Tipping and Barrington

[2016] FCCA 1993

FEDERAL CIRCUIT COURT OF AUSTRALIA

TIPPING & BARRINGTON [2016] FCCA 1993

Catchwords:
FAMILY LAW – Application for interim/urgent spouse maintenance and ancillary orders.

Legislation:

Family Law Act 1975, ss.72, 74, 75, 77

Cases cited:

Bevan & Bevan (1995) FLC 92-600

Weir & Weir (1993) FLC 92-338

Applicant: MS TIPPING

Respondent: MR BARRINGTON

File Number: SYC 2939 of 2013

Judgment of: Judge Altobelli

Hearing date: 21 July 2016

Date of Last Submission: 21 July 2016

Delivered at: Wollongong

Delivered on: 28 September 2016

REPRESENTATION

Solicitors for the Applicant: Mark Hodges

Counsel for the Respondent: Ms Snelling

Solicitors for the Respondent: P.A Khoury Lawyers

ORDERS

THE COURT NOTES THAT:

1. On 23 August 2013 Mr M (hereinafter referred to as “the third party claimant”) filed an affidavit in which he claimed that the Respondent gave to him a painting by the artist, (omitted) (hereinafter referred to as “the painting”).  The painting is known as “(omitted).”

2. On 25 March 2015 the Respondent filed an affidavit in which he claimed that he is the rightful owner of the painting, a painting by the artist, (omitted).

THE COURT ORDERS THAT:

1. That within seven days from the date of these Orders the Respondent Husband is to do all such things and to sign all such documents as are necessary to give authorise and give instructions to (omitted) of (omitted), (country omitted) to enable (omitted) to proceed with the sale for the best price possible of the painting and that the proceeds of sale shall be paid in the following manner and priority:

   (a)All costs and expenses charged by (omitted) for the storage of the painting and for the costs and expenses of the sale

   (b)The balance to be paid to the trust account of the solicitor for the Applicant Wife and to be held in such trust account pending further order of the court

2. That Respondent Husband is to provide to the Solicitors for the Applicant Wife a copy of the letter or instructions forwarded by the Respondent Husband to (omitted) together with any other instructions or letters given (omitted) concerning the sale of the painting.

3. That in default of the Respondent Husband complying with Order 3 then pursuant to section 106A of the Family Law Act 1975 the Registrar is authorised sign all documents in the place of the Respondent Husband.

4. Order 3 be suspended for 35 days.  Within 7 days, the Wife is to provide to the third party claimant a copy of this Order and these Reasons for Judgment.  The said third party claimant has leave to relist this matter before the Court on 72 hours’ notice, provided such request is made before the expiration of 35 days from the date of these Orders.

Interim Spousal Maintenance

1. That pending final hearing the Respondent Husband is to pay to the Application Wife the amount of $1,000.00 per week such payment to paid by Respondent Husband into a bank account nominated in writing by the Applicant Wife with the first payment to be made within 7 days from the date of these Orders and then weekly thereafter.

Enforcement: (omitted)

1. That the Respondent Husband forthwith release custody, possession and control of the statue by (omitted) known as (omitted) to the Applicant Wife for the purpose the Applicant Wife selling the said statue in accordance with Orders made today.

2. That the Applicant Wife is to take all reasonable steps to have the statue sold by private treaty or public auction for the best price which can be obtained in the current market, with the sale proceeds to be applied:

   (a)In payment of all costs associated with the transportation and sale of the statue including any commission payable on the sale.

   (b)In payment of the balance to be placed into a controlled monies account in the name of the husband and wife, pending further order of the Court, subject to order 10 below.

3. That in the event that the Respondent Husband is in default of the spousal maintenance orders made today then the Applicant Wife is authorised without further order of the court to withdrawn from any funds held in a controlled money account in order to pay any amount due for spousal maintenance.

4. The matter be stood over to the Final Hearing on 13 March 2017.

5. Both parties file and serve any Amended Application, Response and/or Financial Statement upon which they intend to rely by no later than 6 February 2017.

6. Each party is to file and serve one consolidated Affidavit in support of the orders sought by them, together with any other witness’s affidavits by no later than 6 February 2017.

7. Neither party may rely on any documents filed after 6 February 2017 without leave of the Court and in the event of non-compliance with these filing directions, the Court will at its discretion either vacate the trial dates or list other matters with priority.

