COLGAN & COLGAN

[2015] FamCA 1009

FAMILY COURT OF AUSTRALIA

COLGAN & COLGAN [2015] FamCA 1009

FAMILY LAW – ORDERS – Variation – Where the husband seeks a discharge of an interim spouse maintenance order and a release of funds from a controlled monies account – Capacity of the husband to maintain the wife – Where the husband is now unemployed and the wife is in employment – Order discharged – Where the Court finds it just and equitable to release funds to the husband who now has no income or capital – Sum to be released to be characterised as a partial property settlement.

Family Law Act 1975 (Cth) s 72

APPLICANT: Mr Colgan

RESPONDENT: Ms Colgan

FILE NUMBER: SYC 5091 of 2014

DATE DELIVERED: 17 November 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 9 November 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Holmes of KD Holmes Solicitors

COUNSEL FOR THE RESPONDENT: Ms Murphy

SOLICITOR FOR THE RESPONDENT: Slater & Gordon

Orders pending further order:

1. Leave is granted to the husband to make an oral application to amend his Application in a Case so as to provide:

   2.In the alternative to Order 1 herein, that Order 4 made on 10 September 2014 be and is hereby discharged.

2. Order 4 made on 10 September 2014 is discharged.

3. The husband has leave to withdraw the sum of $50,000 from the controlled monies account in the name of his solicitor, with such payment being characterised as a partial property settlement.

4. Otherwise, the husband’s Application in a Case filed on 7 October 2015 is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Colgan & Colgan 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 5091 of 2014

Mr Colgan

Applicant

And

Ms Colgan

Respondent

REASONS FOR JUDGMENT

The proceedings

1. On 10 September 2014 the Court made interim orders were made which provided that Mr Colgan (“the husband”) pay for the benefit of Ms Colgan (“the wife”) the following sums:

   1.        Rent in the sum of $1,905 until 17 January 2015;

   2.        Home and contents insurance;

   3.        Registration and insurance for a German motor vehicle in her possession; and

   4.        Spouse maintenance in the sum of $763 per week.

2. At the time when these orders were made, the husband was employed as a consultant with a company known as D Pty Ltd.  The wife was unemployed and had been out of the paid workforce for some six years.

3. The husband is currently without employment, his contract with D Pty Ltd having been terminated on 31 July 2015.  On 7 October 2015 he filed an Application in a Case, by which he sought the following orders:

   1.That Order 6 made herein on 10 September 2014 be and is hereby varied to the following extent, namely:

   “That the Respondent Husband have the leave of this Court, for the duration of his period of unemployment, to satisfy the spouse maintenance liability that he has pursuant to Order 4 made that same day, from the controlled monies as referred to in Order 5.2 of the said Orders”.

   2.In the alternative to Order 1 herein, that Order 6 made 10 September 2014 be and is hereby discharged.

   3.That the Husband have the leave of this Court to pay his child support liabilities from the said controlled monies as referred to above.

   4.That the Husband have the leave of this Court to withdraw the sum of $100,000 from the aforesaid controlled monies account for the purposes of payment of:

   4.1.        His taxation liabilities.

   4.2.        His legal fees.

   4.3.        His living expenses.

   5.Costs.

   6.That leave be granted to serve short notice of this Application.

1. In the course of preparation of these reasons I realised that it was likely that the husband in fact sought a discharge of the order which requires him to pay spouse maintenance to the wife, rather than the provision which restrains each of the parties from dealing with the funds in the controlled monies account.

2. For this reason, I caused the proceedings to be listed for mention by telephone on 11 November 2015.  The husband’s solicitor confirmed that he sought a discharge of Order 4 made on 10 September 2014.  The wife’s solicitor offered no objection to the proposed amendment of the husband’s Application in a Case.

3. When the husband filed the present application, he was unaware that the wife had taken on a twelve month employment contract as an manager with M Pty Ltd.  The husband learned of this change in the wife’s employment status only by way of her Financial Statement of 5 November 2015.  The wife there deposed to a gross weekly salary of $3,433, pursuant to a twelve month contract which terminates on 31 August 2016.  On 5 November 2015 the wife filed a Response to an Application in a Case.  She sought a dismissal of the husband’s Application in a Case.

4. The Orders of 10 September 2014 also provided that the husband and wife respectively lodge sums of $605,000 and $100,000 into controlled monies accounts in the names of other solicitors.  They each retained an amount of $150,000 from bank accounts held in their respective names.  In his Application in a Case the husband sought an order that he be permitted to access a sum of $100,000 from the funds held by his solicitor.

5. Prior to the termination of his contract of employment, the husband was assessed to pay Child Support in the sum of $565.35 per week.  His Child Support liability has now been reassessed in a sum of $51 per week.

Background

1. The husband and wife are aged 44 and 43 respectively.  They began to live together in July 2007 and married in 2008.  The parties separated on 9 August 2014, after having cohabited for approximately seven years.  The parties have two children:  K born in 2010 (5) and L born in 2013 (2).  The children live with the mother at present and it appears that there are parenting proceedings on foot.  On 9 November 2015 I made orders by consent for provision of copies of subpoenaed documents to the single expert, Dr E.

2. The husband lives with his parents in their home at Suburb F.  He pays no rent for his accommodation.  He deposed that he wishes to rent independent housing.

