Eastman and Eastman & Anor

[2015] FamCA 808

FAMILY COURT OF AUSTRALIA

EASTMAN & EASTMAN AND ANOR [2015] FamCA 808

FAMILY LAW – Interim proceedings – Spouse maintenance – Where the wife seeks lump sum spouse maintenance and periodic weekly payments from the husband – Where the husband primarily resides in Country F – Where the parties were married for over 50 years – Where the wife has established a need and the expenses she claims are not challenged – Where the husband has capacity to pay – Orders made as sought by the wife.

FAMILY LAW – Injunction – Where the wife seeks to restrain the sale of a property owned by a company (controlled by the husband and parties’ sons) in which she holds shares – Where the wife asserts that should the sale proceed she will receive nothing from the sale – Where the court is satisfied that the husband has a current intention to sell the property – Where the wife has satisfied the test in Mullen & De Bry (2006) FLC 93-293 –Where the wife has given an undertaking as to damages – Where it is found that the imposition of an interim injunction is necessary to preserve the property – Order made as sought by the wife

Family Law Act 1975 (Cth)

Bevan and Bevan (1995) FLC 92-600
Mullen & DeBry (2006) FLC 93-293
Oates and Crest (2008) FLC 93-365; 216 FLR 469
Redman and Redman (1987) FLC 91-805
Waugh and Waugh (2000) FLC 93-052

Williamson and Williamson (1978) FLC 90-505

APPLICANT: Ms Eastman

RESPONDENT: Mr Eastman

2^nd RESPONDENT: B Pty Ltd

FILE NUMBER: SYC 3628 of 2015

DATE DELIVERED: 30 September 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 21 September 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Bridges

SOLICITOR FOR THE APPLICANT: Barraket Stanton Lawyers

SOLICITOR FOR THE RESPONDENT: No appearance

SOLICITOR FOR THE INTERVENOR: No appearance

Orders

1. The respondent husband and B Pty Ltd and each of them be restrained from selling, charging, mortgaging or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, the property situate at and known as C Street, Suburb D, being the whole of the land in Folio Identifiers …, …, … and ....

2. I note the wife’s undertaking as to damages.

3. Both the husband and B Pty Ltd can apply to discharge order 1 by giving 14 days notice to the court and the wife.

4. The husband pay to the wife lump sum spousal maintenance in the sum of $16,258.

5. The husband pay to the wife periodic spousal maintenance in the sum of $800 per week, the first payment to be within seven (7) days.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Eastman & Eastman and Anor 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 3682  of 2015

Ms Eastman

Applicant

And

Mr Eastman

Respondent

And

B Pty Ltd

2^nd Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. Ms Eastman (“the wife”) has made an urgent application for an asset preservation order to prevent the sale of a property situated and known as C Street, Suburb D, being the whole of the land in Folio Identifiers …, …, … and … (“the Suburb D property”). The Suburb D property was purchased in September 1990 by E Limited (now B Pty Ltd) for a sum of $3.5 million. The wife asserts the property now has a value of $17.5 million. There is a mortgage on the property which on its face secures less than $3 million. She also seeks orders for interim spousal maintenance.

2. The wife is 70 years old. The parties separated in 2012 and were married for over 50 years. The husband resides for three quarters of every year in Country F. Neither the husband nor the company have attended court today personally or by a legal representative or so far as the wife knows, reacted in any way to the service of the documents.

3. The parties have 10 adult children. The wife has not worked since the date of marriage and says that throughout the marriage and post separation she was not involved or consulted by the husband in relation to any decisions he made about the parties’ financial or business affairs.

4. The parties were divorced on 6 August 2015.

SERVICE OF THE WIFE’S APPLICATION ON THE HUSBAND AND UPON B PTY LTD

1. Two affidavits of service were filed. The first affidavit by Mr G indicates that the husband was served with the documents by email to email addresses that the wife deposes are accessed by the husband. Service was also effected on the husband by express courier through Australia Post to the husband’s address in Country F. The second affidavit by Mr H Eastman (the parties’ son) indicates that the husband was served by hand when Mr H met with the husband at a hotel in Malaysia.

2. The wife’s solicitor also gave oral evidence that she had telephoned the husband’s solicitors, Eastman Lawyers in Suburb C. The principal of that firm is the husband’s nephew. Mr I Eastman indicated he had not received instructions in the family law matter but was acting in respect of the sale of the Suburb D Property.

