Danson and Danson and Anor (No 2)

[2012] FamCA 1143

FAMILY COURT OF AUSTRALIA

DANSON & DANSON AND ANOR (NO 2) [2012] FamCA 1143

FAMILY LAW – INTERIM PROPERTY ORDER –  Spouse maintenance – Whether there is a demonstrated need by the wife – Where wife entitled to half rental income from a jointly owned property.

Family Law Act 1975 (Cth)

APPLICANT: Mr Danson

RESPONDENT: Ms Danson

INTERVENOR: Mr B

INDEPENDENT CHILDREN’S LAWYER: Abrams Turner Whelan

FILE NUMBER: SYC 3088 of 2011

DATE DELIVERED: 29 November 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE: 16 November 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Maurice

COUNSEL FOR THE RESPONDENT: Ms Gillies

COUNSEL FOR THE INTERVENOR: Mr Millar

INDEPENDENT CHILDREN’S LAWYER Ms Saltoon

Orders:

Pending Further Order

1. The parties are to do all things necessary to cause any rental income received from their property at C Street, D Town, to be divided equally between them. The parties are to contribute equally to all outgoings in respect of the property at C Street, D Town.

2. The wife’s application in a case filed 17 August 2012 is otherwise dismissed.

3. The order sought by the husband for interim property settlement as sought in his response to an application in a case filed 19 September 2012 is refused.

4. The wife is restrained from discussing with any of the children any matter concerning the conduct of the father towards them. In the event that any of the children make a complaint to the mother about the father’s conduct, she is to listen carefully to the complaint and then, in the absence of the child or children, as soon as possible after the complaint is made, make and keep a note of exactly what the child said. Should the wife have any concern about the words spoken by the child or children, she is to forthwith contact either the Independent Children’s Lawyer or Ms E and advise them of the words she had heard. She is to carefully consider their recommendation in deciding what course of action she takes thereafter.

5. The wife is restrained from discussing any allegations that she and/or the children have made or may make in future concerning the conduct of the father towards the children or any of the children with any person other than

   (a)       A representative of the Department of Family and Community Services;

   (b)       Dr E;

   (c)       Dr F;

   (d)       The wife’s legal representatives;

   (e)       The Independent Children’s Lawyer;

   (f)        Any other person nominated by the court.

6. I direct that the wife file and serve a response to the Application in a Case filed in Court by the husband on 16 November 2012 within 14 days from the date hereof. The husband’s application in a case and the wife’s response thereto are listed for hearing on 7 February 2013 at 10 a.m. or such other date which the court may allocate should 7 February not be convenient to the parties.

7. I reserve each parties’ (including the Independent Children's Lawyer) costs of the hearing conducted on 16 November 2012.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Danson & Danson 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

Ms Danson

Applicant

And

Mr Danson

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 24 October 2012, I adjourned for hearing to 16 November 2012 an Application in a Case filed by the wife on 17 August 2012 and the Response to that Application in a Case filed by the husband on 19 September 2012. When the matter was before the Court, the husband sought to also proceed with an Application in a Case filed by him on that day. That Application was supported by an affidavit sworn 14 November 2012 by the husband.

2. The first half of the day on 16 November 2012 was taken up with the consideration of a review of the orders of the Registrar made 17 October 2012, whereby she released documents for inspection which had been produced to the court under subpoena. There had been objection to that release from the wife’s brother.

3. The wife’s Application in a Case, filed 17 August 2012, seeks an order, on an interim basis, for the husband pay to the wife a sum equal to half the rental income received from C Street, D Town, commencing on the date on which the husband left the matrimonial home, and the sum of $2,300 per week by way of spouse maintenance. The orders sought in that application were amended in the wife’s outline of case document, dated 16 November 2012, in which she sought the following orders in lieu of those set out in her Application in a Case dated 17 August 2012.

   a)         Payment to her of 50 per cent of the rental received by the husband in respect of their investment property at D Town, of which she and the husband  are joint proprietors;

   b)         Payment to her of interim spouse maintenance of the sum of $500 per week by amending order 1(b) to read “$500” in lieu of “$2,300 per week.

4. On 19 September 2012, the husband filed a response to the wife’s Application in a Case. By that Response, he sought the parties cause the Property at C Street, D Town to be sold and for each of the parties to receive a sum of $200,000 from the sale proceeds with the balance to deposited into a controlled monies account. He otherwise sought that the wife’s spouse maintenance application be discharged.

5. By a Reply filed on 19 October 2012, the wife opposed the orders sought by the husband in his Response to an Application in a Case filed 19 September 2012.

