Xander and Labrie and Anor - [2012] FMCAfam 940

FEDERAL MAGISTRATES COURT OF AUSTRALIA

XANDER & LABRIE & ANOR

[2012] FMCAfam 940

FAMILY LAW – Application to vary existing injunctive orders and for further injunctions – spousal maintenance application.

Family Law Act 1975, ss.72, 74, 75, 114

Applicant:

MS XANDER

First Respondent:

MR LABRIE

Second Respondent:

MS LABRIE

File Number:

SYC 1764 of 2012

Judgment of:

Altobelli FM

Hearing date:

27 July 2012

Date of Last Submission:

27 July 2012

Delivered at:

Sydney

Delivered on:

3 August 2012

REPRESENTATION

Counsel for the Applicant:

Mr Johnson

Solicitors for the Applicant:

Wang & Associates Solicitors

Solicitors for the first and second Respondents:

Lawside Lawyers

ORDERS

The Wife’s Application in a Case filed on 2 July 2012 be dismissed.
The Husband’s costs be reserved.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYC 1764 of 2012

MS XANDER

Applicant

And

MR LABRIE

First Respondent

MS LABRIE

Second Respondent

REASONS FOR JUDGMENT

In the matter of Xander & Labrie & Anor, I provide the following oral reasons in relation to an application that was before me on 27 July 2012. The applicant wife is 37 years old and is currently unemployed. The respondent husband is 50 years old and manages a small business. I call them wife and husband, even though it is a de facto relationship which was commenced in January 2008 and which appears to have ended in February 2012. They have one child, [X], who lives with the mother and who is three and a half years old. The respondent husband has a daughter, Ms Labrie, who is 25 years old, lives with him and works as a [omitted] in the small business that he operates. The daughter is the second respondent in the wife’s case.
The substantive proceedings between the parties is for alternation of property interests. The issues that seem to be emerging in that litigation include, firstly, the constitution of the asset pool with both making allegations that the other has not made proper disclosure. Nextly, the value of the business in question. Nextly, assessment of the contribution that they have made and lastly, assessment of any future needs that each might have. There seems to be one main tangible asset, a small mixed business owned by the parties, through a corporate entity, but operated by the respondent husband. The business is at [address omitted]. The wife says the business is value at 128,000. The husband says that the business is valued at $80,000.
It is interesting to note that the business was purchased for $80,000 in April 2011. It is hard to understand the wife’s assertion that the business is worth so much more than what it was purchased for. I understand that the parties have not as yet obtained a valuation of the business, but I would have thought it quite self-evident that obtaining an independent or joint valuation would greatly assist in resolving the issues of a substantive nature before the court.
Unless the parties can prove to the court that there are in fact other assets that each has not disclosed to the court, this means the pool of assets is small indeed. Not that one would know, by the size of the documents filed in these proceedings to date and the ferocity with which these proceedings have been conducted. In any event, the applicant wife seeks certain orders that are contained in an application in a case that was filed on 2 July 2012. She seeks what she describes as freezing orders and urgent spousal maintenance and I will incorporate the terms of the orders sought into these, my oral reasons. The husband seeks dismissal of the wife’s application. The court had before it a substantial volume of information, including a series of affidavits from the applicant and from the respondent, relevant in the context of the present application. There was also evidence from the second respondent, but of marginal interest in the application before me.
A procedural history is necessary to set the context. On 3 April 2012, ex parte orders were made, the effect of which was, at the application of the wife and as against the husband, his daughter and a number of other named entities to freeze the assets and in particular, the business at [omitted]. The wife satisfied me at that time on the balance of probabilities, that unless orders were made on an ex parte basis, there was a real risk of dissipation of the business assets.
On 17 April 2012, consent orders were entered into, including injunctions to limit and regulate the operation of the said business. On 18 May 2012, there were further consent orders this time varying the terms of the orders and the injunctions that had been previously made, but also including orders for the provision of information and the undertaking of a stocktake. On 5 July, the matter was set down for hearing in March 2013, a number of procedural directions were made and the parties were ordered by consent to participate in the Law Society’s Family Law Settlement Service.
It will be noted from this procedural chronology that the original injunction has been varied twice but, on each occasion, it was either with the consent and input of either a solicitor or counsel for the wife. The first issue raised in the application in a case before the court, is whether the interim orders made 18 May 2012 should be varied again, but of course, this time, it is not by consent. The husband opposes this.
The wife has a number of concerns. One is that the freezing orders were agreed to be varied by consent on the basis of a representation on behalf of the husband, that the orders being varied were having an adverse impact on the trading of the business, particularly in terms of obtaining day to day credit and using EFT facilities. Another concern is that the husband did not comply with orders for the provision of business records. Another concern of the wife is that she had discovered irregularities in the husband’s accounting for business expenses that, she says, can only be understood if the husband is selling stock and not accounting for the cash used to pay for that stock. The wife also asserts that above award wages are being paid and that this is contrary to the order that was made.
