PORTER & PORTER

[2016] FamCA 867

FAMILY COURT OF AUSTRALIA

PORTER & PORTER [2016] FamCA 867

FAMILY LAW – PROPERTY – Application for periodic and lump sum spousal maintenance – Interim Orders that husband pay wife interim spousal maintenance – Wife’s application for lump sum spousal maintenance dismissed

Family Law Act 1975 (Cth)

APPLICANT: Ms Porter

RESPONDENT: Mr Porter

FILE NUMBER: SYC 6491 of 2014

DATE DELIVERED: 19 August 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Benjamin J

HEARING DATE: 19 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Johnson

SOLICITOR FOR THE APPLICANT: Lloyd & Lloyd

COUNSEL FOR THE RESPONDENT: Mr Campton SC

SOLICITOR FOR THE RESPONDENT: Reid Family Lawyers

Orders

UNTIL FURTHER ORDER

1. The husband pay to the wife the sum of eight hundred and fifty dollars ($850.00) per week calculated on a monthly basis, payable monthly in advance to an account reasonably nominated by the wife.

2. All other applications contained in the application in a case be dismissed AND IT IS NOTED it is open for either party to come back in relation to the production of documents once the report or preliminary reports of Ms B are produced, noting that the existing order is an interim order.

3. Costs of both parties be reserved.

IT IS DIRECTED

1. A copy of the reasons for these orders be taken out and placed on the court file.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel and senior counsel to attend.

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 Porter & Porter 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 SYDNEY

FILE NUMBER: SYC 6491 of 2014

Ms Porter

Applicant

And

Mr Porter

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. These are proceedings between Ms Porter (‘the wife’) and Mr Porter (‘the husband’).  They fall into essentially four areas, as I now understand it, and I invite counsel as I go through to interrupt if I get a fact which they think is wrong or I misunderstand one of their assertions.  Firstly, there is a claim by the wife for about $1,700 per week by way of periodic spousal maintenance.  Secondly, there is a claim by the wife for lump sum maintenance of some $40,000, which I can only envisage is an application for spouse maintenance by way of payment of her tax liability.

2. Thirdly, the question of an injunction in relation to the husband’s business activities, and fourthly, the question of discovery.  I will deal with those in reverse order once I go through some of the background material.

3. I thank each of the parties’ counsel for their case outlines, which provide an adequate chronology, containing what appears to be most of the substantive issues: dates of birth, cohabitation, marriage, children and separation to be fairly accurate.  I have had regard to that document.  I have also had regard to the procedural orders set out in Exhibit H1, which appears to be not in issue, and I thank Mr Campton in particular for setting out in his case outline the essence of the affidavits, the details of the corporate structures in a much more assessable way.  In addition I have had regard to the documents referred to in the affidavits, the financial statements, and the documents tendered during the course of this hearing.

4. In terms of the application for further discovery, it was conceded in submissions on behalf of the wife that much of that material has or is likely to have been produced.  I was given a document which is Exhibit W5, which sets out the documents that are missing or asserted to be missing, and I accept the submissions of Mr Campton that they do not assist the wife in terms of her application, and as such, I intend to dismiss the application for further discovery, noting that as the process of the forensic accounting continues, there may need to be further discovery at some later date, as is appropriate in the circumstances.

5. The second is that relating to the injunctions sought by the wife in her amended application in a case in relation to the husband’s business activities.  That is set out in orders 2, 3, 4, 8, 9, and by way of positive injunction in order 7.  I accept and adopt the submissions of senior counsel for the husband in relation to that; in particular, the concerns that there is no evidence of disposition or intention.  I understand the submissions made on behalf of the wife that there are significant moneys being expended by that business.  However, the nature of that expenditure and how it is to operate will become much clearer, it seems to me, once the report of the single forensic accounting expert, Ms B, is completed.  As such, I dismiss that part of the wife’s application. 

6. The question of spouse maintenance arises in the circumstances where the wife, I am satisfied on the evidence, earns about $800 per week net.  I have looked at the documents produced in relation to her business and the growth of her business.  The wife’s business circumstances are unusual in this Court in that her business is growing when most parties in this Court find their businesses shrinking until the proceedings come to an end, but it is growing.  From examining the material, including that raised by Mr Campton, it is clear that the business is earning the wife about $800 per week net. 

7. The figures in her profit and loss statement bring it up to about $60,000 per year, or just under that, as a gross figure.  I will just check that with reference to Exhibit W2.  A net profit of $59,125.  It may be that this would involve a modest increase in her salary or her income having regard to the tax that would otherwise be payable upon that.  For the purpose of assessing her needs I intend to treat her income at present as approximately $850 per week.

8. I am troubled by the evidence of the husband, although I make no positive or negative finding one way or the other.  He has a significant beneficial interest in the agreement set out at page 88 as the investment development manager.  I note the fees to be earned over the period of time are limited to $37 million, and that it is over 5.5 years.  I also note there is provision for incentive fees.  As to what in actuality should be made of that will need to be reflected upon by a judicial officer after the report is prepared by Ms B. 

