Lupez and Lupez and Anor

[2009] FamCA 897

FAMILY COURT OF AUSTRALIA

LUPEZ & LUPEZ AND ANOR [2009] FamCA 897

FAMILY LAW – PROPERTY – Interim

Family Law Act 1975 (Cth)

APPLICANT: Ms Lupez

RESPONDENT: Mr Lupez

2^nd RESPONDENT: G Nominees Pty Ltd

FILE NUMBER: SYC 791 of 2009

DATE DELIVERED: 19 May  2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 19 May 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Givney

SOLICITOR FOR THE APPLICANT: Alex Stuart & Associates

COUNSEL FOR THE RESPONDENT: Mr Jackson

SOLICITOR FOR THE RESPONDENT: Legal Ease Lawyers

Orders

1. That the wife’s Application in a Case filed 13 February 2009 be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Lupez & Lupez 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: SYC791/09

MS LUPEZ

Applicant

And

MR LUPEZ

Respondent

REASONS FOR JUDGMENT

1. These are proceedings in relation to interim financial issues.  The wife and husband are 27 and 37 years of age respectively.  They started to live together in July 2004, married a year later and separated in September of last year. They have no children.

2. The wife’s application is an Application in a Case filed 13 February 2009. She seeks a raft of orders in relation to the sale of a property and the parties have that under way so that is not an issue today.  In effect there are injunctions, the wife be appointed trustee for certain things. There has not been much focus on those particular forms of relief today. 

3. The focus of today has been on debts.  The wife wanted, within 14 days, the husband to discharge arrears in relation to the G property mortgage; she wanted $29,000 so she could pay out two credit cards; she wanted $50,000 being part of the proceeds of sale of a boat; she wanted a payment to her solicitors of $20,000 on account and the Commissioner paid $45,000 in respect of a tax liability. She also seeks $2000 a week by way of spousal maintenance and financial disclosure by the husband.

4. Some of her orders are sought by way of mandatory injunction to address matrimonial debts that the wife says she has been left exposed to and for interim costs. She seeks payments by way of interim or partial property settlement being the proceeds of sale of the boat and spousal maintenance of $2000 per week. 

5. Maintenance is a right that arises because of a marriage where one party cannot adequately support themselves from their own resources for a proper reason.  The other party can be called on to provide that support to the extent of their reasonable capacity.

6. It is a very short marriage. The parties met in London. The parties were involved in litigation which led to bankruptcy early on, certain payments were made and some debts remained.

7. The parties were both involved in an enterprise dealing with other peoples’ debts and it still trades to some extent. It is referred in the documents by its initials AA. It has generated an income I think to both parties but income in excess of $100,000 in the last two financial years to the husband.

8. Everything is in dispute between the parties in relation to the debts.  There seems to be some dispute between the parties as to whether they are joint debts and both parties say that they have debts relating to tax and other debts. I invited the husband’s counsel to describe his overall financial position and he would not venture anything other than an equivocal opinion.

9. The problem with the case, and it was a problem when the matter was before me before and again today, is that I cannot be confident about the financial circumstances of the parties or the entities.

10. Now in a case where there are assets, one could draw on that. That is not what is proposed on behalf of the wife, at least until the G property is sold. What worries me is: if each of the parties says that they are in a position where they cannot pay their debts, I may well just compound the problem by adding another set of debts. I cannot be confident those new debts can be met.

11. There are things in both cases that seem unusual and odd.  The husband was confident enough to propose that he would take over the company-related debts and provide proper support to the wife in terms of her accommodation. All of that commitment is now withdrawn, apparently because she incurred additional expenses. To the extent that that is to do with something other than his financial circumstances, that suggests that his present incapacity to provide support is a fiction.

12. Both parties say that the wife was intimately involved in the financial aspects of businesses associated with the parties. In those circumstances it is a bit odd that neither of the parties seems to know anything about the preparation of summary financial records and the compliance with obligations to the regulatory authorities including the Australian Taxation Office for Business Activity Statements, for example.

13. The wife has produced a document that is said to be a summary document in relation to the central enterprise showing a very healthy, positive balance, retained profits of half a million dollars and suggesting that all is very well in relation to that enterprise. She does not say where she got it from. That document is repudiated by the husband. He says it has nothing to do with the real accounts. Neither of the parties has provided any source documents. There is nothing from an accountant. There is a letter dated yesterday to say that work is under way on the summary records. This is far from adequate.

14. As to the wife’s maintenance case, the background evidence is that she has worked very hard. The husband agrees with that and says she was very effective in the early part of her involvement with businesses. That suggests she has business skills. 

15. The wife says she is planning a career in beauty services and indeed she puts that down as her occupation but has no income. An applicant for maintenance has to do more than that.  I do not think there would be a time in the wife’s life when she has not held down a job and worked hard. There is simply no explanation for what is happening at the moment.

16. She says she lives with a flatmate, Mr N.  She pays him $200 a week rent.  He does not provide any support to her and she does not pay anything for his benefit. That is what her Financial Statement says. Thus they are flatmates and there is no mixture of funds. She spends about $600 a week on her living expenses and there is no real explanation as to where that money comes from.  Her credit card debts are about the same as they were when the case started and there is no explanation of the source of her living expenses.

17. There was an attempt at service on Mr N and he is avoiding service.  Now it might just be that he is a flatmate, as has been said, and he just does not want to be involved. However, in my experience, it is unusual for ordinary citizens to go to the trouble of dodging process servers. Coming back to the husband, there are a couple of affidavits from people who have provided him with funds over the years. One of them, a Mr S, says that he is not willing to help the husband out, particularly not if the money is going to go to maintenance for the wife. A Mr H, who is a mortgage broker, says the same thing.

18. I simply do not know enough to make an enforceable order. The only way we are going to get to the bottom of this is at a final hearing when somebody has had a look at the books. I might be sensible to appoint a single expert now so as to get that work under way.  There was a level of informality about the business and both parties were involved in that. That is likely to have contributed to the situation we are in.

19. On the basis of the facts as they are known, I cannot meet my obligation to grant injunctions that are proper or orders that reflect the aspirations of s 79 in relation to interim or partial property settlement. I can see the arguments for interim costs but the problem is the lack of an available fund. In relation to spousal maintenance there are problems on the applicant’s side of the case and there are certainly problems, as has been said, on the husband’s side of the case.

20. This is a highly unsatisfactory outcome but a Court should act carefully. If there was a net equity somewhere, even a safe line of borrowing that did not run the risk of defeating the claims of other creditors, then I would chance my arm in relation to the matter but I am not confident about it.

21. So without in any way seeking to dismiss the underlying claims, I will order that her application in a case filed 13 February be dismissed.

22. It was accepted by both parties, in their correspondence last year, that the husband would be responsible for business debts. He is planning to take the business on into the future. Therefore he must have a capacity to service the business debts. It is not clear how he proposes to do that and meet his other obligations.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan

Associate: 

Date: