JOHANSON & JOHANSON

[2012] FamCA 1045

FAMILY COURT OF AUSTRALIA

JOHANSON & JOHANSON [2012] FamCA 1045

FAMILY LAW – Exclusive occupancy.  No basis for any orders.  Partial property.  Basis to make an order.

Family Law Act 1975 (Cth)

Bing and Bing [2007] FamCA 418, (2007) FLC 93-318
Burke v Burke [1987] 2 FLR 71
G v J (Ouster order) [1993] 1 FLR 1008
Scholte and Scholte (unreported, the Full Court Kay, Holden and Monteith JJ, 7 February 2002
Sieling and Sieling (1979) FLC 90-627
Strahan and Strahan [2009] FamCAFC 166, 241 FLR 1, (2011) FLC 93-466

APPLICANT: Ms Johanson

RESPONDENT: Mr Johanson

FILE NUMBER: MLC 3997 of 2012

DATE DELIVERED: 29 November 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 29 November 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Combes

SOLICITOR FOR THE APPLICANT: Mathews Family Law

COUNSEL FOR THE RESPONDENT: Mr Edmunds

SOLICITOR FOR THE RESPONDENT: MDG Lawyers

Orders

1. That the application by the wife and the husband for injunctive relief by way of an order for the sole use and occupation of the real property at B Street, Suburb C is refused.

2. That the husband pay to the wife the sum of $4,000,000 on or before 28 February 2013 or such other time as may be agreed between the parties by way of interim distribution of property pursuant to s 79 of the Family Law Act 1975.

3. For the purposes of paragraph 2 hereof, the husband do all acts and things necessary to authorise the appropriate entity to sell such D Pty Ltd shares as may be necessary to effect the payment referred to in paragraph 2.

4. That the interim orders ought in both the amended application of the wife filed 31 August 2012 and the response of the husband filed 16 July 2012 save as to issues of spousal maintenance are otherwise dismissed.

5. That subject to submissions otherwise, the costs of both parties of this proceeding are reserved to the trial judge.

IT IS CERTIFIED:

1. That pursuant to Order 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 Johanson & Johanson 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 3997  of 2012

Ms Johanson

Applicant

And

Mr Johanson

Respondent

REASONS FOR JUDGMENT

1. This interim dispute has two issues.  The first is, who should remain living in the parties’ home at B Street, Suburb C pending the final hearing of the property dispute between the parties?  Secondly, what (if any) interim property distribution in favour of the wife should now be made?

2. Each party sought orders for sole use and occupation of the Suburb C property.  In my view, there is not sufficient evidence to justify an order in favour of either party.

3. In respect of the second issue, the wife sought $1 million as well as being able to live in the home pending trial and in the alternative, that if she could not have Suburb C, she should have an interim property distribution pending trial.  She sought $4 million.  Whilst the husband conceded that he should pay $1 million within 90 days, he opposed anything more than that. 

4. In my view, this is a case where the wife is entitled to $4 million and it is appropriate in the circumstances of this case to make the order.

5. The case was heard on submissions and each counsel drew my attention to the affidavit material filed by the parties.  I do not propose to deal with the precise evidence but the parties will understand that I have taken everything they have said into account in the exercise of what is clearly judicial discretion.

6. The background can be simply stated.  Both parties are 70 years of age.  They have been married for almost 60 years and separated in early 2011.  Even on the timing of the separation, they had a disagreement.  The husband is in a profession but does not practise but who has not only international business interests but is a recognised expert in his field.  The wife not only has no employment but no income.  She has a pending application for spousal maintenance. 

7. There are many controversial facts in this case and it is neither necessary nor appropriate that I endeavour to make findings of fact about those matters.  The credibility of each party will no doubt be tested at trial.

8. Each party drew my attention to the relevant paragraphs of their respective affidavits and I also had the benefit of an outline of the issues each intended to argue.

9. The husband travels internationally for a significant portion of each year and argued that he used the Suburb C property not only as a residence when he was here but also for the purposes of storing significant data for the research activities of a variety of entities.  In addition, he conducts meetings from time to time in the lounge room of the parties’ home.  For her part, the wife described the storage facility as a spa room and that the husband had the meetings at the dining room table.

10. Each party appears to have either entered into a new relationship or alternatively, has a connection with a person who is more than just an acquaintance.  In the husband’s case, the wife asserts that the husband’s partner is a resident of the home.  From the husband’s perspective, the wife is residing with her new partner who is of similar age and much more wealthy than he is and whose home is not far from the matrimonial home.

11. Over a space of some months subsequent to the conclusion of the relationship, a variety of events occurred which involved both parties and the wife’s current companion.  They included each changing the locks by locksmiths and chaining the front gate.  An unseemly sign was placed on the front gate no doubt to the bemusement of the neighbours.  Quite sadly, police have had to attend to referee a dispute as to who could be on the property and it seems common ground that those police treated the matter as a “domestic” and declined to do anything.

12. The legal position is that the home is in the name of the wife alone.  The husband asserted that the property had been acquired with money borrowed from a company but it was conceded that to the extent there was an equitable charge in relation to the property, no caveat had been lodged to give notice to the world that such an equitable charge existed.  The home is otherwise unencumbered.