8. Each party is to file and serve a Case Outline document by no later than 4:00pm on 6 March 2017, setting out:

   (a)a list of documents to be read in their case;

   (b)a precise Minute of Orders Sought;

   (c)a list of objections to evidence and the basis for such objection;

   (d)a brief summary of argument touching upon the matters set out in the Family Law Act 1975, with reference to the relevant evidence relied upon;

9. The Applicant is to comply with the payment of any setting down and/or daily hearing fee in accordance with Rules 24.03 and 24.04 of the Federal Circuit Court Rules 2001 or as otherwise directed by the Registry Manager by the date of filing of further material.

10. The matter be adjourned to 14 February 2017 at 9:30am for Mention in Sydney.

THE COURT NOTES THAT:

A.A party’s trial Affidavits will not be read until the Case Outline document has been filed and served in accordance with these directions, which may result in the Final Hearing dates being vacated, other matters being listed with priority, or the matter becoming part-heard.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 2939 of 2013

MS TIPPING

Applicant

And

MR BARRINGTON

Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons for judgment explain the orders that the Court has made in interim proceedings between the parties.  This is a long running, bitterly contested financial dispute between the Applicant Wife who lives in Sydney and the Respondent Husband who lives in (country omitted).  There are two main issues before the Court.  The first issue is spousal maintenance, both urgent and interim.  The second issue is whether to enforce certain existing orders of the Court, and if so, how.

2. Running concurrently with the Family Law proceedings are Bankruptcy proceedings between the parties.  The Wife has applied to set aside a bankruptcy notice issued by the Husband against her in respect of a debt that arose as a result of a costs judgment against her.  The proceedings are running concurrently before the same Judge of this Court.

Background

1. The Applicant Wife was born in Australia and will be 46 years old by the time these reasons for judgment are published.  The Respondent Husband was born in the (country omitted) and will be 62 by the time these reasons are published.  He has permanent residency in Australia, but apparently now lives permanently in (country omitted).  Both the Husband and the Wife have children from previous relationships.

2. The parties commenced a romantic relationship in about (omitted) 2008, but commenced cohabitation when they married on (omitted) 2010.  They separated on 23 March 2013.  Nothing turns on the accuracy of these dates.  They have 1 child, X, born (omitted) 2011 who is currently 5 years old.  X has special needs.  After the parties married, they lived between (omitted), a (omitted) Sydney suburb, and (omitted) in the New South Wales (omitted). 

3. The Applicant Wife describes herself as a mother and a carer.  She has a (omitted) degree but has not (employment omitted).  When she first met the Husband, she was working as a (occupation omitted) for a Sydney (employer omitted).  The Husband describes himself as being retired.  He was an investor during the marriage, working in the (employment omitted) but the paucity of information filed on his behalf makes it very difficult for the Court to understand what, precisely, the nature of the Husband’s investment activities were.

4. A review of the evidence filed by the Wife in this case suggests that she has had consistent and pervasive concerns about the Husband not properly disclosing his financial affairs to the Court.  As it turns out, and having regard to the quite limited scope of the inquiry in the interim proceedings, the Court finds that there is substance to the Wife’s concerns.

5. The substantive proceedings between the parties relate to an application for alteration of property interests, spousal maintenance, child support departure orders and parenting orders.  The parenting issue has been resolved.  The final hearing of all outstanding issues has been listed for 13 March 2017.

6. The procedural history of the matter is complex, but does need to be understood as it provides the context of the present application, explains the Wife’s concerns and also explains why the Court declined the Husband’s adjournment application and, thus, proceeded to deal with the matters before it on 21 July 2016 in his absence, though he was represented by both solicitor and Counsel:

   ·Proceedings were commenced by the Wife filing an Initiating Application on 29 May 2013. Only financial orders were sought.

   ·The Husband responded by filing a Response on 6 August 2013.

   ·The proceedings came before Registrar Chayna for a Case Assessment Conference on 12 August 2013. A Conciliation Conference was allocated, as well as disclosure obligations directed upon both parties. 

   ·The matter came before Justice Watts on 26 August 2013 in which His Honour directed that the sale proceeds of the (omitted) investment be disbursed to payout the (omitted) Bank debt. The parties’ sculpture “(omitted)” was directed to be sold and the sale proceeds disbursed to pay commission and sale costs, Capital Gains Tax and the remainder placed in an interest-bearing account. Both parties were also restrained from dealing with sale proceeds, assets or artwork.

