Hilliard & Hilliard

[2016] FamCA 245

FAMILY COURT OF AUSTRALIA

HILLIARD & HILLIARD AND ANOR [2016] FamCA 245

FAMILY LAW – URGENT SPOUSAL MAINTENANCE – wife’s application for urgent spousal maintenance pending contested interim spousal maintenance hearing – where wife has established an immediate need for financial assistance pursuant to s 77 – where the husband has capacity to pay – order for husband to pay urgent spousal maintenance and continue to pay rent for the benefit of the wife pending contested hearing – wife’s application for urgent spousal maintenance granted.

FAMILY LAW – PRACTICE AND PROCEDURE – JOINDER – wife’s application to join the husband’s family company to the matrimonial property proceedings between the husband and the wife – where the company is the trustee of a Unit Trust – where the husband is a director of the company and has a one third interest in the Unit Trust – where husband alleges the Unit Trust is the registered proprietor of the property that the parties resided in during the marriage and where the wife and child continue to reside – no evidence at this stage of proceedings that the company (as distinct from the Unit Trust) may be directly affected by an issue in the case such as to require the company to be joined under Rule 6.02(1) – insufficient evidence to warrant joinder – wife’s application for joinder refused.

FAMILY LAW – INJUNCTION – wife’s application to restrain the husband’s family company from selling or otherwise disposing of property – where the company is the trustee of a Unit Trust – where the husband is a director of the company and has a one third interest in the Unit Trust – where husband alleges the Unit Trust is the registered proprietor of the property – where there is no evidence that the company owns the property – where the nature of the husband’s interest in the property is inevitably linked with the interests of other unit holders in the Unit Trust – where there is no evidence of the identity of or notice to other unit holders in the Unit Trust – injunction on company not justified in the circumstances – wife’s application for injunction refused.

FAMILY LAW – PROPERTY – wife’s application to retain possession of motor vehicle driven by her but registered in the husband’s name – application granted.

Family Law Act 1975 (Cth), ss 72, 77, 79, 80, 90AF(2), 114 and 117
Family Law Rules 2004 (Cth), rr 6.02 and 6.03

Chapman & Chapman (1979) FLC 90-671

APPLICANT: Ms Hilliard

RESPONDENT: Mr Hilliard

OTHER PARTY: B Pty Ltd

FILE NUMBER: MLC 11117 of 2015

DATE DELIVERED: 18 April 2016

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Thornton J

HEARING DATE: 6 April 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Davis

SOLICITOR FOR THE APPLICANT: Beswick Foulkes Family Law

THE RESPONDENT: In person

COUNSEL FOR THE OTHER PARTY: Ms Swann

SOLICITOR FOR THE OTHER PARTY: Unknown

Orders pending further order

1. That the wife’s application to join the company B Pty Ltd (“the company”) to the proceedings be refused.

2. That the wife’s application that the company be restrained by injunction from selling or otherwise disposing of the property situate and known as C Street, Suburb D, more particularly described in Certificate of Title volume … folio … (“the Suburb D property”) be refused.

3. That paragraphs 2 and 3 of the wife’s Application in a Case filed 8 March 2016 be otherwise dismissed.

4. That the motor vehicle registered in the name of the husband remain in the wife’s possession and that she have the sole and exclusive use of the vehicle.

5. That the husband pay urgent spousal maintenance of $250 per week to the wife from 6 April 2016 until the determination of the proceedings listed before the Senior Registrar on 29 June 2016. 

