Lofts and Farina and Ors

[2014] FamCA 1097

FAMILY COURT OF AUSTRALIA

LOFTS & FARINA AND ORS [2014] FamCA 1097

FAMILY LAW – INTERIM INJUNCTION– whether one party should continue to meet expenses associated with a property pending finalisation of the matter.

APPLICANT: Ms Lofts

RESPONDENT:	Mr Farina
SECOND RESPONDENT:	C Pty Ltd
THIRD RESPONDENT:	D Pty Ltd
FOURTH RESPONDENT:	Mr B

FILE NUMBER: BRC 10102 of 2012

DATE DELIVERED: 8 December 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 25 August 2014,
5 September 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Hawkshaw by way of direct access brief

THE FIRST RESPONDENT: In Person

SOLICITOR FOR THE SECOND, THIRD AND FOURTH RESPONDENTS: Mr Trost, Cleary Hoare Solicitors

Orders

IT IS ORDERED THAT

1. The wife’s application for leave to amend the Application in a Case filed 14 March 2014 is dismissed.

2. In the event that the parties cannot agree the terms of a joint letter of instruction to Mr I of U Pty Ltd:  

   (a)each party has leave to forward a letter to Mr I outlining those matters said by that party to be relevant to his engagement;  and

   (b)each party shall ensure that all other parties are provided with a copy of any correspondence forwarded to Mr I.

IT IS ORDERED UNTIL FURTHER ORDER THAT

1. Within fourteen (14) days of the date of this Order, the husband pay any outstanding body corporate fees payable in relation to the former matrimonial property.

2. The husband pay all body corporate fees payable in relation to the former matrimonial property by the due date for payment.

3. Within fourteen (14) days of the date of this Order, the husband pay all outstanding Region P Council rates and water charges for the former matrimonial property.

4. The husband shall continue to pay the rates and water charges for the former matrimonial home as and when they are payable until such time as final orders are made in these proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lofts & Farina and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 10102 of 2012

Ms Lofts

Applicant

And

Mr Farina

First Respondent

And

C Pty Ltd
Second Respondent

And

D Pty Ltd
Third Respondent

And

Mr B
Fourth Respondent

REASONS FOR JUDGMENT

1. The Application in a Case filed by the wife on 14 March 2014 was substantially finalised when Orders were made on:

   a)18 July 2014:  joining the Second to Fourth Respondents, and

   b)25 August 2014: by consent in relation to all but two of the issues raised in the Application in a Case.

2. Details of the factual circumstances within which the outstanding issues are to be determined may be found in the Reasons for Judgment delivered 18 July 2014. I adopt and incorporate the same into these short Reasons delivered after a consideration of the written submissions filed by the wife and the husband.

Payment of Body Corporate Fees

1. The wife seeks an order that the husband continue to pay all body corporate fees by the due date for payment as due to the body corporate until such time as final orders are made in these proceedings.[1]

   [1]          Clause 2, Wife’s Application in a Case filed 14March 2014.

2. On 11 March 2013, Federal Magistrate Howard (as his Honour then was) made Orders by consent requiring the husband to pay the arrears of the body corporate fees in the then amount of $1,929.29. The Order did not create an ongoing obligation on the part of the husband to continue to pay the body corporate fees as and when they become due and owing.

3. The husband did not comply with this Order. 

4. On 14 December 2013 the body corporate commenced proceedings in the Magistrates Court of Queensland seeking the payment of $1,929.29 in respect of unpaid body corporate fees.[2]  Counsel for the wife suggested that these proceedings resulted in a default judgment against the wife because the husband continually evaded service of the same.[3]

   [2]          Affidavit of Wife filed 14 March 2014, Exhibit SL-19.

   [3]Written Submissions on behalf of the Applicant Wife, filed 4 September 2014, paragraph 5(e).

5. The wife asserts that the husband’s failure to comply with the requirement to pay body corporate fees resulted in the amount due and payable increasing significantly such that, by about March 2014, it was in the amount of $4,079.61.[4]

   [4]          Affidavit of Wife filed 14 March 2014, at paragraph 65.

6. The husband asserts that on 20 August - I infer ‘2014’, he caused all outstanding body corporate fees in the amount of $14,550.15 to be paid.[5] He says he did so by obtaining a personal loan from a commercial lender.

