Thomas and George

[2012] FamCA 915

FAMILY COURT OF AUSTRALIA

THOMAS & GEORGE [2012] FamCA 915

FAMILY LAW – PROPERTY – Injunction

Family Law Act 1975 (Cth)

APPLICANT: Ms Thomas

RESPONDENT: Mr George

FILE NUMBER: SYC 8066 of 2010

DATE DELIVERED: 7 September 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 7 September 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr M. Kearney

SOLICITOR FOR THE APPLICANT: Gayle Meredith & Associates

COUNSEL FOR THE RESPONDENT: Mr Lethbridge SC

SOLICITOR FOR THE RESPONDENT: Blanchfield Nicholls Partners

Orders

1. That by way of interim property settlement the parties sign all documents and do all things to cause a payment to each of them in the sum of $66,000.00 for the purposes of payment of profit costs and disbursements associated with these proceedings AND unless the parties agree otherwise that payment is to be made from a sale of the assets represented by Items 15 and/or 23 of the Balance Sheet which is part of Exhibit 6 in these proceedings.

1. An order is made in terms of paragraph 3 of the Minute of Orders sought by the wife at Annexure A of her affidavit of 24 July 2012 AND in terms of paragraphs 5, 6, 7 and 8 replacing 28 days with 14 days of that Minute as set out hereunder:

1. That the husband pay all costs of Fichier des Comptes Bancaires et Assimiles (“FICOBA”) (if any) which occur as a result of the husband’s application to FICOBA.

1. That in the event translations are needed of documents provided to the wife in relation to the husband’s financial position in France that subject to Order 7 herein that the husband pay for the translations which will be undertaken by a joint expert.

1. That the husband and wife do all necessary to cause to be retained a joint single expert to value the following:

6.1the husband’s entitlements in the French pension funds including Agirc and Arrco;

6.2the stock options, share rights, share grants, performance shares and savings schemes in which the husband has an interest;

6.3the Natio Vie life insurance policy number 3099726;

and that subject to Order 7 herein the husband pay for the valuation.

1. That the characterisation of any costs paid by the husband in accordance with Orders 3-6 herein be reserved to the trial Judge.

Injunction

1. That pending further orders and in the event the husband receives bonuses from his employer and/or any associated entity:

8.1the husband shall forthwith upon receipt pay the whole of those sums into a joint account to be set up by the husband and the wife with Westpac Banking Corporation; and

8.2each of the husband and wife be restrained from dealing with that account other than:

8.2.1the husband having first provided to the wife not less than 14 days prior notice in writing of any intention to apply such funds for any purpose, which notice shall include the amount intended to be withdrawn and the purpose(s) to which such funds are intended to be applied; or

8.2.2in accordance with the written agreement of the parties or Orders of this Court.”

1. That orders be made in terms of paragraphs 4(A) and 4(B) of paragraph 1 of the Minute of Order set out in the Case Outline document submitted on behalf of the wife today as set out hereunder:

“4A.That the husband forthwith do all things and sign all authorities necessary to cause the Commission Nationale de l’Informatique et des Libertes [CNIL] to provide to each of the husband and the wife banking data indentifying the nature of all accounts recorded in the name of the husband (whether alone or jointly with any other person) including the number, type, account features and address of the institution managing the account.

4B.That forthwith the husband shall sign and provide to the wife all authorities as are requested of him by the wife authorising and directing the production by any financial institution of statements of financial transactions on all accounts in or which have been in the name of the husband (whether alone or jointly with any other person).”

1. That an order be made in terms of paragraph 5 of the orders sought in an Application in a Case filed 29 August 2012 commencing after the word “continued” in the third line as set out hereunder:

“5.That pending further order the husband shall do all things necessary to secure alternate rental accommodation for and as selected by the wife and for such purpose:

5.1the husband shall pay to such real estate agent or landlord nominated by the wife an amount of up to $1,600.00 per week on account of rent together with such amount as is required to be paid by way of a rental bond, any advance payment of any rent or otherwise to secure the wife’s tenancy of such property;

5.2the husband shall pay as and when same fall due, all amounts required to be paid in respect of the outgoings, home contents insurance and utilities for the wife’s rental premises, including in respect of any security or bond amount required to be paid in respect of any of the same;

5.3the husband shall pay the costs of removalists retained by the wife for the purpose of moving the contents of the matrimonial home to the wife’s renal premises;

5.4the husband shall provide all guarantees that may be required by the real estate agent or landlord of the said rental premises in order to secure the wife’s tenancy of the same; and

5.5the husband shall pay all costs required for the storage of the contents of the former matrimonial home in a secure storage facility for those contents the wife is unable to move to her new rental premises.”

