Ciu and Nao

[2016] FamCA 1037

FAMILY COURT OF AUSTRALIA

CIU & NAO [2016] FamCA 1037

FAMILY LAW – PROPERTY – Injunctions – Where parties operate a partnership boarding house business – Where wife remained in occupation of the boarding house premises after separation – Where interim orders made by consent previously as to the ongoing conduct and management of the boarding house business – Where since interim orders the wife has failed to comply with same and unilaterally retained and disbursed income from the business – Where husband seeks that the wife vacate the property and that the property be independently managed – Where husband seeks that the wife received one half of the net monthly income from the business pending further order – Where order made for the wife to vacate the property and receive income as proposed by the husband.

Family Law Act 1975 (Cth) ss 72(1), 114

APPLICANT: Mr Ciu

RESPONDENT: Ms Nao

FILE NUMBER: PAC 2330 of 2016

DATE DELIVERED: 2 December 2016

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 14 November 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Tockar

SOLICITOR FOR THE APPLICANT: Uther Webster & Evans Pty Ltd

COUNSEL FOR THE RESPONDENT: Mr Eardley

SOLICITOR FOR THE RESPONDENT: Lavulo Lawyers

Orders

1. That orders made on 15 August 2016 be discharged.

2. That within 7 days from the date of these orders the wife vacate the property at B Street, Suburb C and that thereafter the wife remain away from the said property and not approach or enter upon the said property except in the company of a managing agent appointed by the husband.

3. That upon vacating the property at B Street, Suburb C the wife be restrained from removing from that property any items of personalty other than her clothing and personal effects except with the written consent of the husband with such writing to include SMS or email communication.

4. That the wife is hereby restrained from approaching or contacting or communicating with all current and future employees, residents and tenants of the property at B Street, Suburb C whether by letter or email or telephone text message or any other means.

5. That the wife is hereby restrained from purporting to authorise and direct any current or future residents and tenants of the property at B Street, Suburb C to pay rental income to herself or any third party nominated by her.

6. That the wife is hereby restrained from representing to any person or entity or organisation that she has authority to undertake any action or thing on behalf of the boarding house business operated at the B Street, Suburb C property without the written consent of the husband with such writing to include SMS or email communication.

7. That the wife is otherwise restrained from interfering with or attempting to interfere with the ordinary operation and course of business of the boarding house enterprise operated from the property at B Street, Suburb C.

8. That the husband is hereby authorised and directed on behalf of the husband and wife to forthwith appoint an appropriately qualified managing agent to manage the day-to-day conduct of the boarding house enterprise conducted at the property at B Street, Suburb C including:

   (a)authorising the managing agent to deposit gross rental income for the property to the agent’s trust account;

   (b)authorising the managing agent to pay from the agent’s trust account all outgoings and expenses associated with and incidental to the operation of the business and the Suburb C property including but not limited to payments in relation to agents commission, property rates, property levies, property insurances, mortgage payments, utility bills, internet and phone bills, property taxes and costs associated with preparation and lodgement of all necessary BAS and partnership returns for the business;

   (c)authorising the managing agent commencing on 6 January 2017 and thereafter on the sixth day of each and every month to pay 50 per cent of any surplus rental income after payment of the expenses referred to above in an account nominated by the wife and 50 per cent of any such surplus rental income to an account nominated by the husband provided always that any such payment to the wife shall be not less than $2,200.00 per month with any balance then remaining then to be paid to the husband with such payments to be by way of preliminary distribution of net partnership income as determined at the end of each financial year;

   (d)authorising the managing agent to provide to the wife at the close of each relevant monthly period a copy of the management statement evidencing receipts and disbursements in relation to the boarding house business conducted at and the property at B Street, Suburb C.

9. That pending further order the husband and wife are restrained from withdrawing or in any way accessing funds in National Australia Bank account #870 except by joint authority of the husband and wife.

10. That the husband provide to the wife written notice of his intention to deal with the property at D Street, Suburb E by way of sale, mortgage or lease with that notice in any event to be given not less than one month before the formal listing of the property for sale or the entry into by the husband of any further mortgage or lease in relation to the subject property and in respect of this order the wife has liberty to apply on short notice.

