Venter & Venter
[2022] FedCFamC1F 67
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Venter & Venter [2022] FedCFamC1F 67
File number(s): BRC 10651 of 2021 Judgment of: BAUMANN J Date of judgment: 18 February 2022 Catchwords: FAMILY LAW – REVIEW – Review of Registrar’s Orders for the payment of spouse maintenance – such Orders reviewed and discharged as at the date of they were made Legislation: Family Law Act 1975 (Cth) ss 72, 74, 75 Cases cited: Hall & Hall [2016] HCA 23
Kennon v Spry [2008] HCA 56
Division: Division 1 First Instance Number of paragraphs: 32 Date of hearing: 25 January 2022 Place: Brisbane Counsel for the Applicant: Dr M Sayers Solicitor for the Applicant: Broun Abrahams Burreket Counsel for the Respondent: Mr G Richardson SC Solicitor for the Respondent: Damien Greer Lawyers ORDERS
BRC 10651 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR VENTER
Applicant
AND: MS VENTER
Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
18 FEBRUARY 2022
THE COURT ORDERS:
1.That the Orders made by Senior Judicial Registrar Spink on 16 December 2021 are reviewed and discharged as at the date of they were made.
2.That the wife’s Application in a Proceeding filed 28 October 2021 be dismissed.
3.That the parties’ costs of the hearing before Senior Judicial Registrar Spink and the Application for Review filed 4 January 2022 be reserved to the trial Judge.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Venter & Venter has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
Although the substantive property proceedings commenced by wife, Ms Venter (aged 56 years), on 11 August 2021 has been identified as a matter suitable for specific judge management in the Complex Financial Property list, where it has been allocated to the Honourable Justice Carew, the proceedings came before me on 25 January 2022 because of an Application for Review filed by the husband, Mr Venter (aged 59 years).
The husband seeks to review a decision made by a Senior Judicial Registrar, resulting in orders made on 16 December 2022 for the husband to pay the wife interim spousal maintenance of $2,200 per week, together with the wife’s current private health insurance premiums.
At the hearing before me, conducted as a hearing de novo, the husband was represented by Mr Richardson of Senior Counsel and the wife was represented by Dr Sayers of Counsel. Both identified material relied upon and in the case of the wife, she continued to rely upon written submissions prepared by her earlier Counsel and filed 10 November 2021.
Although the substantive proceedings included other parties (essentially the parties’ three adult children – Mr C Venter 33 years old; Mr B Venter 31 years old and Ms Glynn 28 years old) and entities associated with them, they did not participate in the Review Application, although evidence from Mr C Venter was relied upon by the husband.
It provides some necessary context to record in these reasons, some relevant history as follows.
SHORT HISTORY
The parties were married in 1985 and separated finally in mid-2017, a relationship of some 32 years. The parties divorced and the husband has remarried to Ms L.
The financial history of the early years of the marriage in Country M and Country N reveals commercial activity and some entrepreneurial flair. Having decided to make Australia their home in 2002, the parties commenced business 1 and business 2, however the wife says the businesses were “a failure” and the husband was declared bankrupt. With the husband an undischarged bankrupt, the wife was the sole director of an entity, Q Pty Ltd, however eventually that business was placed into administration in 2006 and the wife was declared bankrupt on 9 August 2007, with the wife deposing that “by 2006 we had lost everything”.
Although I anticipate the following history is likely to be controversial, during 2007 the husband and wife decided to commence a “financial business”. Because the wife says she and the husband were not able to hold the required business licenses to operate the business, the parties’ son Mr B Venter (at the time 19 years of age) became the sole director and shareholder of the business, which grew rapidly with the assistance of a friend’s capital injection.
Without the need to record a number of other developments in the apparently profitable business (including, for example, litigation between 2013 and 2015 with ASIC) in around June 2016, a restructure of entities took place, forming a number of entities broadly described as the “D Group”. The wife, in her submissions, conceded that:
… The joinder of the additional Second to Eighth Respondents in these proceedings has been necessary in circumstances where they hold the legal interest in a number of entities which comprise the “D Group”.
(wife’s case outline filed 10 November 2021, paragraph 4)
and further that:
At all times, the directors of V Company, F Company, R Company and G Company have, variously, been Mr B Venter, the Second Respondent in these proceedings, Mr C Venter, the Third Respondent in these proceedings and Mr J.