   [5]          Written Submissions filed by Husband on 4 September 2014, at paragraph 12.

Rates and Water Charges

1. The wife seeks an order that, within seven days of the date of these Orders, the husband pay all the outstanding Region P Council rates (said to be approximately $3,989.35) and water charges (said to be about $1,143.99) for the former matrimonial property and that he continue to pay the rates and water charges for the former matrimonial home as due by the Region P Council and water authority until such time as final orders are made in these proceedings. She indicates the husband has previously indicated to her, through his former solicitors, that he would solely meet these payments.[6]

   [6]          Affidavit of Wife filed 14 March 2014, at paragraph 70.

The submissions

1. The wife’s overarching submission may be distilled to the contention that the husband’s financial capacity to meet the payments sought is superior to hers. It is, in essence, submitted that the Court would be persuaded the balance of convenience favours the making of the directive injunctions sought on an interim basis because:

   a)the husband has retained for his own benefit and use all the profits and assets of the corporate entity and trust through which he operated the business which previously supported the parties and their children during their cohabitation; and

   b)the husband has actively sought to divert or transfer profit previously attributable to the corporate entity he controls to another corporate entity controlled by the Fourth Respondent; and

   c)the wife is the primary carer for the parties’ two children (aged 8 and 4 years) and, whilst she works part time as a yoga instructor, she does not have the financial capacity to meet the future body corporate fees, rates and water costs from the combination of her income, family tax benefit and child support.

2. The husband opposes an order that would require him to meet the payments, fees and charges outlined above. He submits the wife should be responsible for meeting such payments because:

   a)she has lived in the former matrimonial home since May 2012 after obtaining an ouster order in his absence and without his opposition; and

   b)she seeks to retain the property in the property settlement proceedings; and

   c)despite having withdrawn $100,00.00 from a joint account secured by mortgage over the property after separation, she has made no financial contribution to the body corporate fees or Council charges despite living in the property since May 2012; and

   d)he continues to make the mortgage repayments - which range from $800.00 to $2,000.00 per month and which include amounts referable to the $100,000.00 withdrawn by the wife - relating to the property; and

   e)the wife travelled overseas with the parties’ daughter in about March 2013; and

   f)despite the payment of the sum of $6,000.00 pursuant to an Order made on 11 March 2013, the wife failed to make any payment toward the body corporate or Council fees and charges; and

   g)the wife has the capacity to pay the body corporate and Council fees and charges from her yoga and bed and breakfast businesses, particularly in circumstances where she operates these from the property and could claim the same as business expenses.

Discussion

1. The fact that the husband was able to make arrangements to pay the outstanding body corporate fess in the amount of $14,550.15 in August 2014 – by whatever means – suggests to me that he has the capacity to continue to make arrangements for the payments of such fees and those payable to Council for rates and water charges pending the finalisation of the property proceedings between the parties. 

2. It cannot be forgotten that the business he continues to operate once provided sufficient income and financial resources – however ordered and paid – to meet all of both parties’ financial needs. As I did in the Reasons delivered on 18 July 2014, I note, in particular, that Mr I has said:[7]

   The change in financial circumstances for the business has arisen as a result of the new arrangements relating to [D Pty Ltd] and will cause a substantial reduction in the profit of [C]. These arrangements see an entity owned by [Mr B] purchasing stock items from the supplier and then on selling the products to [C]. Previously [C] would purchase the products directly. Due to an additional margin charged by [D] to [C], this results in a transfer of profits from [C] to [D].

   We hold concerns in relation to the nature of these changes and whether they are appropriate given the relevant duties owed as a Trustee/Director. However, we are not able to form any conclusions on these matters what possible remedies the Husband might have (if any).

   [7]           Affidavit of Ms Lofts filed 14 March 2014, Annexure “SL-10”.

3. This change to the manner in which the business operates occurred after separation and without the wife’s input or imprimatur.

4. Having considered all of the matters outlined above, I consider it just that the husband meet the costs of the body corporate charges, rates and water charges relating to the property until the finalisation of the property settlement proceedings between the parties.

5. It may, of course, be open to the husband to assert at a final hearing that these payments should be regarded as post-separation financial contributions by him to the conservation of the property of the parties and/or the support of the children.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 8 December 2014

Associate:                 

Date:    8 December 2014