IMBARDELLI & IMBARDELLI

[2018] FamCA 352

FAMILY COURT OF AUSTRALIA

IMBARDELLI & IMBARDELLI [2018] FamCA 352

FAMILY LAW – SPOUSAL MAINTENANCE – Interim – where it is conceded the wife has a need- whether the husband has the capacity to pay – where the husband has access to property and financial resources in addition to income.

Family Law Act 1975 (Cth)

Hall & Hall [2016] HCA 23
Maroney & Maroney [2009] FamCAFC 45

APPLICANT: Ms Imbardelli

RESPONDENT: Mr Imbardelli

FILE NUMBER: MLC 8876 of 2009

DATE DELIVERED: 22 May 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: 19, 20, 23 April 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Dellidis

SOLICITOR FOR THE APPLICANT: AMT Legal

COUNSEL FOR THE RESPONDENT: Mr Williams

SOLICITOR FOR THE RESPONDENT: Pearsons Lawyers

Order Until Further Order

1. The husband pay to the wife for her maintenance the sum of $1,000 per week to be payable monthly in advance in the sum of $4,333.33 by direct debit to an account nominated by the wife the first payment to be made on 29 May 2018 and monthly thereafter.

2. The wife’s application for interim spousal maintenance be otherwise dismissed and removed from the list of cases awaiting hearing.   

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Imbardelli & Imbardelli has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8876  of 2009

Ms Imbardelli

Applicant

And

Mr Imbardelli

Respondent

REASONS FOR JUDGMENT

Background 

1. The substantive application in this case is the wife’s Amended Initiating Application filed 1 September 2017 in which she seeks, inter alia, to set aside final property orders made by consent on 30 June 2010 by Federal Magistrate Hughes pursuant to s 79A of the Family Law Act 1975 (Cth) (“the Act”) and parenting orders. In that application the wife also sought interim orders that the husband pay her periodic spousal maintenance in the sum of $5,000 per month.

2. On 11 December 2017 I made orders, inter alia, requiring the wife to vacate the property at B Street, Suburb C (“B Street”) by 15 January 2018 and ordered that the husband pay the wife the sum of $5,000 before 15 December 2017 by way of lump sum spousal maintenance to assist her to relocate from the property. I otherwise adjourned the further hearing of the wife’s spousal maintenance claim to the Senior Registrar’s Duty List on 18 January 2018.

3. When the matter came on for hearing in the Senior Registrar’s Duty List on 18 January 2018, counsel for the husband sought to cross-examine the wife. However, there being insufficient time for him to do so that day and the substantive application having already been listed for hearing before me on 19 April 2018, the interim application for spousal maintenance was adjourned to that date. Senior Registrar Field also made orders by consent, inter alia, that the husband pay to the wife the sum of $7,000 within 7 days. The husband denied both the necessity for the order or that he had the capacity to make the payment and the wife, whilst accepting the payment, denied its sufficiency. 

4. When the case commenced before me the wife was seeking periodic interim spousal maintenance of $960.00 per week. However in her final address counsel for the wife said that there had been an error in the adding up of the expenses in her Financial Statement, that the figure should read $1,170  and that the amount she was now seeking is $1,028. Although at the commencement of the case, the husband opposed any order for interim spousal maintenance during final addresses, his proposal was that he would pay interim spousal maintenance of $400.00 per week.

5. Although I am not yet in a position to deliver judgement with respect to the substantive application to set aside the final property orders, as I indicated to counsel, I am satisfied that the interim spousal maintenance application requires some priority and I propose to deal separately with that aspect of the case.

Background

1. The husband is 48 years of age. The husband is a company director and he and his brother operate a business under the umbrella of the Imbardelli Family Trust. The husband is in good health.

2. The wife is 46 years of age and has a long history of mental health issues. She is in receipt of disability benefits. In her Financial Statement filed 15 January 2018 the wife deposed to be receiving a disability pension of approximately $420 per week and rental assistance of $65 per week. Although during cross-examination the husband suggested that it was possible that the wife had some savings, he did not suggest that the wife has any other source of income. The husband did not adduce any evidence in support of his assertion that the wife had or may have savings and I am not satisfied that is the case. Although counsel for the husband challenged some of the wife’s expenditure, his case was not that the wife did not have a need but that he did not have the capacity to pay the amount of spousal maintenance she seeks.

3. The parties were married in 2006. It is common ground that they separated in September 2009. The wife’s case is that they reconciled in March 2010 and thereafter lived as husband and wife until their final separation under the one roof in August 2017.  Although the husband agrees that he and the wife lived under the one roof from the time of the wife’s release from hospital in March 2010 until he left the former matrimonial home with the children of the marriage on 20 September 2017 he disputes there being any reconciliation or that they lived as husband and wife at any time during those seven years.  

