VALENCIA & MCGILL

[2017] FamCA 535

FAMILY COURT OF AUSTRALIA

VALENCIA & MCGILL [2017] FamCA 535

FAMILY LAW – SPOUSAL MAINTENANCE – INTERIM – Application for periodic spousal maintenance – Where the husband concedes the wife is unable to support herself – Reasonable needs of the wife – Orders made for the husband to pay $1,285 per week to the wife.

FAMILY LAW – PROPERTY – INTERIM PROPERTY SETTLEMENT – Where the wife seeks $135,000 from the husband – Where it is appropriate to characterise the payment sought by the wife as interim property settlement rather than costs or lump sum spousal maintenance – Where the amount sought is not likely to exceed any entitlement of the wife at final hearing – Orders made that the husband pay $135,000 to the wife.

FAMILY LAW – INJUNCTIONS – Where the wife seeks an order that the husband be restrained from drawing down on his superannuation in circumstances where the husband seeks that the wife receive 50 per cent of his superannuation entitlements at final hearing – Orders made restraining the husband drawing down on his superannuation unless he provides the wife sufficient notice and pays her 50 per cent of the amount he receives.

APPLICANT: Ms Valencia

RESPONDENT: Mr McGill

FILE NUMBER: SYC 1089 of 2017

DATE DELIVERED: 20 July 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 19 July 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Davis

SOLICITOR FOR THE APPLICANT: Pearson Emerson Meyer

COUNSEL FOR THE RESPONDENT: Mr Schonell

SOLICITOR FOR THE RESPONDENT: Horton Rhodes Legal

Orders

1. That the husband, within seven days, pay to the wife the sum of $135,000 by way of interim property settlement.

2. That the husband pay to the wife, by way of spousal maintenance, the sum of $1,285 per week, the first payment to be made on 24 July 2017 and, unless otherwise agreed, weekly thereafter.

3. That the husband pay, as and when they fall due, all outgoings on the property at B Street, C Town and be solely entitled to receive all rent paid for that property.

4. That the husband be restrained from withdrawing any funds from his superannuation funds unless he first gives to the wife 21 days’ notice in writing of his intention to do so and, within seven days of receiving such payment, pays to the wife 50 per cent of the amount received by him.   

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Valencia & McGill has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1089 of 2017

Ms Valencia

Applicant

And

Mr McGill

Respondent

REASONS FOR JUDGMENT

1. Ms Valencia (“the wife”) is the applicant in financial proceedings arising out of her marriage to Mr McGill (“the husband”). They commenced to live together in June 1981 and married in the same year. They separated on 5 May 2015. They have two adult children.

2. The wife initiated proceedings for property settlement by filing an Initiating Application on 21 February 2017. On 20 June 2017, the wife filed an Application in a Case seeking orders for interim spousal maintenance in the sum of $1,500 per week; lump sum spousal maintenance of $35,000 and interim costs in the sum of $100,000. In addition, the wife sought the sole use of the rent received from a jointly owned property in C Town, and an order that the husband pay half of the mortgage repayments for that property. She also sought an order restraining the husband from drawing on his self-managed superannuation fund.

3. In response, the husband conceded that the wife was entitled to spousal maintenance but, it was submitted, in the sum of $350 per week. He conceded that there should be a payment to her of $100,000 but that the payment should be characterised as an interim property settlement. He opposes the application for payment of lump sum spousal maintenance.

4. At the commencement of the hearing, the husband agreed that he would pay the mortgage payments on C Town.

INTERIM PROPERTY SETTLEMENT

1. The parties have substantial assets of which the principal assets (using the husband’s assertions as to value) are:

Unencumbered  property at Suburb D occupied by the husband	$1,750,000
Unencumbered property at Suburb E occupied by the wife	$1,000,000
Rented property at C Town subject to mortgage with a net value of	$529,589
Two properties in Country F owned by the wife	$146,811
Husband’s superannuation	$992,781
Wife’s bank accounts according to her Financial Statement	$6,716
Husband’s bank accounts according to his Financial Statement	$164,856

1. The wife seeks to retain Suburb E. The husband seeks to retain Suburb D. They both ask that C Town be sold and the proceeds divided. By way of final orders, the husband seeks an order that the wife receive half the net proceeds of sale of C Town, half of his superannuation and a cash adjustment such that the wife receives 47.5 per cent of the joint assets.

2. Thus it can readily be seen that the lump sum amounts sought by the wife, if characterised as an interim property settlement, are well within any likely entitlement to a final property settlement.

3. Counsel for the wife submitted that the lump sums could be ordered to be paid either by way of interim property settlement or, as to the $100,000, by way of costs and, as to the $35,000, by way of lump sum spousal maintenance.

4. The wife’s solicitor estimates that her costs of the proceedings will be approximately $100,000. The wife gives evidence that she needs to make repairs to the Suburb E property which will cost about $35,000.

5. The preferable course is to treat both amounts as interim property settlement. If the proceedings should settle and the full sum of $100,000 not be used for costs, a problem arises as to how the remainder should be characterised. That problem does not arise if the sum is characterised as interim property settlement. If the wife spends $35,000 on repairs to Suburb E, presumably the value of the property will be improved. Ultimately, if the money is paid by way of interim property settlement, the wife can spend it in any manner she chooses.

6. In relation to the sum of $35,000, counsel for the husband submitted that there was no evidence of quotations for the work. The wife deposed to having quotes available from nominated tradesmen and offered to provide copies. No request was made for the quotes. I accept that the wife has established that the repairs are required and that they will cost about $35,000.