6. The urgent spousal maintenance order is made on the assumption that the husband continues to pay rent of $403 weekly on the Suburb D property for the benefit of the wife.  In the event that the husband ceases to pay that rent for the benefit of the wife then the husband is to pay to the wife urgent spousal maintenance of $653 per week.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hilliard & Hilliard 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 MELBOURNE

FILE NUMBER: MLC 11117 of 2015

Ms Hilliard

Applicant

And

Mr Hilliard

Respondent

And

B Pty Ltd
Other Party

REASONS FOR JUDGMENT

1. The applicant wife brings an Application in a Case in the Judicial Duty List seeking the following:

   1.   That all times be abridged to permit this matter to be heard as soon as the business of this Honourable Court permit;

   2.   That the company, B Pty Ltd, be joined to the proceedings;

   3.   That the company be restrained by injunction from selling or otherwise disposing of the property situate and known as C Street, Suburb D, more particularly described in Certificate of Title volume … folio …;

   4.   In addition to his obligation to pay child support, that the Husband pay to the Wife by way of spousal maintenance the sum of $400 per week, backdated to the 11 February 2016;

   5.   That the Husband continue to pay all expenses including, but not limited to:-

   o   Gas

   o   Electricity

   o   Water rates

   o   Health insurance

   o   Telephone

   o   Cable television and subscriptions

   o   Internet services

   o   House contents insurance

   o   Petrol

   o   Registration and comprehensive insurance for the motor vehicle driven by the Wife

   6.   That the motor vehicle currently driven by the Wife remain in the wife’s possession;

   7.   Such further or other orders as this Honourable Court deems appropriate;

   8.   That the Husband pay the Wife’s costs of this Application on an indemnity basis.

2. The respondent husband opposes the application and sought a defended contested hearing regarding the periodic spousal maintenance and the payment of expenses for the wife where he proposed to be represented by counsel.

3. The parties agreed that paragraphs 4 and 5 of the wife’s Application in a Case filed 8 March 2016 be adjourned for a contested hearing before the Senior Registrar on 29 June 2016 for cross-examination of the parties. 

4. In those circumstances counsel for the wife made an urgent spousal maintenance application for the wife pending that hearing.  This was opposed by the husband.

5. The property at C Street, Suburb D (“the Suburb D property”) is the former matrimonial home where the wife and child of the marriage reside.

6. The husband is the applicant in the substantive property proceeding which was initiated in the Federal Circuit Court on 26 November 2015 and transferred to this Court on 17 February 2016.

7. Counsel for B Pty Ltd, appeared to oppose the application by the wife that the company be joined in the substantive proceedings. 

The issues

1. The issues then remaining for determination are:

   ·   The wife’s application for urgent spousal maintenance;

   ·   The wife’s application that the company be joined to the proceedings;

   ·   The wife’s application that the company be restrained by injunction from selling or otherwise disposing of the Suburb D property;

   ·   The wife’s application that the motor vehicle driven by her remain in her possession.

Documents relied upon by the applicant wife

1. The applicant wife relied upon the following documents:

   ·   Application in a Case filed 8 March 2016;

   ·   Affidavit of the wife filed 8 March 2016;

   ·   Affidavit of the wife filed 4 April 2016;

   ·   Affidavit of Ms E filed 5 April 2016;

   ·   Financial statement of the wife filed 8 January 2016.

Documents relied upon by the respondent husband

1. The respondent husband relied upon the following documents in response to the wife’s application:

   ·Response to an Application in a Case filed 5 April 2016;

   ·Affidavit of the husband filed 5 April 2016;

   ·Financial statement of the husband filed 31 March 2016.

2. The husband purported to rely on the affidavit material filed by the wife.

Interim nature of proceedings

1. It is not possible in the usual course of events to resolve contested matters of facts in interim proceedings. 

2. The parties disagree about a large number of factual matters.  The manner in which an interim hearing is conducted (without the opportunity to observe the parties under cross-examination intended to test the validity of assertion and counter assertion) means that the Court is unable to reach definitive conclusions about the issues in dispute.

3. The following facts do not appear to be in dispute:

   ·The parties were married in 2005 and separated on 22 September 2015.  There is one child of the marriage aged 8 years.  Since 2004, the parties lived at the former matrimonial home at C Street, Suburb D. 

   ·The child resides with the wife at the former matrimonial home and does not spend time with the husband.  The husband left the former matrimonial home at separation and resides at a property at F Street, Suburb G (“the Suburb G property”) where he conducts his business.

