DAILY & DAILY

[2019] FamCA 996

FAMILY COURT OF AUSTRALIA

DAILY & DAILY [2019] FamCA 996

FAMILY LAW – PROPERTY – Interim – Where the wife seeks to stay the child support assessment pending the outcome of her departure application – Where the wife seeks injunctions against the husband’s use of settlement sums received from his former employer – Where there is sufficient equity in the former matrimonial home to satisfy the wife’s claim, if successful – Orders

Child Support (Registration and Collection) Act 1988 (Cth) s 111C, 111C(3)

APPLICANT: Mr Daily

RESPONDENT: Ms Daily

FILE NUMBER: ADC 4606 of 2018

DATE DELIVERED: 20 December 2019

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 13 December 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Jordan

SOLICITOR FOR THE APPLICANT: Jordan & Fowler Family Lawyers

COUNSEL FOR THE RESPONDENT: Ms Pyke QC

SOLICITOR FOR THE RESPONDENT: Norman Waterhouse Lawyers

UPON NOTING that the wife will pay one half of the current mortgage instalments secured over the property situate at B Street, Suburb C to the Westpac Banking Corporation fixed in the amount of THREE THOUSAND TWO HUNDRED AND NINETY SEVEN DOLLARS ($3,297) and payable on the 15^th day of each month:

IT IS ORDERED

1. That the parties will do all things necessary to cause the regular deduction from the joint Westpac Offset Account for such sum as may be required to pay each monthly mortgage instalment in full.

2. That pursuant to s 111C of the Child Support (Registration and Collection) Act 1988 (as amended) (Cth) the operation of all child support assessments payable by Ms Daily for and on behalf of X born … 2006 and Y born … 2009 be stayed pending determination of the application made by her for departure from the administrative assessment of child support.

3. That all interim proceedings 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 Daily & Daily 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 ADELAIDE

FILE NUMBER: ADC 4606 of 2018

Mr Daily

Applicant

And

Ms Daily

Respondent

REASONS FOR JUDGMENT

Introduction

1. By Further Amended Response filed 12 December 2019 Ms Daily (“the wife”) seeks by way of financial orders that there be a declaration pursuant to s 90G(1)(b) of the Family Law Act 1975 (Cth) (“the Act”) that the Binding Financial Agreement made between the parties on 21 July 2005 is either not binding or be set aside pursuant to s 90K(1)(d) and/or 90K(1)(b) and/or 90K(1)(e).

2. If the wife is successful she thereafter seeks orders by way of property settlement, spousal maintenance and a departure from the administrative assessment of child support for X born in 2006 and Y born in 2009 (“the children”) pursuant to ss 117 and 118 of the Child Support (Assessment) Act 1989 (Cth).

3. The husband opposes the orders sought by the wife and maintains that save as to child support the Court does not have jurisdiction to hear and determine the wife’s application for settlement of property.

4. The final applications of the parties have been listed for hearing on 30 March 2020.

5. Notwithstanding the trial listing there are outstanding interim applications in respect of paragraph 4 of the husband’s Application in a Case filed 23 October 2019 and paragraphs 1, 2 and 3 of the wife’s Amended Response filed 11 December 2019.

The husband’s application

1. The parties are the joint registered proprietors of the former matrimonial home situate at B Street, Suburb C, South Australia (“the Suburb C property”). The wife currently has sole use and occupation of the Suburb C property and pursuant to order 5 of orders made 8 April 2019 the wife is required to pay all reasonable outgoings (noting any reduced mortgage repayment).

2. The order was predicated upon the parties using their best endeavours to reduce the current mortgage repayments to the minimum amount as may be required by the bank. It is agreed that the efforts of the parties to seek forbearance by the bank was unsuccessful.

3. The current mortgage instalments to Westpac is fixed in the amount of $3,297 to be paid on the 15^th day of each month.

4. It appears that the wife has not paid the full amount of the instalment but rather has opted to pay one half. In her affidavit filed 19 November 2019 the wife confirms that she has paid half of the mortgage instalments from her income and:-

   [I]n anticipation of the Bank then deducting the balance of the mortgage payments from the joint mortgage offset account and in accordance with my discussions with the Bank…

5. The shortfall paid by the husband now stands in the sum of $11,250 as at 15 November 2019.

6. The wife does not consider that she has the financial ability to maintain the mortgage at its current level.

7. The parties have agreed that the Suburb C property is to be sold. It is currently on the market for sale and was passed in at auction on 7 December 2019 with the highest bid of $1,285,000 falling short of the agreed reserve price of $1,350,000. The property continues to be advertised for sale and the parties remain hopeful of a timely sale and settlement.

8. Queen’s Counsel for the wife highlights that the order requiring the wife to pay all reasonable outgoings does not quantify the extent of the wife’s obligation to pay the mortgage instalments and by reference to [43] and [44] of her Affidavit filed 19 November 2019 the wife expected that the bank would agree to a reduction of the monthly mortgage payments.

9. In summary, the wife is prepared to pay one half of the mortgage repayments but no more.

10. The husband’s solicitor conceded that at this time the husband’s concern is to seek reimbursement of the money that he has paid to maintain the full mortgage payment. There is a question as to the extent of the Court’s jurisdiction to consider an order that a mortgage be paid but in particular that the wife be required to reimburse the husband a specific amount.

11. If the Court does not set aside the Binding Financial Agreement or declare that it is not binding then there is limited jurisdiction to hear ancillary disputes.

