COSTA & COSTA

[2016] FamCA 1219

FAMILY COURT OF AUSTRALIA

COSTA & COSTA [2015] FamCA 1219

FAMILY LAW – PROPERTY – Where the husband filed two Applications in a Case – Where both parties sought exclusive occupation of the former matrimonial home – Where exclusive occupation by the husband, provided that he pays the wife $40,000 and there is sufficient time for her to find new accommodation, is the most appropriate course – Where both parties wished to keep a company vehicle – Where it is appropriate for the vehicle to be provided to the wife for her use and that the parties’ company continue to keep the car registered and insured – Where both parties are directors of their company – Where orders made restraining the wife from purporting to represent the company to third parties; from attending at the business premises in order to communicate with employees and other people associated with the business; and from operating any accounts without prior written authority of the husband.

APPLICANT: Mr Costa

RESPONDENT: Ms Costa

FILE NUMBER: SYC 5042 of 2015

DATE DELIVERED: 18 December 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Cleary J

HEARING DATE: 18 December 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Othen

SOLICITOR FOR THE APPLICANT: Mills Oakley Lawyers

COUNSEL FOR THE RESPONDENT: Mr Jackson

SOLICITOR FOR THE RESPONDENT: M J Woods & Co

Orders

1. That the husband and the wife in their capacity as directors of M Pty Limited (“the Company”) shall do all acts and things necessary to instruct the manager of the Commonwealth Bank of Australia Suburb V Branch to reactivate the bank accounts associated with the company, such that the parties are joint signatories with either party to sign NOTING that the wife shall not operate the accounts without the express written authority of the husband.

Business Operations

1. That the wife be restrained from involving herself in any aspect of the day to day running of the business operated by the company NOTING that her obligations and entitlements as director and shareholder of the company remain in place.

2. That pending further order, the wife is hereby restrained from approaching, contacting or communicating by any means with any contact, client, supplier, debtor, creditor, bank, financier or employee of the Company at the Company premises at B Street, Suburb V.

3. The wife is restrained from representing to any person or entity or organisation whatsoever that she has authority to undertake any action or thing on behalf of the company without the express written authority of the husband given in advance.

Occupation of the Suburb V property

1. That on or before 5 January 2016 the husband pay to the wife the sum of $40,000.00 for relocation expenses and rental NOTING that the wife anticipates paying approximately $800.00 per week for suitable accommodation.

2. That the wife shall vacate the Suburb V property on or before 4.00 pm on Friday 29 January 2016.

3. That subject to Order 5 and 6 and pending further Order, the Applicant husband have the sole use and occupancy of the property situated at and known as B Street, Suburb V (“the V property”).

Company vehicle – the Land Cruiser

1. That on or before 4.00 pm 20 December 2015 the husband shall deliver to the wife the Toyota Land Cruiser motor vehicle (“the Land Cruiser”) along with all of the keys, and further, the husband shall direct the Company to maintain registration and insurance for the Land Cruiser pending finality of these proceedings by settlement or hearing and determination.

Undertakings

1. The husband undertakes through his Counsel to pay all outstanding costs for the orthodontist Dr A directly to that practitioner.

2. The wife undertakes through her Counsel to stay the proceedings matter no. U2015/… commenced by her on 13 October 2015 in the Fair Work Commission and shall take no other step to progress the proceedings pending further Order of the Court.

3. All outstanding Applications in a Case and Applications for Interim Orders contained in the Initiating Application and Response are dismissed; and in particular:

   a.The Application in a Case filed 10 December 2015 by the husband;

   b.

   The Amended Application in a Case filed by the husband on

   
   

   7 December 2015; and

   c.

   The Response to the Application in a Case filed by the wife on

   
   

   15 December 2015.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5045 of 2015

Mr Costa

Applicant

And

Ms Costa

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

introduction

1. These are competing applications in respect of the following issues:

   a)The operation of a business run by a company of which these parties are both directors, including the use of a company vehicle;

   b)Occupation of the former family home (“family home”);

   c)Proceedings brought by the wife elsewhere in respect of unfair dismissal; and

   d)Other issues.

The Parties

1. The applicant is the husband. 

2. The respondent is the wife. 

3. They are both aged in their early forties. 

4. The parties have three children aged 16, 14 and 13 years next month.

The Family Home

1. The parties separated under the one roof in April 2015. 

2. After an incident on 27 August 2015 where the police were called, the husband moved out of the family home to stay with his parents and has lived there since. 

3. The wife and children have remained in the family home.

4. The family home is located on approximately two acres of land, which also includes what the parties refer to as the “shed”.  The shed is the building from which the parties’ company operates its transport business. It includes an office, storage for plant and equipment and vehicles.  The home and the shed are about 100 metres apart. 

5. This proximity of the home and business is at the heart of the parties’ dispute.

A Brief History of Relevant Events

1. In either 1995 or 1996, the parties bought the family home at Suburb V and began living together.  It was the beginning of a 20 year marriage. 

2. In 1997, the parties began a company, M Pty Limited (“the company”). Both the husband and wife are office holders, directors and shareholders. 