   ·The matter came back before Registrar Chayna on 15 October 2013 for a Conciliation Conference. Directions made at the end of that conference note that there are parenting issues in dispute between the parties but states ‘Parenting yet to be filed’.

   ·The matter was back before Registrar Chayna for a procedural hearing on 29 November 2013 and was allocated a date for final hearing of 29 January2014, which was vacated as the matter was not ready to proceed. At this time, the parties were again directed to provide disclosure.

   ·On 10 December 2013 the Wife filed two Applications in a Case in relation to interim parenting orders, spousal maintenance and full and frank disclosure.

   ·As at 3 February 2014 neither party had filed an application or response seeking final parenting orders, Registrar Chayna noting at the directions hearing on that date ‘only interim parenting issues filed’. The outstanding directions from 29 January 2013 were also noted.

   ·On 28 March 2014 Registrar Chanya specifically directed parties to file and serve an Amended Initiating Application and an Amended Response seeking final orders – presumably, in part, to rectify the deficiency with respect to there being no final parenting orders sought by either party. The Registrar also directed the parties to file and serve any amended applications and responses with respect to interim orders together with any further affidavits.

   ·On 13 May 2014 the Wife’s two Applications in a Case filed 10 December 2013 were dealt with in relation to the parenting orders sought at an Interim Hearing and were dismissed by Senior Registrar Campbell.

   ·The matter was next before the Court on 6 June 2014 before Registrar Chayna to deal with parenting issues. Subsequently on 30 June 2014 the parents entered into final parenting Consent Orders. It was on this date that the matter was transferred to the Federal Circuit Court.

   ·On 15 October 2014 the parties again entered into Consent Orders being interim orders for disclosure and for the Husband to file an amended Response to the Wife’s amended Initiating Application. The parties were also directed by Her Honour, Judge Henderson to file an updating Financial Statement including details of post-separation disposal of property.

   ·On 2 March 2015 the Wife was given access to money held in the child’s name for the purposes of the child’s special care and medical needs. The Husband was directed to provide information in relation to reduction of funds in the Bank (omitted) lump sum payments from the (omitted) pension scheme and draw down amounts in various bank accounts held by him.

   ·The matter was transferred to my docket by Her Honour, Judge Henderson on 12 April 2016. During the adjourned period both parties’ contempt applications were withdrawn.

   ·The matter was first before me for directions on 19 May 2016 at which time the parties entered into Consent Orders for the Respondent Husband to provide disclosure. The matter was listed for an Interim Hearing on 21 July 2016 and it was noted the issues to be dealt with were spousal maintenance and enforcement of Orders made by Justice Watts on 26 August 2013.

   ·Disclosure was yet again an issue on 26 May 2016 when orders were made in Chambers for the Wife to provide updated disclosure in relation to her superannuation entitlements.

   ·The matter was then listed before me for the Interim Hearing.

7. The Court granted leave to address the Court to Mr M, a creditor at this hearing.  Mr M’s firm has a judgment against the Husband for $34,000 in respect of professional fees.  He explained to the Court that execution had been sought against the statue known as “(omitted)”, without success.  A bankruptcy notice against the Husband was contemplated, but had not, as at 21 July 2016, been issued.  As a creditor of the Husband, he wanted the Court to note his firm’s position and interest in the proceedings.  It was clear to the Court that Mr M was keen to ensure that Family Law orders were not made that defeated his firm’s interest.

The Orders Sought

1. The Orders sought by the Wife are contained in her proposed minute which is reproduced in the first schedule to these reasons.  She sought an order in relation to the sale of a painting by (omitted) called “(omitted)”, orders for interim and urgent spousal maintenance and various orders in relation to the sale of a statue by (omitted) known as “(omitted)”. 

2. The Husband sought that all applications before the Court be dismissed and that the matter otherwise be listed for final hearing. 

