NIELSEN & SPRINGER
[2018] FamCA 69
•15 February 2018
FAMILY COURT OF AUSTRALIA
| NIELSEN & SPRINGER | [2018] FamCA 69 |
| FAMILY LAW – SPOUSAL MAINTENANCE – Factors considered – Interim spousal maintenance order in favour of the mother – Where the father asserts that his liabilities exceed his income – Where the amount of spousal maintenance amount is reduced after an assessment of the financial circumstances of the parties FAMILY LAW – INJUNCTIONS – Where the mother sought an injunction restraining the father from accessing monies held overseas – Where the mother feared the final property pool would be diminished prior to settlement – Principles to be considered when granting an injunction – Where there is a risk that the asset may be depleted prior to final settlement – Where an injunction is granted |
| Family Law Act 1975 (Cth) ss 77, 114(1), 114(3) |
| Cardile v LED Builders Pty Ltd (1999) 198 CLR 380, 428 [122] In the Marriage of Farr (1976) FLC 90-133 Kelleher & Anderson [2007] FamCA 137 Lampros & Anor & Lampros & Anor [2012] FamCA 415 Lawson & Crawford and Ors [2014] FamCA 1012 [52] Hall & Hall [2016] HCA 23 |
| APPLICANT: | Mr Nielsen |
| RESPONDENT: | Ms Springer |
| FILE NUMBER: | ADC | 1483 | of | 2017 |
| DATE DELIVERED: | 15 February 2018 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 8 February 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Anderson |
| SOLICITOR FOR THE APPLICANT: | CG Family Law |
| COUNSEL FOR THE RESPONDENT: | Ms Lee |
| SOLICITOR FOR THE RESPONDENT: | Georgina Parker Lawyers |
Orders
That paragraph 1 of the orders made 31 May 2017 is discharged.
That by way of interim spousal maintenance the father pay to the mother the sum of TWO HUNDRED AND FORTY DOLLARS ($240) per week to a bank account as may be nominated to her.
That the father do within fourteen (14) days transfer to the trust account of his solicitor or such other interest bearing account in the name of the parties as may be agreed between the solicitors for each of the parties in writing a sum equivalent to THIRTY FIVE THOUSAND EUROS, such sum not to be withdrawn by either party SAVE AND EXCEPT as may be agreed in writing or by order of the Court.
That paragraph 6 of orders made 6 December 2017 be discharged.
Subject to Order 3 herein, that the father be restrained and an injunction be granted restraining him from dealing with, transferring, dispersing or making any withdrawal from monies standing to his credit in any overseas bank account of financial institution, but in particular Country F SAVE as to the sum of TWENTY THOUSAND EUROS (20,000) which he shall be able to withdraw at his election.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Nielsen & Springer has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 1483 of 2017
| Mr Nielsen |
Applicant
And
| Ms Springer |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
Mr Nielsen (“the father”) and Ms Springer (“the mother”) each seek parenting orders in respect of B born in 2008, C born in 2010 and D born in 2012 (“the children”) and orders for settlement of property in relation to a relatively modest pool.
The proceedings commenced by the father filing an Initiating Application on 12 April 2017. An Amended Response was filed by the mother on 15 September 2017.
The parties had been principally concerned with the ongoing parenting arrangements in respect of the children, in particular the status of their passports and the ongoing arrangements for the children to spend time with each of them.
Orders were made on 6 December 2017 which adjourned further consideration of paragraphs 13, 16 and 17 of the Response filed 15 September 2017. Paragraph 6 of the orders restrained the father from transferring, dispersing or making any withdrawal of money standing to his credit in overseas bank accounts or financial institutions, but in particular Country F.
At the commencement of the hearing counsel tendered a Minute of Order which resolved issues arising from paragraph 13 of the Response and narrowed the dispute in respect of paragraph 16 as to whether the sum to be transferred to the father’s solicitors trust account be 30,000 or 35,000 EUR.
BACKGROUND
In her Affidavit of 19 May 2017, the mother outlines what she considers to be the assets and liabilities of the parties. By any measure, the pool of property is modest and is principally comprised of bank accounts in the name of the father held in Country F with a value at the time of the affidavit of 114,823 EUR or the approximate equivalent of $171,561 AUD.
The father accepts the accuracy of his accumulated savings and investments as described by the mother.
The mother has not been in significant employment since 2008, although she does have a Master’s Degree and some experience as an instructor.
The father is an academic.
As at 31 December 2016 the mother asserts that the father had a superannuation entitlement of $151,867 AUD. The mother retains a modest superannuation entitlement of $13,500 USD.
The gravamen of paragraph 17 and now to a lesser extent paragraph 16 of her Response is her concern that unless the investment monies in Country F are preserved, the father may take steps to dissipate them.
The funds invested have already been the subject of substantial withdrawal.
Of the amount originally standing to the father’s credit of between $170,000 AUD to $180,000 AUD (depending upon fluctuating exchange rates), $25,000 AUD was withdrawn and transferred to the mother pursuant to an order of Judge Young on 31 May 2017.