4. There are three children of the marriage, D born in 2008 (aged 10), E born in 2009 (aged eight) and F born in 2009 (aged eight). The children live primarily with the husband.

Material Relied Upon

1. In her case outline the wife relied upon:

   ·her Amended Initiating Application filed 1 September 2017;

   ·her Affidavit filed 16 February 2018;

   ·her Financial Statement filed 15 January 2018.

2. The husband in his case outline relied upon:

   ·his Response filed 31 August 2017;

   ·his Affidavit filed 16 January 2018;

   ·his Affidavit filed 15 March 2018;

   ·his Affidavit filed 7 September 2017;

   ·his Financial Statement filed 16 January 2018;

   ·Affidavit of Ms G Imbardelli filed 15 March 2018;

   ·Affidavit of Ms H filed 15 March 2018;

   ·Affidavit of Mr I Imbardelli filed 15 March 2018.

3. The documents relied upon by both the husband and wife were relied upon for the purposes of both the substantive application and the application for interim spousal maintenance and to that extent, not all of the affidavits relied upon are relevant to the interim application I must determine. As both the substantive application and the interim application were dealt with in the same hearing, I have read all of the material relied upon by the parties with respect to both issues and have had the benefit of cross-examination of both the husband and his brother and the wife.

Legal Principles

1. In Hall & Hall [2016] HCA 23 the High Court outlined the approach the Court should take in the determination of an application for spousal maintenance as follows:

   [3] …The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That sub-section provides that “[a] party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)”.

   [4] The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That sub-section provides that, “[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part”.

   [5] A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment”. They also include, by virtue of s 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.

2. At paragraph 8, the High Court said with respect to an application for interim spousal maintenance as follows:

   [8] …a court exercising the power to make an interim order under s 74(1) must be satisfied of the threshold requirement in s 72(1) and must have regard to any matter referred to in s 75(2) that is relevant. No doubt, on an application for an interim order “[t]he evidence need not be so extensive and the findings not so precise” as on an application for a final order. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth). A court determining an application for an interim order under s 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it, that the threshold requirement in s 72(1) is met having regard to any relevant matter referred to in s 75(2).

3. This is the approach I propose to adopt in determining the wife’s application for interim spousal maintenance.

Issues

1. In this case there is no dispute that the wife is unable to adequately support herself. In these circumstances the issues to be determined in this case are:

   ·What are the wife’s reasonable needs?

   ·What capacity does the husband have to pay interim spousal maintenance and how much should he be required to pay?

The Wife’s Reasonable Needs

1. In her Financial Statement filed 15 January 2018 the wife identified her weekly needs as follows:

   ·Rent $410

   ·Contents Insurance $5

   ·Food  $170

   ·Household Supplies  $30

   ·Gas  $50

   ·Electricity $50

   ·Telephone $10

   ·Petrol  $90

   ·Fares and parking $10

   ·Clothing and shoes $50

   ·Medical Dental and Optical (not including health insurance)  $100

   ·Pharmaceutical $20

   ·Entertainment/Hobbies  $50

   ·Books and magazines $20

   ·Gifts   $20

   ·Hairdressing and toiletries $25

   ·Sport and Embroidery   $80

2. The wife was cross-examined about why she needed a three bedroom house in circumstances where the children are not presently spending any overnight time with her. However I am satisfied that in circumstances where the wife is seeking orders for the children to live with her or at the very least spend substantial time with her, that it is not unreasonable that she should rent accommodation suitable for both herself and the children.

3. The wife was also briefly cross-examined about her expenditure, in particular, the amount she spent on gas and electricity, medical and dental expenses, petrol and her entertainment and hobbies. On the basis of the wife’s evidence, counsel for the wife amended the wife’s claim allowing $70 per week for gas and electricity, $38 per week for medical and pharmaceutical expenses and $80 per week for her hobbies and sporting activities. Although the wife was cross-examined about the amount she spends on petrol each week, I accept her evidence that the car she is driving, which is a V8, is expensive to run.  

4. The wife also seeks the return of a 4WD vehicle that she had been using prior to the parties’ separation in August 2017. The husband and his brother gave evidence that they had removed the vehicle from the wife’s possession because it was a vehicle owned by the company and because the wife had not been attending to its repair. Even if that is the case, there was no evidence to suggest that the husband or his brother offered to return that vehicle which is now used by employees of the company along with other vehicles, to the wife once it was repaired. Although that is the case I am not satisfied that, in circumstances where the wife has the use of a vehicle, I should in the interim make an order for the return of the 4WD.