3. In mid-1999, the wife ceased paid work prior to the birth of the parties’ first child in June of that year.  In mid-2001, their second child was born.  In early 2003, the third child was born.

4. In 2007, there was a refinance of the family home to raise funds for plant and equipment for the company. In that year, the parties also purchased an investment property in Queensland. 

5. Either in that year or 2008, the parties set up the Costa Family Superannuation Fund (“the fund”).  The trustee is the company.  The company pays rent to the fund. 

6. In April 2015, the parties separated but lived still under the one roof.  This was the beginning of a period of increasing tension for the parties and the children.

7. On 28 April 2015, in annexure D to the husband’s affidavit, there is a reference to discussions between the parties, where the wife had suggested that she would relocate with the children to the central coast of New South Wales, which was opposed by the husband, at least without sufficient notice. 

8. On 16 or 19 June 2015, the wife withdrew $40,000 from the company business account for a non-business expense. 

9. On 30 June 2015, that money was returned to the business loan account.

10. On 27 July 2015, the wife is alleged to have withdrawn $30,000 from the overdraft account associated with the investment property in Queensland.  It was a period of months before the husband became aware of that withdrawal. 

11. Tensions between the parties rose. 

12. On 31 July 2015, the husband filed his Initiating Application in these proceedings.  The final orders sought by the husband are for him to retain the family home property and to pay the wife the sum of $900,000 for her interest. 

13. On 27 August 2015, the father was at home with two of the parties’ children, while the mother was out with their third child. There was an incident involving the father and the youngest child.[1] The only comment I will make about that incident is that it appears that the child in question was taking advantage of the parents’ estrangement to test how far she could go with defiant behaviour, and the father overreacted in response.

    [1] Affidavit of the husband filed 01/12/2015, par 21; Affidavit of the wife filed 22/09/2015, pars 59-63

14. On 1 September 2015, the father was served with a provisional apprehended violence order for the protection of the youngest child.  The father moved out of the family home into his parents’ home. 

15. On 2 September 2015, an adjustment was made at the local court to the apprehended violence order, permitting the father to attend his business premises on the land of the home property.

16. On 4 September 2015, the father filed an Application in a Case for exclusive occupation of the family home.

17. On 22 September 2015 the wife filed a Response.  Her final orders were that she retain the family home and receive an additional sum of $400,000. 

18. It is apparent, at this point, that the parties are very far apart in their proposals. 

19. On 24 September 2015, the company notified the wife that her employment had been terminated. 

20. On 2 October 2015, the wife filed an Application in a Case for interim spousal maintenance and partial property settlement.

21. The matter came before this Court on 14 October 2015, and Orders were made by consent. The most significant for the purposes of these proceedings being an undertaking by the wife that she would not withdraw any moneys from business bank accounts and an undertaking by the husband to cause the wife to be paid $800 per week by the company. 

22. On 7 December 2015, the wife attended the company’s bank and, to use the husband’s words, “sought stoppage of accounts”. [2]  I could not be confident that that was the wife’s intention, but it has been the result.  The bank chose to deactivate the running of the accounts until there was clarity about who had authority. 

    [2] Affidavit of the husband filed 10/12/2015, par 22

23. There were competing considerations in relation to this aspect:  the need to run the business in an orderly manner; and the right of the wife to understand and follow the running of the business in her role as director and shareholder, as well as the respondent to these family law proceedings. The wife has corporate and personal duties to the company in addition to her concerns about being fully informed for a resolution of these proceedings. 

24. On 8 December 2015, at the local court, an interim apprehended violence order was made in relation to the August 2015 incident. By agreement, the parties did not proceed to a final hearing of the matter, which would have required their 12 year old child to be called to give evidence.[3]   The husband is, accordingly, subject to the standard orders made in apprehended violence orders, for a period of six months, and if, during that period there is no further incident, then the matter is fully resolved.

    [3] Affidavit of the wife filed 15/12/2015, Annexure C

25. Also on 8 December 2015, the husband was notified by his bank that the accounts had been frozen, which had the immediate consequence of the manager of the business being unable to pay staff wages.[4]

    [4] Affidavit of the husband filed 10/12/2015, pars 21-23

Current Applications and Evidence

1. On 17 December 2015, the matter came before me for hearing in respect of further applications:

   a)The husband’s Amended Application in a Case filed 7 December 2015; and

   b)The husband’s Application in a Case filed 10 December 2015, which relates exclusively to the issue of the freezing of the company accounts.

2. Those two applications were supported by the husband’s affidavit filed on

   
   

   10 December 2015.  There were also short affidavits filed by Mr J on 9 December 2015 and Mr Y on 9 December 2015.  The husband also relied on a financial statement filed on 13 October 2015 for the prior proceedings. 

3. For her part, the wife filed a Response to an Application in a Case – relating to the husband’s the earlier application – and, supporting that, an affidavit by herself filed on 15 December 2015 and an affidavit of Ms R filed on

   
   

   16 December 2015. The wife also relied on her financial statement filed 22 September 2015 from the earlier proceedings. 

4. Both parties were represented by counsel, and there was a Case Summary document provided by both parties. 

5. The initial position of the wife was that she would be unable to meet the husband’s second Application in a Case, but in the urgency of the circumstances for the company and with the cooperative assistance of counsel for both parties, it became possible to also deal with that application.

