Gaynor and Gaynor & Ors

[2010] FamCA 765

FAMILY COURT OF AUSTRALIA

GAYNOR & GAYNOR AND OTHERS [2010] FamCA 765

FAMILY LAW – PROPERTY – Interim

Family Law Act 1975 (Cth)

APPLICANT: Ms Gaynor

RESPONDENT: Mr Gaynor and Ors

FILE NUMBER: SYC 7076 of 2007

DATE DELIVERED: 31 August 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE: 30 August 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell

SOLICITOR FOR THE APPLICANT: Mr Long

COUNSEL FOR THE RESPONDENT: Mr Richardson SC

SOLICITOR FOR THE RESPONDENT: Mr Barry

Orders

1. Order 1 as sought by the husband in his application filed 29 July 2010 is granted in its terms as set out hereunder:

   1. That the parties shall do all acts and things and sign all documents necessary to secure the withdrawal of $250,000.00 from the funds held in a controlled monies account with National Australia Bank Account number […]813, in the name of Pearson Family Lawyers and Clinch Long Letherbarrow atf [the wife] and [the husband] and such sum shall be paid to the solicitors for the husband for his ongoing legal fees incurred from time to time.

2. Orders as sought in paragraph 1 and 4 on the wife’s response to an application in a case filed 30 August 2010 are made in the precise terms of those paragraphs as set out hereunder:

   1.   That the parties shall do all acts, take all steps and sign all documents necessary to secure the withdrawal of funds held in the controlled monies account with National Australia Bank account number […]813, in the name of Pearson Family Lawyers and Clinch Long Letherbarrow atf [the wife] and [the husband] and such funds be paid as to $8,783 to [M] School.

   …

   4.   That the parties shall do all acts, take all steps and sign all documents necessary to secure the withdrawal of funds held in the controlled monies account with National Australia Bank account number […]813, in the name of Pearson Family Lawyers and Clinch Long Letherbarrow atf [the wife] and [the husband] and such funds be paid as to $11,770 to [D Accountants] on account of the jointly appointed single expert’s fees.

3. The hearing of the wife’s application for an order pursuant to paragraph 3 of her response to an application in a case filed 30 August 2010 is adjourned to a date to be fixed. That date is to be after the wife has provided the other parties to the proceedings with a statement of her contentions in relation to her entitlements in respect of the Z Trust, Mr PV, each of her parents (including their estates). Upon such notice being provided, the wife is to be at liberty to request a date be set by the Court to hear and determine her said application.

4. The parties are to cause to be withdrawn from funds held in the controlled monies account of the National Australia Bank in the joint names of the parties’ lawyers the sum of $250,000. Such sum is to be forthwith paid to the husband. The husband is to not deal with funds otherwise than to pay them to the credit of his loan account with the company S Pty Limited.

5. The Court notes that the husband intends the company will use the funds to meet pressing liabilities. The payment is made upon the husband’s stated position that should the company be in a position, at the time of the trial, where his loan account is said to be irrecoverable by the single expert, or found to be so by the court, the husband agrees to the loan account, to the extent of $250,000, being treated as recoverable and as an asset in his hands.

6. The balance of the husband’s application seeking $350,000 for payment to the company S Pty Limited is adjourned to a date to be fixed following the wife stating her position as referred to in order 3 hereof. If the wife has not stated her position within 14 days of the receipt of husband’s Points of Claim/ Particulars document, as ordered to be provided to the second and fourth respondents, the husband may seek a hearing date for the balance of this application.

7. An order is made pursuant to Exhibit W1 as amended and set out hereunder:

   1.   Order that within 14 days of the receipt of the husband’s Points of Claim/Particulars the wife shall provide to the solicitors for the husband notice in writing setting out her contentions (in context of the issues raises in these proceedings) in relation to her entitlements in respect of the [Z] Trust, Mr [PV], each of her parents (including her parent’s estates) and setting out, in summary form, the facts that she alleges to be relevant to those contentions, addressing but not limited to the relevance of:

   1.1     the Deed Poll executed by the trustee on 10 December 1999;

   1.2     the document purportedly signed by the wife and each of her parents on 21 February 2001;

   1.3     the document addressed to [Mr PV] and purportedly signed by the wife bearing the date 1 December 2003;

   1.4     the issues and contentions included in the notices from the solicitors for the 2^nd and 4^th respondents under cover of letters dated 15 April and 20 August 2010; and

   1.5     any other relevant written or oral agreement with any member of her family(in which case she must set out the material terms and particulars of  the same).

