Sumey and Sumey and Anor

[2015] FamCA 893

FAMILY COURT OF AUSTRALIA

SUMEY & SUMEY AND ANOR [2015] FamCA 893

FAMILY LAW – SPOUSAL MAINTENANCE – PROPERTY

APPLICANT: Ms Sumey

RESPONDENT:	Mr Sumey
2nd RESPONDENT:	Mr Cohen
INDEPENDENT CHILDREN’S LAWYER:	Independent Children’s Lawyer

FILE NUMBER: SYC 7655 of 2014

DATE DELIVERED: 23 October 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 19 October 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gilbert

SOLICITOR FOR THE APPLICANT: Swaab Attorneys

COUNSEL FOR THE RESPONDENT: Mr Serisier

SOLICITOR FOR THE RESPONDENT: McGirr Lawyers

COUNSEL FOR THE 2^ND RESPONDENT: Mr Cohen

SOLICITOR FOR THE 2^ND RESPONDENT: Cambridge Law

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Legal Aid NSW

Orders

IT IS ORDERED

1. That until further order the husband pay to the wife by way of spousal maintenance the sum of $920 per week, the first payment to be made on 26 October 2015 and weekly thereafter to a bank account nominated by the wife.

2. That the husband and the wife do all things required to authorise Swaab Attorneys to pay to the wife, from the money held by them in trust for the parties, the sum of $100,000 by way of partial property settlement.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sumey & Sumey and Anor 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 7655  of 2014

Ms Sumey

Applicant

And

Mr Sumey

Respondent

And

B Pty Ltd

2^nd Respondent

REASONS FOR JUDGMENT

1. Ms Sumey (“the wife”) and Mr Sumey (“the husband”) were married in 2005 and separated on 31 August 2014.

2. There are two children of the marriage, C, who will soon be eight and D who will be six early next year. The primary application before the Court is the application by the husband for review of a decision by Principal Registrar Filippello in relation to the parenting arrangements for the children. Fortunately, with the assistance of the Independent Children’s Lawyer, that application was able to be settled and Orders were made by consent which will provide for the children to spend, initially, time with their father each alternate weekend from after school on Friday until Sunday evening and, at the expiration of six months, each alternate weekend from after school on Friday until the commencement of school on Monday morning.

3. Each of the parties sought then to agitate applications in relation to financial matters.

4. On behalf of the wife it was sought to agitate an order for spousal maintenance in the sum of $1,000 per week and an order for partial property settlement.

5. On behalf of the husband it was sought to agitate an application requiring the parties compulsorily to attend mediation in relation to their financial proceedings. After hearing argument in relation to compulsory mediation that application was dismissed and short reasons were delivered orally.

THE APPLICATION FOR SPOUSAL MAINTENANCE

1. The wife seeks an order that the husband pay spousal maintenance in the sum of $1,000 per week.

2. She is the primary carer of the two children and it is her unchallenged evidence that she works in a business owned by her mother between 9.15 am and 2.45 pm Monday to Friday and receives $400 per week by way of wages. The wife also receives a family benefit payment which is disregarded for the purpose of this application.

3. There is a dispute about whether or not the wife actually receives child support and, if so, how much the child support amounts to. The husband alleges that he pays, on average, $168 per week by way of child support for the two children. The wife asserts that the husband pays no child support. Because these are interim proceedings I am not in a position to make a determination about whether the husband is paying child support and if so in what amount. However, any amount which is paid by way of child support would be allocated to the expenses of the children and not the expenses of the wife and therefore for the purpose of this decision I propose to disregard child support.

4. The wife, in her Financial Statement, claims weekly expenses by way of rent in the sum of $775 per week and Part N expenses for herself in the sum of $545 per week. I do not accept the submission of counsel for the husband that the Court should disregard expenses such as clothing, holidays, gifts and hairdressing. I note that the husband claims, in his Part N expenses $50 per week for clothing and shoes, $25 a week for entertainment and hobbies, $25 a week for holidays and $15 a week for hairdressing and toiletries. Having regard to the husband’s expenses I cannot make a finding that the wife’s expenses are excessive. The wife’s expenses are modest and I propose to allow them as claimed.

