SMYLLIE & SMYLLIE

[2019] FamCA 318

FAMILY COURT OF AUSTRALIA

SMYLLIE & SMYLLIE [2019] FamCA 318

FAMILY LAW – PROPERTY – Interim order – Where the wife sought an order for exclusive possession – Where the husband eventually did not contest such an order – Where the property was in the wife’s name – Where it was not reasonable, sensible or practicable that the parties be required to live together – Application granted – Wife to retain exclusive possession and be responsible for all outgoings.

FAMILY LAW – SPOUSAL MAINTENANCE – Where the husband seeks various spousal maintenance orders – Where the onus was on the husband to prove that he cannot adequately support himself – Where the husband’s capacity to support himself was limited due to a period of incarceration – Where the wife financially supported the husband through the period of incarceration – Where the Court found this as an indication that the husband had no other means to adequately support himself – Orders made for lump sum and periodic maintenance.

Family Law Act 1975 (Cth) ss 72, 74, 75(2)

Hall & Hall [2016] HCA 23

APPLICANT: Ms Smyllie

RESPONDENT: Mr Smyllie

FILE NUMBER: SYC 2168 of 2019

DATE DELIVERED: 6 May 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 6 May 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Batey

SOLICITOR FOR THE APPLICANT: York Law

COUNSEL FOR THE RESPONDENT: Mr Looney QC

SOLICITOR FOR THE RESPONDENT: McInnes Wilson Lawyers

Orders

1. The husband is to vacate the Suburb A property within 14 days of the date of this Order.

2. The wife is to have the sole right to occupy the Suburb A property and is to be responsible for all expenses associated with the property, including but not limited to, mortgage repayments, council rates, water charges and home and contents insurance.

3. Pursuant to s 72 and s 74 of the Family Law Act1975 (Cth), within seven days the wife shall pay to the husband:

   (a)The amount of $26,000 net by way of lump sum spouse maintenance; and

   (b)The amount of $1,200 net by way of periodic maintenance, with such payment to be made no later than Friday of each week, with the first payment to be paid by the first Friday of this Order.

4. Within 14 days of the date of these Orders, the wife is to pay the husband the sum of $25,000 for the purchase of a motor vehicle.

5. The amount referred to in Order 3(a) be applied only for the purposes of rental accommodation for the husband and that the amount referred to in Order 4 be applied only for the purchase of a motor vehicle for the husband’s use.

6. From six month’s from today’s date the periodic amount of $1,200 per week pursuant to Order 3(b) be increased to $2,200 per week pending further order.

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 Smyllie & Smyllie 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:  SYC2168 of 2019

Ms Smyllie

Applicant

And

Mr Smyllie

Respondent

REASONS FOR JUDGMENT

1. These are proceedings in relation to exclusive occupancy in relation to a property at Suburb A and in relation to interim financial relief.  The wife’s application was given a return date into the future.  There was an application made to review the decision of the registrar for that return date.  That application came before me, was granted, and the matter was listed today, effectively, as a first return date. 

2. By his Response to Initiating Application filed 24 April 2019 the husband seeks orders in the alternative.  As the matter was argued, the husband will leave the Suburb A property and that the wife thereafter have exclusive occupation of the property.  That made relevant the alternate orders sought by the husband.

3. The effect is that the husband seeks that he be required to leave the property within 14 days of today’s date, that the wife have the right to occupy it and be chiefly responsible for the outgoings.  He seeks an order that within seven days, the wife pay to him $31,200 by way of net lump sum spousal maintenance, and I understand that was calculated by reference to a need for rental accommodation over six months. 

4. He seeks an amount of $1,387 by way of periodic maintenance, payable weekly.  And at the expiration of six months, he seeks that that amount be increased by $1,200 a week to $2,587 to take up his need for rent.  The rent for  the first six months is included in the rolled-up sum that he seeks.

