Mulcahy and Panchal and Anor

[2014] FamCA 526

FAMILY COURT OF AUSTRALIA

MULCAHY & PANCHAL AND ANOR [2014] FamCA 526

FAMILY LAW – PROPERTY – De facto – interim orders – wife’s application for spousal maintenance – where the de facto husband has not participated in the proceedings – where the de facto husband is currently receiving income disability payments – finding made that the de facto husband is reasonably able to contribute to the de facto wife’s support conditional upon receipt of payments pursuant to his income protection insurance.

Family Law Act 1975 (Cth) 90SE

APPLICANT: Ms Mulcahy

RESPONDENT: Mr Panchal

THIRD PARTY: B Pty Ltd

FILE NUMBER: MLC 4322 of 2013

DATE DELIVERED: 17 July 2014

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: 1 July 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Staindl

SOLICITOR FOR THE APPLICANT: Clancy & Triado

COUNSEL FOR THE RESPONDENT: No appearance

SOLICITOR FOR THE RESPONDENT: N/A

COUNSEL FOR THE THIRD PARTY:	Appearance excused
SOLICITOR FOR THE THIRD PARTY:	Carew Counsel Pty Ltd

ORDERS

IT IS ORDERED UNTIL FURTHER ORDER THAT

1. The de facto husband forthwith do all acts and things necessary to:

   a)advance and/or facilitate any claim which he has made pursuant to any income protection policy in his name or for his benefit; and

   b)whilst in receipt of any payments pursuant to any income protection policy in his name or for his benefit pay to the de facto wife by way of spousal maintenance the sum of $1,000 per week payable as and from 1 July 2014 and weekly thereafter.

2. The time for the de facto husband to file and serve the documents referred to in paragraph 4 of the orders made 7 May 2014 be extended to 4.00 pm on 28 July 2014.

3. By no later than 4.00 pm on 28 July 2014 the de facto husband, the de facto wife and the third party B Pty Ltd do all acts and things and sign all necessary documents to engage Ms C of D Accounting to value B Pty Ltd, the costs of Ms C’s report to be shared equally between all three parties.

4. The de facto wife’s costs of the application made before Registrar Moser on 7 May 2014 and the hearing on 1 July 2014 be reserved.  

5. All extant applications be otherwise adjourned for further hearing in the Judicial Duty List at 10.00 am on 5 August 2014.

6. As soon as practicable the de facto wife’s solicitors serve a sealed copy of these orders and reasons for judgment on the de facto husband by pre-paid post addressed to him at E Street, Suburb F in the State of Victoria.

AND THE COURT NOTES THAT
In the event that the de facto husband fails to comply with paragraph 2 hereof, the de facto wife have liberty to apply to proceed on an undefended basis at the hearing on 5 August 2014 including with respect to the application of the proceeds of sale.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mulcahy & Panchal and Anor 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 4322 of 2013

Ms Mulcahy

Applicant

And

Mr Panchal

Respondent

And

B Pty Ltd
Third Party

REASONS FOR JUDGMENT

1. This matter was listed for hearing before me in the Judicial Duty List at 10.00 am on 1 July 2014. The respondent de facto husband (hereafter “the husband”) was called at the commencement of the hearing but did not appear.

2. On 8 April 2014 the applicant de facto wife (hereafter “the wife”) filed an application in a case and that application was listed for hearing in the Registrar’s Directions List on 7 May 2014. On that date, Registrar Moser made orders reinstating the wife’s initiating application filed 31 May 2013 and further ordered that within 14 days the wife file and serve an amended initiating application joining B Pty Ltd as a party to the proceedings. Registrar Moser otherwise adjourned all extant applications to the Judicial Duty List but excusing the third party from attendance on that date on the basis that the wife was only proposing to proceed on the adjourned date in relation to those parts of her application in a case that related to the husband.

3. At the commencement of the hearing before me, counsel for the wife sought the following orders as set out in a document titled “orders proposed by the wife”:

   (1)That by 8 July 2014 the Wife’s solicitor is to serve the Husband by pre-paid post to his last known address a sealed copy of this Order.

