Crocker & Crocker
[2022] FedCFamC1F 995
Federal Circuit and Family Court of Australia
(DIVISION 1)
Crocker & Crocker [2022] FedCFamC1F 995
File number(s): MLC 3322 of 2022 Judgment of: STRUM J Date of judgment: 23 November 2022 Catchwords: FAMILY LAW – PROPERTY – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – Where the applicant wife seeks orders for disclosure, partial property settlement and sole use and possession - Legislation: Family Law Act 1975 (Cth), ss 74, 79, 114
Income Tax Assessment Act 1997 (Cth), Div 7A
Federal Circuit Court and Family Court of Australia Family Law Rules 2021
Transfer of Land Act 1958 (Vic)
Cases cited: Davis & Davis (1976) FLC 90-062; [1976] FamCA 38 Division: Division 1 First Instance Number of paragraphs: 36 Date of hearing: 23 November 2022 Place: Melbourne Counsel for the Applicant: Ms Tulloch Solicitor for the Applicant: Testart Family Lawyers Counsel for the Respondent: Mr Hutchings Solicitor for the Respondent: Aitken Partners Pty Ltd ORDERS
MLC 3322 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CROCKER
Applicant
AND: MR CROCKER
Respondent
order made by:
STRUM J
DATE OF ORDER:
23 november 2022
THE COURT ORDERS THAT:
1.The Husband have sole use and occupation of the real property situate at and known as B Street, Suburb C in the State of Victoria (“Suburb C”) on the following dates:
(a)From 10:00 am on 29 November 2022 to 10am on 6 December 2022;
(b)From 10:00 am on 13 December 2022 to 10am on 20 December 2022; and
(c)from 10:00 am on 27 December 2022 to 10am on 10 January 2023.
2.The Wife have sole use and occupation of Suburb C on the following dates:
(a)From 10:00 am on 6 December 2022 to 10am on 13 December 2022;
(b)From 10:00 am on 20 December 2022 to 10am on 27 December 2022; and
(c)from 10:00 am on 10 January 2023 to 10am on 24 January 2023.
3.Following the dates specified in paragraphs 1 and 2 herein, until further order, the parties share sole use and occupation of Suburb C on an equal shared basis in consecutive alternating one-week blocks commencing from 10am on 24 January 2022, with the husband to have sole use and occupation in the first one-week block, and the wife to have sole use and occupation in the second one-week block.
4.Until further order, the Wife have sole use and occupation of the real properties situate at D Street, Suburb E in the State of Victoria, F Street, Suburb G in the State of Victoria and the parties’ property at Suburb H in the State of Victoria.
5.The settlement funds in respect of J Street (in the sum of $2,268,688.48 held upon trust by the wife’s solicitors, Testart Family Lawyers), be forthwith released to the wife absolutely.
6.Until further order, the Husband pay or cause to be paid to the Wife the sum of $6,000 per month, without deduction, by way of spousal maintenance to commence on 1 December 2022.
7.Within 28 days, the Husband provide the documents requested by the Wife as set out in exhibit SS-2 to the Affidavit of Stephanie Anne Steele filed 22 November 2022 and in the event there is an objection on the ground that any documents that have previously been provided or of asserted inability to produce any of the requested documents, the Husband advise the Wife’s solicitor within the prescribed period by letter why such documents have not been provided or the grounds of objection to production of same, including when and how such documents are said to have been previously provided.
8.The Wife’s Application in a Proceeding filed 7 November 2022 and the Husband’s Response filed 18 November 2022 thereto be otherwise dismissed.
9.Within 24 hours each of the parties file and serve Costs Disclosure Notices in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
10.The husband file and serve a Financial Statement within 14 days of this day.
11.Both parties’ costs of this day be reserved to trial.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Crocker & Crocker has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Delivered Ex TemporeSTRUM J:
This is a case which, with some common sense on the part of both parties, should not have occupied the Court’s time. The parties are in their early 70s and they married nearly half a century ago. They have adult children who are in their early 40s. This case proves the maxim that money does not buy happiness.
The wife asserts the net asset pool available for division between them at trial to be in the order of $145,000,000. The husband contends it is somewhat less than that. It includes several luxury vehicles. The parties, directly or through companies controlled by them, own 15 real properties. And yet, their family is fractured. Not only are the husband and wife embroiled in this litigation, when there is more than enough money to go around, even if they each live to a very ripe old age, but their daughter appears to be aligned with her mother, whilst her father, for reasons which are presently unclear, seems to have aligned himself with her former husband.
