Tindell and Tindell

[2008] FamCA 405

FAMILY COURT OF AUSTRALIA

TINDELL & TINDELL [2008] FamCA 405

FAMILY LAW – CHILDREN – parenting orders
FAMILY LAW – FINANCIAL – Spousal maintenance / child support
FAMILY LAW – INJUNCTION – restraint from selling property / motor cruiser / motor vehicle

Family Law Act 1975 (Cth)

APPLICANT: MRS TINDELL

RESPONDENT: MR TINDELL

FILE NUMBER: SYC 258 of 2008

DATE DELIVERED: 14 MAY 2008

PLACE DELIVERED: SYDNEY

PLACE HEARD: SYDNEY

JUDGMENT OF: LOUGHNAN JR

HEARING DATE: 14 MAY 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr J Lloyd

SOLICITOR FOR THE APPLICANT: Pearson Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr P Batey

SOLICITOR FOR THE RESPONDENT: Watts McCray Lawyers

Orders

1. That the parties are to resume the Child Responsive Program and the Court requested that Family Consultant Ms M complete the interviews and any required assessment for the purposes of the initial phases of that program in these proceedings.

1. Leave to the parties to restore the parenting proceedings to the list at the conclusion of that initial phase once any assessment is available on giving seven (7) days’ notice to the Court and to the other party, subject to the earlier commencement of the Less Adversarial Trial in relation to those issues.

1. There be no departure from the current assessment of child support which issued on 7 February 2008 AND THE COURT NOTED that that order is made on the basis that there are non-agency payments made by the husband and continue to be made by him, in accordance with sub-paragraphs (a)-(h) inclusive of paragraph 38 of the husband’s affidavit of 14 May 2008.

1. That unless the parties agree to the contrary in writing the husband is restrained from selling the B property, the Motor Cruiser or BMW 330i motor vehicle registration number … without giving the wife at least 7 days prior written notice of the purchaser, the purchase price and any other significant terms of sale.

1. Until further order the husband is restrained from taking possession of, disposing of or otherwise dealing with the BMW motor vehicle presently in the possession of the wife except for the purposes of complying with the orders made today.

1. Orders are made in terms of paragraph 4 of the “Minute of Orders Sought on Behalf of the Wife” marked Exhibit A, as amended, as set out hereunder:

“4.The husband pay to the solicitors for the wife, forthwith upon receipt of a tax invoice, all fees and disbursements incurred on behalf of the wife in relation to these proceedings.”

1. Unless the parties otherwise agree in writing an order is made in terms of paragraph 5 of Exhibit A as set out hereunder:

“5.That the husband is restrained from doing any act or thing which will cause the mortgages secured over the former matrimonial home by the National Australia Bank to be further encumbered in any way, (as referred to in Clauses 1.12, 1.13, 1.14, 1.15, 1.16 herein) except for the purposes of satisfying Order 6 herein.”

1. The interim financial proceedings are stood over in relation to the question of return of chattels to the husband generally with liberty to either party to restore that matter to the list by arrangement with Judicial Registrar Loughnan’s associate and the other party.

IT IS NOTED that publication of this judgment under the pseudonym Tindell & Tindell is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 258 of 2008

MRS TINDELL

Applicant

And

MR TINDELL

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for interlocutory orders, parenting and financial orders in the context of final proceedings for property, spousal maintenance, child support and parenting orders.

2. The proceedings were commenced in January of this year.  The wife is 39 and the husband is 42 years of age.  The parties started to live together in April of 1999, were married in January 2000 and separated on 28 September last year.  They have two children, E and L, who are six years and 11 months of age and five. 

3. It is the second marriage for the husband, the first for the wife.  The husband came into the marriage with a property at H, being the outcome of his property settlement in accordance with some orders made in about February 1999.  The property was encumbered as to about $440,000.  The wife had been working as a Personal Assistant to an executive in a television company.  She stayed in paid employment until February 2001 and has been a Homemaker since then.  There is some slight reference to her doing some work, secretarial sort of work for the husband earlier on but I do not think that has been continued to any significant extent.

