GIGLIOTTI & GIGLIOTTI

[2015] FamCA 1010

FAMILY COURT OF AUSTRALIA

GIGLIOTTI & GIGLIOTTI [2015] FamCA 1010

FAMILY LAW – SPOUSE MAINTENANCE – INTERIM PROCEEDINGS – Where the applicant wife seeks an order for spouse maintenance – Capacity of the husband to reasonably maintain the wife – Application dismissed.

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the applicant wife seeks a lump sum payment from the husband – Where consent orders were made releasing funds to both parties from a controlled monies account – Application dismissed.

Family Law Act 1975 (Cth)

APPLICANT: Ms Gigliotti

RESPONDENT: Mr Gigliotti

FILE NUMBER: SYC 5281 of 2015

DATE DELIVERED: 18 November 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 9 November 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT:	Mr Carlisle of Carlisle Attorneys
SOLICITOR FOR THE RESPONDENT:	Ms Parker of Parker Law

Orders

1. The wife’s application for interim orders, as contained in her Amended Initiating Application filed on 5 November 2015, is dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Gigliotti & Gigliotti 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 5281  of 2015

Ms Gigliotti

Applicant

And

Mr Gigliotti

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Mr Gigliotti (“the husband”) and Ms Gigliotti (“the wife”) are parties to litigation concerning settlement of property and spouse maintenance. On 9 November 2015, in a Duty List, the wife sought interim orders that the husband pay to her spouse maintenance of $300 per week and a lump sum of $50,000 “pursuant to sections 117 and 81(k) of the Family Law Act”.  The husband sought a dismissal of the wife’s interim application.

Background

1. The husband and the wife, who are aged 41 and 40 respectively, married and commenced cohabitation in 2003.  They separated on 10 May 2012 and were divorced on 15 October 2015.  The parties have one child, B, who was born in 2011 and is presently four years of age.  The child lives with the wife and spends time with the husband each alternate weekend from the conclusion of day care on Friday until 5.00 pm on Sunday and from the end of day care every Tuesday until 7.00 pm Wednesday.

2. Until 2012 the husband and a partner, Mr C, operated a business known as D Pty Ltd.  The partnership terminated on 3 May 2012, with the husband receiving a lump sum payment.  The amount of that payment was disputed but this issue is not relevant for present purposes.

3. In approximately January 2013 the husband established another business which trades as E Pty Ltd.  The husband is the sole director, shareholder and secretary of this company.  The husband conducts his business via the Mr Gigliotti Family Trust, the corporate trustee of which is E Pty Ltd.

4. After the separation the husband moved into the home of his grandmother.  The wife and the parties’ daughter the child continued to occupy the former matrimonial home at F Street, Suburb G.  The husband paid the mortgage and other outgoings in respect of the Suburb G property until about April/May 2015.

5. In September 2015 the sale of the former matrimonial home was completed and the parties received a net amount of approximately $821,000.  These funds are held in a controlled monies account operated by the conveyancing solicitor.

6. On 29 April 2015 the wife entered into a twelve month lease of an apartment at H Street, Suburb G.  She pays rent of $615 per week.

7. On 30 June 2015 the husband underwent surgery to his back, which involved the fusion of three vertebrae.  According to the husband, his neurosurgeon advised him to restrict his activities to light duties for six months following the surgery.

8. The husband deposed that his taxable income from the transport business was as follows:

($)
·       30 June 2013	41,698
·       30 June 2014	154,934
·       30 June 2015	96,653

The husband deposed “I have reduced my drawings from the business as I have had to employ persons to take over much of the work that I previously performed”.

1. In his Financial Statement of 15 October 2015 the husband deposed that he has drawn no wages from the business since 20 August 2015, nor any funds from the trust after 3 September 2015.  The husband’s business pays to his partner Ms I an amount of $1,300 per week, which includes a sum of $500 on account of rent.

2. The husband currently lives with Ms I, who assists with his post-operative care.  In addition she carries out administrative tasks in his business.  Her taxable income was as follows:

($)
·       30 June 2013	58,782
·       30 June 2014	59,496
·       30 June 2015	58,238

1. After the separation the husband’s Child Support liability was assessed at $947 per month.  The current assessment stands at $104 per month.

2. The husband deposed that his business operates equipment which is subject to financial liabilities.  On 1 July 2015 E Pty Ltd entered into a contract to purchase new equipment, at a total cost of $317,500.  The husband deposed that he purchased this equipment with hopes of expanding and stabilising the operations of his business.  The husband deposed further that he entered into this contract in the expectation that he could pay the purchase price from the sale proceeds of the former matrimonial home.