   (2)That the date referred to in paragraph 4 of the Orders made on 7 May 2014 for the Husband to file and serve the documents referred to therein is extended to 22 July 2014.

   (3)That the Husband do all things necessary:

   (a)To advance and/or facilitate any claim which he has made pursuant to an income protection policy; and

   (b)To direct the insurer to make any payments pursuant to the policy to the Wife by way of spousal maintenance up to the amount of $10,000 per month with any balance to be paid to the Husband.

   (4)That the proceeds of sale of the real property known as and situate at [G Street, Suburb H (“Suburb H”)] be disbursed as follows:

   (a)Firstly, to pay the costs of sale, including agent’s fees and commission and all Conveyancing costs;

   (b)Secondly, to discharge the Commonwealth Bank mortgage encumbering Suburb H; and

   (c)Thirdly, the balance to be deposited into the Applicant De Facto Wife’s solicitor’s trust account to be applied as follows:

   (i)To discharge the Wife’s Commonwealth Bank personal loan;

   (ii)To discharge the Wife’s NAB MasterCard;

   (iii)To discharge the Wife’s Flexirent Loan;

   (iv)To discharge the Wife’s outstanding legal fees as at the date of settlement of the sale of [Suburb H];

   (v)To discharge the finance loan encumbering the Wife’s [European] motor vehicles; and

   (vi)The balance to be released to the Wife for living expenses and/or legal fees, with such sum to be characterised by the Trial Judge.

   (5)That by 22 July [2014] the Husband, Wife and [B Pty Ltd] do all acts and things and sign all documents to obtain a valuation of the business operated by [B Pty Ltd], the costs of which to be shared equally by the Husband, the Wife and [B Pty Ltd]. The valuation is to be carried out by [Ms C] of [D Accounting].

   (6)That this matter is adjourned to [DATE] at 10:00am.

   (7)That the Wife’s costs of the application made before Registrar Moser on 7 May 2014 and the Wife’s costs of this day be paid by the Husband on an indemnity basis.

   (8)That the Court engross these Orders and they be expedited.

   NOTATION

   In the event that the Husband fails to comply with paragraph 2 of this Order and/or fails to appear on the adjourned date, then the Wife intends to apply for a warrant for the Husband’s arrest.

4. The wife ultimately reduced the amount she sought by way of spousal maintenance from $10,000 per month to $1,000 per week and did not pursue her application with respect to the application of the net proceeds of sale of the property at G Street, Suburb H, in accordance with paragraph 4(c) of her minute of proposed orders.

The husband’s participation in the proceedings

1. The wife commenced these proceedings in May 2013.  The wife deposes in her affidavit sworn 3 April 2014, filed in support of her application in a case, to the many attempts that she has made to finalise the proceedings with the husband notwithstanding his failure to provide full and frank disclosure of his business interests.  Although according to the wife the parties have reached agreement on more than one occasion, the husband has refused to sign documents giving effect to any of the agreements that they have reached.  The husband has not filed any documents in these proceedings, either in response to the wife’s initiating application nor since she issued her application seeking to reinstate the proceedings.

2. The wife sought leave to file an affidavit of service of documents forwarded to the husband by pre-paid express post at E Street, Suburb F, being the former matrimonial home in which he is currently living with the wife. Annexed to that affidavit of service was a copy of a letter dated 12 May 2014 sent by the wife’s solicitors enclosing a sealed copy of the orders made 7 May 2014, which was delivered on 13 May 2014, and a further letter addressed to the husband dated 15 May 2014 enclosing a sealed copy of the wife’s amended initiating application, which was delivered on 16 May 2013.

3. I am satisfied that the husband has been served with a copy of the orders made 7 May 2014 adjourning the wife’s application in a case to the Judicial Duty List on 1 July 2014 and that, being aware of the hearing, has chosen not to participate in the proceedings. Although it does appear that the husband is now suffering from depression it is also the case that he similarly did not participate in the proceedings during 2013. In all of the circumstances, I propose to deal with the wife’s application in his absence, having regard to the nature of the orders now sought by the wife and the fact that the husband will have a further opportunity to attend and participate in the proceedings, should he choose to do so, when the matter is listed for further hearing in the Judicial Duty List at 10.00 am on 5 August 2014.

