Kima and Kima

[2016] FamCA 798

FAMILY COURT OF AUSTRALIA

KIMA & KIMA [2016] FamCA 798

FAMILY LAW – Interim Orders – Property - Spousal maintenace

Family Law Act 1975 (Cth)

APPLICANT: Ms Kima

RESPONDENT: Mr Kima

FILE NUMBER: CAC 743 of 2013

DATE DELIVERED: 6 September 2016

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 19 August 2016

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Self-representing

COUNSEL FOR THE RESPONDENT: Mr G Howard

SOLICITOR FOR THE RESPONDENT: Watts McCray Lawyers

Orders

IT IS ORDERED THAT

1. The Minute of the Interim Orders Sought by the wife, marked exhibit W1, is dismissed.

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 Kima v Kima 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 CANBERRA

FILE NUMBER: CAC 743 of 2013

Ms Kima

Applicant

And

Mr Kima

Respondent

REASONS FOR JUDGMENT

1. These are proceedings in relation to applications made by the wife as set out in her Minute of Interim Orders marked as W1 in the proceedings on 19 August 2016.  In that application the wife seeks an order that the husband release the amount of $100,000 from the joint equity in the former matrimonial home as part of the overall property settlement.  The wife explains that to affect this order she seeks that a loan be applied for, presumably jointly between herself and the husband, to increase the drawings against the former matrimonial home.

2. The second order sought by the wife is an order for spousal maintenance in either an amount of $588 per week if the funds of $100,000 are released to her or $848 per week if the funds are not released to her. 

3. Dealing firstly with the application for the payment of a lump sum the principles relating to the payment of a lump sum are set out in the Full Court case of Strahan. The first step in relation to the making of an interim payment is the identification of the source of power which governs the making of an order. It is necessary to identify the source of power in order to identify the conditions placed upon the exercise of the power. In this case, it is put that the $100,000 would be paid as a part of an overall property settlement, that is the power is to be that which is contained under s 79 of the Family Law Act 1975. Noting that in general it is preferable that there be a single exercise of that power this Court is at liberty to make multiple orders in the discharge of the exercise of the power. The two steps that were identified in the case of Strahan are firstly, will the jurisdiction of the Court be entertained in relation to the application for an interim distribution and secondly, if so, how will the exercise of the jurisdiction be conducted in accordance with the relevant considerations.

4. The first of these questions, will the jurisdiction be entertained, is answered in accordance with an overarching consideration of whether or not it is in the interests of justice for the Court to fragment the decision making process.  There is no requirement that there be a compelling case presented to justify the Court doing so, it is simply a question of whether or not it is in the interests of justice for it to occur.

5. As to the second question, that is, how the jurisdiction would be exercised it is necessary to conduct a brief consideration of the s 79 and s 75(2) factors in order to determine whether there is a likelihood that on a final disposition of the property there will be sufficient to make good the interim payment.

6. In this case the application for the payment of $100,000 is put forward as part of an overall property settlement pursuant to s 79. In presenting her application the wife posed three questions. The first question is whether or not there could be a redraw made against the former matrimonial home. In particular the wife presented evidence in her affidavit of 2 June 2016 and in particular within that affidavit at annexure B an e-mail from Nakul Sharma, the ANZ Client Manager. What was asserted is that per the income and expenses that had been disclosed and the equity in relation to the property and subject to the minimum lending criteria that it would be possible to borrow $100,000. What was undisclosed within that evidence is the material that was provided to the ANZ Bank. I am not told on the evidence what disclosure of income was given, who the income was attributed to, in what manner it might be in excess of expenses, what expenses were referred to and how it was that that might be said to support the making of a loan. Further, it was unclear on what assessment of equity it was said that a loan could be drawn and, finally, there was no evidence to suggest what the phrase ‘subject to minimum lending criteria’ meant.

7. Although this material indicates that it may be possible that a loan could be drawn against the property, I am unable to be satisfied that as a matter of fact there can be a redraw, without the disclosure of the further items. 

8. The second question posed was a question of how it would affect the husband if a further redraw was made and it was put in the wife’s material, in particular annexure C, that use of a loan calculator revealed that there would be a minor increase in the payments that would need to be made for the B Street property.  The current loan repayment was said to be for a loan of $255,000 resulting in a loan payment of $449 per week.  It was asserted by virtue of the results of using a loan calculator that the increased drawings of $100,000 would lead to an increase in the loan repayment to $451 per week.  Again, it was unclear the basis of the calculations. 

9. I am not persuaded that such a redraw, even if it had been shown to be available, would have such a minimal effect on the husband.  I am unable to determine the effect that it would have on him to increase the indebtedness.  I note this leaves aside the question that was posed by counsel for the husband as to whether it was proper for an order to be made to direct the parties to loan further funds to make any payment.