6. The wife relied on her Affidavits sworn 10 august 2012, 18 October 2012 and 8 November 2012. She also relied on her Financial Statement filed 13 August 2012. The wife also attached to her case summary document a summary of the rent received from the D Town property. There was no issue as to the amount stated therein, and the document was marked as exhibit W5.

7. In addition to his Response to an Application in a Case filed 19 September 2012, the husband relied on two affidavits sworn by himself on 19 September 2012 and 23 October 2012. He also relied on a Financial Statement sworn by him on 25 July 2012.

8. During the hearing, each of the parties tendered documents, which I will refer to later in these reasons where they are relevant. In addition, the parties provided a balance sheet, jointly prepared, which I had requested when the matter was before me on 24 October 2012. I directed that same be provided to my chambers by the close of business on 13 November 2012. Following the submissions from the parties, it appears that the only item which is contentious and which has the potential to add a significant sum to the balance sheet is the value of the husband’s interest in G Medical. The wife contends that the husband’s practice does have a goodwill value because it forms part of a group of services specifically designed to attend to the needs of children. The wife says for that reason it is capable of being differentiated from a specialist health practitioner.

9. A summary of the wife’s evidence is a follows. Her only source of income is derived from her ability as a performance artist. She states she has a total salary or wage, before tax (if any), of $73.27 as at 9 October 2012 (Financial Statement). She is entitled to half of the income from the property at C Street, D Town. That property is the subject of a loan from a company, associated with family members of the wife’s, called L Pty Ltd. There is a debt of $52,026 owing to that company.

10. Exhibit W5 is a summary of rent received from the D Town property. The period referred to in the schedule commences 1 July 2010 and concludes 30 June 2012. In the year ended 30 June 2011, the gross rental  receipt was $34,000 and in the year ended 30 June 2012, the gross rental was $48,660. The summary of gross rental received does not accord with detail contained in the husband’s tax return for the financial year ended 30 June 2011. That document states a total gross rental income of $5025. The net rental is $4099. The husband returned one half of that net rental in his tax return for the year ending 30 June 2011. The parties are not obliged to make any interest or capital payment on the loan to L Pty Ltd by way of monthly or other periodic payment. They had however been making payments pursuant to an arrangement or agreement with the company.

11. In paragraph 4 of the wife’s affidavit sworn 10 August 2012, she says that in 2011 she sold an investment worth $90,000 and had been living on the proceeds since that time. At the time of swearing that affidavit, she said that the husband’s child support payments were seven weeks in arrears.

12. In later evidence, the wife said that the receipts from the sale of the investment, together with $10,000 of savings she had at the time, she paid to her mother who then released funds to her as they were required.

13. The wife is the owner of a property at Q Street, Suburb R. Those premises are used by the husband and other health professionals to carry on business. The husband pays rent to the wife for the premises, however, she is responsible to meet a debt due to T Finance. The wife annexed a schedule to her affidavit which she says demonstrates that she pays T Finance $17,569 more in repayments than rentals she receives from the husband. The statement is calculated in relation to the period June 2009 to June 2012 (inclusive).

14. On 13 July 2012 the wife’s mother died. The wife claimed she is not a beneficiary to her mother’s estate. The husband claims that, given the circumstances of the wife’s family and what he says was a very close relationship between the wife and her mother, it is an extraordinary circumstance that the wife is not a beneficiary of the mother’s estate.

15. The wife claims to be actively seeking work as a performing artist. She has been unable to obtain consistency of such work.

16. In her affidavit sworn 18 October 2012, the wife points out that she has the principal care of the parties’ three children, the youngest of whom is three years of age.

17. The wife said that her brothers and late father were engaged in business together. She said she was not involved in that business although she was asked to sign some documents which made her a director of the companies. Her understanding being that this was a precautionary appointment in case of emergency. She described herself as an “alternate director”.

18. Section 201K of the Corporations Act provides for the appointment of “alternate directors”. Such directors are required to comply with the provisions of the Corporations Act including section 181 and are answerable for their actions when they act as a director pursuant to their appointment.

19. The wife worked as a performing artist until the birth of the parties’ first child P. She says there is a limited amount of work available during school or pre-school hours.

20. During the marriage, the parties lived at N Street, Suburb O. The wife still resides in that property. The property was owned by the wife’s mother. She lived in an adjoining property.

21. The wife asserts that she has never been a shareholder in any of the companies her parents and family members own. She concedes that she was a director of some of the companies, however, she described herself as an “alternate director” and said she had never taken any active role in any of the businesses.

