FARLING & ALEXOPOULOS (No.2)

[2018] FCCA 4041

FEDERAL CIRCUIT COURT OF AUSTRALIA

FARLING & ALEXOPOULOS (No.2) [2018] FCCA 4041

Catchwords:
FAMILY LAW – Property – interim hearing – where the husband seeks the sale of the former matrimonial home.

Legislation:

Family Law Act 1975 (Cth)

Applicant: MR FARLING

Respondent: MS ALEXOPOULOS

File Number: SYC 250 of 2018

Judgment of: Judge Boyle

Hearing date: 5 October 2018

Date of Last Submission: 21 November 2018

Delivered at: Sydney

Delivered on: 22 November 2018

REPRESENTATION

Counsel for the Applicant: Ms Kennedy

Solicitors for the Applicant: Blumberg Family Lawyers

Counsel for the Respondent: Mr Stapleton

Solicitors for the Respondent: Walter & Elliott Family Lawyers

THE COURT ORDERS THAT:

1. The matter is listed for mention on 29 January 2019 at 9:30am.

2. The husband’s application in a case filed 16 August 2018 is dismissed.

3. The wife shall file written submissions in relation to costs within 7 days.

4. The husband shall file written submissions in relation to costs 7 days thereafter.

5. Within 7 days, the parties shall approach the President of the Real Estate Institute of NSW to appoint a joint valuer of the property at B Street, Suburb C, NSW. The costs of the valuer shall be shared equally by the parties.

6. Within 7 days, the parties shall approach the President of the Real Estate Institute of Queensland to appoint a joint valuer of the property at D Street, Suburb E, City F, Queensland. The costs of the valuer shall be shared equally by the parties.

7. Within 14 days, the wife shall provide disclosure in relation to the Business.

8. The husband shall file a Form 6, Superannuation Information Request Form in relation to his Super Fund G within 14 days.

9. Within 14 days the parties shall agree on a valuer in relation to the Greek property in which the wife has an interest.

10. Within 14 days the wife shall provide to the husband a copy of the certificate of title of the Greek property and documents in relation to the rental income of the Greek property.

11. The parties shall file a joint balance sheet by 25 January 2019.

IT IS NOTED that publication of this judgment under the pseudonym Farling & Alexopoulos (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 250 of 2018

MR FARLING

Applicant

And

MS ALEXOPOULOS

Respondent

REASONS FOR JUDGMENT

(Delivered Ex Tempore)

1. I have before me an interim application in a case filed by the husband on 16 August 2018, which seeks that orders 7 and 8 of the orders made 21 March 2018 be set aside.  Those orders require that the husband pay 50 per cent of the following: the mortgage payments, the council rates, home and contents insurance, other outgoings on the property.  He was also ordered to pay spouse maintenance of $300 per week.

2. In addition to setting aside those orders, the husband seeks the sale of the former matrimonial home.  Various orders are sought around the sale of the property including that once the usual expenses are paid out, each of the parties receive $100,000 from the proceeds. 

3. The wife seeks that the application in a case be dismissed, and orders for costs. In the alternate, she seeks that the property at D Street, Suburb E in City F, Queensland, be sold.  The parties would then each receive from the proceeds of sale $25,000.  She also seeks to vary the order for spouse maintenance to $744 per week.

4. The wife’s case was argued on the basis of the husband’s application being dismissed.  There was some argument with respect to the sale of the Queensland property.  Increase of spouse maintenance was not pressed in any serious way, or contended for in submissions. 

5. The parties have each filed case outline documents, and an extraordinary amount of material well outside the practice direction for interim proceedings. 

6. At the time of the interim hearing in October 2018, the husband was represented.  At the conclusion of the interim hearing counsel for the husband indicated that there were further short submissions he wished to make, and tender further documents.  Directions were made for that to occur by 9 October 2018, and for the wife to have an opportunity to respond by 11 October 2018.  The matter was relisted on 12 October because material provided was in excess of what had been intended.  It was adjourned for further brief 30 minute submissions, which time limit was exceeded. 

7. In the previous orders, the husband was directed to disclose the H Bank accounts in his name held in Country J, by 17 October 2018. The husband has not complied with disclosure.  Instead, he filed an affidavit on 20 November annexing various documents, including disclosure with respect to the H Bank account.  This was clearly outside the timeframes permitted. 

8. Pursuant to the orders of 19 March 2018, the husband has been paying $300 per week by way of spouse maintenance, and $350 per week by way of contributions to the cost of the former matrimonial home. It is argued by the husband that this is unsustainable for both parties. 

