Dalby-Schuller and Schuller and Anor

[2009] FamCA 1326

FAMILY COURT OF AUSTRALIA

DALBY-SCHULLER & SCHULLER AND ANOR [2009] FamCA 1326

FAMILY LAW – PROPERTY-  INTERIM ORDERS- Enforcing previous orders- Future spousal maintenance arrangements

Family Law Act 1975 (Cth) ss 79, 83(1)(2), 117(2)

APPLICANT: Ms Dalby-Schuller

1^st RESPONDENT: Mr Schuller

2^nd RESPONDENT: Mr Olden

FILE NUMBER: BRC 11339 of 2008

DATE DELIVERED: 21 December 2009

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 21 December 2009

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Ms Stratton-Funk of

Nita Stratton-Funk & Associates, Brisbane

SOLICITOR FOR THE 1^ST RESPONDENT: Mr Greer of Herbert Geer, Brisbane

2^ND RESPONDENT: No appearance

Orders

IT IS ORDERED THAT:

1. In part satisfaction of future spousal maintenance payments due to the Wife pursuant to paragraph 4 of the order of the Federal Magistrates Court dated 28 January 2009, the Husband shall cause Schuller Investments Pty Ltd as the Trustee for the Schuller Family Discretionary Trust to pay to the Wife by direct debit from the Commonwealth Bank Account number … the sum of $1,500 per month on the 15^th day of each month into an account as nominated by the Wife.

2. For the purpose of giving effect to Order 1 above paragraph 1 of the Order of the Federal Magistrates Court dated 13 March 2009 and paragraph 2(e) of the Order of the Federal Magistrates Court dated 17 December 2008 be varied so as to allow the said monies to be withdrawn and paid out by the Commonwealth Bank.

3. The Application contained in the Response filed by the Husband by leave today is dismissed.

4. The costs of both parties of and incidental to today’s hearing are reserved to the Trial Judge.

IT IS NOTED that publication of this judgment under the pseudonym Dalby-Schuller & Schuller and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 11339 of 2008

MS DALBY-SCHULLER

Applicant

And

MR SCHULLER

1^st Respondent

And

MR OLDEN

2^nd Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. On 17 December 2008, Slack FM made orders, on an ex parte basis, effectively restraining the husband from dealing, either on his own behalf or through corporate trust entities, with property that may ultimately be the subject of orders made pursuant to section 79 of the Act.

2. That order was, as it were, supplemented on 22 December 2008 by an order, also made by that federal magistrate, restraining the husband from leaving the Commonwealth of Australia and an order placing his name on the airport watch list. 

3. The injunctive orders, made ex parte, were returned before the Federal Magistrate on 28 January 2009.  At that time, it is significant to note, the husband was represented by a solicitor. 

4. At that time, Slack FM made an order that the husband pay to the wife the sum of $5000 per month, the first payment to be made within seven days of today’s date and monthly thereafter.  It is common ground, in these proceedings before me that are, effectively for enforcement of the order made by Slack FM, that there is currently about $55,000 owing pursuant to that order. 

5. Slack FM’s order was not appealed by the husband despite him, at the time, being represented by a legal practitioner. 

6. In the approximate 10 months since, no application has been made by the husband, pursuant to section 83 of the Act, to vary, discharge, or suspend the order. 

7. In proceedings before me today, leave was granted to the husband to file a response to the wife’s Application in a Case which sought, among other orders, an order that the operative provisions of Slack FM’s order just referred to be suspended. That is the first such application made by the husband since the order was made.

8. The wife sought, in earlier proceedings before Bell J in whose docket this matter sits, to have paid to her the sum of $20,000 from money standing to the credit of a corporation with the Commonwealth Bank.  That corporation is, it is conceded on behalf of the husband, controlled by him.  In a similar vein, that corporation is the trustee of a trust, the trust deed for which is before the court.  The husband is the appointor of that trust.  Effective control of the trust rests with the husband.  It can be seen then that the husband controls the trustee of the trust and, as appointor, ultimately has control of that trust.

9. The corporate bank account earlier referred to had credit funds at the time that the application was brought before Bell J.  His Honour ordered, on 11 November 2009, that the husband pay to her the sum of $20,000 from this corporate account.

10. Further components of the application in a case filed by the wife at that time were not dealt with by his Honour.  The Application in a Case, had sought orders as follows:

    That in part satisfaction of future spousal maintenance payments due to the wife, pursuant to paragraph 4 of the order of the Federal Magistrates Court dated 28 January 2009, the husband shall cause [Schuller Investments] Pty Ltd, as the trustee for the [Schuller] Family Discretionary Trust, to pay to the wife, by direct debit from the Commonwealth Bank account referred to in (1) above, the sum of $1500 per month on the 15^th day of each month, into an account as nominated by the wife.

