Stanton & Brook

[2012] FamCA 230

FAMILY COURT OF AUSTRALIA

STANTON & BROOK [2012] FamCA 230

FAMILY LAW – DE FACTO PROPERTY – exclusive occupation – interim property – interim spousal maintenance

Family Law Act 1975 (Cth)

Bevan and Bevan (1995) FLC 92-600
Harris (1993) FLC 92-469
Strahan (2011) FLC 93-466
Redman and Redman (1987) FLC 91-805
Williamson and Williamson (1978) FLC 90-505

Oates and Crest (2008) FLC 93-365; 216 FLR 469

APPLICANT: Mr Stanton

RESPONDENT: Ms Brook

FILE NUMBER: SYC 7465 of 2010

DATE DELIVERED: 17 April 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 22 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd, SC

SOLICITOR FOR THE APPLICANT: Blanchfield Nicholls Partners

COUNSEL FOR THE RESPONDENT: Mr Richardson, SC

SOLICITOR FOR THE RESPONDENT: KDB Holmes Solicitors

Orders

Pending further order:

1. The de facto husband’s application that the de facto wife vacate the property known as and situated at Lot 1 and Lot 2, W Street, Town R and that the de facto wife provide security codes for the Town R property and divide the contents of the Town R property farm house by agreement between them, be dismissed.

2. The de facto wife have exclusive occupation of the residence on the property situated at and known as Lot 2 W Street, Town R.

3. The de facto husband pay to the de facto wife by way of interim property order, the sum of $400,000 by payment of four sums of $100,000, the first within one month of the day of these orders and the remaining three within four, seven and ten months of the date of these orders respectively, provided that:

   3.1.Any remaining unpaid balance of the sum of $400,000 will become payable in the event that there is a settlement of the sale of the three properties which are known as lots 1, 2 and 3 W Street, Town R; and

   3.2.In the event that final orders are made prior to the due date for any payment, then any remaining payment or payments would not be payable.

4. Both parties do all things necessary to ensure the de facto wife continues to receive $231 per week rental for the leasing of the paddock(s) on the property known as Lot 3 W Street, Town R.

5. The de facto husband pay to the de facto wife by way of periodic maintenance the sum of $2,719 per week, the first payment to be made within seven (7) days of the date of this order and each subsequent payment to be made weekly thereafter, provided that the de facto husband’s liability to pay the amount of $2,719 per week shall be reduced dollar for dollar by any amount that the parties or either of them cause F Pty Ltd to pay in respect of any item of expenditure set out in paragraph 12 of the de facto wife’s affidavit sworn 24 August 2011 and filed in these proceedings on 25 August 2011, up to the weekly dollar figure nominated in paragraph 12 for each item.

6. The de facto husband pay by way of further periodic maintenance all medical insurance premiums incurred by the de facto wife at the private insurance level, and fees charged by Medibank Private;

7. The de facto husband further cause to be paid amounts from time to time as they fall due in respect of:

   7.1.All household contents and insurance policies in respect of the real property known as “[… Horse Stud]” and situate at Lot 1, Lot 2 and Lot 3, W Street, Town R in the State of New South Wales (all together hereinafter called “the R property”).

   7.2.All reasonable maintenance expenses incurred in respect of the maintenance of the R property;

   7.3.All electricity expenses incurred in respect of the R property;

   7.4.All water charges levied by D irrigation company and any other water supply providers;

   7.5.All horse maintenance expenses, including veterinarian expenses for all 23 horses presently housed on the R property.

   and how these payments by the de facto husband are to be treated will be a matter for the trial judge at the final hearing for alteration of property interests between the parties. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Stanton & Brook has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7465 of 2010

Mr Stanton

Applicant

And

Ms Brook

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. The parties in this case were living in a de facto relationship from April 1996 to January 2010, a period of almost 14 years. The net property pool of assets is estimated at approximately $5 million.

2. The de facto husband makes an application for an interim order to obtain exclusive occupation of the property where the de facto wife is currently residing, and the de facto wife responds by making an application for an order for an interim property adjustment and interim spousal maintenance.

3. The matter was adjourned from 24 October 2011 to 22 November 2011 following the decision by the lawyers for the de facto wife to proceed with an application for an interim property order in the sum of $500,000 rather than for an order for interim costs in the same amount.