   ·The husband has a 16 year old child from a previous relationship for whom he pays child support.  

   ·The business conducted by the husband is in sales and marketing for B Pty Ltd.

   ·The registered proprietor of the former matrimonial home and the Suburb G property is the B Group Holdings Unit Trust (“the Unit Trust”).

   ·The husband owns 10 out of the 30 total units in the Unit Trust.

   ·B Pty Ltd is a company which acts as trustee of the Unit Trust.  Annexure A of the husband’s affidavit is an ASIC current company extract dated 4 April 2016.  This document lists the husband, his brother and Mr H as the directors of B Pty Ltd and lists the husband and his brother as having 10 ordinary shares each and the husband’s father as holding 60 ordinary shares and his mother as holding 20 ordinary shares.  The current directors of the company are listed as Mr H, the brother of the husband and the husband.

   ·The Unit Trust borrowed money from the company to fund the purchase of the Suburb D property.  Doing the best I can on the untested evidence, this occurred in late 2005 or early 2006 (the wife’s affidavit states the Suburb D property was purchased in November 2005 and husband’s Annexure C refers to a lease of that property from 1 January 2006).

   ·The husband was paying to the wife $350 weekly as informal financial support for the wife and child until he commenced paying child support after being assessed by the Child Support Assessment Agency. 

   ·Since separation the husband also paid utilities, rent and other living expenses for the wife and child until he was assessed to pay child support.

   ·The husband ceased to pay for the utilities on behalf of the wife and child after he was assessed to pay child support.

   ·The husband purported to give notice to the wife to vacate the Suburb D property so that the property could be sold by the registered proprietor.

   ·The husband continues to pay the rent of $403 per week for the Suburb D property to the registered proprietor.

   ·The motor vehicle registered in the husband’s name was driven by the wife during the marriage.  The vehicle is in the possession of the wife and is currently driven by her.

Joinder and injunction on the company

1. The parties are in dispute about the Suburb D property.

2. In her affidavit filed 8 March 2016, the wife deposes to the husband being a director and secretary and shareholder of the company.  She asserts that the husband has been acting as the financial controller of the company for many years.

3. The wife then deposes that she does not know anything about the formal structure of B Pty Ltd or anything about its financial circumstances as the husband has failed to produce any financial documents.[1]

   [1] Paragraph 5 of the wife’s affidavit filed 8 March 2016

4. The wife at paragraph 6 of her affidavit deposes that the Suburb D property is the former matrimonial home which was purchased in November 2005 for $570,000.  She deposes that the parties rented that property from July 2004 and that it was rented and subsequently purchased with the intention that it was the parties’ matrimonial home.

5. The wife deposes that on 18 September 2015 she received an email from the husband advising her that the company had given notice to vacate the Suburb D property by the end of October.  Annexed to the affidavit of the wife filed 8 March 2015 is the email to the wife from the husband which provides:

   Sorry there is no good time to move house but the time has unfortunately come for us to move.  [B] will put the house on the market for sale in the next month so we both need to look and find an alternative place to live by the end of October.

   The email goes on to provide that the parties are “technically on a month-to-month lease with [B]” and that B is “herewith giving us notice to vacate by the end of October, 2015”.  The wife deposes that this was received four days before the husband left the matrimonial home.

6. Counsel for the wife submitted that pursuant to rule 6.02 of the Family Law Rules 2004 (Cth) (“the Rules”) there is no discretion not to join or notify a third-party of a potential claim. He referred to the case of Bergman but did not provide a citation or tender a copy of that case. He submitted that the paramount reason for rule 6.02 is to notify a third party at the earliest possible convenient time that a potential claim is going to be made against them. He went on to say that as soon as a party to a proceeding brought under the Family Law Act 1975 (Cth) advises the Court that they intend to make a claim against a company asset that is not an asset of the parties, the Court is obliged to join the company. He further submitted that it is then open to the Court to make a direction that an Amended Application be filed setting out the basis upon which the claim is made on the company.