5. He seeks that within 14 days, the wife pay him $30,000 towards the purchase of a motor vehicle.  He seeks some practical orders about valuations and things which were not addressed in the course of the oral submissions before me today.  I assume they have been resolved.

6. The wife agrees with the order about exclusive occupation, but she opposes, as I understand it, any order for spousal maintenance.  If there is to be a payment, then she says it should be reduced in quantum.  I do not know that she is ultimately alighted on a figure, but I gather from the submissions made in her case that she thinks that $550 a week would be a more appropriate rental allowance than $1,200 a week, and presumably if, against her submissions, there was an order for the rolled-up figure for the husband’s accommodation for six months, it would be reduced accordingly, as would the ongoing sum payable after six months.

7. As to the motor vehicle, I assume she opposes the order but as she is driving a vehicle of modest value she suggests that $10,000 would be an appropriate figure for the value of a vehicle for the husband to drive. 

8. There is not really any controversy about exclusive occupation.  The wife is living in a property at Suburb A which has a value of something like $5 or $6 million.  It is a property owned by her – I think gifted to her by her parents.  There is no possibility that the husband will be living in that property in the medium term.  In circumstances where the husband was recently incarcerated in Country B for 12 months, although there is some dispute about how that came about, I have no doubt that the parties are separated.  One of the few matters about which the parties seem to agree is that their relationship has broken down.

9. The wife says that the parties’ final separation was in March this year.  That is about the time the husband unexpectedly returned from Country B. 

10. The legal position in relation to exclusive occupancy is that the court would need to be satisfied that it is not reasonable, sensible or practicable that the parties be required to live together.  There is ample evidence that the parties have reached that point.  Unfortunately, there are also adult children in the house.  There is no doubt that it is not appropriate that the parties live together, if that can be avoided. 

11. On the known facts, of the parties, only the wife has the capacity to reaccommodate herself.  These issues arise at a very early stage in the proceedings.  The parties have completed financial statements and affidavits.  It is alleged that the parties have failed to properly disclose and some doubt is cast on the estimates that they have provided in their financial statements, particularly.  There is some objective evidence about some matters, but as is the case with most interim proceedings, there is a level of imprecision about the detail. 

12. The property at Suburb A is in the wife’s name.  She also has all of the shares in the companies:  Company D; Company F; Company G; and in her superannuation company.  The wife says that Company G is dormant.  She has $1.9 million in superannuation.  She owes half a million dollars to the Bank H.  The wife has a rest in her mother’s estate.  She puts the value of that interest at half a million dollars plus or minus.  There is not much doubt that the wife has significant financial resources.  There is no suggestion from the wife that at any time during their long marriage, her husband had significant resources.  The family enterprise was a business associated with retail goods.  The wife would characterise the business and indeed the marriage as something that was largely or wholly subsidised by the wife’s parents.

13. Spousal maintenance is a remedy available in this instance, between parties to a marriage, whether the marriage is on foot or not.  If one party can demonstrate that they cannot adequately support themselves from their own resources, then the other party can be called on to provide that support to a reasonable extent.  That is the import of s 72 and s 74 of the Family Law Act1975 (Cth) (“the Act”). Any decisions about those threshold matters or about the detail are to be made by reference to s 75(2) of the Act.

14. The first port of call is for the husband to demonstrate that he cannot adequately support himself from his own resources.  He says that as a result of trumped up charges in Country B, he was incarcerated for 12 months, and that he was ultimately released without any conviction.  He says that support was provided to him by the wife and she agrees.  I think he says she applied some of his own funds to his legal expenses.  The wife says that she paid all of them.

15. The parties commenced cohabitation in 1985 and only separated in March of this year.  The marriage was a long one.  It seems to me that the husband has made his case that he cannot adequately support himself from his own resources.  The only income of the husband referred to in the documents was his income through work in the family business.  Obviously he has not played any active role in the business of recent times.  In any event, it is the wife’s evidence that the business is winding up.  Therefore there is no suggestion that the husband worked as an executive with somebody else or that he had any other role independent of the business.  The fact that the wife felt that she needed to provide financial support in terms of his legal fees in Country B and so on suggests that she concedes that he had no other sources of financial support for those things.