APPLICATIONS

1. The de facto husband seeks:

   4.1.That within 14 days of the date of orders being made, the de facto wife shall vacate the property known as and situate at Lot 1 and Lot 2, W Street, Town R in the state of New South Wales.

   4.2.That the de facto wife forthwith provide to the de facto husband the security codes for the R property.

   4.3.That the parties divide the contents of the R property farm house by agreement between them.

   4.4.That the de facto wife pay the de facto husband’s costs of and incidental to this application.

2. The de facto wife seeks orders 3 to 10 in her Response to an Application in a Case filed 28 July 2011. To paraphrase, she seeks:

   5.1.spouse maintenance of $3,600 weekly, to be reviewed yearly;

   5.2.that the de facto husband pay private health insurance, insurance policies in respect of the R property and horse stud, maintenance and electricity of the R property, all water charges and horse maintenance expenses;

   5.3.Exclusive occupancy of the R property until its sale; and

   5.4.Interim property order of $500,000 for costs in relation to “Solicitors, Counsel, Accountants, Valuers and other legal costs and disbursements including process server fees and conduct money” to be paid, if necessary by selling the Suburb P property.

DOCUMENTS RELIED UPON

1. The de facto husband relies upon the following documents:

   6.1.Response to Initiating Application filed 11 February 2011 (orders 7, 8, 10 and 11);

   6.2.Affidavit filed 18 November 2011;

   6.3.Affidavit of 8 November 2011;

   6.4.Affidavit filed 21 October 2011 (paragraphs 8, 11, 13 and annexed schedules not read);

   6.5.Affidavit filed 24 August 2011;

   6.6.Affidavit filed 12 April 2011;

   6.7.Affidavit filed 1 March 2011; and

   6.8.Affidavit filed 11 February 2011;

2. The de facto wife relies upon the following documents:

   7.1.Response to an Application in a Case filed 28 July 2011 (orders 3 to 10);

   7.2.Affidavit filed 24 October 2011;

   7.3.Affidavit filed 24 August 2011;

   7.4.Affidavit filed 28 July 2011; and

   7.5.Financial Statement filed 25 November 2010.

THE LAW TO BE APPLIED

Interim property and maintenance

1. In this case, the parties did not marry. The following discussion involves cases where the parties were married. The Family Law Act 1975 (Cth) (“FLA”) contains mirror provisions dealing with financial matters of de facto couples. Passages from the cases quoted below should be read as if a reference to s 79 FLA is s 90SM FLA; to s 80(1)(h) FLA is s 90SS(1)(h) FLA; to s 72 FLA is s 90SF(1) and (2) FLA; to s 74 FLA is s 90SE(1) FLA; and to s 75(2) FLA is s 90SF(3) FLA.

Approach to an application for an interim property order

1. The Full Court in Strahan (2011) FLC 93-466 revisited the principles applicable to applications for interim property orders. An interim property decision involves two steps.

2. First, it must be established that s 90SS(1)(h) FLA was enlivened to allow an interim property settlement under s90SM FLA. The test for this was not confined to ‘compelling circumstances’. The Court in Strahan revisited the earlier well known statement made in Harris (1993) FLC 92-469 where the Full Court had said:

   “The exercise of the power should be confined to cases where the circumstances presented at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s.79 proceedings. However, circumstances may arise before there can be a final hearing which dictate that some part of the property of the parties should be the subject of orders. A common example is where both parties agree to the disposal of some assets pending the trial. However, we do not consider that it is confined to cases where the parties consent. Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.”

3. In Strahan, the Full Court said:

   [132] In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

   [139] We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.

4. As explained by the Full Court, s 80(1)(h) FLA (in this matter s 90SS(1)(h) FLA) is a wide enabling provision for interim property decisions, and there is no reason to limit it, by requiring a finding of ‘compelling circumstances’. All that is required before the power to make an interim property order is exercised, is an assessment of whether it would be “appropriate” to make an interim order, with the “over arching consideration” being the interests of justice. There may need to be evidence of the likely cost of litigation, but only if that is the reason or part of the reason that is propounded as to why it is appropriate that the order be made.

5. As was discussed in Harris and confirmed in Strahan, the second step in making an interim property order is to have regard to the usual matters in a section 90SM order (ss 90SM(3) and 90SM(4) FLA). A detailed inquiry is not required, but there must be some assessment of section 90SM matters. Given it is an imprecise exercise, the interim property order has to be “conservative” so that the final outcome of property settlement will not be compromised by the interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

6. Being a preliminary property order, the recipient may choose to spend that money however they wish.

7. In Harris, the Full Court said:

   “As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.”