7. He submitted that the husband has a 10 per cent legal interest in the former matrimonial home as a shareholder of the company and that the wife proposes to make a claim that she and the husband own 100 per cent of the former matrimonial home.  He submitted that the application to join the company is made because the wife is unaware of the circumstances of that company and she seeks to investigate the husband’s interest in it by way of discovery.  He proposed filing an amended application on behalf the wife setting out further detail of the basis of the claim upon the company following discovery.

8. Counsel for the wife submitted that there was no requirement on the wife to provide any undertaking as to damages for the injunction on the company having regard to the authorities in the 1990’s and that it would be an unfair burden on the wife.  He submitted that the joinder of the company was a “flag type” application with potential for relief claimed.  He relied upon the wife’s evidence of the utilities being cut off as an indication of the need for an injunction.

9. Regarding the company he foreshadowed discovery, inspection of documents and the issue of subpoenae.

10. The husband deposes that B Pty Ltd is a company which was incorporated by his parents on 25 March 1977 and that he and his brother became employed by that company and began working in the business.  He deposes that he acquired a 10 per cent shareholding in that company in 1985 and that his brother also has a 10 per cent shareholding in the company.  He deposes that his parents retain 80 per cent of that company.  The husband also deposes that B Pty Ltd acts as the trustee of the B Group Holdings Unit Trust, another entity originally established by his parents.  He deposes at paragraphs 10-12 of his affidavit as follows:

    10.Latterly, I have derivatively acquired a 1/3^rd interest in the units of the Unit Trust, which I hold through a company called [I Pty Ltd] as trustee for the [J Trust].  The [J Trust] owns 10 out of the total 30 units in the said Unit Trust.

    11.I am not the “financial controller” of [B].  That task is undertaken in Sydney at head office by [Mr H], a director and the company accountant of [B].

    12.I mainly handle the sale and marketing of [B] predominantly in Victoria and in some other states from time to time.

11. Annexure B to the husband’s affidavit is the financial statements for the year ended 30 June 2014 for B Pty Ltd.  The profit and loss statement for 2014 records a profit from ordinary activities before income tax of $213,627.  The balance sheet as at 30 June 2014 records net assets of $1,313,962. 

12. Annexure C to the husband’s affidavit is a letter from B Group Holdings Unit Trust dated 15 January 2006 to the husband confirming a 12 month lease/rental arrangement regarding the Suburb D property.  The letter is signed by the accountant for B Group Holdings Unit Trust Mr H.  It is also signed by the husband as tenant.

13. The husband maintains that the Suburb D property was purchased by the Unit Trust as an investment proposed by his father and that the parties continued to live in the property as tenants paying rent to the Unit Trust.  The husband maintains that:

    19.At no time was there ever any discussion between the Wife and I of purchasing the property to, in essence, be our matrimonial home. 

    20.Neither the Wife or I contributed towards the acquisition of the [Suburb D] property via the Unit Trust.[2]

    [2] Paragraphs 19-20 of the husband’s affidavit filed 5 April 2016

14. The husband maintains that he became the tenant of the Suburb D property and commenced paying an agreed monthly rental to B Pty Ltd as trustee for the Unit Trust.  He relies on Annexure C to his affidavit.  The husband claims that the lease is on a month-to-month basis and that the Suburb D property was never purchased by B Group Holding Pty Ltd with the intention of it being the matrimonial home.  He deposes that the wife has never made any contribution to the maintenance, preservation or any improvement of the Suburb D property “other than cleaning and infrequent tenant decorating”.[3]

    [3] Paragraph 23 of the husband’s affidavit filed 5 April 2016

15. Counsel for the wife submitted that an injunction on the company dealing with the former matrimonial home is necessary to preserve a matrimonial asset. He relied upon the husband’s proposal to sell the Suburb D property. 

16. The husband submitted that there was “no valid claim on the company” and there was no evidence that the former matrimonial home was an asset of the parties.  He submitted that any restriction on the company disposing of one of the assets which it owns is an inappropriate restriction on the company making profits on an investment property.

