Chilwell and Lycett

[2007] FamCA 499

FAMILY COURT OF AUSTRALIA

CHILWELL & LYCETT [2007] FamCA 499

FAMILY LAW - Spousal maintenance - Interim application

Family Law Act 1976 (Cth)

APPLICANT: MS CHILWELL

RESPONDENT: MR LYCETT

FILE NUMBER: SYF 2035 of 2006

DATE DELIVERED: 21 May 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: Loughnan JR

HEARING DATE: 21 May 2007

REPRESENTATION

SOLICITOR FOR THE APPLICANT: In person

SOLICITOR FOR THE RESPONDENT: In person

Orders

1. Leave is granted to the wife to make oral application for spousal maintenance in terms of paragraph 4 of her affidavit filed 19 February 2007 and that application is dismissed.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2035 of 2006

MS CHILWELL

Applicant

And

MR LYCETT

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for interim spousal maintenance.  The application of the wife is contained in an affidavit sworn on 19 February 2007 and filed the same date.  She seeks a payment of $1,365 a week made up of $350 for rent, $580 per week for living expenses, some of which relates to a motor vehicle and $435 a week for health and life insurance and credit card minimum payments.

2. The Court's jurisdiction rests on the fact that the parties were married, and that is an agreed fact.  I have explained to the parties that the jurisdiction arises in circumstances where one party can prove that they cannot adequately support themselves from their own resources.

3. The wife's case is that she has had paid employment in the past but she is not able to work now. She says that she want some breathing space so that she does not have to worry about where the next meal is coming from, does not have to live with her parents and she can then concentrate on getting herself back on her feet.

4. Unfortunately, there is no evidence that she cannot secure paid employment. I do not know whether that would be fatal in the context of these proceedings.  Her presentation in Court today has been one of someone who I think would struggle to hold down a job.  She has been very unhappy today and angry at the process. Although she has brought the matter to Court, she feels that the Court process is flawed. She says that she has had a very unhappy experience with a former lawyer and I understand she has incurred legal costs of $50,000 or more. I gather from her references to the Legal Services Commission, that there may well be a dispute between herself and that lawyer.

5. The background to the proceedings from the wife’s point of view is that she went from a position during the marriage where the parties had an interest in a number of properties, there were two businesses and she felt that the parties were making some progress. Properties have since been sold at a significant loss, creating debt. Another property, at C, is on the market for sale. The wife is concerned that the husband is not actively seeking to market that property.  As the wife sees it, the husband continues to run a business and yet the only benefit she receives is by way of payments being made on a BMW motor vehicle.  I assume there is no significant value or equity in the BMW motor vehicle.

6. The wife’s case is that she is living with her parents and, in effect, she has no income and no capacity for any proper support.  There is no medical evidence about problems that would interfere with her securing paid employment job, whether on her own account or as an employee somewhere.  But, as I say, for the purposes of today, I accept that the wife might have a case that she will struggle to obtain a job.

7. The second part of the task for the Court is to identify the capacity in the husband to provide financial support. His evidence, which is challenged by the wife, is that there is a debt of $190,000 arising from the sale of a property at Darlinghurst. I cannot resolve that factual dispute. The husband says that he owes $25,000 to his parents in respect of school fees for two children, $17,000 on a Visa credit card, he has legal bills arising from these proceedings of $35,000 and a debt owing to the Child Support Agency, that stands at in excess of $123,000. Those debts far outweigh his assets which are $2,500 in a bank as at 30 March 2007 and a business that he thinks might be worth $250,000 and some personalty.

8. By way of income, the husband says he takes a salary of $3,525 a week.  He gets dividends at the rate of $4,500 a week and trail income from loans of $3,840, making a total of $11,365 per week.  He pays $2,500 a month in his share of rent, credit card payments of $245, mortgage payments on a property at T of $2,500, Health Insurance of $360, he has a debt for school fees at $3,400 but he says his parents are paying that. His weekly child support is $433, he says that he make mortgage payments of $4000 on C, rates and land tax at $1000 and BMW payments and insurance of $2000 bringing his expenditure to $10,511 per week. That leaves about $800 a week.  He says that his girlfriend, Ms P is pregnant and the baby is due on … July 2007. 

9. Now there are a number of allegations made by the parties.  The wife says the husband is driving a Porsche motor vehicle that presumably he could sell or realise.  The husband says the wife has had three overseas trips in the last year that was 2006.  I understand the husband's position to be that the car is worth less than is owed on it and I hear the wife say that she did not have overseas travel.

10. The difficulty in granting the wife’s application is that there is no fund that she can point to. As I have said to the parties - in circumstances where there is more debt than asset, there is a specific obligation in s.75 to creditors. The risk here, in the parlance of bankruptcy law is that a payment ordered for the benefit of one person may be a preference in respect of other creditors.  I doubt that notice has been given to all of the creditors of the husband in relation to these proceedings.  I do not know the effect of any proposed order on the ability of a creditor to recover a debt.

11. In terms of the wife’s onus to prove her case - she cannot show that she is unable to support herself adequately from her own resources. She asserts that she cannot work but there is no medical evidence that says she cannot work.  Even if I accepted that proposition on the basis of my own observations and I am not really permitted to do that - there is no obvious capacity in the husband to make the payments.  There is no fund that the wife can point to that could be the source of payments.  Her case is that the husband is not telling the truth about his financial disclosure.  That is an allegation. For a Court to accept that proposition takes evidence.

12. This case is a tragedy. As I understand it each of the parties says that there are no net assets. The wife's hope is that there might be enough value in the business to allow a crystallisation of debt so she can start trading out of the portion of the debt that she is responsible for.  The husband has the same sort of approach.  He wants to keep trading to try and avoid bankruptcy and salvage something.  In those circumstances, I doubt that a final hearing is going to provide them with any answers. 

13. The application must fail.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan

Associate: 

Date:  1 June 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as CHILWELL & LYCETT