The Evidence Relied On

1. In the Wife’s case, she relied on the following affidavits:

   a)Affidavit, Ms Tipping sworn 24 May 2013, filed 29 May 2013: Paragraphs 4 to 24; 28; 42 to 46; 54; and 58

   b)Affidavit of Mr A sworn 21 August, 2013, filed 22 August 2013: Paragraph 5

   c)Affidavit of Mr M sworn 23 August 2013, filed 23 August 2013: Paragraphs 20 to 27

   d)Affidavit of Ms Tipping sworn 9 December 2014: Paragraphs 11 – 19

   e)Affidavit of Ms Tipping sworn 6 January 2015, filed 6 January 2015: Paragraphs 1 to 4, 7 to 9

   f)Affidavit of Ms Tipping sworn 19 May 2015, filed 19 May 2015: Paragraphs 17 to 19

   g)Affidavit of Ms Tipping sworn 19 June 2015, filed 19 June 2015: Report of Forensic Accountant, Mr T replied upon by the Applicant Wife

   h)Affidavit of Ms Tipping sworn 1 September 2015, filed 2 September 2015: Entire Affidavit

   i)Affidavit of Ms Tipping sworn on 1 March 2016, filed 1 March 2016: Entire Affidavit relied upon by the Applicant Wife

   j)Financial Statement filed by Applicant Wife on 1 March 2016

   k)Balance Sheet filed by Applicant Wife on 26 February 2016

   l)Affidavit of Ms Tipping sworn on 12 May 2016, filed 12 May 2016: Entire Affidavit relied upon by the Applicant Wife

   m)Affidavit of Ms Tipping sworn on 10 June 2016, filed 10 June 2016: Entire Affidavit relied upon by the Applicant Wife

   n)Affidavit of Ms Tipping sworn on 28 June 2016, filed 28 June 2016: Entire Affidavit relied upon by the Applicant Wife

2. In the Husband’s case, he relied on the documents set out in his case outline:

   a)Amended Response filed  8 July 2016;

   b)Application in a Case filed 19 July 2016;

   c)Affidavit of Ms M sworn and filed 19 July 2016;

   d)Affidavits of Mr Barrington of:

   i)25/03/2015.

   ii)23/02/2015

   iii)02/12/2014

   e)Updated Financial Statement of 12 July 2016;

   f)Minute of Orders Sought.

3. The Husband was not present at the hearing and was, therefore, not cross-examined.  The Wife was cross-examined by Ms Snelling, Counsel for the Husband.

The Applicable Law

1. The applicable law will be discussed, where relevant, in the context of the reasons given in respect of each order sought by the Wife.

The Urgent Maintenance Application

1. Section 77 of the Family Law Act provides as follows:

   Urgent spousal maintenance cases

   Where, in proceedings with respect to the maintenance of a party to a marriage, it appears to the court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made, the court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable.

2. At the conclusion of the hearing before the Court on 21 July 2016, the Court formed the view, from all the evidence before it, that the Applicant Wife was, in fact, in immediate need of financial assistance.  An urgent maintenance order in the sum of $1000 per week was made, pending these reasons for judgment relating to her interim spousal maintenance application.  These reasons for judgment make plain the reasons why the Court made the order.

3. As will be seen from the next section of these reasons for judgement, dealing with interim maintenance, the Court is satisfied that the Wife’s case has been made out.

Application for Interim Maintenance

1. Section 74 of the Family Law Act relevantly provides as follows:

   Power of court in spousal maintenance proceedings

   (1)  In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.

2. Section 72 of the Act also relevantly provides:

   Right of spouse to maintenance

   (1)  A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

   (a)  by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

   (b)  by reason of age or physical or mental incapacity for appropriate gainful employment; or

   (c)  for any other adequate reason;

   having regard to any relevant matter referred to in subsection 75(2).    

3. Finally, section 75(2) of the Act provides as follows:

   (2)  The matters to be so taken into account are:

   (a)  the age and state of health of each of the parties; and

   (b)  the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   (c)  whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and

   (d)  commitments of each of the parties that are necessary to enable the party to support:

   (i)  himself or herself; and

   (ii)  a child or another person that the party has a duty to maintain; and

   (e)  the responsibilities of either party to support any other person; and

   (f)  subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i)  any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)  any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g)  where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and

   (h)  the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (ha)  the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

   (j)  the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

   (k)  the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

   (l)  the need to protect a party who wishes to continue that party's role as a parent; and

   (m)  if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

   (n)  the terms of any order made or proposed to be made under section 79 in relation to:

   (i)  the property of the parties; or

   (ii)  vested bankruptcy property in relation to a bankrupt party; and

   (naa)  the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:

   (i)  a party to the marriage; or

   (ii)  a person who is a party to a de facto relationship with a party to the marriage; or

   (iii)  the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)  vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and

   (o)  any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (p)   the terms of any financial agreement that is binding on the parties to the marriage; and

   (q)  the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

1. The Full Court in Bevan & Bevan (1995) FLC 92-600 at 81981 held, inter alia, that an award of spousal maintenance requires the Court to make: (1) a threshold finding under s.72; (2) consideration of s.74 and 75(2); (3) no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permits; and (4) discretion exercised in accordance with the provisions of s.74 which is reasonable in the circumstances.