(wife’s case outline filed 10 November 2021, paragraph 5.4)
During oral submissions, Counsel for the wife, consistent with earlier submissions, accepted that neither the husband or the wife had a “legal” interest in the entities which create the income for the D Group; that Mr C Venter has no “legal obligation” to support either the husband or the wife; and that, on an interlocutory basis, the wife does not ask the court to find that the husband is in control of the entities which Mr C Venter operates as a director.
PRINCIPLES
The Court must be satisfied that the Applicant wife is unable to adequately support herself (s 72(1) of the Family Law Act 1975 (Cth) (“the Act)), which is often discussed as the “threshold issue”, the evidentiary onus to do so falling upon the Applicant wife. If the wife satisfies this test, then s 74 of the Act empowers the Court to make such orders as it considers proper for the provision of maintenance, having regard to the matters reflected in s 75(2) of the Act.
Although Senior Counsel for the husband says the wife has not discharged the onus of establishing she is unable to adequately support herself, I am, on an interlocutory basis, satisfied she does.
The husband further submits that the wife’s assessment of her reasonable needs does not establish a need to a level of $2,200 a week. I disagree for reasons given below.
The gravamen of my decision really requires the Court to decide whether the husband has the capacity to pay, and this is dealt with more extensively below.
Before undertaking an analysis of the evidence and submissions, it is appropriate to record that in this interlocutory application, the Court is restricted in making some findings because of the direct conflict in evidence given, particularly of the asserted discussions between the wife and her son Mr C Venter. As earlier noted, if, as the wife contends, the D Group has a value of $100,000,000 or not, the substantive proceedings in essence acknowledge that any capacity by the Court to “access” these assets, held legally by other family members or entities, will only occur if it can be established that those third party interests are held by the children on behalf of the parents; some earlier transactions are able to be set aside under s 106B of the Act and/or the wife can establish that the entities are under the control of the husband as his alter ego or in effect, Mr B Venter and/or Mr C Venter are his “puppets”.
Dr Sayers indicated that the current evidence could not, until properly tested, allow the Court to make such findings and draw such inferences. That was a proper concession.
IS THE WIFE ABLE TO ADEQUATELY SUPPORT HERSELF?
The husband says the wife has not prepared any evidence that properly establishes she is unable to secure employment or unable to do so because of ill health or the like. It is noted that, from whatever sources, the husband continued to provide financial support to the wife until before the Application was filed, so that her need to “look for work” if that is what the husband expected, did not really arise.
However, the wife has not been in “employment” outside of the family businesses since 1985. She has no formal qualifications. Having been declared bankrupt in 2007, she was unable to participate as a director in the financial business which appears to be the source of the family wealth. At paragraph 59 of her affidavit sworn 12 October 2021, the wife says:
I have previously been diagnosed with clinical anxiety and depression. In 1998 I suffered a seizure and was admitted to hospital for surgery. Following surgery, I suffered a further seizure and the doctors discovered that I had a large tumour in my brain, located behind my right eye. I was prescribed epilepsy medication. I have developed chronic depression which has been exacerbated by these proceedings. I currently attend up a psychologist for ongoing treatment of my anxiety and depression.
The wife’s Financial Statement shows no income; estimated expenses of $3008 per week; $12,034 in bank accounts; two second hand motor vehicles and household contents. She deposes to holding “jewellery” to the value of $34,142.
I accept that the wife could have produced medical evidence to support her claims of mental health challenges, however on an untested basis, I am comfortably satisfied that the wife is unable to adequately support herself.
THE WIFE’S REASONABLE NEEDS
Whilst the wife, in her submissions, points to the husband’s estimate of his personal needs detailed in his Financial Statement at $8,237 per week as a basis of asserting her claim of $2,200 per week is reasonable, that comparative is not particularly helpful.
The wife’s claim for $3008 per week is set out primarily at Part N of her Financial Statement and totals $2,961. Although some of the items of discretionary weekly expenditure examined, for example:
·$150 – electricity;
·$300 – cigarettes;
·$300 – holidays; and
·$300 – cleaning;
seems on the high side, the submission that reducing the claim by $808 per week does, to some extent, deal with these concerns. The wife has had the benefit of funds paid to her in June 2020 of $100,000 “to invest”; and $15,000 “for holidays”. The wife’s costs notification reveals she has paid costs to date of $75,484.34.
