Witten & Witten

[2008] FamCA 663

FAMILY COURT OF AUSTRALIA

WITTEN & WITTEN [2008] FamCA 663

FAMILY LAW – PROPERTY – Injunctions

Family Law Act 1975 (Cth)

APPLICANT: Ms Witten

RESPONDENT: Mr Witten

FILE NUMBER: MLC 4832 of 2008

DATE DELIVERED: 2 July 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 2 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr M. Wood

SOLICITOR FOR THE APPLICANT: Lander & Rogers

THE RESPONDENT: In person

Orders BY CONSENT

1. THAT until further Order, the Husband pay to the Wife the sum of $1,750.00 per week for the support of the Wife (“the spousal maintenance payment”), the first such payment to be made this day.

2. THAT the Husband pay to the Wife the sum of $75,000.00 (“the sum”) and the characterisation of such payment be reserved to the Trial Judge.

1. THAT the Husband in his capacity as Director of D Pty Ltd sign all documents and do all things necessary to cause sufficient of the shares held in the name of D Pty Ltd in the CommSec account no. … to:

   (a)pay the sum to the Wife; and

   (b)pay to the Wife the sum of $100,000.00 to be held by the Wife in an interest-bearing account in the name of the Wife (“the account”) and from the account, the Wife receive the spousal maintenance payments on a weekly basis.

2. THAT subject to paragraph 3 hereof and until further Order, the Husband personally, and by his servants and agents, and in his capacity as Director of D Pty Ltd, be and is hereby restrained from:

   (a)pledging, advancing, lending or providing any funds whatsoever to R Limited, being any fund held by or on behalf of the Husband, the parties jointly or by D Pty Ltd;

   (b)selling or dealing with in any manner whatsoever any shareholdings held in the name of D Pty Ltd or the parties personally;

   (c)selling, disposing or dealing with in any manner whatsoever any of the assets held in the Witten Family Trust of the Witten Self Managed Superannuation Fund.

3. THAT the Husband provide to the Wife on a monthly basis, a statement of assets and liabilities of D Pty Ltd, and details of any significant transactions conducted during each month.

4. THAT the Husband forthwith provide to the Wife all documentation in relation to the funds lent and / or pledged to be lent by D Pty Ltd to R Limited and all shares sold by him to date.

5. THAT the Husband as a Director of D Pty Ltd otherwise sign all documents and do all things necessary to enable the Wife to have the sole use and occupation of the Lexus RX 350 motor vehicle registration no. … (“the motor vehicle).

6. THAT the Husband forthwith advise the Wife of the name of the insurer and all policy details with respect to any insurance policy relating to the motor vehicle.

7. THAT the Wife’s costs of this Application be fixed at $5,000.00 and reserved to the Trial Judge.

8. THAT liberty to apply be reserved to the Husband to apply to set aside or vary these Orders within 14 days provided that the Husband file and serve:

   (a)an Affidavit of the Husband setting out the reasons why the Husband did not appear before the Court this day; and

   (b)a Financial Statement.

9. THAT pursuant to Rule 19.50 this matter properly required the attendance of Counsel.

10. THAT the Wife’s Application in a Case filed 28 May 2008 be otherwise dismissed.

11. THAT these proceedings be adjourned to a Case Assessment Conference at 11 am on 26 August 2008.

12. THAT reasons for judgment this day be transcribed and placed on the file and made available to the parties.

13. THAT as soon as practicable, the solicitors for the Wife serve by post upon the Husband a copy of these Orders and in due course, the reasons for judgment.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 4832 of 2008

MS WITTEN

Applicant

And

MR WITTEN

Respondent

REASONS FOR JUDGMENT

1. This is an application in the duty list brought by the wife.  It seeks a raft of financial orders.  The application in the case was filed on 28 May 2008, which was the same day as the application seeking final orders. 

2. The husband has not appeared today.  I have ample evidence to show that not only was he served on 17 June 2008, but on 28 May 2008, which was the day of the filing of the documents, the various materials were emailed to him as well. 

3. I have been told by Mr Wood of counsel from the bar table that, in addition to those matters, the wife had a conversation with the husband today in which he indicated that he was not coming.  That is his prerogative.  All I have to be satisfied about is, firstly, that he is aware of the proceedings and their nature.  After that, it is a matter for the wife obviously to be able to prove all of the issues that she seeks to litigate. 

4. I am satisfied in this case that the matter can proceed.  As Mr Wood, rather kindly, offers, in the event that the husband feels aggrieved by some of these orders then he can file an application to set them aside, within a very limited period of time that I will give him, but it will be coming back to me and it will be on the condition that he explains why he was not here today.  This is not a simple matter and it strikes me as rather odd that someone who is a company director involved in an enterprise involved with millions of dollars would see fit to simply ignore a court application of this nature, particularly having regard to the fact that it involves his own marriage.

