NIU & ZHAI
[2015] FamCA 599
•16 July 2015
FAMILY COURT OF AUSTRALIA
| NIU & ZHAI | [2015] FamCA 599 |
| FAMILY LAW – CHILDREN – Interlocutory Application – Best Interests – Parental Responsibility – Where the children each have meaningful relationships with both parents – Children to live with the husband – Children to spend substantial and significant time with the wife – Where such an arrangement has been consensually occurring for the past 12 months – Parties to have equal shared parental responsibility FAMILY LAW – PROPERTY SETTLEMENT – Interlocutory Application – Where it is just and equitable for an order to be made providing for either the husband to transfer his title in one of his motor vehicles to the wife, or alternatively, pay her a monetary sum to enable her to buy her own car FAMILY LAW – PROPERTY SETTLEMENT – Spousal Maintenance – Where there is little or no dispute about the wife’s need for maintenance – Where the husband, by reason of the financial resources available to him, has the capacity to pay spousal maintenance – Husband to pay the wife $1,400 per week by way of spousal maintenance |
| Family Law Act 1975 (Cth), ss 60B, 60CA, 60CC, 61DA, 62B, 65AA, 65DA, 65DAA, 65D, 65LA, 72, 74, 75, 77, 79, 114, 117 Family Law Rules 2004 (Cth), rr 9.08 |
| Moroni & Moroni [2014] FamCA 664 Strahan & Strahan (interim property orders) (2009) 42 Fam LR 203 |
| APPLICANT: | Ms Niu |
| RESPONDENT: | Mr Zhai |
| FILE NUMBER: | SYC | 8031 | of | 2014 |
| DATE DELIVERED: | 16 July 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 16 July 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Cummings SC |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan |
| COUNSEL FOR THE RESPONDENT: | Mr Campton SC |
| SOLICITOR FOR THE RESPONDENT: | Kells The Lawyers |
Orders
Parenting
The parties shall have equal shared parental responsibility for the children:
a. B, born … 2003;
b. C, born … 2005; and
c. D, born … 2010.
The children shall live with the father.
Each of the parties shall take all reasonable steps to ensure that the children spend time with the mother as follows or as otherwise agreed:
a. during school terms, on a fortnightly basis:
(i)in week one, commencing from Friday 17 July 2015, from after school on Friday until 11:00 am on Sunday;
(ii)in week two, commencing on Friday 24 July 2015, from after school on Friday until 7:30 am on Monday;
b. for the first half of the autumn, winter and spring school holidays; and
c. during the summer school holidays, on an alternating week about basis commencing in the first week of the holidays in the years when the holidays commence in an odd numbered year and commencing in the second week of the holidays in the years when the holidays commence in an even numbered year.
Orders 2 and 3 hereof are suspended during the following periods:
a. from 3:00 pm on Christmas Eve until 3:00 pm on Boxing Day each year during which period the children will spend time with the mother from 3:00 pm on Christmas Eve until 3:00 pm on Christmas Day and with the father from 3:00 pm on Christmas Day until 3:00 pm on Boxing Day in odd numbered years with the same arrangements in reverse in even numbered years; and
b. between 9:00 am and 5:00 pm on each Mother’s Day and Father’s Day during which periods the children shall spend time with the mother on Mother’s Day and with the father on Father’s Day.
For the purposes of the implementation of orders 2, 3 and 4 hereof, the children shall be exchanged between the parties at the mother’s residence on all occasions other than when children are collected from or returned to school.
Each party is restrained from:
a. denigrating the other in the presence or hearing of the children and from permitting the children to remain in the presence or hearing of another person denigrating the other; and
b. discussing the evidence filed in any proceedings between the parties.
The parties shall forthwith enrol themselves to commence and thereafter participate in and complete a post-separation parenting program.
Each party shall forthwith inform the other and keep the other informed, in writing, of their respective current residential address, mobile telephone number and email address.
Pursuant to s 65DA(2) and s 62B of the Family Law Act, the particulars of the obligations that these orders create and the particulars of the consequences that may follow contravention of these orders and details of assistance to comply with these orders are set out in the attached Fact Sheet, which forms part of these orders.
