Talbot and Talbot

[2013] FamCA 671

FAMILY COURT OF AUSTRALIA

TALBOT & TALBOT [2013] FamCA 671

FAMILY LAW - PROPERTY – Interim distribution – Husband seeking interim distribution of $50,000 to fund litigation – Husband alleges wife has removed funds from the parties’ companies – Property pool comprised of a number of properties – Order that one parcel of land, one investment property and one beach shack be sold, with the proceeds to be held on trust – Leave to apply in relation to distribution of those funds held on trust – Order that parties attend conciliation conference – Order for discovery of financial documents in relation to the companies

APPLICANT: Mr Talbot

RESPONDENT: Ms Talbot

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 4263 of 2013

DATE DELIVERED: 15 July 2013

PLACE DELIVERED: Launceston

PLACE HEARD: Launceston

JUDGMENT OF: Benjamin J

HEARING DATE: 15 July 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Ayliffe

SOLICITOR FOR THE APPLICANT: Walsh Day James Mihal

COUNSEL FOR THE RESPONDENT: Ms Mooney

SOLICITOR FOR THE RESPONDENT: Medina Legal

Orders

1. The husband’s application for spousal maintenance is withdrawn and dismissed AND IT IS NOTED the application has not been heard on its merits.

2. BY CONSENT, the respondent wife will within fourteen (14) days authorise and instruct (in writing) the accountant/s acting for any company of which she is a Director to respond to any reasonable request for information from the applicant’s solicitors. This order is subject to either party applying for variation of it if the requests are not reasonable in the circumstances.

   IT IS FURTHER ORDERED

3. The husband’s application for payment of fifty thousand dollars ($50,000.00) from the assets of the business or businesses is dismissed. It is noted that such dismissal does not preclude future/further applications for interim property orders.

   IT IS DIRECTED

4. The parties do all acts and sign all documents to cause the following properties to be sold, as soon as is practicable namely:-

   ·B Street, Suburb D

   ·E Street, Suburb F

   ·G Street, Suburb H

   on the following basis:-

   (a)     at a price agreed between the parties or if the parties are unable to agree to a price, at a price determined by a valuer reasonably nominated by the President of the Institute of Valuers Tasmania.

   (b)     through a solicitor or solicitors agreed between the parties and if the parties are unable to agree then a solicitor nominated at the request of either party by the President of the Law Society of Tasmania. 

   (c)     through a real estate agent or real estate agents agreed between the parties and if the parties are unable to agree then an agent nominated at the request of either party by the President of the Tasmanian Real Estate Institute.

   (d)     on the sale of the properties, after payment of legal expenses on the sale, valuation expenses and the appointment of solicitor valuer and/or real estate agent, the proceeds be placed into an interest bearing trust account in the name of both parties. 

5. Leave be given to the parties to apply, on the giving of fourteen (14) days notice in relation to distribution of those funds if necessary as set out in order 4(d) above.

6. Leave be given to the parties to apply generally on the giving of fourteen (14) days notice.

   IT IS DIRECTED

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

   IT IS FURTHER NOTED

8. The Registrar may consider this a matter for transfer to the Federal Circuit Court following the Conciliation Conference and subject to whether that Court has original jurisdiction in relation to the Corporations Act 2001 (Cth) and other matters such as complexity and listing dates.

   IT IS FURTHER DIRECTED

9. BY CONSENT the wife cause to be produced to the solicitors for the husband in either hard copy or electronic form the following:-

   (a)     bank statements from 1 April 2013;

   (b)     cash books from 1 April 2013; and

   (c)     financial statements and balance sheets from 1 January 2013 in relation to the companies J Pty Ltd, J Australia Pty Ltd, Talbot Family Holdings Pty Ltd and K Pty Ltd.

10. Each party produce to the other a copy of the current and previous years income tax returns in either hard copy or electronic form.

11. Each party provide to the other a copy of their credit card statements and bank account statements in respect of any personal credit card or personal bank account of which they hold from 1 April 2013, such material to be provided within twenty one (21) days from today’s date.

    IT IS FURTHER NOTED

12. The wife is not required to produce documents already discovered to the husband or to the husband’s solicitors.

    IT IS FURTHER DIRECTED

13. The parties attend a Conciliation Conference on 11 September 2013 at 11.00am at Launceston.

    IT IS CERTIFIED

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym Talbot & Talbot 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 LAUNCESTON

FILE NUMBER: MLC 4263 of 2013

Mr Talbot

Applicant

And

Mr Talbot

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. Mr Talbot and Ms Talbot have engaged in litigation following the breakdown of their marriage in April of this year.  One of the orders the husband sought in his initiating application, filed 29 May 2013, is an order that the wife cause $50,000 to be paid to him by way of interim property settlement for the purpose of funding this litigation.  The issue is not so much whether there is a need for those funds, for clearly there is, in terms of both the parties.  It is from where the funds ought to be provided, if such funds exist.

2. The husband’s case is that the wife removed a series of cash sums from the parties’ business, shortly after separation, those being the sums of $89,000, $57,950, $33,177, $60,000, $196,000 and $1,200.   It is the husband’s case that those monies were available to the wife, either personally or through other companies, which she has either taken over or established to control those funds.  Another source that the funds can be derived is from the properties owned by the parties.