22. The wife said her mother had been generous to her during the course of her life. Her mother owned the house in which she and the children, together with the husband, lived before the separation, and where she continues to live with the children.

23. The wife says that in late 2011 she cashed in an investment worth $90,000. She said she was concerned that the husband had access to her bank account by the internet. She gave the money to her mother to hold for safekeeping. She also gave her mother a further $10,000 for safekeeping for her, making a total payment to her mother of $100,000.  She says that she has now completely dissipated that fund on payment of legal expenses and living costs.

24. On 3 September 2012, the wife entered into a credit loan facility agreement with her brothers Mr B and Mr S. The agreement does not refer to a specific amount of money, however, it sets the terms in relation to any advances made between the parties to the agreement from time to time. The wife says that to date, she has borrowed $14,000 (as at the date of swearing her affidavit 18 October 2012).

25. The wife annexed as annexure “B” to her affidavit, a letter from L Pty Ltd in relation to outstanding payments due pursuant to the agreement relating to the advance of funds to the parties from that corporation to enable the purchase of property at C Street, D Town. The balance owing at the time was $52,026.24. It seems the husband was meeting those payments following separation, but is no longer doing so.

26. As stated earlier the wife is not a beneficiary under her mother’s will. She has not sought advice in relation to a Succession Act claim. Her brothers have informed her that she and the children are able to remain in their home at the moment.

27. The wife opposes the sale of the D Town property as she sees it as a potential source of future income.

28. In her Affidavit sworn 8 November 2012, the wife says that her mother gave her a Diners Club credit card and a Motor Pass card before she was married and she has used those cards to meet family expenses since. The use of those cards continue today. The wife says that she has never made payment for her use of the Diners Club or Motor Pass cards. She understood that her mother met those payments and now those payments are met by her brothers, who add to the loan agreement liability as payments are made. The wife annexes a statement which she says comes from her brothers showing that as at 6 November 2012, the “loan agreement ledger, [Ms Danson]” has the following summary:

    c)Living expenses: $4,700

    d)Diners Club: $5,432

    e)Legal Fees: $43,062

    f)Payment to the ICL: $8351

    g)Total amounts debited to the ledger: $61,546

29. The wife swore her Financial Statement on 9 October 2012. She has a stated income of $73.27. She noted that the husband was obliged to pay $489.05 per week for child support, however, the document indicates that she is not actually receiving it. Her weekly expenditure is $2610. She has a 2003 model motor vehicle of modest value. She attests to no other savings or resources which would enable her to have access to income or capital by which to support herself and the children whilst in her care.

30. The husband relied on an affidavit sworn by him on 18 September 2012 and filed 19 September 2012. In that affidavit the husband says relevantly that the wife has capacity to earn an income greater than that currently being received by her. He also says he does not have capacity to meet an order for spouse maintenance. He said he will shortly be required to pay $153,300 in taxation for the 2011/2012 tax year.

31. The husband sets out his expenditure based on an income of $7744 per week. What is not clear from the husband’s evidence is why he has been exempted from payment of monthly or quarterly tax instalment payments to the ATO. The picture painted by the husband is that he is not required to pay any instalments in payment of his taxation liability throughout the financial year, but rather to pay it in a lump sum at the end of the financial year. The other possibility is that because he has had a substantial increase in his income during the 2011/2012 tax year he is required to pay the difference between the amount paid be periodic instalments during the year and what should have been paid  having regard to what he actually earned. The expenditure set out in paragraph 30 of the husband’s affidavit accounts for the whole of his income.

32. The husband says he uses the income generated from the D Town property to pay the children’s school fees. He says that in this particular year, there has been a deficiency in the income in terms of meeting the school fees of $9400 which he has met himself. He also says that between April and October 2011, he paid the wife a total of $3523 from the D Town earnings.

33. The husband asserts that until 23 May 2011, the wife was a director of 44 companies. He sets out the names of those companies. This is not an issue in the case, however, it appears that on about 20 October 2011, the wife resigned as a director of all the companies except G Medical.

34. The husband denied the wife’s assertion that he is in arrears with his payment of child support. The husband says that he had been making payments for a sum greater than that required under his Child Support (Assessment) Act and therefore built up a credit.

35. In relation to the wife’s liability to meet the mortgage payments on the property occupied by the husband and his business partners, he denies that he is in arrears with any payment to the wife by way of rental.