Any and all other outstanding applications for interim orders pursuant to
Part VII of the Family Law Act are dismissed.
Interim property settlement
By way of interim property settlement, the husband shall within seven (7) days hereof do all acts and things reasonably necessary to either:
a. transfer to the wife all his right, title and interest in, and his possession of, the German motor vehicle registration …; or
b. pay to the wife the sum of $30,000 in lieu thereof, in which event the wife must apply such funds to the purchase of a motor vehicle within a further seven (7) days thereafter and refund any remaining balance to the husband.
Spousal Maintenance
The husband shall pay to the wife the sum of $1,400 per week by way of spousal maintenance upon the following conditions:
a. the first payment is due seven (7) days from the date of these orders; and
b. payments shall be made by way of direct deposit to the banking account nominated by the wife to the husband in writing within 48 hours’ hereof.
Litigation Funding
Pursuant to s 117(2) of the Family Law Act:
a. within seven (7) days after any future payment by or on behalf of the husband of any money in payment of account rendered by his solicitors including in relation to expenses associated with the preparation of his case (save and except for the payment of joint single expert fees for which the husband is completely liable), the husband shall pay or cause to be paid the same sum of money to the solicitors for the wife whilst ever the wife remains legally represented in these proceedings;
b. within 24 hours after the payment by or on behalf of the husband of any money referred to in the preceding sub-order, the husband shall cause to be given to the wife’s solicitors a memorandum stating the amount or amounts so paid to the solicitors;
c. all money paid to the solicitors for the husband including on his behalf pursuant to this order shall be held in trust by the solicitors for the husband and not applied in payment of the husband’s solicitors until such time as the same amount has been paid by or on behalf of the husband to the solicitors for the wife;
d. in the event that the payment referred to in sub-order (a) hereof is not made within seven (7) days thereafter, the husband is to direct his solicitors to pay 50 per cent of whatever sum is received by them to the solicitors for the wife; and
e. The amounts paid pursuant to this order to the solicitors for the wife are to be applied by them in payment of the costs and disbursements incurred by the wife in the conduct of these proceedings.
Injunctions
In respect of:
a. the following corporations and trusts:
i.E Pty Limited;
ii.E Family Trust;
iii.Either F Unit Trust or G Unit Trust;
iv.H Pty Limited;
v.H Family Trust;
vi.Either I Family Trust or J Family Trust;
vii.G Enterprises Pty Limited;
viii.K Pty Limited
ix.L Pty Limited;
x.M Pty Limited;
xi.G International Unit Trust.
b. the husband is restrained, so far as is within his power in his capacity as director, secretary, shareholder, appointor, trustee or beneficiary, from:
i.resigning his office;
ii.causing or permitting the appointment of more officers;
iii.causing or permitting any change to existing shareholdings;
iv.causing or permitting any change to existing trustees;
v.causing or permitting any change to existing beneficiaries; or
vi.causing the disposal, encumbrance or further encumbrance of any asset other than in the ordinary course of business.
Costs of the Interim Hearing
The parties shall bear his and her own costs of and incidental to the interim hearing conducted on Wednesday 15 and Thursday 16 July 2015.
Notation
A.The parties do not require the publication of reasons in respect of Order 15 hereof as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Niu & Zhai 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 SYDNEY |
FILE NUMBER: SYC 8031 of 2014
| Ms Niu |
Applicant
And
| Mr Zhai |
Respondent
EX-TEMPORE
REASONS FOR JUDGMENT
These proceedings between the parties concern substantive disputes over both parenting orders for their three children and the adjustment of their property interests.
The parties separated in May 2014 and proceedings were commenced by the wife in December 2014.
More recently, on 3 June 2015, the wife filed an Application in a Case seeking interim orders and the husband responded by filing a Response to an Application in a Case on the date fixed for interim hearing, being 15 July 2015. He also sought interim orders.
At the hearing, the wife indicated her abandonment of the orders proposed in her Application in a Case and, instead, her application for a series of orders set out within two Minutes of Orders, which were tendered and marked Exhibits W3 and W4. Some proposed orders replicated some of the orders contained within her former Application in a Case and some were completely new. The wife thereafter indicated a further change in position. She only pressed proposed Orders 1 to 15 inclusive of Exhibit W3 and abandoned proposed Orders 16 to 30 within that exhibit.