5. The wife was a good witness and I accept her evidence with respect to her expenditure subject to those few concessions made on her behalf by her counsel and that she was uncertain as to some of her expenses in circumstances where she had only recently moved into her own accommodation. The fact that she made those concessions does not in my view reflect or cast doubt upon the accuracy of her evidence in relation to her expenditure generally.  Having regard to these matters, I am satisfied that expenditure in the sum of $1,000 per week is in all of the circumstances reasonable.

6. Although the wife is in receipt of a disability support pension and rental assistance these are income tested benefits which the Court must disregard in determining what order should be made for the wife’s support under s 75(3) of the Act. I am satisfied that the wife cannot adequately support herself.

Husband’s evidence

1. The husband was not a good witness. He was both evasive and disingenuous. There was, in my view, a significant degree of artifice in the way in which the husband and his brother gave evidence about the Imbardelli Family Trust, the management of that Trust and the relationship between their personal finances and the Trust. One example was the way in which the husband and his brother attempted to distance the husband from any interest in the B Street property in which he and the wife had lived with the children. They did this by suggesting that the reason the husband had purchased the property at Suburb J was because he did not own a “principal residence”. This was notwithstanding that it was the husband’s own evidence that he had contributed approximately $300,000 to the purchase of B Street. The husband also said that his parents “would have put about $200,000 - $300,000 in it as well” although I note that according to the financial statements for K Pty Ltd, as trustee of the Imbardelli Family Trust as at 30 June 2016, many years after the acquisition of B Street, the beneficiary loan account in the name of the husband’s parents was $27,849. The husband also said that his brother had helped with renovations on another property owned by the husband and that there was an agreement through the family trust that he would be compensated for those contributions, albeit there did not seem to be any record of any monies owed by the Trust to the husband’s brother.

2. The husband repeatedly avoided answering questions on the basis that he did not understand what he described as the “paper trail” and that his accountant would have to answer these questions. I am satisfied that even if the husband and his brother did not understand the detail of the so called “paper trail’ they did understand the Trust structure and relied upon that structure in support of the husband’s case that he did not have the capacity to pay interim spousal maintenance.

3. One example of this was their evidence that the husband had borrowed money from his brother to make the lump sum payment to the wife as ordered and to pay some of his legal costs because he did not have the money to make these payments. However it was clear from the brother’s evidence that he had borrowed the money from the Trust to make these payments on the husband’s behalf. He was unable to provide any explanation as to why he would have borrowed the money rather than the husband and it is difficult to understand in circumstances where as at 30 June 2016, the husband had a loan account, being monies owed to him by the Trust, in excess of $1 million.

4. The husband and his brother’s evidence as to why the Trust drew down on the mortgage secured over the B Street property and advanced those monies to the husband’s brother to purchase an investment property in October 2017, after the husband and wife separated, was also not convincing. Although the husband said that his brother had not had time to obtain his own finance and had therefore drawn down on the loan the Trust had taken out for the purchase of B Street, it was clear from the evidence of his brother that he had no intention, at least in the foreseeable future, of obtaining his own finance or repaying that loan. At the very least, this suggests that the Trust has operated for the benefit of both the husband and his brother, that they have access to the resources of the Trust when they need or wish to and in these circumstances that there is not the separation between the Trust and the husband he would have the Court accept. 

The husband’s capacity to pay spousal maintenance

1. In his Financial Statement the husband deposed to being in receipt of total drawings of $1,500 per week and to having expenses of $3,282 per week.  These expenses include an amount of $1,995 described at paragraph 32 of that form. Unlike the wife, the husband had not completed Part N of that Financial Statement so it is not clear what that figure includes. What is clear is that the husband’s Financial Statement does not give an accurate picture of the husband’s income or expenses. 

2. Although in his Financial Statement the husband deposed to paying $435 per week tax on his income of $1,500 per week, in cross examination he conceded that he receives a net figure of $1,500 per week. The husband also included a figure of $400 per week for rent paid to the Imbardelli Family Trust for the property in which he, the wife and the children lived until January 2018 and where he and the children still live. Although having conceded that he does not make this payment, he referred in cross-examination to there being some adjustment made for that rent.  Although it is reasonable to assume that if an adjustment were made, it would be made against his loan account, the husband’s evidence about this was at best unclear. What is clear is that the figure of $400 per week is not deducted from the $1,500 per week.

