Malloy and Malloy

[2008] FamCA 1248

FAMILY COURT OF AUSTRALIA

MALLOY & MALLOY [2008] FamCA 1248

FAMILY LAW – PRACTICE AND PROCEDURE
FAMILY LAW – PROPERTY – Value of property
FAMILY LAW – PROPERTY – Expert evidence

APPLICANT: Ms Malloy

RESPONDENT: Mr Malloy

FILE NUMBER: MLC 13189 of 2007

DATE DELIVERED: 4 March 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Mushin J

HEARING DATE:

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms S.C. Dowler

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: Mr M. Wilson

SOLICITOR FOR THE RESPONDENT:

Orders

1. All applications be and are hereby included in Justice Mushin’s docket.

2. The said applications be adjourned to a first day Less Adversarial Trial at 10:00am on 6 May 2008.

3. The parties attend upon Family Consultant Skoufis at the Melbourne Registry of the Court on Tuesday 11^th March 2008 at a time to be advised for the purpose of interviews for the preparation of an Issues Assessment of all issues relevant to Part VII of the Family Law Act 1975, such Family Consultant to be available to give evidence on the said adjourned date.

4. Mr T, Chartered Accountant, L Broking be and is hereby appointed as a single expert witness to prepare and publish a valuation of the husband’s interest in N Pty Ltd, such report to be released to the parties no later than midday on 7^th April 2008.

5. The costs of the report referred to in paragraph 4 hereof be initially borne from draw downs from the facility of the parties on the borrowings on the former matrimonial home and all questions of the ultimate disposition of such payment be reserved to the Trial Judge.

6. The parties attend a Financial Conciliation Conference at 2:15pm on 8^th April 2008.

7. No later than 4:00pm on 29 April 2008 both parties file and serve a completed questionnaire for the purpose of the hearing on the said adjourned date.

8. Until further order pursuant to s 77 of the said Act the husband pay to the wife for her maintenance the sum of $1800 per month, the first payment to be made on 15^th March 2008 and monthly thereafter.

9. Notwithstanding paragraph 8 hereof liberty be reserved to both parties to call any evidence and make any submission with regard to the manner in which the said paragraph is to be regarded on the determination of final applications herein.

10. All questions of costs be reserved.

11. General liberty be reserved to both parties to apply.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 13189 of 2007

MS MALLOY

Applicant

And

MR MALLOY

Respondent

REASONS FOR JUDGMENT

1. These proceedings have been heard in the judicial duty list by way of submissions.  There are two major issues between the parties.  The first of those concerns matters with regard to the nature of communication, both face to face and otherwise, that the husband might have with the children of the marriage who are in the primary care of the wife.  That primary care is not disputed by the husband and the question of a change of residence is not an issue before the court.  With regard to that matter, I have included these proceedings in my docket listing and will conduct the first day of a less adversarial trial process on the adjourned date of 6 May 2008.

2. The second and far more contentious issue for the court concerns financial matters.  Those are divided into two categories: first, the question of alteration of property interests and, secondly, the question of maintenance of the wife, and although not argued before me, presumably consequentially, child support in respect of the children.  The children are four in number and very young.

3. The wife, as I have said, has their primary care and would appear to be finding it extremely difficult to make financial ends meet.  The parties separated about six or seven months ago.  Following the separation, the husband made certain payments to the wife.  For the first couple of months, those payments were in the approximate figure of $5000 per month, reducing to approximately $2500 and more recently to $1800 per month.  The situation is, on the contention of both parties, dire, but the responsibility for that and the way in which it might be overcome are matters of great contention.

4. The husband has conducted a business under the company name of N Pty Ltd with a partner which is a franchise business acting on behalf of a principal for entertainment events in regional Victoria.  It appears that Victoria is divided into 12 regions for that purpose.  Two are unsaleable, as having been occupied by competitors and therefore they would not be marketable; eight have been sold but another two, which would appear to be of lesser value, at least on the submission of the husband's counsel, are in the process of attempts to sell.  There does not seem to be a great deal of enthusiasm or confidence that they will realise any significant amounts.  That is a matter of conjecture because I have conducted this matter on the basis of submissions and I have not heard evidence and certainly have not heard cross‑examination such as would enable me to make any actual findings.

5. I have made an order for $1800 per month until further order by way of maintenance from the husband to the wife.  I have reserved the right of both parties to argue the significance of that payment in due course which will only be possible when further facts have been revealed.  By far the most important of those facts is the question of the valuation of the husband's company.  The husband contends through counsel that it is of minimal value and the wife believes that it may have some more significant value.  That not only goes to the question of capital for the purpose of the asset findings in the alteration of property interest applications but may also go to the question of whether that company constitutes an income stream for the husband from which he may be able to derive moneys to pay one or both of spousal maintenance and child support. 

6. I have competing assertions arising out of facts deposed to by the parties with regard to the husband's financial position.  Having noted, as I have already done, the husband claims that his financial position is dire, on the other side, counsel for the wife submits that there is a sum of $39,000 in a bank account which is I think a company bank account.  The first objection to that put by counsel for the husband is that it is an account of the company and there is a partner involved in the business as well. 

7. The second matter which is put is that all of that money is owed to the principal in the franchise agreement.  It is contended on behalf of the wife that the husband recently purchased a computer for $3000.  While the amount is not specifically admitted, it would appear that a computer was purchased.  It is contended by counsel for the husband that the basis for that purchase is that the husband is looking for other employment because the franchise company to which I have referred is now effectively defunct.  Counsel submitted that the husband was seeking to go into a truck financing enterprise; as to whether that is feasible, given that the husband on his own contention has virtually no capital, is a matter which will need to be considered in due course. 

8. The only significant asset is the former matrimonial home occupied by the wife and four children which appears to have a net equity at the moment of a little either side of $600,000.  There is a significant drawdown facility from the lender which I think is in the vicinity of $200,000 but obviously given what appears to be, on at least one view, a very small net asset pool available for distribution and the fact that there are four very small children who need to be maintained, the wife is quite naturally very reluctant to further encumber that property.  She is dependent on a Centrelink pension which the legislation requires me to ignore for present purposes. 

9. I have noted that I have made an order for $1800 per month and I have been asked for these reasons particularly with regard to that order.  The primary basis on which I make it is under section 77 of the Act.  It is quite clear that the wife is in very serious need indeed.  It is clear that she does not have the means, other than by way of the drawdown. 

10. The husband is hoping to derive some funds, although they may be reasonably small, from the sale of the last two franchises and he has most recently paid the sum of $1800 per month on two occasions, the latter one being last month. 

11. Given all of the facts which I have recited, the fact is that until we have a valuation of the business, the situation both as to asset and income is completely unclear and the wife has a need which for present purposes I need to ignore as far as an income test of pension or benefit is concerned.  It seems to me appropriate that I continue an order in the terms of what the husband has recently paid. 

12. I recognise that in making that order, questions of enforcement may be an issue and I intend that by reserving the right of the parties to argue the significance of it in due course that it may well be that I am satisfied as the trial judge in due course that the order was inappropriate.  In those circumstances, it seems to me that there are sufficient assets such as would enable any correction to be made and in those circumstances, in my view, the rights of both parties and particularly in these circumstances of the husband are sufficiently protected.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Mushin

Associate:     

Date:  May 2009