4. The H property was sold in 2005.  The parties disagree about the sale price.  That does not matter much. B Street, H was bought and again they disagree about the purchase price. The property was bought in the wife's name and was encumbered by a flexible mortgage for $100,000 and a line of credit as to $30,000.  The husband borrowed the money and the wife guaranteed the debt. 

5. In March of 2006 the parties bought a flat in the husband's name at B, I think it was fully encumbered. 

6. As to the wife's income; the wife has been a discretionary beneficiary of something called the A Family Trust receiving distributions of $150,000 a year and for some reason her mother received the same distributions.  It is the wife's case that she did not actually receive the funds.

7. There have been child support assessments made, somewhat distorted by the fact of those distributions. The husband was on the child support income cap of about $108,000 a year and the wife was on $60,880 a year because of her distribution. 

8. The wife says that the parties enjoyed a good standard of living during the marriage.  She says, in effect, she was the primary care giver and that the husband was very much circumscribed in terms of the time he had available to the family, by his working hours.

9. The husband is an equity partner in a financial services firm. He has re-partnered and lives with Ms S and her two children. I do not know how old they are.  The husband and Ms S rent a five-bedroom property in N.

10. The children have been living with the wife and spending time with the husband in the afternoon of Fridays to Monday morning alternate weekends, Wednesday's five until eight. 

11. There are a number of issues.  The parties have worked away at trying to settle the proceedings. This is the third time they have been before me - 19 February, 19 March and today.  Their applications are something of a moving feast but the documents that I am dealing with today are a minute of order prepared on behalf of the wife; not all of which she presses today, and a Further Amended Response to an Application in a Case filed today setting out the husband's orders.

12. Going to the most important thing first; the husband seeks orders whereby the children live with him week about.  He seeks school holiday time and the wife's application today is that the husband's time with the children be the same as it is now; 5.00 pm Friday to 7.00 pm Sunday, alternate weekends, Monday afternoons (rather than the current Wednesday) and block periods in school holiday time.  However, I am asked to adjourn that matter because the parties, had been involved in the Child Responsive Model whereby a family consultant assists the parties by providing feedback of the impact of their behaviour on their children. The parties were part-way through that process.  They reached an agreement about something in terms that I have not been told about and the process before family consultant, Ms M, was aborted.

13. That was a process to which the parties are committed. One of the orders the husband seeks is that the parties and the children be referred for inclusion in the Child Responsive Program. I will grant his application.

14. As I said during the course of submissions; it is bad enough making these decisions at the best of times but when there is a process whereby the parties can be assisted and the Court can be assisted in relation to things that are child-focussed and arrangements that are likely to be in the best interests of a child, it is dangerous, in my view, to stumble through and make decisions. There is a real issue in this case about the extent to which the husband has been available.  The parties' documents cannot be reconciled.  The husband would have it that he has been available a great deal of the time. The wife says she could not make any inroads into his mornings because he had an hour of work at home and then swimming between seven and nine in the morning and the evenings were spent with a late return from work and documents scattered over the lounge.  In addition to that; she says that there was some trouble with work. The husband's affidavit has him intimately involved in all of the day to day activities involving the children.  So there is an issue about that. Rather ominously there is a figure of $1200 a week for a nanny in the husband's Financial Statement, which I am told would be his contemplation of the costs associated with him managing a week about arrangement. So it seems that there might be an issue for him in terms of what time he has available and what times Ms S has available for the children. That reference runs counter to the suggestion in his affidavit that he might cut down his working hours. Maybe he would just make inroads into the times that the wife has referred to and he needs the nanny for something else. In any event there is an important issue there.

15. Otherwise the parties each ask for shared decision making which triggers the presumption in the legislation about the Court considering, with a view to ordering, equal time and if it does not order it; considering, with a view to ordering, substantial and significant time. There is a decent argument that what is happening now is not substantial and significant time because of the lack of involvement for the husband in the school week.  He does not have the opportunity to be responsible for getting them off in the morning so I suppose there is an argument about that and the division is three nights out of the 14 and that suggests that there would be restrictions on the extent to which the children could be involved in important events in his life and vice versa. I accept that we are probably a little short of the aspiration of the legislation.

