King and King and Anor

[2011] FamCA 906

FAMILY COURT OF AUSTRALIA

KING & KING AND ANOR [2011] FamCA 906

FAMILY LAW – SPOUSAL MAINTENANCE – Interim – Rent - Husband’s capacity is shown because he paid mortgage payments in a negative-gearing situation - Injunctions precluding the sale of a house

Family Law Act 1975 (Cth)

APPLICANT: Ms King

RESPONDENT: Mr M King

2^ND RESPONDENT: Mr B King

FILE NUMBER: MLC 9554 of 2011

DATE DELIVERED: 29 November 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 29 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Ham

SOLICITOR FOR THE APPLICANT: Kliger Partners

THE RESPONDENT: In person

THE INTERVENOR: Mr Fronistas

Orders

1. That all outstanding applications relating to parenting issues are adjourned to the Senior Registrar’s list on 20 December 2011 at 10.00am for determination of what (if any) time should be spent between the husband and the children of the marriage.

2. That all outstanding financial issues are adjourned to the Judicial Duty List on 24 January 2012 at 10.00am.

3. That until further order, the children of the marriage C born … June 1996, D born … September 2003 and E born … June 2006 live with the wife.

4. That until further order, the husband pay to the wife $475 per week by way of spousal maintenance, the first of such payments to be made on 9 December 2011.

5. That the reasons for judgment this day be delivered as soon as practicable.

6. That BY CONSENT there be orders in accordance with the minutes of proposed orders as between the wife and the 2^nd respondent marked Exhibit “A” sealed and attached hereto AND IT IS DIRECTED that such minutes remain upon the Court file.

7. That the solicitor for the wife engross the minutes and deliver them by electronic transmission to my Associate within 7 days.

8. That the husband file and serve any affidavit material and amended response upon which he intends to rely by 4.00pm on 2 December 2011.

9. That the wife file and serve any amended application and affidavit of material upon which she intends to rely by 4.00pm on 16 December 2011.

10. That the husband be restrained from encumbering, in any way whatsoever, by way of mortgage, charge or any other dealing, his interest in the Suburb H property without first obtaining leave from the Family Court of Australia.

11. That the husband be restrained from selling or otherwise dealing with the Suburb H property without first obtaining leave from the Family Court of Australia.

12. That the husband be restrained from dealing with, encumbering or disposing of any of the assets of the company known as A Pty Ltd, save and except in the ordinary course of the company’s business or with the written consent of the wife.

13. That pursuant to s.65DA(2) and s.62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym King & King and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9554 of 2011

Ms King

Applicant

And

Mr M King

Respondent

And

Mr B King
2nd Respondent

REASONS FOR JUDGMENT

1. In the busy Duty List on 29 November 2011, I heard an interim dispute between the parties including a third party and made a variety of orders.  I did not have sufficient time to give reasons and accordingly, these are the reasons for those orders.

2. The issue in this proceeding concerns an urgent application for spousal maintenance by the wife who seeks that the husband pay $475 per week to enable her to rent a property for herself and the three children of the marriage.  The husband opposed the application. 

3. This is a long marriage.  The parties married in 1974 and divorced in 1998 but then remarried in 2003 and separated in 2011.  There are three children of the marriage under the age of 18 years.

4. The proceedings relevant to this determination began on 24 October 2011 when the wife filed an application seeking both final and interim orders.  The application was supported by an affidavit and a financial statement.

5. That application was subsequently amended by a further application filed on 24 November 2011. 

6. The husband filed a response to the original application of the wife.  He filed that document on 22 November 2011.

7. Mr Ham of counsel appeared on behalf of the wife and the husband appeared in person.

8. Mr Fronistas of counsel appeared on behalf of the third parties but as I have indicated, the matters associated with his client do not need to be mentioned in these reasons.

9. The amended application of the wife sought a raft of orders.  In essence however, the only ones pressed by the wife related to interim parenting arrangements and the rental issue to which I have referred.  There were other orders sought concerning a family report which for reasons which follow, became irrelevant.