2. The Court has no difficulty at all in finding, on the evidence before it, that the Applicant Wife is unable to support herself by reason of having the care and control of a child of the marriage who has not attained the age of 18 years.  The Mother is solely responsible for the care of the parties’ child, X.  Her evidence is that when he was three years old he was diagnosed with autism spectrum disorder, global developmental delay and prenatal kidney abnormality and dilation.  Moreover, in about October 2014, he was diagnosed with a severely retracted jaw.  The medical evidence in relation to X creates a strong impression that he requires very substantial support for his social communication impairment and his repetitive and restrictive behaviours.

3. X attends a special school, five days per week, between 9.30am and 2.45pm.  The Court does not accept the contention advanced on behalf of the Husband that the Wife could, somehow and perhaps miraculously, find work during the hours that X attends his special school.  The fact that the Mother has (omitted) qualifications and indeed (omitted) skills from her past employment, does not advance the Respondent Husband’s case one iota in this regard.   

4. The fact is that, in circumstances where she is solely responsible for his care with no financial support from the Husband since October 2015, it is in this Court’s view perfectly appropriate for her to focus her life on attempting to meet X’s special skills, as best she can.  The Court finds that the Applicant Wife is unable to support herself adequately by reason of having the care and control of X, in all the circumstances of this case.

5. Moreover, the Wife’s financial circumstances as evidenced by her financial statement sworn 1 March 2016 plainly demonstrate that she is in need of maintenance.  All of her income is derived from Government benefits.  Quite apart from the fact that her total personal expenditure was not challenged in cross-examination, the Court, nonetheless, independently concludes that the expenses that she discloses for herself are reasonable, given the amount of maintenance that she seeks.  The Wife was, of course, cross-examined about her financial circumstances, but, with all due respect to counsel for the Respondent Husband, the focus of the cross-examination was misplaced.

6. Much of the cross-examination focused on her financial circumstances immediately before, at, and after the date of the separation.  The Applicant Wife may well have disposed of various items of property, and it may well be that there are some grey areas about these transactions, but it seems equally open to the Court, on the available evidence, to conclude that her actions were in proportion to her needs.  In any event, the focus of the present application is her present and future needs and whatever may have happened in the past, does not inform the Court’s decision about her present needs, and future needs.  She is clearly in need, and is unable to support herself adequately. 

7. The focus then turns to the Husband’s capacity to pay the maintenance sought.  The Husband’s most recent financial statement was sworn 12 July 2016, before a notary public in (country omitted).  He deposes that his only income is from the (omitted) Pension Scheme which gives him a benefit, expressed in Australian dollars, of $1,094 per week.  He deposes to personal expenditure of $1,427 per week.  He, of course, did not make himself available for cross-examination on his financial circumstances and his adjournment application was declined, as was an earlier application to give evidence by video link.

8. Nonetheless, even a cursory examination of the expenditure in his financial statement raises issues of concern.  It is not clear, for example, whether there is a relationship between the trustees of (omitted) settlement and the Husband, relating to the mortgage or rent payments at item 21 of his financial statement.  This accounts for $363 of weekly expenditure.  It is unclear what property the rates or levies at item 22 relate to.  This is $38 per week.  He claims MasterCard payments of $100 per week at item 30, but one can only assume that he  funds some of the expenditure referred to at part N of his financial statement, via his Mastercard, so the $100 per week is, in effect, double dipping.

9. His claim for $350 per week for food is manifestly unreasonable, compared to the Wife’s claim of $300 per week, which includes the party’s son.  He claims tobacco of $60 per week, in circumstances where the Court is not prepared to allow that expenditure in priority to meeting the needs of his Wife.  In other words, even if no attention were directed to the question of whether the Husband has properly disclosed his income, his claim for expenses does not survive critical scrutiny.