16. Counsel for the husband made reference to recent research from Professor Jen McIntosh who has done some research into the outcome of the amended Family Law Act that imposed this line of decision making on those planning proposals for children and there are some horror stories about the slavish adoption or imposition of week about arrangements when that has turned out not to be in the child's best interest.

17. I do not think any of that adds anything for the purposes of today.  These are young children and are therefore vulnerable children.  You want all the help you can get in making decisions about them. Their parents have not been able to do that.  I am not free just to leap to some conclusion and impose that. I need to be comfortable, that something I have ordered is more likely than not to be more in the interests of the children than what is happening now. I do not have the building blocks to do that today. The children do not get much of a mention in the affidavits.  There is a reference to the fact that the children say they would like to spend more time with their father.  They would probably like their parents to get back together but I am not going to be able to deliver that either.

18. I will put the matter over to another day and I will ask Ms M to continue the process of seeing the children and feeding back information to the parents. If necessary an assessment can come out of that process which may assist the Court as well as the parties.

19. Nextly, there is a question about spousal maintenance.  The parties have slightly different proposals.  The document setting out the orders she seeks is not what she presses today.  What she in fact wants is a continuation of orders that were made in terms of paragraph 14 of a response filed on 19 February.  They were incorporated into order number four made by me by consent pending further order on 19 February 2008. In summary, they are private health insurance, together with gap payments and the following outgoings on the H property, mortgages, council rates, building and contents insurance, electricity accounts, gas, water accounts, Foxtel and Big pond accounts, home telephone accounts, gardening and lawn mowing. She also seeks $650 a week.

20. The husband wants to pay $650 a week, the private health insurance and the gap payments.  He wants to pay lease payments in relation to the wife's motor vehicle and he wants to pay the same outgoings that the wife wants except he does not want to pay the contents insurance.  He is happy to pay the building insurance and he does not want to pay Foxtel and Big pond, home telephone, gardening and lawn mowing.

21. So they are the issues for me.  A number of the claims leak over into child support and interim costs. Spousal maintenance is a remedy available to parties who have been married, whether the marriage is on foot or not, and in circumstances where one party can demonstrate that they are not adequately able to support themselves from their own resources, the other party can be required to do so to the extent of his or her capacity.

22. There were no submissions made about the wife returning to the paid workforce. The husband's affidavit suggests that he thinks that might be a possibility. Invariably these matters come before me in the shadow of separation. This is a case where the wife has been out of the paid workforce for a long time under arrangements that the parties put in place. There are a couple of paragraphs in the affidavits about inconclusive things that the parties have said during the marriage about whether the wife might return to the paid workforce but I cannot make a finding about that.  There is nothing about the fact that the marriage has broken down that better fits somebody for paid employment; quite the contrary.  We do not live in times of full employment so it seems to me for the purposes of these proceedings I can accept that the wife is not going to have paid employment in the short term. I do not mean any disrespect by that. She has worked in a highly skilled position before.  It may well be that she will return to that in the medium term. 

23. Ignoring for the moment her reported income – the wife has no capacity for self-support. There is a complaint about the level of the wife’s claimed outgoings. I could almost type the affidavits blindfolded because I read the same thing every week from the same firms about different families.  The wife says that she has continued the same level of expenditure that the parties maintained during the marriage except for cutbacks that were necessary when the tap was turned off.

24. The husband says that he has observed that the expenditure has become excessive and is excessive. I cannot get to the bottom of that. The parties disagree about everything - the number of overseas trips, the class of airfare they used, the number of stars of the hotels that they stayed at.  It might be that I have the papers out of one file for one party and they have been mixed up with the papers out of another file for another marriage.  That would make sense.  I cannot get to the bottom of it.

25. The background facts suggest that the parties have lived at a reasonably comfortable level.  In relation to the particular matters that I am dealing with; they are the extension of insurance from building to contents.  It is a distinction the husband does not make in his documents.  In his latest affidavit he talks about things he has paid and he lists contents and building insurance at a particular figure, which sounds a bit as though it might be a wrapped up policy.  He has not offered me the outcome of disaggregating that between building and contents and it might be that I am just being pedantic and he has simply forgotten to include contents in the insurance he is willing to pay.

