MacDougal and MacDougal (Also Known As Benson)

[2013] FamCA 483

FAMILY COURT OF AUSTRALIA

MACDOUGAL & MACDOUGAL (ALSO KNOWN AS BENSON) [2013] FamCA 483

FAMILY LAW – PROPERTY – Husband to retain pre-paid school fees

APPLICANT: Mr MacDougal

RESPONDENT: Ms MacDougal (also known as Benson)

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 1674 of 2013

DATE DELIVERED: 6 June 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Dessau J

HEARING DATE: 6 June 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Strong

SOLICITOR FOR THE APPLICANT: Forte Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr St John

SOLICITOR FOR THE RESPONDENT: Lennon Mazzeo

Orders

1. That the husband shall be authorised to retain any pre-paid school fees for the 2014 academic year refunded by School O and School P (estimated in the order of $30,842) and the wife be and is hereby restrained from in any way interfering with or opposing any application by the husband to the said schools for such refunds and from intercepting or in any way receiving such refunds by herself, her servants and agents, and that the wife sign all documents and do all acts and things as may be requested to join in or authorise any such application and in default, a Registrar be authorised to sign in her place pursuant to s 106A of the Family Law Act.

2. That my Reasons for Judgment given this day shall be transcribed, and retained on the court file and made available to the parties.

3. That all existing applications shall be adjourned to the Judicial Duty List on 19 July 2013.

4. That the wife pay the husband’s costs of today fixed at $4,488.

IT IS NOTED that publication of this judgment by this Court under the pseudonym MacDougal & MacDougal (also known as Benson) 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 MELBOURNE

FILE NUMBER: MLC 1674 of 2013

Mr MacDougal

Applicant

And

Ms MacDougal (also known as Benson)

Respondent

REASONS FOR JUDGMENT

1. Yesterday I made some interim parenting orders to implement existing orders designed to get a regime under way for the parties’ 14, 12 and 7 year old children to spend weekly time with their father.  Unfortunately, it was well after court hours when it became clear that the matter and the remaining financial issue could not be contained to finish within a reasonable time, and certainly the case has taken some hours again this morning just on remaining discrete financial issues.

2. The parties separated quite recently, in February 2013.  Unfortunately the litigation since then, although short, has been torrid. 

3. The case first came before me on 8 March this year when the parties agreed a number of orders.  In summary, the wife agreed to pay all minimum monthly amounts on the husband’s NAB Visa and Wesptac Mastercard from funds controlled by her consequent upon the sale of a Suburb Q property – a property sold just before separation.  The wife was to pay all instalments on various loans, private school fees, Optus telephone invoices, the rates and bills for three properties owned by the parties, and the costs of the report of Ms R in relation to the parenting issues. 

4. In addition, each party was to receive $50,000 from the net proceeds of the sale of the Suburb Q property and those payments were to be characterised by the trial Judge.  There was an order in relation to the collection of some assets by the husband, and there were various undertakings – most pertinently the undertaking by the wife that she be restrained from dealing in any way with the net proceeds of sale of the Suburb Q property, except as agreed between the parties in writing or as ordered by this court, and an undertaking that she would refrain from or do certain other things, all designed towards preserving assets until the trial. 

5. The case came before me again on 23 April 2013.  The husband was urgently seeking funds that day, asserting that the wife had failed to comply with many of the orders made just a short time before.  The parties and their legal representatives negotiated all that day.  The parties seemed very close to settling the outstanding issues and, from recollection, I was told several times that it appeared that they had settled.  But very late in the day, it did not resolve, and specifically due to the lateness of the day when that occurred, the case had to be adjourned to 9 May 2013, when it came back before me.

6. On 9 May 2013, I gave brief reasons as to why I was ordering the wife to pay the husband’s costs thrown away by virtue of that lost day on 23 April.  And in the reasons I gave that day I set out in paragraphs 6 and 7 in particular, concerns in relation to the wife’s conduct.  I made various other orders on 9 May, some by consent, some not.  I ordered that various small sums of money under the wife’s control be transferred to the husband, that the two motor vehicles be transferred to him to sell, and that he have access to collect chattels from several properties, and that the wife give the husband details of legal fees she had paid, and that she make full disclosure.

7. Orders were also made by consent that the categorisation of payments be determined by the trial Judge, that all applications be adjourned to 5 June 2013 in the Judicial Duty List, (that was yesterday’s listing), that the husband have leave to join the wife’s parents and her brothers and corporate entities, and that he have leave to apply if the wife failed to comply with the payments set out in those orders. 

