JENNER & DESMOND

[2015] FamCA 1056

FAMILY COURT OF AUSTRALIA

JENNER & DESMOND [2015] FamCA 1056

FAMILY LAW – PRACTICE AND PROCEDURE – Application by de facto husband seeking release of funds held in trust account for payment of invoices - Orders made re payment of outstanding invoices

FAMILY LAW – PRACTICE AND PROCEDURE – Application by de facto wife seeking disclosure of documents - Orders and directions made in respect of filing documents

FAMILY LAW – PRACTICE AND PROCEDURE – Application by de facto wife seeking appointment of single experts - Orders made appointing single experts to provide livestock valuations - Orders and directions made in respect of payment of single experts fees

Family Law Act 1975 (Cth)
APPLICANT:	Ms Jenner

FIRST RESPONDENT: Mr Desmond

SECOND RESPONDENT:	Ms Desmond
FILE NUMBER:	LNC	657	of		2014

DATE DELIVERED: 12 November 2015

PLACE DELIVERED: Launceston

PLACE HEARD: Launceston

JUDGMENT OF: Benjamin J

HEARING DATE: 12 November 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Welch

SOLICITOR FOR THE APPLICANT: Philip Welch

COUNSEL FOR THE FIRST RESPONDENT: Mr Turnbull

SOLICITOR FOR THE FIRST

RESPONDENT:

Friend & Edwards

COUNSEL FOR THE SECOND RESPONDENT: Mr Turnbull

SOLICITOR FOR THE SECOND RESPONDENT: Friend & Edwards

Orders

1. Ms Desmond (‘the second respondent’) shall file and serve a response in these proceedings on or before 4.00pm Wednesday 9 December 2015.

2. The second respondent file and serve an affidavit of discovery providing to the applicant de facto wife and respondent de facto husband the following:-

   (a)in respect of the … livestock acquired by the second respondent in or about 2012 all documentation, invoices, statements and the like with respect to that acquisition of the livestock and subsequent purchases and sales of the livestock by the second respondent, until the current time, including any lease documentation as between the second respondent and any other party with regard to the livestock; and

   (b)documentation including identification codes/identification tags issued in accordance with the National Livestock Identification System in respect of the livestock.

3. The Court appoints Mr B as single expert to value the dairy livestock which are the subject of lease and/or control by the respondent de facto husband as at the present time.

IT IS DIRECTED

1. The cost of such valuation as set out in order 3 above shall be paid out of the funds frozen in the account totalling some $381,000 and each of the de facto husband and de facto wife shall sign all authorities necessary to authorise such payment.

IT IS FURTHER ORDERED

1. The court appoints Mr C as single expert to value the … livestock as at 31 January 2012 and 6 June 2012 although if they are roughly the same, one valuation over that period will be sufficient if it does not undermine the valuation and as at the present time.

IT IS FURTHER DIRECTED

1. The cost of such valuation as set out in order 5 above shall be paid out of the funds frozen in the account totalling some $381,000 and each of the de facto husband and de facto wife shall sign all authorities necessary to authorise such payment.

IT IS FURTHER ORDERED

1. The parties sign all documents to release from the $381,000 the sum of $220,332.01 to D Pty Ltd in payment of the outstanding invoice.

2. Costs of both parties are reserved.

IT IS DIRECTED

1. A copy of the reasons for these orders be taken out and placed on the Court file.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Jenner & Desmond 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 LAUNCESTON

FILE NUMBER: LNC 657 of 2014

Ms Jenner

Applicant

And

Mr Desmond

First Respondent

And

Ms Desmond
Second Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. In the proceedings of Jenner & Desmond, there are a number of matters before me today.  The first is an application in a case on behalf of the respondent de facto husband, Mr Desmond (‘the de facto husband’), for permission to use, from a fund account of about $371,000, the whole of that sum to pay $220,332 to D Pty Ltd and $174,042.20 to E Pty Ltd.  Clearly there are insufficient moneys to pay the whole of those sums.  That application is opposed by Ms Jenner (‘the de facto wife’).  Also today attending the Court is Ms Desmond, to whom some livestock were allegedly transferred in early 2012.