26. The only other submissions that I received - there was nothing said about Foxtel and Big pond accounts or home telephone but there was a suggestion that the wife would be able to do her own gardening and lawn mowing.  There are some figures provided by the parties in relation to the costs of that. The husband's suggestion is that the wife take up those tasks herself and I think I heard a plaintive cry, sotto voce, that the wife does not have access to a lawnmower.

27. I will find that the wife’s claimed expenses are proper, being the expenses she seeks with the addition of those the husband has agreed to.  That is HCF instalments, $650 a week, the lease payments and insurance on the motor vehicle and the other outgoings that I mentioned on the home; mortgage, council rates and so on. They   So that they are proper expenses.

28. As to the husband's capacity; that is a difficult issue.  It is a bit hard to know exactly what his income is.  I do not say that he has set out to mislead the Court, but it is a bit of a moveable feast.  What he says is; the breakdown has caught us at a time of a considerable acceleration in his income.  So he says 2004, $135,128 gross income.  2005, $248,399 gross income, 2006, $388,028 gross income.  His Financial Statement says his income is now $10,350 a week which I make $538,200 a year.

29. Then we have the problem of unravelling of the income splitting device that also involved the husband's sister and the wife's mother and there is reference in some documents from the husband’s employer to the children. The document from the husband’s employer - it seems to me to be a very puzzling document.  I am told that you read this to say that his 11 month income was $739,938 which I extrapolated to $807,000.  I am told that there are two things about that.  Firstly, the husband's declaration and disclosure about that came in the form of his latest affidavit where he tells me about some other moneys that came to him; presumably in addition to the moneys that were identified in his Financial Statement. And secondly, that they are lump sum payments and presumably the argument is they cannot be relied on for the purposes of a weekly distribution and that they come with liabilities such as income tax liability which the husband has contracted to meet in a timely way.

30. He is on a good income.  Of the two parties, he is on the only income.  He has some expensive hobbies. There can be no complaint about that. There was an investment property, a 40 foot cruiser and a motor vehicle when the marriage broke down. They are not things he has taken up since separation. He has not been able to divest himself of those assets. I suppose the first thing to be said is; they give some insight into the living standard during the marriage. Looking into the future; the husband does propose to sell them.  The wife wants him to sell them so it may be something that will be able to be fixed in the medium term. Those sales will have a very beneficial effect on his weekly outgoings.

31. In one of the husband’s affidavits, there being one for each of the return dates, he records a sharing arrangement for household expenses. In addition Ms S owes him $13,000 which she is going to repay by a date I think in March. I am told that is an amount recorded in his Financial Statement as a debt.  Then his latest affidavit says that the debt is up to $29,000 and is to be repaid by a date in June. 

32. He has no obligation to support Ms S.  The money spent on her support would give way to his legal obligations to support other people including the wife in these proceedings and the children.  He is making an election to support Ms S. There is a suggestion in the affidavit that he might have been looking at buying a different boat.  Now the plan might be to of downsize from 40 foot to seven foot or something. In fact there is a mention in the evidence of a child saying something to do with a boat with more accommodation.  Anyway, that does not speak of somebody winding back all of the aspects of his outgoings.

1. There is criticism in these documents from the wife about things like the husband insisting on thinking time and an invoice in relation to the older child’s tennis lessons.  And I think the thrust of that criticism is that he is being mean. I do not think a proper reading of the evidence would support that accusation.  I think a proper reading of this would suggest that the husband has been making a very proper contribution to the household of the wife.  But in the circumstances, with that background, I think that is what is expected of him.

2. It is not necessary for me to point to the gap between his income and his outgoings to find the funds that are claimed. He can pay maintenance out of financial resources.  He can draw down on income from the future, whether it be capital or from the sale of assets. He can make payments from his drawings from the firm and he can borrow within certain limits.  These things can be adjusted.  Of the parties he is the only one with any flexibility in relation to that.  In my view, for the purposes of today, he can make the payments.

3. The next issue is Child Support. The Court's jurisdiction in child support is not uncircumscribed. Where there is an assessment the Court has power to intervene only in a couple of narrow categories of cases. It can order what is called a substitution payment.  That is, a payment in a form other than periodic payment. It can deal with departure where a whole lot of administrative steps have been gone through including an appeal to the Social Securities Appeals Tribunal.