As it turns out, I decline to make the orders that the wife seeks. The main reason is that I’m satisfied that if I made the orders she seeks, it would lead to the business closing. I ask rhetorically, who would work in a small privately owned business, 12 hours per day, 7 days per week for $666.10 per week? That is the order that the wife seeks. It is an absurd proposition. The existing employee, the husband’s daughter, is paid $1,015 per week. Even her efforts are supplemented by the unpaid labours of the husband. Moreover, to limit the business to $500 per week for payments relating to the operation of the business is manifestly absurd.
The evidence before the court is that the weekly expenses of the business, including rental and salary of $1,015 per week, is about $8,900. The business records relied on by the husband and provided pursuant to orders consented to by the wife, show that the cigarettes purchased each week cost more than $500 per week. It is not for the court to fashion the remedy the wife needs or seeks. There was ample opportunity for the wife to study the business expense records and seek to craft relief that was more realistic.
Given that the wife’s application so clearly fails, I will not consider the other payments that she proposes. Even if I had not decided the case on the basis of what I have set out above I nonetheless note she has not established that the consent orders were the product of any misrepresentation of the impact of the prior orders on the business. The solicitor’s affidavits do not establish what she asserts. The wife has not established that the husband has not complied with the order. Whilst it is possible that there are irregularities in the husband’s accounting, these are matters for a final hearing and do not warrant draconian relief as sought by the wife. The absurdity of the award wage argument advanced by the wife has already been noted.
It is apparent that insofar as the wife’s application relates to the operation of the business, it was both ill-considered and misconceived. She also seeks to restrain the operation of various accounts. Again, with great respect, she has not thought this through. If I were to restrain the [X] Investments account, it will cut off all credit for the business. Money would go in, but none would go out. Moreover, she has made out no case to restrain the operation of the accounts that she seeks. I am satisfied that in fact the existing orders provide a much more realistic protection of the existing business assets than the orders advanced by the wife.
Both the husband and the wife need to take a reality check about this business. The wife herself says, at paragraph 25 of her affidavit of 27 March 2012 that she was aware that the business makes a profit in the range of $1,200 to $2,000 per week. The husband deposes at paragraph 30 of his affidavit of 15 April 2012 that it was making a profit of $1,200 per week. Now clearly, the husband now says it is no longer making this profit. I do not know why. The husband who has occupation of and operation of this business, needs to understand that the onus will be on him to explain this. In a cash business, it will not be hard to draw certain inferences if the evidence justifies this and if the court is so asked. That, however, does not justify the orders that the wife seeks in terms of freezing orders and injunctions.
The wife seeks spousal maintenance in the sum of $700 per week. I decline to make this order. I’m not satisfied on the evidence before me that the husband has capacity to pay. I’m not satisfied on the evidence before me that the wife has need. Her medical evidence is flimsy, is limited in terms of time and in any event only establishes that she could not work in a busy [omitted]‑type environment. Moreover, I am far from satisfied that the wife has fully disclosed the resources available to her. The husband points to evidence suggesting that she has remitted money overseas. There is at least a prima facie impression of this. These are matters to be explored at a final hearing and not in the context of an interim application.
I therefore dismiss the application in a case filed on 2 July and I reserve the husband’s costs arising out of this application. I want to make something very clear to the husband and the wife in this case, and I trust that Mr Johnson will explain this to his client and that Mr Oi and Ms Chen will explain it to their client. I trust that the lawyers will sit down and carefully explain all of these reasons to their clients, but especially this part.
If at the final hearing I hear evidence of any legal or fiscal irregularity I will not hesitate to adjourn these proceedings whilst I refer the file to the appropriate legal or fiscal authority. For example, the wife asserts that the husband is taking cash from the business. If I make this finding, it raises certain revenue implications that affect not just the husband but the wife as well. The husband asserts that the wife was receiving social security at a time when she was cohabiting with him. Indeed, the bank statements that the wife herself produces to the court suggest that she was receiving a pension, and in this regard we’re not talking about Family Tax Benefit A and B, but she was receiving a pension during the period of cohabitation.
If that is the evidence that I hear at a final hearing, that too raises legal and revenue implications. The husband and the wife and those who advise them need to think very carefully about this matter before it comes back before me for a final hearing. I note that an order was made for the parties to attend on the Law Society’s settlement initiative. I would have thought that that was an ideal venue to discuss, in private, some of the issues that clearly should not be discussed in the context of a public venue like a Family Law Court.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Date: 7 September 2012