HA & BRUMAGE

[2015] FamCA 1103

FAMILY COURT OF AUSTRALIA

HA & BRUMAGE [2015] FamCA 1103

FAMILY LAW – SPOUSAL MAINTENANCE – Wife’s application for spousal maintenance – Where the wife is unable to support herself – Where the husband has not given discovery in accordance with Court Orders – Where the only evidence as to the husband’s financial position is a joint balance sheet and the husband’s financial statement sworn more than a year prior – Where the Court is satisfied that the husband has the ability to pay the amount of maintenance sought by the wife.

FAMILY LAW – INTERIM COSTS – INTERIM PROPERTY SETTLEMENT – Wife’s application for a lump sum payment by the husband pursuant to ss 80(1)(h) and 117 of the Family Law Act 1975 (Cth) – Where the Court is not satisfied that the alleged disparity in the financial circumstances of the husband and the wife and the husband’s failure to comply with Court Orders justifies the making of a costs order – Where the Court is not satisfied that it is appropriate to make an order for interim property settlement pursuant to s 79 and s 80(1)(h) – Wife’s application dismissed.

Family Law Act 1975 (Cth) ss 72, 80, 117
Family Law Rules 2004 (Cth)

Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466

APPLICANT: Ms Ha

RESPONDENT: Mr Brumage

FILE NUMBER: SYC 4064 of 2013

DATE DELIVERED: 11 December 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 8 December 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Carlisle Attorneys

SOLICITOR FOR THE RESPONDENT: Robertson Saxton Primrose Dunn

Orders

IT IS ORDERED

1. That, pending further order, the husband pay to the wife by way of spousal maintenance the sum of $700 per week, the first payment to be made on 18 December 2015 and thereafter weekly.

2. That the application of the wife for the payment, pursuant to s 117 of the Family Law Act 1975 (Cth), of $57,000, be dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Ha & Brumage 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 4064 of 2013

Ms Ha

Applicant

And

Mr Brumage

Respondent

REASONS FOR JUDGMENT

1. Proceedings for property settlement between Ms Ha (“the wife”) and Mr Brumage (“the husband”) are listed for call over on 18 January 2016 to allocate dates for hearing in the event that all affidavit material, including experts’ reports, has been filed.

2. On 21 September 2015, Orders were made for the preparation of the matter for hearing. Those Orders included Orders for the appointment and instruction of single expert valuers which have not been complied with. That matter has been addressed by Consent Orders made today for the appointment of single expert valuers, initially at the expense of the husband.

3. By an Application in a Case filed 27 November 2015, the wife sought procedural orders which have been addressed by the Consent Orders referred to above, and further orders.

4. Firstly, the wife sought an order pursuant to s 117 and s 80(1)(h) of the Family Law Act 1975 (Cth) (“the Act”) for the payment of costs in the sum of $57,000.

5. Secondly the wife sought spousal maintenance of $700 per week.

6. Both applications were opposed by the husband.

SPOUSAL MAINTENANCE

1. The wife relied upon a Financial Statement sworn 26 November 2015 and an affidavit in support of that application sworn 26 November 2015.

2. Insofar as the wife sought to rely on earlier affidavits filed in the proceedings, the Family Law Rules 2004 (Cth) (“the Rules”) preclude her from so doing. However, she was permitted to rely on an updating affidavit sworn on 2 December 2015.

3. The wife and the husband commenced living together in April 2008 and separated in about May 2013. They were divorced on 14 July 2015.

4. There is a dispute as to the wife’s contributions during the marriage. The wife asserts that she worked in the husband’s accommodation business. He disputes the extent of her contribution. That issue does not need to be resolved here.

5. After separation, the husband gave the wife $10,000. She worked intermittently, running a market stall. It is her evidence that she has now used all of her available funds and has no ability to buy stock and therefore no ability to earn income from her stall. She therefore has no source of income and asserts that she is unable to support herself and meets the threshold test imposed by s 72 of the Act.

6. The husband disputes that assertion and submits that the wife has not been frank in disclosing her income.

7. The Orders made on 21 September 2015 provided for each party to give discovery, verified by affidavit, according to the Rules. The wife provided an affidavit of documents within the required period of 21 days. The husband has not looked at the wife’s documents, despite having the opportunity to do so.

8. The husband has not filed an affidavit of documents. That fact is relevant to his assertions as to his current financial position.

9. Both parties relied upon a joint balance sheet filed on 24 August 2015. That document shows the wife as the owner of a unit in B Street, Sydney valued at $700,000 with a mortgage of about $560,000 and $67,000 in bank accounts.

10. Since August 2015, the wife has spent $53,650 renovating and furnishing the unit.

11. She deposed that she had attempted to obtain qualifications to sell real estate but had not passed the course because her English was not good enough. She has completed formal education in Country C to the equivalent of Year 10 and has no qualifications for employment.

12. Tendered in the husband’s case was a bank statement, from her discovered documents, showing movements in the wife’s accounts up to 3 September 2015. That statement is consistent with her evidence that she has used the money from her bank accounts both for the renovation and furnishing of the unit and for living expenses.

13. I accept that the wife is unable to support herself.

14. Her expenses are set out in her Financial Statement. The principal expense is a mortgage payment of $444 per week for the wife’s unit at B Street, Sydney. The wife shares her unit with her daughter and claims all of her daughter’s expenses as her own. The wife’s daughter has an income of $450 per week. The wife’s daughter makes no contribution to the expenses.

15. The wife claims Part N expenses of $608.75 per week for herself. Those expenses were not the subject of challenge. I also propose to allow half of the mortgage payment ($222) and half the rates and levies ($57.50) as reasonable expenses of the wife. Thus her reasonable expenses exceed the sum of $700 per week which she seeks.

16. The husband has not given discovery in accordance with the Orders made 21 September 2015. He has not complied with that part of those Orders which would have facilitated the preparation of a valuation report in relation to his business interests. He has not filed an updated Financial Statement.

17. Thus, the Court is left with the joint balance sheet filed on 24 August 2015 and the husband’s Financial Statement sworn 2 April 2014 to determine his ability to pay spousal maintenance.

18. In his Financial Statement the husband deposed to a weekly income of $1,333 and expenses of $605. Those expenses are tax of $250, credit card repayments of $275 and storage fees of $80. The husband gave no information as to his Part N expenses. He discloses no expense for rent or a residential mortgage.

19. The notes to the Financial Statement indicate that the husband’s self-managed superannuation fund had cash of $62,000. The husband was born in 1942 and is thus of an age where he has access to his superannuation.

20. In the joint balance sheet the husband asserts that he has property totalling $2,732,912 and debts of $1,253,000 (including credit card debts of $24,000). Thus, the husband asserts that he has net assets of $1,479,912. In addition the husband has superannuation he values at $815,000 net. This value is some $200,000 more than the value the husband deposed in his Financial Statement in April 2014.

21. The income received by the husband of $1,333 is described as rent from the Brumage Family Trust. Presumably, the husband has a capacity also to draw income from his self-managed superannuation fund if he chooses to do so.

22. I am satisfied that the husband has the ability to pay the amount of maintenance which the wife seeks.

COSTS

1. The wife seeks an order for the payment of $57,000. She relies specifically on the provisions of ss 117 and 80(1)(h) of the Act.

2. In her affidavit sworn 26 November 2015, the wife deposed that she has outstanding building expenses of $26,871, which expenses are itemised. In submissions, the solicitor for the wife said that the wife has a need of funds in a lump sum which relates both to her living expenses and to her legal costs. Insofar as the wife seeks an order pursuant to s 117 of the Act, that application must be confined to legal costs and her living expenses could not be considered.

3. She deposed to the need to obtain valuations of the interests of the husband in the D Town Motel and the E Town Motel. Orders have been made which provide that, in the first instance, the husband pay the costs of those valuations so no expense will be incurred by the wife.

4. The wife has unpaid legal fees of $5,931 and unbilled fees of $10,000 in relation to these proceedings. She has an unpaid bill of $4,298 in respect of earlier work.

5. The solicitor’s fee agreement is attached to the wife’s affidavit. He reserves the right to cease acting for the wife if his fees remain unpaid. There is no evidence that he has sought to exercise that right. The solicitor is also entitled to charge interest on unpaid fees.

6. The principles to be applied are set out at s 117(2A) of the Act as follows:

   FAMILY LAW ACT 1975 - SECT 117

   Costs

   (1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.

   (2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.

   (2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a) the financial circumstances of each of the parties to the proceedings;

   (b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g) such other matters as the court considers relevant.

7. The relative financial circumstances of the parties have been considered in part in relation to the wife’s application for spousal maintenance. However, the husband contends that, in addition to her property in Australia, the wife owns two apartments in Country C. The wife contends that she has no beneficial interest in those properties or, in the alternate, that they have no realisable value to her. There is no evidence before the Court of the purchase price of those apartments in 1997 and 2000 respectively or of their current value. Thus it is not possible to gauge with any accuracy the disparity in the parties’ respective financial positions. That is an issue that cannot be determined until the final hearing.

8. The husband has not complied with his obligations imposed by the Orders of 21 September 2015 in that he has not filed an affidavit of documents and has not complied with his obligations in respect of the appointment of single experts. The latter deficiency has been attended to by the Orders made on 8 December 2015. The former has not.

9. The proceedings before the Court have been necessitated in part only, by the husband’s failure to comply with those Orders. The applications for spousal maintenance and the application for costs are not necessitated by the husband’s non-compliance.  

10. The balance of the provisions are not relevant here.

11. I am not satisfied that the alleged disparity in financial circumstances and the husband’s failure to comply with the Orders of 21 September 2015 justify making an order for costs pursuant to s 117 in the amount of $57,000.

12. In oral submissions, the solicitor for the wife sought to make the wife’s application for a lump sum payment of $57,000, in the alternate, by way of an application for an interim property settlement order pursuant to s 80(1)(h) of the Act. This section provides that the Court has a general power to “make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order”. Whilst the amount sought by the wife is a fairly insignificant portion of the net asset pool of $2,799,794 contended by the husband, as outlined by their Honours Boland and O’Ryan JJ in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”) at paragraph 139, “in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.” The husband’s substantive application is for an order that the wife receive substantially less than she claims by way of interim distribution. In circumstances where the marriage was of a relatively short duration and where there are significant issues of fact in dispute between the parties, including issues surrounding the extent of the wife’s contribution and the financial positions of both parties, I do not consider it appropriate to make an Order requiring a further lump sum payment to be made by the husband in addition to the spousal maintenance order I have made in these proceedings.

13. The wife’s application for the payment by the husband to her of $57,000 pursuant to ss 117 and 80(1)(h) of the Act will be dismissed.

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 11 December 2015.

Associate:

Date:  11/12/2015