10. The third question posed by the wife is whether or not it would be prejudicial for the husband to make such an order.  By that I take it that she meant whether or not it would be prejudicial in the sense of the overall disposition of the property.  The wife asserted a tangible asset pool, if I have understood her correctly, of $822,000.  I am not clear where that figure is derived from.  Examining the parties financial statements it appears that the property available to the parties is generally as follows:

    a)The property at B Street, Suburb C worth $625,000;

    b)The property at Suburb D worth $330,000;

    c)The property at Suburb E worth $270,000; and

    d)A property in India worth $46,000.

11. This in total leads to property valued at $1,271,000.  This disregards an amount that the husband says should be added back in relation to expenditures made by the wife and remitted to India.  At this stage I am unable to assess how strong the husband’s argument is for a notional add-back of those sums although at face value it appears arguable.  Against these amounts the following debts are asserted:

    a)A debt of $260,000 for the B Street property

    b)A debt of $310,000 for the Suburb D property

    c)A debt of $330,000 for the Suburb E property

12. These equate to a debt of approximately $900,000.  Again, in broad terms this indicates equity of approximately $371,000.  The wife notes that the husband seeks a 55 / 45 per cent split of the tangible asset pool.  Such a split of equity of $371,000 is a split of $167,000 and $204,000 that is the 55 per cent share equates to $204,000, the 45 per cent share to $167,000.  However, annexure B of the husband’s affidavit indicated the presence of further properties that had previously been undisclosed being properties either held by the wife or by potentially persons associated with the wife.  If the values asserted in relation to these properties are approximately correct this indicates the presence of a further $500,000 worth of properties in India.  If these indeed form a part of the ultimate tangible asset pool then there is significant risk to the enforceability of a claim by the father should a $100,000 payment be made to the wife at this point.  That is adding those into the pool and applying the 55 / 45 per cent split would mean that unless recourse could be had to drawing against the properties in India the husband’s claim stands at grave risk of falling short.  That is, I could not be satisfied that the payment of $100,000 would not impinge upon the husband’s claim nor could I be satisfied that it could be reversed in the manner that is suggested in the case law.

13. Hence applying the principles as set out in Strahan I note the following.

14. As to the first, that is whether in the general interests of justice it is appropriate to fragment the decision making process I would consider that on the justifications put forward by the wife in terms of her immediate need there is an arguable case for there to be a fragmentation of the decision making process such that an interim order could be considered.  However, in considering the second limb of Strahan I am unable to make even an approximate determination on the material before me that would mean that the 55 / 45 per cent claim made by the husband is such that it would not be defeated by the transfer of the $100,000 to the wife.  In any event, as indicated earlier I have no satisfaction that there is an available mechanism for the payment of the $100,000 as I am not satisfied on the evidence before me as to the ability to secure a loan.  As such I decline to make the order in respect of the payment of the lump sum.

15. Turning then to the application for spousal maintenance.  The wife in applying for spousal maintenance sets out the number of expenses that she faces which she says justifies the making of a spousal maintenance order.  These are principally set out at paragraphs 9 through 20 of her affidavit.  Amongst these are matters which touch upon the care of the children of the marriage.  In examining the overall expenses asserted by the wife it is unclear how many and what aspect of these expenses relate to the maintenance of the children of the relationship.  The presentation of the evidence by the wife does not allow me to adequately distinguish between what would be required for her maintenance as opposed to what would be required for the maintenance of the children.  Counsel for the husband in submissions pointed to the fact that the application here is for spousal maintenance not maintenance in relation to a child.  The Full Court case of Stein & Stein makes it clear that in making an order for spousal maintenance it is impermissible for the Court to have regard to the expenses paid by the claimant in respect of the children.  In addition to this the husband points to additional capacity on the part of the wife principally by virtue of annexure G of his affidavit.  There it is indicated that the wife holds a full time position but is working on a part-time basis.  That is, the wife has an additional income earning capacity available to her.  It is however unclear to me to what extent the wife is unable to support herself.  Partly because it is unclear what weekly income is available to her and what component of the expenses that she has disclosed related to her and what component relate to the children.  I note that the High Court case of Hall v Hall indicates that the usual rules in respect to the proof of a case apply even to an application for interim spousal maintenance.  That is, the applicant carries the burden of proof which is required to be discharged by reference to the evidence that is led to establish the fundamental matters to the exercise of the power by the Court.  In this case the fundamental matters to the exercise of the powers are a satisfaction that the wife is unable to adequately maintain herself and further a satisfaction that the husband is able to maintain her in addition to his ability to maintain himself.  This leads me to the final matter in relation to this application and that is the evidence did not enable me to be satisfied that the husband has the capacity to make good on the maintenance claim made by the wife (see for example paragraph 17 and following of the husband’s affidavit setting out his income and expenses). 

16. Hence, given the findings I have made, or been unable to make, I decline to make the order for spousal maintenance. 

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 6 September 2016.

Associate:

Date:  21 September 2016