1. The proceedings are adjourned in relation to the readiness of the substantive proceedings to 9:30 am on Tuesday, 30 October 2012 before Justice Loughnan at the Parramatta Registry of this Court AND leave is granted to the legal representatives to attend by telephone and the parties are excused personal attendance.

IN CHAMBERS

1. That by consent orders be made in terms of the document titled Consent Order marked Exhibit 1 as set out hereunder:

“1.That Orders made 21 September 2011 be discharged.

2.That pending further order the mother and father have equal shared parental responsibility for each of the children, Raphael Malthias George born 1 October 1994 and Alexandra Salome George born 25 November 1996 (“Alexandra”) including but not limited to their current and future education, their medical treatment and other health issues and overseas travel.

3.That Alexandra live with each of the husband and wife at times which accord with her wishes.

4.That both the father and the mother facilitate Alexandra having telephone, email, text and other communication with the other parent while she is in their care in accordance with Alexandra’s wishes.

5.That within 14 days the mother shall provide to the father Alexandra’s US passport and Carnet de Vaccinations.

6.That all applications as to costs be adjourned until determination of the substantive proceedings.”

IT IS NOTED that publication of this judgment by this Court under the pseudonym Thomas & George 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 8066 of 2010

Ms Thomas

Applicant

And

Mr George

Respondent

REASONS FOR JUDGMENT

1. These are proceedings that had a terribly convoluted history.  The background facts involve a husband who is 49 years of age and a wife who is 45. The husband is the Managing Director of an entity called SITA Australia.  He had been seconded from, I think, the parent company called Sewers Environment.  The parties married in 1988, separated in December of 2010 and were divorced in July of last year. The parties have two children, Raphael and Alexandra, who are nearly 18 years of age and 15 and nine months of age, respectively. The parties came to Australia in 2007 from the United States, where they lived because of the husband’s work, for about 8 years.

2. Final parenting orders were made in this Court on the 21 September 2011, providing for equal shared parental responsibility and roughly equal time.

3. Shortly before those orders were made and since, Alexandra exhibited concerning psychological symptoms, including self harm, and the parties worked to address those problems through a doctor and psychologist. In October last year it was agreed between the parties that for the time being she would live with the father.  Raphael starts at a French university this month.

4. There are property proceedings on foot. There was a substantial distraction when the wife started preliminary proceedings, leading to divorce proceedings in France. Ultimately, she accepted, as she should, that the proper forum is Australia and without further objection I granted the parties divorce which dealt with that issue.

5. Preparations are underway for a hearing on property issue. There are interlocutory issues about financial support, issues about discovery and disclosure, questions about whether the proceedings can be accelerated or not, and there are issues about interim property settlement. 

6. It is an agreed fact that the wife is not able to take up paid employment in Australia.  The effect of sections, 72 and 74 and 75, is that parties to a marriage are obliged to support each other where one cannot adequately support themselves from their own resources, to the extent of the reasonable capacity of the other.  The matters taken into account in a financial sense are the income, property, financial resources and their physical and mental capacity for gainful employment.

7. The husband has the only income in the family.  It follows that that will be the primary source of support. An application for maintenance is an application that the other party provides support.  It is not required, and I do not think it was seriously suggested, that the support must come from income.  Certainly, I do not know of any authority for it.  One would be careful, certainly on a final basis, in making an order that went beyond the payer’s income, but I don’t know of any authority for that requirement. The legislation does not include such a requirement. Indeed the breadth of the section 75(2) provisions, including the concept earning capacity, cover the issue of where the support could come from.

8. The wife has been living in a property at Maroubra.  The rent has been paid by the husband’s employer.  He is the Managing Director of that entity.  A letter has been recently sent and advice was given, I am told as early as 2010, that the wife must leave the property. There were earlier deadlines, but certainly at some point she was told the indulgence would not extend beyond the term of the lease. I am told by learned senior counsel on behalf of the husband, that the lease ends now.  She has to get out. 

9. The wife has not resisted, she sought a supplement to her spousal support to meet her new rent. She nominated $1600 per week as the appropriate level of rent.  Notably, as is said in her case, that is a factor of difference less than the rent that was paid for the Maroubra property, which has been the matrimonial home. One could understand why more modest premises would be appropriate for the wife, given she does not need to accommodate many people.

10. The husband has had a relationship with Miyuki Lui, I think, since November 2011. The evidence is that they do not live together. Apart from when the husband was away last year, Ms Lui does not reside in his Bronte property. I understand that the Bronte premises are rented at a similar rate to that paid for the Maroubra property. The husband is not sure how that is all calculated, but he understands that his employer has paid the rent on both properties. On the company records in evidence the rent has been brought to account as reportable fringe benefits in a sum of $159,900 for the 2012 financial year. That was specifically referable to the Maroubra property but not to the Bronte property. In summary, the husband’s employer has paid the rent on both properties.

