DORSETT & GODARD

[2020] FamCA 969

FAMILY COURT OF AUSTRALIA

DORSETT & GODARD [2020] FamCA 969

FAMILY LAW – ADULT CHILD MAINTENANCE – Where the wife failed to satisfy the requirements of an order for maintenance of an adult child – Application dismissed.

FAMILY LAW – PRACTICE AND PROCEDURE – Orders made for the valuation of the agreed matrimonial property – Orders for each party to pay 50 per cent of the costs necessary for the valuations – Orders for the preparation of financial statements for the self-managed superannuation fund.

Family Law Act 1975 (Cth) s 66L

APPLICANT: Ms Dorsett

RESPONDENT: Mr Godard

FILE NUMBER: SYC 4107 of 2014

DATE DELIVERED: 17 November 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 16 October 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gardiner

SOLICITOR FOR THE APPLICANT: Byrnes Lawyers

THE RESPONDENT: Mr Godard

Orders

1. The Application in a Case for adult child maintenance filed by the wife on 2 March 2020 is dismissed.

2. The Application in a Case in relation to adult child maintenance filed by the husband on 1 June 2020 is dismissed.

3. 3.1      Within 21 days each of the parties do all things and execute all documents necessary to appoint an accountant as agreed between them, to prepare financial statements and all other documents necessary to place their self-managed superannuation fund in a position of compliance with all relevant legislation.

   3.2Each of the parties pay promptly one-half of all professional fees and costs properly incurred by the accountant appointed pursuant to Order 3.1

4. 4.1      Within 21 days each of the parties do all things necessary to instruct OO Valuers to carry out valuations of the following parcels of real estate:

   ●        J Street, I Town;

   ●        K Street, I Town;

   ●        L Street, N Town;

   ●        M Street, I Town.

   4.2Each of the parties pay promptly one-half of all professional fees and costs properly incurred by OO Valuers.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Dorsett & Godard has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4107 of 2014

Ms Dorsett

Applicant

And

Mr Godard

Respondent

REASONS FOR JUDGMENT

The proceedings

1. On 16 October 2020 a plethora of interim applications, together with a Contravention filed by the wife, were listed for hearing.  Ultimately the wife withdrew the Contravention application and the interim hearing proceeded in relation to the following issues:

   1.the wife's Application that the husband pay to her adult child maintenance of $650 per week for the parties' son, Mr B, born in 2000;

   2.the Application of the wife that the husband pay to her solicitor a sum of $40,000 for the purpose of valuation of various parcels of real estate and corporate entities.

   Both of these applications were opposed by the husband.

Background

1. The parties to this long-standing, acrimonious litigation are Mr Godard and Ms Dorsett, who commenced cohabitation in 1991 and married in 1994.  They are the parents of four children who are now adults.  The youngest child is Mr B, for whom the wife seeks an order that the husband pay to her adult child maintenance.

2. The husband is a solicitor who conducts a practice at I Town.  The wife earns income in an environmental consulting role.  In my view, it is fair to observe that the financial circumstances of each of the parties remained unclear on the available evidence.  In my view, it is also fair to say that each of the parties seeks to present the financial circumstances of the other through a prism of suspicion and acrimony.

Adult child maintenance

1. Pursuant to section 66L of the Family Law Act 1975 (Cth) (“the Act”), the wife sought an order that the husband pay to her a sum of $650 per week by way of maintenance for the parties' son Mr B, who was born in 2000 and is currently 20 years of age. In support of this application the wife relied upon her affidavits of 14 February 2020 and 23 June 2020, together with a Financial Statement of 2 March 2020. The wife adduced no evidence from Mr B, who, obviously could have provided information as to his current intentions in regard to his university course and attendance at a residential college, his current living arrangements and financial position.

2. Mr B spent the year 2019 on a "gap year" in Country P.  The wife deposed that Mr B worked at a school and received free accommodation and a wage of approximately 175 local currency per week during his time in Country P.

3. The wife deposed that she paid "an Application and Bond fees totalling $1,615 to the College” at Q University ("the college") in September 2019.  The wife deposed further that she paid $15,784 on 11 February 2020 for semester one fees at the college, of which $6,780 has been credited toward semester two costs.

4. The husband deposed that the college has been closed since March 2020, due to the COVID-19 pandemic.  The husband gave uncontradicted evidence that Mr B lives with him in Sydney on a rent-free basis and, as at 23 June 2020, that he had employment from which he earns $600 per week.  The husband deposed that this arrangement for rent-free accommodation in his home is available for Mr B throughout his university education.

5. The wife gave the following estimates of projected expenses for Mr B "during 2020":

(a)  Accommodation

$27,000 at college

[or $450 per week (private) = $23,400 + travel to university + electricity/gas/internet/moving etc (assume approximately $27,000]

(b)  College, University and club subscriptions

$4,000

(c)  Computer

$2,500

(d)  Text books, stationery and academic requirements

$3,000

(e)  Clothes, shoes, uniforms, sports gear

$2,500

(f)   Phone service

$360

(g)  Medical, pharmacy, grooming, dry cleaning, etc

$2,000

(h)  Entertainment, sports rego.

