King and King

[2009] FamCA 442

FAMILY COURT OF AUSTRALIA

KING & KING [2009] FamCA 442

FAMILY LAW – PROPERTY – Interim

APPLICANT: Ms King

RESPONDENT: Mr King

FILE NUMBER: MLC 7073 of 2008

DATE DELIVERED: 13 May 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Dessau J

HEARING DATE: 13 May 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Dr R.S. Ingleby

SOLICITOR FOR THE APPLICANT: Berry Family Law

COUNSEL FOR THE RESPONDENT: Mr K.F. Nicholson

SOLICITOR FOR THE RESPONDENT: Maria Barbayannis & Co

Orders

1. That paragraph 4 of the orders of the Federal Magistrates’ Court made at Melbourne on 15 September 2008 be varied to allow the wife to extend the mortgage facility encumbering the property at W and the property at M, to provide to the wife the sum of $100,000 such sum to be provided to the wife’s solicitors Berry Family Law and applied as may be necessary to the costs and expenses to be incurred by her in these proceedings.

2. That the sum of $100,000 drawn by the wife shall be characterised by the trial Judge.

3. That the wife’s costs of this day shall be reserved to the trial Judge.

4. That my reasons for judgment given this day shall be transcribed and retained on the court file

5. That pursuant to the Family Law Rules this matter reasonably required the attendance of counsel.

IT IS NOTED that publication of this judgment under the pseudonym King & King is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 7073 of 2008

MS KING

Applicant

And

MR KING

Respondent

REASONS FOR JUDGMENT

1. The parties in this case were married for almost 27 years.  They have seven children.  Four are adults.  The younger three children are aged 6, 13 and 15.  They live with the wife. 

2. The wife operates the parties' shop business and she pays the mortgage and the children's school fees.  The husband is presently on Centrelink benefits, and so pays no child support, or probably minimal child support.  They currently have a property case pending before the court.

3. They have disagreements on various fronts, about the value of assets and whether some assets have been concealed, and whether there has been full disclosure about the business income.

4. I have before me today the wife's Application filed 15 April 2009.  In it she seeks a variation of an order made in the Federal Magistrates Court on 15 September 2008.  It is the order contained in paragraph 4 of those orders, which was a general restraint against both parties from accessing any of the major assets.  She wants that injunction varied to allow her to extend the mortgage which exists over two properties, to release $100,000 to her to pay various legal fees.

5. Dr Ingleby for the wife has approached the case on the basis of three main arguments.  The first one related to an authority, Frigo v Kulhaci, a decision of the Supreme Court of New South Wales Court of Appeal, delivered on 17 July 1998.  I have to say that this was the weaker of his arguments. 

6. Dr Ingleby submitted that the New South Wales Court of Appeal held in that case that injunctions should never be made in the form that they are made in this case: that a party should always have access to his or her own assets for living expenses, payment of debts, and legal expenses, and, if that proviso is not included form the outset, it should be engrafted into orders at the earliest appropriate time. 

7. At page 18 of the decision, the Court of Appeal observed that Mareva injunctions were, by nature of their form, necessarily tentative, "especially since time did not permit full argument on this issue".

8. In this case the injunction in its present form was made by a Federal Magistrate.  Both parties were represented.  It was not an ex parte application brought in urgent or limited circumstances. 

9. In any event, I am satisfied that in this case there has potentially been a change of circumstances since the order was made.  Dr Ingleby's client alleges that since the order was made she has ascertained that the husband had effectively siphoned off $1 million into a separate account and that she, as a director of the company, is now left trying to sort out the tax consequences, and something like $60,000 of the $100,000 sought is to enable her to clarify that aspect, it being essential to the proper running of the business, but also essential to the proper running of this case, to know the commitments of the parties. 

10. I cannot make any definite finding about that aspect.  It is one that the trial Judge will need to determine, but there is a concern that it is an issue that has arisen since the injunction, and therefore might well amount to a circumstance that needs to be taken into account. 

11. It is Dr Ingleby's next argument for the wife though that really has the substance in this case.  It is not necessary at this stage to go through the figures, because there is a concession by Mr Nicholson for the husband that makes this aspect quite easy.  It can be summarised as follows.  Even putting the husband's case at its highest, the assets in this case will be sufficient so that if the wife were to have access now to $100,000 of the parties' funds, on any view it would not represent more than 25% of the parties' assets. 

12. It is inarguable that the wife will receive at least that share on a property hearing, Mr Nicholson rightly concedes that.  Accordingly, I am satisfied that it is appropriate for her to receive that now for legal fees.  I am satisfied that there is sufficient complexity in this and that the legal issues are such, that money should be unlocked for her to look after the tax issues as well as her family law issues, which will include an expensive valuation of the business.  The trial Judge can determine how this payment is to be treated.

13. The husband has raised an argument as to whether the wife has sufficient income from the business to meet these sorts of expenses as they fall due.  That is not something I will get to the bottom of today.  Given what I have said, that there is adequate property here to cover the wife's ultimate share of the property settlement, I do not really need to spend too much time reflecting on that contentious issue right now.  

14. I am satisfied that in practical terms it is reasonable to order the full $100,000 at this point.  The costs are so closely on the horizon that it would only involve the parties in more costs if there has to be further negotiation or court proceedings.  So I will accede to the application.

DISCUSSION as to wording of the Orders

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau 

Associate: 

Date:  13 May 2009