Labonte and Labonte

[2019] FamCA 433

FAMILY COURT OF AUSTRALIA

LABONTE & LABONTE [2019] FamCA 433

FAMILY LAW – SPOUSAL MAINTENANCE – Where the husband seeks a discharge of spousal maintenance orders – Where the wife opposes that application – Where the husband alleges a change of circumstances sufficient to warrant a modification of spousal maintenance – Where the wife has no capacity for work as she is a full-time carer for the parties son, who suffers from very serious health problems – Application dismissed.  

Family Law Act 1975 (Cth) s 83(2)(a)(ii)

APPLICANT: Ms Labonte

RESPONDENT:

SECOND RESPONDENTS:

THIRD RESPONDENT:

Mr Labonte

Labonte Holding Pty Ltd

Ms N

FILE NUMBER: SYC 3565 of 2018

DATE DELIVERED: 5 July 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 4 July 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

John de Mestre & Co Pty Ltd

SOLICITOR FOR THE RESPONDENT:

COUNSEL FOR THE SECOND RESPONDENTS:

SOLICITOR FOR THE SECOND RESPONDENTS:

SOLICITOR FOR THE THIRD RESPONDENT:

York Law Family Law Specialists

Mr O’Ryan SC

Sekel Grinberg Judd

Pearson Emerson Meyer Family Lawyers

Orders

IT IS ORDERED

1. That the application of the husband to discharge Orders 3 and 4 made on 24 September 2018 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 Labonte & Labonte 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 SYDNEY

FILE NUMBER: SYC 3565 of 2018

Ms Labonte

Applicant

And

Mr Labonte

Respondent

And

Labonte Holding Pty Ltd
Second Respondents

And

Ms N
Third Respondent

REASONS FOR JUDGMENT

1. Ms Labonte (“the wife”) and Mr Labonte (“the husband”) separated in May 2014 according to the husband or in August 2015 according to the wife.

2. They have two children aged nine years and seven years. The children live with the wife in the former matrimonial home. It is not disputed that, because of the very serious health problems suffered by the parties’ eldest child, the wife is unable to work and attends to his care at home.

3. The husband is a designer and has engaged in business both in his professional capacity and as a property developer. The designing practice is owned by F Pty Ltd. That company is regarded as a creature of the husband.

4. In relation to the property developments, the husband’s parents have provided funds from time to time.

5. There are substantive proceedings before the Court in relation to parenting and property settlement. The parties to those proceedings are the wife, the husband, the husband’s parents and entities associated with them (the second respondents), and the husband’s girlfriend who is the third respondent.

6. In the substantive proceedings, the husband’s parents claim repayment of monies advanced by them towards various property ventures undertaken by the husband.

7. Before me today, the wife, the husband and the second respondents have agreed to orders which will effect the sale of 11 units held by an entity associated with the husband and the payment of specified encumbrances. The balance of the proceeds of the sales is to be held pending resolution of the substantive proceedings.

8. The issue to be determined today is the husband’s application to vacate orders made on 24 September 2018 for the payment of spousal maintenance and for the husband to pay the outgoings on the home in which the wife and the children live.

9. Those orders provide:

   (3)The husband pay spousal maintenance to the wife in the sum of $1,265 per week, such payments to be made weekly, in advance, to the wife’s nominated bank account, with the first such payment to be made two days from the date of these orders and weekly thereafter.

   (4)The husband continue to pay, as he has been doing, the following payments as and when they fall due:

   a)The mortgage repayments in relation to the [Suburb D] mortgage; and

   b)The following expenses in relation to the motor vehicle driven by the wife:

   i)       Registration and comprehensive third party insurance;

   ii)     Servicing and repairs; and

   iii)   Car lease.

10. In his reasons for judgment, McClelland DCJ stated:

    92.The husband accepts that he has the capacity to pay spousal maintenance to the wife in the sum of $855 per week.  In my view, he has the capacity to pay an additional $410 per week.  This is evidenced by the following discretionary payments made by the husband:

    a)$5,479 paid to [V Lodge] at [Town W] on 31 December 2017; and

    b)Various payments made to [Ms N] in the period subsequent to 30 November 2015, which are set out in pages 221 to 236 of the wife’s tender bundle.