2. Ms Desmond wishes to pursue her claim for interest in those livestock, and is appearing today for that purpose.  I have given her additional time to document that claim and to participate in the proceedings, and I have indicated to her that if she does not do so, the Court will not give her any further time given the notices she has had in the past and will assume that she really claims no interest in the material.  If she wishes, she can file affidavits in the de facto husband’s case and it can be argued as between the parties, but not as between the parties and Ms Desmond.  It is a matter for her to take legal advice in that respect.

3. To her credit, Ms Desmond is content for the livestock to be valued as long as there is no charge to her, and she says she will give discovery, although says there is very little for her to discover at this time.  Accordingly, the orders for the extension of time and for the valuation of the livestock will be made by consent.  There is an issue as between the de facto husband and the de facto wife, as to who should pay the cost of the valuations, and I will deal with those a little later.

4. The matter came before me last week, and I was concerned, given the evidence of the de facto husband, that he was trading insolvently.  Consequently any order by me may have been given a preference to a credit, but further evidence has been adduced.  So that it is clear to anyone reading these reasons, I will detail what the state of the evidence is at the present time.

5. Given the submissions, I have had regard to the following documents on behalf of the applicant de facto wife: 

   (a)her application in a case filed 23 October 2015; 

   (b)her affidavit filed 23 October 2015; 

   (c)her financial statement filed 18 December 2014; and

   (d)her amended initiating application filed 2 September 2015. 

6. The de facto husband relied upon:-

   (a)his application in a case filed 7 October 2105; 

   (b)his affidavits of 7 October 2015, 4 November 2015, 12 November 2015; and

   (c)an affidavit of his account, Mr F.

7. Mr F describes himself as being “the accountant for [the de facto husband]”.  The de facto husband refers to Mr F as his “business advisor”.  However, it is not clear as to Mr F’s qualifications.

8. The background of this matter that the de facto husband was born in 1974 and is aged 41.  He is a farmer by occupation.  The de facto wife is aged 36 and is a salesperson by occupation.  The parties, it appears, commenced cohabitation, at least on the evidence of the de facto wife, in about 2007 and separated in about 2014. 

9. There is no issue that the parties were in a de facto relationship for more than two years and that de facto relationship has now failed or broken down.  As such this Court has jurisdiction under the Family Law Act 1975 (Cth) (‘the Act’) to determine issues between the parties.  The proceedings are listed for hearing. 

10. I will deal with the easier aspects of the application first.  The first relates to the application for discovery made on behalf of the applicant de facto wife.  I am told that an affidavit of discovery was provided with the directions I made last week and as such that part of the application has been dealt with.  If, of course, there is insufficient discovery or inadequate discovery that is a matter for a different application at a different time. 

11. The second relates to the valuation of the livestock.  There are a large number of livestock which were allegedly transferred in either January of 2012 or June of 2012 by the de facto husband to his mother, Ms Desmond. 

12. Ms Desmond has sought to be a party to these proceedings and continue as a party to these proceedings and I have enabled her to do so.  She has consented to the valuation of the livestock, which order I will make.  That valuation being as at 31 January 2012 and 6 June 2012 to the current date.  Ms Desmond has also agreed to provide discovery in relation to the acquisition and maintaining of the livestock. 

13. Ms Desmond was asked to file responses on two occasions by direction of this Court and has not complied with those directions.  I am giving her one further opportunity to do so.  If she does not do so then I will assume that she no longer wishes to be a party in these proceedings and she will be removed as a party to these proceedings. 

14. There is an application for single experts to be appointed to value not only the these livestock but the other livestock which have been the subject of significant debate today.  The parties agree that the valuation ought to be undertaken but there is disagreement as to the payment. 

15. Given the nature of the proceedings I will not be requiring Ms Desmond to provide any funds towards to the acquisition of those valuations, although it is of course open for one party or another to apply for costs and disbursements against Ms Desmond depending on the outcome of these proceedings.  This comment ought not to be taken as an indication that costs may or may not be ordered.  It is just a reality which needs to be addressed. 

16. Accordingly, I will be making an order for the valuation of all the livestock at, with regard to the latter, different times.  As to the cost of those valuations I intend to order that those costs are met out of the money held in a trust account, which totals $381,000.  Both the parties to the relationship appear to be struggling financially and this seems to be an easy and effective way to arrange payment.  It then can be determined at a later date as to whether that should remain in place or whether there ought to be further contributions by one or the other with regard to that sum. 