10. However, the focus of the Wife’s case was very much on the issue of the Husband’s non-disclosure of his financial circumstances, and the reality (she contends) that he has understated his income.  The Wife’s argument in this regard, based on the evidence before the Court, is extensively set out in the case outline document prepared by Mr Mark Hodges, her solicitor, filed 14 July 2016.  The relevant paragraphs are 13-15.6.  These submissions are cross-referenced, not just to the relevant pages of the Wife’s affidavits, but also to source documents which were tendered and came into evidence, for example, as exhibit A1.

11. As a result of this evidence, the Court is able to make the following findings:

    a)Notwithstanding the assertion contained in the Husband’s financial statement of 12 July 2016, his average monthly income is, more likely than not, in excess of $7000, being income received into his (omitted) Bank account, thus meaning that his weekly income is more like $1,770 per week, rather than the $1,094 that he asserts. 

    b)The disclosure by the Husband at item 45 of his financial statement of his interest in a (omitted) retirement plan is insufficient, and misleading.  He gives no value, even though he has been directed to provide information in relation to this asset and has declined to do so and even though the Wife’s expert evidence provides value in this regard.  Significantly, in the present context, however, there is reason to believe that not only is this an asset which is valuable in the Husband’s hands, but it is also an asset that he could presently draw on, and which would supplement his income.

    c)The Husband has failed to properly account for the nature and value of his interest in the (omitted) Pension Scheme.  The Wife’s evidence suggests that in addition to the yearly annuity that he receives as monthly income, he took a substantial lump sum benefit, in respect of which he has failed to make adequate disclosure as to how it was dealt with.

    d)Orders made on 19 May 2016 required the Husband to disclose the source of certain regular deposits into his (omitted) Bank account.  He failed to do so.  The Wife believes that the Husband has an interest in a (omitted) bank account and that this may explain the payments into the (omitted) Bank account.  It is not clear whether this is the case or not.  The Husband’s failure to disclose, as ordered, is merely one example of many in this case.  The Court accepts that the amounts in question are relatively small, but the obligation on the Husband to disclose is clear, and he has failed to do so.

12. There is much more that can be said on this issue of the Husband’s non-disclosure, but the Court has seen enough of the evidence to conclude that it cannot accept the Husband’s evidence about his financial circumstances, and the adverse inference can be drawn against the Husband that his financial circumstances are far better than he asserts and thus, he has the capacity to meet the maintenance payments ordered.  The law in this regard is well known. The Full Court in Weir (1993) FLC 92-338 at 79,593–4 made the following statement regarding the duty to disclose and the Court’s powers where non-disclosure has been found:

    This Court has pointed out in a line of cases leading up to the recent decision of the Full Court in Black & Kellner (1992) FLC  92-287, that it is the duty of a party involved in property proceedings in this jurisdiction to make a full disclosure of their financial affairs. See also Giunti & Giunti (1986) FLC 91-759, and Mezzacappa & Mezzacappa (1987) 11 Fam LR 957; (1987) FLC  91-853. It is clear enough from his Honour's findings in the present case that the husband had not done so and had in fact pocketed the proceeds of a substantial number of cash sales. It is obvious that in most cases of this nature it is difficult enough for the other party to establish that fact let alone establish the quantum of what has been taken. 

    It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature…

    We appreciate that this is something of a broad brush approach, but, as we have said, where there is clear evidence of non-disclosure as there was here, the Court should not be unduly cautious about making findings in favour of the other party. It has been said by one commentator (O'Ryan and Broadfoot, 5th National Family Law Conference Handbook, p 249) the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors. 

13. The Wife has established the necessary elements to justify making an order for interim spouse maintenance in the sum of $1,000 weekly.

The (omitted) Painting “(omitted)”

1. The Wife seeks orders for the sale of the (omitted) painting known as “(omitted)”. (omitted) was a (nationality omitted) painter who died in 1914. The order sought by the Wife in this regard is reproduced in the schedule to these reasons. She wants it sold with the sale proceeds paid into trust pending further order of the Court. A number of matters are implicit from the Wife’s proposal as to the painting. Firstly, that it is part of her maintenance claim. Secondly, that the realisation of this asset could take some time. Thirdly, that the context of her application was both the Husband’s record of non-disclosure, but also his failure to comply with orders in relation to the statue known as “(omitted)” (that will be discussed below). Fourthly, she quite properly disclosed the possibility of a claim by a third party (Mr M, her father) to an interest in the painting.