$2,000

(i)   Transport

$500

(j)   Accommodation and food when with me in I Town

$200 per week for 20 weeks = $4,000

1. These figures are merely the wife's speculation or supposition as to expenses which Mr B might incur while an undergraduate student.  I consider these estimates to be vague, unreliable and unsupported by any objective evidence or analysis.  I do not know what expenses might be covered by "college, university and club subscriptions $4,000" or "academic requirements" in item (d) above.

2. The husband deposed as follows, inter alia, as to the wife's claims in relation to Mr B's projected expenses:

   ●        Mr B is not a member of any university club

   ●        Mr B has a computer which the husband will replace if necessary

   ●        he will provide all stationery requirements for Mr B

   ●he pays and will continue to meet the cost of private health insurance and gap medical expenses for Mr B.

3. The wife provided no reason why she should be the custodian of funds provided by the husband for the financial support of Mr B during his university education.  She gave no explanation for the lack of evidence from Mr B.  No basis was elucidated in the evidence or submissions on behalf of the wife as to her quantification of the husband's necessary contribution to the financial support of Mr B at $650 per week.

4. As a question of law, the wife has standing to bring an application for maintenance of the parties' adult son.  Whether it is appropriate and proper that she should do so is another matter entirely.

5. I conclude that the wife failed to satisfy the requirements for an order for maintenance of an adult child, as prescribed in section 66L of the Act. In summary, I have regard to the following matters:

   1.there was no evidence from Mr B that he endorses, or indeed even is aware of, the wife's application that the husband pay to her maintenance for his financial support;

   2.there was no evidence from Mr B as to his intentions in relation to university studies, attendance at a residential college and/or his current financial position;

   3.the wife's evidence as to Mr B's necessary expenses rose no higher than her unsubstantiated speculation; and

   4.the wife failed to establish that payment to her by the husband of $650 per week was "necessary to enable Mr B to complete his education".

6. For these reasons, I will dismiss the wife's application that the husband pay maintenance to her for the parties' adult son Mr B.  Of course, it is entirely open to the husband and Mr B to continue the arrangements which they have apparently put in place for his financial support during his university education.

Valuation issues

1. By an Application in a Case filed on 12 March 2020 the wife sought the following orders:

   1.Within 14 days the Husband pay to Byrnes Lawyers Trust Account (the solicitors for the Wife) the sum of $40,000.

   2.The monies paid pursuant to Order 1 above are to be utilised towards payment of:

   2.1The Husband's one half share of the cost of the valuation of the following parcels of real estate:

   2.1.1   J Street I Town.

   2.1.2   L Street, N Town.

   2.1.3   K Street, I Town.

   2.1.4R Street, I Town.

   2.1.5S Street, Suburb T.

   2.1.6M Street, I Town

   2.2The costs associated with V Company valuing the parties’ interests in the following entities:

   2.2.1The parties 50% shareholding in W Pty Ltd as trustee for the X Trust.

   2.2.2The parties 100% shareholding in LL Pty Ltd (as trustee for the Y Family Trust).

   2.2.3The parties 100% interest in the Y Family Trust.

   2.2.4The Husband's 100% shareholding in Z Pty Ltd

   2.2.5The parties 50% shareholding in AA Pty Ltd.

   2.2.6The parties 50% shareholding (under the guise of W Pty Ltd) in KK Pty Ltd.

   2.2.7The parties 16.33% interest (under the guise of W Pty Ltd) in BB Pty Ltd.

   2.2.8The Wife's 100% interest in CC Pty Ltd.

   2.2.9The Wife's 60% interest in DD Pty Ltd.

   3.Within 14 days the Husband provide to the Wife the documents requested in the letter from Byrnes Lawyer to MM Lawyers dated 18 December 2019.

   4.Within 7 days the Husband instruct his solicitors to sign and return to the Wife's solicitor the joint letter of instruction to EE Valuers which is Annexure "J" to the Affidavit of the Wife sworn 9 March 2020.

   5.Within 7 days the Husband instruct his solicitors to sign and return to the Wife's solicitor the joint letter of instruction to V Company which is Annexure "K" to the Affidavit of the Wife sworn 9 March 2020.

   6.In the event that the Husband does not comply with Orders 4 and 5 above, the Wife is at liberty to engage EE Valuers and V Company as her own (and not a joint) expert.

2. By a Response to Application in a Case filed on 24 June 2020 the husband sought a dismissal of the wife's application and an order that each party pay 50 per cent of the cost of "all single expert valuations, including business valuation."  In an email dated 30 June 2020 to the wife's solicitor (Exhibit 2) the husband set out his proposal for progression of these proceedings in terms of valuation issues.  This proposal was in the following terms:

   ...