5. Although I accept that a proportion of the rent which is being paid by the wife would be allocated to the benefit of the children, in circumstances where the wife says the children’s reasonable needs amount to $795 per week and the husband on his own evidence is paying no more than $168 per week I think it is appropriate that the whole of the rent should be allocated as an expense of the wife. Therefore the wife has justified a need for spousal support in the sum of $1,320 less her earnings, or $920.

6. The husband swore a Financial Statement on 13 October 2015. He deposed that he has an income of $1,513 per week.

7. The quantum of the husband’s income is challenged by counsel for the wife who asserts that his income is considerably higher.

8. The husband lives in a de facto relationship with Ms E, who is a professional. She does not depose to having any experience or qualifications in Mr Sumey’s line of business, that being the husband’s occupation throughout the marriage. Ms E is about to give birth to their child and is not currently working.

9. The husband runs a business but is currently without a licence and banned from working for the foreseeable future. In conjunction with Ms E, he has commenced a new business. The business is conducted through the medium of the Sumey Family Trust. The trustee of the Sumey Family Trust is F Pty Ltd, which is the sole shareholder of the company G Pty Ltd which conducts the business.

10. Ms E is the sole shareholder and director of F Pty Ltd and G Pty Ltd. Therefore Ms E controls the trust and the business. The husband and Ms E are both beneficiaries of the trust.

11. Tendered in the wife’s case was a letter from H Partners, addressed to the husband, containing an invoice for setting up the structure through which the business operates. The invoice for the setting up of the business structure was dated 21 November 2014. The husband gave the instructions to H Partners.  

12. Also tendered in the wife’s case was the bank statement for G Pty Ltd which was opened on 24 March 2015. Between 24 March 2015 and 21 September 2015 sums in excess of $4,500,000 were paid into that account. On 21 September 2015, the balance of the account was $76,743.

13. Records produced by a web search indicate that there were no public sales for the period 1 October 2014 to 7 September 2015 by F Pty Ltd, the husband or Ms E. However, the records indicate that G Pty Ltd (ID:…) conducted business listing the salesman as the husband, between those dates. The records produced by the website indicate that the husband sold $1,996,820 worth of products during that period. The records produced by the website indicate that, in the same period, products to the value of approximately $2,248,000 were withdrawn from sale. The products that were withdrawn from sale included a 4WD motor vehicle registered number … which was listed at a price of $75,990. That is the vehicle which was taken from the wife’s possession on 28 February 2014 by a person unknown to the wife who purported to repossess the vehicle. How that vehicle then came into the possession of the husband and could be offered for sale by him was unexplained by the husband.

14. Records produced by the website indicate that, as at 7 September 2015, two items with a total value of $474,980 remained for sale online by the husband as salesperson for G Pty Ltd.

15. The husband annexed to his affidavit his tax return for the financial year ended 30 June 2015 in which he described his main business or professional activity as car wholesaling. The business name was said to be “Mr Sumey” and the business address I Street, Suburb J, which is the husband’s home address.

16. In the husband’s individual tax return he deposes to an estimated total income of $305,611 from his main business. The husband claims costs of sales of $231,671 together with other business expenses including lease expenses and interest of $20,000 making total business expenses of $269,134. The husband claimed a taxable income of $37,291 in his own right. Presumably that income was separate from any income which was earned by G Pty Ltd, or from the husband’s employment which is referred to below, and is in addition to that income.

17. In his Financial Statement the husband names his employer as “K Pty Ltd”. Annexed to the husband’s affidavit is a copy of his employment contract indicating that he is employed as a corporate client director. That contract commenced on 16 April 2015. The husband earns $78,720 per annum pursuant to his contract of employment. His income from the sales business is in addition to that income.

18. Similarly any income which might have been earned by G Pty Ltd is in addition to the income which he earns from K Pty Ltd.

19. The bank account of G Pty Ltd appears to have been used for personal expenses for either the husband or Ms E. There are numerous transactions relating to supermarkets, Ikea, Bunnings, hairdressers, doctors and the like.