8. In Strahan, the Full Court said in exercising the wide and unfettered discretion conferred by s 79 and s 80(1)(h) FLA (and by extension to s 90SM and s 90SS(1)(h) FLA):

   “Regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.”

9. A corollary of these statements made by the Full Court in Harris and Strahan is the proposition that as a generality, the interests of the parties and the court are better served by there being as few interim property applications under s 90SM as is possible.

Interim spousal maintenance

1. Section 90SF(1) FLA requires a party to a de facto relationship to maintain the other party, to the extent that they are reasonably able to do so, and only if, that other party is unable to support herself or himself adequately because of certain reasons and having regard to factors set out in s 90SF(3) FLA. If the applicant establishes a need and it is shown that the respondent has a capacity to pay, then the court may make such order as it considers proper for the provision of maintenance (s 90SE(1) FLA).

2. In interim proceedings, the Full Court in Redman and Redman (1987) FLC 91-805 endorsed a statement made by Fogarty J in Williamson and Williamson (1978) FLC 90-505 as follows:

   “Another consequence is that on an application for interim maintenance, the court conducts ‘not as final or exhaustive a hearing as would be the case if one were hearing the matter finally’ ... the evidence need not be so extensive and the findings not so precise.”

3. So, upon an application for interim maintenance, an approach can be taken with a broader brush.

4. Any proposed interim property order must be taken into account when interim spousal maintenance is considered (see Bevan and Bevan (1995) FLC 92-600 and Oates and Crest (2008) FLC 93-365; 216 FLR 469).

Occupation of the Stud Property

1. There are three properties relevant to this application:

   22.1.Lot 1 consisting of 41 acres, owned partially by the de facto husband and partially by the trustee of a unit trust which in turn is owned by a superannuation fund that is administered for the benefit of the de facto husband;

   22.2.Lot 2 consisting of 5 acres, including sheds for stallions and other horses, which is adjacent to Lot 1, and is owned by the trustee of a unit trust; and

   22.3.Lot 3 consisting of 26 acres and which is an unoccupied five bedroom house, and is owned by the de facto wife.

2. There is a concession that all three properties are to be sold.

3. A horse stud business is run on the properties known as Lot 1 and Lot 2, W Street, Town R by a company called F Pty Ltd. It is the de facto husband’s case that the de facto wife is not properly running the horse stud and he must be able to re-enter the property to protect this asset.  He submitted that it was necessary for the impending sale for the property, to ensure that it appears the property may be effectively run as a horse stud. He also wishes to utilise the property for weekends away.

4. It is the de facto wife’s evidence that she has lived at Lot 2 for 14 years. She said after separation she spent a number of months in Sydney recovering from an operation, whereupon she returned to Lot 2, which was not occupied at that time. The de facto wife said she is running the stud as an employee of F Pty Ltd, and receives $2,000 per month to maintain the expenses of the establishment. The de facto wife says that Lot 3 has never been her residence and she would not feel comfortable there. She submits that she should not be forced out of the home she has lived in for 14 years so that Mr Brook, who is now settled in Suburb P, Sydney and has a second residence at Suburb K, may enjoy the property from time to time.

5. Although it is the de facto husband’s case that the de facto wife is not properly running the stud, he conceded that he would be willing for the de facto wife to continue with her daily duties at the stud, in consultation with the de facto husband’s management. The de facto husband alleged the de facto wife has not put the mares into foal, has given away or sold stock, and raises questions as to the whereabouts of a mower. The de facto wife did not respond in detail to these accusations but said these were issues that were “hotly in dispute” and contends that the de facto husband’s willingness to have her continue in her role at the property undermines his argument. Her counsel says there are lengthy letters evidencing her cooperation with the de facto husband, but I was not referred to the detail of any such correspondence.

6. The de facto husband initially claimed he was not privy to the access code to the gates in the property to allow him to work at the stud. He maintained that his lack of access to the properties was symptomatic of a lack of cooperation by the de facto wife in running of the stud. However, his counsel later conceded he was given these codes however he has no access to the house on the property in which the de facto wife resides.

7. The de facto husband contends that the de facto wife should move to Lot 3 which is owned by her and is unoccupied at present. It is newly renovated. Given it is not furnished he would be willing to provide the necessary funds to furnish that property.