12. Whilst I consider I have jurisdiction to make orders that would preserve the property pending the determination as to the status of the Binding Financial Agreement, I do not consider that this would extend to reimbursement.

13. I propose to order that the husband shall be at liberty to contribute up to one half of the mortgage payments from the money held in the Westpac Mortgage Offset account in the joint names of the husband and the wife.

14. The wife’s sole use and occupation of the home is pursuant to s 114(1) of the Act. If the wife does not maintain her contribution to the mortgage then in the absence of a timely sale, consideration may need to be given to the parties exploring whether the Suburb C property should be the subject of tenancy first offered to the wife and if not taken up then the home could be placed on the open rental market.

The wife’s application

1. The wife seeks an order pursuant to s 111C of the Child Support (Registration & Collection) Act 1988 (Cth) (“the CSRC Act”) that the operation of all child support assessments payable by the wife for an on behalf of the children be stayed pending determination of the wife’s departure application.

2. The wife received advice on 3 October 2019 that the Department of Human Services had assessed the husband’s child support obligation in the sum of $1,115 per month. A further letter dated 3 October 2019 advised that the Department had accepted the husband’s estimate of his income for the period 30 September 2019 to 22 December 2020 such that the wife’s entitlement to child support was in the sum of nil dollars per month.

3. The child support assessment based upon the husband’s income was predicated upon his estimate of his income being nil dollars with the wife’s provisional income being set at $50,000 resulting in a child support obligation in favour of the husband at the rate of $275.67 per month.

4. The wife’s application is to be seen against the background of the husband’s employment which included a remuneration package of $345,000 per annum inclusive of base salary and superannuation contribution.

5. The husband’s employment was terminated and following litigation he received a settlement which included a damages payment of $250,000 for pain and suffering, $70,000 as a lump sum in consideration of the husband not undertaking work for a period of six months and a further balance of $180,000 as an employment termination payment.

6. Whilst there is some uncertainty as to the quantum of the components of the husband’s termination settlement with his employer, the wife considers that the husband is likely to return to employment and given his gross income in the 2017 financial year was $947,433 and in 2018 was $350,000, it is likely that any employment would again result in the husband having a child support liability in favour of the wife.

7. The husband highlights that the wife is working full time as a police officer and whilst she has not filed a recent financial statement her annual salary is somewhere between $84,000 and $97,000 per annum.

8. The husband does not consider that the payment of his claim by his former employer should be considered as income and therefore it is not relevant to the assessment of child support.

9. Obviously, the consideration of a departure application brings into account the financial circumstances of each of the parties.

10. Section 111C(3) of the CSRC Act provides that:-

    Pending the hearing and final determination of the proceeding, the court may make such orders as the court considers appropriate staying or otherwise affecting the operation or implementation of the Assessment Act and this Act if the court considers that it is desirable to do so, taking into account the interests of the persons who may be affected by the outcome of the proceedings.

11. The financial circumstances of the parties are not yet determined.

12. The wife has a current application for departure from the administrative assessment which if successful would seek that the husband pay child support in as yet an undefined amount.

13. The husband does not provide any information as to his future employment intentions but I am satisfied that there is a live issue between the parties and taking into account the history and the dispute as to whether the settlement proceeds received by the husband following the termination of his employment should be brought to account for the purposes of determining a child support assessment; I consider there is merit in the wife’s application and propose to make the order staying the operation of all child support assessment.

14. The wife seeks orders that the husband be restrained from giving away, assigning or otherwise disposing of his interest in any savings or investment accounts, D Family Trust pursuant to a Deed of Release dated 16 August 2019 and the settlement proceeds received by the husband following his employment termination.

15. By way of final orders, if the wife is successful in setting aside the Binding Financial Agreement or in obtaining a declaration that the agreement is not binding, she seeks a settlement sum of $898,619 together with a superannuation split from the husband’s splittable interest in the Australian Superannuation Fund of $351,193.

16. The wife acknowledges that the husband has paid her the sum of $250,000. There is some argument as to whether the settlement sum the wife seeks is in addition to the monies she has already received or whether she has received a part payment.

17. The equity in the Suburb C property is substantial and likely to equal the amount of the settlement sum sought by the wife.

18. The property is in the joint names of the parties and accordingly the net proceeds of sale cannot be disbursed without their joint agreement. The husband has flagged his consent to the net proceeds of sale being invested pending the resolution and final determination of the proceedings.

19. In those circumstances I consider that the purpose of an interim injunction is to maintain things as they are and to protect the claims that the parties may have to substantive relief.

20. The applicant seeking an injunctive order bears the onus of satisfying the Court that the circumstances justify the making of that order.

21. The Court must be satisfied that it just and convenient to grant such an injunction or make an interlocutory order. That requires the assessment of the risks involved and in particular that the applicant must establish that a real risk of assets being disposed of exists.

22. In considering whether there is serious issue to be tried, the Court must consider that the balance of convenience supports the making of an order.

23. An order by way of injunction must not be exercised lightly.

24. There is no utility in the breadth of an injunction extending beyond that which is reasonably required to satisfy the wife’s claim.

Conclusion

1. Accordingly, I do not consider that the injunction sought by the wife is necessary to preserve the property of the parties.

2. I make orders as appear at the commencement of these reasons.

I certify that the preceding forty five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 20 December 2019.

Associate:

Date: 20 December 2019