13. The depths to which the parties plunged were such that the wife applied for a family violence order in the State Magistrates’ Court but then withdrew it with the consent of the husband.  The parties have adult children some of whom appear to be embroiled in the dispute.

14. Correspondence between lawyers was also relied upon in evidence and it is clear that different perspectives can be gleaned from that correspondence.

15. Despite a submission by the husband to the contrary, I am satisfied to make a finding that the wife has never abandoned the desire to return to the home and would still pursue it in the ultimate proceedings.  Whether she can now do that by virtue of the orders I propose to make, is a matter for argument.  Despite the fact that the house is registered to the wife alone, the husband maintained that he desired to keep it as part of any settlement process.  There is not sufficient evidence for me to make any finding about, let alone order who ultimately should have the final legal entitlement to that property.

16. Despite all of the eloquent submissions of counsel, this case really boiled down to a question of what was the balance of convenience.

17. From the wife’s perspective, the husband lived overseas for the majority of the year whilst the wife resided here in Melbourne.  The husband had the use of a number of overseas properties and had the capacity to avoid having to pay tax by virtue of his international status.  It was submitted by the wife that she resided with her companion because she had nowhere else to go and it was always her intention to remain living in the Suburb C property.

18. It was submitted for the wife that she could not live in the same property as the husband because he had installed a woman with whom he is currently having a relationship.  The wife’s position was that the husband’s need for the Suburb C property was limited to a few bookshelves and the storage of his archived files.  To the extent that it was necessary to so say, the wife argued that the finances of the husband were such that he could easily obtain alternative accommodation for anytime that he was living in Melbourne.

19. The submission of counsel for the wife was that the conduct of the husband in removing the wife was an important factor.  Whilst in some cases that is so, I am not in a position to make any specific finding.  Specifically, counsel for the wife pointed to the fact that the husband had engaged a security guard at a cost of $60,000 to effectively prevent the wife entering the home.  I am not entirely sure that that was what the security guard was doing but when there was a confrontation, the wife did not persist in trying to enter.  Those are matters more appropriately examined at trial.

20. Counsel for the wife submitted that her situation was degrading and upsetting as well as unnecessary having regard to the husband’s financial position.  She wanted the order to assist her emotional needs.

21. The husband’s case was that he was actively involved in research and development and he used the home as I have indicated earlier.  He claimed that he became aware of the separation by being notified by the wife that she had found another person with whom she wanted to be.  For her part, the wife said that the husband had had relationships outside of Australia in the past.  Just what all that means, remains to be seen.

22. Counsel for the husband pointed to the varying approaches that the wife had made to living in and leaving the Suburb C property and the statements asserted to have been made about what she felt about the property.  Again, all of those matters are disputed and they remain to be tested in evidence.

23. Counsel for the husband pointed to a letter dated 11 August 2011 from the wife’s solicitors in which she indicated that she did not want to exclude the husband from the home.  The statement is sufficiently vague for me to be unsure about what it meant.  The husband’s version was that the wife was saying that the husband could have the home whereas the wife was indicating that she had no problem about him coming and going according to his business needs but he was not to live there.  That is a matter that no doubt will be tested at trial.

24. Counsel for the husband pointed to what happened in respect of the intervention order bearing in mind the allegations made in that application.  The wife did not proceed with the matter and there was an amicable resolution.  Counsel for the husband pointed to the fact that the wife had attended and collected items on a number of occasions but that is equally open to the inference that the wife was collecting items on a piecemeal basis or as she needed them.  That does not really assist me to determine this matter.

25. The husband pointed to the fact that he had a current “lady friend” who maintained the Suburb C property and dealt with the husband’s business affairs when he was overseas.  It was submitted that that should not be disturbed.

26. It was also submitted that it was relevant to take into account that the wife’s application had taken a long time to be filed despite the disputes that had occurred between the parties in the meantime.  There is some substance in that submission.

27. Ultimately, the agreed facts are very limited.

28. The power to grant an injunction relating to a home such as this is found in s 114 of the Family Law Act 1975 (Cth) (“the Act”). It is a specific power. The Court is empowered to make the order if it considers proper with respect to the matter in which the proceedings relate.

29. In G v J (Ouster order) [1993] 1 FLR 1008, the English Court of Appeal cited with approval a passage from Lloyd LJ in Burke v Burke [1987] 2 FLR 71 where his Lordship referred to the fact that an Ouster order should only be made in cases of real necessity. In Scholte and Scholte (unreported, the Full Court Kay, Holden and Monteith JJ, 7 February 2002), their Honours agreed with the sentiments expressed in G v J. Their Honours pointed out that there were no words of limitation in s 114 other than that the grant of the injunction must be proper. They opined that an injunction could not be proper unless there was an appropriate factual base to support it. Their Honours observed that it was unlikely that the mere existence of tension and argument in a home short of unacceptable conduct or clear detriment to the welfare of a child, would lead the Court to exclude a person who had a lawful occupation of the property. There is clearly a distinction between lawful occupation and legal ownership. Lawful occupation must include equitable rights and the husband has flagged that equitable right to the Suburb C home by lodging a caveat in which he asserts that the title does not necessarily mean what it says.