    That for the purpose of giving effect to orders (1) and (2) above, paragraph (1) of the order of the Federal Magistrates Court, dated 13 March 2009, and paragraph 2 (e) of the order of the Federal Magistrates Court, dated 17 December 2008, be varied so as to allow the said moneys to be withdrawn and paid out by the Commonwealth Bank. 

11. The two paragraphs of that Application in a Case that were not dealt with as part of Bell J’s orders of 11 November 2009 are before me for determination this morning.

12. The nature of interim applications brought before this court are of themselves summary by nature.  Further to that, this application was brought in the confines of the judicial duty list held three days prior to Christmas.  The principles applicable to interim applications are of course well known and have been the subject of decisions of the Full Court. 

13. So too, applications for interim maintenance are summary in nature and frequently involve a more curtailed process, in respect of the factual findings that can be made,  than can occur at a trial. 

14. In this particular case, a number of the broad factual matters relevant to the determination of the case are not the subject of dispute and can be summarised. 

15. The parties had been married for about 17 years when separation occurred toward the end of 2008. In November 2008, the husband sold the home in which the parties had resided at D in far north Queensland. 

16. It transpires that the net proceeds of sale of that home, together with the proceeds of bank accounts and other property owned by the parties, netted about $1.5 million. In about early December 2008, that money was expatriated, by the husband, to the United States. 

17. The money, the husband says, was invested with a person in the United States.  The arrangements between the husband and that person are allegedly contractual and involve the money being held by that person in a business that involves, in some form, the charter of aircraft. 

18. The husband asserts that the contractual arrangements are such that the money could not be returned to him for four years.  It is now asserted by the husband that the investment of what amounts to the totality of the cash funds, available to the parties immediately consequent upon separation, are highly likely to be lost. 

19. In what might be seen as a further, very unfortunate, development, (also occurring unfortunately, at about the time of separation), an income stream available to the husband through an investment in the United States, apparently sourced through his parents, and involving his siblings and which, until separation, had involved him receiving income- now no longer results in him receiving income.

20. The husband asserts that the reason for this is a dispute between he and his elder brother who is, it seems, responsible for the management of that investment and the distribution of the income stream. 

21. It again seems terribly unfortunate that the income available from that investment should cease at about the same time as the parties separated. 

22. It is particularly unfortunate in circumstances where the sum of about $1.5 million has been expatriated to the United States unilaterally by the husband and, it seems, that this money, at least as asserted by the husband, will also be lost.

23. There are a number of assertions made by the wife, including that, consequent upon separation, the husband withdrew the money in all accounts previously accessed by each of the parties during the course of the relationship and changed pin numbers and passwords in respect of the accounts, and the like.  This matter was not, as I understand it, the subject of a concession, by the husband and I make no comment upon it in the context of these interim summary proceedings.

24. The parties continue to have property, in the section 79 sense, in Australia which includes a property at D, valued at $460,000, a commercial property situated in Cairns, valued at slightly more than $2 million, and a storage facility at B, valued at $95,000.

25. The two real properties are subject to a mortgage, which, I gather, is cross collateralised, securing a borrowing of about $1.6 million. 

26. The material relied upon by the wife includes documents relating to the corporate Commonwealth Bank account earlier referred to, sought to be made the subject of the orders earlier outlined. 

27. By consent, Ms Stratton-Funk, who appears for the wife, tendered a document, which became Exhibit W1 which sets out the payments in and out of that corporate account based upon what the bank statements reveal of the credits and debits to that account.

28. I am told that the accounts reveal, and certainly the documents annexed to the affidavit material of the wife reveal, a consistency in the debit payments in respect of the mortgages, involving $1,832.38 per month, and $6105.73 and $4800. 

29. The documents also reveal that the commercial property, which it is accepted, is leased to a corporation that runs a business at the property, produces rental of $16,000 per month.  There is a dispute about the circumstances in which two months payments were or were not in arrears in October/November last year but, leaving aside those two payments, it is accepted that there has been a consistency in the $16,000 credit being received into that account each month. 

30. The wife, through her solicitor, Ms Stratton-Funk, produces, in Exhibit W1, the impact on the account of the orders sought by her at paragraph 2 of the orders applied for. 

31. That document shows a credit balance of about $24,000 by the end of February 2010. 

32. I should interpose here that this matter, which, as I said, is in Bell Js docket, is, it seems clear, on the path to a final determination in the not too distant future.  In particular, the orders made by his Honour on 6 November 2009, contemplate the filing of a case outline and the like by 24 March 2010.  It might be anticipated that, in the usual course of events the matter would be listed to a call over by Bell J shortly thereafter and trial dates allocated.  The approximate time frame, accordingly resulting, is an important contextual matter in the context of the determination of this interim case. 

33. In circumstances where an order of a court has been validly made and not appealed, the circumstances in which a party can apply to vary, discharge or suspend it, are set out in section 83 of the Act. 