    93.However, even if I am wrong in making that assessment, I note that, consistent with the authority of Maroney & Maroney (supra), the husband has, according to his own evidence, a joint interest in the 12 unsold units at the [Suburb E] development.  In his draft balance sheet, the husband contends that the value of the 50% interest retained by his parents in the [Suburb E] development is $1,839,730.  As I understand, the husband contends that, after deduction of the increased indebtedness and income tax liability associated with interest and penalties, his interest in the Suburb E development, through the [Mr Labonte] Family Settlement, is $1,595,369.

    94.In addition, in his Financial Statement, the husband acknowledges that he is owed the following monies:

    a)   Loan to [Labonte] Family Discretionary Trust at $378,929;

    b)   Loan to [Labonte] Holding Pty Ltd at $33,121; and

    c)   Loan to Ms N at $750,000.

    95.Accordingly, I am of the view that the husband has the capacity to pay spousal maintenance to meet the reasonable needs of the wife, which I have determined to be $1,265 per week.  For reasons which I set out below, having regard to those matters set out in s 75(2) of the Act, I am satisfied that it is reasonable to make an order requiring the husband to pay that total amount to the wife by way of spousal maintenance.

11. The husband now seeks to discharge those orders. The application is opposed by the wife.

12. It is the husband’s case that he does not have the ability to pay the sums ordered.

13. On behalf of the wife, it was submitted that, whatever the husband might contend is his current financial position, he is able to find sums of money when it is convenient to him to do so.

14. There is some force in that submission.

15. In 2015, when according to the husband the parties had separated, he borrowed $4.4 million.

16. In January 2018, at a time when the parties, on any version, were separated, the husband borrowed a further $1.7 million.

17. Those borrowed funds were disbursed by him in payment, inter alia, of a total of $1,490,000 to his parents, loans of more than $1.5million to his designing practice and a loan of $800,000 to the third respondent who has since repaid $50,000.

18. The loan to the third respondent was to enable her to pay out the entitlement of her former husband to property settlement and retain their former matrimonial home. It would seem that the loan is undocumented. The husband deposed that he has requested that the third respondent repay the loan and that she has declined to do so. There is no suggestion that the third respondent pays interest in relation to the money outstanding.

19. Since these proceedings have been on foot, the husband has paid some $250,000 to his lawyers. There is no suggestion that the third respondent pays interest in relation to the money outstanding.

20. He is leaving this week for a holiday in Europe but, he tells the Court, his parents are paying for that holiday.

21. From the bar table, the solicitor for the husband told the Court that the payments pursuant to the orders are being paid, at the present time, by the designing practice.

22. On behalf of the husband, it was submitted that he is currently paying the spousal maintenance and the outgoings on the house, in priority to paying tax. Bank statements for the husband’s personal account which were tendered show that the spousal maintenance payments and the mortgage payments are being made.

23. The husband relies upon the fact that proceedings have been issued against F Pty Ltd by the Deputy Commissioner of Taxation (“ATO”) in respect of outstanding tax. However, those proceedings were issued in August 2018 and returnable on 19 September 2018, that being a date before the orders were made on 24 September 2018. Therefore, that fact cannot constitute a change of circumstances for the purpose of section 83(2)(a)(ii) of the Family Law Act 1975 (Cth).

24. A further demand has been served upon F Pty Ltd by the ATO in relation to tax owed by the company which appears to be a consolidation and updating of the earlier debt. There is no explanation from the husband of the way in which the income which generated the tax liabilities has been disbursed.

25. The fact that the husband’s or F Pty Ltd’s tax debts have increased is not a change in circumstances but rather a continuation of a pre-existing circumstance.

26. Despite the demands of the ATO, the spousal maintenance and other amounts pursuant to the orders are currently being paid.

27. I am not satisfied that there has been a change of circumstances such that it is reasonable to discharge the orders.

28. The wife remains unable to support herself by reason of her care of the parties’ child. 

I certify that the preceding twenty eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 5 July 2019.

Associate: 

Date:  05/07/2019