Watts and Mantello

[2016] FamCA 262

FAMILY COURT OF AUSTRALIA

WATTS & MANTELLO [2016] FamCA 262

FAMILY LAW – PROPERTY – INJUNCTION – where orders were made ex parte restraining the use of certain funds – whether such injunction ought to be continued – where injunction discharged. 

Mullen & De Bry (2006) FLC 93-293
Waugh & Waugh (2000) FLC 93-052

APPLICANT: Ms Watts

RESPONDENT: Mr Mantello

FILE NUMBER: BRC 10571 of 2014

DATE DELIVERED: 15 April 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 15 April 2016

REPRESENTATION

THE APPLICANT: In person

SOLICITOR FOR THE RESPONDENT: Ms Rosborough-Ball

Orders

IT IS ORDERED BY CONSENT THAT

1. Clause 2 of the Order made on 29 March 2016 by the Honourable Justice Hogan is discharged.

AND IT IS FURTHER ORDERED THAT

1. Clause 1 of the Order made on 29 March 2016 by the Honourable Justice Hogan is discharged.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 10571 of 2014

Ms Watts

Applicant

And

Mr Mantello

Respondent

Ex Tempore

REASONS FOR JUDGMENT

1. I have heard a number of sets of submissions in relation to the current Application in a Case. 

2. On 29 March 2016, I made orders on an ex parte basis restraining Ms Watts from accessing funds provided to her as a consequence of the administration of the estate of her late mother and/or funds provided by the B Trust.  I did so on the application of Mr Mantello on the basis that such order was necessary to preserve the property of the parties pending the final determination of the property settlement proceedings between them.  I subsequently afforded Ms Watts the opportunity to appear by telephone from the United Kingdom on two occasions and, having heard the last submissions yesterday, reserved this decision to today. 

3. I have determined to discharge Clauses 1 and 2 of the Order made on 29 March 2016. 

4. Clause 2 will be discharged by consent after Ms Rosborough-Ball, who appears on behalf of Mr Mantello, told the Court yesterday that she did not press for the continuation of that Order. 

5. Clause 1 will be discharged after my consideration of the material relied upon by both Mr Mantello and Ms Watts as it relates to this Application. 

6. It is, I think, sufficient to provide a very short understanding of the circumstances of the Application.

7. Mr Mantello and Ms Watts cohabited in a de facto relationship between either March 2009 and August or September 2013 (according to Mr Mantello) or October 2009 and March 2013 (according to Ms Watts).  Thus, their de facto relationship occurred for a period of either three and a half or four and a half years.  It seems that they separated under the one roof in about August/September 2013 and, in about February 2014, Ms Watts and the children who lived with them moved to live separately. 

8. Mr Mantello and Ms Watts have one child, C, who was born in 2009.  Ms Watts has two children from a previous relationship:  C, who is about 13 years of age, and E, who is about 11 years of age.  Those two children lived primarily with the parties during their relationship and spent time with their father (who lives in Zurich). 

9. It appears from the material before the Court that Ms Watts and Mr Mantello first lived together in the United Kingdom and relocated to Australia in about November 2010.  At that time, they lived in rented premises, after initially, perhaps, staying with Mr Mantello’s parents in their home.

10. Ms Watts has recently returned to the United Kingdom with C and E.  C remains living in Australia with his father.  There are parenting proceedings on foot between the parties in relation to his future parenting arrangements. 

11. It appears that Ms Watts left Australia in about January 2016.  The Orders previously made on an ex parte basis restrained her, as I have said, from accessing funds provided to her as a result of the administration of her late mother’s estate, and/or by the administrators of the B Family Trust. 

12. It was contended by Ms Rosborough-Ball for Mr Mantello that the Orders were necessary because the evidence revealed that, in the period since Ms Watts’s mother passed - which was in about, I think, November 2014 - she has received (as a consequence) approximately $483,000.00 in total, when regard is had to the conversion from British pounds into Australian dollars.  It is said on behalf of Mr Mantello that, given that the evidence establishes the existence of significant debts, orders should be made restraining Ms Watts from accessing whatever of those funds now remains.

13. The existence and quantum of the debts referred to by Mr Mantello is one of the issues in dispute between the parties.  Doing the best that I can, it appears from the material that there are certain debts that are accepted to be liabilities of the parties, but other significant debts are in issue.  It also appears that both of the parties have not insignificant liabilities asserted by each of them to be owing to third parties.  In the case of Mr Mantello, he asserts that, in essence, he owes about $152,000.00 to commercial lenders and these debts should be taken into account.  Ms Watts disputes that these liabilities are liabilities which should be properly taken into account in the determination of the value of the nett property of the parties for the purpose of the proceedings. 

14. In a not dissimilar way, Mr Mantello disputes that liabilities asserted by Ms Watts (which total about $89,000.00 - many of which are alleged to be owing by her to friends and/or her ex-husband) should be taken into account in the familiar determination of the nett value of the property of the parties.

15. Having regard to the material before me, it appears that, at present, Ms Watts may have property having a total value of $17,000.00 and superannuation entitlements of about $2,000.00.  Included within the value of the property (other than an entitlement to superannuation) is her entitlement to receive £5,000 (or about $9,000.00) which is all that it seems remains payable to her in the administration of her late mother’s estate.  Mr Mantello appears to have property having a value of about $18,000.00 and an entitlement to superannuation in various funds (which together amounts to about $77,000.00) and an entitlement to receive a pension from the United Kingdom which, at this stage, is asserted to have a value of about $30,000.00.

16. It is clear, therefore, that the value of the property of the parties is very modest - particularly when regard is had to the extent of the liabilities to which I have already referred.