10. The husband’s response was supported by an affidavit and a financial statement.  Leaving aside the issue of the final orders, he sought orders that the children spend time with him as the Court considered appropriate.  He also sought a variety of orders that the wife pay half of expenses associated with the children and that she pay him spousal maintenance of $300 per week or such other amount as the Court considers appropriate.  There were other orders which I shall not mention further having regard to the paucity of the evidence of the husband.

11. The wife’s application indicated that the husband had not seen the children for some months. His approach to the difficulty was that he was being denied contact with the children. There is a contentious issue here that on the material, I could not resolve. The husband provided no affidavit material of substance that would have enabled me to address any of the issues under s 60CC of the Family Law Act 1975 (Cth) (“the Act”). His affidavit was limited to the fact that he had been verbally and physically abused although I only inferred that that accusation was against the wife. He said that he had been stabbed by her and had been hospitalised with severe injuries but those appear to have been caused by the wife’s father who was convicted. He said he was concerned for his own safety and wellbeing and he had taken out an intervention order against the wife and also made reference to an open file with “the child services”. He therefore wanted the applicant to attend counselling and anger management and for a family welfare report to be prepared for the children as a matter of urgency.

12. Attached to his documents was a bundle of papers in no apparent order which included a copy of an application for an intervention order which noted that the wife had an interim intervention order against him listed for February 2012.  There is also amongst the papers, an interim intervention order against the wife issued on 10 November 2011 which included the children as affected family members but the wife was apparently not served with the application and was not present at the hearing.  I do not understand the basis upon which that order was made.

13. Because of the paucity of evidence and the assertion by the wife that the husband had had little contact with the children, I made interim orders that the children live with the wife to maintain the status quo and fixed an interim hearing before the Senior Registrar prior to Christmas.  I advised the husband that he needed to file appropriate material and not just a bundle of papers.

14. The fundamental issue however before me related to the question of the spousal maintenance.

15. Section 74 of the Act provides that the Court may make such order as it considers proper for the provision of maintenance in the proceedings before it.

16. The respondent to an application for spousal maintenance is liable to maintain the applicant only to the extent that he or she is reasonably able to do so but if and only if the applicant is unable to support himself or herself adequately either by reason of having care and control of a child of the marriage under the age of 18 years, by reason of age or physical or mental incapacity for appropriate gainful employment or for any other adequate reason. However, s 72 requires the Court to have regard to any of the matters that may be relevant in s 75(2).

17. In essence therefore, the applicant must establish whether or not she can support herself and if not, what are her reasonable needs. Once that is established, the Court needs to turn to the capacity of the respondent to meet the order. If each of those matters is satisfied in favour of the applicant, the Court must consider what is reasonable having regard to the matters set out in s 75(2).

18. The financial circumstances of the parties in this case are shrouded in mystery.  The wife asserts that the husband’s family members are involved in relation to movement of assets.  There have been very recent proceedings in the Supreme Court of Victoria before Ferguson J in which a company A Pty Ltd was wound up under the provisions of the Corporations Act and liquidators were appointed.  It would appear on the evidence that the wife was the director of that company but it was accepted that the husband exercised control instead. 

19. A provisional liquidator’s report was handed to the Court and my attention was drawn to various parts of it.  It indicates on its face, many questions about the financial position of the husband.  The provisional liquidator queries whether the company is still trading as a supplier of retail goods to the hospitality industry and whether it continued to operate two retail stores at F Shopping Centre.  Those two stores now appear to have been transferred to an entity controlled by the husband’s sister.  There are questions about bank accounts and missing documents.  There are cars involved that are said to be missing as well.

20. The wife asserted that the husband is driving a luxury motor car, travels first class overseas and attends nightclubs.  None of that evidence assists me in this particular case however it behoves the husband to seriously clear up the liquidator’s questions and make proper disclosure of all of his financial circumstances to this Court so that any financial issues as between the parties can be sorted out. 

21. The critical issue related to the fact that the wife had desired to move into a property at T Street, Suburb H.  That property is owned by the parties and secured by a mortgage to the Westpac Bank.  The husband leased that property to tenants through an estate agent effectively precluding the wife from taking occupation.  It was initially her application to have that property to the exclusion of the husband.  The renting of the property commercially precluded that happening.  According to the wife, the husband is now living with his sister.

22. There are allegations and counter-allegations.  The husband said that the wife had properties in Turkey and during the time together, the rental on those properties was paid to the wife’s parents.  He produced no evidence to support such an assertion. 

