Aheb and Aheb

[2008] FamCA 1176

FAMILY COURT OF AUSTRALIA

AHEB & AHEB [2008] FamCA 1176

FAMILY LAW – PROPERTY – Sole use and occupation – Sale of property – Costs

Family Law Act 1975 (Cth)

APPLICANT: Ms Aheb

RESPONDENT: Mr Aheb

FILE NUMBER: MLF 2471 of 2006

DATE DELIVERED: 30 December 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 30 December 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr D.A. Mort

SOLICITOR FOR THE APPLICANT: Jane Baldwin

COUNSEL FOR THE RESPONDENT: No appearance

SOLICITOR FOR THE RESPONDENT: JK Lawyer & Co

Orders

1. That the wife have leave to proceed in the absence of the husband.

2. That paragraph 8 of the orders made on 6 November 2006 be discharged.

3. That paragraph 1 of the orders made on 30 October 2007 be suspended until further order.

4. That the wife have sole use of the former matrimonial home situated at and known as W property and the husband be restrained from entering that property save for the collection of his chattels as provided in paragraph 6 hereof.

5. That the wife be at liberty to change the locks on the former matrimonial home.

6. That by 4.00pm on 20 January 2009, the husband, at his expense, arrange for his belongings and personal effects to be collected from the former matrimonial home.  The date and time of the intended collection is to be conveyed by the husband’s solicitor or the husband to the wife’s solicitors and upon 48 hours notice, the wife do all reasonable things to facilitate those arrangements.  In the event that the husband does not comply with this paragraph, all such chattels in or at the former matrimonial home may be disposed of by the wife.

7. That the former matrimonial home at W being the land described in Certificate of Title Volume … Folio … be forthwith placed on the market for sale with the wife having the sole right to have control and conduct of the sale and upon completion of the sale, the proceeds be applied as follows:

   (a)     First, to pay all costs, commissions and expenses of the sale, including the preparation of the property for sale and the disposal of any chattels, personal effects or other items in or at the former matrimonial home;

   (b)    Secondly, to discharge the mortgage and any other encumbrance affecting the former matrimonial home;

   (c)    Thirdly, the costs ordered on 29 August 2007 and such sum be adjusted against the husband’s entitlement in the ultimate property proceedings; and

   (d)    Fourthly, the balance to the wife by way of part property settlement.

8. That in the event that the husband refuses or neglects to comply with any of the orders herein in relation to the sale of the home then, upon the solicitor for the wife providing an affidavit sworn by her as to that non-compliance, a registrar of the Family Court of Australia at Melbourne execute all deeds and documents in the name of the husband and do all acts and things necessary to give validity and operation to these orders.

9. That the parties have liberty to apply to me on short notice.

10. That the husband pay the wife’s costs of and incidental to this application fixed in the sum of $4540 such sum to be paid out of the husband’s share of the property proceedings.

11. That my reasons for judgment this day be transcribed and be made available to the parties.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLF 2471 of 2006

MS AHEB

Applicant

And

MR AHEB

Respondent

REASONS FOR JUDGMENT

1. On 22 December 2008 the wife filed an application in a case, supported by an affidavit filed on the same day.  There has been no appearance by the husband today or by his counsel who appeared on that occasion or by any other legal representative.  However, it is important to note that there has been an affidavit filed by the solicitor for the husband which she swore herself.  That affidavit was filed on 24 December 2008.

2. Mr Wilson QC sent a courtesy message to my associate this morning, indicating that he had not been instructed to appear and had no further instructions from the husband.  That was to some extent corroborated by the fact that in the affidavit to which I have just referred from the solicitor for the husband, Joyce Khoo, said the following:

   My client, [Mr Aheb], who is the husband in this application, travelled to Egypt end November or early December 2008 and has informed me that he is undergoing medical treatment there and attending to ongoing litigation matters there.  He does not know when he will return to Australia.

3. She goes on to say:

   I have been corresponding with [the husband] via electronic mail and very occasionally via long-distance telephone since Egypt is nine hours behind Australia and it is difficult to match our times for correspondence via telephone. 

4. She then says:

   Unfortunately, [the husband] does not respond to my requests for instructions and I have been unable to get satisfactory instructions and details from him to mount the application to vary his Honour Murphy J's orders dated 28 November 2008.