17. It is in this context, then, that Mr Mantello asserts the Court would be persuaded to order that Ms Watts be restrained from further accessing the funds that remain available to her - which, as I said, appear at this stage to amount to no more than about £5,000 - in order to preserve the same so that it (and any other funds which may be found later to be under her control) can be applied toward meeting debts which he asserts are joint liabilities - in the sense that they are asserted to have arisen during the course of the relationship - or otherwise be included in the value of the property of the parties for the purpose of the proceedings.

18. In determining whether to make an order restraining a party from accessing funds, the Court may, where it appears just or convenient to do so, make such order as it considers appropriate.  The matters to be considered are whether there is a serious issue to be tried (in the sense of a serious or arguable claim for relief), whether, objectively assessed, absent the making of the orders sought there may not be property available to satisfy any ultimate determination and also whether the balance of convenience favours the making of the order sought.  It is also clearly established that any injunctive orders made by a Court should go no further than is necessary to prevent the abuse or frustration of process in relation to the property proceedings currently on foot between the parties.  Regard need only be had to authorities such as Waugh & Waugh (2000) FLC 93-052 and Mullen & De Bry (2006) FLC 93-293 for clear statements of principle.

19. Having had the opportunity to peruse the affidavit material again - including that which was filed most recently by Ms Watts - I consider the following may be concluded on an interim basis.  I do so conscious of the fact that the material before the Court at this stage may well be less than complete and that there may well be matters which, with further investigation and/or disclosure and/or appropriate inquiry, come to light. 

20. However, doing the best that I can, it seems to me that the material establishes (when regard is had to the Trust Account statements provided by the B Trust) that Ms Watts has been distributed approximately £263,691, or, on today’s exchange rate, $A483,504.00.

21. Of that, it appears that approximately £29,493, or $A54,079.00 was not received directly by her, but, rather, paid to meet liabilities associated with the Trust.  So much is apparent from regard to the statements provided by her, which have been provided to her by the Trust.  These payments, or deductions, include the Trust’s costs and apportionments to meet capital gains tax liability. 

22. It appears that the Trustees for the B Trust have advised Ms Watts that she has a balance of £5,000 remaining, that their role as trustees has finished (as they have accounted to her for the Trust entitlement) and, consequently, they have no standing in retaining the funds now due and payable to her.  It is clear they consider that their role has, if not completely come to an end, very much come nearly to its conclusion.

23. Regard to the trust statements exhibited by Ms Watts to her most recent affidavit appears to establish the following:  she has spent about £10,124 (or about $A18,564.00) in paying the trustees of the B Trust their costs associated with “toing and froing” between the parties’ respective solicitors in Australia in relation to the trust accounts and the proceedings in this Court.  In addition, payments have been made from the monies payable to her by the Trust to meet school fees (totalling some £9,000 or about $A16,520.00); she has paid to her previous legal representatives in Australia a total of $A96,359.00; she has spent nearly $A50,000.00 in meeting credit card debt and she has paid her rent in advance in the sum of about £37,700 (or about $A69,000.00).  Taken together, these sums amount to about $A250,500.00. 

24. When regard is had to the total referred to earlier, the reality as established, at this stage, is that Ms Watts has additionally had available to her the sum of $178,000.00 (or about £97,544) from the time her first payment received on about 23 November 2014 to date. 

25. As I understand her case, she contends she has spent these funds in meeting day-to-day living expenses (such as food and clothing costs for herself and the children, and, more recently, purchasing a car, acquiring furniture, and the costs associated with her return and that of her two older children to the United Kingdom earlier this year). That is, she asserts that, over a period of about 18 months, those funds have been nearly exhausted as a consequence of her calling upon them to meet day-to-day living expenses.  I note, in passing, that a perusal of the statements exhibited to her most recent affidavit appears to establish that she – and, perhaps, at least the two older children – have travelled to the United Kingdom, not only in about January of this year but, also, on at least an occasion during 2015.  Further, certain of the accounts, the statements for which are exhibited to her affidavit, also appear to establish that she was supported, to a large extent, by deposits made by the Trust, at least from November 2014 onwards.

26. The reality, then, is, it seems to me, that, whatever the position might be on a final hearing, at this point in time, it appears that Ms Watts has used the funds she inherited from her mother and received approximately no less than 12 months after her separation from Mr Mantello in meeting her living expenses and the expenses associated with support of her children, including, of course, C when he was in her care prior to her departure for the United Kingdom earlier this year. 

27. I am not persuaded that the balance of convenience favours the making of an order restraining Ms Watts from accessing further the funds which remain.  These appear on the evidence before me to be minimal in amount.  It is established that, at this point in time, they represent the only source of funds available to Ms Watts from which she can meet the costs associated with her support and the support of her two children.  In arriving at that conclusion I take into account that the documents also appear to evidence her receipt of funds paid by her two older children’s father, presumably by way of child support, whether as assessed by the appropriate authority or as agreed.

28. The bank statements certainly do not establish that Ms Watts has any other source of income but, rather, seem to me to confirm and corroborate her assertions that she is, at present, unemployed and dependent upon those funds for her support and the support of the children. 

29. As I noted with Ms Rosborough-Ball during the course of hearing her oral submissions, whatever should follow from Ms Watts’s use of the funds received by her from November 2014 onwards is, it seems to me, in the current circumstances, more a matter for the final hearing.

30. There is not identified a source of funds other than the about £5,000 to which I have already referred - given that that appears to be, as I have said, the only source of funds available to Ms Watts for her own support, the balance of convenience does not suggest or persuade that she should be restrained from accessing those funds. 

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 15 April 2016.

Associate:

Date:              19 April 2016