8. Counsel for the de facto husband referred to annexures G and H to the affidavit of 24 August 2011, which are letters from the de facto husband’s lawyers flagging the possibility that the Australian Taxation Office (“ATO”) may question the nature of the ‘business enterprise’ and if they are not reassured by the income the stud generates, the business may lose valuable tax benefits. He said this was a result of the way the de facto wife is running it and pointed to potential damages. Counsel for the de facto husband drew my attention to the fact that the de facto wife indicated on 5 July 2011 she would reply regarding the work needed to be done to support the development of the stud. A letter dated 2 November 2011 from the de facto wife’s solicitors says, “our client instructs that you may or may not have received her three page statement entitled “Comments on Running of Stud Business” by our client dated 14 July 2011”.

9. The letter provided by the de facto wife details the inherent difficulties in running a business such as the horse stud, including staffing challenges, the high cost of running the business and need for substantial investment, and the lack of proximity to, and support from, the industry. Essentially, she explains that the difficulties are not due to her running of the business, but the industry in which the parties have chosen to invest.

10. My view about the running of the stud by the de facto wife is that there is insufficient uncontroversial evidence to make a finding against the de facto wife that she is running the business in a way that would threaten the tax status of the business. It is therefore not a basis to make an interim order to exclude her from the home. In any event, the de facto husband has made no application in these interim proceedings to exclude her from the running of the business, only that she leave the residence which is located on the property from which the stud business is conducted.

11. I am not able to make a finding that the de facto wife is a threat to the business. There is insufficient evidence to cause me to make an order in the de facto husband’s favour for exclusive occupation. It is appropriate given the history of the de facto wife’s occupancy of the residence on Lot 2, W Street, Town R, to make an interim order for exclusive occupancy in her favour, pending its sale.

Interim Property

1. The de facto wife seeks an interim property settlement of $500,000. Her counsel submitted that the de facto husband himself concedes the de facto wife should receive at least $500,000 on his own application for final property orders. Counsel for the de facto wife submitted that to ease the de facto husband’s capacity to pay, they would consider receipt of the $500,000 sought in a number of lump sum payments of $100,000 or more.

1. Counsel for the de facto wife argued that the de facto husband has the capacity to pay this interim sum or sums. They point to his affidavit material which details a number of payments made by the de facto husband in a six month period totalling over $1 million, including a reduction of debt, a loan to a sibling, a voluntary super contribution, property renovation and property repairs.

2. It was further submitted that the de facto husband’s affidavit material does not provide a complete picture of his financial circumstances. In response, counsel for the de facto husband noted that the de facto wife’s lawyers have not complained about the quality of financial disclosure and have not sought further particulars.

3. There was some ambiguity in how the de facto husband presented his actual income. Paragraph 59 of his affidavit of 24 August 2011 said he is paid $12,000 per month ($144,000pa) from Company 1 in addition to profits. While referring to that affidavit, the de facto husband says at paragraph 6 of his affidavit of 8 November 2011 “My salary from [Company 2] of $120,000 gross per annum is paid directly to me. Tax is deducted by [Company 2].” I am unclear as to what these sentences are meant to convey.

4. The affidavit of 8 November 2011 then refers to “other income” by way of profit share which is paid to the Stanton Family Trust No2 and then distributed to various entities that the de facto husband controls. He said in the 2011 financial year the estimated total amount of profit received from Company 2 to be $1,845,000.

5. Counsel for the de facto husband argued that the figure of $1,845,000 included the wages he received. I discussed with Counsel that it would be an unusual case where a company made ‘profits’ but still had to pay an employee ‘wages’.

6. The de facto husband’s affidavit of 24 August 2011 records at paragraph 61 that his “estimated disposable income for the year ended 30 June 2011 will be no more than $1,000,000”. It is submitted that the de facto husband did not initially disclose that his gross income was over $1.8 million and the reason why it was not $1.8 million taxable was because he had significant losses that had been carried forward and that he had about $800,000 worth of tax free income in the last financial year. It was submitted by counsel for the de facto wife that no affidavit material from the de facto husband prior to 8 November 2011 declared his profit share was anything in the order of $1,845,000.

7. Doing the best I can with the de facto husband’s evidence, it appears the de facto husband has most recently received in gross amounts $144,000 per annum in addition to profits of $1,845,000 per annum. I acknowledge I have not had the benefit of any testing or further evidence about the de facto husband’s written statements.