5. She then said:

   As it stands, [the husband] has not managed to deposit further funds into my office's trust account and that fees are outstanding to my firm and to both senior and junior counsels.

6. Finally, she said:

   [The husband] has not provided our office with any clear instructions to appear at the hearing before his Honour Cronin J on 30 December 2008.

7. On 16 December 2008 at a time when the husband and wife were both represented before me, I ordered as follows:  (1) that the proposed interim application filed by either the husband or the wife in respect of matters arising out of the orders of the Honourable Murphy J be listed before me for hearing at 10 am on 30 December 2008; (2) that each party file and serve by 4 pm on 24 December 2008 any material upon which each intends to rely.

8. It is important to note that the matter had been sent to me by Murphy J on 28 November 2008.  On 16 December 2008, senior counsel for the husband sought to have me deal with the release of funds to the husband to enable him to undergo medical treatment, as well as to pay some money to his lawyers.  I have inferred on that date that everybody was very conscious of the order of Murphy J made on 28 November 2008.   His Honour on that day, apart from sending the case to me at 9 am on 16 December said as follows:

   The husband do all such things and sign all such documents as are necessary to transfer to the trust accounts of the solicitors for each of the parties the sum of $40,000 on account of legal fees for their respective clients from the balance of the funds in the Commonwealth Bank of Australia Cash -

   it actually says "case" -

   Management Account, number […] in the name of the husband and the husband be restrained from otherwise accessing such account without further order of the court. 

9. I stress and emphasise the last few words of that paragraph, that the husband was restrained from otherwise accessing the account without further order of the court. The wife alleges now that the husband has breached not only the orders of Murphy J but also those of Mushin J made on 6 November 2006. 

10. Paragraph 6 of the wife's affidavit filed in these proceedings sets out what Mushin J ordered on 6 November 2006.  It was:

    Save as herein provided, each party be restrained from otherwise dealing with or encumbering any of the assets of the parties or the assets of [A Company] Pty Ltd or interfering with or in any way seeking to alter the directorships or shareholdings or assets of any of the companies of which the parties are directors or the [A] Superannuation Fund, [A] Business Trust or [K] Pty Ltd, without the written consent of the other or pursuant to court order.

11. The wife's position therefore is that the husband is not only deliberately flouting the injunctive orders and failing to comply with the recent orders that would have enabled the wife to have access to money to pay her own legal costs but that he is arrogantly treating the court with disdain in respect of procedural orders, such as the requirement to file documents and to provide proper disclosure. 

12. Having regard to the evidence, this is a matter where I should proceed and to make orders sought by the wife on the basis that, first, the husband has had an opportunity to be heard but has chosen not to be here or to be represented; secondly, there is unchallenged evidence of the wife as to what the husband has been doing; thirdly, there is a strong inference that the husband has ignored court orders; fourthly, there is an urgency about protecting the asset pool and fifthly, the wife has patiently waited for her entitlement, as have her lawyers, and at the same time paid her obligations under the orders of the court.

13. It is therefore in my view proper to proceed in the absence of the husband.  The substantive property proceedings are part-heard before Murphy J and on any view will not be concluded until about June 2009 when his Honour returns to Melbourne.  The substantial issue between the parties is apparently about add‑backs to the property pool on the basis of the money that the husband has had access to. From what I can understand from the affidavit material, there is much conjecture about that, although the matters to which I shall refer chronologically in a moment would tend to suggest that the husband has had access to money without much regard for court orders.

14. Apart from anything else, solicitors for the husband have now produced to the solicitor for the wife a trust ledger showing that costs to them have been paid in excess of $100,000.  It is of curious concern where those moneys have come from, having regard to the injunctions and more particularly the oral application made by Mr Wilson on 16 December.  The facts that give rise to the application are underscored by an almost complete absence of disclosure.  It is asserted by counsel for the wife and it has a strong ring of reality about it that the husband has continued on his way, spending money, whilst not telling the wife anything about what he was doing with it. 

15. In August of 2008 I ordered that the husband provide proof as to the use of superannuation funds.  The superannuation amount has been valued by an expert in the substantive trial at about $500,000 but it now transpires that the husband had commuted his entitlement and received a cash sum of $242,000.  Of that sum, I am satisfied that there is about $7000 left, if that, on the basis of a statement that is now some days old.