34. The section prescribes mandatory requirements that the court must comply with in order to make the order which, in this case, is sought by the husband.  Section 83(2) of the Act provides:

    (2)The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied:

    (a)     that since the order was made or last varied:

    (i) the circumstances of a person for whose benefit the order was made have so changed (including the person entering into a stable and continuing de facto relationship);

    (ii) the circumstances of the person liable to make payments under the order have so changed; or

    (iii) in the case of an order that operates in favour of, or is binding on, a legal personal representative – the circumstances of the estate as such as to justify its so doing;

    (b)that since the order was made or last varied, the cost of living has changed to such an extent to such an extent as to justify its so doing;

    (ba) in a case where the order was made by consent - that the amount ordered to be paid is not proper or adequate;

    (c)that the material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false.

35. Mr Greer, who appears for the husband before me, quite properly concedes that there is no affidavit evidence filed on behalf of his client that satisfies the circumstances there referred to. In particular, there is no evidence before me which would satisfy me that relevantly: “The circumstances of [the husband] under the order have so changed or that the cost of living has so changed to justify a change in the order.”

36. This is, unsurprisingly, a significant impediment to the husband obtaining the orders sought in the response filed by him. 

37. Mr Greer relies upon the inherent power of a court to not make an order in circumstances where it is clear that doing so is either redundant or where the practicalities of the situation are such that make it impracticable for the order to be carried out.  In that respect, Mr Greer relies upon the fact that there is an amount owing, in respect of taxation, and an amount asserted to be owing to the husband’s accountant.   There is no evidence before me of the latter.

38. The husband produces today, although not on affidavit, documents from a business entitled “WB Business” that enclose a number of Business Activity Statements for the Schuller Family Discretionary Trust and Schuller Pty Ltd and Schuller Investments Pty Ltd for the periods 2008 and 2009.  Ms Stratton-Funk makes the point that she has not seen the financials in respect of the taxation years ‘08 or ‘09.

39. A handwritten notation on the documents just referred to indicates taxation payable in a period from September to September (in an unspecified year, but presumably September ‘08 to September ’09), totalling $13,040. This is the taxation that the husband says is payable. 

40. The documents to which I have just referred became Exhibit H1 in the proceedings before me.  Although expressed in the terms I have indicated, it seems to me that, in truth, the submission by the husband is, in fact, a submission that is directed towards section 83(2) of the Act. 

41. The submission, properly analysed, is not so much that it is impracticable for the order to be put in place and carried into effect but, rather, that there should be a suspension of the order because of the financial circumstances of the husband and/or the corporate/trust entities which he controls.

42. No financial statement has been provided by the husband, for himself, nor, despite his conceding the control of those corporate trust entities, up to date financials for any of the corporate trust entities. 

43. Mr Greer, again quite properly, concedes that, although the husband has filed an earlier personal Financial Statement, the historical information contained within it is no longer up to date and hence, in terms of the financial position of the husband as at today, it is inaccurate. 

44. It seems to me that the best evidence upon which I can rely, in respect of the application before me, is contained in the independent third party statements from the Commonwealth Bank together with what is accepted to emanate from those statements, which is contained in Exhibit W1. 

45. Mr Greer, he argues, takes issue with Exhibit W1, to the extent of the quantum, because, he argues, it does not take account of the two principal items of expenditure to which I have made reference. 

46. It is, in my view, very significant that section 83(2) of the Act is expressed in the terms in which it is.  The section is not expressed in permissive terms; it is mandatory.  The section says that “the court shall not make an order” relevantly decreasing an amount ordered to be paid unless it is satisfied of the enumerated factors.

47. Section 83(1) of the Act makes it plain that those factors apply in the case of an order for suspension, which is, in truth, the order sought here by the husband. 

48. In summary, I am not satisfied, on the basis of any evidence adduced before me by the husband, that the requirements of section 83 of the Act are met nor that there are any other reasons which would justify suspending the order. 

49. That being the case, it seems to me that it is only appropriate that, from an account clearly identified as owned by a corporation as trustee of a trust, each of which is, controlled by the husband, which is capable of meeting the order sought by the wife at paragraph 2 of the application in a case, that still an order should be made.

50. I note that, if an order is made in those terms and it is combined with the order made by Bell J for the lump sum payment earlier referred to, and assuming no further moneys additional to those are paid by the husband, there will by the time of trial be a very significant arrears of spousal maintenance owing by him. 

51. The wife seeks her costs. It seems to me that some of the matters, and perhaps all, directly relevant to section 117(2) of the Act will be explored, in some considerable depth, in the trial proceedings due to take place before Bell J.

52. I accordingly reserve the question of both parties’ costs to the trial judge.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy

Associate: 

Date:  9 February 2010