3. The parties own a home at B Street, Suburb D, which has a value of between about $870,000, according to the wife, and about $1 million, according to the husband.  The property is subject to a mortgage of in excess of $600,000.  It is not property which is available for distribution at this time, particularly bearing in mind that the child of the parties’ marriage is living with the wife at that home, together with the wife’s two children of a previous relationship.

4. The parties own an adjacent parcel of land at B Street, Suburb D. Neither the wife nor the husband object to an order for sale, with the funds to be put aside for the purpose of division at some stage in the future. Such a division will depend on the repayments of loans to the financiers.  I have made that order, although at this stage I have not directed how much, if any, will come from that sum, for reasons I will address later. 

5. The second is the property at G Street, Suburb H, which is unencumbered and has a value of about $250,000.  The Suburb H property was owned by the husband prior to the marriage but he agrees that it ought to be listed for sale, for the purpose of consideration of interim property orders.

6. The third is a property at Suburb F which is leased to mining employees, although not necessarily employees of the parties.  The wife is reluctant to see the sale of that property, because it achieves significant returns.  However, she acknowledges that it will inevitably have to be listed for sale and offers no strong opposition to its sale at this time.  In fact it was the wife, through counsel, who indicated that the property ought to be considered for sale.

7. The question to be determined was whether I ought to order the sum of $50,000 to be paid to the husband from the company funds, which are under the control of the wife.  The husband relies on his affidavits filed 29 May 2013, 10 July 2013 and 14 July 2013, together with his financial statement and affidavits of Mr L and Mr M, both filed on 11 July. 

8. The husband was born in 1974 and the wife was born in 1978.  Neither party has attained their 40^th birthday, at the time of hearing.  The parties met in 2007/2008 and married in 2010.  The wife has two children from a previous marriage: N, age 14, and O, age 13.  The husband has a child from a previous marriage, P, also age 14.  There is one child of this marriage, C, born in 2010 and who has some significant health difficulties.

9. The parties operated a business called J Pty Ltd; a corporation of which the parties are both directors and which the shareholding is apparently owned by the husband.  The business involved the supply of staff and other services to the mining industry and has operated profitably over a number of years.  The way the business appears to have operated in the past was that the husband and the wife worked in partnership.  The husband was responsible for connecting employees with mining contracts and these recruitment services returned a profit.  The wife was responsible for the day-to-day running of the business in terms of the paying of bills and maintaining of books and records.

10. The wife asserts that during the last 10 months of the marriage, at least, that the husband had a significant alcohol problem, and was not performing his usual duties within the business.  The husband denies that assertion and says that he was operating the business as normal.  On an interim application, I was not able to make findings of fact in relation to that except to note the parties’ varying opinions.  The parties agreed that the companies, including the company managed jointly by the parties and those subsequently established by the wife have cash funds of about $178,000, but also liabilities of about $278,000.  

11. The husband’s case is that somewhere between $300,000 and $400,000 was drawn from the companies and is available, on his submissions, for the litigation fund.  Again, I was unable to make findings in respect of that area of disputed facts.  There is no issue that the funds to which I alluded to earlier; the approximate sums of $89,000, $57,000, $33,000, $60,000, and $196,000 were taken from the company’s accounts.  The wife provided explanations as to the withdrawals of those amounts, particularly in her last affidavit.

12. I was conscious that if I directed the payment of $50,000 as sought by the husband and the wife’s assertions through counsel are correct, that the funds available in the company structures are insufficient to meet the existing liabilities, then I would put one or other of the companies in circumstances where they are unable to meet their debts as they fall due.

13. As a consequence, I was reluctant to make the order sought by the husband in that regard.  I have made an order for the sale of the three properties and provided that the funds from those sales are to be held in trust, pending either agreement between the parties or further determination of this Court. 

14. I also heard an application for discovery.  The husband is a director of the parties’ company and is therefore already entitled to obtain information from the company’s accountant.  At the same time, he is not entitled to information in respect of the companies operated by the wife.

15. The wife states that she set up these companies to protect the interests and assets of the parties’ company after separation.  I have not made a determination as to whether that is accurate, or whether her actions were consistent with that required under the Corporations Act 2001 (Cth). I have noted that a more detailed list, as required for discovery, was prepared. I would expect any such reasonable request to be complied with promptly, to enable each of the parties to remain informed as to the current circumstances of the company.

16. I did not make an omnibus order, as it seems that by reference to the limited asset pool of this case, I risked imposing a liability upon the parties from which they may never recover.  I listed this matter for conciliation conference in September 2013 and urged the parties to treat this conciliation conference as a way to avoid financial ruin.  I note that the wife asserts that her contributions have been eight times greater than that of the husband and were derived from inheritance.  I do not know whether this is accurate or not however I warn the parties that if they are unable to resolve this matter, then it is likely that the cost of court proceedings will exceed the value of any distribution the parties would receive. 

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 15 July 2013.

Associate: 

Date:              15 July 2013