The interim contest between the parties therefore distilled to the following issues:
a)parenting orders;
b)orders pertaining to a motor vehicle;
c)spousal maintenance;
d)litigation funding orders; and
e)injunctive orders.
Background
The parties married in 2000 and separated in May 2014, at which time the wife vacated the former matrimonial home and left the three children in the primary care of the husband.
The children were born in 2003, 2005 and 2010, and are currently aged 12, 9 and 5 years respectively.
Since separation, by informal arrangement between the parties, the children have spent time with the wife for five nights in each fortnight, divided into two tranches of time across each and every weekend.
It is fair to say the family lived a privileged lifestyle. The husband and children still do, but the wife does not. The wife suspects the husband has very valuable property interests, which the husband denies. He asserts their financial privilege is almost entirely due to the voluntary largesse of his parents, without which he and the children would be similarly impecunious.
As would be obvious, a grave level of distrust has invaded the parties' relationship because of the wife's disbelief of the husband's assertions about his financial circumstances and her diligent attempts to disprove his claims.
Leave to make applications and adduce evidence
Neither party came to Court without blame.
The wife belatedly sought leave to prosecute her applications for interim orders set out within Exhibits W3 and W4, which were not even disclosed to the husband until the day of hearing.
The wife belatedly sought leave to rely upon her second affidavit, or at least paragraphs 1 to 18 inclusive of it, sworn or affirmed by her the day before the hearing, but filed on the first day of hearing.
The husband did not file his Response to an Application in a Case until the first day of hearing and, although he filed his affidavit and financial statement the day before, copies were not given to the wife until the day of hearing. Rule 9.08(3) of the Family Law Rules 2004 (Cth) (“the Rules”) required the husband's material to be filed by Monday 13 July 2015 at the very latest.
The husband opposed leave being granted to the wife to press her application for any fresh orders not contained within her Application in a Case filed on 3 June 2015. He also opposed leave being granted to the wife permitting her reliance upon her second affidavit, in the event the wife opposed him being granted leave to rely upon his belatedly filed affidavit and financial statement.
The wife opposed leave being granted to the husband to rely upon 13 specific paragraphs of his affidavit, which she asserted contained evidence she was deprived of the opportunity to meet by reason of its lateness.
Leave was ultimately granted to both parties to rely upon their late applications and late evidence. Both were disadvantaged to some extent, but neither to such an extent that the prejudice caused material damage to their respective cases.
The interests of the parties specifically, and the community more broadly, were better served by facilitating the prompt determination of the parties' grievances. The unattractive alternative was an adjournment, with its attendant impediments of delay, increased cost, and the proliferation of further evidentiary material.
Proposal and evidence of the wife
The wife prosecuted her application for orders set out within Exhibit W3 (orders 1 to 15 only) and Exhibit W4.
In support of that application, she was permitted to rely upon:
a)her affidavit filed on 3 June 2015;
b)her financial statement filed on 3 June 2015;
c)her affidavit sworn on 14 July 2015 (paragraphs 1 to 18 only);
d)a series of other documents marked Exhibits W1, W2, W5, W6 and W7; and
e)the Child Responsive Program Memorandum prepared by the Family Consultant on 19 June 2015.
The wife was denied leave to re‑open the evidence and tender further exhibits during the course of the husband's final submissions. A line had to be drawn under her excesses at some point.
Proposal and evidence of the husband
The husband prosecuted his application for the orders set out in his Response to an Application in a Case, filed on 15 July 2015.
In support of that application, the husband was permitted to rely upon:
a)his affidavit sworn on 14 July 2015;
b)his financial statement sworn on 14 July 2015; and
c)a series of other documents tendered and marked Exhibits H1, H2, H3 and H4.
The husband was denied leave to rely upon another affidavit he tried to read on the second day of the interim hearing. He contended it was necessary to answer the belated application of the wife, but the evidence had to close at some point. The parties had about six weeks to ready themselves for the interim hearing so an attempt to adduce further evidence on the second day of the interim hearing was unreasonable. Instead, the husband removed annexures from the affidavit and tendered some of them as exhibits – the exhibit numbers being those to which I have already referred. The husband’s senior counsel outlined the effect of the husband’s affidavit and he did not appear to be unfairly prejudiced by his preclusion from reliance upon such evidence when he was instead permitted to tender further exhibits he considered important.