9. The primary asset of the parties is the former matrimonial home.  There is substantial equity in the property, which is subject to a mortgage of $590,000.  The husband argues that neither party can afford to buy the other out, and that it is appropriate for the property to be sold on an interim basis.

10. I note that on a final basis the wife seeks orders for effectively 70 per cent of the pool.  A payment to the husband would be required.  The City F property has an estimated value of between $200,000 and $250,000.  I understand that the husband’s elderly uncle resides there.  The sale of that property would attract capital gains tax.  I do not have before me a calculation of the likely amount of capital gains tax.  I expect it would be a reasonably significant amount, given the property was purchased for $70,000 many years ago.  The husband argues that sale of that property would provide minimal benefit to the parties given the capital gains tax likely to be payable. 

11. The wife has been critical of the husband’s failure to repatriate to Australia funds contained in what is described as the Country J Provident Fund.  Those funds arose from a period when the husband was employed in Country J from 2013 to 2015.  The Fund is superannuation accumulated over that period.  The background to this issue was provided in the judgment of 19 March 2018, and I do not propose reiterating the issues. There is an ongoing issue about what amount is in the Fund, how it can be repatriated to Australia, and what the costs of doing so are. 

12. The evidence on this is unclear.  It seems there would be tax payable, which may well be both in Country J, and in Australia.  The husband understands that there would be a cost of some $2,000 for the funds to be repatriated to Australia.  The wife’s best guess, as she puts it, is that the fund is $140,000 gross.  Regardless of these matters it is clear that there is a sum of money available in circumstances where the husband says there is a paucity of funds, and he is stretched to the limit.  It may provide funds in the order of $50,000 for each of the parties. 

13. The material discloses that the husband received financial assistance from his sister to meet legal fees in the amount of $35,250.  There was a loan agreement entered into that required payment of $1,000 per month, with interest.  The husband received a redundancy of $36,225, and utilised those funds, without reference to the wife, to pay out the loan to his sister. 

14. There is no explanation from the husband why, when funds were available during the course of this year, a portion of that money was not used to repatriate the funds from Country J.  The husband’s financial statement on 14 March 2018, disclosed income of $3,557.  His current gross income on the amended financial statement filed 27 September 2018 is $4,392. 

15. Looking at the two financial statements, the husband sets out an increase in his total expenses from $3,446 to $4,944.  He has had an increase in his rent from $300 per week, which was for a room in a friend’s home, to $590 per week for independent accommodation. 

16. In order to modify a spouse maintenance order pursuant to section 83, the court may discharge an order, or suspend the operation in whole or in part, or revive in whole or in part, or increase or decrease any amount that has been ordered subject to subsection (2).  Subsection (2) makes it clear that the court should not make an order that increases or decreases the amount ordered to be paid by way of a spouse maintenance order unless it is satisfied that since the order was made, the circumstances for the party whose benefit the order was made has so changed, or the circumstances for the party liable to make the payments has so changed, as to justify the court so doing. 

17. It is relevant to consider then the husband’s financial position.  His gross wage has increased by $835 per week, and his rental costs have increased by $290 per week.  His affidavit and amended financial statement do not support significant change to his circumstances that would make it appropriate to vary the order that has been made.  It is for the husband to make out his case and, in my view, he has not done so.  This is particularly so in circumstances where orders were made on 21 March 2018 with respect to the Country J Provident Fund, and he has not complied with the orders. 

18. The husband has received since the orders the redundancy payment I have referred to.  No part of those funds was used to comply with requirements to the orders.  The credit card statements[1] reveal regular payments made by the husband, and that he is meeting expenses.  His submission that there is no buffer, or that these are stretched to the limit are not supported by the evidence.  I do not propose varying the spouse maintenance order pursuant to section 83. 

    [1] Exhibit W4

19. Both parties complain about disclosure by the other.  Firstly, with respect to the H Bank Country J documents, the husband has not explained why the order previously made was not complied with.  Nor did he explain what he had done now to be able to produce the documents, when he has previously sworn on 27 September 2018 that he would need to personally go to Country J to obtain those documents.  He has not travelled to Country J.  He was able to have the documents emailed to him.  It is concerning that the husband is prepared to swear to matters which are on any view incorrect. 

20. The husband raises an argument about the wife’s lack of disclosure, in particular with respect to records produced by the K Bank.  He complains that the documents provided by her are not recognisably a bank statement.  Therefore she is not in compliance with her requirements for disclosure.