3. The husband also gave evidence that he uses his credit card for all of his personal expenditure. However, he ultimately conceded in cross-examination that although his credit card debt was usually paid in full or close thereto each month, not all of the $1,500 per week he receives each week is applied to meet his credit card expenditure. The husband also said that he has been using his savings to meet his personal expenditure and this may explain in part how he has been able to meet those expenses. However I am also satisfied based upon his evidence and that of his brother, that they both have access to drawings from the company in addition to the weekly sum of $1,500. Although the husband did say that he also uses the credit card for business expenditure and that the company then reimburses him for that expenditure, I am satisfied that the payments the company makes for the husband’s credit card are not limited to business expenses that he has paid for using that credit card. How that is then accounted for is unclear. It would have been open to the husband to produce evidence in relation to these matters including financial statements for the financial year ending June 2017. However he did not do so, notwithstanding that these proceedings have been on foot since September 2017. These are matters that will no doubt be dealt with in more detail when the wife’s application for spousal maintenance is listed for a final hearing.

1. The husband’s own evidence is that his expenditure significantly exceeds his disclosed income of $1,500. It was his evidence that he is paying private school fees in excess of $40,000. I have had regard to the fact that the parties both wanted the children to attend a private school and that the husband is solely responsible for the children’s support including the private school fees. If his income were, as he deposed, only $1,500 he would be left with approximately $730 per week to meet all of his other expenses after payment of the private school fees. The overseas holidays, such as the holiday in 2017 at a cost of approximately $25,000 are also not consistent with the income the husband disclosed.

2. Whilst the husband, when faced with cross-examination about these matters, said that he now realised that he has been living beyond his means, that is not consistent with the way in which he and his brother and the Trust appear to have conducted their financial affairs. The husband is the owner of a property in Suburb J which is partially demolished. There was no evidence to suggest that there was any need, let alone any intention on his part to sell this property to relieve financial pressure and help him meet his ongoing expenditure. There was also no evidence to suggest that his brother was intending to repay the $600,000 advanced to him by the Trust, notwithstanding that his evidence demonstrated a capacity to make that repayment. This is notwithstanding it was the husband’s evidence that the reason his brother had borrowed money from the Trust to purchase his investment property was because he had not had time to arrange his own finance. This is significant in circumstances where the husband is owed in excess of $1 million by the Trust and if I were to accept his evidence that reality has hit and he now knows that he has been living beyond his means, an obvious source of funds would be for the husband to draw down on the mortgage over B Street upon his brother having repaid the $600,000 he used to complete the purchase of his investment property. 

Conclusion  

1. Coleman J in Maroney & Maroney [2009] FamCAFC 45 at paragraph 56 stated that

   …The “capacity” to meet an order for interim spousal maintenance is not confined to income. Once a party, such as the wife in this case, establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.

2. I have found that I am satisfied that the wife is unable to adequately support herself and that her expenses are reasonable. Notwithstanding the number of affidavits relied upon by the husband, including the affidavit of his accountant, which, notwithstanding the concessions made by both the husband and his brother, tends to suggest that their only income is the $1,500 per week, and the extensive cross-examination of the husband and his brother, I still do not have a completely clear picture of the husband’s finances. Not only has the husband not, in my view, presented an accurate picture of his finances, the evidence that might have clarified the position is evidence within his possession and/or control. However, although I am not in a position to make precise findings, I am satisfied that the husband earns or has access to funds in excess of the $1,500 he discloses and has access to both capital and assets upon which he could draw or, if necessary, borrow against. As previously referred to, although the financial statements for the trustee for the financial year ending 30 June 2017 have not been completed, based upon the returns for the financial year ending 30 June 2016 the husband had a loan account of $1,196,678. Even if as the husband said in cross-examination, payments made by the company for his benefit may have been debited against his loan account, it was not part of the husband’s case, nor was there any evidence to suggest that his beneficiary loan account is likely to be significantly less than it was at the end of the 2016 financial year.   

3. The husband is also the registered owner of an unencumbered property in Suburb J. Although in his Financial Statement he attributes a value of $450,000 to this property, he agreed in cross-examination that he had purchased the property in 2015 for $632,500. He also has an interest in two properties in L Town.  

4. These are interim proceedings and in circumstances where the wife has established a reasonable need, I am satisfied that an order should be made in the sum of $1,000 per week notwithstanding that the husband may be required to call upon capital in order to satisfy that order. The husband’s capacity to meet an order of this amount on an ongoing basis will be a matter that the Court can consider in more detail upon the final hearing of the wife’s application for spousal maintenance and at a time when the Court has all of the relevant information as to the husband’s financial circumstances available to it.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 22 May 2018.

Associate: 

Date:  22 May 2018