On balance, I do regard the wife’s estimate of reasonable needs, considering as well the lifestyle previously enjoyed by the wife (however so supported or financed), as fair and proper.
CAPACITY OF THE HUSBAND TO PAY
It is not in dispute that since separation the wife has, in addition to continuing to live in the H Street property (rent free), received periodic funds from family entities.
Initially she received on separation $1,068 per week increasing to $2,200 per week from 8 September 2020. The payments ceased, the wife claims, without notice, on 19 October 2021, prompting the current interim Application in a Proceeding, seeking, inter alia, spouse maintenance, to be filed on 28 October 2021.
The wife contends, on an assessment of evidence whilst accepting the limitations of making findings on an interlocutory basis, that given the history of financial support the husband has had the benefit of, the Court should find the husband has a reasonable expectation that if he had a need or a deficiency of expenses over income, he will be able to access a financial resource – being the D Group capital and/or income through his son Mr C Venter.
In oral submissions, Counsel for the wife conceded at this time the “family assets” are “legally in the control of, it would seem at the moment, the adult son Mr C Venter”.
The earlier written submissions prepared by the Senior Counsel for the wife filed 10 November 2021 (and still relied upon by Dr Sayers) contended that:
6.The Husband and Mr C Venter have sworn evidence in these proceedings designed to obfuscate and mislead the Court as to the Husband’s control of the D Group.
It is a very strong submission to make that parties have tried to “mislead” the Court, a point taken up by Mr Richardson SC in his oral submissions when he pointed to the wife’s sworn evidence based on her belief the husband does control the D Group and influences Mr C Venter’s decisions. All this exchange really does is to identify the core “triable issue”, namely should the D Group assets and interests form part of the pool of assets available for alteration of interests under s 79.
Contrary to the considered submissions of the wife, I am not at this time, on the evidence and applying the civil standard of proof, satisfied that the husband does have the capacity to pay spouse maintenance to the wife for the following reasons:
(a)Although the wife has established that she has received funds in the past, I am not satisfied the husband can access, as of right, a stream of income or capital so as to pay the wife. On this basis, if an order for spouse maintenance was made, it would not be capable of enforcement against the husband. Courts should not make orders which are incapable of enforcement;
(b)Although far from certain, the extended payment date of a loan due for repayment to the entity the husband does control, namely S Pty Ltd from K Pty Ltd of $1 million, means it will not be before September 2022 that the husband will know if the debt is repaid and what the nett funds available to his entity will be. S Pty Ltd has a liability to repay funds to R Company, for which S Pty Ltd has offered security. If the debt is repaid and a sum is available to the husband, then at that time the husband may have some capacity to pay spouse maintenance. The ability and capacity to pay maintenance must be assessed on the evidence now – not what might be the position in the future;
(c)I accept the submission of Mr Richardson SC that the wife is asking me in a summary hearing, where the evidence cannot be tested on facts in contest, to reach by inference a finding about the future expectation of funds to the husband (based partly on the history), in direct conflict with the evidence provided by Mr C Venter – who controls the entities. In this regard, Mr C Venter, in his affidavit filed on 9 November 2021, says inter alia:
(i)that he has had a “strained personal relationship with my mother since in or about 2014” (at paragraph 4);
(ii)he has told his mother on many occasions from 2017 that “I don’t want to deal with you on money” and “I am not going to get involved in matters between you and dad” (at paragraph 6);
(iii)he makes his own decisions and “decisions about the D Group are not my father’s to make” (at paragraph 8) and since July 2018 he had made a decision to make payments to his mother voluntarily, not acting “on the direction of my father” (at paragraph 12);
(iv)the trustee of the Family Trust “decided it was in the interests of the trust to cease any further payments or advances to my mother in circumstances where legal proceedings have been instituted by her against myself, my siblings and related entities” (at paragraph 14);
(v)he told his parents that he would not sign any agreement that required him to make a payment to his mother although payments were made on a voluntary basis (at paragraph 17);
(d)I accept that at a trial other findings as to the control of the Family Trust or other entities may on the tested evidence, be open. However in light of the proper concession by Counsel for the wife, I am not prepared to ignore the direct sworn testimony of the person who controls the D Group;