3. According to the wife, at the commencement of cohabitation she possessed the following assets:

   i.      $494,326 in savings;

   ii.     $15,665 in shares;

   iii.     $131,307 in superannuation;

   iv.     A motor vehicle worth approximately $15,000; and

   v.      $51,000 redundancy payment in May 2009.

4. The wife maintained that the husband had the following assets at the commencement of cohabitation:

   i.      Equity in a property at Suburb G - $238,000;

   ii.     German motor vehicle - $70,000;

   iii.     $95,000 in superannuation; and

   iv.     $53,000 in savings.

5. It appeared to be common ground that the parties’ present assets and liabilities, with one exception, were accurately set out in the Outline of Case submitted on behalf of the wife as follows:

Assets	Wife’s value ($)	Husband’s value ($)
Controlled monies held with H solicitor	605,134	605,134
Controlled monies held with W previous solicitor	99,603
W savings	11,607
H savings	45,539	45,000 E
H German motor vehicle	53,000	Excluded
W shares	24,853
Liabilities
W: Westpac Visa Credit card debt	27,965
W: Debt owed to Mr H	15,000
W: Centrelink debt	2,208
W: Legal fees (Family Law)	15,000 E
H: Legal fees (Family Law)	20,000
H: Estimated tax debt FY15	24,000
H: Estimated tax debt July/August 2015	38,866
Superannuation
W: Superannuation	239,962
H: Superannuation	154,647

1. A bank statement for the period 7 October 2015 to 9 November 2015 in relation to the husband’s NAB account (Exhibit “1”) showed a credit balance of $427.59 as at 7 November 2015.  The credit balance as at 7 October 2015 was $44,013.22 but $38,866 was withdrawn on 28 October 2015 and paid to the Australian Taxation Office.

Consideration

Spouse maintenance

1. Assuming that the wife is “unable to support herself adequately” for the purposes of section 72 of the Family Law Act1975 (Cth), the husband is liable to “maintain [her] to the extent that [he] is reasonably able to do so”. In my view, it is clear that the husband has no present capacity to pay spouse maintenance for the wife. He has no income and no funds from which he can pay spouse maintenance.

2. It may well be that the husband will re-enter the paid workforce after a short period of unemployment.  In such circumstances, it could be the issue of spouse maintenance again will arise for consideration.  The reality at the present time, however, is that the husband simply has no capacity to pay spouse maintenance.

3. In any event, it seems to me that some of the wife’s alleged expenses as set out in Part N of her Financial Statement are excessive on their face.  Examples would be “entertainment/hobbies/eating out $160” and “beautician/massage $100” per week.

4. Counsel for the wife submitted that the husband “is not working by choice”, apparently in reliance upon a statement in a letter of 31 July 2015 that “[D Pty Ltd] and [Mr Colgan] mutually agreed to terminate the contract”.  In the Outline of Case submitted on her behalf the wife stated, inter alia, that “the husband may be choosing not to work”.

5. In my view, a finding to the effect that the husband voluntarily relinquished his highly paid employment in order to avoid payment of spouse maintenance and/or child support is not open on the available evidence in the context of these circumscribed interim proceedings.  It should be remembered that the husband sought that spouse maintenance and child support be paid from funds in the controlled monies account held by his solicitor, before he learned that the wife had entered into relatively highly paid employment.  The husband did not seek a discharge of the spouse maintenance order until he became aware of the advantageous change in the wife’s financial position.

6. In all of the circumstances I will discharge the order for spouse maintenance.

Release of $100,000 to the husband

1. The husband sought a release to him of the sum of $100,000 from the total amount of approximately $605,000 held in the controlled monies account by his solicitor.  The wife opposed the release to the husband of any amount.  The basis of her objection was she seeks, by way of final property settlement, the totality of the funds held in the controlled monies accounts together with payment to her of a sum of $100,000 by the husband.

2. At the present time the husband has no income and no capital.  He seeks access to the sum of $100,000 for the purpose of payment of his tax liabilities, legal fees and living expenses.  The husband’s lawyer indicated that this sum of $100,000 should be characterised as a partial property settlement.

3. In these circumstances, I am satisfied that it is just and equitable that the husband have access at this stage of the proceedings to some of the funds in the controlled monies account held by his solicitor.  I am not necessarily of the view that it would be just and equitable that he receive a sum of $100,000.

4. As noted, it was common ground that the parties’ assets and liabilities, with the exception of the husband’s NAB account, were accurately set out in the wife’s Outline of Case document.  On that basis and in rough terms, the net value of the pool of non-superannuation assets is approximately $750,000.  $100,000 would equate to approximately 0.13 per cent of that figure.

5. In my view the wife’s application for final orders for property settlement is unrealistic, even taking into account her proposed claim on the basis of the authority of Kennon & Kennon (1997) FLC 92-757. Nonetheless, I will err on the side of caution and order that the husband receive a sum of $50,000 from the controlled monies account. That sum would equate to approximately 0.06 per cent of the net pool of non-superannuation assets as identified by the wife. I can envisage no circumstances in which the husband would receive an amount less than that percentage of the net pool of non-superannuation assets.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on

17 November 2015.

Associate:

Date:  17 November 2015