17. Counsel for the company submitted that “the wife’s case was not pleaded fully” and that there is no evidence of an express declaration of trust.  She referred to paragraphs 6 and 7 of the wife’s affidavit and submitted that this was the  highest point where the wife claims that the former matrimonial home was rented and then purchased with the intention that “it was our matrimonial home”.  She submitted that there was evidence to the contrary referring to Annexure C to the husband’s affidavit which is the letter about the lease arrangements.

18. Counsel for the company submitted that on the basis of paragraph 10 of the husband’s affidavit, the Unit Trust will form part of the property of the marriage but only one third of the Unit Trust. She referred to the fact that there was no disclosure by the wife regarding her financial contribution and that it was inappropriate for the Court to find it proper to join the company.

19. Regarding any injunction she argued that there was no undertaking as to damages proposed by the wife and that the wife had no arguable case.  She stated that “the company has not proceeded with the notice to vacate because the husband is paying the rent”. She submitted that the wife has been given a reasonable opportunity to vacate the property and the company should be able to deal with the property as it sees fit.

Conclusion: Joinder

1. Rule 6.02(1) of the Rules provides that a person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case. This rule does not obviate the need to comply with rule 6.03 which refers to the requirements of adding a party.

2. Rule 6.03 of the Rules provides that a party may add another party after a case has started by amending the application to add the name of the party. In those circumstances a party must file an affidavit setting out the facts relied on to support the addition of the new party, including a statement of the new party’s relationship (if any) to the other parties; and serve on the new party, a copy of the application, amended application, affidavit and any other relevant document filed in the case.

3. There is no evidence of the value of the husband’s interest in the Unit Trust which owns the Suburb D and the Suburb G properties.  On the husband’s evidence he owns 10 units of the total 30 units.  There is no evidence of the identity of the owners of the 20 units in that Unit Trust. The husband and counsel for the company acknowledge that the husband has a one third interest in the Unit Trust.  An issue in the trial will be the determination of the property of the marriage.  It is the wife’s case that the Suburb D property was purchased as the matrimonial home during the marriage and the parties resided in that property during the moderately long marriage.  The husband’s case is that the wife has no interest in that property and that she has only made limited contributions to the Suburb D property by way of cleaning and ‘infrequent tenant decorating’.  

4. It is the husband’s evidence that the company is the trustee of the Unit Trust.  There is no reason why the wife should be precluded from investigating the financial circumstances of the husband’s interest in the Unit Trust of which the company is trustee in circumstances where she claims that the Suburb D property was purchased as the matrimonial home during the marriage.

5. The company does not appear to be the registered proprietor of the Suburb D property. There is nothing to preclude the wife from preparing her case to add a party in accordance with the Rules and from also investigating the husband’s interest in the Unit Trust. At this stage of the proceedings, there is no evidence that the company may be directly affected by an issue in the case as distinct from the Unit Trust such as to require the company to be included as a party. Accordingly I propose to refuse the wife’s application to join the company.

Conclusion: Injunction on Company

1. There is a real paucity of evidence here but no evidence that the company owns the Suburb D property.

2. An injunction on the company cannot be justified in circumstances where it does not own the Suburb D property.

3. The evidence is not clear as to the intentions of the Unit Trust for the Suburb D property.  There is no evidence of any valid notice to the husband to vacate the Suburb D property. 

4. There is no evidence of the identity of the other unit holders in the Unit Trust which on the husband’s evidence is the registered proprietor of the Suburb D property.

5. On the material before me, the husband has a one third interest in the Suburb D property by virtue of his unit holding. That interest is property of a party to the marriage. Under section 114(1)(e) of the Act the Court has a discretionary power to make an injunction in relation to the property of a party to the marriage as it considers proper.

6. Although the Court has the power to order an injunction under sections 114 and 90AF(2) of the Act, in relation to the husband’s interest in the Suburb D property, the nature of that interest here is inevitably linked with the interests of the other unit holders in the Unit Trust which owns the Suburb D property.