36. The husband claimed that during the marriage, the wife received income as a director of various family companies. He says the wife told him payments of about $11,000 received by her three or four times per year were for work she did as a director of the family companies. Further, he says that the motor vehicle used by the wife during the marriage was always owned by the family companies and her petrol was paid for by those companies.

37. The husband relied on an affidavit which was described as sworn on 23 October 2012, however, it was not dated as such. Nevertheless, the document has been identified and it principally answers an affidavit sworn by the wife on 18 October 2012. Matters of particular note from that affidavit include the following. The husband says the wife has not accounted for how she expended the $100,000 which she received from her mother (but which was her money) during 2012.

38. In support of his application for the sale of the D Town Property the husband says that he has entered into a retainer agreement with Paul and Paul Lawyers to act on his behalf in relation to the hearing listed for February 2013 (four days). One of the terms of the retainer agreement is that their accounts be paid within 7 days of issue.

39. The husband swore a Financial Statement on 25 July 2012. In that statement, he says he receives income from the business G Medical of $7444 per week. He receives rent of $300 per week from the D Town property. He has no other source of income.

40. He resides with his partner Ms H, who has a gross income of $950 per week. She contributes $500 per week to the expenses of the husband.

41. The husband pays $2280 per week in mortgage instalments and $489 per week in child support payments to the wife. He pays $455 per week as school fees to U School, the children’s school. The husband and his partner Ms H have purchased a property at I Street, J Town since the parties’ separation. The husband and his partner have a joint liability to the Commonwealth Bank of approximately $1.8 million. This amount relates to borrowings for the purchase of the property at I Street, J Town and also to discharge the mortgage owing on Ms H’s property at K Town (see Exhibit W1).

42. There were objections to a subpoena issued to Mr B for production of documents. During the course of the submissions and debate in relation to that subpoena, it was acknowledged by the wife’s legal representative that pursuant to the Corporations Act 2001 the wife, as a former director, is entitled to copies of the financial returns and any other relevant documents for any of the corporations where she was a director during the time her directorship continued. As a consequence, an order was made for the wife to produce within 7 days, to either the husband’s solicitor or the Court, should there be any objection to disclosing information, the financial statements for any of the corporations referred to in the Schedule to the subpoena issued to Mr B on 3 September 2012, in which the wife was a director during the years ending 30 June 2009 up to and including the year ended 30 June 2012.

1. During that debate, counsel for Mr B placed on record his instructions that none of the corporations named in the subpoena issued to him is a trustee company.

Submissions on behalf of the wife in support of her Application in a Case

1. It was submitted that the wife is the principal carer of the parties’ children, the youngest of whom is three years of age. Her vocation is that of a performing artist. Whilst the husband submits that the wife could work more, there is no evidence that there is more work available to her which she could take advantage of and still fulfil her role of principal carer for the children. The husband says he would be able to assist the wife in the care of the children should she obtain further work.

2. As against the wife’s income, the husband has an income of $7744 per week gross. That includes money that he receives as rental from the jointly owned property at D Town. He receives the totality of the rent from that property. Exhibit W5 illustrates that the total rent received by the husband from the D Town property for the year ended 30 June 2011 was $34,000 and for the year ended 30 June 2012, it was $48,660.

3. The wife drew the Court’s attention exhibit W2, which is the husband’s tax return for the year ending 30 June 2011. The Court’s attention is drawn to the fact that income is earned from the rental of rooms in the property occupied by his business. It is submitted on the part of the wife that this income is relevant to the value of the husband’s practice, which it is submitted may prove to have substantial value. The husband’s assertion is that his business has no saleable value as he is a specialist health practitioner and he has no goodwill to sell. The wife argues that the husband has established a holistic health service and as such, that is a different type of business to a specialist health practitioner carrying on business under his sole name.

4. The above submissions are relevant to the wife’s opposition to the husband’s application for the sale of the D Town property. The wife, in her application for Final Orders, seeks that the property be transferred to her unencumbered. The Husband, in his Response to an Application in a Case seeks that the property be sold forthwith.

5. As can be seen from tab 2 of the documents in exhibit W1, the husband had, perhaps ambitiously, told the Commonwealth Bank at the time he was seeking an advance of funds to buy his property at J Town, that he anticipated the sale of the D Town Property being divided equally between he and the wife.

6. Further submissions were made in relation to Exhibit W1, which was a copy of the loan application and supporting documents relevant to that loan application, made by the husband and his partner to the Commonwealth Bank. The loan application is dated May 2012. At tab 3 of those documents, the wife has noted that information provided in respect of Ms H (husband’s partner) was that she expected her income to increase this year as she has become better known in the community.