The mother complains that the account statements as at 29 July 2017 disclose that the father had withdrawn a significant sum in excess of that which was necessary to pay to the mother.
In submissions, the father confirmed that he has withdrawn the equivalent of $50,000AUD (approximately 31,890 EUR*) which has principally been used for legal fees, but has also supplemented his day to day expenses.
* Note: Conversion rate used is 1 EUR = 1.567 AUD
Accordingly, there remains the sum of about $100,000 AUD held in accounts in the father’s name in Country F.
Should the sum transferred to the father’s solicitors trust account be 30,000 EUR (approximately $47,038) AUD or 35,000 EUR (approximately $54,845 AUD)?
It is difficult to rationalise how the parties could remain in dispute over 5,000 EUR or $7,835 AUD given their escalating costs.
The father argues that on any reasonable consideration of the mother’s claim for property settlement, the retention by her of $25,000 AUD and the further quarantining of funds which at minimum are the equivalent of $47,000 AUD provides adequate security for any reasonable order that the Court might make.
There is no concession by the parties that money used to pay legal fees will necessarily be the subject of addback.
There remains uncertainty as to the extent of the parties’ liabilities. In particular there is a substantial education debt owed by the mother to the government of the Country Z.
Of more significance, although the relevance is best considered against the issues raised by the mother in support of her injunction, is the father’s contention that his expenditure both fixed and discretionary exceeds his income. The father’s assertion is that it is only by recourse to the balance of the investments that he is able to provide for his necessary commitments and also the continued payment of child support and possibly spousal maintenance.
It is likely that the remaining sum, after deduction of either 30,000 or 35,000 EUR would be about $45,000 to $50,000 AUD.
The father considers that legal fees, expenses for the children and his continued ability to pay child support will soon exhaust the remaining funds. He is keen to retain as much as is reasonable and not strictly required to satisfy any order made in favour of a settlement sum payable to the mother.
THE INJUNCTION SOUGHT
The Court has broad powers to grant injunctive relieve including for the purposes of preserving the property of the parties or otherwise regulating the conduct of the parties pending final hearing.
Whilst s 114(1) of the Family Law Act 1975 (Cth) (“the Act”) empowers the Court to make orders in positive as well as negative terms, as in the case of a mandatory injunction, such orders must be considered proper. The term “proper” means “reasonable and just in the circumstances” (see In the Marriage of Farr (1976) FLC 90-133)
In those circumstances, pursuant to s 114(3) of the Act, the Court must be satisfied that it is just or convenient to grant such an injunction or make an interlocutory order.
As was observed by Forrest J in the decision of Lampros & Anor & Lampros & Anor [2012] FamCA 415 at paragraph 50:-
In this Court particularly, interim injunctive relief is primarily utilised to maintain things as they are, or to restore things as they were until they were abruptly changed to the prejudice of an interested party, to protect claims that parties have or may have to substantive relief after a final hearing.
In Sieling & Sieling (1979) FLC 90-627 at 78,264 the Full Court said:-
The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly. The Court must balance the hardship to each party of granting or refusing an order, and frame its order in such a way as to impose no further restriction that is necessary to achieve the protection of the applicant’s interest. It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim.
The following principles are relevant to the Court’s consideration of the parties respective applications:-
(a)In so far as the purpose of the proposed injunction is to restrain dealing with property pending the final hearing, the Court must address the question as to whether there is evidence of a risk of the disposal of any asset that would defeat any anticipated order in the substantive proceedings. However that is but one of a number of factors to be considered (Lawson & Crawford and Ors [2014] FamCA 1012 [52]);
(b)The applicant seeking such orders must establish “a real risk of assets being disposed of” prior to final hearing (Cardile v LED Builders Pty Ltd (1999) 198 CLR 380, 428 [122]);
(c)In assessing that risk it is not necessary for the applicant to satisfy the Court as to the probability of success of the applicant’s case;
(d)In that context as was noted in Kelleher & Anderson [2007] FamCA 137 at [195]:-
[The applicant] for injunctive relief… bears the onus of establishing, on the evidence, a real risk of assets being disposed of and also that such disposal may cause [his or her] claim to be defeated or prejudiced. It would not be sufficient merely to show that there is a risk of disposal of assets, or the asset pool being diminished, without also establishing that there is a risk that the [party’s] claim may be defeated or prejudiced if the injunction is not granted.
The focus of submissions made on behalf of the mother is that the pool is modest and has already been the subject of substantial depletion. The father has indicated that a significant further sum is to be deducted for his legal fees and that he requires access to the funds to supplement the shortfall given his expenditure exceeds his income.
The orders sought by the mother are that she should receive 80 percent of the non-superannuation assets, and a base payment equivalent to 80 percent of the father’s superannuation balance with G Super. Whatever the merits of that claim might be, she asserts that the funds have been depleted to the extent that such an outcome is unlikely to be capable of settlement.
The counter argument by the father requires a consideration of his Financial Statement filed 26 May 2017. The father refers to his weekly income being $3,107, with a total personal expenditure of $3,252 resulting in a shortfall of $145.