11. By a note to his Financial Statement the husband flags the possibility that his employer might seek reimbursement from him in relation to the rent paid for the Maroubra and Bronte properties. That would make sense if it is beyond his entitlement to have two premises. I cannot make a finding about that issue but I assume that at the end of the Maroubra lease the impost on the husband’s employer, or if he is ultimately responsible, on the husband, will be reduced by the cost of that lease. 

12. The husband’s income is paid in two ways.  He receives income in the form of a wage which has been calculated and rationalised in terms of Euros. It reflects some sort of tax equalisation, components for living expenses and for an overseas posting. His June 2012 pay slip puts his taxable gross at $655,760.   The husband usually received a bonus in March each year. He anticipates that he will receive a bonus next March. The 2012 bonus resulted in a net payment of 30 odd thousand dollars.

13. The wife’s expenses are set out in her affidavit. There is nothing extraordinary by way of category.  She has double counted, it appears, in relation to medical, dental and optical expenses for herself and Alexandra at $75 a week.  There are expenses which she isolates, or identifies, as also including, costs for the children.

    The clothing and shoes for me, my daughter and son, $100 a week.

14. Raphael is now living in France and it is submitted for the husband that he is wholly supported by his father. I take it that the wife is not required to pay for his clothing. Similarly, Alexandra lives with the father. I am told without complaint that she has spent time with the wife something like five times in the last two months and not overnight. In those circumstances I take it that the impost for the wife for Alexandra’s pharmaceutical and other chemist expenses would be limited to infrequent or emergency expenses.

15. But otherwise, there is nothing in the wife’s claimed expenses of substantial concern.  There are two costs totalling $750 a week arising out of these legal proceedings that bring the wife to the total of the order of the current ordered rate of $1950. That was an order agreed to by the parties in January 2011. Whatever one might say about, if I ignore all clothing and shoes, and all pharmaceutical expenses, $250 a week is not going to provide the wife with rental accommodation.

16. The legislation also requires consideration of the relevant standard of living. The effect of the authorities including Wilson’s case is that the standard of living during the marriage does not represent the minimum future standard appropriate for the payee, nor the maximum to which the wife might aspire.

17. Every family is different of course and as I said during the course of submissions, these two good folk took up obligations for each other on a day when they feel happier about each other than today. On that day, if one had asked them whether instead of a $3000 rental for the wife’s accommodation, $1600 per week or $350 per week would be more appropriate, the answer might have been closer to the higher rate.

18. And as I say, there is this provision in relation to the relevant standard of living:

    Where the parties are separated or divorced, a standard of living that in all the circumstances is reasonable. 

    Although, Alexandra is nearly 16, there may well be an effect on her if her mother is living in a bedsit somewhere in the eastern suburbs and the father is living as he has done.

19. I am permitted a broad brush approach on an interim basis. That is because, if mischief is caused by my order, that may be able to be undone. In a hearing such as this, conducted on the papers, I am not permitted to make a finding on a disputed issue of fact without independent evidence that wholly excludes one ersion of events or fully supports the other. There is a level of inexactitude about most matters and while I accept that the husband can say, “Well, I’m an open book”, he’s not your traditional PAYE public servant taxpayer.  There are vagaries about his financial circumstances that he says he does not know about.   

20. For example, the fringe benefits treatment of the Bronte rental. He is the Managing Director of his employer.  So there are some complexities about his financial circumstances that I can’t get to the bottom of, that it’s legitimate for there to be a query about and can be solved on another day. Beyond the husband’s income, even the estimates the wife and the husband provide are wrong. There was no week when the wife spent exactly $275 on food and household supplies, no week when she spent exactly $100 on clothing, shoes and so on. 

21. So while the parties do their best and the Court does its best in giving guidance about what information is to be provided, it’s not realistic or practicable to expect that all of these things are precise.

22. Next, each of the parties has made provision in their Financial Statements for expenses that would give way to necessity.  In the husband’s case, expenses that would give way to his obligation to support his wife, include:  entertainment and hobbies at $400 a week, holidays at $550 a week. 

23. So we come back to assess the wife’s claimed expenses. I don’t have a reason for picking a rental figure other than the rental figure that the wife has proposed. Of course, there may be appropriate rental available for $1312 a week. Normally, the parties would sort these things out and not undergo the indignity of having someone in my position make the decision.  We know that it is possible to spend $3000 a week on rental in the eastern suburbs. That was the appropriate rental chosen by the parties for the Maroubra and Bronte properties. In that context the wife’s claim does not seem to be out of all proportion.   