7. Further, the wife points to the information that the loan was an investment loan and the bank apparently understood that the property was to be rented for an income of $1200 per week. That has not been the case, as the husband and his partner have occupied the property at J Town.

8. The wife argues in relation to the husband’s proposal for the sale of the D Town property that there is no immediate necessity to sell the property. Next it is submitted that should ultimately the Court reach the conclusion that the property ought be transferred to the wife in circumstances where it has been sold, the order would become impossible to perform.

Submissions on behalf of the husband

1. The husband raises a suspicion that the wife has had some special arrangement made for her by her family as a result of her mother not leaving her any legacy. The husband’s submission is, effectively, that the circumstance of the wife’s mother not leaving her any bequest under her will is contraindicated by the close relationship which the wife and her mother had during the mother’s lifetime coupled with the generosity of the wife’s mother to the wife during the course of her lifetime. No evidence as to the nature and/or extent of the wife’s mother’s estate is before the court. The Court does not know whether the wife’s mother had any estate of moment to leave to the wife even if she desired to do so.

2. It is asserted by the husband that the property occupied by the wife and children currently and by the family during the course of their marriage is owned by wife’s mother and now by the trustee of the wife’s mother’s estate. He asserts that the wife has never been charged rent for occupation of that property. Likewise, he asserts, and the evidence discloses, that the wife has had use of a Diners Club credit card and a Motor Pass credit card. Those credit cards are apparently paid for by the family companies. The wife has made no reference to those benefits in her Financial Statement.

3. The husband submits that the wife’s resignation as a director in October 2011 has not been explained by the wife since that happening. The wife has not yet advised whether she will make an application in relation to her mother’s estate.

4. The husband submits that although the wife claims to have an income of $74 per week on average, she has produced no evidence of payment to her of any funds which might give rise to being able to calculate that average weekly receipt. No evidence has been provided as to where she has worked during the last 12 months.

5. It is submitted by the husband that exhibit H1 demonstrates a high level of involvement by the wife in the family companies and enterprise. If she is no longer engaged in those corporations then she would have a greater capacity for work. The husband says that the provision in section 72 of the Act casts an obligation on the wife to establish that she is unable to support herself adequately.  The husband says the wife has failed to demonstrate that she is unable to so support herself.

6. The husband points to exhibits H2 and H3. He says that prior to separation, there were very significant deposits which the wife received to her accounts. On 25 August 2010, the wife deposited $67,380. It was deposited in four amounts: three of $11,000 and one of $9,250. On 4 February 2010, the Wife deposited $23,864.97. On 15 January 2010, she deposited $47,000. The husband says these deposits indicate a source of income for the wife prior to separation which she now claims she doesn’t have.

7. The husband says the wife has given two different versions of the receipt of proceeds from the cashing of her investments in early 2012. In any event, it appears the wife gave her mother $100,000 of the wife’s funds in early 2012. She says all of that fund has now been spent. The husband says the wife has not accounted for how those funds were expended

8. The husband submits the evidence above referred to would lead to a conclusion that the wife has other resources which she has not disclosed to the Court.

9. The documents produced by Diners Club in respect of the wife’s expenditure during 2012 show that the wife had the following expenditure in the following months:

   h)April 2012: $5500

   i)May 2012: $1452

   j)June 2012: $10,104

   k)July 2012: $868

   l)August 2012: $2449

   m)September 2012: $2114

10. The expenditure above amounts to $22,487 over 6 months that would be a weekly spend of $864. This amount should be taken into account as part of the available funds which the wife has available. It seems the wife also has available other funds provided for her living expenses from her brothers or the family companies. These sums are said to be loans which are accumulating in  a “loan agreement ledger”

11. The husband addressed the wife’s application that he pay one half of the rent received from the D Town property to the wife. The husband says that the rent is used to pay school fees. If half the rental is paid to the wife, it could place the children’s school fees at risk. The husband submits that he does not have the capacity to pay anything further.

12. The husband says that the wife has established a need for only $316 per week. Her other expenses amount to $97 per week but they are also expenses of the children, so only 20 per cent of those expenses should be seen to be applicable to the wife.

13. The husband, through his counsel, said he would not object to the wife obtaining an extension of the loan in respect of the D Town property advanced by L Pty Ltd. That loan currently has a balance of $26,013.12.

14. On 16 November 2012 the husband filed an Application in a Case supported by an affidavit by the husband. The Application sought a restraining order against the wife in relation to parenting matters. The husband sought to have that Application heard on 16 November 2012 at a time when other applications had been listed by me for hearing. There was insufficient time to hear that matter on that day, and the wife had no notice of the Application sufficient to allow her to respond to same. The wife opposed the orders sought.