2. Despite a direction in this regard, the Husband did not provide a minute of order in relation to this painting. His Counsel was not able to assist the Court even with an indication of his instructions about this.

3. As for the claim by the third party, what the Court does know from the evidence is that Mr M claims that the Husband gave him this painting. The Husband however, deposes to his confirmed ownership of the painting. The Wife contends that the painting is not the property of her father, but of the Husband. Any potential claim by the third party cannot be ignored. If the Wife otherwise makes out her claim for the sale of the painting, before the order is executed, it will be served on the third party who will then have leave to make an application to this Court in relation to any alleged claim of ownership.

4. The Court’s power to make this order is clear. Should the Court exercise this power? The Wife’s financial needs are great. Whilst a maintenance order has been made in her favour. All this does is to cover part of her weekly financial expenses as set out in her financial statement of 1 March 2016. She is still left with debts exceeding $80,000. She is currently very ably represented on a pro bono basis, but this may be difficult to sustain especially with the prospect of a 4 day hearing early next year. Child Support is in arrears. The Court cannot rule out the possibility of the order for maintenance not being complied with. The geographical issues in this case are a complicating factor. When all these matters are considered, the Court concludes it is appropriate to make the order. However, as foreshadowed in the paragraph above, the order will be suspended for one month to give Mr M an opportunity to make an application in this regard.

The Sculpture known as “(omitted)”

1. On 26 August 2013, Justice Watts relevantly made the following order:

   ORDERS AND NOTATIONS:

   The husband do all things to continue efforts to sell the bronze sculpture known as “(omitted)” by Mr G and to apply the proceeds as follows:

   In the payment of all sale costs and commissions;

   In payment of capital gains tax, if applicable;

   The balance to be deposited in an interest bearing deposit as agreed between the parties.

   The parties be restrained from disposing of or dealing with the proceeds of the sale of any asset including any payment received arising out of any interest in superannuation, a retirement plan or the like, unless there is written consent of the other party to do so or a court order authorizing that happening.

   Both parties are at liberty to make an application for the assessment of what they claim to be a potential capital gains tax liability.

   Liberty granted to either party on 14 days notice to make an application to have any frozen funds made available to them if they establish they have a reason for needing that to happen.

   I make orders 4 and 17 in accordance with exhibit 1 as follows: 

   4. The wife be at liberty to provide a copy of these orders to the unit holders and directors of (omitted) Investment.

   17.    Leave be granted to each party’s legal representative to inspect and photocopy the court file in respect of the marriage of Mr Barrington and Ms S, being proceedings number SYC (omitted).

   The parties be restrained from selling, disposing, assigning or otherwise dealing with any artwork or personal items without 21 days written notice and I note that notice has already been given in relation to the (omitted) painting and in relation to the artwork known as (omitted).

   I note the wife has formally withdrawn her application for an interim departure order in respect of child support.

   This matter be expedited but on the basis that the conciliation conference which I am informed is scheduled for October 2013 takes place and then if the matter remains unresolved, the Docket Registrar place it in the pool for allocation of the matter for a first day before the trial judge. 

2. The Wife alleges, and the Husband is curiously silent about, the Husbands failure to comply with the order. Perhaps the Husband’s silence is indeed explained by reference to the document provided to the Court at the interim hearing entitled “Respondent Husband’s Proposed Minute of Order”, Order 1 of which proposes that “(omitted)” be transferred to the Wife (presumably as part of her property settlement) with all costs of the removal and shipping to be borne by her. The order the Wife proposes in relation to “(omitted)” is set out in her Minute reproduced in the schedule to these reasons. She proposes that it be sold with the balance to be held in trust, but to be applied to payment of any arrears of spouse maintenance.

3. At the hearing there was some discussion between the parties about an agreed, orderly sale of the statue in the (country omitted) where it was anticipated it could sell at a greater price. The problem is that the statue is believed to be here in New South Wales and the logistics of shipping it to a more favourable market was considered to be formidable as well as expensive. Nothing appears to have come out of these discussions.

4. The sale of this statue was ordered by Justice Watts. The order itself does not disclose whether it is an interim property order, or spouse maintenance order. His Honour was dealing with the Wife’s Initiating Application filed 29 May 2016. Even reference to this does not assist in understanding the precise basis of the orders made. This Court does not regard this to be an obstacle to the making of an order that is clearly intended to be by way of enforcement of the order made by Justice Watts.