16. The wife was also ordered by this court to pay into that same account the monthly moneys she received from rental properties, and from what I can glean from the documents, the wife has diligently done what she was ordered to do.

17. On 15 August 2008, the $242,000 from the superannuation fund was paid into the Commonwealth Bank Cash Management Account.  I can recall on 27 August counsel for the husband indicating with some reticence my suggestion about ordering disclosure in relation to the use of the superannuation funds.  That reticence did not bode well for what seems to have happened.  On 18 August there was a withdrawal from the cash management account of $10,000.  On 19 August there was a withdrawal of $30,000; on the same day, a further withdrawal of $2500. 

18. The statements tend to suggest that the husband was travelling significantly around this time, despite being unable to attend court.  His travel would also seem inconsistent with a man said to be quite ill and needing money for medical treatment.  In August, I also ordered that monthly information and statements be provided to the wife and that they be an obligation of the husband.  I am now told that the husband has not complied with that order, except for the first time on 24 December.  Whilst I will accept that the statement provided on 24 December came from the solicitors on the husband's instructions, it came with the affidavit, which tends to suggest that the husband did not even know that the solicitor was providing the information.

19. Since 3 November 2008 the husband has withdrawn from the cash management account over $167,000.  If that is so, and it is in breach of injunctions, it is a very serious issue.  In November, the husband withdrew large sums, including $65,000.  It is noticeable that a $60,000 payment was made a day or so later into the husband's solicitor's trust account.  That will be seen from exhibit W1 which is a record of the solicitor's trust account.

20. I have already set out what Murphy J ordered on 28 November.  It was quite significant that his Honour made it clear that each party was to have $40,000 but that otherwise the injunctions that were in existence were to continue.  It is quite clear from looking at the bank statement document that there was not $80,000 in the account on that very day.

21. It is important to also note that the trial of the substantive proceedings had begun on 17 November.  Both parties were present, the husband having come from Egypt.  On that very same day when the trial began, $5000 was withdrawn from the account.  Four days later on 21 November, $6000 was withdrawn and, more importantly, on 27 November, the very day before Murphy J had the telephone hearing to which I have referred, $20,000 was withdrawn and that seems to have made its way to the solicitor's trust account.

22. On 28 November the husband also withdrew two sums and these totalled $16,000.  More disconcertingly, however, on 1 December, he withdrew $50,000. 

23. There has been no explanation as to what happened to the $50,000, save that on 16 December, Mr Wilson told me that it had been paid to Aughtersons.  He said that the husband understood that he had an arrangement with Aughtersons, that although their bill was over $60,000, they would accept a lump sum payment of $50,000 and that was now a matter in dispute.  It was noticeable that Aughtersons also had caveats over all of the real properties of the parties.

24. Why the payment of $50,000 was made is not clear.  As I said, Mr Wilson said that his instructions were that his client misunderstood what Murphy J had said.  I must say I find that hard to believe and most unlikely, having regard to the fact that the order of $40,000 was quite precise.  There may be some confusion about who it was to be paid to, but why it would be $50,000 rather than $40,000 escapes me.  More importantly, on the day prior to the orders of Murphy J, the sum of $20,000 was paid into the husband's solicitor's trust account.  Meanwhile, the wife was continuing to pay the $800 per month into the same account to cover the mortgage and yet it seems that the husband keeps spending even that sum. 

25. According to Mr Mort, Murphy J was told during the trial that the real estate alone of the parties was about $2.8 million.  In addition to that sum, the wife is claiming add-backs of just under $1 million.  The husband has not paid the $40,000.  I see no prejudice to him for the former matrimonial home, which is largely unoccupied most of the time, the husband being away, being sold to protect the mortgage position.  There is a significant encumbrance on the former matrimonial home and the wife is the guarantor for that loan.  At the rate that the husband is spending the money from the cash management account, there will be insufficient funds to cover the mortgage payment and once that occurs, the parties are facing the prospect that the bank will act on the default.  More disconcertingly again, the equity I am told in the home is only about $100,000.  It seems to me that the wife should have that as a partial property settlement rather than anything else at this stage. 

26. According to the affidavit of the wife, the husband is living in the home only about 20 per cent of the time and that would certainly seem to be corroborated by some of the withdrawals from the cash management account which show substantial travel in a variety of countries. 