16. The high point of the wife’s case on this issue is that she points to inconsistencies in the detail of the husband’s financial circumstances.  She says that in the short time she has had the opportunity to see the husband’s bank accounts, there are transactions that are inconsistent with somebody who has no financial resources.  For example there have been a number of deposits.  When she initially asked about that, she was told that that they resulted from the sale of commodities.  As is submitted in the wife’s case, that is even more concerning because the husband had never disclosed any commodities.  For the husband the submission is that he omitted to disclose the commodity.  Another deposit is said by the husband to have come from moneys advanced from a friend which have been since repaid because they were not used for the purpose for which they were originally advanced.  “More questions”, the wife would say.

17. The husband was living in hotels before he moved back in to the former matrimonial home.  He was living and spending money at a rate inconsistent with the sort of expenditure he identified in his financial statement and inconsistent with his representations about his financial circumstances.  There is no real explanation in relation to that.

18. I have been referred to a decision of Hall & Hall [2016] HCA 23, a relatively recent decision of the High Court. Relevantly there was a question of support potentially available to the wife from members of her family. There may be some similarity between the threshold issue in those proceedings. I recall that in the earlier proceedings the wife’s brothers, had carriage of the assets of an estate and she was found to have not fully explored what financial support might be available to her from that quarter. In those circumstances, the wife could not establish the threshold requirement of need. In a similar way, the wife in the proceedings before me may have accommodation available to her in a property at Suburb C. There is a suggestion that the wife’s brother has indicated that the property would not be available to the wife in the short term. The question arises, has that possibility been adequately explored for the purposes of the competing exclusive occupation arguments.

19. In the event that the wife has not fully explored that issue with her brother, it may be inferred that she has not done so for tactical reasons.

20. I am obliged to make findings of fact where I can.  That does not mean that every fact must be corroborated from an independent source.  Similarly, it may not be possible or necessary to make findings of fact about every issue.  Coming back to the threshold issue before me.  There are inconsistencies in the husband’s case but it seems to me that the husband has demonstrated for the time being that he cannot adequately support himself from his own resources.  He is aided in that argument by the wife’s criticisms of him in relation to the business and otherwise.  The wife says that he did not have a very significant role in the business.  She is also critical of his conduct, critical of the way in which he made his contribution to the family in the broader sense.  This is a family, comprising children of the parties and older children of the wife.  In my view the wife makes a reasonable case that the husband is not a good proposition for remunerative employment.

21. There are also the obvious and uncontested background facts.  The husband says that he is 65 years of age and he spent the last 12 months in dreadful circumstances in Country B.  He says that there have been health consequences from that - mental health issues, for which he is seeking treatment and issues of his physical health.  At 65 years of age some citizens leave the paid workforce.  Therefore in those circumstances it would not be a remarkable thing if he was to stop paid employment.  In his affidavit he said he had not decided about whether he would stay in the workforce.  His counsel tells me that he meant by that that he might maintain a role in the business.  On the fact of the wife’s evidence there is absolutely no prospect of that occurring.  Even if the business had continued it was going to be practicable for the parties to continue to undertake roles in the business.  Beyond the superannuation, the wife does not point to any assets that are available to the husband.  She does not know and is suspicious. 

22. I am broadly satisfied with the husband’s disclosure.  It may be as the case develops, more issues come to light and the husband might not be able to sustain that position but today a decision is required and it seems to me I can make that finding.  That gives rise to two questions:

    What are his needs for adequate support? and;

    What level of support would be reasonable for the wife to provide? 

23. The wife does not cash resources that can be applied to the husband’s support.  She shows a weekly shortfall of about $800 of liabilities over her income.  However, there is no requirement that interim spousal maintenance be paid from property or from income.  It can be paid from financial resources, it can be paid from borrowings and particular latitude is available on any interim basis.