4. Sadly, there is a loophole in I think it is 116 of the Child Support Assessment Act that says in effect:

   If there are proceedings between the payer and the carer in the same Court then the Court can consider a departure application if it would be in the best interests of the parties.

5. And that is where we are up to today. There is an interesting debate that I have had with the same counsel, never reaching a satisfactory conclusion, about whether there is such a thing as an interim child support departure. In my view the combination of the catch-all provision of the Assessment Act and s.117 suggests that an order can be made until further order. There is power.  But making any inroads into the various things that one has to take into account under 117(4) and (5) and the grounds in these sorts of proceedings where there is no testing of evidence, is something of an impossibility. 

6. Having said all of that; again there was a moving feast on that issue.  The wife's application was for a particular figure and certain payments. What she had settled for is the current assessment, which is $2168 per month and certain other payments identified in paragraph 38 of the husband's affidavits. The husband's case is that he cannot afford to do that.  The purpose of paragraphs 37 and 38 was to say:

   I am making these payments.  My child support has just been increased   significantly and I cannot afford to make the payments.

7. As to what he seeks in his Response, some of the things overlap of course; private health insurance is covered by spousal maintenance. I think the figure on the previous assessment might have been $900 a month.

8. I do not know what the registrar has based this assessment on.  It is not said that any of the things that the wife claims are inappropriate.  There is reference, for example, to swimming activities. The husband says that he was involved in their swimming. He says that he took responsibility for their attendance at the Nippers Program. There is reference to a claim for tennis lessons and indeed the husband says in his affidavit he has been making the payments.  In fact, these payments are all payments that it has pleased him to make.

9. Doing the best I can; it seems to me that there is no basis for making any change on an interim basis to those fixed outgoings or to the assessed rate.  As much as anything else; I do not know why the Registrar picked $2,168 per month and it follows from what has been said; the husband has been making these extra curricular payments.  These are children who will have additional expenses over and above those that are incurred in lower income families.  Something like $500 a week, $250 a week per child is not completely out of sync with the Lee Tables in relation to the costs of living of children.

10. So I will make no change to the assessed rate of the Child Support Assessment and I will note that order is made on the basis that the husband continues to make the payments that he has identified in paragraph 38.

11. Nextly, there are some issues about injunctions. The wife seeks orders to restrain the husband from doing some things. Firstly, increasing the borrowings on the former matrimonial home. The odd issue here is that the husband wants to increase the borrowings and yet it is his case that he will not be able to do so to any significant extent. The wife wants to stop him borrowing except for a certain purpose.

12. I think there is some point in restraining the husband in the terms that are sought, except with the prior written agreement of the wife.  It might please the parties to extend the borrowings for various purposes.  In the first instance, the purposes of child support and interim spousal maintenance are to be a payment from one party to the other. The character of a payment ceases to be interim spousal maintenance or child support if the wife makes the payment herself.  That would be the outcome if payments are funded from borrowings secured on her assets.

13. The husband wants to continue making the lease payments on the BMW so I assume he does not intend to do anything to dispose of that car, so I will make that order.

14. Now, in relation to the B property; the boat and the husband's spare motor vehicle; I am told that the minute of orders sought on behalf of the wife is to be taken to mean she wants to have a say in the process of disposing of those things, rather than a blanket injunction.

15. Lest it be said those orders are too restrictive, if there is a great offer made, the wife will be pleased to agree in writing to that going ahead short of the seven days notice.  I do not think there can be any real mischief done by those orders.

16. Otherwise, I will not seek to interfere in relation to who gets paid what. We are in dangerous territory here because there are several creditors the Court should not be involved in preferring one of them over others.

17. I have already said that I will make an order that until further order that the husband be restrained from taking possession of, disposing of or otherwise dealing with the BMW motor vehicle presently in the possession of the wife except for the purposes of complying with the orders made today. 

18. Then there is the question of interim costs.  The wife seeks an order that upon invoice, the husband pay the wife's fees as they are incurred and I think I was told there is $56,000 owing.  So presumably the first invoice will be for $56,000.

