Lido and Mont and Anor

[2009] FamCA 515

FAMILY COURT OF AUSTRALIA

LIDO & MONT AND ANOR [2009] FamCA 515

FAMILY LAW – FINANCIAL – Exclusive occupation – Interim spousal maintenance – Property owned by trust

Family Law Act 1975 (Cth)
APPLICANT:	Mr Lido

RESPONDENT: Ms Mont

2^nd RESPONDENT: M Pty Ltd

FILE NUMBER: SYC 5650 of 2008

DATE DELIVERED: 27 April 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: LOUGHNAN JR

HEARING DATE: 27 April 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Jackson

SOLICITOR FOR THE APPLICANT: Uther Webster & Evans

COUNSEL FOR THE RESPONDENT: Mr Foster

SOLICITOR FOR THE RESPONDENT: Slater & Gordon

COUNSEL FOR 2^nd RESPONDENT: Mr Johnston

SOLICITOR FOR 2^nd RESPONDENT: Sagacious Legal

Orders

1. That the application of the husband contained in paragraphs 3, 4, 5 and 6 of the Interim Orders sought in his Application filed 25 March 2009 is dismissed AND the Court noted that the dismissal of paras.4 and 5 of that application is by consent.

2. That the costs of all parties be reserved.

3. The parties attend a conciliation conference at 9:30 am on 12 May 2009.  Each party must deliver to each other party and lodge with the Court at least 7 days before the Conciliation Conference, a Conciliation Conference document, failing which the conference may be vacated.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5650 of 2008

MR LIDO

Applicant

And

MS MONT

Respondent

M PTY LTD

Second Respondent

REASONS FOR JUDGMENT

1. These are proceedings in relation to interim financial issues.  The husband is 62 years of age and the wife is 65.  The husband says he is a Farmer, the wife is a Company Director.  The husband says he lives with Mr D who is 89 years of age and a friend. Mr D has an average weekly income equivalent to the pension, whatever that means. Interestingly, Mr D lives in separate accommodation on the property but nevertheless the husband says that he is part of his household.

2. I understand that the wife lives with one of her daughters. Neither of the parties says they have a new partner.

3. The parties started to live together upon marriage in October 1992 and separated in August 2008.  There has been some controversy about the date of separation.  I think the wife applied for a divorce. I am told that a Federal Magistrate found that the parties separated in August 2008. The wife concedes that fact in her affidavit and then spends a few paragraphs trying to argue the issue again. It does not matter much, when the parties separated. The focus of property proceedings is on contributions rather than the fact of separation. However, here we have a definitive answer, a Federal Magistrate has decided that it is August 2008. Up until that time the husband had been receiving $600 a week by way of a living allowance through the wife.

4. When the parties met the husband was working in the personal services industry, the wife was a director of M Pty Ltd.  The husband says that he found a property at K. The parties agree that that property was bought by a trustee company in 1992.  The trustee company is the trustee of a trust established by the wife's first husband. As to the beneficiaries of that trust, I think there are primary beneficiaries and others. The primary beneficiaries are the wife and her children and then there are general beneficiaries which include relatives of the primary beneficiaries, including, relevantly here, a spouse for the time being of a relevant beneficiary.

5. The husband says that he also found a property at S in 1993 and that was bought also by the trust. The wife agrees that is what happened. Renovations were made to the S property until 1994/1995. The parties lived in the K property during the renovations and once the renovations to the S property were completed the wife substantially lived there and the husband moved between the two properties.

6. The S property was sold in 2005. The parties then rented a one bedroom apartment in Sydney. From that time the wife substantially stayed in that property and the husband came and went between there and the K property.

7. In February 2007, the wife's daughter A moved into the one bedroom apartment in Sydney. She slept on the bed and the husband says his wife slept on an inflatable mattress and he slept on a couch when he was there. The husband says that from mid 2007 he has substantially lived at the K property and the wife at the Sydney apartment.

8. I did not follow the narrative right through but I am told that the wife is now living in a rented property in Queensland where the rent is paid by somebody called J.

9. The application by the husband seeks interim relief.  He seeks exclusive occupation of the K property and he seeks $600 a week by way of interim spousal maintenance.  He had sought orders for the sale of the K property.  It seems that both parties seek such a sale, so that is not an issue. The husband does not press his application for sale today and the parties agree that in that regard his application be dismissed.

10. The matter is complicated because of the trust.  The court has power under s 114 to make orders between parties to a marriage, inter alia in relation to property of a marriage.  There are later amendments to the Family Law Act that give the Court power in relation to other assets.

11. Section 114 provides for orders in proceedings between parties to a marriage. Examples are given of the type of orders that can be made and one of the examples related to the occupation of the former matrimonial property. 

12. The problem here is that the property is owned by somebody else.  It is owned by a trust through a trustee company. The trustees are the wife and two other people.  The wife is the appointor of the trust.  The husband says in effect that the wife is the trust and that the property is the wife's property. On that basis he contends that it is matrimonial property, therefore there is no impediment to the Court making an order in relation to its use and occupation.

13. On the other side it is conceded that the wife is the appointor, that she is the substantial beneficiary of the trust but it cannot be said that she is the trust. It is submitted that the trustees collectively have other obligations which may at times be different to the obligations or the preferences or wishes of the wife. 