23. The wife filed a financial statement in which she indicated that her only source of income was Centrelink payments other than a minimal amount of child support paid which the husband said was what he had been assessed to pay by the Child Support Agency.  The wife is currently living in rented accommodation but that property is subject to a dispute before VCAT and there would appear to be no guarantee of an ongoing entitlement to occupation.  With that dilemma and the inability to take the Suburb H property, the wife sought that the husband pay her rental set at the sum of $475 being an amount equivalent to that paid by the commercial tenants of the Suburb H property.

24. The husband’s position was that he could not afford to do that because of his obligation to the Westpac Bank to pay $750 per week by way of mortgage.

25. The husband’s financial statement showed that he was earning $600 per week from his employment although details were not set out and then he added the $475 from the tenants.  Offset against his income was his modest obligation to pay child support, some tax and other very modest living expenses.  His major expense is the mortgage. 

26. As I pointed out to the husband, he was allowing the tax payers of Australia to pay for the support of his wife and children.  His response to that was that she should get a job.  On the other hand, he conceded that he was making a conscious choice to pay the mortgage to avoid the property being sold.  He has made a conscious choice to pay the mortgage ahead of his obligation to the wife.  On any view of his own concession, the amount of child support he is paying is inappropriate.

27. The wife’s position was that she did not have employment and that she has the obligation to care for the children.  On an interim basis, I accept that is the case.  I am satisfied therefore that the wife meets the threshold test.

28. The Act requires that a court exclude from its consideration any income-tested pension or benefit.  Accordingly I find that the wife has no income at all other than the child support but that is clearly directed towards the support of the children.

29. The next step is a question of whether or not the husband has the capacity to pay.  Having made the conscious choice to pay the mortgage in a negatively geared arrangement, it seems inappropriate that he should be permitted to do so.  Accordingly, the rental that he receives from the Suburb H property should be paid to the wife by way of spousal maintenance.

30. All of the matters however need to be seen in the context of the requirements of s 75(2) of the Act. I do not propose to set those matters out seriatim but it is quite clear on the evidence before me that it is the wife who is caring for the children in straitened circumstances where she is in receipt of government benefits. I am not at all clear on what the husband’s financial circumstances are having regard to the clouded position associated with the liquidation of the company. The assertions of the wife as to the car that the husband drives and the overseas travel just add to the intrigue. The wife’s position is that she wanted to continue to fulfil the role of a parent and on that basis, what seems to be sought by her is reasonable in the circumstances having regard to all the matters in s 75(2) of the Act.

31. Accordingly, it is appropriate that the husband pay that rental from 9 December 2011 which is when he asserts that the rental for the current property owned by the wife is paid until.

32. The wife also sought injunctive relief to preclude the husband from disposing of assets and in particular the Suburb H property. The power to make an order restraining a party from disposing of property lies in s 114 of the Act. That provision requires the Court to only make an order if it is satisfied that it is proper to do so. The husband has asserted that if he cannot pay the mortgage, the bank will foreclose. Be that as it may, the bank will take some time to sort out what steps it will take at which time the Court will have an opportunity to have comprehensive details from the husband and the liquidator will no doubt clear the air. The husband said that he would have to sell the property and in the circumstances, having regard to the matters set out in the liquidator’s report, it seems appropriate that the husband be restrained from taking unilateral action. To the extent that it becomes apparent that his position is as he portrays it, it might be inevitable that the property will have to be sold. That is for another day but in the meantime, the husband needs to be restrained for taking the action that concerns the wife. I therefore make orders on the basis that it is proper to make them. Those matters can all be reviewed in January at the next Judicial Duty List hearing.

33. The wife sought orders that the husband comply with the liquidator’s demands but that seems more appropriate to be dealt with by the liquidator and the Supreme Court of Victoria to the extent that the liquidator is not satisfied that the husband is being cooperative.

34. I stressed to the husband the need to make proper disclosure but also to file material relating to the children’s issues and he indicated that he could do that almost immediately.  Those matters can be dealt with by the Senior Registrar prior to Christmas.

I certify that the preceding Thirty Four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 29 November 2011.

Associate: 

Date:  5 December 2011