8. Counsel for the de facto wife referred to the de facto husband’s affidavit of 8 November 2011 and the lending facilities available to the de facto husband and submitted that the facility to which the de facto husband has access are:

   41.1.paragraph 23: $37,000;

   41.2.paragraph 24: $155,000 (or $105,000 as of the last affidavit);

   41.3.paragraph 25: $847,000; and

   41.4.paragraph 27: $508,900.

9. In relation to the facility in paragraph 27 of the de facto husband’s affidavit, the de facto husband explains how the property has a loan facility secured against it in the name of the de facto wife and T Pty Ltd as trustee for the M Unit Trust which is owned by the self-managed superannuation fund. The de facto husband declared in that paragraph that there are legal limits on the purposes for which he may draw on those funds due to the existence of the superannuation fund’s interest. Counsel for the de facto wife criticised the de facto husband for not setting out what those impediments might be given his level of financial expertise and noted that his earlier affidavit did not suggest any limitations. Counsel for the de facto husband responded that it was self evident that monies in a superannuation fund come with the normal well known legislative restrictions on the ability to access those funds. 

10. There was some discussion about the property owned by the de facto husband in Suburb A. Paragraph 40 of the de facto husband’s affidavit of 8 November 2011 records that last year one suite of the Suburb A property was sold for $1,085,000 which was put towards the reduction of debt on the property, and another suite is being prepared for sale. There was argument about the current status of the Suburb A property. Counsel for the de facto husband submitted that it had been on the market for a long time. Counsel for the de facto wife said the de facto husband’s evidence indicated that refurbishment had begun in May 2011 and that it would thereafter go on the market.

11. In relation to the Suburb A property, the de facto husband also has debts owing to him of $660,000 and has given no evidence about why they cannot be called in. Counsel for the de facto wife also pointed out that the de facto husband has provided no evidence about the three companies recently incorporated and the tax benefits they provide.

12. The de facto husband says there is an ATO debt likely owing for the past and current financial year and puts in issue his capacity to pay this debt. The de facto husband says his estimated ATO obligations are likely to be in the vicinity of $600,000 for the 2011 financial year to be paid by June 2012 and another $600,000 for the 2012 financial year to be paid by July 2012, whereupon the 2013 financial year’s tax will be paid in quarterly amounts of $150,000. These figures arise out of the brief letter of advice from chartered accountant C Accountants, dated 25 October 2011. Counsel for the de facto wife argued that the accountant proceeded on the basis of ignoring any use of the de facto husband’s tax losses and on the basis of what somebody else has told her the income will be ($1,200,000 which is not consistent with the other evidence given in the hearing).

13. It was argued by counsel for the de facto husband that his foreseeable obligations to the ATO are substantial and will require the utilisation of the facilities and properties that are made available to him by his financiers, using those particular properties as security. Counsel for the de facto husband made the submission that ordering interim property orders in the quantum the de facto wife seeks will require the sale of property that could otherwise be utilised as security for financing the ATO debt. It was argued that ordering the interim property orders sought by the de facto wife will cause significant prejudice to the de facto husband which may cause him to be in default of his obligations to the ATO. In response, senior counsel for the de facto wife made the point that the de facto husband’s application for final orders included the order that awarded the de facto wife with $500,000 which did not require the sale of any properties.

14. I do take into account the de facto husband is a very qualified and experienced business professional and that it can be expected that his affairs are complex and that there is some indication he has been less than forthcoming at this point in terms of full and clear financial disclosure. 

15. Counsel for the de facto husband asked me to adopt a realistic approach and find there was no urgency in making the lump sum order and to wait until the property sold. In my view that may, inappropriately, fetter the de facto wife’s ability to conduct the litigation and I am not attracted to that argument.

16. The de facto husband has given evidence that he is committed to building work at his property at Suburb K.  I am not attracted to the concept that that commitment should have priority over the ability for the de facto wife to receive some funding for her litigation and general expenses.

17. Looking at the de facto husband’s untested evidence on an overall basis, I find that he has the financial capacity to attend to his liability to the ATO as well as to make a payment pursuant to an interim property order, particularly if that payment was made by instalments. I will also find that he has the capacity to make payments for periodic support of the de facto wife.