9. It is clear from the accounts of the husband that significant funds are being paid to him.  Those funds are at least some $400,000 per year.  Those funds are applied towards his living expenses, which are at relatively higher levels than are sometimes seen in this Court.  I make no criticism or positive assertion.  I simply note that.  The husband has the capacity and the demonstrated capacity to pay the sum $1,200 per week for a stepson.  He has had the capacity to reduce some liabilities. 

10. I am not sure how to deal with the material with regard to the company C Pty Ltd.  Counsel for the wife asserts that there are records of a $1.5m payment; to me the numbers seem more there is some error or accounting mistake.  I am not sure if I can leap to that conclusion, but the figures trouble me, and I bear in mind that I am doing this on an interlocutory basis, so I give that no significant weight.  The husband has no credit card liabilities and I adopt and repeat the matters submitted to me in that regard and, in particular, in regard to the other issues in the financial statement raised by Mr Johnson.  It seems that the husband has been repaid a debt or the debt of some $250,000 has been forgiven.  No adequate explanation has been given in relation to that.  It is clear that he travels and stays in what could only be regarded as high quality hotels, although the amounts involved are in the thousands of dollars and not the tens of thousands of dollars.

11. On the evidence before me I am satisfied that the husband shows a capacity to spend at a disposable level, at levels far beyond that which he asserts he earns.   I am satisfied that from his income and from the resources available to him he is able to meet the greater needs of the wife than he otherwise asserts.  However, I first need to determine the reasonable needs of the wife before those of the husband.  And whilst my expression is that way my understanding of the law is clear the other way.

12. The wife has, as Mr Campton says, set out a number of expressions as to her reasonable needs in her financial statement filed at the commencement of this application and in paragraph 52 of her earlier affidavit.  In terms of one of her expenses I accept her evidence that there is a need for her to accommodate herself for either one of two of the reasons.  Firstly, that her mother is no longer able to provide accommodation for her or will soon be unable to provide accommodation for her and, secondly, the wife need to provide accommodation for herself in such a way as would accommodate her and her children.

13. I accept that the wife has in all of the circumstances a reasonable need for accommodation in the sum of $900 per week, bearing in mind all of the evidence in that regard.  In terms of her weekly and monthly expenses, the time is well past for people to turn up with shopping lists and the like.  Judges are entitled to look at the sworn material and form an opinion of them.  In her most recent financial statement the wife set out that her reasonable needs were some $870 per week in addition to the rent.  I note that this does not include her telephone, motor vehicle, petrol, maintenance and the like and many of the expenses are far less than that set out at paragraph 52 of her affidavit.

14. For instance, food has dropped from $220 a week to $140 a week; household supplies from $70 to $25; electricity, and I have put electricity and gas together, seem to have dropped from $80 to $45 and television down to $20.  In going through those expenditures, given the nature of the parties’ livelihoods, I am satisfied that the wife’s expenses will amount to, other than rental, some $870 per week.  I had been concerned about the hiring of storage for her furniture but, of course, that will not be needed and that is not included as far as I can see in her financial statement.

15. Thus if the wife’s reasonable needs is some $1,770 per week.   Her capacity to earn income at the present time, having regard to the long hours that she works is some $870, and there appears to be a shortfall of some $820 per week.  It was put to me that the wife may have had a resource in terms of her mother and that the wife had spent some $100,000 to $200,000 in legal costs which would have been better expended in supporting herself.  Firstly, I am not satisfied that Hall v Hall [2016] HCA 23 is authority which would require a party to exhaust the resources of their family or friends before they can ask for maintenance under Part VIII of the Family Law Act 1975 (Cth).

16. As I said to senior counsel for the husband during the course of the earlier hearing, that particular case and its particular circumstances were unusual. 

17. Each of the parties is in reasonable health, although there was some evidence that the wife is suffering from stress.  I take that from her evidence and from the amount that she claims in counselling on a weekly basis.  The parties have income or capacity to earn income at various levels to which I have alluded to earlier.  Each of the children of the marriage is over 18 years and it is not a factor to which I am obliged to have regard.  Although I sometimes scratch my head as in real life children over 18 tend to cost much more than children under 18. 

18. However, that is the nature of the Act.  The husband has a responsibility to support his spouse.  However, he does not have responsibility in Australia to support his stepson.  I am not sure that the law – that may apply in other jurisdictions, or what the law is in the various states of the United States for that matter.

19. The wife’s standard of living has clearly deteriorated since separation.  The husband’s appears not to have.  The wife is working to the extent of her capacity at this stage and, as I said, to her credit she is growing her business notwithstanding these proceedings.  I have had regard to the duration of the marriage and all of the other relevant factors.  As such, in terms of periodic spousal maintenance I intend to make an order that the husband pay $820 per week by way of spousal maintenance to the wife.  Mr Campton got a bit agitated when I redefined the tax as being for spousal maintenance application and I make no criticism of him for that, but it was the only way I could see it could be properly treated.

20. However, I do not intend to make that order in any event.  The wife has had capital at her disposal through orders of this Court and through other ways, which may well have been able to enable that to be paid and on balance I do not propose to make that order.  It would seem to me that I have addressed all of the issues no matter how badly it is in an extempore basis. 

21. I will reserve all costs of both parties to the interim and interlocutory applications.

I certify that the preceding twenty one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 19 August 2016.

Associate:     

Date:              10 October 2016