7. The husband has cash in the bank which can be used to satisfy any order for interim property settlement.

8. The order will be that the husband  pay to the wife the sum of $135,000 by way of interim property settlement.

SPOUSAL MAINTENANCE

1. The husband conceded that the wife is entitled to $350 per week. Thus, there is no issue that she meets the threshold test and is unable to support herself.

What, then, are the wife’s reasonable needs?

1. Unfortunately, ascertaining her reasonable needs is not as simple as looking to Part N of her Financial Statement. At Part N, the wife claims expenses of $1,230 per week.

2. The wife deposed that, during the marriage, she spent freely and always had money at her disposal. After separation, the husband, for a time, continued to provide comfortably for the wife but his financial support has been gradually reduced. Three days after she filed her Initiating Application, he unilaterally reduced the credit limit on the credit card she was able to use from $12,000 to $4,000. Since the husband also used that card, it could not be assumed that she had $4,000 per month available to spend.

3. In February and March 2017, the husband paid $7,250 into the wife’s bank account. Those funds were used by her to pay living expenses.

4. In addition, the husband deposed that he has paid the insurance and registration on the wife’s car, her health insurance premiums and “general living expenses”.  In his Financial Statement the husband deposed to paying approximately $1,000 each week for the benefit of the wife, including $644 for “Visa and other expenses”.

5. The husband will continue to pay, as they fall due, the mortgage payments on C Town so the wife will be relieved of her share of that expense.

6. Understandably, the wife does not wish to be beholden to the husband to pay her whatever he thinks is appropriate. She wants to have a sum certain to live on and to pay her own expenses.

7. In her affidavit, the wife estimated that, before the husband restricted her access to the credit card, her expenses were $1,500 per week but she makes no attempt to quantify that conclusion or to provide any basis for it. Counsel for the wife sought to tender a large bundle of bank and credit card statements and an unattributed summary of those documents which, it was asserted, demonstrated the wife’s reasonable expenses at that time. The documents had only been provided to those representing the husband on the morning of the hearing. The accuracy of the summary was not admitted by the husband. The tender was rejected.

8. In addition to the expenses included in Part N of her Financial Statement, the wife will have to pay the following expenses:

   Motor vehicle insurance and registration;

   Medical benefits insurance;

   Rates on Suburb E;

   Building and contents insurance for Suburb E which the husband says are $29 per week.

9. There was no attempt in the wife’s case to quantify those expenses.

10. Doing the best I can, I will allow a further sum of $200 per week to cover those additional expenses, bringing the wife’s reasonable needs to $1,430.

11. The parties both agree that the wife will receive the income from C Town which is rented for $620 per week. Since the property is a commercial property, there is an adjustment from the tenant for land tax and other outgoings. The agent deducts the outgoings from the rent.

12. It is impossible calculate what income might be available to the wife from C Town. The husband will pay the mortgage but that does not take into account the land tax and other outgoings such as rates and insurances. The outgoings will be paid by the husband and any amounts required to be paid in addition to the rent adjusting payments should be paid by him.

13. The preferable course is to allocate the rent paid on C Town to the husband for the purpose of this calculation and to order that the husband pay a sum certain to the wife each week. Thus for the purpose of these orders, the husband will receive the rent from C Town and pay all the outgoings.

14. The wife has income from property owned by her in Country F which is not disclosed in her Financial Statement. In her affidavit she deposed that she receives $US500, or about $630, per month by way of rent which she allows to accumulate in her bank account in Country F. That equates to about $145 per week in income. In November 2016 the wife’s brother arranged to transfer $US20,000 from the wife’s bank account in Country F to her daughter in the United States. Her daughter then made funds available to the wife. The rent received by the wife in Country F is income of the wife for the purpose of these proceedings.

15. Thus the wife has income of $145 per week and reasonable expenses of $1,430, a shortfall of $1,285.

What is the husband’s ability to pay?

1. In his Financial Statement, the husband deposed to an income of $5,742 per week and expenses of $5,939. Those expenses included $1,000 per week which he has paid for expenses of the wife and $738 per week which he pays for expenses referable to his current partner. Since she has an income of $3,133 per week, there is no necessity for him to contribute to her expenses. Thus the husband will have at least $1,541 available to pay spousal maintenance. That amount will be increased because he will receive the income from C Town. It is not possible to calculate the exact increase because there is no evidence of the outgoings.

2. The husband deposed that between 3 November 2015 and 18 July 2017, he has transferred $158,000 to his sister of which some $59,000 was used as a contribution towards his daughter’s wedding and a further $36,000 used to buy her a car. In addition, the husband has participated in the transition to retirement scheme from which he drew $40,000 from his superannuation fund in the financial year ended 30 June 2017.

3. I am satisfied that the husband has the ability to pay the sum of $1,285 per week.

INJUNCTION

1. The wife seeks an order that the husband be restrained from drawing funds from his superannuation unless he pays the same amount to her.

2. The husband drew funds from his superannuation in 2016 and again in 2017. He did not tell the wife at the time.

3. It is the husband’s application that the wife receive half of the superannuation entitlement. In those circumstances it is appropriate that he does not draw funds from the superannuation to her disadvantage.

4. Orders will be made in relation to the superannuation funds as sought by the wife.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 20 July 2017.

Associate: 

Date:  20.07.2017