15. The children in this case are represented by and Independent Children’s Lawyer. The Independent Children’s Lawyer attended at Court on 16 November 2012 because of the aforementioned Application having been brought to her notice. The Independent Children’s Lawyer supported the Court making an interim order as sought by the husband until such time as the case could be determined. I advised the parties that the only way I could deal with this matter is to consider it in chambers, make orders if that was appropriate, and otherwise list the matter for hearing.

16. The foundation upon which the orders sought is contained in the Affidavit of the husband sworn 14 November 2012. In that affidavit, the husband recites a conversation with Ms E, the children’s therapist, which by its terms recites that the child M told Ms E “Mummy has told me to tell you that Daddy tongue kisses me.” Further, the husband reports that Ms E told him she had received information from the mother of another patient, who knows the wife in these proceedings, alleging the wife had informed her of the husband tongue kissing M.

17. Ms E is said to have advised the husband that she was obliged to notify the Department of Community Services of the allegations.

18. The husband is by occupation a health care specialist. By its nature, the husbands’ practice involves the treatment of children. Any suggestion that he abuses children, were it brought to the attention of his governing body and/or the administrators of the hospitals in which he practices/visits, would be expected to give rise to action which would see the husband prevented from practising.

19. The orders sought by the husband have a proper foundation, however, the orders themselves, by their wording, may not be in the best interests of the children. I propose to make orders which would prevent the wife from discussing with any of the children any matter concerning the conduct of the father towards them. However, it needs to be clear that should any of the children make a complaint to the mother about the father’s conduct, she is to listen carefully to the complaint and then, in the absence of the child or children, as soon as possible after the complaint is made, make a verbatim note of exactly what the child said. Should the wife have any concern about the words spoken by the child or children, she is to forthwith contact either the ICL or Ms E, and advise them of the words she had heard. She is to follow their recommendation in relation to what course she needs to take thereafter.

20. The second order sought by the husband restraining the wife from discussing with any person other than those named in the order needs to be extended to include the Independent Children's Lawyer. I propose to make such an order.

21. I propose to make a direction for the wife to respond to the Application in a Case filed in Court on 16 November 2012 and allocate a return date for that Application.

Determination of the Wife’s Application for Interim orders seeking 50 per cent of the rental received from the parties’ property at D Town together with an interim Spouse Maintenance order in the sum of $500 per week.

1. The husband and wife are the joint owners of the property at C Street, D Town. There is no order of the Court which entitles the husband to receive all of the rental from that property to the exclusion of the wife. The fact that such a circumstance occurs arose from the fact that the husband arranged for that to occur at some time prior to the wife’s Application in a Case filed 17 August 2012. The husband says that the arrangement is in place to enable him to pay the children’s school fees. He says the rental received (after necessary expenses) falls short of the amount necessary to fund the children’s school fees.

2. The orders sought by the wife in her Minute of Order, which forms part of her case summary document prepared for the hearing on 16 November 2012, varies slightly from the orders sought in her Application in a Case filed on 17 August 2012. By that Application, she sought that the husband pay her a sum equal to half of the rental income from the property at C Street, D Town since the applicant left the former matrimonial home and that he pay her the sum of $2300 per week by way of spouse maintenance. The husband’s Response to that Application in a Case seeks that the wife’s Application for spouse maintenance stand discharged. If further seeks that the parties cause the property at C Street, D Town to be sold and that the net sale proceeds be distributed as to the sum of $200,000 to each of the parties and the balance to be deposited in a controlled monies account. The husband does not seek an order, pending further order, that he be entitled to receive all the rental from the property at C Street, D Town. There is no order sought by the husband, either in the Response to an  Application in a Case or in the face of the court on 16 November 2012 when the wife had notified of the amendment to her Application, to oppose the wife’s Application to receive half of the rental from the subject property.

3. Although the husband receives all of the rental from the property, and apparently has done so since separation at least, he only returns in his tax return one half of the net rental. There does seem to be a disparity between the evidence of the wife as to the amount of rental received, and the amount returned in the husband’s tax returns. No explanation has been provided in relation to that, however, in fairness, it was something which was brought to the husband’s attention on 16 November 2012.