19. Interim costs is a remedy intended to preserve the exercise of judicial power so that parties can fairly litigate. It ensures that parties can be properly represented. There seems to have been a development over time in the authorities from Poletti and cases like that where there was a requirement for a couple of things; real complexity in relation to the affairs of the marriage and one person controlling what was called in Poletti, the "Patrimony of the Parties".  In other words; access to funds and knowledge, with the other party's representation jeopardised by a lack of funds. 

20. I think there has been a development in the law since then and if there has not been there should have been. That is because what is invariably sought in these circumstances, absent some later decision about costs, is that a party have access to their own money to meet their own costs. Why on earth the Court would have any interest in preventing that except to the extent raised in cases such as Harris's case whereby the costs sought might make such inroads into the body of the funds being argued about that it would jeopardise a proper distribution of those funds at the end of the case. This is could be such a case. The way the parties are going, they will make serious inroads into the pool of property. The husband is already on notice through the amended application of the wife that she seeks an ongoing order for spousal maintenance. That is an indication that she thinks this may be a case where her financial claims might not be adequately met out of capital funds. So it is an important issue here that the parties avoid spending too much on costs.

21. There is not much complexity in the case. There is an argument that the wife wants to run in relation to "an asset", being the husband's stream of income.  That is an argument of some sophistication and some work will need to be done in relation to that in exploring the husband's circumstances of employment and so on.

22. Other than that, this is not a very complicated case.  It is a case where the husband's knowledge about financial arrangements will be greater than that of the wife. It is a case where the wife has committed herself to legal representation on terms, which means that in general terms, the lawyers need to be paid as they go.  Now, different lawyers work differently about that.  But it is increasingly the case that lawyers want to be paid; certainly in relation to disbursements if not profit costs, as the costs are incurred. Depending on the size of the firm it can be unfair to ask a solicitor to carry significant debt and it is unfair to expect a solicitor to advance funds on behalf of a client for disbursements such as valuations and other things.

23. There seems to be no problem with the husband securing proper representation and it is important that the wife be able to litigate this case on an even footing.  There is a spectre in financial cases that a party might be forced to consider an offer in circumstances where they feel under some pressure in relation to their legal costs. This is a case where each of the parties says a threat like that has been made. I have forgotten the exact words, but it is a case where the wife says the husband said to her:

    I will resign from [work].  I will run you dry and see you without support.

24. Those are things said in the heat of the moment and contrast starkly, as I said, with a very proper performance, in my view, by the husband by and large in relation to financial support of his family. Nevertheless, those words are an example of the sort of pressures that can apply in these proceedings. 

25. So it seems to me that it is quite proper that the wife be able to secure her costs.  I have been offered two documents that demonstrate that there are lenders, commercial lenders for litigation. They are in tiny print but I cannot see any mention of an interest rate in the documents. I have been asked to accept that the interest rate that is offered by those bodies, Quantum Litigation Funding and Impact Capital may well be less advantageous than the commercial rates that might be available to the husband through the current mortgagee or through some other device. That is probably right. There may even be scope to reduce repayments on borrowings to interest only.

26. The only potential harm is to the wife’s own claim and in those circumstances I cannot see why the wife should not have access to her own money for the purpose of paying her own bills, whether that is to buy sausages or to pay her legal fees.  So I am going to make the order.  The downside of the order as it is framed is that there is no indication of what the costs will be. In other matters and from firms looking very similar to the two firms represented today, there is a generous estimate of $100,000 or $200,000 or some other figure. We do not have that here.  I suppose at least that means that the husband can be assured that he is not funding the litigation into the future and beyond a point where the parties might need to have it funded - that bills are being paid just as the parties go. Perhaps that will encourage both the parties to give proper consideration to settlement. 

27. I make an order in terms of paragraph four of the minute of orders sought on behalf of the wife which is exhibit A. and unless the parties otherwise agree in writing I make an order in terms of paragraph five.  That is the order that isolates the secured borrowings from anything except interim costs.

28. As I say; it might please the wife to agree if the sum proposal made for whatever proper purpose, be it tax or a shortfall on the sale of something or whatever. 

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan

Associate:  Jay McMullen

Date:  11 June 2008