The matter was listed for trial in December 2022 but has been adjourned until May 2023 because it was not ready to proceed. That will resolve the legal and financial issues plaguing the parties. However, it will not and cannot resolve the other issues which afflict this family.
Before me for determination today is the wife’s Application in a Proceeding filed on 7 November 2022 and the husband’s Response thereto filed on 18 November 2022.
On 9 November 2022, the matter was listed for hearing today. Amongst other orders that I made, written submissions were to be filed by 22 November 2022. The wife complied. The husband did not. It is not a matter for which he personally or his counsel, who was only briefed yesterday afternoon, can be criticised; his solicitor may be in a different position, but I shall say no more in that regard.
The wife seeks orders for disclosure; for the provision of funds, ostensibly by way of partial property settlement; for spousal maintenance; and for sole use and occupation of various properties. They are the properties situated at D Street, Suburb E, B Street, Suburb C (“Suburb C property”), F Street, Suburb G, and a property at Suburb L. By his Response, the husband concedes that the Suburb E and Suburb G properties can be the subject of such an order and, through his counsel today, he has also conceded the Suburb L property.
That leaves in dispute the Suburb C property, which is registered in the name of M Pty Ltd. It was purchased in 2004 and comprises 10 acres of land in the N Region. It was purchased as a holiday home by the parties and registered in the name of that company. It was purchased for the enjoyment of the parties, their children and their grandchildren.
The parties separated in in 2017 but it appears that, only after the wife issued these proceedings earlier this year, the husband changed the locks to the Suburb C property. Use of that property between the parties does not appear to have been an issue prior thereto.
The wife sought the sole use of that property absolutely or, in the alternative, sole use at specified times over the summer and thereafter in alternating weeks. Today, she has abandoned her application for sole use of the property pending trial and simply seeks that I make orders for sole use at specific times and, thereafter, alternating weekly. The husband opposed the wife having the sole use of that property but, late in the course of the hearing today, conceded that she could have the sole use of it for the whole of the month of January 2023.
In opposing the wife’s application, the husband raised issues such as an alleged lack of potable water and that he has unilaterally allowed the parties’ former son-in-law to live there when spending time with his children (the parties’ grandchildren). He also relies upon the fact of ownership of the Suburb C property by M Pty Ltd, of which the wife is neither a director nor a shareholder. However, it is not contended by him that, at trial, the company and /or the property will not be available for division between the parties pursuant to s 79 of the Family Law Act 1975 (Cth) (“Act”) or that the property is not amenable to an order under s 114 of the Act.
The lack of potable water is entirely irrelevant. If it is a problem, it will be a problem for the wife and it is not the husband’s concern. Clearly, he does not think of it as an issue for himself, for his former son-in-law or for the parties’ grandchildren. Accordingly, his professed altruism towards the wife is misplaced.
In relation to the parties’ former son-in-law and their grandchildren, they are not a relevant consideration for today’s purposes. I do not understand the family dynamic in this case. The parties’ former son-in-law lives in his and their daughter’s former matrimonial home in Suburb P. The parties’ daughter and grandchildren live in Suburb Q and the grandchildren go to school nearby.
The husband deposes that it is more convenient for the parties’ former son-in-law to spend time at the Suburb C property, which is closer to the children’s school and their mother’s home, when he spends time with them. They may be noble sentiments on the part of the husband and I do not criticise him therefor but they are entirely irrelevant. Any balance of convenience is as between the husband and the wife, and not third parties.
Both parties refer to and rely upon the decision of the Full Court in Davis & Davis (1976) FLC 90-062. However, none of the matters referred to there pertain to this case. The husband submits that the onus rests upon the wife to satisfy me as to why I should deprive the registered proprietor, M Pty Ltd, of the enjoyment of the property. However, it is not as simple as that.
The husband, at [41] of his affidavit filed 18 November 2022, deposes that the Suburb C property was registered in the name of M Pty Ltd for asset protection purposes. He deposes that he purchased it, using the singular, first person pronoun “I”, but he gives no particulars as to how it was purchased. The wife deposes that the husband and she purchased the property but, again, she provides no particulars as to how. Both parties concede that it is an asset available for division between them at trial and both have enjoyed the use of that property jointly and, more recently, severally, until the husband unilaterally changed the locks.