(e)On the basis of Mr C Venter’s evidence (which perhaps unsurprisingly is echoed by the husband), I am not satisfied that the husband has a reasonable expectation that he will receive funds from Mr C Venter to benefit the wife. I accept the submission of Mr Richardson SC that the observations of the plurality of the Hugh Court in Hall & Hall [2016] HCA 23 at [54] and [55] are apposite when read in the shadow of Mr C Venter’s sworn testimony and explanations for prior conduct. There the Court said:
54.The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
55.Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
(f)The wife’s submissions contend that, for this application at least, there is some significance to the conduct of the husband in entering into a Deed to Vary the Family Trust Deed from October 2020, to remove him as the appointor. If the mere position of appointer under a Trust Deed amounted to control and therefore an argument that the assets of the Trust are, in some way, available to one of the parties to the marriage, that could be significant. However, as Chief Justice French said in Kennon v Spry [2008] HCA 56 at [64]:
64.The word “property” in s 79 is to be read as part of the collocation “property of the parties to the marriage”. It is to be read widely and conformably with the purposes of the Family Law Act. In the case of a non-exhaustive discretionary trust with an open class of beneficiaries, there is no obligation to apply the assets or income of the trust to anyone.
And further at [65] said:
65.Where property is held under such a trust by a party to a marriage and the property has been acquired by or through the efforts of that party or his or her spouse, whether before or during the marriage, it does not, in my opinion, necessarily lose its character as “property of the parties to the marriage” because the party has declared a trust of which he or she is trustee and can, under the terms of that trust, give the property away to other family or extended family members at his or her discretion.
In this case in respect of the Venter Family Trust, Mr C Venter says, he created the Trust and as such its origins and characteristics could not permit a finding that the Trust assets are property of either the husband or the wife. Clearly at a final hearing it is likely that an examination of the circumstances leading up to how the Trust was established and who it was that contributed in reality to the asset creation in the Trust, will be a critical issue. However, at this time where the evidence is that Mr C Venter created the Trust and where neither the husband or wife have been a shareholder or trustee of the Trust or named beneficiaries, the bland assertions of the wife from her perspective (or relying upon what she says the children have told her – much of which is disputed at least by Mr C Venter) that the husband controls the Trust and the D Group, cannot be accepted. I of course acknowledge, at the conclusion of what is likely (considering the factual matrix in dispute) to be a complex trial, findings as so alluded to by the wife may, be open;
(g)I accept the submission of Mr Richardson SC that even if the husband sat with the power of appointment intact, there would still be a real argument as to whether the assets of the Trust were available to satisfy any order under s 79. Of course, the wife may well seek to set aside the Deed of Variation under s 106B, but that again is a matter for trial, not now;
(h)Finally, because of the conclusion I have reached about the future expectations of the husband, little is served in analysing the history – as interesting as that might appear. Spouse maintenance orders require a finding of future capacity. It may be that the husband and Mr C Venter are found to have worked together to “disentitle” the wife in some way. It may be that the intentions way back in 2007 did not include the situation developing as it has today. Often courts are asked to consider (generally in trusts controlled by a parent for the benefit of discretionary adult children beneficiaries), how the strength of the family relationships will likely lead to future distributions. This seems to be based often on a happy concept that families who have created wealth are inclined to share such wealth. It is a sad reality, and this case may be an example, that a breakdown in the parents’ relationship and all the hurt and emotional conflict that follows, often creates family dysfunction where moral expectations are replaced by legal reality.
CONCLUSION
For the reasons given, I have reached the conclusion that the husband does not have the capacity at this time to pay spouse maintenance to the wife.
As a result, I make the following orders:
(a)The Orders made by Senior Judicial Registrar Spink on 16 December 2021 are reviewed and discharged as at the date of they were made;
(b)The wife’s Application in a Proceeding filed 28 October 2021 be dismissed; and
(c)The parties’ costs of the hearing before Senior Judicial Registrar Spink and the Application for Review filed 4 January 2022 be reserved to the trial Judge.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann Associate:
Dated: 18 February 2022
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