Spousal Maintenance

1. Pursuant to s 90SF of the Family Law Act 1975 (Cth) (“the Act”) the husband is liable to maintain the wife, to the extent that he is reasonably able to do so, and only if the wife is unable to support herself adequately whether:

   a)    by reason of having the care and control of a child of the de facto relationship under the age of 18 years;

   b)    by reason of age or physical or mental incapacity for appropriate gainful employment; or

   c)    for any other adequate reason.

2. The court must have regard to the matters referred to in s 90SF(3) of the Act in so far as they are relevant to the particular case.

3. The wife is 44 years of age and commenced a Graduate Certificate at the University I in February 2014. She is otherwise engaged in home duties. The husband is 34 years of age. According to the wife, the parties commenced cohabitation in April 2006 and separated finally on 23 January 2013.  There is one child of their relationship, J, who is almost 4 years of age. J has lived with wife since the parties’ separation. The wife also has a child from a previous relationship in her care.

4. The wife deposes that her only income is by way of Centrelink benefits. According to the wife, the husband has been assessed to pay child support of $102 per month. It is her evidence that following separation the husband voluntarily paid her $9,000 per month, which she described in her financial statement filed 30 May 2013 as maintenance and child support. The wife deposes that those payments have now ceased.  In that same financial statement, the wife deposed to having total expenditure of $3,057 per week, which included mortgage payments of $981 per week, personal loan repayments of $233 per week, and Flexirent payments of $68 per week. I was informed by counsel for the wife that the wife has made a claim on the grounds of hardship and is currently not required to meet either the mortgage or the personal loan repayments and that she has completed the Flexirent repayments.

5. The wife’s evidence is that during their relationship the husband established a successful and profitable group of companies. It was her belief that the husband was the sole director and shareholder of these entities.

6. The wife deposes that in early 2014 the husband told her that he had disposed of his business in order to defeat her claim for property settlement. It is her evidence that he has now told the wife that although this transaction was a sham he has been ousted from the business and no longer has access to any funds from the business. It is on this basis that the wife sought to join the third party and seeks to set aside the transactions between the husband and the third party.

7. The wife deposes that the husband is now so stressed by what has occurred that he has returned to live with her at the former matrimonial home. The wife says although she agreed to let him return to the home they are not living as a couple. The wife says that shortly after his return to the former matrimonial home the husband appeared to have what she described as a “nervous breakdown” in front of her. The wife says she took the husband to a general practitioner at a local medical clinic who immediately referred him to the K Clinic for psychiatric assistance.  Although the wife says the husband refused to attend at K Clinic for fear of being admitted as an involuntary patient, she deposes that he has since started attending upon a psychologist.

8. According to records subpoenaed by the wife for the production of documents in relation to the husband’s income disability insurance, the husband has an adjustment disorder and is suffering from depression.

9. The wife deposed in her affidavit that the husband had recently sold his convertible motor vehicle but that, other than the sum of $12,000 which she says he paid to her on 27 February 2014, she does not know how he has otherwise applied the proceeds of sale of that vehicle.

10. The wife also deposed that in 2013, by agreement with the  husband, she purchased a European motor vehicle and borrowed $78,000 from the dealership in order to do so.  The vehicle is registered in the wife’s sole name as is the finance. The wife deposes that the husband increased his monthly payments to her from $9,000 to $10,000 per month to cover the loan repayments, which she says are $1,355 per month.  According to the wife the husband made the payments for a few months after purchase of the car although those payments were irregular, were sometimes $9,500 or $9,000 per month, and eventually ceased altogether. The current loan balance is $75,000.