4. It appears to me, therefore, that each of the parties has a prima facie right to receive one half of the net income from the property at D Town, absent any order of this court. To the extent that the husband controls the receipt of rental income from the property, it will be necessary for the Court to make an order requiring him to account to the wife for one half of all receipts and it will be necessary to require the parties to each contribute one half of the necessary outgoings associated with the property. At this stage it seems implicit in the wife’s case that the husband will continue to manage the property to the extent that he has done so post-separation, however, that is a matter for the parties to arrange between themselves and the court is not asked to make any order in relation to same.

The wife’s application for interim spouse maintenance in the sum of $500 per week

1. For the purpose of the application currently under consideration, sections 72(1), 74(1), 75(2) and 77 of the Family Law Act have particular application. The application is not framed as urgent maintenance under section 77, in which “it appears to the court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made”, rather it is framed as interim maintenance which requires different considerations.

2. The court is empowered by section 80(1)(h) to make a maintenance order “until further order”. In relation to urgent spouse maintenance orders made pursuant to section 77 of the Act, the decision in the case of Williamson v Williamson (1978)FLC 90-505 recites that such orders should be for short duration. Where there is sufficient evidence for an interim or final maintenance order to be made that course should be preferred to making an order under section 77 (see Malcolm and Malcolm (1977) FLC 90-220).

3. The first matter to determine is whether the wife is unable to support herself because of the matters set out in s 72(1) including any “adequate reason”. In this case, the wife says that following the birth of the children, she has predominantly been their primary carer and has only been able to work on an occasional basis. Since the separation, the wife says she has continued to seek work and accept work as a performing artist as her responsibilities for the care of the children allow. That gives rise to a stated income on average of $73.27 per week.

4. The husband says the wife’s capacity to work is in fact greater than she currently undertakes. He says, that if the wife’s earning capacity has been stifled by her requirement to care for the children, he would be available to provide additional care for the children to free her up for work. Given the current rate of remuneration that each of the parties is able to achieve calculated on a working hour, at this stage it seems quite counter-productive for the husband to cut down his working time in order to allow the wife to take advantage of additional work which she may be offered. Further, it seems that the type of work that the wife is offered from time to time may be on short notice and her availability would be subject to the husband being able to reorganise his work commitments. There would, no doubt, be other employment which the wife may be able to take advantage of where significant prior notice was available.

5. I am satisfied for the purpose of this interim application that at current time, the wife’s ability to earn income is restricted by her responsibility for the care and control of the children, the youngest of whom is three years of age. There is no evidence to suggest that the wife has a capacity to earn income other than as a performing artist at this time. That may not be the case at the time of a final hearing in relation to the parties’ financial matters.

6. The next matter to determine is whether the wife has established a need for $500 per week spouse maintenance. The husband says that on the wife’s own evidence she does not establish a need to that level. Additionally, it has to be recalled that the wife will receive half the rental from the D Town property. If the rental received in the period 1 July 2011 to 30 June 2012 was to continue to be replicated, it would mean that the wife would receive annually $24,330. That would equate to $468 per week. Clearly there would be expenses associated with the property, however, at this stage it is not possible to calculate what those expenses might be. In part N of the wife’s Financial Statement sworn 9 October 2012, she discloses her weekly expense as $316. In addition, she sets out between items 19 and 31 in that document the balance of her expenses. At item 21, the wife says she has a liability to T Finance of $958.27 per week. In that document, the wife itemises a note in relation to item 21 as follows “the applicant agreed to pay all outgoings in respect of the mortgage over the [Suburb R] property, which he uses as his surgery. However, he has underpaid me approximately $21,000 and he separately swore on oath in these proceedings that I had paid the first three months of outgoings.”

7. In the husband’s evidence, he denies that the rental payments made by him to the wife in respect of the property at Q Street, Suburb R are in arrears.

1. Marked as exhibit H2 are copies of cash management bank statements for the account held by the wife with the Commonwealth Bank. They cover the period from January 2012 until September 2012. Those statements show that each month the husband deposited to the wife’s account $4040.66, making a total of eight payments totalling $32,325.28. During the same period, T Finance deducted from the wife’s account a total of $31,853.78. Thus it can be seen that the husband’s version of evidence in relation to this particular issue in dispute is correct, at least for the period covered by the bank statements above referred to. It must be acknowledged that may not apply to the whole of the period post separation. That is, that he has paid more by way of rental to the wife than she has had to pay to T Finance by way of Mortgage instalments. However, the instalments charged by T Finance vary having regard to when they are actually paid. T Finance seeks to extract from the wife’s account a monthly payment on about the 13^th or 14^th day of each month. On a number of occasions, illustrated in the bank statements above referred to, when T Finance has sought the payment, there has been insufficient funds in the wife’s account to meet the instalment due. The reason that there are insufficient funds arises because the husband has been late in making his payment to the wife’s account. Thus a payment due on the 13^th or 14^th day of each month of $3805.83 may increase to a maximum of $4137.46 if paid late.