5. The wife relies upon an affidavit in relation to the application, together with an affidavit sworn by her solicitor setting out what costs she would face if the matter proceeds.  She also filed and relied upon a statement of financial circumstances.  As I said, the husband not having participated, I have only her evidence to rely upon.  That also means of course that I have the benefit of treating that evidence as unchallenged.

6. The wife's overarching principle in all of this is that she really does not have a very clear picture of what the financial circumstances of the marriage are.  She seems to have been prepared to agree to various activities of the husband, on the basis that she has accepted his word that if the action did not take place, the parties would be the loser.  That is evident from the fact that the matter was originally listed for hearing in 4 June and on that day, Dessau J agreed to an adjournment until today.  I am told that the basis upon which that adjournment occurred was that the husband prevailed upon the wife to agree to it, having regard to the business activities that he was involved in.  There seems therefore to be no reason why the matter cannot proceed today. 

7. By way of background, the parties were married in 1987 and separated only in May of this year, so it is, in most respects, a long marriage.  The wife is 51 years of age and she is a registered nurse by profession, but works on a casual basis.  The husband is 53 years of age and is the director of a company. 

8. The marriage came to an end in May and the wife left the former matrimonial home, which was a rented property in C.  The husband still resides there.  There are two children of the marriage:  a 17‑year‑old, who is in Year 12, and a 14‑year‑old, who is in Year 9.  The 14‑year‑old remains living with the husband, but Mr Wood seems to think that there might be some prospect of that changing if the wife's financial circumstances get better. 

9. The wife is currently living in a rented unit in K, which she describes as not ideal, and she wants to get on with her life.  Part of getting on with her life is being in a position to divide up the assets of the parties.  There is a fundamental obligation on all parties in property proceedings in this Court to make comprehensive disclosure.  If the husband decides not to participate in the proceedings, as is his right, then he must face the consequence that a court will presume that the information that the wife is providing about the financial circumstances is unchallenged.

10. Mr Wood put to me that if we were dealing with the property matter, there would be great difficulty at the moment because the wife has very little knowledge of the husband's financial affairs and to that extent, determining the pool of assets for division would be quite difficult.

11. In respect of the matters before me today, I have an affidavit, which is general, as it must be, in relation to each of the issues sought.  The first of those issues relates to an order that the husband pay to the wife by way of spousal maintenance, the periodic sum of $1750 per week.  The wife relies upon her affidavit, but also upon her financial statement. 

12. Her financial statement shows that she is living on the borderline of poverty.  So in that sense, from a financial perspective, she could justify seeking spousal maintenance, but that is not the test.  The test is that she is unable to support herself.  In that regard, she sets out in paragraph 21 of her affidavit that she is currently employed on a casual basis for between five and 10 hours per week and she has no further income, and, more importantly, no further means of being able to generate an income to support herself and the children, bearing in mind at the moment that she only has one child living with her, but that may change. 

13. In addition to that, she points to the fact that she has had to significantly pare back her standard of living compared to that which the parties enjoyed during the marriage.  In the circumstances, I find that she meets the threshold. 

14. The more difficult question is the second part of the test for spousal maintenance which is establishing the husband's capacity to pay.  Without any information about his financial circumstances, as would normally be expected, it's difficult to make an assessment as to whether he has the capacity to pay. 

15. However, whilst I do not have any income details about the husband, I have a very clear statement from the wife about his entrepreneurial activities.  He seems quite content to deal in a business venture advancing sums which go to millions of dollars.  So to that extent, I see no reason why I should not presume that he has the capacity to provide some form of support for the wife, she having met the threshold. 

16. A dilemma is just what sort of order should be made in a spousal maintenance case like this, and Mr Wood, in his inimitable style, suggested one solution was to give the wife a lump sum and allow her to draw down on that lump sum consistent with her needs, as set out in her application; to that extent, I would be protecting both parties.  I think that is a sensible solution. 

17. The next problem of course is where that lump sum comes from.  What I have been told is that a significant sum of money has been pledged in this business venture, but there is still $1.7 million sitting in CommSec shares which could easily be liquidated and used for more sensible purposes, such as the support of the parties in circumstances where they have worked so hard.  It seems to me, the sensible solution therefore is to make an order for $1750 per week, the first payment to be made this day; and that, to give effect to that order, a sum of shares be sold.  I will leave that subject for a moment until I deal with the other issues.

18. The second application relates to what is colloquially known as a Barro application.  The wife seeks that the husband provide $75,000.  This is a very early stage of the proceedings and there is only the evidence of Mr Parker as to the likely costs that will be incurred by the wife if the proceeding continues.  It may not continue if in fact the husband uses some commonsense and provides some assistance. 

19. However, what is being sought by the wife is the sum of $75,000, and, having regard to the fact that this is a long marriage and on at least the most minimalist view there is $1.7 million worth of assets, I do not see any reason why the wife should not have access to that sum to be used as she sees fit for the purposes of conducting appropriate inquiries to assist the conclusion of the litigation.  To that extent, I therefore am content to make an order for $75,000, notwithstanding the reservations that I had a moment ago about the state of the litigation thus far.