An application for sole use and occupation is an application for an injunction under s 114(1) of the Act. Relevant to the exercise of my discretion is the balance of convenience. Neither party could point to any relevant factor which would tip the balance of convenience in his or her favour respectively. As I have mentioned, the wife abandoned her application for sole use absolutely, to the exclusion of the husband, pending trial and put her alternative position as her primary position; namely, that she be able to use it at specified times until the end of January 2023 and, thereafter, it be shared between the parties on an alternating week-about basis. The husband now proposes, in the alternative to sole use by him, that the wife have the sole use and occupation of the property only for the whole of the month of January 2023 but not otherwise.
I can see no reason why, on the husband’s evidence, the wife’s use of the property should be limited only to the month of January. Section 114(1) of the Act provides, inter alia, that the Court may make such order or grant such injunction it considers proper with respect to the matter to which the proceedings relate, including in par (e) thereof, an injunction in relation to the property of a party to the marriage. In my view, for the reasons aforesaid, the order sought by the wife in relation to the Suburb C property is proper and certainly more proper than that sought by the husband and I will make such an order.
In relation to the release of funds, the wife sought, first, the release to her of the proceeds of sale of a property at J Street which was registered in her name and which are held upon trust by her solicitor, in the sum of approximately $2,268,000; and, secondly, cash at bank held by R Pty Ltd as trustee for the Crocker Investment Trust, in the sum of $2,584,000.
From the husband’s material it appears that he has applied, or made provision for, the application of the funds held in the name of R Pty Ltd, including by unilaterally gifting $1 million thereof to the parties’ former son-in-law. The wife complains about this, but does not today press her application for a partial property settlement upon her of those funds.
The husband concedes that the J Street proceeds of sale should be released to the wife. Her application sought that those moneys be paid to her by way of partial property settlement. However, they derive from the sale of a real property that was registered in her sole name. Releasing those funds to her will not involve any exercise of power under s 79 of the Act, because it will involve no alteration of interests in property.
The funds came to be held on trust by the wife’s solicitors because the husband had placed a caveat on J Street. In order for settlement of the sale to occur, the wife agreed for the sale proceeds to be held upon trust by her solicitor. However, the husband, at [86] of his affidavit filed 18 November 2022, deposes that the caveat was lodged over the property prior to settlement in order to ensure that the net proceeds of sale would be paid to the parties’ business as he asserts they had agreed. That was no basis in law for which to lodge the caveat. It was unsustainable and capable of challenge in court. The Transfer of Land Act 1958 (Vic) provides for penalties for the wrongful lodgement of caveats, including for solicitors who do so albeit on instructions.
The husband belatedly deposes that he is content to release the wife’s solicitors from their undertaking to hold the moneys on trust and asserts that, accordingly, nothing more is needed. However, out of an abundance of caution, to avoid any dispute arising hereafter, I will make an order that the moneys be forthwith released to the wife. She is legally entitled to them and there is no claim that equitable title to them lie elsewhere
In relation to the wife’s application for spousal maintenance, she seeks an order in the sum of $9,000 per calendar month. It is common ground that, at the date of separation in 2017 and until 30 June 2021, she was employed by one of the parties’ companies, S Pty Ltd, for which she also received superannuation contributions.
Her employment was terminated by letter dated 25 June 2021 from the Chief Financial Officer of that company, Mr T, which was said to be effective from 30 June 2021. That letter stated inter alia:
To ensure your financial independence, until divorce settlement has been reached, the sum of $6000, similar monthly after tax amount prior to terminating your employment, will be paid into your account on an ongoing monthly basis. [S Pty Ltd] will deal with the tax implications.
Two things must be said about this. First, the wife previously received $9,000 net and S Pty Ltd paid the taxation on top of that amount, whereas now it was proposing to deal with the tax by deducting it and paying only $6,000 net to her. Secondly, that promised sum of $6,000 was never been paid to the wife thereafter, notwithstanding the representation on 25 June 2021 that it would be paid monthly after 30 June in that year.
The husband asserts that the company has suffered a financial downturn. However, that does not explain why, at least in the immediately ensuing months, the wife was not paid that amount. I take the letter of 25 June 2021 as an admission against interest by the husband of the wife’s need for $6,000 per calendar month and of the company’s capacity to pay it.