3. I am satisfied that service took place on the registered office of B Pty Ltd. The wife’s solicitor gave sworn oral evidence before me that she telephoned the registered address of B Pty Ltd and spoke to the receptionist. The solicitor confirmed that the receptionist identified the letter received from the solicitor’s office and identified the application to this court, the financial statement and two affidavits being received. I am satisfied that the accountants who act for that company at that registered office have been served with the documents.

INJUNCTION

1. The husband and three of the parties’ sons are directors of a company, B Pty Ltd. The shares in the company are owned beneficially by the husband, the wife and four of the parties’ sons. The husband holds one E class share and the wife holds one F class share.

2. B Pty Ltd manufactures and sells goods from the premises at Suburb D. The wife asserts the company also owns three registered trademarks.

3. The wife was first informed in January or February 2014 that the husband was intending to sell the Suburb D property.  Two of the parties sons’ indicated to the wife that they do not want to sell the property because of potential re-zoning of the land. On 29 July 2015 the wife was notified by one of her children that a buyer had been found for the property who had offered $17.5 million.

4. The wife is concerned that should the sale proceed she will receive nothing from the company and will not be informed about any decisions made by the company, despite being a shareholder and her inchoate rights under the Family Law Act 1975 (Cth) (“the Act”).

5. The wife has never been paid or received funds from the company by way of dividends or otherwise.

6. Counsel for the wife refers in the wife’s case outline to Waugh and Waugh (2000) FLC 93-052. In that case the Full Court considered the fundamental question when determining whether or not an interlocutory injunction restraining a party from dealing with property is:

   …whether there was any evidence of any intention by the [respondent] to dispose of any assets pursuant to any scheme to defeat any judgment which the [applicant] might obtain in the substantive proceedings…

7. In Mullen & DeBry (2006) FLC 93-293 the Full Court clarified the principles relating to the granting of an injunction in family law property proceedings. In particular, it clarified the meaning of the decision of the Full Court in Waugh, re-affirmed the importance of referring to the text of s 114(3) of the Act and gave guidance in relation to factors the Court will weigh when assessing what will be a just or convenient result. In Mullen & De Bry the Full Court considered the objective risk of disposal of assets to defeat judgment, of which any evidence of intention is only one consideration.  A mere thought on fear of disposition by a spouse, absent any context where an objective risk might be said to exist, is still not enough.  The Full Court confirmed:

   A court … may grant an injunction … in any case in which it is just or convenient to do so…

8. In order to determine what is a “just or convenient” result, the Court will conduct an overall assessment of a number of factors. On this issue, the Full Court said:

   … while ultimately a particular factor may overwhelm others, it is generally unwise to commence with a rigid focus on finding, to a particular standard of proof, one or more of a number of factors relevant only at a discretionary level and subsidiary to the ultimate question.

9. The parties’ daughter, Ms J has filed an affidavit in these proceedings on 3 September 2015. In that affidavit Ms J deposes to conversations she had with the husband about the sale of the Suburb D from which Ms J has gained the view that the husband does not intend to provide the wife with anything from the sale of the property. Ms J says from her observations the husband “does whatever he wants and does not consider [the wife]”.

10. On the evidence of the wife and Ms J, the husband is also the director of a company called K Pty Ltd which manufactures goods in Asia. The father is the majority shareholder of his company.

11. I am satisfied that the company and the husband have a current intention to sell the property.

12. I note the wife’s undertaking as to damages. The wife upon the material filed, seems to have a significant claim against the husband. This property seems to be the major asset of the company and it follows the shares in the company seem to be a major asset in the husband’s hands.

13. The wife has satisfied the test in Mullen & DeBry (2006) FLC 92-600 She has established that there is a real risk that the husband or the company may dispose of relevant assets or property in their possession or under their control and that the risk of that disposal of property would defeat a likely judgment of the court in making orders under s 79 of the Act. The evidence satisfies a finding that the imposition of the interim injunction is necessary to preserve the Suburb D property.

SPOUSAL MAINTENANCE

1. The wife seeks a lump sum spousal maintenance payment in the sum of $16,258. She also seeks $1000 per week by way of periodic spouse maintenance and that the husband pay all council rates, water rates, and building/contents insurance for the former matrimonial home.