   1.We arrange to have the following properties valued by an agreed valuer:

   i.       The various commercial lots at J Street;

   ii.      K Street;

   iii.     The vacant land at N Town

   iv.     M Street, I Town property.

   2.The parties pay 50% each of the cost of these property valuations.

   These are the properties which are not the subject of any dispute about whether they are in the matrimonial pool and if these properties are valued we will be in a position (subject to agreement on funding) to move straight onto a valuation of the various companies which effectively own the I Town & N Town properties.

   We can then argue about the properties owned by my current wife and who pays for the companies to be valued later.

   There are going to be some issues regarding the valuation of the
   self-managed super fund in that it hasn't had its accounts prepared or audited for several years as there is no cash in the fund to pay for them to be prepared.  It will be quite expensive, as there's 3 or 4 years to be done. ...

3. It would thus appear that the there was agreement that valuations be carried out in respect of the following properties:

   1.        J Street, I Town

   2.        K Street, I Town

   3.        L Street, N Town

   4.        M Street, I Town.

4. The husband opposed an order for valuation of the property S Street, Suburb T.  He deposed that this property is owned solely by his current wife.  The husband deposed further that the property was purchased from the sale proceeds of his wife's previous home at FF Street, Suburb GG.  The husband gave the same evidence as to ownership and source of funds for the acquisition of the property R Street, I Town.

5. The husband deposed that the company AA Pty Ltd was deregistered in April 2016 and that he has never held a 50 per cent interest in that entity.  The husband deposed further that the company BB Pty Ltd was deregistered in February 2018.

6. In his oral submissions the husband said words to the effect:

   The problem is that most of the assets are owned by a self-managed superannuation fund and it is non-compliant.

   The husband said further:

   Financial statements need to be updated and that is the responsibility of both the wife and me.

7. The parties presented confusing and apparently incomplete evidence in relation to their interests in various corporate entities.  The wife deposed that “Our financial affairs were largely conducted by the Respondent".  The wife deposed further:

   The Respondent has operated those entities since we separated.  Since shortly after separation I have not had any involvement in their operation ...

8. Some limited information in relation to these corporate entities was contained in the husband's Financial Statement of 16 April 2020.  Part O thereof read in part as follows:

   2.Question 38 – The family trust owns a 50% share in a block of vacant land at N Town, NSW, ...  The trusts only other assets are loans to the HH Trust ($28,309) and a 23.56% of the X Trust ...  The trust has liabilities to Westpac ($136,600) to our SMSF ($54,618) and to the X Trust ($51,283).

   3.Question 41 – Z Pty Ltd is owned by the JJ Family Trust.  ...

   5.Question 45 – The Units in the X Trust are owned 50% by NN and 23.56% by the Y Family Trust and 26.54% by the HH Trust.  All of the units in the HH Trust are held by our SMSF.  The X Trust owns commercial property at K Street, I Town and has loans to KK Pty Ltd ... and to the Y Family Trust ...

9. It seems to me that there is merit in the submission of the husband, to the effect that a necessary next step in the proceedings is preparation of financial statements for the parties self-managed superannuation fund.  It seems to me that a much clearer picture of the financial position of the parties and their corporate entities would be available, once the superannuation fund is brought into a position of compliance.  With the benefit of real estate valuations and current bank loan payout figures, it may well be possible that calculations be carried out as to the value of these corporate entities.  Alternatively, a clearer picture should emerge as to what process is then required to determine these values.

10. In effect the wife sought that the husband be solely responsible for payment of all costs necessary to progress these proceedings, with the notable exception that she would meet the cost of a valuation of the Suburb T property.  As observed above, the financial position of each of the parties was far from clear and they both levelled accusations of non-disclosure and general dishonesty against the other.

11. I cannot and will not attempt to unravel the competing allegations of

    
    

    non-disclosure and concealment of relevant material in the context of this interim hearing.  It is likely that the accountant who prepares the financial statements for the superannuation fund will require the parties to provide a number of documents for that purpose.  This process may well circumscribe the discovery process in the fullness of time.

12. In these circumstances, it seems to me that the best I can do is order that each party pay 50 per cent of the costs necessary for the valuations of the agreed parcels of real estate and preparation of financial statements for the self-managed superannuation fund.  I can see no point in orders for valuation of corporate entities, as sought by the wife, prior to the preparation of financial statements for the superannuation fund.

13. No suggestion was offered as to an accountant to be engaged for the preparation of financial statements for the superannuation fund.  Accordingly, I can do no more than make orders for the appointment of an accountant as agreed by the parties for that purpose.  In his email of 30 June 2020, the husband agreed to the appointment of OO Valuers as single expert real estate valuers.  I will make orders accordingly.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 17 November 2020.

Associate: 

Date:  17 November 2020