8. I reserve each party’s costs of the hearing of the husbands’ application filed 29 July 2010 and the wife’s response filed 30 August 2010. Following the relisting of either of the husband or wife’s application/responses, as provided for in these orders, either of the husband and/or wife may press for determination of a costs application arising out of the hearing conducted on 30 August 2010.

9. The matter is listed before me, Justice Le Poer Trench in chambers on 29 October 2010 at 8am for a file review.  Parties are not required to attend at that time.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7076 of 2007

MS GAYNOR

Applicant

And

MR GAYNOR AND OTHERS

Respondent

REASONS FOR JUDGMENT

1. Before the Court is an application by the husband filed 29 July 2010 and a response to an application in a case, filed by the respondent wife on 30 August 2010.  The husband supported his application with an affidavit filed on 29 July and an affidavit filed in court on 30 August.  He also relied on documents identified by his Counsel and also documents tendered in evidence.  The wife relied upon an affidavit sworn 26 August 2010 and a report of Ms R dated 30 September 2009.

2. There is no contest in relation to the orders sought in paragraphs 1 and 4 of the wife’s response.  Accordingly, orders will be made by consent in respect of those paragraphs.

3. The wife does not oppose $250,000 being paid from the parties joint funds to the husband for the purpose of meeting his legal costs.

1. Contentious applications

1. The husband seeks a payment of $350,000 to be injected into the company S Pty Limited to keep that company viable.  In his affidavit filed 29 July 2010, the husband said he needed funds immediately to pay creditors, including the Australian Tax Office.  As at 28 July 2010, S Pty Limited had the following liabilities:  trade creditors, $105,000;  BAS for April and June, $98,170;  $157,537 owing to the Australian Taxation Office, however, there is a contractual arrangement to pay that debt by instalments of $10,000 per month. The company owes employee superannuation of $66,430 and outstanding rent of $29,975. The costs for August’s publication will be $61,635. The company car, used by the husband has a $36,000 shortfall on re-finance. There is corporate credit card debt of $38,870.  The total of the creditors is $593,618.  The husband says $350,000 must be paid forthwith.

2. The husband’s case is that there is nearly $2.9 million remaining of the funds from the sale for the property at P.  Since the original hearing was aborted in March 2010, the second to the fourth respondents have quantified their position in relation to the wife’s interest in their assets. They say the wife’s entitlement is in excess of $3 million.  There is still to be determined the husband’s assertion that the wife has a 10 per cent interest in some of those assets and if that be established it is contended the wife’s interest could have a value of $20 million.  The wife is still to explain what happened to a distribution to her of $2 million in the 1993 tax year.  The husband says there is a very real prospect that money is yet to come to her.

3. It is the husband’s case that, as things stand now, he is likely to receive the bulk, if not all, of the parties’ available joint assets upon the completion of the proceedings.

4. The wife has not made her position clear in relation to her entitlements in or from the second to the fourth respondents.  The wife says the current application for funds to meet liabilities of S Pty Ltd is a repeat of the application made by the husband at the end of last year.  She says the current application throws up the real prospect that the company will fail.  She submits that if the company does fail then the parties’ funds, injected into the company, will be lost.  The husband’s answer to that claim is to say he will provide, by way of agreement, that the $350,000, upon it being paid, is to be injected into the company through his loan account and treated as an asset of his, irrespective of whether it is determined to be recoverable at the final hearing of the case.

5. On 30 August 2010, the husband filed another affidavit.  The husband in that affidavit said the company has two publications imminent. With those two publications $875,594 will be invoiced by the end of September this year.  The affidavit shows aged creditor accounts totalling $244,524.  I assume the cost of printing of the two items now due for publication, is not included.  The aged receivables total $321,242.  This does not include invoices for two publications to be published in September.  Those invoices will add another $554,352 to that account.  The husband points out that payment of invoices issued by the company are expected in 60 to 90 days after invoice.  The dates of issue of invoices are not included in the aged debtor/receivable accounts attached to the husband’s affidavit.