11. That otherwise all interim applications before the Court be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAC 2330  of 2016

Mr Ciu

Applicant

And

Ms Nao

Respondent

REASONS FOR JUDGMENT

1. The primary issue for determination between the parties to these proceedings is the question of property settlement. Interim orders are sought by both the husband and wife in relation to the boarding house business conducted by the parties in premises owned by them at B Street, Suburb C.

2. The applicant de facto husband in his application commencing proceedings filed 24 May 2016 seeks an order that the Suburb C property be transferred to him and that he thereafter indemnify the de facto wife from any liability arising from the mortgage secured over the property and otherwise each of the parties retain assets in their respective entitlement or possession.

3. The respondent de facto wife in her Response filed 20 June 2016 seeks orders relevantly that provide for an overall adjustment of assets as to 60 per cent to her and 40 per cent to the husband and that to effect such entitlement the husband to transfer to her the property at B Street, Suburb C and pay to her any necessary cash adjustment.

4. The present interim proceedings arise from the husband’s Amended Application in a Case filed on 6 October 2016. In that Amended Application he seeks orders that provide for:

   a)orders made on 15 August 2015 by consent be discharged;

   b)that within 7 days the wife vacate the property at B Street, Suburb C and that thereafter the husband have sole use and occupation of the property to her exclusion; and

   c)that the wife relevantly be restrained from entering upon or approaching the property and from approaching or contacting any tenants of the property (a boarding house) and from representing to any person or entity that she has any authority to take any action in relation to the boarding house operated from the said property; and

   d)that the husband be appointed as trustee for the purposes of the ongoing management of the boarding house business conducted at B Street, Suburb C.

5. At hearing the husband sought orders (Exh “A”) that provided in summary:

   a)that the wife vacates the Suburb C property and that the husband have exclusive occupation thereof;

   b)that F Agents be confirmed as managing agent for the property;

   c)that the husband and wife do all things necessary to authorise the managing agent to manage the property including instructions that gross rental income for the property be paid into the trust account of F Agents;

   d)that commencing 6 December 2016 and thereafter each month the managing agent pay 50 per cent of any surplus rental income after payment of all outgoings and expenses for the property to the wife to an account nominated by her and the other 50 per cent to the husband to an account nominated by him;

   e)that in the event that the wife’s 50 per cent share of net rental income is less than that $2,200.00 for a period of three months after the date that the wife vacates the Suburb C property the husband is to pay any shortfall into the account nominated by the wife;

   f)that upon the wife vacating the Suburb C property the husband pay her rental bond for alternative accommodation up to a maximum of $1,400.00 and that he pay the wife’s reasonable cost of rental accommodation to a maximum of $350.00 per week for a period of three months from the date that the wife vacates the Suburb C property.

6. The wife for her part in her Amended Response filed 4 November 2016 to the husband’s Application in a Case seeks orders that provide for:

   a)the wife to have occupation of the separate one-bedroom residential unit with storage at the Suburb C property to the exclusion of the husband;

   b)that she be permitted to maintain a caveat lodged by her in respect of the property at D Street, Suburb E and that the husband be restrained from taking any steps to remove that caveat;

   c)that the husband forthwith arrange for G Agents to manage the property at B Street, Suburb C;

   d)that the husband and wife execute the authorities necessary for the wife to be paid from the rental account for the B Street, Suburb C property:

   i)the sum of $6,501.00 for each of the months of September, October and November 2016;

   ii)from December 2016 and each month thereafter $2,200.00.

   e)that within seven days of the provision of an invoice to the husband he pay the wife’s medical account to the sum of $1,527.15;

   f)that within seven days the husband pay into the wife’s superannuation fund $27,457.71;

   g)that within seven days the husband pay to the wife wages of $91,231.00:

   h)that within 28 days the husband do all things necessary to transfer to the wife the Japanese motor vehicle registration number …;

   i)that within 28 days the wife do all things necessary to transfer to the husband German motor vehicle registration number …;

   j)that interim orders made 15 August 2016 be discharged.