Parenting orders
Orders in respect of children are regulated under Part VII of the Family Law Act 1975 (Cth) (“the Act”).
When invited to make a parenting order, the Court is enjoined to bear in mind both the objects of the legislation and the principles which underpin those objects (s 60B) in determining the nature of the parenting orders which ought properly be made (s 65D).
When making parenting orders, the Court is mandated to regard the child's best interests as the paramount consideration (ss 60CA, 65AA). The Act specifies with precision the criteria which the Court must contemplate in arriving at a conclusion as to what is in the best interests of the child (s 60CC).
The Court is required to apply a rebuttable presumption that a child's best interests are served by an order allocating equal shared parental responsibility for the child to the parents, though that presumption may either not apply or be rebutted in certain circumstances (s 61DA).
In the event an order is made allocating equal shared parental responsibility to the child's parents, either presumptively or otherwise, the Court is then obliged to consider both the advisability and practicability of the child living for equal time with both parents, or alternatively, living primarily with one and spending substantial and significant time with the other (s 65DAA).
Only the husband sought substantive parenting orders in relation to the children. The wife abandoned the parenting orders set out in her Application in a Case and she instead only sought some orders directed to family therapy and some ancillary injunctive orders (see Orders 12 to 15 inclusive of Exhibit W3). The orders proposed by the husband essentially sought to regularise the arrangement for the care of the children which has so far been consensually implemented by the parties for the past year. On or about 30 May 2014, the parties negotiated a parenting plan, a copy of which is annexed to the husband's affidavit (as Annexure K). Although the parenting plan was not signed, its terms have largely been the subject of implementation by the parties. The husband did, however, seek a series of other orders which ultimately were neither the subject of any evidence or any submission.
Turning, therefore, to s 60CC of the Act, which section specifies the criteria for which the Court must have regard in making any determination as to the children's best interests, it is appropriate to take up the narrative by reference to the contents of the Family Consultant's Memorandum.
The Family Consultant observed that each of the three children appear to have meaningful relationships with both of their parents, though the two eldest children's relationships with the wife appear to have been affected by her use of physical discipline with them. The wife admitted to the Family Consultant that, since separation, her relationships with the children had "deteriorated" and she perceived that the children had "bonded" with the husband because he had become more involved in their day‑to‑day care. The issue was not the subject of any direct submission by the parties, but I accept for the purposes of s 60CC(2)(a) of the Act, that the children each have meaningful relationships with both parents from which they do and should continue to derive benefit.
Turning then to s 60CC(2)(b) of the Act, the Family Consultant noted the husband's suggestion that he thought the children:
may be at risk of harm in their mother's care due to her previous use of physical discipline with them.
It is instructive to observe that no submission was made by senior counsel on behalf of the husband to the effect, pursuant to s 60CC(2)(b), that there was any need to implement a measure to protect the children from any harm they may suffer by reason of their subjection or exposure to abuse perpetrated by the wife. In fact, as I have already indicated, the husband's proposal was for him and the wife to share parental responsibility for the children and for the children to spend substantial and significant time with the wife. Such a proposal on his part is entirely repugnant to any assertion that the children are at risk of abuse by the wife. The comment that the husband previously made to the Family Consultant is, therefore, given no weight.
The wife conceded to the Family Consultant that she perceived the two eldest children would probably want to remain living with the husband and to only visit her, though she thought the youngest child had expressed a desire to live with her. Ultimately, no submission was made by either party to treat the children disparately and I proceed on the basis of an inference that the children's best interests will be served by them being treated similarly and by orders which require them to live together.
The Family Consultant's opinion was that the children would benefit from spending at least substantial and significant time with each parent, but some work needed to be done regarding the children's relationships with the wife.
I am satisfied it is appropriate, in the circumstances, for orders to be made for the children to live with the husband and to spend substantial and significant time with the wife, just as has been consensually occurring for the past 12 months.
Section 61DA(1) of the Act, to which I adverted in passing, requires the application of a presumption of equal shared parental responsibility.