18. Counsel for the de facto husband made the submission that the de facto wife had not provided any evidence that she had attempted to raise finance against her own property. That is not a significant point given that there is already a loan facility in place against the other properties and there is no indication that the de facto wife on her level of income would be able to secure the lump sum in the order that she seeks. Counsel for the de facto husband also referred to the fact that there is about to be an agreed sale of all of the assets and argued that a distribution of monies to her from a draw down on financing facilities was premature. There is no indication as to how easily these three properties will sell and there is no argument as to why the de facto wife’s access to funds should be delayed pending a sale of these properties. 

19. Counsel for the de facto husband stated that there is no evidence as to why or what the Respondent would do with those funds if the application were acceded to and referred to the need for credible evidence to verify her need.

20. The de facto wife’s application is clearly that the interim property order is to be applied to costs in relation to solicitors, counsel, accountants, valuers and other legal costs and disbursements. At 28 July 2011 the $500,000 claimed by way of interim property was said to be made up by:

    53.1.$200,000 for services of E Accountants;

    53.2.$200,000 for solicitors fees; and

    53.3.$100,000 for senior and junior counsel.

21. Counsel for the de facto husband made the point that it was inappropriate in circumstances where the parties were agreeing on the appointment of a single expert to allow the de facto wife monies for the engagement of a shadow expert (E Accountants).  That argument is superficially attractive, however, in this case, senior counsel for the de facto wife has referred to matters which may indicate that the de facto husband has not been quick in disclosing financial information, as outlined above.

22. E Accountants are currently owed $11,270 and estimate they would require $100,000 to $150,000 to complete their work. Given the letter of estimate was dated 26 August 2011 and the outstanding account is dated 17 October 2011, I infer the outstanding amount is included within the $100,000 to $150,000 estimate and accordingly the figure of $200,000 is an overestimate. Although I do not accept that the engagement of E Accountants is premature, they may not need the whole of their fees immediately. This is another circumstance which supports the notion of establishing a payment program for the interim property order. 

23. The de facto wife’s lawyers are currently owed $32,736.

24. So far as I am aware, no junior counsel has yet appeared but I presume junior counsel may be involved if the matter proceeds to a final hearing.

25. I find that in the circumstances of this case that it is appropriate and in the interests of justice to make an interim property order in the sum of $400,000. As Strahan makes clear, once that finding is made it still needs to be an order that is conservatively within the ambit of a likely final order pursuant to s 90SM FLA.

26. Looking at the untested evidence in relation to the financial history of the parties, an order for $400,000 is conservatively within that ambit. That amount is $100,000 less than the amount the de facto husband is prepared to concede in his application. I find that if that amount is paid in four instalments over a ten month period, there should be no hardship occasions the de facto husband in making those payments on interim basis.

27. If the three properties at Town R are sold prior to that time, then the remaining balance can be paid to the de facto wife. If final property orders are made before all four payments are made, then obviously those final property orders would subsume any liability the de facto husband had under these interim orders.

Spousal Maintenance

1. No submissions were made as to how an interim property order would affect the maintenance. Bevan and Bevan (1995) FLC 92-600 says that interim property orders must be taken into account before interim spousal maintenance is calculated.

2. The de facto wife seeks an order, pending further order, for spousal maintenance in the sum of $3,600 per week. In addition, she wishes that amount to be indexed and for the de facto husband to make periodic payments in relation to her private medical insurance premiums, insurance on household contents and in addition, to pay reasonable expenses, maintenance expenses in relation to the R property, all electricity expenses on the R property, all water charges levied by D irrigation company and to pay for the maintenance of the horses (23) presently housed at the R property.

3. The de facto wife also receives $231 a week rental income from the use of the paddocks on Lot 3.

4. Senior counsel for the de facto husband submitted that the de facto wife had taken no steps to derive income from the unfurnished, unoccupied property which she has title to and that there was no evidence to indicate that tenanting the property would impede the saleability of the property. However, I find it would be unrealistic to expect that the de facto wife would attempt to find a tenant for the property in circumstances where both the parties had agreed that all three properties would now be marketed in an orderly way.  Experience would say that it would be usual that you would expand your range of potential buyers if you were able to offer vacant possession. 

5. Counsel for the de facto husband asked for an admission that the de facto wife had worked at a restaurant called “[M]” in … on 19 November 2011.  That concession was not forthcoming despite the de facto wife being in court.  I can make no inference about the lack of an admission in the context of this interim hearing.

6. In relation to the de facto wife’s claim for personal spousal maintenance, the evidence that she has filed relating to her needs has undergone a number of iterations.