2. Section 72 of the Act requires a party to a marriage to maintain the other party, to the extent that they are reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately because of certain reasons and having regard to factors set out in s 75(2) of the Act. If the applicant establishes a need and it is shown that the respondent has a capacity to pay, then the court may make such order as it considers proper for the provision of maintenance (s 74 of the Act).

3. In interim proceedings, the Full Court in Redman and Redman (1987) FLC 91-805 endorsed a statement made by Fogarty J in Williamson and Williamson (1978) FLC 90-505 as follows:

   Another consequence is that on an application for interim maintenance, the court conducts ‘not as final or exhaustive a hearing as would be the case if one were hearing the matter finally’ ... the evidence need not be so extensive and the findings not so precise.

4. So, upon an application for interim maintenance, an approach can be taken with a broader brush.

5. Any proposed interim property order must be taken into account when interim spousal maintenance is considered (see Bevan and Bevan (1995) FLC 92-600 and Oates and Crest (2008) FLC 93-365; 216 FLR 469).

6. The wife is 70 years old.

7. The wife gives evidence that B Pty Ltd filed company returns indicating that the wife was paid substantial dividends in the 2009-2013 financial years inclusive in an amount totalling in excess of $270,000. The wife’s evidence is that none of those funds came directly into her hands.

8. The wife asserts that prior to separation the husband provided her with $200 per week to buy food, groceries and clothing. The husband paid the household bills and expenses.

9. When the husband commenced to reside in Country F Ms J provided the wife with $500 per week. At the end of 2014 that amount was reduced to $200 per week. The money received from Ms J is withdrawn by her from an account controlled by the husband (initially an Arab Bank account and now a Westpac account).

10. Ms J pays for rates, insurance, electricity, gas and telephone for the former matrimonial home from funds in a Westpac Bank account controlled by the husband to which Ms J has access.

11. The wife drives a Japanese motor vehicle. The motor vehicle is owned by B Pty Ltd. The wife meets petrol and running costs. The company pays for the registration and insurance costs.

12. The wife resides in the former matrimonial home at Suburb L. She asserts the interior of the home was last painted in 1996 and requires painting. The exterior of the house is also faded and requires repainting, and the gutters and external woodwork require repainting. The wife has obtained a quote for the repainting of the home in the sum of $11,000. In addition, the wife has provided quotes for garden and maintenance and installation of blinds to the matrimonial home. The overall total of those three quotes is $16,258. I accept on the wife’s evidence that those monies need to be expended to maintain the matrimonial home.

13. The husband provided the wife with a new stove for the former matrimonial home in 2014. The wife however asserts that much of the home is rundown and required repairs. She is unable to meet the costs of repairs and maintenance.

14. In 2014 the wife underwent a laminectomy surgery due to compression in her spine. She now requires weekly physiotherapy sessions at the cost of $85 per week. The wife pays for these sessions out of her $200 allowance.  Ms J funds the wife’s private health insurance costs out of the Westpac account.

15. The wife attends a weekly art class at the cost of $12 per week. The wife also spends $300 per year on art supplies.

16. In her affidavit Ms J asserts that when the husband opened the Westpac account he deposited $43,000 into it. He also requested that Ms J transfer $23,000 to one of her brothers. He then asked that Ms J transfer $10,000 to a Mr M for “Auburn re-zoning”. Ms J says she refused to transfer those funds to Mr M.

17. Ms J gives evidence that there is a balance of $8,000 remaining in the Westpac account from which she provides the wife with $200 each week. Ms J asserts that the husband will not provide any more money to deposit into that account.

18. In her financial statement filed 3 September 2015 the wife sets out a total average weekly income of $200 and total personal weekly expenditure of $1,335. These expenses include food, household supplies, household repairs, telephone, clothing and medical expenses.

19. Given the non-attendance of the husband, these sums are not challenged. One item however, house repairs in the sum of $313 per week, I infer has some connection to the proposed work covered under the quotes. There would be some ongoing maintenance needed to the home and I will allow $100 per week instead of the $313 claimed.

20. Overall the wife has established a need of $800 per week.

21. I am satisfied on the material, the husband has ample capacity firstly to provide a lump sum of spousal maintenance so that the wife can attend to the work needed on the matrimonial home and secondly, has capacity to make a periodic payment to the wife in the sum of $800 per week and it is proper that I make the spousal maintenance orders as requested by the wife.

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 30 September 2015

Associate: 

Date:  30.9.15