The Family Consultant noted in her Memorandum that:
Both parents proposed to share parental responsibility for the children.
Notwithstanding the husband's suggestion to the Family Consultant that the children could possibly be at risk of harm in the wife’s care, the evidence falls way short of establishing reasonable grounds to believe that the wife has engaged in abuse and, as a consequence, s 61DA(2) of the Act does not operate so as to render the presumption of equal shared parental responsibility inapplicable.
Even if that were not the case and it was considered the evidence was sufficient to invoke operation of s 61DA(2), it is clear from the admissions made by the husband to the Family Consultant and also from the proposal he made in these proceedings that he thinks it is entirely appropriate for the parties to have equal shared parental responsibility for the children. So, notwithstanding the prospective inapplicability of the presumption of equal shared parental responsibility, the husband clearly believes the children's best interests warrant an order for equal shared parental responsibility being made.
The orders will therefore provide for the parties to have equal shared parental responsibility for the children and for the children to live with husband. The orders will also provide for the children to spend substantial and significant time with the wife. Such an arrangement is reasonably practicable to implement and in the children’s best interests, whereas the parties acknowledge an arrangement of “equal time” is not (s 65DAA).
The orders will accommodate school holidays, but the orders will not make any express provision for other special occasions in accordance with the proposal made by the husband. Those proposed orders were not the subject of any evidence or submission by his senior counsel. If the parties are dissatisfied with that outcome they can exercise their equal shared parental responsibility to agree otherwise.
Changeovers will occur for the children at their school or otherwise at the wife’s home, consistently with the proposal of the husband.
The orders also restrain the parties' denigration of one another and their involvement of the children in these proceedings, consistently with the order proposed by both parties.
The Family Consultant recommended that the parties both participate in post‑separation parenting programs. I intend to make an order requiring both parties to enrol in and complete such programs, as envisaged by s 65LA of the Act.
Importantly, the Family Consultant observed:
After the parents have completed such programs, the family might benefit from participating in family therapy, particularly with respect to the mother's relationship with the second child.
Clearly, the engagement of the family members in family therapy was envisaged by the Family Consultant to take place, if at all, only after the parties' completion of post‑separation parenting programs. Additionally, it is also important to note that the Family Consultant was only of the view that such family therapy might help their circumstances, not that it probably would.
For those reasons, I am not attracted to the parenting orders proposed by the wife and, outside of orders requiring the parties' participation in post‑separation parenting programs, her application in that regard is otherwise dismissed.
In conclusion, the wife also sought to preserve her right to re‑agitate further interim parenting orders upon completion of the therapy she envisaged. Such an application is rejected. The Court should generally rebuff any attempt by parties to perpetuate interim disputes to enable litigation to be brought to a final conclusion as soon as can possibly be arranged.
Motor vehicle
The car that was previously used by the wife was sold by the husband. It is pointless trying to resolve the factual dispute at this interlocutory stage as to whether the husband sold that vehicle with or without the wife's consent.
It is common ground the wife is without transport. She has no car. She deposed that she has been reliant upon public transport since the parties separated and her car was sold by the husband.
The husband previously offered to pay for the wife's transport and to buy her another car. He deposed that he offered to buy a motor vehicle from a friend for the wife, which was in very good condition, but when he offered to do so she declined his offer.
In the past, when the children have been with her, the husband has refused to provide her with a car, notwithstanding his past offer to provide her with one. The wife deposed that she and the children are required to use public transport, which is costly and difficult for her with three young children. Such a proposition hardly seems controversial. The wife deposed she has not had the use of a car since April 2014 and she now cannot afford to buy her own.
The wife proposed an order that the husband provide one of his motor vehicles to her so that she can transport the children to and from school, to their medical appointments, and to their extra‑curricular activities.
The husband undoubtedly has two cars. In his financial statement, he referred to his ownership of an German sedan, which is the subject of the wife's proposed order, and another smaller motor vehicle.
In the course of these proceedings, the husband tendered (as Exhibit H2) a repair estimate in relation to the smaller motor vehicle in the sum of approximately $9,000. That repair estimate was prepared in May 2015. The evidence remains indistinct as to whether the value attributed to that vehicle by the husband in his financial statement, sworn only two days ago, takes into account that repair estimate. Nor is the evidence clear as to whether or not the repairs the car required six weeks ago have yet been undertaken.