5. In the circumstances the Court believes that the order proposed by the Wife is appropriate.  One would have thought that it would potentially benefit both parties to maximise the sale prospects and sale proceeds, but the paternalism of the Court only goes so far.

General Observations about this Case

1. With great respect to the parties, there needs to be a robust reality testing of expectations about this litigation. The property pool is probably a small one. It may be larger than what the Husband asserts, but smaller than what the Wife suggests. The costs associated with a 4 day hearing would probably be prohibitive and possibly disproportionate to the asset pool. The level of emotion seemingly present in this case is of concern to the Court. This case it not about retribution, it is about assessing contribution and future needs in a comparatively small pool of assets, after a comparatively short marriage. The Husband would do well to consider the reality that this case will go on – with him, or without him and whether he is in Australia or the (country omitted). One would have thought that the prospects of settlement are greater if he is personally present to instruct his lawyers, or to participate in negotiation. The Wife would do well to step back from the coal-face of this litigation and appraise it more objectively and realistically. Both parties would do well to consider the value to them of a compromise that they can live with, which is better than the alternatives of costly, protracted and unpredictable litigation.

2. The matter is listed for hearing on 13 March 2017 and directions will be made to facilitate that.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Date:         27 September 2016

Schedule 1

The Wife’s Proposed Minute of Order

Proposed Minute of Order as to the sale of the painting by (omitted):

The court notes:

1.   That on 23 August 2013 Mr M (hereinafter referred to as “the third party claimant”) filed an affidavit in which he claimed that the Respondent gave to him a painting by the artist, (omitted) (hereinafter referred to as “the painting”).  The painting is known as “(omitted).”

2.   That on 25 March 2015 the Respondent filed an affidavit in which he claimed that he is the rightful owner of the painting a painting by the artist, (omitted).

The court orders:

3.   That within seven days from the date of these Orders the Respondent Husband is to do all such things and to sign all such documents as are necessary to give authorise and give instructions to (omitted) of (country omitted), to enable (omitted) to proceed with the sale for the best price possible of the painting and that the proceeds of sale shall be paid in the following manner and priority:

3.1All costs and expenses charged by (omitted) for the storage of the painting and for the costs and expenses of the sale

3.2In payment of the balance to be placed into a controlled monies account in the name of the husband and wife.

3.3.That the solicitors for the Applicant Wife and the Respondent Husband be authorized to sign all necessary withdrawal forms or other documents necessary for the withdrawal of funds from such controlled money account.

3.2The balance to be paid to the trust account of the solicitor for the Applicant Wife and to be held in such trust account pending further order of the court

4.   That Respondent Husband is to provide to the Solicitors for the Applicant Wife a copy the letter or instructions forwarded by the Respondent Husband to (omitted) together with any other instructions or letters given (omitted) concerning the sale of the painting.

5.   That in default of the Respondent Husband complying with Order 3 then pursuant to section 106A of the Family Law Act, 1975 the Registrar is authorized sign all documents in the place of the Respondent Husband.

Proposed Minutes of Order as to Interim Spousal Maintenance

6.   That pending final hearing the Respondent Husband is to pay to the Application Wife the amount of $1,000.00 per week such payment to paid by Respondent Husband into a bank account nominated in writing by the Applicant Wife with the first payment to be made on or before 28 July 2016 and thereafter each following Thursday.

Proposed Minutes as to Enforcement

7.  That the Respondent Husband forthwith release custody, possession and control of the statue by (omitted) known as (omitted) to the Applicant Wife for the purpose the Applicant Wife selling the said statue in accordance with the orders made today.

8.   That the Applicant Wife is to take all reasonable steps to have the statue sold by private treaty or public auction for the best price which can be obtained in the current market.

1.In payment of all costs associated with the transportation and sale of the statue including any commission payable on the sale.

2.In payment of the balance to be placed into a controlled monies account in the name of the husband and wife.

3.That the solicitors for the Applicant Wife and the Respondent Husband be authorized to sign all necessary withdrawal forms or other documents necessary for the withdrawal of funds from such controlled money account.

10. That in the event that the Respondent Husband is in default of the spousal maintenance orders made today then the Applicant Wife is authorize without further order of the court to withdrawn from any funds held in a controlled money account in order to pay any amount due for spousal maintenance.

Contempt

11. That the wife’s application for contempt be listed for hearing.

Further Applications.

1. That the Wife be given leave to file the following further applications.