It is not the business of the Court to arrange the parties’ finances in a tax-effective manner or even to assist them to minimise, even lawfully, their taxation obligations. The husband not having abided by the very arrangement that he proposed, through his Chief Financial Officer, the wife now seeks an order against him for spousal maintenance.
Whilst the husband points out that some of the wife’s expenses of $2,631 per week are paid on her behalf at his direction, I note that the wife’s expenses in her financial statement equate to $11,401 per month, of which she seeks only $9,000. It was not suggested by the husband that he will no longer pay that which was previously paid by him directly to third parties. He may well be criticised if he ceases to make such payments hereafter.
I agree with the husband that some of the wife’s expenses totalling $2,631 per week or $11,401 per month ought not properly to be taken into account for spousal maintenance purposes. For example, there is the sum of $310 per week, which the wife claims in respect food for “children”, which I presume to mean the parties’ adult children or grandchildren; it is not clear. Other examples include the sum of $230 per week for house repairs, which are of a capital nature, in circumstances where there will be a trial in less than six months’ time, and the sum of $460 per week for holidays, in circumstances where the wife will now have the use of the Suburb C property at the times she seeks. However, sensibly, given the factual matrix of this case and, in particular, the financial circumstances of the parties, counsel for the husband did not undertake a line-by-line analysis.
The money received by the wife until 30 June 2021 was almost the entirety of her income. She is 71 years of age and cannot reasonably be expected to find paid employment; certainly not paid employment in the period between now and when this matter goes to trial. The husband submits that she can rent one of the properties of which she will have the sole use and occupation by reason of the orders I shall make. That may be so, however, s 74 of the Act requires me to make such order as I consider “proper” That is a relative concept which depends upon the facts of each case.
Unfortunately, the difficulty I have in this case, which emanates solely from the husband’s camp, for an explicable and possibly inexcusable reasons, is that a financial statement has not been filed. I have been told from the Bar table by his counsel that he is not to blame for that - and that may well be so - but that does not explain his solicitor’s failure to do so. I will, in any event, require him to file a financial statement within 14 days from this date.
In addition to a salary of approximately $150,000 per annum, he has received dividends between 2018 and 2020 in amounts of approximately $5.6 million, $6.7 million and $11.5 million. His evidence is that this is to meet the requirements of Division 7A of the Income Tax Assessment Act 1997 (Cth). That may well be so but, in law there is no such concept as “paper entries”. If dividends are declared in his favour, they are lawfully payable to him, to do with as he pleases or, in this case, as the Court may order.
In the circumstances, first, the husband concedes a need on the part of the wife for, and an ability on his part to pay or cause to be paid, the sum of $6,000 per calendar month; secondly, he has historically received very substantial dividends; thirdly, he has failed to file a financial statement as required by the Federal Circuit Court and Family Court of Australia Family Law Rules 2021, which would have enabled me to understand his financial circumstances; and, fourthly, the matter will proceed to trial in May of 2023. In the latter regard, a period of between about six to nine months is involved. It is therefore readily apparent that what is involved is a total sum of between about $36,000 and $54,000. That may be what the parties have spent between them on this round of litigation. I know not because I have not been provided with costs estimates by either of the parties.
In circumstances where the wife’s Part N expenses in her financial statement include a number of expenses which I find ought not reasonably form part of a maintenance obligation of the husband, I am satisfied that it would be proper to make an order for him to pay or cause to be paid to her, without deduction, the sum of $6,000 per calendar month until trial.
Lastly, I turn to the issue of disclosure. The wife has refined the documents she now seeks from those initially listed in her Application in a Proceeding. That is yet another matter which, with a modicum of common sense, could and should have been resolved. Disclosure is at the heart of financial litigation in this Court; it is a case of “show and tell”, not “hide and seek”. The wife now seeks documents in accordance with exhibit SS2 to the affidavit of her solicitor, Stephanie Anne Steele, filed yesterday, 22 November 2022 at 5.13 pm. However, it narrows, rather than expands, the documents sought.
The husband does not argue that the documents sought are irrelevant or that they are privileged; rather, that they have already been provided or that they are not in his possession. I will require him to provide the documents in exhibit SS2, save insofar as they have already been provided or are not in his control. If he asserts that he has already provided them, or that they are not within his control and cannot be brought into his possession, he will need to provide particulars in support of that assertion within 28 days, together with the other documents provided.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Strum. Associate:
Dated: 16 December 2022
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