Notwithstanding, the fact remains the husband has two cars. Even if he was left with the one which remains faulty, for reasons to which I will advert in due course, he undoubtedly has the capacity to ensure its rectification.
There was an arid argument during the course of these proceedings as to whether the provision of the German sedan by the husband to the wife would be an order related to the wife's maintenance, an injunctive order, or an interim property settlement order.
The nature of the order proposed by the wife was unclear. It actually proposed that she simply have exclusive use of it and that the husband continue to pay all outgoings related to the car, including but not limited to, its repairs, maintenance, servicing, insurance and registration.
An order to that effect does not have the guise of a maintenance order within the meaning of ss 72, 74, 75 or 77 of the Act. It could plausibly be an injunctive order, with both restrictive and mandatory components, within the ambit of s 114(1)(e) of the Act, but an order providing the wife with the car is most capably accommodated by an interim property settlement order under s 79 of the Act.
An order is therefore made, posited in the alternative, providing for either the husband to transfer his right, title, and interest in the German sedan to the wife, or alternatively, his payment to her of $30,000 cash so that she can buy her own car. The husband deposed the German sedan was worth much more than $30,000, so the choice will be his.
If an order for interim property settlement is to be made under s 79 of the Act, according to the jurisprudence found within Strahan & Strahan(interim property orders) (2009) 42 Fam LR 203, the order must be just and equitable by reference to the matters set out in ss 79(4) and 75(2) of the Act and it must be likely that the applicant will receive, by way of property settlement, a sum sufficient to cover the advance. There is also a preliminary adjectival or procedural step, requiring consideration of whether such an application will even be entertained.
In my view, the evidence capably establishes: firstly, that it would be just and equitable for there to be an interim property settlement within the meaning of s 79(2) of the Act, having regard to their lengthy marriage and the wife's current comparative destitution; secondly, the contributions they each made during a relationship of about 15 years duration; and thirdly, the obvious inequality between their current financial circumstances. The wife is clearly in an inferior financial position to that currently enjoyed by the husband. I am therefore satisfied the pre‑conditions set out within Strahan that are necessary for an interim property settlement order to be made are established.
Spousal maintenance
It is clear that the wife's reasonable expenses outflank her income.
In her financial statement, the wife deposed to her salary income at $350 per week and her weekly expenses of $950. Self‑evidently, the disparity is $600.
There does not appear to be much dispute about the wife's need for maintenance. The husband deposed in his affidavit:
The children often complain to me that there's not enough food at the mother's residence, and the mother says to them "Blame your father. He doesn't give me any money".
The calculation of the differential of $600 per week does not include the rent incurred by the wife, which is currently paid by the husband. The husband deposed in his financial statement to his current payment of the wife's rent in the sum of $800 per week.
Accordingly, I calculate the wife's reasonable need at $1,400 per week, which is the current rental payment of $800 made by the husband and the deficit between her income and expenses of $600 per week.
The issue has become critical in recent days because the wife deposed in her second affidavit to the service upon her only last week of a Notice to Quit her current rental property. She is therefore obliged to soon vacate the property and find alternate rental accommodation. If she does so, I am not satisfied the husband should be obliged to pay rental of any greater sum than he has done to this point in time. Any extra rent should be her responsibility.
Nonetheless, it is clear that the husband has always promised to pay the wife's rent. In the parenting plan negotiated by the parties in May 2014, to which I have already referred, they ensured the inclusion of paragraph 11. It relevantly contained a provision to the following effect:
The husband agrees to pay for the wife's rental accommodation.
Thereafter followed a series of other provisions which required communication between the parties about the address of the rental accommodation and the standard of the accommodation, but the parties expressly noted that they had discussed a range of $650 to $800 per week as the rental payment the husband would make in favour of the wife.
No doubt that promise by the husband to continue paying the wife's rent was made in expectation that the allowance paid to him by his parents would continue into the future. The husband deposed in his financial statement (at both paragraph 15 and Part O) to the following effect:
Living allowance paid by my parents at their discretion and pleasure. I have no entitlement at law to receive these funds.
and:
I receive approximately $2,500 per week from my parents who reside in Indonesia. If I need additional funds, sometimes they send further funds and sometimes they don't.