24. The wife seeks $1600.  There are some problems with the wife’s estimates for her living expenses but they are not significant.  The $75 a week is double accounted.  It may be that there are some expenses in relation to clothing and shoes and so on that are now met more now by the husband than the wife.  One could take $100 off.  It seems to me that it’s neither here nor there.  

25. Turning to the husband’s capacity, the submission made in his case is that he is unable to borrow. I assume that means that he is not able to borrow in Australia.  I think that is not literally true. I gather the problem is that, because he is a non-resident, for the time being, there would limits on his capacity to borrow. The concession has apparently been made that he can borrow on a credit card, so I take it that he has some borrowing capacity.  We know that there is some level of flexibility between himself and his firm.  The note about the Maroubra rent suggests that the company might come to him at some point for reimbursement. 

26. If the husband’s employer paid both the Bronte and Maroubra rents, that suggests a level of non-commerciality about that exercise. The Bronte rent hasn’t been brought to account in the reportable fringe benefits statement.  I don’t know what that means but it suggests a level  of flexibility.  As has been said in the course of submissions, it may be that the husband has some capacity to borrow in the short term.

27. The parties are going through a period of disinvestment. They have taken on a very expensive hobby:  litigation in a superior court of record. As most budgets must do the husband will be expected to accommodate any shortfall for the time being, and can make adjustments in the medium term. 

28. For the purposes of today, I am satisfied that, in the broad, taking in to account his income, his earning capacity, his financial resources and his property, the husband has the capacity to meet the wife’s claim. I note that her claim is something like $1400 a week less than the cost that has in fact been met for her support to date. 

1. In relation to the cost of valuations, the only source of funds at the moment is the husband.

2. The parties are free, as Mr Lethbridge says, to reach an agreement to draw on their capital. As to interim costs Mr Kearney has mentioned the decision of Strahan.  Whereas the law isn’t “why not”.  It is almost “why not”. Here the parties are seeking access to their own funds for their own purposes.  There is a recognition in that decision, as opposed to Poletti, Zschokke,Hogan, Barro, that the parties are entitled to access their funds. Life doesn’t stop during property proceedings. The parties have expenses. If the fridge dies, they should be able to get access to their funds, let alone for something as problematic as legal expenses. 

3. However, absent there being an agreement about that, and you would think it might have been wise for them to reach an agreement to that effect, the husband is the only available source of funds for any expenses. If it transpires that the expenses are unreasonably incured, he can come back to court and complain about it. If they cause delay, he can do the same thing.  After the event, he can say they were unnecessary and they can be attributed more to the wife than to himself, so no harm done. 

4. In relation to the injunction sought by the wife in respect of the husband’s bonus, it’s only an injunction that provides notice. When a marriage breaks down, we go from one circumstance to another. As is many marriages, the husband has become a trustee for the matrimonial assets. In his dealings with property, in his dealings with large sums of money, he is effectively a steward for the wife. If those funds are not expended, they will form part of the property pool to be divided between the parties.   

5. He has a conflict of interest in relation to his dealings with joint funds or moneys that might be found to be joint funds. In those circumstances it is appropriate, where the parties’ trust for each other is strained, to allow them to to keep an eye on each other, to give notice to each other, to explain what’s going to happen in advance. In that way the other party can be heard and potential embarrassment can be avoided.  

6. This is not a case of calling the husband a villain or assuming that he will do something inappropriate”. It is just giving the wife, who for all the reasons that are outlined in Poletti & Zschokke is the party who is likely to be short on resources and information, the capacity to intervene.

7. As to disclosure, that order is appropriate for obvious reasons. The life blood of financial proceedings is disclosure.  The wife is entitled to satisfy herself about matters.  It may be, as her husband says, that he is an open book and his affairs are unremarkable; that the wife should have taken him at face value, and she has in fact received all the documents she needs.  It may be the enquiries will prove a waste of time, but she is entitled to make those inquiries and argue about that later.  

8. The final issue raised with me on behalf of both parties is the allocation of trial dates and a level of expedition. We are not ready for that yet. Some mischief has been done to the timetable.  The parties have been thrashing around for various reasons, good and bad.  I’m happy, as I said to Mr Lethbridge in the course of submissions, to give this matter such priority as I can, but the first step is getting ready.  The parties have had real trouble satisfying each other about various things.  There has been the distraction of the forum issue. Therefore this is the last case that I set down for hearing before I knew that the general level of evidence, particularly any valuation evidence, was all complete. I will list the matter for mention at a time convenient to the parties after the inquiries are likely to be completed.   

.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 7 September 2012.

Associate:

Date:  29 October 2012