11. Although the wife has not filed an updated financial statement, based upon her earlier statement, and deducting those amounts she says she is no longer paying, she is left with expenses based upon that statement of approximately $795 per week. That amount does not include the obligation the wife now has for the motor vehicle purchased in late-2013, after her financial statement was filed, of $312 per week, which takes her total expenditure to $1,107 per week.  This also does not take into account any increased cost of living or the fact that the husband is now living in the former matrimonial home, which is likely to have inflated the household expenditure. The court must disregard any entitlement the wife may have to an income tested pension, allowance or benefit.

12. In circumstances where the wife has the primary care of the child of the relationship and is undertaking a course of study to improve her prospects for future employment I am satisfied that she is not able to support herself adequately and that, although some of her expenditure may also be referable to the children, the $1,000 per week she seeks is in all of the circumstances reasonable.

13. It is alleged by the wife that the husband has significant business interests in overseas and holds bank accounts in City L apart from the business interests in Australia which he is said to have disposed of, subject to the wife’s allegations that those transactions were a sham. I do not need to make any findings with respect to these matters for the purposes of the matters I am asked to determine as it is only if the husband receives any payments as a result of any claim pursuant to his income protection insurance that he will be required to pay her spousal maintenance.

14. In that regard, counsel for the wife relied upon documents produced pursuant to subpoena which indicated that the husband had received the sum of $13,023 paid by EFT by MLC for the period 30 April 2014 to 29 May 2014 and that a further payment was to be made on 11 June 2014. I am satisfied that insofar as the proposed payment is linked to the husband’s income disability payments that he is reasonably able to contribute to the wife’s support.

15. In all of the circumstances I propose to accede to the wife’s application that the husband pay her the sum of $1,000 per week by way of spousal maintenance. I do not however propose to make the order in the form sought by the wife in her proposed minute of orders which would require the insurer to calculate what payment it was required to make to the wife. Instead, I propose to place the obligation upon the husband to make the payment and I propose to order that payment be made as and from the date of the hearing before me, 1 July 2014, and weekly thereafter.  

Other matters

1. The husband is the registered proprietor of the property at G Street, Suburb H. This property was tenanted sometime in early 2013 and the wife deposed in her first affidavit filed 30 May 2013 that she was under the impression that the rental income was being applied to the mortgage. For whatever reason that appears not to be the case and although the wife indicated in her first affidavit filed at the commencement of the proceedings that she wished to retain the Suburb H property in the face of foreshadowed action by the mortgagor, that property was subsequently placed on the market.  Although the property did not sell at the auction on 1 December 2014 a further auction is scheduled for July 2014. It is the proceeds of sale of this property that the wife initially sought to have applied to retire debts in her name.

2. As this matter is likely to be listed for hearing before settlement, that is assuming the property sells at auction, the husband will have the opportunity to respond to the wife’s application in a case noting however that if he does not do so the wife will be at liberty to apply to have the matter proceed on an undefended basis including with respect to the application of the proceeds of sale. The wife will not in these circumstances be prejudiced by the adjournment of this aspect of her application.

3. The wife also sought an order that the husband pay her costs of the application before Registrar Moser on 7 May 2014 and the costs of the hearing before me on 1 July 2014, to be paid on an indemnity basis. At this stage, I propose to simply reserve the wife’s costs in relation to these matters.

4. I will also, as sought by the wife, extend the time for the husband to file material in reply however I do not however propose to make the notation she seeks in relation to applying for a warrant for his arrest in the event of non-compliance. As I have already indicated, I will grant the wife liberty to apply to proceed on an undefended basis in the event that the husband does not file any responding material.

5. Finally, the orders proposed by the wife included an order that the husband, the wife and the third party do all acts and things necessary to obtain a valuation of the business operated by the third party with the costs of such valuation to be shared equally by all three parties. This proposed order is in accordance with the order sought by the third party in its response to initiating application filed 11 June 2014.  In those circumstances and in order for the matter to progress I propose to make that order at this time notwithstanding that the third party was excused from attendance at the hearing before me.  

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered 17 July 2014.

Associate: 

Date:  16 July 2014