7. In her financial statement filed 25 November 2010, the de facto wife indicated that her average weekly expenses totalled $3,960. The expenses (apart from income tax and superannuation) set out in Part N of her financial statement, totalled $3,631.

8. The de facto wife in her affidavit of 28 July 2011 annexed a document (Annexure D) which she said she had prepared for the purpose of assisting in drawing the financial statement in November 2010. Some of the entries on this document are different from what she swore to when she swore her financial statement.

9. The most recent version of the de facto wife’s expenses is contained in paragraph 12 of her affidavit filed 25 August 2011. Again, there are considerable differences in the amount claimed in relation to particular items. As an example, “entertainment/hobbies” was originally $560 per week in Annexure D; was recorded as $710 per week in the financial statement and is now $547 per week in the more recent affidavit.

10. The total on that list of items that the de facto wife claims she requires for her weekly expenses is in the sum of $3,704.

11. Apart from money that the de facto wife receives from F Pty Ltd, she does not receive any other income apart from rent that is being paid to her in relation to a property which is in her name. That amount is in the sum of $231 per week.

12. At paragraph 18 of her affidavit of 24 August 2011 the de facto wife deposes to the fact that she has based the budget on “actual historical figures wherever possible adding in where necessary a minimal allowance for inflation and a return to active social life. The source documentation includes invoices, credit cards, statements, receipts and a large working spreadsheet”. None of that material was produced to the court.

13. On 22 November 2011 I refused counsel for the de facto husband the opportunity to tender material going to the de facto wife’s spending, in circumstances where the de facto husband had had the opportunity of presenting that material at an earlier time, when the matter was before the court on 24 October 2011.

14. I am left in the circumstance for the purposes of this interim hearing, of having untested assertions by the de facto wife which she says are based on historical records that she holds and which the de facto husband clearly will seek to challenge at some later time.

15. In those circumstances and given that the de facto wife has not provided any of the source material to the court to which she refers in her affidavit, I treat with some caution the list that she has provided, given the differences in three lots of sworn evidence and the actual amounts claimed for individual items. In particular, I am unsure of the amounts claimed in respect of the following items:

    House repairs;

    Clothing and shoes;

    Entertainment/hobbies;

    Gifts;

    Hairdressing/toiletries and cosmetics; and

    Other necessary commitments.

16. Those amounts, as they are set out in paragraph 12 of the de facto wife’s affidavit of 25 August 2011, add to a total amount of $1,246. I am prepared to allow $500 for those categories. That reduces the de facto wife’s claim from $3,704 per week to about $2,950 per week. I am prepared to assess the de facto wife’s need for spousal maintenance on an interim basis in the sum of $2,719 per week ($2,950 - $231) less any amount or assistance the de facto wife receives from any other source. Quite a number of the categories in respect of which the de facto wife makes a claim, have historically been paid from F Pty Ltd. If the de facto wife’s expenditure in relation to any of those categories are paid by F Pty Ltd (to an amount no more than she has claimed in paragraph 12 of her affidavit of 24 August 2011), then the amount the de facto wife would need on a weekly basis is to be adjusted downwards accordingly.

17. Counsel for the de facto wife raised the same evidence regarding the de facto husband’s capacity to pay an interim property order, as it related to his ability to pay spousal maintenance, pointing again to the lack of particulars in his material. Based upon my prior discussion, I find that the de facto husband has a capacity to pay the de facto wife the amount I have assessed as her need.

18. I shall not index the weekly amount given the interim character of the order.

19. I find the de facto husband also has the capacity to meet the expenses in paragraphs 5.1 to 5.6 of the de facto wife’s Response to an Application in a Case filed 28 July 2011. Given the de facto wife has not claimed in her list of expenses anything for medical insurance, then I will make the orders that she seeks in paragraphs 5.1 of her Response to an Application in a Case filed 28 July 2011.

20. I will make the orders the de facto wife seeks in paragraphs 5.2 to 5.6 of her Response to an Application in a Case filed 28 July 2011 but not on the basis that these payments are spousal maintenance. It is proper, given the capacity that each party has to make payments, that the de facto husband bear those costs until the final hearing. It will be a matter for the trial judge as to how the payments for these costs are adjusted at the final hearing.

I certify that the preceding eighty (80) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 17 April 2012.

Associate: 

Date:  17.4.12