The Issues

Exclusive occupation

1. Both parties wish to remain in the family home for different reasons.

2. The wife wishes to remain there because she wishes to maintain stability for all or any of the children who live with her. She has looked for rental accommodation and found herself to be gauged as an unsuitable tenant because of a lack of history of income.  She has not been in the paid workforce, other than in respect of the company, for about 16 years. 

3. The husband wishes to remain in the home with all or any of the children who live with him.  He no longer has an order which restrains his movement on or around the property; however he wants an unimpeded and uneventful day-to-day running of his business.   It is in the interest of both parties and the children for the company to continue to generate income as it has done in the past.  This is the sole source of support for the whole family. 

4. There have been incidents of a disruptive nature. 

5. The wife’s witness, Ms R, refers to a time in July 2015 when one of the children’s horse was moved to the front yard and subsequently, the husband felt compelled to stay away, when a fence was installed around it for the benefit of the horse, rather than be in breach of the apprehended violence order. 

6. On 7 December 2015, the wife went to the shed with a view to removing the Land Cruiser vehicle.  There was an angry exchange between the parties in the presence of employees which appeared to have been a distraction for them with the potential for difficulty depending on who else was present on that day.  That is not to say that that represents a criticism of the wife.  The husband had moved the Land Cruiser vehicle on 25 November 2015 and had changed the keys for it.

7. There had also been a period of time when mail had accumulated in the mailbox, including matters for the company to pay.  The mailbox is about

   
   

   25 metres from the house and not quite equidistant between the house and the business. 

8. In these proceedings, the mother has sought an order that the father be restrained from coming within 10 metres of the family home.  It is an indication of the level of stress and conflict that exists between the parties, particularly in the circumstances of having been in the Local Court in respect of apprehended violence orders.  The situation is tentative and difficult.

9. The six months of what is effectively a probationary order not to engage in any conduct which intimidates the protected person, the parties’ youngest child, has potential to create difficulties not only for the child, but for there to be further incidents which are disruptive to the orderly running of the parties’ company.  The husband has offered $40,000 as a payment to the wife so that she can pay rent up front, obviating the difficulty of not being able to establish a history of income. 

10. It would be difficult for the husband to resist a further application for such funds, pending trial, given the evidence that the wife has had the full-time care of the children and has not been in the paid workforce since 1999. 

11. The wife submits that this payment would represent an eating into the asset pool; however it is a fact that two households now have to be established. 

12. In the event that the husband remains living with his parents, no doubt there would be an argument for them having contributed by providing him with accommodation.

13. The wife offered an undertaking that her new partner would not live at the house if she had exclusive occupation. However, the possibility of further conflict in and around the premises, being the house and the shed, is likely, given the partner’s presence from time to time. Such possibility of conflict cannot be ignored in the context of the orderly operation of the business in future. 

14. It is for that reason that I come to the conclusion that exclusive occupation by the husband, provided that he pays the $40,000 and there is sufficient time for the wife to find new accommodation, is the most appropriate course.

The Land Cruiser

1. Both parties wish to retain this vehicle.  It is owned by the company. 

2. It is apparent that it has not always been used exclusively for company purposes. The evidence suggests that the wife has used the vehicle for transporting the three children, no doubt their school and sports equipment and friends of the children from time to time. There is also evidence that the youngest child has a horse and that the vehicle is used for transporting a horse float.

3. There was a concession by the husband that it was likely that the children would continue to live with the wife. 

4. In those circumstances, it is appropriate for the vehicle to be provided to the wife for her use and that the company continue to keep the car registered and insured.  An order will be made accordingly.

Undertakings

1. The application of the wife to the Fair Work Commission has been resolved by an undertaking by her through her counsel that that matter will be stayed and not progressed, pending the final determination of these proceedings. 

2. There was also an undertaking that certain bills relating to orthodontry for one of the children would be paid by the husband. 

The orderly running of the business in terms of the wife’s involvement

1. Orders will be made that the bank should be approached by both parties and that they take all steps necessary to reinstate the running of the business accounts as they were prior to 8 December 2015; that is a joint account with both parties to sign, but noting that the wife will not operate the accounts without the express authority of the husband. 

2. It was established during the course of this hearing that the wife does not expect to be involved in the day-to-day running of the business.  She has her obligations to the company as a director and shareholder.  She also has an interest in understanding how the business is progressing.  She is entitled to receive the accounts of the business as a director and to make inquiries. 

3. However, the Orders will restrain her from purporting to represent the company to third parties; from attending at the business premises in order to communicate with employees and other people associated with the business; and as stated, from operating any accounts without prior written authority of the husband.

I certify that the preceding sixty three (63) paragraphs are a true copy of the

ex-tempore reasons for judgment of the Honourable Justice Cleary delivered on 18 December 2015.

Associate: 

Date:  1 March 2016