6. The wife says the company’s position as at 30 August 2010 seems far less desperate to that portrayed in the affidavit of the husband filed 29 July 2010.  She also says the husband has $129,000 of his own which he should use to support the company if he is confident of its success.

7. I consider that with the revelation of the position of the second to the fourth respondents that they hold funds on behalf of the wife in excess of $3 million  it seems far less likely the wife will succeed in her application that she retain all of the funds from the sale of the former matrimonial home.  I agree with the husband’s submission that, prima facie, the husband’s entitlement to the joint assets of the parties looks as if he will retain not less than 50 per cent of the assets, yet I have not been told the wife’s position in relation to the interest she may have in or with the second to the fourth respondents.  I will need to know that position before I can have a better understanding of what the outcome of the litigation might be.  The wife says she will not be in a position to advise her position until after she has seen the husband’s points of claim/particulars of his claim against the second to the fourth respondents.

8. In the circumstances as outlined, the court should move with caution.  I need to give the husband the opportunity to keep the company viable, but also be alive to the prospect that ultimately, but before the completion of the proceedings, the company fail.  I also need to be alive to the possibility that the husband ultimately might not be able to prove an entitlement to all or most of the party’s property as it now stands.

9. In those circumstances I consider it appropriate to order a payment of $250,000 to the husband, at this time, to be loaned to the company, upon the condition agreed to by the husband.  The husband has $129,000 of his own funds which he can also loan to the company.

10. Upon the wife disclosing her position in relation to the second and the fourth respondents, the husband may press for the balance of the $100,000 sought in this application should he so desire.  I will make orders accordingly.

1. The wife’s claim for 250,000 to be paid to her for legal costs

1. This application is opposed by the husband.  He says the wife has funds available of $3 million, as agreed by the second and the fourth respondents.  Those funds can be accessed to meet her legal costs. 

2. At this time the wife has not said what her position is in relation to the second and fourth respondents. The wife says she cannot dialogue with the second and the fourth respondents about the funds until the husband’s application as to her entitlements is concluded.  She says the husband is seeking to establish her entitlements are far greater than $3 million.  The wife says that she cannot therefore enter into discussions with the second and the fourth respondents to have the stated funds of $3 million paid to her.

3. It needs to be remembered that the persons with authority in the second and the respondents are the wife’s father and brother.  I do not accept that she is unable to speak with them about making her funds, or some thereof, available to her.  I do not accept that she cannot speak to them, at least on a preliminary basis, to ascertain their position in respect of various aspects of the case.

4. I conclude that until the wife is able to clearly state her position in relation to the claims against the 2^nd to 4^th Respondents, she should not be able to access further of the party’s joint funds as ultimately it may be she will not receive any of those assets.  I will not dismiss the wife’s application but rather adjourn it.  I do not accept that the wife will be prevented from continuing her participation in the proceedings due to lack of legal representation during that period, as was submitted on her behalf.  There is no evidence before me that her retained lawyers will not act any further until she has paid the sum of $250,000 to them or any other sum.

1. The time for the wife to disclose her position in relation to the claim against the second to the fourth respondents

1. The husband seeks the wife disclose her position in relation to the husband’s claims as to her entitlements in and from the second and fourth respondents.  The wife agrees she should state her position.  Each has presented a minute of order to provide for same.  The minutes are identical except in one area, namely, the time by which the wife is to provide that statement. I consider the wife should be able to see the husband’s particulars of claim against the second to fourth respondents before having to state her position.  I consider that 14 days after receipt of such particulars should be more than sufficient time for her to determine what her position will be.  I will so order.

1. Costs

1. I propose to reserve all parties’ costs until there can be a determination of all of the husband and wife’s applications as contained in the husband’s application in a case filed 29 July 2010 and the wife’s response filed 30 August 2010.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 31 August 2010.

Associate: 

Date:  3 September 2010