17. Accordingly, I make the normal order appointing Mr B as single expert to value the livestock which are the subject of lease and/or control by the de facto husband as at the present time. 

18. I am then left with the most difficult of decisions.  That is whether to expend the whole of the $381,000. 

19. I struggled to understand the financial position of the de facto husband and de facto wife in a general sense.  I took submissions and I took as an agreed fact the following:-

    a)Firstly, that there was an issue as to the legal and equitable ownership of the livestock and so I did not include that in this calculation at this time. 

    b)Secondly, there was a valuation of the livestock earlier this year of some $865,000 and those livestock are subject to a lease to G Bank which, if paid out at the present time, would be some $580,000. 

20. It appears that there is some $15,000 needed to be paid a month for the lease on these livestock and when the lease is completed, a further sum of $180,000 or so.  The current value of those livestock, if they were paid out at the present time, would seem to be the agreed fact of some $285,000.  In addition, there are the funds frozen in the account of some $381,000, making a total of $666,000.

21. There is evidence that there is plant and equipment to the value of some $460,000 as set out in the documentation.  This gives a gross asset pool of some $1,126,000 or thereabouts.  There is some $220,000 owing to D Pty Ltd and some $174,000 owing to E Pty Ltd.

22. These are included in the total, it seems to me or as the parties asserted to me, and which I accept as an agreed fact a present liabilities of some $716,119.  In addition there are non-current liabilities of some $182,000 making total liabilities of both current and non-current as some $908,000 which, if that was accepted, leaves a net value of assets in the sum of $200,000.

23. The evidence of the de facto husband is somewhat confusing.  In his financial statement he asserts that his assets are far less than his liabilities.  He now says that his assets are greater than his liabilities.  It may be that the earlier document was one which was prepared with some level of confusion as to what the assets and what the liabilities were.  He says that he needs these funds to enable the feeding of the livestock and for the business to continue.

24. The evidence, as I understand it, is that D Pty Ltd will, if paid out, offer further credit to feed the livestock at least for the next few months.  E Pty Ltd will not provide any further credit, it at all, until the whole of the amount is paid out.  The proposal suggested by the de facto husband will, of course, mean that they are not paid out because they will be some $20,000 short.

25. The de facto husband’s case is that whilst he has fallen behind in recent times because of two things: the first being the garnishee and the second being the freezing of these funds.  He asserts that he has been unable to adequately run his business, but once the funds are freed he would be able to manage his business and it would meet its debts as and when they fell due.  As such it would not be trading insolvently.  It is unclear to me whether the feed is for the both or either of the livestock; no doubt that will come out at the hearing.

26. Mr Welch observed that the evidence is poor.  The fact that I had to struggle so hard to understand the current assets and liability situation perhaps reflects on the lack of knowledge of farm and livestock business in this judge, and perhaps the nature of the affidavits where only part documents were provided. 

27. Mr F’s affidavit does not help as he at no stage says that the business is trading solvently nor does he make the comments which one would have hoped would have been made.  There is no profit or loss statement and the Court has no idea as to the expenses or how this will operate, simply on the word of the de facto husband, in circumstances where trust between these parties as long since evaporated.

28. I do not intend to order the payment to E Pty Ltd at this stage as it will serve no practical purpose given that whichever way it is done, it will not provide feed for these livestock.  I will, however, order that both parties sign authorities to pay $220,3332.01 to D Pty Ltd to pay the current bill and enable the livestock to be fed into the future.

29. That will leave the sum of about $160,000 or thereabouts, in that account.  If there is to be an adjustment of the property on the de facto husband’s case, there would be more than enough there to meet the amount payable for the de facto wife.  If, in the long term, the livestock are to be treated as assets of the parties and are brought back into the pool, then there will be more assets for that purpose.

30. Accordingly, I make a further order that the parties sign all documents to release from the $381,000 the sum of $220,332.01 to D Pty Ltd in payment of the outstanding invoice.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 12 November 2015.

Associate:     G Doyle

Date:              12 November 2015