20. The third issue sought by the wife relates to injunctions.  The initial application sought injunctions both in respect of a company called D Pty Ltd, which is a private company conducted by the husband and wife as directors and shareholders, and R Pty Ltd, which is a company that I think is publicly‑listed and in which the husband seems to be the driving force. 

21. R Pty Ltd seems to have received substantial sums of money.  The wife's affidavit said that at the time the affidavit was sworn, $1.7 million had gone into it, but I have been told today that that sum has now gone up to $4 million.  Those sums have been drawn from the parties' resources.

22. Therefore, it seems logical that one can conclude, that the parties at least have a significant amount of resources at their fingertips, providing it is not lost.  One of the problems with these sorts of cases is that if one party is the dominant force and does not involve the other in the various investments, then it can create problems later on for ownership of losses, where one party pleads ignorance.  I do not want that to happen here.

23. It seems to me logical that the husband should be not only involving the wife in the significant decisions that are to be made but, to protect her resources, an injunction should be made precluding the husband from spending any more of the D Pty Ltd or doing anything that might give rise to a situation where there is a loss. 

24. In those circumstances, having regard to the activities that are clearly set out in the wife's affidavit - and I refer specifically here to paragraphs 9 and 10 of her affidavit where she sets out what activities the husband has been doing, it seems to me that this is a case perhaps not so much injuncting him from doing things that might damage the resources of the parties as much as protecting those resources.  This is more of a positive injunction. 

25. In the circumstances, I see no reason why an injunction should not be granted giving the husband the liberty that I have already mentioned to come back and argue that it is in some way restrictive of his activities and therefore damaging to the parties.  He would need to be very persuasive in relation to that argument.

26. The wife's application sought injunctions, as I said, against both companies, but today she now seeks only that the injunction relate to D Pty Ltd and also injunctions relating to the use of the shareholdings of the parties personally.  I see no reason why that does not fall into the same category as the assets of D Pty Ltd.  Under those circumstances, I propose to make orders in relation to those matters.

27. Another issue relates to the question of a motor car.  The wife was recently overseas and when she returned the car had vanished.  In her application filed on 28 May, one of the things she sought was details as to the whereabouts of the car.  It now transpires that she has become aware of its whereabouts.  The car needs to be repaired.  She wants to have it repaired and to have the sole use of it, pending the further determination of the court. 

28. That is not an order that I would be making under s 79, but, rather, a s 114 order, permitting a party to use what is effectively a resource arising out of the marriage, in any event.  The wife also seeks details as to the insurance, which has not provided by the husband.  It may be a forlorn hope that he will cooperate, but I propose to make an order that he provide details of the insurance as well.

29. The final issue, which would normally not be part of the making of orders today, is that the wife sought costs. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out that it is a fundamental principle of the Act that each party pays their own costs. The exception to that principle arises where the circumstances justify the court departing from the principle. If I am to depart from the principle, then I have to look at the question of what is set out in s 117(2A).

30. The first step is whether there is a basis to say that the wife is justified in having a contribution made towards her costs.  This is a case in which the husband has not cooperated at all.  This is a case in which there are significant assets and resources.  This is a case where the wife has had to obtain a lawyer to bring the matter to court, not only to protect her resources but also to seek what is justifiably hers.  In those circumstances, I am satisfied that this is a case in which the principle should be departed from and I am satisfied that an order for costs is justified.

31. Having said that, turning to the provisions of s 117(2A), the following matters need to be considered. I only know the financial circumstances of the parties as described by the wife; however, having regard to what I have said about the millions of dollars that seem to be floating around in this case, I am not troubled about that aspect. It does not seem that any party in the proceedings is assisted by a grant of legal aid, so that consideration is irrelevant.

32. I am obliged to take into account the conduct of the parties in relation to not only the general conduct of the proceedings but the specific way in which the case has had to have to been conducted to date.  It is quite clear that the husband's lack of cooperation in this case is making it more difficult for the wife.  That, in my view, justifies an order for costs.

33. The other issue of some significance is whether or not someone has been wholly unsuccessful.  That issue can remain to be determined on another day, depending on whether the husband decides to participates in the proceedings. 

34. In the circumstances, it is appropriate to make an order for costs, at least fixing and reserving a sum for a later date.  Mr Wood sought the sum of $5000.  Usually I would be obliged to look at the scale, but, having regard to the fact that in this case I have a plethora of affidavit material and this is the second occasion that the matter has been before the court, the sum of $5000 does not seem to me to be unreasonable.

35. Costs orders are discretionary orders, and in the circumstances I propose to exercise my discretion and order that the sum of $5000 be fixed and reserved to be determined by the trial judge.

I certify that the preceding Thirty Five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  10 July 2008