24. So the issue about what is a reasonable rate, the husband has provided a financial statement which sets out in part N his estimated expenses, including some estimated fixed expenses. 

25. In terms of the categories of expenses claimed by the husband, there is nothing extraordinary that leaps off the page.  I am entitled to something of a broad brush in relation to household expenses.  The wife spends more on some things, a lot more on some things, and a bit less on other things.  But in terms of the categories of items and the quantum, there is nothing in his estimates that are remarkable. 

26. In my view, the fact that the husband may have recently spent money at a vastly greater rate than he now claims is not necessarily have a bearing on what his reasonable expenses would be.  It seems to me that he has a need for maintenance of the order of the claims that he has made.  As to the lump sum claim for a motor vehicles.  The husband obviously has a particular motor vehicle in mind.  I think it is legitimate for me to make an arbitrary reduction in the claim as was suggested in the alternative, on behalf of the wife.

27. Of course, albeit probably an asset of diminishing value, the proposed expenditure would go to an asset which in turn would be included on the same balance sheet that will go forward in the proceedings.  As I have indicated to the parties, I think it is appropriate that that be a payment of $25,000 for this purpose.  I understand that the wife has a legitimate concern that the moneys that she provides be applied to the purposes for which they are sought.  That would apply to the rental provision, both as to the lump sum and as to the weekly amount.  By specifying that the funds be used in that way, the risk of them being wasted is diminished.

28. The husband’s application, as I said before, is broken up into $31,200 for the first six months of rent.  I will specify $26,000 to cover six months’ rent at $1,000.  That is not to say that the husband must rent a property for $1,000 a week.  It is just that he can only put this money towards the rent.  He could top that rent up, if he wants and can choose to rent a property for a greater sum.  That is a matter for him.  But in terms of what the impost on the wife should be, I think it would be reasonable that it be at $1,000 a week.

29. And then at the end of the six months when the rolled up figure cuts out, that the $1,000 a week be added to the $1,200 a week for maintenance which, again, is a bit less than his claim. 

30. The husband will have some choices to make about what he does about his superannuation.  I understand that as at 30 June 2018 he had about $590,000 in superannuation.  There is a document from his fund which says that if that fund in two years’ time is worth $654,000, then that could fund an income for 25 years of $1,420 a fortnight.  Well, there are a number of problems with that.  Twenty-five years might not be enough.  As presently advised, the $526,000 will not be $654,000 in two years’ time.

31. It is likely that there will be a source of income available to the husband from his superannuation.  I am advised that he thinks he will not be returning to the paid workforce and, therefore, he will be able to draw on his superannuation.  So he will have a capital sum.  There is no requirement that a party exhaust their capital in aid of their support and there is a very significant difference between the parties’ financial circumstances, even in the event that there is nothing more for the wife out of her mother’s estate than the property she is in.  In the context of a 34 year marriage, there is a very significant imbalance in the finances of the parties.  Now, that might be explained and justified in arguments about contributions and adjustments.  We will find out about those things.  But there is a very significant imbalance for the time being.  As I said before, there is no requirement that there be a fund available, or that maintenance be paid out of income.  It is not appropriate, in my view, that the Court order the wife to borrow money because it is the wife and not the Court that must make the collateral undertakings that a borrower makes to a lender.

32. It nevertheless seems to me that the wife could make arrangements to provide the moneys required.  Whether that is by the wife drawing on an existing facility – and there is evidence of such a facility or whether the wife does something in relation to the Suburb C property, whether, for example, she and somebody else lives there and the Suburb A property is rented out.  Those are not matters for me but they are matters that the wife can consider.  And in the circumstances and for the interim, it seems to me on the facts of the case it would be reasonable that she be required to make the provision I have specified.

1. She gets something for the price of it, of course, and that is quiet enjoyment of the Suburb A property if that is the way she wants to arrange her affairs.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 6 May 2019.

Associate: 

Date:  21 May 2019