7. Having regard to the limited evidence available and the lack of evidence of any identification or notice to the other unit holders in the Unit Trust, it is not appropriate or proper to make an order restraining the company as trustee for the Unit Trust from dealing with the Suburb D property.

The wife’s financial circumstances

1. The wife deposes that since separation and until 11 February 2016 the husband had paid all expenses on her behalf and had previously deposited the sum of $350 into her account on a weekly basis.  She deposed that he labelled these funds “Child Support”.  The wife deposes that since 11 February 2016 the husband failed to continue these payments and the husband’s solicitors forwarded a letter on 24 February 2016 stating that the husband would no longer pay the expenses relating to the former matrimonial home or health insurance which he had previously paid. 

2. The solicitors for the husband notified the wife that because he was assessed to pay child support by the Child Support Agency that the husband was providing notice that from 1 March 2016 he would no longer contribute to the payment of utilities and/or services consumed or used by the wife at the Suburb D property or elsewhere.  The solicitors for the husband notified the wife that forthwith she should arrange to have all such utilities and services transferred to an account in her name, failing which there would be a risk that the services would be terminated or disconnected.

3. It is the untested evidence of the wife and the wife’s friend Ms E that the electricity and gas to the Suburb D property was disconnected in circumstances where the service providers had given no notice to the wife.  The wife’s friend assisted the wife in reconnecting the utilities after a 48-hour delay.  The wife’s friend registered the utilities in her name and has assisted the wife in paying electricity bills and the payment of mechanical repairs to the wife’s car so that the wife could drive the parties’ child to school.  The wife’s friend deposes to having her husband approach the husband to reimburse her for the payment of the mechanical repairs to the car which were reimbursed the following day.  The wife’s friend also deposes to having given the wife cash and paid for essential family expenses such as petrol, groceries and meals on behalf of the wife over the past six months.

4. The wife deposes to a deteriorating financial position whereby she has had to resort to selling jewellery and other items in order to make ends meet.  She deposes to selling inessential household appliances and attending Cash Converters.[4]

   [4] Paragraph 20 of the wife’s affidavit filed 8 March 2016

5. The wife deposes to being a baker and the owner/operator of a small business which makes biscuits and which she operates from the Suburb D property.  She earns approximately $346 per week from that business and in summer her sales are minimal.  She deposes to “struggling to put food on the table”.  She deposes to relying on credit cards to make ends meet and currently having a credit card debt of approximately $25,000 which she is unable to service.  She deposes that her financial situation is extremely precarious because she will not be able to support herself and the child unless the husband pays the expenses that he was previously paying.  She deposes to being dependent upon the motor vehicle which is her only means of support.  The wife deposes to being solely responsible for the education expenses for the child who attends K School and to paying for her extra-curricular activities which she currently cannot afford to meet.

6. The wife’s financial statement was sworn on 7 January 2016 before the husband ceased the voluntary payments of $350 per week.  The wife’s financial statement deposes to an estimated total average weekly income of $696 and total personal expenditure of $1,268. She records that other expenses paid by the husband for her benefit are “not known” but refers to utilities, rates, car expenses and insurances. Her weekly income at that time was comprised of voluntary child support of $300 and a voluntary payment from the husband of $50 for her benefit and an estimated income of $346 from her business. The wife deposes to having no funds in the bank or any other property.

7. The wife in her financial statement records a liability of $24,000 for credit card debt. She records no financial resources.

The husband’s financial circumstances

1. The husband’s financial statement filed 31 March 2016 is incomplete. There is no evidence as to Part N which relates to average weekly expenses.  The husband deposes to weekly income estimated at $3,560 and $3,221 of this amount is paid to the husband in dividends.  There is no evidence as to the source of those dividends in the financial statement. 