8. Yesterday, before MacMillan J, it was agreed that the husband’s application in relation to the wife’s family’s company, T Pty Ltd, be adjourned to 19 July 2013, upon the company’s undertaking not to deal with about $470,000-odd from the Suburb Q property proceeds. 

9. What is now sought by the husband, the ICL having been excused today now that there is only a small financial issue to be dealt with, is that any school fees pre-paid for 2014 by the wife to School O and School P claimed by the husband to be a little over $30,000 (although documents this morning from the school would suggest it is more like $19,000), be effectively paid out to the husband.  That is, that he be permitted to apply to the school and that the wife not do anything to interfere with that process.  There is no order sought as such against the school.

10. From the husband’s perspective, it is important, as his case is that he has been seeking financial support for several months, and that his endeavours to obtain that financial support and to enforce earlier orders have been on-going but as yet not completed.  I agree with counsel on his behalf that some of those matters are properly before the Court at the moment because they were adjourned by me until yesterday and then on to today. 

11. Apart from a possible desire or choice to secure the position into the future, there’s no obvious explanation as to why the wife, when ordered to pay 2013 school fees for the children, has chosen to pay 2014 fees, particularly when she says that her financial position has been absolutely parlous. 

12. She says that she has no money at all, that she is awaiting but does not receive a pension, that she is living off family support, and cannot even, for example, afford the $1000 fee that Ms N had sought for family therapy, and that she had been ordered by me to pay, specifically to enable the children to be reunited with their father, as the children indicated to the Family Report writer that they would like, that the Family Report writer has said is appropriate, and as the wife through her own counsel yesterday indicated she also thought was appropriate.  So, she says that despite her parlous financial position, she borrowed further money from her parents or their entity, not only to meet various living expenses, but to unilaterally decide to prepay the children’s school fees for 2014 before any invoices had even been struck for next year.

13. Mr St John, senior counsel for the wife, has argued that no orders should be made today. He submitted that no orders should be made until the matter returns on 19 July with T Pty Ltd and the wife’s family members present in court. He says there is no basis for the orders: that if orders are sought under s 79 of the Act, I would need to go through the process set out there, that if orders are sought under s 74 of the Act, there is no maintenance claim by the husband, and if orders are sought under s 117 of the Act, then I would need to consider the wife’s financial position as part of the process. He says too that when it comes to any purported enforcement of orders, that there has quite simply been no breach on his client’s part.

14. Mr St John submits that the 8 March 2013 orders restrained the wife from dealing with the net proceeds of sale of the Suburb Q property, but on his submission, as her parents or their entities were owed a very substantial sum, that she then pay to them shortly before the 8 March 2013 hearing from the Suburb Q property proceeds, there were quite simply no net proceeds and therefore no breach.  Mr Strum says that T Pty Ltd is irrelevant to this small application today.  I agree.  Although the wife produces loan agreements purportedly entered between herself and T Pty Ltd on 13 March and 25 March 2013 for $78,000 in one instance and $74,000 in the other, and curiously I note from her own material that the dates and the amounts are somehow transposed, all of which will be an interesting area for evidence in due course.  But she says that she has entered those loans and it’s from those loans that she has prepaid the 2014 school fees. 

15. There is absolutely nothing in the loan agreements that has been put to me to suggest that the loan agreements were in any way tied to specific payments.  Quite simply she has received those moneys.  They cannot be said to be tied to any particular payment, although she chose to apply some to school fees beyond the fees yet due.  I am not persuaded by the argument for the wife that she has in no way breached the orders of 8 March 2013.  I am not making a definitive finding today because I have not heard the argument at large on the issue. 

16. What I can say though at this urgent interim stage is that she concedes in her own affidavit, sworn 19 April 2013, that prior to the hearing in court and the agreed orders on 8 March 2013, she had already used the full sale proceeds, paying $310,000 to T Pty Ltd on 4 February 2013, paying $850,000-odd to Company U on 4 February 2013 – Company U being the parties’ company of which she was the sole director.  From that money, the sum of $494,000 was directed by her to T Pty Ltd on 14 February 2013, as was a further sum of $19,000 from the company EE – a company controlled by the husband also on 14 February 2013. 