27. It is the wife have the use exclusively of the former matrimonial home for the purposes of the sale.  She does not desire to live there. 

28. This is a matter that falls within the provisions of s 114 of the Family Law Act 1975 (Cth) (“the Act”) which is the injunctive power.  The Full Court has consistently said that the exercise of that power is a discretionary one and the fundamental issue is whether or not it is proper to make the order. 

29. In my view, this is a case in which it is proper to use that power because of four things:  the first is that the husband has had scant regard for orders of the court; the second is that it will protect the wife's position, particularly in relation to her credit rating, and I am satisfied in that respect, the wife is on a limited income.  The third issue is that there is a limited equity and in a pool of $2 million or more, that sum is not terribly important. The fourth is that the house is more or less unused by the husband and insofar as he has any desire to retain it for the future, I see no reason why he cannot endeavour to buy it at the auction which I propose to order.

30. The problem is compounded somewhat, however, by the fact that the husband has retained all of his chattels or some of them in that home.  I propose to make an order that the wife secure the property by changing the locks and that the husband is on notice as of now that he has 21 days in which to get those chattels out and either store them, from his own point of view, or if that is not what occurs, they can be sold and the proceeds can be contributed to the pool for division between the parties.  On any view, it would seem that the chattels are not of any great note, having regard to the fact that they do not feature in the pool to be divided between the parties on the documents that I have read.

31. There is also an unresolved issue of costs.  Guest J left the issue of costs on 29 August 2007 to Bennett J but her Honour did not deal with that when her Honour dealt with the case.  Paragraph 28 of the reasons of Guest J made it clear that that was his intention.  I see no reason why that particular order should not now be paid in full, having regard to the fact that the husband seems oblivious to the wife's costs position.  Accordingly, I propose to also order that the husband pay the wife's costs and that sum be paid from the proceeds of the sale.

32. In addition to those matters, the wife today seeks an order for costs. Costs orders are covered by s 117 of the Act. It says that each party should bear their own costs. The exception to that situation is where the court finds that it is just to depart from that rule. If the court proposes to make that sort of finding, then the court must consider the matters set out in s 117(2A) of the Act.

33. This is a case in which the husband's conduct alone would justify the making of an order for costs.  I say that without having any information from the husband's side in relation to the assertions put by the wife.  It seems clear, however, that on any view, he has been using the funds without regard to the wife and certainly has not been complying with orders for the provision of information.  Those matters alone justify a departure from the rule.

34. Subsection (2A) requires me to take into account a number of matters, the first of which is the financial circumstances of each of the parties.  Notwithstanding the husband's apparent argument about impecuniosity, he seems to have little regard for spending money.  The wife, on the other hand, has limited income and is continuing to use the rent moneys to pay into the court as she was required.  More importantly, however, on any view, there is a pool in excess of $2 million to ultimately be divided.  The costs question therefore should not really be troubled by the financial circumstances of the parties.

35. I am told that neither party is in receipt of legal aid.  I have already made comments about the conduct of the husband in relation to the way he has conducted himself in these proceedings, not only in respect of the use of the funds but also in relation to compliance with procedural orders for the filing of documents. 

1. I am also obliged to take into account whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court.  I find at this stage, on the evidence that I have before me, the husband has failed to comply with the injunctive orders in relation to not using the cash management account.  I find there is no reason why I could criticise the wife in any way in respect of her conduct.

2. In this case, although the husband has not been heard in the proceedings, he has been provided natural justice and has had ample time to be prepared for these proceedings.  The solicitor for the husband indicated that she communicates with the husband via email and some almost two weeks has gone by since I made the orders and I find it hard to believe that the husband has not had ample opportunity to be in touch with his solicitors.

3. On that basis, I find that the husband has been wholly unsuccessful in these proceedings.  Accordingly, it is appropriate to make an order for costs, the quantum of which is a discretionary issue.  There is an application before me for $1850 in counsel's fees and $2691 in respect of solicitor's costs.  None of those fees seem to me to be unusual or extravagant in the circumstances and as they all drawn on the scale, it seems appropriate they be ordered.  Accordingly, I propose to make an order that the husband pay the wife's costs, fixed in the sum of $4540, which sum is to be paid from the ultimate settlement proceeds.

I certify that the preceding Thirty Eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin 

Associate: 

Date:  8 January 2009