Delacroix and Delacroix

[2013] FamCA 1056

FAMILY COURT OF AUSTRALIA

DELACROIX & DELACROIX [2013] FamCA 1056

FAMILY LAW – INTERIM PROPERTY ORDERS – Where the wife sought interim orders in relation to interim spouse maintenance, refinance of the former matrimonial home and a child support departure order – Relevant legal principles applied – Where the court determined that an interim costs order be made in favour of the wife – Where the court determined that the husband has the capacity to make a payment of a modest amount of spouse maintenance – Where the wife is presently endeavouring to vary the administrative assessment of child support – Where the wife’s application for child support departure is dismissed.

Family Law Act 1975 (Cth) s 79

Child Support Assessment Act 1989 (Cth) s 117(2)(c)

Gyselman & Gyselman (1992) FLC 92-279
Sheahan & Sheahan (1993) FLC 92-375
Strahan & Strahan (2011) FLC 93-466

APPLICANT: Ms Delacroix

RESPONDENT: Mr Delacroix

FILE NUMBER: SYC 4987 of 2013

DATE DELIVERED: 22 November 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 15 November 2013

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Barkus Doolan

THE RESPONDENT IN PERSON: Mr Delacroix

Orders

1. That by consent the wife shall forthwith have exclusive occupation of the property situate at B Street, Suburb B in the State of New South Wales and the husband is restrained from entering within the boundaries of that property without the prior written consent of the wife.

2. That by way of spousal maintenance the husband shall pay the sum of $235 per week to the wife.  The first payment shall be made within seven (7) days of the date of these orders.

3. That by way of interim costs order the husband shall pay to the wife’s solicitors, Barkus Doolan, the sum of $60,000.  Such sum shall be paid within thirty (30) days hereof. 

4. That in the event of default of Order 3 the husband is to take all necessary steps to sell his motor vehicle 1 at a price notified in writing to the wife forty-eight (48) hours prior to entry into an agreement for sale and from the proceeds of sale pay the said $60,000 to Barkus Doolan.

5. That leave is granted to each party to apply to relist the matter, upon giving seven (7) days notice to the other party, in respect of the implementation of these orders.

6. That the wife’s application for interim orders contained within her Initiating Application filed 28 August 2013 and the husband’s application for interim orders contained within his Response filed 4 November 2013 are otherwise dismissed.

NOTATIONS:

1. I note the written undertaking of the husband dated 15 November 2013 in relation to the quarterly payments by the partnership.

2. I note that the husband is selling the motor vehicle 2 and that the proceeds will be used to pay the children’s school fees.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Delacroix & Delacroix 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 4987 of 2013

Ms Delacroix

Applicant

And

Mr Delacroix

Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons were delivered orally.

2. The wife has sought a number of orders by way of interim relief.  One of those orders will be dealt with by consent and some, ultimately, were not pressed.  The orders requiring consideration are an application for interim spousal maintenance, an order requiring the husband and wife to refinance the former matrimonial home at B Road, Suburb B (“the B property), and for the borrowings to be used to pay school fees, to meet an interim costs order in favour of the wife and in payment of the single expert’s fees.  The wife also seeks a child support departure order.

3. The husband sought an order that the B property be sold, the proceeds used to repay a loan to his parents, $25,000 be paid to each of the parties for their legal fees, the payment of the single expert’s fees and the balance to be held pending further order of the court.  The husband also sought an order that he sell his motor vehicle 2 and pay the proceedings into the same account as the proceeds of the sale of the B property.

4. The applicant wife, Ms Delacroix, was born in 1966 and is 47 years old.  The respondent husband, Mr Delacroix, was born in 1965 and is 48 years old.  They commenced living together about 1993 and were married in 1999.  They separated on 8January 2013.  Since separation, the wife and the children have resided at the B property.  At the time of the separation the husband was admitted to the C Clinic following an attempted overdose where he stayed for approximately one month.  Following his discharge he has resided in rental accommodation.  There are three children of marriage who are 16, 13 and 10 years old respectively.  Since separation, the children have spent only a limited amount of time with the husband, although they see him regularly.

5. In broad terms, the parties’ assets and liabilities are: the B property is valued at between $3.3 and $3.5 million.  There is a $150,000 line of credit secured over the property which is presently drawn down to the sum of approximately $142,000.

