining respective lifestyles – Whether the wife has satisfied the threshold test of being unable to support herself adequately - Whether it is reasonable to order the husband to pay the amount required by the wife

FAMILY LAW – COSTS – Interim – Considerable interlocutory litigation – Where orders provide for the husband to pay to the wife’s solicitors an equivalent sum to that paid to his own legal representatives

Family Law Act 1975 (Cth)

APPLICANT: Ms Calder

RESPONDENT: Mr Poca

FILE NUMBER: WOC 167 of 2010

DATE DELIVERED: 16 November 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 16 November 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Page

SOLICITOR FOR THE APPLICANT: Shepherds The Family Law Specialists

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: A R Yates & Co

Orders

1. That orders are made in accordance with the hand-written Minute of Orders filed in Court today and signed by Justice Johnston and placed with the Court papers as set out hereunder:-

1.That the husband forthwith do all things, sign all documents and give all necessary authorities to sell within 6 weeks from the date of these orders the property Lot 13 N Road, N, Lot 13 in DP 1096901 at a sale price of not less than $670,000 or such sum as may be determined and advised in writing by the selling agent if a price of $670,000 has not been offered by a purchaser.

2.The selling agent shall, for the purpose of order 1 be Century 21 at Picton.

3.Upon settlement of the sale of the N property the proceeds of sale be distributed in the following priority:

1)In payment of agent’s commission, selling costs and all reasonable costs of sale;

2)In discharge of the mortgage to NAB after allowance for any shortfall from the Term Deposit No 79-747-6697;

3)In payment of $30,000 to the wife on account of legal expenses;

4)The balance to the husband.

4.The categorisation of the payments pursuant to order 3(3) and 3(4) be left to the trial judge at the final hearing.

5.Pending the sale of the N property and the payments provided in orders 3(3) and 3(4) herein the husband pay to the solicitors for the wife an equivalent sum or sums paid by the husband to his solicitors for the further conduct of these proceedings as and from the date of these orders.

6.To facilitate the payments pursuant to order 5 herein, the husband’s solicitors are to notify the wife’s solicitors of the receipt of any payment from the husband for these proceedings within 48 hours of their receipt of payment from the husband.

7.Notation:  Neither party intends to take any action to enforce the orders requiring a sale of:

1)B Street, W Town;

2)P Street, W Town.

Without 28 days notice in writing to the other party.

8.That pending further order the husband shall pay to the wife or as she shall in writing direct the sum of $750 per week, first payment within 7 days.

9.That the substantive property proceedings be listed for hearing for 3 days before Stevenson J commencing on 4 April 2011.

10.That the substantive proceedings be listed before docket Registrar George at 9:00 am on 16 December 2010 by telephone link for directions for trial.

IN CHAMBERS

1. That pursuant to r 11(2)(b) of the Family Law Regulations 1984:

2.1The applicant wife pay one half of the setting-down fee ($304), and one half of the hearing fee for each of days two ($304) and three ($304);

2.2That the respondent husband pay one half of the setting-down fee ($304), and one half of the hearing fee for each of days two ($304) and three ($304).

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: WOC 167  of 2010

Ms Calder

Applicant

And

Mr Poca

Respondent

REASONS FOR JUDGMENT

1. These are proceedings between parties, Ms Calder and Mr Poca, involving interim financial matters.  I shall refer for convenience to the parties as “the wife” and “the husband” respectively.  Unfortunately today’s applications come in the context of litigation which has been ongoing between the parties for something approaching four years. 

2. There are substantive property proceedings.  I am told that the net pool of property available to the parties in the substantive proceedings would be approximately $5 million.

3. Unfortunately the parties have not been able to resolve their differences about how to divide that net pool of property.  This has been manifested in, amongst other things, considerable interlocutory litigation.  I am told that the legal costs that the husband has incurred to date, most of which has been paid, are somewhere in excess of $333 000 and the wife’s costs are close to $250 000.

4. Most unfortunately, the trial which was listed before this Court in February this year was unable to be commenced in circumstances where it is said by the husband that on the day of the commencement of the trial, he became aware that the wife and another person had in fact each placed certain information before the Australian Taxation Office asserting that the husband had not declared the entirety of the revenue available to his business, C Pty Ltd, with the consequence that it was thought by those advising them that there was a real likelihood that out of this pool would probably have to be paid an amount by way of outstanding taxation liability and possibly penalties. 

5. In those very uncertain circumstances, the trial was unable to go ahead.  Unfortunately that has just caused not only further delay for the parties but further costs to them and real difficulty.  Each of them is subject to considerable ongoing costs in terms of maintaining their lifestyles and respective households.  So unfortunately this particular aspect is just another unfortunate interlocutory step in this longstanding litigation.

6. I should shed some optimism into those rather gloomy observations.  I have ascertained from the associate to her Honour Stevenson J, before whom the trial had been listed in February this year, that her Honour would be able to offer the parties three days in the week of 4 to 8 April 2011 on the basis of assurances that the matter can be ready.  I propose to make some orders allocating dates and redirecting the matter back to Registrar George for some further directions.