30. Each of the parties in this case has resources and in the wife’s case will have resources from the orders I propose to make and I am conscious that she has a spousal maintenance application pending if not by now determined.  The conduct to which I have referred above and which is the subject of some dispute, appears to be just adults behaving badly.  It is not conduct which in my view would be seen as unacceptable.  In circumstances where an order is being made that the wife have access to funds whether by way of partial distribution of property or spousal maintenance, the exclusion of her by the husband in the future could hardly be seen as unacceptable conduct.  I am conscious too that the husband has an application for sole occupancy.  The refusal of the wife’s application does not mean that he is therefore entitled to such an order. 

31. In Sieling and Sieling (1979) FLC 90-627, the Full Court said that the granting of an injunction is a balancing of hardship to each party in which there should be no imposition of restriction more than is necessary but where the circumstances of the relationship were such that it was necessary on a temporary basis, to restrain a spouse from exercising their lawful rights. In this case, the balance of convenience does not favour either party. There were periods of time when the husband is not in the home and the fact that he has installed a female friend is a matter that ought not influence the decision. On the other hand, the wife will have money from the orders that I make and she has a friend with whom she does not want to feel obligated but certainly he can provide a roof over her head if it is necessary. The balance of convenience approach therefore does not assist me one way or the other.

32. In my view, it would not be proper to make an order in favour of either party for sole occupancy. 

33. There is nothing in the wife’s conduct on the facts about which there is no controversy that would justify such an order being made.  On that basis, both applications for sole occupancy based upon conduct must be refused.

34. In addition to the sole occupancy application, the wife sought a partial distribution of property.  The approach to the determination of such cases was set out by the Full Court in Strahan and Strahan [2009] FamCAFC 166, 241 FLR 1, (2011) FLC 93-466. The two questions that need to be answered in this case are clear. In my view, there is sufficient evidence here to justify making an order under s 79 because the criteria are present and in the circumstances, it is appropriate to exercise the discretion.

35. This is a relationship of almost 50 years.  The evidence of the wife is that she was predominantly involved in homemaker and parent roles and that defined her contribution save that she also received significant funds by way of inheritance.  In her affidavit, she set out how they were used within the marriage.  Whilst there is some dispute by the husband about those inherited funds and the purpose for which they were used, the husband defined the parties’ respective contributions by saying that he was the primary breadwinner and the wife was the homemaker.  Whilst counsel for the husband submitted that it would ultimately be argued that the husband by his extra contribution assisted enormously in the creation of the parties’ wealth, the evidence before me at this point is hardly controversial.

36. The husband’s own financial circumstances remain a little unclear. The uncertainty surrounds the impact of changes in the share market, taxation consequences upon disposal of those shares and importantly, how they might ultimately be valued if retained by a party because of the nature of the shareholding within the corporate entity itself. In addition, one of the entities has significant property holdings in the United States and the husband has not been in a position to obtain values at this stage. Despite that however, even on the most conservative approach, it is clear that the parties have significantly different legal interests at the moment. Regardless of how the husband’s shareholdings lie, the entities separate from him are entities under which he has significant control. Even on the most conservative estimate, there is at least $20 million of assets in his control. On the wife’s side, there is the home in Suburb C which the husband wants to retain and which on a conservative estimate may be worth about $3 million. Apart from that asset, the wife has about $50,000 or thereabouts in shares. If the wife is excluded from the home and the husband is ultimately to retain it, it is clear that the husband has a bundle of assets in the vicinity of $23 million whilst the wife has a bundle of assets worth $50,000. On any view of the evidence and the requirement of the Court only to make orders which are just and equitable, that could not be seen as a just and equitable outcome to satisfy the requirement of s 79(2) of the Act.

37. Having regard to the fact that the evidence which indicates that an adjustment will be made in due course and having regard to the nature of the wife’s current financial circumstances, in my view, it is just and equitable to make the order sought by the wife.

38. The husband’s argument in relation to the quantum was that there would be severe consequences if such an order was made because of the taxation implications and the other matters to which I have just referred.  However, those are matters relating to enforcement (see Bing and Bing [2007] FamCA 418, (2007) FLC 93-318). They are not matters that I ought to consider at this stage because there is a large disparity between the financial positions of each party and in my view, the wife is entitled to an immediate payment of something from her own equitable entitlements.

39. In my view, it is therefore appropriate to make the order in this case.

40. In my view, it is also not appropriate that I deal with the issue of the timing of the payment other than to fix a starting point.  It is entirely in the hands of the parties whether an alternative arrangement is made but if agreement cannot be reached, then the wife is at liberty to enforce her order.  It makes sense for the parties to contemplate that dilemma because the consequences foreshadowed by the husband may very well reduce the pool of assets in his hands which ultimately means that there will be less in the hands of the wife.  I do not propose to give the parties liberty to relitigate that issue and if agreement cannot be reached, the matter becomes an issue for enforcement.

I certify that the preceding Forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 29 November 2012.

Associate:

Date:  12 December 2012