21. There seemed to be some suggestion from the husband that there was something untoward about the documents produced by her.  Her evidence is that she downloaded the documents from the K Bank website, and provide those to the husband.  She has not been provided by the bank with statements per se. 

22. Neither party provided any document that would allow me to make any determination as to whether the wife had complied or not complied with her disclosure requirements.  All I can do is simply note that she is under an ongoing obligation to comply with disclosure, and that bank statements should be provided to the husband if those are available.  One would expect in an ordinary banking situation statements would be available.  The fact that those documents might be in Greek is neither here nor there.  If what she is doing is all that she can from the website, then she may need to provide affidavit evidence to that effect if the issue continues to be pressed.

23. There is a further issue about the wife failing to provide documents to the husband with respect to a business that she previously conducted with her sister.  Both were directors of the business.  The wife resigned in 2016.  I am told that she received no income.  None of that makes any difference to her obligation to comply with disclosure.  She should be providing to the husband whatever documents she has up to the date of her resignation as director, that make clear the financial position of that entity.   

24. The husband raised issue about the wife’s trip to Greece in 2018.  The wife submitted that the trip was funded by her sister.  It appears there has been money spent by her in the sum of $3,000.  Again, the wife is required to provide to the husband ongoing disclosure and the costs of a trip expended whilst in receipt of spouse maintenance clearly need to be disclosed. 

25. I draw both party’s attention to their ongoing obligations.  My concern is that the party’s preoccupation with listing matters, and arguing here in court is distracting from the larger issue such as settling a balance sheet, conducting a mediation, and seeing what they can do to resolve this matter. 

26. With respect to the husband’s application for the sale of the former matrimonial home, the wife and son reside in that property.  The total of the mortgage is $546 per week. There are rates and expenses additional of some $92 per week, so a total of $638 per week.  The husband is paying $590 per week for rent. The wife would no doubt be required to rent accommodation at similar expense for herself and X were the house to be sold. 

27. The husband has been required pursuant to orders since March 2018 to repatriate the Country J Provident Funds, and has not done so. It is unusual to come to court requiring an interim sale of the home on the basis that he is cash strapped, when a fund is available. 

28. I accept the husband’s argument that a sale of the City F property, and requirement for payment of capital gains tax, would be unlikely to assist the parties financially. 

29. The wife has made submissions and provided evidence of options available which would arguably permit her to retain the former matrimonial home.  Those are loans offered to her firstly by her sister, and further by her friend Ms L, both of whom are on affidavit.  The wife argues that there are a number of ways in which she could improve her position, or be able to buy the husband out.

30. An issue arose over whether the wife may be able to assist her position by taking in a border.  The husband reacted to in his affidavit at paragraph 32, that if the wife rents any room to lodgers he will immediately make an application that X live with him. 

31. The previous judgment at paragraph 52, dealt with the issue of a lodger in the former matrimonial home.  The wife gave evidence that she had advertised a room, and had had difficulty in letting it.  The judgment refers to the difficulty in renting a room to a person who would be required to share a house with a two year old. Some vetting would be required.  In those circumstances it was reasonable for the wife to maintain that it was not appropriate for a lodger to live with her and X.  There was no suggestion that the wife would be incapable of vetting someone, if that were an appropriate step to take.  It is simply an acknowledgment that living in a house with a two year old, it was not unreasonable for her to take the position that she could not let a bedroom.

32. I refer to this because there are reactions by the parties in this matter that are indicative of a poor relationship between them which do not assist in a variety of matters, including resolution of the property dispute, nor management of parenting issues. 

33. The husband has superannuation in Australia of some $285,000.  The wife earns $2,096 per week working four days per week.  The husband’s income is approximately double that of the wife.  The wife has presented various options to enable her to retain the property, supported by the affidavits of the two witnesses I have referred to. 

34. The former matrimonial home is clearly the major asset of the parties.  It is the husband’s complaint that neither party has at present a safety net, and that it would be of assistance if the property was sold and funds made available to each of them.  As I have referred to on a number of occasions, there would be a buffer for the parties or a safety net for the parties if the money from Country J was repatriated. 

35. It is a serious issue to sell the former matrimonial home at an interim stage of proceedings, particularly in circumstances where one party seeks to retain the property, and it may be possible for her to do so.  I do not propose at this stage ordering the sale of the former matrimonial home. 

36. I understand that the wife is seeking orders for costs. I propose dealing with that issue by written submissions rather than bringing the parties back to court which is going to be more expensive for them.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Boyle

Associate:

Date: 14 January 2021