7. At interim hearing the wife in summary sought orders ( Exh “B”) that would provide:

   a)that the wife have occupation of the separate one-bedroom residential unit with storage space at the Suburb C property;

   b)that the wife be permitted to maintain her caveat registered against the title of the husband’s Suburb E property;

   c)that the husband forthwith arrange for G Agents to manage the Suburb C property;

   d)that the husband pay to her $4,334.00 being payments provided for in orders made 15 August 2016 for the months of September and October 2016 and that thereafter the husband pay to the wife $2,167.00 per month;

   e)that the wife be paid $6,501.00 being three months payments as provided for in orders made on 15 August 2016;

   f)that interim orders made 15 August 2016 be discharged.

8. The husband relied upon his affidavit filed 24 May 2016 in part and his affidavit filed 6 October 2016.

9. The wife relied upon her affidavit filed 20 June 2016 and her further affidavit filed 4 November 2016.

Context

1. The husband was born in China and is presently 53 years of age. The wife is presently 54 years of age.

2. The husband asserts that the parties were in a relationship from 2006 until 2008 at which time the wife returned to China. The husband and wife subsequently renewed their relationship in 2009 and commenced residing together in March 2009 in a property owned by the husband at Suburb I in Sydney.

3. The wife says that she was in a relationship with the husband from about August 2005 with no period of separation save for a period from September 2008 to February 2009 when she was in China for family reasons.

4. The Suburb I property was sold in 2014 and the parties moved into the property at B Street, Suburb C.

5. The parties separated in mid-October 2015. The husband moved out of the Suburb C property on 5 November 2015, moving to separate rental accommodation. The wife remained in occupation of the property.

6. The husband says that subsequent to separation he attended at the Suburb C property each day to ensure its proper maintenance and management. This continued until April 2016 when he was refused access to the property.

7. The wife has retained the Suburb C rental income.

The husband’s evidence

1. The husband complains that subsequent to final separation in November 2015 the wife has:

   a)changed the locks on the property so as to prevent his access and has directed payment of rental monies from the tenants to her in cash from which she has attended to payment of the mortgage loan and other outgoings;

   b)withdrawn funds from the joint operating account that were otherwise set aside for expenses relating to the Suburb C property;

   c)travelled overseas in December 2015/January 2016 without notice to him, allegedly in breach of “relevant regulations”;

   d)failed to pay all outgoings in respect of the Suburb C property with the shortfall having to be met by him;

   e)prevented the husband having access to the property.

2. The wife, through her solicitors, represented that the rental income for the Suburb C property as at late March 2016 was $2,677.00 each week. The husband refutes this contention and he asserts that the rental income is $3,710.00 per week.

3. At the commencement of the parties cohabitation the husband asserts that he was the owner of the following properties:

   a)J Street, Suburb I;

   b)50 per cent interest in K Street, Suburb L;

   c)one third interest in M Street, Suburb N;

   d)D Street, Suburb E.

4. Otherwise the husband says that he had a company, a small stock portfolio, about $25,000.00 in US currency and superannuation of about $17,000.00.

5. In about 2006 he received an inheritance from his father of about $500,000.00. These funds were used to purchase the Suburb C property and its subsequent renovations.

6. The husband says that to the best of his knowledge the wife had two properties in City O, China valued at about $2 million and stock portfolio valued at about $400,000.00. Her income he says was comprised at the time of cohabitation of Chinese superannuation payments of $625.00 per month and rental income from her two City O properties.

7. The husband says that subsequent to cohabitation he provided funds to the wife by way of salary from his company, rental income from his Suburb E property and various cash sums to facilitate her overseas travel or otherwise as requested.

The Suburb C Property:

1. The Suburb C property was purchased in late November 2009 in the joint names of the parties. The property was purchased for $1.55 million with the purchase price comprising $155,000.00 from the husband’s company, $200,000.00 from the husband’s ANZ account and a mortgage advance from the National Australia Bank of $1.2 million. Stamp duty to the purchase was borrowed from a third party and later paid back by the husband.