3. On 9 November 2015 the parties consented to the following orders:

   1.That within seven (7) days the parties do all things and sign all documents necessary to direct D’Angelo Solicitors to disburse from the monies held on trust on behalf of the parties:

   1.1The sum of $40,000 to the Applicant Wife or as she may direct and

   1.2The sum of $80,000 to the Respondent Husband or as he may direct.

   2.That the categorisation of these payments be left to the trial judge on the final hearing of the matter.

   Notation

   A.That the Respondent Husband shall apply the sum of $80,000 received pursuant to Order 1.2 to the acquisition of a prime mover through [E Pty Limited].

Consideration

Interim spouse maintenance

1. According to her Financial Statement of 22 September 2015 the wife draws a gross weekly amount of $1,369 from her business known as J Pty Ltd.  She pays tax of $221 and rent of $615 per week.

2. In her Financial Statement the wife included the following amounts as weekly expenses:

($)
·       Motor vehicle insurance	32
·       Motor vehicle registration	23
·       [Auto] Finance	160
·       Petrol	50
·       Fares/car parking	200
·       Motor vehicle maintenance	20

In her 2015 tax return the wife claimed the following deductions on account of her motor vehicle:

($)
·       Interest	1,289 ($25 per week)
·       Fuels	1,651  ($32)
·       Registration	1,313  ($25)
·       Insurance	2,343  ($45)
·       Repairs and maintenance	324  ($6)
·       Tolls/parking	4,972  ($96)

1. It would thus appear that there is a degree of double-dipping with this aspect of the wife’s actual income and expenditure.  On the basis of the deductions claimed in her 2015 tax return, a sum in the order of $229 per week is available to her in addition to her taxable income of $1,369.  On the basis of the figures in her Financial Statement, the additional amount would be in the vicinity of $325 per week, without any allowance for interest on her motor vehicle finance.

2. Since the sale of the former matrimonial home, the wife has incurred a necessary additional expense of rent.  The husband claimed that she has leased an unnecessarily expensive property but there was no evidence to that effect.

3. In her Financial Statement the wife deposed that her credit card has been cancelled and that a debt collecting agency is currently taking recovery action.  In her affidavit of 22 September 2015 the wife deposed that she has an unpaid income tax debt.

4. Although there was some lack of precision as to the wife’s actual income and expenditure, it is clear that she is in a tight financial position.  On the other hand, she had bank savings of $1,249 when she swore her Financial Statement on 22 September 2015 and she will receive $40,000 pursuant to the orders of 9 November 2015.  The use which she makes of this money is entirely a matter for the wife’s discretion.

5. The husband deposed that he receives no weekly income at present and that he has drawn no wages since 20 August 2015, nor funds from the trust after 3 September 2015.  His de facto partner, Ms I, receives the sum of $1,300 per week which is paid to her by the husband’s business and/or the trust.

6. I accept that the husband’s capacity to work personally in his business is at present somewhat limited due to his recent back surgery.  I accept also that he has had to employ staff to carry out tasks which he performed prior to his surgery.  It may be that the acquisition of the new equipment will improve the fortunes of the business but that is a matter only for speculation at this stage.  I am satisfied that the husband presently has insufficient income to pay spouse maintenance.

7. In my view the solution to the problem of meeting their day-to-day living expenses lies in the parties’ own hands.  A sum in the order of $700,000 remains in the controlled monies account, after payment of the sums prescribed by the orders of 9 November 2015.  They are at liberty to alleviate the financial problems from which they apparently both suffer by resort to those funds.

Payment of a lump sum of $50,000 by the husband to the wife

1. The husband has no fund from which he could pay $50,000 to the wife.  He had an amount of $17,000 in a bank account when he swore his Financial Statement on 15 October 2015.  As noted, however, he was drawing no funds from his business and/or the trust.

2. I would observe that I do not share in the concerns expressed on behalf of the wife that the husband has been less than frank in his disclosure concerning the Mr Gigliotti Family Trust.  I note that the wife proposes to spend an amount of approximately $10,000 in order to have a forensic accountant investigate the husband’s commercial interests.  Of course, that decision is entirely a matter for the wife and those who advise her.  Superficially at least, it appears to me that a business whose assets appear to consist primarily of encumbered equipment would not be likely to have a substantial value.

Disclosure

1. The husband annexed to his affidavit a copy of a letter dated 17 September 2015 from his solicitor to the wife’s lawyer, which enclosed a number of documents by way of disclosure.  I had the benefit of no submissions as to which additional documents should be provided by the husband.

2. For all of the above reasons I will dismiss the application of the wife for interim orders.

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

18 November 2015.

Associate:

Date:  18 November 2015