7. I would hope that the parties will be able to have put together this afternoon some further directions to enable various updating matters to be attended to with a view to having the matter ready for hearing on those dates.

8. The immediate matter which is before the Court is an application by the wife to the effect that the husband pay to her by way of periodic spousal maintenance the sum of $805 per week, that in addition he do all things and sign all documents necessary to bring about a payment or perhaps a release of the sum of $12 576 from the National Australian Bank term deposit in the joint names of the parties, that there be orders in effect to put the wife in to some funds to enable her to have the matter made ready for trial on the basis of an order that the husband pay to the wife one dollar for every dollar paid by him to his legal representatives, that certain other orders be made to facilitate a sale of the property which was the former matrimonial home at unit P Street, W Town, and then payment of the net proceeds of that sale out to the parties.

9. Those orders are opposed, perhaps with the exception of the preparedness on the part of the husband to agree with orders being put in place which would enable payment to the wife and the husband towards her legal costs on the dollar for dollar basis that I have referred to, backed up by an order for sale of another property that the parties have, which I will describe as the N property.  I shall come to that a little further below.

10. Apart from those matters, the orders are opposed.  The husband asks the Court to order that there be a sale of a different property, that is the property at B Street, W Town, and that out of the net proceeds of sale of that property, after discharge of the mortgage and paying the usual costs, a sum of $200 000 be paid to the wife by way of interim property settlement.

11. As submissions progressed, the husband proposed that out of the sale of the N property the wife could have the first $30 000 of the net proceeds of sale.  This would probably leave an amount of something like $20 000 available to the husband. 

12. The brief background matters are as follows.

13. The husband was born in 1960; the wife was born in 1964.  They commenced cohabitation upon their marriage in 1984.  They separated on 2 July 2006 and they divorced on 7 October 2007.  There are three children of the marriage Ms D, born in 1985, Ms E, who was born in 1991, and F who was born in 1995.

14. On my calculations two of the children are adults.  They are 25 years of age and almost 20 years of age.  F is almost 16 years of age.  There were consent orders made on 16 May 2007.  The effect of those orders was that the husband was to pay the wife lump sum spousal maintenance of $48,000 and there were orders to the effect that the parties sell the former matrimonial home at P Street for the reserve price of $1.1 million.  Then the net proceeds of that sale were to be paid to the parties in equal shares.

15. The $48,000 was paid.  But the parties had been unable to achieve a sale of the P Street property.  It is not necessary to go into what the respective assertions are in that regard.  In any event, the husband is most desirous of being able to retain that property as a residence for himself.  I must say I would have thought in all the circumstances, this Court would be most reluctant to order the sale of that property.

16. On 15 May 2008 further orders were made following a defended interim hearing.  Those orders were to the effect that the husband pay the wife further lump sum spousal maintenance in the amount of $78,000.  There was an alternative order under which if the P Street property could not be sold then the B Street property was to be sold.  Part of the required funds were to be paid out of the net proceeds of sale of that property.

17. The husband was ordered to pay the wife $50,000 for her legal costs and disbursements.  It is common ground that the husband paid $44,000 towards that lump sum $78,000 spousal maintenance liability.  He has not paid any part of the $50,000 and under those orders the wife was to receive the balance of that lump sum plus the $50,000 for her legal costs from the sale of the B Street, W Town property.

18. I also make the observation at this point that, as was the case with the P Street property, B Street has not been sold and we have a mirror situation to that of P Street.  That is, the wife is most desirous of being able to retain the B Street, W Town property.  Again, I would have thought this Court would be reluctant to make an order at this point in relation to B Street.

19. The wife has been in financial difficulty.  She has had to fund very expensive litigation.  She has gone through firstly the $48,000 lump sum that was paid to her by the husband and secondly the $44,000 which was paid by the husband.

20. The wife has borrowed $142,425 from the ASK Capital organisation, that being to fund her litigation and some living expenses.  In fact, she owes an amount that is nearly double that amount now, which has largely accumulated from interest liability under the loan contract.  She has gone through those funds.

21. In December 2009 the wife borrowed $82,000 from her mother to fund more of her legal costs, particularly in the context of what was then the upcoming property trial listed for February 2010.  Those moneys have gone.  There has been no trial.  The wife is obviously still in need of funds.  She said that she has had to change residences six times since separation.

22. She is currently living rent-free in a property owned by her mother.  The wife said, and I accept it at this point, that she has had to borrow more money from family and friends to meet her necessary expenses.

23. It was suggested in the husband’s case that the wife is not able to establish the threshold matter.  That is that she is in need of spousal maintenance, being unable to support herself adequately.

24. It was said that the wife was able to work for in excess of a month recently which produced for her something above $600 per week and she has not explained why she has not been able to achieve employment since that time. The wife said that, prior to that time, she had made more than 60 applications for positions of employment since she separated and that she had not been successful in obtaining even one of those positions.

25. It is true that the wife had been working in the family business, C Pty Ltd, during the parties’ marriage.  Her employment in that business came to an end at about the time of separation or shortly thereafter.  No doubt each of the parties will have some evidence to put before the Court about the circumstances of that.  But it is not a matter about which it is necessary to go into detail in the context of these immediate proceedings.