On the evidence placed before the Court, nothing has changed. The expectation the husband had back in May 2014 of continuing financial support from his parents has continued ever since and there is nothing in the evidence which would suggest it will cease any time soon.
It was contended on behalf of the husband that the wife has additional financial capacity of her own, which submission arose out of some evidence adduced in the wife's case. It is clear she paid her prior solicitors $37,000 for their legal fees in this litigation. It is also clear (from Exhibit H4) that she has paid approximately $66,000 to her current solicitors for this litigation. To fund those payments she received financial accommodation from her own parents of approximately $86,000. It was submitted on behalf of the husband that there was no evidence to suggest that financial accommodation would not continue either, but I reject the submission. The wife deposed in her affidavit:
I have no assets or resources available to me from which I can pay legal fees as and when they fall due.
I draw the obvious inference that, when she gave that evidence‑in‑chief, she did so in the knowledge that the recently procured financial accommodation from her parents was at an end.
Therefore, the inquiry turns to consider the husband’s capacity to pay spousal maintenance to the wife. I am quite satisfied, on the evidence adduced, that he does have such capacity.
As I have already said, there is no reasonable basis for any inference the husband's parents will either terminate or diminish their financial support of him.
Otherwise, the husband certainly has earning capacity of his own which is, if his evidence is to be accepted, not being properly exploited. In his financial statement the husband deposed he is self-employed in a restaurant business, but he alleged he receives no income as a consequence of it. He deposed in his affidavit that:
I admit that I have an interest in various businesses, but deny that I derive an income from these businesses, as they do not generate income.
If it be the case, as the husband alleged, that he works hard in a business and derives no income from his efforts, as senior counsel for the wife asserted, it would be an absurd situation. The husband clearly, on his own admission, has an earning capacity which he is not utilising.
Additionally, there are other financial resources available to the husband, which are clearly relevant to the application of ss 75(2)(b) and 75(2)(o) of the Act.
First, the husband is a director and shareholder of a corporation named E Pty Ltd. That company is the corporate trustee of the E Family Trust, in which the husband is a beneficiary. That trust apparently owns and operates the business in which the husband deposed he is self-employed. It was asserted in submissions, without contradiction, that the business was purchased within that corporate and trust network for something in the vicinity of $500,000.
The husband is also a director and shareholder in another corporation named H Pty Ltd, which is the corporate trustee of the H Family Trust, in which the husband is also a beneficiary. That trust apparently holds beneficial interest in at least two pieces of real estate; one of those properties being the property on and in which the business is conducted.
Aside from those two corporate and trust networks, there are a variety of other corporations and trusts in which the husband has an interest, including the following: F Unit Trust; I Family Trust; G Enterprises Pty Ltd; K Pty Ltd; L Pty Ltd; M Pty Ltd; and G International Unit Trust.
I have referred to the ownership of two parcels of property by H Pty Ltd on behalf of the H Family Trust. The husband deposed H Pty Ltd owns the properties at N Street, Suburb O and P Street, Suburb Q. The bank statements of H Pty Ltd were tendered in evidence (as Exhibits W1 and W2) and the inference fairly arises from those documents that the husband used the banking account of that corporation as his own. There is an abundance of expenditure from that corporate account which is not consistent with the conduct of the trust business. It also seems that, on occasions, the allowance paid by the husband's parents to the husband was deposited into that account.
The husband deposed that the I Family Trust did not exist, which seems curiously inconsistent with the letter sent as recently as two days ago by the lawyers of the husband's parents to the lawyers of the husband declaring that the husband's parents are the controllers or appointors of the J Family Trust. Whether or not there is a typographical error, it is clear that a trust called either the I Family Trust or the J Family Trust exists and the husband has an apparent interest in it.
The husband is also the director and shareholder of M Pty Ltd. Annexures to the wife's first affidavit contain an internet page from the M Pty Ltd website indicating it operates from one of the two parcels of property owned by H Pty Ltd as trustee for the H Family Trust – that being the property at Suburb Q. The internet site for M Pty Ltd represents publicly that the corporation generates:
$1.48 million in annual revenue (modelled) which is fairly typical for a vegetable oil mill.