6. The parties have an interest in a company and a partnership which own and operate a hotel at Suburb D known as the Suburb D Town Hall.  In 2002, the premises and business were acquired by a partnership.  The husband’s parents own 40 per cent of the partnership.  The husband’s brother has a 20 per cent interest and the husband and the wife each have a 20 per cent interest.  The hotel business is presently operated by a company in which the partners who own the land own the shares.  It rents the premises from the partnership.  The amount of rent payable depends upon the turnover and profitability of the business.  The partnership makes a quarterly distribution to the partners.

7. The husband says that in order to fund their share of the purchase of the premises the parties originally borrowed some $2,790,000 from his parents.  He says that from the parties’ regular quarterly distribution interest repayable on the loan is deducted prior to payment to them.  He says that the amount of the loan has been significantly reduced by the making of a number of substantial payments by the sale of other assets.  Recently, the quarterly distribution has been of the order of $15,000 to each party.  The husband has given an undertaking to the court that he himself will not, nor will he permit any other person, to, in effect, inappropriately reduce the amount of that distribution to the wife.

8. The parties were also paid a wage of $45,000 per annum each from the hotel business.  In March 2013, the payment of wages to the wife ceased.  Thus, the quarterly distribution is the wife’s only source of income.  She also receives child support payments presently assessed at $1,700 per month.  The husband continues to receive his quarterly distribution and his wages.

9. In 2009, the hotel and business were valued at $9.5 million.  The husband asserts that, as the income from the business has reduced significantly since then, this value has fallen.  In submissions, it was put by the husband that taking into account that and an appropriate discount for a minority interest, the parties’ interest in the hotel would reasonably be valued at some $2 million.  That, of course, is merely a submission and is not evidence.  The value of the parties’ interest in the hotel must be arrived at by way of agreement or determination by the single expert.

10. The parties owe $1 million to the Commonwealth Bank of Australia on a commercial bill.  The husband asserts, and the wife seemingly denies, that the parties owe his parents $1,332,500.  The wife asserts, and the husband seemingly denies, that the parties owe $400,000 to her parents.  Whether there were in fact such borrowings and whether the agreements remain enforceable, given the time that has elapsed since they were entered into, are matters for final hearing.

11. In addition to the above, the only significant assets owned by the parties are three cars.  There is a motor vehicle 3 driven by the wife and valued by her at $26,760, a a motor vehicle 2 owned by the husband valued by him at $55,000, and a motor vehicle 1 owned by the husband valued by him at $130,000.  This was purchased in January of this year for $200,000.

12. A looming expense are the school fees for the two eldest children for next year, being $40,000 for the eldest and $25,000 for the second eldest.  At sometime early next year, the husband says that the parties will each have significant income tax to pay.  The wife and her solicitors say her legal fees, to take the matter as far as mediation, will be of the order of $60,000.  It is apparent from above that she does not have those funds on hand.

13. The B property is currently occupied by the wife and the children.  The parties are agreed that until further order she should have exclusive occupation of it and an order will be made to that effect.

14. The wife seeks orders requiring the parties to take steps to refinance the B property to obtain a loan of $355,000 secured on it and that the funds be used to retire the line of credit, pay the next year’s school fees, pay the single expert’s fees of $40,000, and pay $60,000 to the wife for legal fees.

15. The wife does not adduce any evidence to the effect that a lender would be prepared to advance that sum to the parties having regard to their present income and expenses, or the terms on which it might be advanced.  Thus, the amount of any regular payments, whether by way of interest only or not, are not known.

16. She does not make a proposal as to how and by whom these payments would be repaid.  Presumably, it would be by the husband.  Thus, as the amount of the repayments are not known, it cannot be ascertained if he could afford to make such repayments.  It is to be remembered that he is paying child support payments and the wife is also seeking spousal maintenance and a child support departure order.  The evidentiary basis for the order sought by the wife has not been established.

17. It is true that the present equity in the property is at least $3.2 million.  Thus, the proposed borrowing would represent only 10 per cent of that equity.  Nevertheless, repayment of the loan must be considered.  It would be up to any proposed lender, not the court, to decide whether or not it would advance any funds and the terms on which those funds would be advanced.

18. It is also true that the husband and his family have control over significant assets and income.  A telling example of this is the cessation of the wife’s wage, if it can be called that, in August 2013.  Although the husband asserts that the decision was not taken by him but rather by his parents and his brother, it speaks eloquently of their control and their attitude to the wife as a partner and shareholder.  As far as the evidence discloses, she did not engage in any work to earn that wage.  If, as the husband asserts, he has no funds to pay his lawyer, it may well be sensible and desirable for the parties to agree on a refinancing but, on the present evidence, it cannot be ordered.  If such evidence were available, which it is not, it would then be necessary to go on to consider whether such an order was desirable and appropriate.