26. I do not accept that the wife has not reached the threshold matter.  She has been out of the workforce since the parties separated subject to one month’s employment.  So in my view she is able to satisfy the threshold matter.  That is that she is unable to maintain herself adequately for one of the reasons included in the statutory provision.  She says that she is in need of periodic support, having exhausted all her funds.  She says that she is unable to get any Centrelink benefits, although she has made inquiries about that.

27. She said that her only income is the $271 a week which in more recent times the husband has been paying by way of child support and at an earlier time paying something considerably less than that.  She said in her financial statement that she requires an amount of $1182 per week in order to meet her needs. 

28. Learned counsel for the husband has taken issue with that and I accept to some extent the submissions that he makes by way of criticism of that amount.  In particular, it is said on behalf of the husband that the wife cannot argue for weekly needs outside those being her personal weekly needs this being a spousal maintenance application.  It is submitted that she has arrived at the figure of $1182 by adding her own estimated needs of $625 per week together with what she estimates are the two children’s needs who are living with her of $557 a week and then adding that to what is a figure of approximately $196 a week which comes out of Part G of her financial statement to come up with a grand total of $1182.

29. There are a number of criticisms.  Firstly, it is said that the wife must have exaggerated her weekly telephone amount because she has included a figure of $130 per week for telephone.  I accept that that seems to be an unreasonable amount in all the circumstances.

30. So I accept the submission that the wife cannot justify $625 a week for her own support.  In my view it is more like a figure of $550.  In any event, learned counsel for the husband has said that the wife simply cannot justify the $557 on the basis that these are costs of the children living with her.  It is said to the extent that she requires further support for these children then the legislation is clear that she approaches the child support agency and undertakes the relevant action to review that amount.

31. I will accept the general thrust of that submission, so that reduces significantly the amount which the wife needs.  It seems she is only able to make ends meet on the charity of others, particularly her mother, who is providing accommodation for herself and the children at no cost.

32. Even on that basis that learned counsel for the husband suggests is the proper legal approach to the matter which is to disregard the children’s costs, it seems to me that the wife still has weekly needs in the vicinity of about $750.  This is calculated by adding the Part 6 costs of $196 to the approximately $550 which in my view the wife needs.  So the question then remains is it reasonable for the Court to make an order against the husband requiring him to pay that sort of amount?

33. Looking at the husband’s figures, he says that his weekly income is $1315 which he receives from his company, Poca Proprietary Limited.  He says that he receives rent from the properties which are set out in his financial statement.  Those rentals, come to a weekly amount of $3767 and in order to be able to maintain those properties one way or the other he says in his financial statement that his costs of servicing the financial facilities come to the weekly amount of $3196.

34. The husband has also some rates expenditure which he says are weekly $296, so all in all there is a total of $1590 for what is coming in.  That is the money from Poca Enterprises and the rental from those properties, less the costs of servicing the facilities and the rates.  So I calculate the husband has net weekly income of $1590.

35. His weekly costs are firstly tax of $276.  He has life insurance of $17.  He has income protection insurance, some credit card weekly payments that he needs to service and he has his child support of $271 per week.  I add these up to $693.  Then he has his personal weekly costs.  He estimates these at being $904 for himself and then in addition he puts in some costs for the children.

36. Now, it seems to me on the basis that his counsel has indicated, the only costs the court can look at would be the husband’s personal costs.  In fact, applying a similar standard to that which I have used in relation to the wife’s Form 13 financial statement, I would prune those costs considerably.  So in my view, that all comes down to the husband having some surplus income approaching a few hundred dollars per week.

37. In my view the question comes down to whether it reasonable in all the circumstances to require the husband by whatever means, either through his credit cards or through him rearranging his financial affairs using the business, to pay the sort of amount that the wife requires.  Learned senior counsel for the wife says that the accounts for the business which are included in Mr G’s valuation for the business shows that moneys have been able to be made available to the business and these are shown up in director’s loans.

38. In the financial year that ended 30 June 2009 there had been loans to directors of something like $132,000.  In any event, the property in which the husband is residing is not subject to any security, as I understand it.  One would have thought in these circumstances the husband would have been able to arrange further borrowings.

39. In my view, it is reasonable that he do so.  In my view, the wife reasonably requires an amount of $750 a week and I propose to make a periodic spousal maintenance order in that amount. 

40. The other matter is the application to put the wife into funds to pay her legal costs.  As I have indicated, it was suggested by learned counsel for the husband that there is a way forward in respect of that matter.  I had indicated that in my view the way forward would be to order the husband for every one dollar he pays to his own legal representatives to pay a similar amount to the wife at least until such time as the parties are able to sell the N property.  The net proceeds of sale of the N property are equalled to amount to 40 or 50 thousand dollars.  The husband says that the wife can have the first $30,000 of that amount and at that point the requirement for him to pay the dollar for dollar amount would then cease.  I would be grateful if orders could be drawn on that basis.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 16 November 2010.

Associate:

Date:              7 September 2011