2. The husband deposes to an estimated total weekly personal expenditure of $3,566.  This figure includes a payment of $403 weekly for the rent on the Suburb D property paid to B Group Holdings.  In submissions, the husband stated that he proposed to continue to pay this amount.  There is no evidence that the husband pays rent for his accommodation and there is no evidence of any encumbrance on the Suburb G property which is also owned by the Unit Trust.

3. Included in the husband’s weekly personal expenditure are credit card payments of $300 and $375 weekly and an amount of $367 per week as a total of all other expenditure which is unexplained.  The husband’s financial statement also deposes to part of the weekly personal expenditure as including $959 as personal expenses he pays for the benefit of others being the parties’ child, a child from a previous marriage and ‘Mr L Hilliard’ (Mr L Hilliard was not explained in the husband’s material but the wife deposes in her affidavit filed 8 January 2016 at paragraph 4 that Mr L Hilliard is the husband’s 20 year old son from his first marriage and the brother of 16 year old M).

4. In the husband’s financial statement there is a reference to a liability of ‘Unpaid utility expenses’ estimated at $2,818 which is not explained in evidence.  The husband deposes to credit card liabilities amounting to a total of $3,062. 

5. The husband deposes to funds in bank accounts totalling $4,181.

6. Counsel for the wife tendered two bank statements (Exhibit B) which were provided to him by the husband at the hearing.  The husband did not dispute that these were his current bank balances.  The bank statements disclose two bank statements: (1) “CMCA Instalment Acct” closing balance $19,375.21 and (2) “Access Pub” closing balance $977.95.

Urgent spousal maintenance

1. Section 77 of the Family Law Act 1975 (Cth) (“the Act”) provides for an application for urgent spousal maintenance. It is usually a summary hearing allowing for a wide discretion without the evidentiary requirements of an interim spousal maintenance application under sections 72 and 80 or a final application under section 72. An order made under section 77 is of a temporary nature for a defined period. It is intended to deal with urgent situations usually without all of the evidentiary material having been filed and where the evidence is untested.

2. The applicant needs to establish a requirement to meet daily needs on an urgent basis, pending a more detailed hearing where the financial circumstances of the parties can be examined and all the issues ventilated. 

3. In this case the parties propose to litigate a contested interim spousal maintenance hearing with cross-examination of the parties before the Senior Registrar on 29 June 2016.

4. Counsel for the wife sought an urgent application for spousal maintenance pending that hearing.  This was opposed by the husband on the basis that he does not have the capacity to pay any urgent spousal maintenance and he proposes to be represented by counsel to cross-examine the wife as to her financial circumstances.

5. There are many issues between the parties which cannot be resolved in this interim hearing.  Included is the issue about the husband’s accommodation.  In submissions, counsel for the wife claimed that the husband has modified the top floor of his office building into an apartment where he stayed with his daughter from a previous relationship at times during the marriage.  The husband agreed that he resided at the office building with his daughter fortnightly during the marriage but disputed in submissions that the building had been modified and relied upon his affidavit evidence that he sleeps on a couch in his office.  

6. The evidence here is untested and counsel for the wife submitted that the husband had overstated his income tax in his financial statement.  I am not in position to make any findings about this.

7. The failure of the husband to complete his financial statement gives me no confidence that it is accurate.  He refers to minimum weekly payments of $375 to Amex and $300 to ANZ for a Visa card but his credit card liabilities amount to a total of $3,062.  These would not appear to be minimum payments given the small amount of the debt.  The husband has the capacity to reduce the payments in order to pay urgent spousal maintenance.

8. In submissions, but not mentioned in evidence the husband also referred to a part time job which he has had for ten years.  In his financial statement, the husband deposes to being employed full-time by the company and his occupation is recorded as ‘Company director – sales person’.  He deposes to an amount of $250 weekly as salary in his financial statement but in submissions stated that this is income received from his part time job.

9. The husband has continued to pay the rent on the Suburb D property of $403 weekly and this is already included in his financial statement as an expense. There is no evidence that he has any expense for his own accommodation.  The husband’s case about the payment of the rent was unclear but he proposed that the Suburb D property be sold.  The husband continues to pay rent on that property.  It is appropriate that he continue to pay the rent on the Suburb D property having regard to the disparity of income between the parties. 