2. Subsequent to the purchase of the Suburb C property the husband undertook extensive renovations of the property. When purchased the property was an old nursing home and the renovations converted the property into a multi-room boarding house. Renovations were undertaken over a period of years but the property was partially habitable and earning some income by mid-2010. The husband says the property was certified as a boarding house in 2012.

3. Significant funds were expended by the husband in and about the renovations to the property in addition to his own work. Subsequent to completion of the property in 2013 he has undertaken the day-to-day maintenance of the property.

4. The husband says that during their cohabitation the wife did not work.

5. In December 2014 the husband sold his Suburb I property for $1.03 million. The net proceeds of sale of about $750,000.00 were applied in reduction of the mortgage secured over the Suburb C property.

Orders 15 August 2016:

1. Orders were made by consent on 15 August 2016 that in summary provided:

   a)that the husband nominate two agents to act in respect to the management of the B Street, Suburb C property;

   b)that the wife select one of the nominated agents;

   c)that in default of the wife selecting an agent then the husband select one of the agents nominated by him;

   d)that by 6 September 2016 the husband and wife do all things necessary to appoint the selected agent to manage the Suburb C property as and from that date and sign all necessary documents to facilitate the agents management of the property including instructions that net rent after payment of agents commission, rates and insurances be paid into the joint National Australia Bank account #870;

   e)that the husband and wife execute an authority directed to the National Australia Bank to facilitate a payment of $2,167.00 per month for a period of three months to the wife from account #870;

   f)that otherwise the husband and wife be restrained from withdrawing any funds from the rental account pending further order or agreement in writing;

   g)that the wife do all things necessary to cooperate with the managing agent and that the wife pay all outgoings in respect of the Suburb C property up to and including 6 September 2016 with the balance of rent collected by the wife to be paid to account #870 and that otherwise the wife do all things necessary to ensure the ongoing operation of the Suburb C property including various day to day tasks and cleaning provided that if she vacates the Suburb C property then the husband will attend to those tasks;

   h)that in default of either party signing documents necessary to implement the orders that a Registrar of the Family Court be authorised to do so.

2. On 5 September 2016 the wife selected through her solicitors F Agents to manage the Suburb C property. The wife delayed in the signing of necessary agency documents and on 15 September 2016 the necessary agency documents were signed on behalf of the wife by the Registrar.

3. The husband thereafter sought particulars as to the wife’s compliance with orders as to the disposition of rental monies and received no response.

4. The husband complains that the wife has refused to pay outgoings for the Suburb C property, refused to cooperate with the managing agent, refused to grant access to the Suburb C property to the managing agent, failed to deposit rental payments to the required account and refused or failed to undertake day-to-day tasks in relation to the property.

5. On 23 September 2016 the husband’s solicitors informed the wife’s solicitors that in default of her complying with her obligations under the orders the husband would seek an order that she vacate the property.

6. The husband was informed on 26 September 2016 that the managing agent was no longer willing to manage the property by reason of the wife’s conduct. The managing agent terminated the agency agreement on 27 September 2016.

1. The husband asserts that the wife has failed to account for rental monies received by her and, in particular, has failed to make mortgage payments that are due in the sum of $6,278.00 per month, failed to pay outgoings in relation to the property and has purported to pay herself a base salary of $2,637.00 per week. The husband asserts that since November 2015 the wife has retained almost $100,000.00 approximately of rental income.

The wife’s evidence

1. The wife makes no assertion that she contributed to the purchase of the Suburb C property although she asserts that she was significantly involved in the renovation of the property and after its completion its day-to-day management.

2. The wife makes no assertion that any of her monies were expended in and about the renovation of the property. The wife asserts various non-financial contributions to the husband’s assets and business from about 2005 but does not assert that she made any financial contribution whatsoever.

3. The wife acknowledges that she nominated the managing agent as asserted by the husband. Thereafter, there was a delay in signing the agency agreement by her.