20. It is impossible to tell what advantage or benefits the husband has received from the accounts of G Pty Ltd.

21. In his Financial Statement the husband discloses that he receives a motor vehicle as a benefit of his employment. He then claims the expenses of that vehicle as an expense. Counsel for the husband conceded that he is not entitled to that deduction.

22. The husband’s allowable expenses are:

    Tax$264

    Health Insurance which includes the children

    and Ms E – for these purposes I propose to

    reduce the amount allowed to          $50

    The husband’s Part N expenses including the

    Expenses for the children  $560

    Total$874

23. The husband claims repayments on credit cards totalling $216 per week. I do not propose to allow that expense. There is no evidence to establish how the credit card debt accumulated. Presumably the advances funded living expenses. In that case, it would be double counting to allow both the living expenses and the debt incurred.

24. The husband has a capacity, if the income from K Pty Ltd were his only income, to pay $639 per week. However, for the reasons I have set out, I am not satisfied that this is his only income and I am not satisfied that the husband has given proper disclosure of his income and earning capacity or the benefits he receives by paying private expenses from the bank account of G Pty Ltd.

25. Therefore I propose to order that the husband pay spousal maintenance in the sum of $920 per week.

INTERIM PROPERTY SETTLEMENT

1. The wife asks the Court to make an order for interim property settlement in the sum of $260,000. The husband opposes that application and asks that an order be made that each party receive $100,000 by way of interim property settlement.

2. The wife has incurred legal fees of about $248,000 of which she has paid some $157,000 from money borrowed from her parents. She has been advised that she will incur further fees of $200,000 to the completion of the trial. Thus the wife’s total estimated costs are $448,000.

3. The husband has paid legal costs of $60,340 using money from the sales of two motor vehicles which were matrimonial property, and, he deposes, borrowed funds. He has been advised that the estimated costs to the completion of the trial are a further $150,000. Thus the husband’s total estimated costs are $210,340.

4. The only identifiable asset is a fund in trust of about $845,000 from the sale of the former matrimonial home.

5. The second respondent in the proceedings is B Pty Ltd (“B”) which claims a debt owed by the husband of $200,000 together with interest currently accruing at $60,000 per annum. The debt was secured by the husband over the former matrimonial home but not with the consent of the wife. B sued both the husband and the wife in the Supreme Court of NSW to recover the debt and consented to the transfer of those proceedings to the Family Court of Australia to be consolidated with these proceedings.

6. The wife disputes that the debt is legitimate. It is her case that the principal of B is a long-time friend of the husband; that, if money was advanced, it has been repaid; and that the liability, if it exists, is solely the liability of the husband.

7. Counsel for B asks the Court to ensure that sufficient funds remain in the trust account to ensure that funds are available to pay the debt. At the present time the asserted debt, with interest, is $320,000. The matter is still in the pool of matters awaiting allocation to a docket. On the assumption that this matter will not be listed for hearing for at least a year it is necessary to preserve a further $60,000 to cover the interest for that period. If B is successful in its claim, then counsel has indicated that costs will be sought. No quantification of the amount of costs has been proffered but it would be reasonable to preserve a further $50,000 on account of costs. Thus the total amount to be secured is $430,000, leaving a balance of $415,000.

8. The wife opposes any partial property settlement in favour of the husband. It is her case that the husband has not disclosed his real income and earning capacity and that he has diverted matrimonial funds to other, concealed, investments. If she is able to make out that case, then she would suggest that she is entitled to the whole of the money in the trust account. The husband concedes, through his counsel, that the wife is entitled to some of the funds in the trust account although he does not quantify the amount.

9. There is no likelihood that any money which is paid to either party will be available to be repaid after the matter is determined.

10. Accordingly I propose to make an order that the wife receive the sum of $100,000 by way of partial property settlement.

11. One possible outcome of these proceedings is that neither the husband nor the wife, after the payment of their costs, will receive anything by way of property settlement. They are urged to consider very carefully the future conduct of this litigation.

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 23 October 2015.

Associate: 

Date:  23/10/2015