19. The husband seeks an order for the immediate sale of the B home.  He asserts that the parties need funds and that it is inevitable that in due course it will have to be sold, so it should be sold sooner rather than later.

20. In support of this proposition the husband asserts that the available pool of assets will be of the order of $4 million of which the wife would be entitled to no more than $2 million.  Even if the retention of assets such as contents, car and superannuation is ignored, the submission proceeds, the wife would need to borrow at least $1.5 million to retain the B property, which she could not do.

21. The first difficulty with this submission is that it proceeds upon the basis that the husband’s case as to loans from the parents, contributions by the parties and valuations of property, is accepted.  This cannot be assumed.  It would be most inappropriate for a court to proceed on that basis on an interim hearing.  Those issues are quintessentially matters for a final hearing.

22. Secondly, as is made plain in Strahan & Strahan (2011) FLC 93-466, an interim property order must not exhaust the power of the court to make final orders under section 79. Any interim order must be capable of reversal or variation.

23. Whilst any foreshadowed payments that could be made to the parties after a sale may well be, having regard to the other assets owned by them, capable of reversal or variation the sale of the house itself will not.  The evidence does not establish that it would inevitably have to be sold.  Thus, it is possible that a sale might ultimately not be necessary.  The wife wishes, if possible, to live in the home and to use it as a home to the children.

24. Thirdly, the wife and the children would, if the house were to be sold, need to find alternative accommodation.  Quite how this might be done was not explained in the evidence or submissions.  I am not satisfied that at present the sale of the B property is either necessary or desirable.

25. A significant part of the wealth of the parties is under the control of the husband and his family.  It is appropriate, as was again recognised in Strahan, that that fact should not be a barrier to the parties having adequate legal representation.  It was submitted by the husband that there were no available assets in the absence of borrowing to meet such an order.  This is not so.  The parties own the cars referred to earlier.  The husband has listed the motor vehicle 2 for sale and will use the proceeds to pay the school fees.  He and the wife each have cars.  The husband’s, however, is quite valuable.  It could easily be sold and the proceeds used, in part, to acquire a cheaper vehicle for him to use.  In submissions, a reluctance to sell that vehicle was expressed and it was pointed out that no order for its sale was sought by the wife.  That is so.

26. Taking into account all the above, the appropriate order is to require the husband, by way of an interim costs order, to pay to the wife’s solicitors the sum of $60,000 within 30 days, in default of which the husband is forthwith to sell the motor vehicle 1 and forthwith upon receiving the proceeds of sale pay $60,000 to the wife’s solicitors.  This will give him the option of raising the funds, including possibly a refinance by agreement, but last resort is had to the car.  That order does recognise, however, that there are assets available to the parties which can be used to meet the appropriate interim costs order.  The quantum of the costs sought by the wife was not disputed by the husband.

The wife’s application for spousal maintenance

1. Dealing with the application for spousal maintenance, the wife described her present income as $1,145 per week.  She said she had expenses of $4,195 per week.  As appears from Part N to her Financial Statement her personal expenditure was $904 per week.  The balance of $2,568 referred to the children.  The wife’s other expenses, excluding income tax, were for rates, insurance premiums, health insurance, totalling $493 per week.  It was submitted that one half of those expenses should be attributed to the children, leaving some $246.50 attributable to the wife.  If her income tax of $230 per week and personal expenses of $904 per week were then added to that sum, her weekly expenses are established at $1,380.50 per week.  Given her income of $1,145 a week, maintenance was sought in respect of the difference, namely some $235 per week.

2. The husband did not dispute this approach.  Rather, he said that the wife had a capacity to work that was not being exercised and that he did not have the capacity to make the payments of maintenance in that sum.

3. As to the first, the wife said that in 1993, when she first met the husband, she was working full-time at two jobs.  In 1997, when the first child was born, she ceased working from one and took maternity leave from her other employment.  She recommenced working in this employment in October 1997, working one day per week.  That ceased in May 2000.  Since then, she’s only worked on two occasions for four months in 2002 one day per week and at the Suburb D Town Hall, again for four months at one day per week.

4. As I have said, the payment of the wage of $45,000 was therefore not seemingly dependent upon her carrying out any work.  Since the birth of the children she has spent her time largely as a homemaker and parent.  She wishes to continue in that role.  That role was part of the way the parties conducted their relationship.  She presently has the care of three children, ranging from 10 to 16.  Whilst they no longer require her complete attention, their care may well limit the hours that she could work.  There was no evidence as to the availability of jobs as a florist, whether full or part-time, or whether the wife’s present skills is sufficient for her to gain employment since she’s not worked for some 11 years.  She, therefore, does have some capacity for employment but it is not unlimited.  It is difficult on the evidence to establish what it is.