By reference to the order for urgent spousal maintenance of $300 per week, that fixed expenditure sum does not appear in the financial statement and as such the full extent of the father’s shortfall is $445 per week.
The focus by the father on the financial statement and his purported inability to meet his obligations (including child support), in particular the order for spousal maintenance, highlights the need to reconsider whether the current order for spousal maintenance is appropriate and if not, to what extent should it be varied.
There was no opposition by counsel to the Court reconsidering spousal maintenance. It is noted that the order was made pursuant to s 77 of the Act which suggests that it was intended to be of temporary application pending a broader consideration of the parties’ financial circumstances.
A consideration of the income and expenditure of the parties, but in particular the father, as required to assess whether there should be a change in the current level of spousal maintenance being paid, will also inform the decision as to whether the current interim order should continue or be the subject of discharge or variation.
SPOUSAL MAINTENANCE
In Hall & Hall [2016] HCA 23 the High Court set out the appropriate approach in considering an application for interim spousal maintenance:-
[3]… The gateway to the operation of Part VIII in relation to spousal maintenance is in s 72(1). That subsection provides that “[a] party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)”.
[4]The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That subsection provides that, “[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such orders as it considers proper for the provision of maintenance in accordance with this Part”.
[5]A Court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment”. They also include, by virtue of s 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
In the present case there is a concession that the mother is unable to support herself without the assistance of a pension benefit or allowance.
The mother has not been in significant employment since 2008. Whilst there is some contention that the mother may well be able to supplement her financial circumstances through employment as an instructor, it was not an issue pressed nor was any evidence presented that such an opportunity for reasonable remuneration existed.
By reference to the mother’s Financial Statement filed 22 May 2017, her income comprises a carer’s pension, family tax benefit and child support as assessed for the three children.
Her expenses total $2,482, but given that the mother has elected to seek an assessment of child support, I bring to account Part N discretionary expenditure only relating to the mother in the sum of $285 and Part G of $557 excluding loan repayments to H Finance and the repayment of credit cards.
Given that I am required by s 75(3) of the Act to exclude income derived from a pension, benefit or allowance, the mother clearly establishes an entitlement to interim spousal maintenance at least equal to the current order.
The father’s financial statement sets out his income at $3,107. Counsel’s submission is that there has not been any change to that income stream. The father is an academic.
His Part G costs total $2,010 including a credit card payment at item 30 of $300. On closer inspection, it appears that a page in the father’s financial statement is missing which if available would detail the extent of the father’s liabilities. Although the sum of $9,500 appears at item 55, there is no detail as to any outstanding liability.
The father conceded that there is no outstanding credit card liability but rather, he uses his credit card to pay his weekly expenses and then repays the credit card – presumably to accumulate loyalty program points.
The sum of $300 should be deducted from the Part G expenses resulting in a balance of $1,710.
The father has been assessed for child support and whilst the figure of $605 appears in his financial statement, it is now agreed that his assessment requires him to pay $520 a week. There was some discussion as to the status of any current child support assessment. Whilst some scepticism was expressed on behalf of the mother, the clear assertion of counsel was that an assessment had been made as of 1 January 2018 and subject to the mechanics of the payment of child support to the mother, child support will be ongoing and paid reliably.
The total of the father’s Part N expenses are $637 including expenses incurred for the children when they spend time with him.
I do not consider that the father’s discretionary expenditure is unreasonable or should be the subject of any further analysis or dissection.
There was no real challenge to the discretionary expenditure of either party.
Accordingly, the father’s total expenses are determined as follows:-
Part G fixed expenses
1,710
Child Support
520
Part N discretionary expenditure
637
Total
$2,867
Taking into account the father’s average weekly income of $3,107, he has the capacity to pay spousal maintenance to the mother of $240 in addition to the child support as paid.
I propose to discharge the current order for urgent spousal maintenance in the sum of $300 per week and put in place an order for interim spousal maintenance in the sum of $240 per week.
CONCLUSION
Given my determination that the father is able to meet his necessary commitments including child support as assessed and spousal maintenance, albeit at a reduced figure of $240 per week, there is little left to counsel’s argument that he needs to access his investment funds to meet a shortfall.
It is likely that the parties will incur further legal expenses. There is no application by the mother for litigation funding or partial property settlement.
I propose to order that the father cause the equivalent sum in Australian dollars of 35,000 EUR to be placed into either his solicitors trust account or an interest bearing account in the name of the parties and that the current injunction securing the funds invested overseas will continue subject to the father being able to withdraw the sum of 20,000 EUR or the equivalent sum in Australian Dollars.
Opportunity was given to the parties to consider whether the issues of dispute could be narrowed such that if two or three Court days were allocated, then the proceedings would be completed. If counsel had provided that assurance, consideration would have been given to the matter being expedited.
The parties were not able to avail themselves of the opportunity provided.
I make orders as appear at the commencement of these reasons.
I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 15 February 2018.
Associate:
Date: 15 February 2018
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