2. The wife has not included in her financial statement the monthly income received from the husband as rental for the property at Suburb R. She has, however, included as a liability the requirement to pay T Finance $958.27 per week. That figure included as a liability of the wife’s and not offset against the income received from the husband, distorts the actual position of the wife’s financial circumstances. For the purpose of calculating her weekly needs, it is submitted by the husband that the liability should be disregarded. In the particular circumstances of this case, given that the wife does not bring into account the income received by the husband as rental for the subject property, I accept that submission. The balance of the wife’s expenditure stated between item 19 and item 31 on her Financial Statement adds up to $97.06. The items claimed for are private health insurance covering the family, insurance for home contents, car and third party insurance, registration costs of the car. The husband submits that all those expenses are expenses not only for the wife but for the children as the children have use of the house, the car and the private heath insurance. The wife’s share of those expenses should therefore be seen as 25 per cent of the figure of $97.06. That is, $24.26. I accept that submission made by the husband. The wife’s weekly expenses therefore (or share thereof) should be calculated as $340.26 per week. As already stated the anticipated gross rental receipt that the wife can expect from the D Town Property is $467 per week. That exceeds by more than $120 per week the established need for maintenance by the wife. In addition to that income from D Town, the wife has an additional $73 per week from the work she generates as a performing artist. In the circumstances therefore, the wife has failed to establish, at this time, a need for $500 per week interim spouse maintenance from the husband.

3. The difficulty for the wife of having to rely on intermittent income is that it cannot be paid in a regular weekly sum. When there are lettings, there will be rent, when there are not, there will be no rent. When she has worked she will have income when there is no work offered she will have no income from that source. The wife’s evidence does not allow me to confidently say I have an understanding of how regularly she might be offered work. The husband acknowledges this position and he placed on record that to the extent that it is necessary, the wife may borrow further funds against the D Town Property from the lender L Pty Ltd. Clearly those borrowings will have to be accounted for in the final hearing, which at this stage, is listed for four days commencing 11 February 2013.

4. For the above reasons, I would not make an order for Interim spouse maintenance as sought by the wife in the nature of a weekly payment from the husband.

5. The husband in his response to the wife’s Application in a case, which he filed on 19 September 2012, seeks an immediate sale of the property at C Street, D Town and a distribution to each of the parties of $200,000 from the sale, pending the determination of the outstanding property proceedings. The wife opposes that sale. The wife says that this is an income earning property and will be a necessary resource to assist in her support until she is in a position to earn a greater income than she currently can. In her application for final order, the wife seeks that she retains the D Town property.

6. The husband says it is unrealistic for the wife to anticipate that the Court, in this case, would realistically make an order for her to retain the whole of the D Town property with or without the debt due to L Pty Ltd. The wife’s answer to that proposition is that the value of the husband’s practice is yet to be established. It is the wife’s case that the husband’s practice will be found to have a considerable capital value and if that occurs, it is realistic for her to anticipate the court would make an order as sought by her in respect of the D Town property.

7. There is no evidence before the Court at the moment as to the value of the husband’s practice. He is a specialist medical practitioner and, as acknowledged by the wife’s legal representative, such practices are frequently found by the Court to have no capital (goodwill) value. They do, nonetheless, frequently show a capacity to earn a high income well into the foreseeable future. Consequently, they will frequently influence the outcome of the case through the Court having regard to a continuing income stream pursuant to s 75(2).

8. Given that this case is listed for final hearing in February 2013, I do not see the necessity to order an immediate sale of the D Town property. Accordingly I would not be prepared to grant the orders sought by the husband.

9. The husband says that his financial position is in difficult circumstances at the moment, particularly due to a pending tax liability. The husband has, since separation, however, acquired a property with his partner which has the effect of incurring, on his part, a mortgage liability of $2280 per week. In addition, there are costs associated with rates and taxes in respect of the property. The property acquired by the husband and his new partner at I Street, J Town, is almost double the value of the parties’ property at D Town and the parties’ property at Suburb R. To that extent, the husband has not attempted to explain why it was necessary for him, prior to the completion of the proceedings between he and the wife in this court in respect of their property, to buy a property of the cost which he entered into with his new partner. Thus the harsh circumstances in which the husband says he now finds himself are to some extent due to his own making.

I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 29 November 2012.

Associate: 

Date:  29 November 2012