5. I am satisfied, taking into account the above matters, that presently the wife is unable to support herself adequately.  The expenses of the wife would not seem to be unreasonable.  I find that they are reasonable.  If she receives the sum of $235 per week as sought, she will still have a significantly more austere standard of living than she previously had.

6. As to the second of the husband’s submission, according to his Financial Statement he has a weekly income of $2,111 per week and expenses of $2,371 per week.  Notwithstanding that shortfall, the wife submitted that the husband has considerable wealth in the form of assets and, thus, a capacity to borrow.  I have already dealt with aspects of refinancing and will not repeat them.

7. There is, however, evidence that the husband has capacity to pay.  Previously, the wife received some $45,000 from the hotel business without having to work.  That expense of the business has ceased.  Of course, the result of the lower expenses should mean, other things being equal, that each of the parties should receive an increased quarterly dividend.  In annual terms, that would be $9,000 each or $173 per week each.  That should increase the wife’s position and the husband’s position by that expense.  Leaving that assumption aside, the business directly has the capacity to pay to the benefit of the husband the $45,000 which was previously paid to the wife.

8. The wife did not seek to attack the husband’s expenses as being unreasonable.  They will drop slightly when the motor vehicle 2 is sold.  Rather, the wife asserted that, notwithstanding his income, the husband has the capacity to pay a modest amount of spousal maintenance.  This is demonstrated by the cessation of the wife’s wages and the availability of them to the partnership.

Conclusion

1. Both the husband and the wife claimed family health insurance costs.  There thus seems to be a double-up and some flexibility in the husband’s expenses.  Notwithstanding the husband’s declared income and expenses, I am satisfied that he has capacity to make a payment of a modest amount of spousal maintenance.  There will be an order, therefore, for the wife to be paid $235 per week spousal maintenance commencing forthwith.  The husband and his family have the control of a substantial asset and a substantial income.

The wife’s application for child support departure

1. The wife sought a child support departure order of $515 per child per week. In doing so, she relied upon the provision of section 117(2)(c) of the Child Support Assessment Act 1989 (Cth).

2. Determining special circumstances cannot be defined with precision but does denote something special or out of the ordinary.  The court will not interfere with the administrative assessment in the ordinary run of case.  (See Gyselman & Gyselman (1992) FLC 92-279)

1. In Sheahan & Sheahan (1993) FLC 92-375 at page 79,884, the Full Court said that:

   The relevant facts of the particular case must be considered to determine whether they constitute special circumstances which, in this context, if not taken into account, would result in injustice or undue hardship to any person.

2. On 13 of August 2013, the husband was assessed to pay child support to the wife in the sum of $395.74 per week.  On 13 September 2013, the wife applied to change the assessment on the ground of special circumstances.  Part of her claim was that the husband has available to him significant cash which is drawn from the business which, presumably, she asserts, is not declared for the purposes calculating income tax.  I interpolate that such an allegation was not made in evidence to me.  She asserts that the husband was able to experience expensive overseas holidays in January 2013 and September 2013.  The husband is in the course of responding to that application.

3. The husband’s declared income would not appear to be sufficient to pay the child support departure order sought by the wife.  Whilst the wife did rely on the husband’s control, with his parents, of the income earning assets, she gave no evidence of cash being retained from the business.  She gave no evidence of cash being used to buy the motor vehicle 1, which was another allegation she made in relation to the claim for reassessment on the ground of special circumstances.

4. The overseas trip in 2013 is referred to only in the application to vary the assessment.  The former payment of $45,000 has already been considered and taken into account in relation to the spousal maintenance.  The court must act on the evidence that is available to it.  Also to be taken into account is the fact that the wife is presently endeavouring to vary the administrative assessment.

Conclusion

1. Taking these matters into account, along with the declared income and the expenses of the parties and the evidence as it presently stands, I am not satisfied that the requirements of section 117(2)(c) have been established. I am not satisfied that, in the special circumstance of this case, it would be unjust and the assessment has resulted in an unjust and inequitable determination.

2. Accordingly, at present, the circumstances are more properly described as being in the ordinary run of circumstances and which a claim for an adjusted assessment is proceeding administratively.  The claim for the child support departure is, accordingly, dismissed.

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 22 November 2013.

Associate: 

Date:  8 January 2013