14. There is no doubt in my mind that I could make an order today.  The trustee company is a party to these proceedings, is represented and I could make an order that affected this property. The issue is whether I should. Section 114 requires that the Court makes an order that is proper and in the granting of an injunction, there are equitable considerations. The husband has a substantial case to argue in part because, it has pleased all of the parties to have him in occupation of that property since 1992. Indeed, it has pleased all of the parties to have him paid a sum to maintain that property since 1992. That arrangement terminated, interestingly, at the time of separation. That property has been his home and he does not have access to any other accommodation

15. That is not the end of it. The trustees say that they intend to take some steps with the property, including a sub-division. They say that some of those steps have been frustrated by the husband.  The trustee has taken action or is going to take action in the Supreme Court to have the husband evicted. The trustee says that the husband permitted occupation by Mr D of a second dwelling on the property, at a fee and without its consent. The husband does not say anything contrary to that. The trustee says and the husband does not dispute, that the husband has denied consultants access to the property for the purposes of the subdivision.  So the trustee's case is the trust's purposes are being frustrated because the substantial remaining real asset of the trust is the K property and it has to be realised in some form for the objects of the trust to be served. Subdivision would have the 240 acre property divided it into at least two lots. That would allow the trustee to raise some moneys that can be applied for the purposes of the trust.

16. It is one thing to make orders about the occupation of a matrimonial asset and quite another thing to interfere with the intentions of trustees, and through them, on the rights of beneficiaries some of whom are not parties to the proceedings. Although there are questions raised by the documents, on the face of it, the trust's assets have been run down. The husband raises questions about that and I do not really understand how this has come to pass suddenly and perhaps conveniently at the same time as the separation of the husband and wife. Nevertheless it appears that the trust has been distributed largely through the wife's loan account to the point where the only meaningful asset is this non income producing asset at K.

17. The law about exclusive occupation does not help much. No one proposes that the husband and wife live together. The wife says she wants to come down to the property to make some improvements in advance of the sale. The trustees do not think that much needs to be done but that is what she plans to do.  She says that the work is in aid of the sale of the property and it sounds like all of the parties want that sale. If the property is to be sold the issue of occupation is only relevant for a short period of time. Given that fact and the element of this case involving the trust it seems to me that the Court should not exercise its discretion to make an order for exclusive occupancy.

18. In relation to spousal maintenance, that is a right that arises between parties to a marriage whether the marriage is still on foot or not.  Where one party cannot adequately support themselves from their own resources, the other can be called upon to do so to a reasonable extent.  As I said during in submissions to Mr Jackson, who is the husband’s counsel, there are all sorts of problems with this. The husband's Financial Statement does not really make sense.  His Financial Statement says he has no income and that his expenditure is $350 a week.  Later in the document we find out that $250 to $300 a week are paid by a Mr D for the husband's benefit and that is not right.  When you go to the note it is not that Mr D has paid things for the husband's benefit.  He has given the husband money each week to assist with his expenses. Therefore it turns out that the husband has some income, in the form of $250 to $300 a week paid by Mr D with whom the husband says he lives but who apparently lives in another house on the property.

19. Everything raises questions. There is no real explanation as to why the husband would not be on some sort of social security benefit. Coming to expenses, the husband says he has one which is a minimum credit card payment of $350 a week. Then if you go to the back of the document he sets out his average weekly living expenses and they total $525 a week.  So I do not know what that means. 

20. The first thing is: Can the husband adequately support himself on his own resources.  He does not account for the fact that he does not earn any income.  He says about that:

    "I have no independent income having been involved on a full-time basis in running the 240 acre [K] property, receiving until August 2008 the sum of $600 a week."

21. He was employed in the personal services industry at the time of marriage, he has not worked in that capacity since shortly afterwards. He says:

    "I can no longer do that partly due to my age but also injuries I suffered in 2000/2001.

    There was an Achilles tendon injury which resulted in an operation and a fall on the property.  That is it. There is no evidence that he made applications for jobs, no discussion about anything else he could do, nothing. He literally has not met his obligation as to the threshold issue of the extent of his capacity to meet his own expenses.  Then there are problems that I have identified with the expenses and so on.  It gets more confusing with his credit card statement, presumably he has been going backwards since August 2008 to the tune of $600 a week but over that period his credit card debt increased from $29,000 to $32,000. As has been pointed out in submissions there are lumpy payments into his credit card account.  Not payments made up of lots of $250 or $300 but payments of $1000, $800 and some larger payments, $2275. They cannot be borrowings because the only debt he declares is to the man called R who repaired a motor vehicle for him. Where did those payments come from. There will be a story about it but it should not be for me to dig around and find it. Thus the husband does not meet the threshold issue. Further, there are a world of problems on the other side of the argument. 

22. As I said during the course of submissions the husband's own case about his wife sleeping on a blow-up mattress in a rented apartment does not speak of a capacity to provide support to him. It suggests that she has little by way of significant lifestyle expenditure. There is no obvious source of income from which support could come.  The wife's case seems to be that she has lived on drawing against her interest in the trust. She says that she has supported her children by drawing on her interest in the trust to the point where her interest in the trust is seriously depleted.  I do not really understand what her financial circumstances are. I do not think she has made a real effort to make that transparent to the Court. There is a document attached to one of the other trustees’ affidavits that purports to be a statement of estimated assets and liabilities of the wife and of the wife's associated family entities, after elimination of inter entity debts. It is said to represent the position at April 2009 and it puts her estimated net position at $1.6 million. That might be a fair statement of what the wife is worth.  If it is the parties have real problems because the K property is the only asset. I suppose it is possible that the K property might generate something more than the estimated $3.5 million. I do not know whether that is an under estimate or an over estimate. 

23. Therefore the husband's application for maintenance must fail.

I certify that the preceding twenty three (23) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan

Associate: 

Date:  17 June 2009