4. The wife asserts that since separation she has met her expenses solely through the income derived from the property at B Street, Suburb C. She gives no evidence as to how she has applied her income as asserted by the husband.

5. The wife asserts that monies received by her from the occupants of the Suburb C property have been expended by her in payment of mortgage payments, Council rates, water rates, Public liability insurance, repairs and maintenance, gas bills, gardening, cleaning and advertising expenses and other periodic fees.

6. She has provided no documents asserting that she has attended to these payments nor has she attended to banking funds as required by orders made previously.

7. The wife says that whilst overseas in December 2014 the husband without her knowledge sold the Suburb I property in which she and the husband were residing. She received no funds from the sale and thereafter has lived in part of the Suburb C property.

8. The wife has ignored her obligations under the orders made on 15 August 2016.

9. In March 2015 when in China the wife sold one of her City O properties for about $1 million. The proceeds of sale were deposited by her into a share trading account in the name of “my friend who lives in China”. Her Financial Statement filed 20 June 2016 asserts her shares now have a value of $675,000.00.

10. The wife asserts that the other property is held by her as trustee for her niece.

Discussion

1. The Court has power under s 114 of the Family Law Act 1975 to make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate including an injunction in relation to the property of a party to the marriage or an injunction relating to the use or occupancy of the matrimonial home.

2. The husband’s application seeks to regularise circumstances that were sought to be addressed by orders made by consent on 15 August 2016.

3. His evidence is that he has endeavoured to comply with the orders and that in all of the circumstances the wife has evidenced her disregard for her obligations under the orders particularly as to the external management of the boarding house at B Street, Suburb C.

4. The wife for her part has shown a cavalier disregard for her obligations imposed by orders made by consent on 15 August 2016.

5. The wife adduces no evidence that would justify payments to her as sought in her Amended Response to the husband’s application in circumstances where she has had control of the total rental income for the property since separation and has made payments at her sole discretion.

6. The wife is entitled to 50 per cent of the net income from the Suburb C property by reason of her underlying ownership of that property and the ongoing partnership of herself and the husband. The husband proposes that she continue to receive 50 per cent of that net rental income.

7. She has provided no objective evidence of any incapacity or any other disentitling circumstances that would prevent her from obtaining gainful employment. Otherwise, the wife has significant capital assets available to her.

8. It is not readily apparent as to whether the wife frames her relief for periodic payments by way of spousal maintenance or an order addressed to the ongoing partnership income from the Suburb C property. In the event that it is asserted that she seeks funds by way of spousal maintenance, she has not in all the circumstances overcome the threshold issue of establishing that she is unable to support herself adequately as contemplated by s 72(1) of the Act. She is, however, entitled to an accounting for her share of the ongoing net partnership income that will be brought to account in partnership accounts at the end of each financial year.

9. The wife has adduced no evidence that would support any order for payment of her medical account as contended. The husband in essence proposes that she receive 50 per cent of the net rental income from the Suburb C property that will not fall below $2,200.00 per month at lease for the first three months. Otherwise, he proposes that he provide rental bond monies and monies on account of rent for the wife for a closed period.

10. The wife does not contend that she has a “caveatable interest” in respect to the husband’s property at Suburb E. Yet she has purported to register a caveat against the title to that property. She has adduced no evidence that there is any intention by the husband to dispose of that property that would be sufficient to facilitate there being an injunction as to him dealing with that property. The husband should remain at liberty to seek the lapsing of that caveat.

11. Yet, in the circumstances, it is proper that there be an order that he provide to the wife reasonable notice of any intention to sell, mortgage or otherwise deal with that property.

12. In the circumstances, it is proper to make orders that facilitate the husband implementing the intention of the 15 August 2016 orders without further interference from the wife and obligating the husband to provide ongoing payments to the wife as proposed by him.

13. In circumstances where the wife’s ongoing occupation of the Suburb C property will clearly lead to conflict and issues and where she has shown an unwillingness to abide by court orders, it is appropriate that she be required to vacate that property.

14. Orders will be made accordingly.

I certify that the preceding fifty nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 2 December 2016.

Associate: 

Date:  2 December 2016