The organisation employs five people and appears to be an operating business. Interestingly, the smaller motor vehicle, to which the husband deposed his ownership, is registered with number plates "M", which I infer to be a reference to M Pty Ltd.
It was also clear (from Exhibit W6) that the husband retains a joint bank account with his mother, which he did not declare in his financial statement.
It is impossible to trawl with precision through the vast amount of evidentiary material and documents tendered as exhibits during these interlocutory proceedings. Nonetheless, for the reasons to which I have already adverted, I am well satisfied that, not least because of the financial resources available to the husband, he has the capacity to meet the wife's reasonable need for spousal maintenance. Orders are therefore made compelling him to pay spousal maintenance of $1,400 per week to the wife.
Litigation funding
The wife admitted she could not point to any asset or fund which could be used as a source of payment by the husband to her of money which she could utilise for payment of her legal fees. She therefore re-caste her application from one seeking a lump sum payment to one seeking the husband's payment of monies to her on a dollar‑for‑dollar basis – that meaning, for every dollar payable by the husband to his own lawyers, he pay an exact amount to the wife's lawyers on her behalf.
It was contended on behalf of the husband that such an order is ultra vires both the Act and the Rules, which submission I reject. The jurisdiction and power to make such orders have been repeatedly accepted over many years, including recently by Watts J in Moroni & Moroni [2014] FamCA 664, in which case his Honour referred to authorities and reasoning establishing jurisdiction and power, which need not be repeated here.
In reliance upon ss 117(2) and 117(2A) of the Act, orders are made generally in terms sought by the wife. The order to that effect is made because: first, the husband is in a position of relative financial strength vis‑à‑vis the wife; and secondly, the wife is disadvantaged in trying to investigate and disentangle the extent of the husband's apparently vast property interests, which he blithely asserts afford him no income at all.
Injunctions
On the face of it at least, the husband has an enormous asset. The balance sheet for E Family Trust, completed as at 30 June 2013, shows the trust is indebted to the husband for the amount of $1,262,580.
It will be remembered that the husband is a beneficiary of that trust, and the director and shareholder of the corporate trustee, E Pty Ltd.
Within the last few days, the husband and his parents asserted the balance sheet, which has now been in existence for over two years, is in error. The husband deposed as follows:
I further advise that the financial statement of the E Family Trust as at 30 June 2013 details evidence of a loan payable to me. This is not correct as these funds originated from my parents and is owed to them. My solicitors have provided me with two letters from York Law dated 14 July 2015, being my parents' solicitors, detailing errors in the family trust's set‑up.
Those letters to which the husband referred are annexed to his affidavit. They reveal that, as recently as two days ago, his parents' solicitors wrote to his own solicitors alleging that the accounts of E Family Trust, which show a loan due to the husband, in fact, should show a loan of that amount to the husband's mother. Further, the letter received by the husband's solicitor demands immediate rectification of the financial statements of the E Family Trust, so as to remedy the alleged error on the loan ledger.
The injunctive orders belatedly proposed by the wife were intended to meet that anomaly and prevent any alteration of the financial affairs of that trust in a way which would deleteriously affect the potentiality of the wife's claim that the husband has a chose in action worth approximately $1.2 million.
The injunctions proposed by the wife were also designed to stop dilution of the husband's power in various companies and trusts, in which he has an interest variously as a director, secretary, appointor, trustee and/or beneficiary.
The injunctions were also designed to prevent those entities' divestiture of significant assets, or the encumbrance, or further encumbrance, of such assets other than in the ordinary course of business.
Importantly, the injunctions are not designed to impede the ordinary conduct of business by those entities or to impinge upon the rights of third parties who have interests in those entities.
Injunctions in those terms are, in my view, reasonable and address the balance of convenience between the parties. I therefore intend to make injunctive orders to preserve the parties’ rights, albeit not in identical terms to the orders proposed by the wife.
For those reasons, I make the following orders.
I certify that the preceding one hundred and three (103) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Justice Austin delivered on 16 July 2015.
Associate:
Date: 27 July 2015