Byrnes and Byrnes (No.2)

[2015] FCCA 3577

FEDERAL CIRCUIT COURT OF AUSTRALIA

BYRNES & BYRNES (No.2) [2015] FCCA 3577

Catchwords:
FAMILY LAW – Property – enforcement of interim property orders by wife – variation sought by husband – husband’s application dismissed.

Applicant: MS BYRNES

Respondent: MR BYRNES

File Number: SYC 7398 of 2014

Judgment of: Judge Henderson

Hearing date: 16 November 2015

Date of Last Submission: 16 November 2015

Delivered at: Sydney

Delivered on: 18 November 2015

REPRESENTATION

Counsel for the Applicant: Mr Dura

Solicitors for the Applicant: Haller & Grad Business Lawyers

Counsel for the Respondent: Mr Barry

Solicitors for the Respondent: Gordon & Barry Lawyers Pty Ltd

ORDERS

1. The husband shall pay, and continue to pay, all mortgage payments with respect to the mortgage secured over the former matrimonial home in favour of the (omitted) Bank as and when such payments fall due.

2. Both parties’ costs of this application are reserved.

IT IS NOTED that publication of this judgment under the pseudonym Byrnes & Byrnes (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 7398 of 2014

MS BYRNES

Applicant

And

MR BYRNES

Respondent

REASONS FOR JUDGMENT

1. The matter of Byrnes is an application filed by the wife seeking to enforce orders made by me on 2 July 2015. The husband resists the enforcement application and via a response he has filed seeks to, on an interim basis, transfer the former matrimonial home to the wife, with her to discharge the existing mortgage on that property. The wife resists that order.

2. Mr Dura of counsel for the applicant wife and Mr Barry, solicitor, for the respondent husband.

3. I had delivered a judgment on 2 July 2015 in relation on the wife’s application for spousal maintenance amongst other matters. In addition to the material I read at that time I have read the following updating material.

4. For the wife.

   a)Application in a case and affidavit in support filed 25 August 2015.

   b)Financial statement of 26 June 2015, which formed part of the previous hearing.

5. For the husband.

   a)Response, affidavit and financial statement filed 12 November 2015. Though the husband was served with his material in and around August 2015 or thereabouts he did not file his documents in response until, effectively, the last moment.

6. In addition I was referred to the husband’s tax returns for himself and his business, (business omitted), profit and loss and other financial matters for the 2014/2015 year. The contract between the husband, wife and maternal grandmother with the (omitted) Bank for finance with that bank to purchase the former matrimonial home and investment property. All three adults are co-borrowers in respect of those mortgages.

7. The wife’s case is that I had made orders for the husband to pay her $220 per week maintenance predicated on him continuing to pay the mortgage on the former matrimonial home, which he was doing at the time of the hearing, and the children’s expenses, which he has continued to pay. Although I did not make an order for him to pay the mortgage she submits it is clear in my judgment and I accept that this was one of the basis upon which I made the order for $220 a week to the wife. At paragraphs 103 I say:

   Currently the husband pays the mortgage on the home and school fees for the children, rates, electricity, car costs, home insurance and activities for the children, to his credit. The wife’s claim is for expenses for herself.

8. I determined the amount of money I should allow the wife in paragraphs 103 to 108. I found the wife had some $545 per week, modest but necessary needs. That she was to receive some $330 from the rental property after leasing and deducting that income from her needs gave a shortfall for her own needs of $220 a week. At paragraph 108, I say:

   This would leave the husband making up the shortfall of $220 a week. Question: can the husband afford to pay that sum? I find the husband has the capacity to pay the wife the sum of $220 per week by way of her ongoing maintenance and continue to make the payments he currently does now, including the mortgage on the former matrimonial home.

9. The wife says he has not since that date paid the mortgage and I ought enforce the orders made on that occasion by way of making an order he pay the mortgage on the former matrimonial home, outgoings and the children’s expenses. The wife has borrowed some a sum approaching $26,000 from her mother to make up the shortfall of the mortgage since my judgment was delivered.

10. The husband says, I cannot afford to pay the mortgage and what I currently pay which is expenses for me, expenses I pay for my children and $220 a week to the wife. He also asserts through Mr Barry that he was not able at the interim hearing to pay the mortgage. I note he continues, as he has always done, to pay his children’s expenses. He further asserts that it is clear on the material now and that is was clear at the time of the judgment and during the relationship that the mortgage the parties took out with the assistance of the wife’s mother was always unaffordable.

11. That he and his wife could not make the payments. He asserts that this unaffordability was known to the Court at the time of judgment as on 19 May 2015 when further orders were made concerning parenting, I noted:

    The father will be able to comply with notation 10 in the orders made 5 February 2015 after 3 June 2015.

12. Notation 10 was that he would cause the mortgage to be paid at the interest only rate, not principal and interest. Thus the husband says at the date of the judgment this was the status quo, was known to the Court, and the situation continues today.

13. However, at the interim hearing I found he did have a capacity to pay the mortgage, the outgoings he was paying, his children’s expenses, and $220 to the wife each week. Looking at the documents the husband filed then and today I see no change to his income, earning capacity or expenses from then to now which would cause me to vary the decision I made in July 2015.

14. He grosses around $500,000 from his (business omitted). He says he nets about $180,000 thereabouts, by way of income. After tax his income is less. There is some blurring of his personal and business expenses, and I make no criticism of that, but there is a blurring of those expenses, and I see no difference today from July. The wife is entitled to the benefit of the orders I made. There is no stay of the orders sought. There was no appeal from the orders made.

15. I do not see that there has been fresh evidence filed which would satisfy me that the husband’s circumstances have so changed that the decision I made in July 2015 would today be varied. Even after I have read the husband’s tax returns for himself and his company I see no difference today from what his position was in July, I see no evidence or basis today whereby I should embark upon the husband’s variation to the orders he seeks by way of his response. I find the wife has made out her case that the orders should be enforced, and those orders will be enforced by my making orders in accordance with her application in a case, which is order 3 that the husband shall continue to pay the mortgage at interest only payments with respect to the mortgage secured over the former matrimonial home in favour of (omitted) Bank as and when such payments fall due and all reasonable outgoings and expenses pertaining to the former matrimonial home and the wife’s motor vehicle.

16. The matter has been allocated a conciliation conference. I am hopeful the parties can come to a resolution and there are steps in progress to have the husband’s business valued.

17. However, I say this: the wife must look at this matter realistically and practically at the end of the day, as hard as it may be. The wife desires to buy out the husband’s interest in the home and the investment unit which she is currently managing.

18. The wife has no earning capacity at present to enable her to do that and pay out the mortgage. Much of her desire to purchase the home and the investment property is predicated on a significant value being placed on the husband’s podiatry business. That value at this stage is unknown. These are all relevant matters for each of the parties to consider at the conciliation conference.

19. In particular, given the significant delays in being able to hear a matter to finality in this court throughout Australia and in the Registry approaching 2 years I would ask that the parties seriously consider the consequences for each of them and their children of maintaining litigation in this court. It cannot be said other than that for a period of two years the husband’s financial position may change, and the orders I have made today may not be able to be carried out. I just say to each of them to think seriously because this is the state of play.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge Henderson

Date: 12 February 2016