17. On 8 March 2013, she had to know that there was no money left from the Suburb Q property.  But at paragraph 92 of her affidavit sworn on 19 April 2013, she swore:

    When I attended court on 8 March 2013, I incorrectly understood the position in relation to the application of the proceeds of sale of the [Suburb Q] property.  It was on the basis of my incorrect understanding that I agreed to paragraphs 1, 2 and 3 of the interim orders made on 8 March 2013.

18. Those orders, broadly speaking, related to payments to be made by her, some specifically from sums controlled by her, arising from the Suburb Q sale.  That paragraph will give rise to fertile cross-examination in the future, and that is not something for today.  But today, what has been argued on her behalf is that she undertook not to deal with net proceeds of the Suburb Q sale, and as there were none as at 8 March, she could not be in breach. 

19. I note however that paragraph 2 of the orders referred to payments to be made by the wife from funds “controlled” by her consequent upon the sale of the Suburb Q property.  There was no reference in that order to “net proceeds” as such, and quite simply she did not tell the Court or the husband that there were no funds controlled by her, or that there had been but they no longer existed.  She agreed to meet payments, but it seems from the material before me this far, she has not met all those payments. 

20. Moreover, I can only note at this stage that the transaction between the wife and her family, or the family’s company, is at the very least a curious one.  Of course, I can make no definitive finding, but I can observe that on her own material, purportedly a loan of something like $120,000 in 1991 attracted a repayment of something like $1.664 million in 2013, just after separation, and without her telling the husband or the Court when she agreed to orders on 8 March.

21. I am satisfied that the order sought by the husband today – an order that is in the smallest compass compared with the argument about the asset pool in this case (which the husband puts at something like $2.4 million – and that may or may not ultimately be the case), should now be made. 

22. As I have noted, it is not an order against the school, but it would enable the husband to at least apply for access to this very small sum of money. 

23. Neither party is employed, having sold their business apparently for no profit shortly before separation.  Of the two however, the husband’s been the one shut out from the control of assets except that each party received a small payment of $50,000 in accordance with the earlier orders.  He is the one of the two who has not been able to meet legal fees.  He has an order in fact for some legal fees that the wife was to pay, and she has not.  She has even been able to prepay school fees, but she has not paid the costs ordered against her, nor has she paid the pressing family therapy fees as ordered. 

24. In due course the case can be heard in detail as to whether the monies paid to T Pty Ltd were legitimately paid by the wife.  Whether or not she should have made further disclosure can also be determined, as can what should occur with the parties’ other real estate.  In the short term though, I am satisfied that I have the power to make the order as sought by the husband, I am satisfied in the circumstances that it is a fair order and one that can very easily be characterised by the trial Judge at trial. 

25. The only issue I want to discuss was the one that was raised by Mr Strum in relation to the actual wording, to ensure that I do not unwittingly restrain what would be normal conversation potentially between the wife and her children’s school.  At the same time, I do not want to open the possibility of her, as Mr Strum put it, interfering with any possibility of the money being paid out.

RECORDED:  NOT TRANSCRIBED

ORDERS DELIVERED

RECORDED:  NOT TRANSCRIBED

1. Provisions as to costs are, as Mr St John submitted, set out in s 117 of the Family Law Act. The parties to proceedings are to bear their own costs unless in the discretion of the court taking into account the factors set out in s 117(2A) a different order is made.

2. I have made it clear that I do not propose ordering costs for yesterday. There was substantial work, and orders, achieved in the morning and I am not going to then start dissecting the day, to determine which bits were necessary and which bits were not.  I take a different view in relation to the costs for today.

3. That is of course only one of the matters for me to consider.  It is important to consider the financial circumstances of the parties.  I have actually already made some reference to that.  Although both parties claim they are in a parlous financial position, it is the wife who one way or another has had access to funds.  That has been partly the basis of the order that I made today, and I am satisfied that as a matter of justice, which is something that clearly is inherent in the exercise of my discretion, that the party who should not be out of pocket for today’s proceedings is the husband, given the nature of the discrete application, and his success in it.  So, I am going to order the costs. 

4. I am going to allow the fees, and I am going to say what I have said for so many hours now, that I should not have had to be dealing with this case for so long.  It involves simple issues with complexity underneath.  And I am quite satisfied that the fees are reasonable.  The wife will pay the husband’s costs of today fixed at $4,488.  All right.  Thank you.  You can all be excused.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau delivered on 6 June 2013.

Associate: 

Date:  6 June 2013