Conclusion: Urgent Spousal Maintenance

1. I am satisfied that the wife is in immediate need of financial assistance and that it is not practicable in the circumstances to determine what order, if any, should be made on a contested interim hearing with cross-examination of the parties. I am satisfied that the wife has a right to maintenance under section 72(1) of the Act. I am satisfied that is it is reasonable to make an order for urgent spousal maintenance.

2. The wife’s weekly income fluctuates but is unreliable.  On the basis of her untested financial statement, her weekly income was $696 when the husband was voluntarily paying $350 per week for her and the child.  Without child support her weekly income is estimated as $346. The wife deposes to necessary weekly commitments of a modest amount of $293.  Since the wife filed her Financial Statement she now has the additional expenses of utilities to meet.   

3. In terms of liabilities, the wife has minimum payments on credit cards of $200 per week which she cannot meet.  Her total liability for credit cards is now $25,000 on the basis of her affidavit. The wife has no assets.

4. The husband has unexplained weekly expenditure and has not provided any details of his average weekly expenses.

5. The husband has the capacity from income to pay urgent spousal maintenance on the basis of the untested material before me. There is also evidence of the husband having an amount of $20,353 in his bank accounts (Exhibit B). On the limited evidence before me I am satisfied that the husband could meet an order pursuant to section 77 of the Act until the contested hearing before the Senior Registrar.

6. The financial circumstances of the parties will be revisited at the hearing on 29 June 2016.

7. Just because the application is for urgent maintenance does not mean that the order should be a “bread line” order (Chapman & Chapman (1979) FLC 90-671).

8. Doing the best I can on the untested evidence, I propose to make an order that the husband pay urgent spousal maintenance to the wife in the sum of $250 per week and that he continue to pay the rent on the Suburb D property of $403 per week. These payments are to be made from the date of this hearing being 16 April 2016.  In the event that the husband ceases to pay that rent for the benefit of the wife, then the husband is to pay to the wife urgent spousal maintenance of $653 per week until the determination of the hearing before the Senior Registrar on 29 June 2016.

Retention of the motor vehicle by the wife

1. Counsel for the wife argued that this vehicle was driven by the wife throughout the relationship and the status quo should be maintained.  He submitted that it was necessary to make the order and a proper exercise of discretion to protect a matrimonial asset from being sold.

2. The husband proposed in submissions that the vehicle driven by the wife be returned to him because it is registered in his name. He also made submissions about his inability to afford expenditure on behalf the wife. From this I infer that the husband proposes to remove the vehicle currently driven by the wife. In his financial statement the husband deposes to paying $31 per week to the wife for that vehicle.  In submissions he explained that this was for registration and insurance.

3. It is clear that the wife needs a vehicle for the transport of the child and that the motor vehicle is the same vehicle that she drove during the marriage.  The husband has paid the registration and insurance for that vehicle and it is registered in his name. 

4. There was no evidence from the husband about that vehicle in his affidavit other than a reference to the motor vehicle at paragraph 43 of the husband’s affidavit filed 5 April 2016 whereby he states that his income is expended on various things, including “the maintenance of a motor vehicle for the Wife”.  In submissions he stated that he could not afford the costs of the vehicle.

5. Although there has not been a testing of the evidence, the husband did not dispute that the wife had been driving the vehicle during the course of the marriage.  It would appear that the established pattern of use of the property of the parties was that the wife drove the vehicle registered in the name of the husband.  It is appropriate that this arrangement continue pending the determination of the alteration of the parties’ property.

6. I propose to make an interim order that the Hyundai motor vehicle registered in the husband’s name remain in the possession of the wife and that the wife is entitled to the sole and exclusive use of that vehicle pending further order.

7. I am satisfied that it is proper to make the order and that I have the power to make the order under section 114(1)(e) of the Act.

I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 18 April 2016.

Associate: 

Date:  18 April 2016