GARDINER & GARDINER

[2009] FamCA 1120

FAMILY COURT OF AUSTRALIA

GARDINER & GARDINER [2009] FamCA 1120

FAMILY LAW – PROPERTY SETTLEMENT – injunction – interim orders – application by the husband seeking that the wife pay the mortgage payments and other outgoings in relation to the former matrimonial home – where the wife continues to reside in the former matrimonial home – where the husband left the home in 2007 – where the husband asserts he cannot afford to continue to meet the mortgage and other payments – order for the wife to pay the mortgage and all rates, taxes and insurance with respect to the former matrimonial home pending the final property settlement judgment

Family Law Act 1975 (Cth) ss 79 & 114

In the marriage of Davis (1976) FLC 90-062
Toomey and Toomey [2008] FMCAfam 654
Pappas and Ebner [2009] FamCA 685
In the marriage of Hughes (1984) FLC 91-549
Milne and Milne [2002] FamCA 365

APPLICANT: Mr Gardiner

RESPONDENT: Ms Gardiner

FILE NUMBER: ADC 78 of 2007

DATE DELIVERED: 25 November 2009

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 19 October 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lazarevich

SOLICITOR FOR THE APPLICANT: Lynch Meyer

COUNSEL FOR THE RESPONDENT: Mr Howe

SOLICITOR FOR THE RESPONDENT: Howe Martin & Associates

Orders

Pending judgment in the property settlement proceedings or until further order:

1. The wife do pay all monthly mortgage payments as they shall fall due levied in respect of the former matrimonial home at T in the State of South Australia.

2. The wife do pay all rates and taxes as they shall fall due levied in respect of the former matrimonial home.

3. The wife do pay all insurances premiums as they shall fall due levied in respect of the former matrimonial home.

4. The husband and wife do forthwith make arrangements to insure the former matrimonial home.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 78  of 2007

MR GARDINER

Applicant

And

MS GARDINER

Respondent

REASONS FOR JUDGMENT

Introduction

1. The husband seeks interim orders that the wife pay the mortgage payments, rates and taxes, and insurance premiums in relation to the former matrimonial home.  The orders are opposed by the wife.

Hearing

1. At the hearing before me on the 19 October 2009 the applicant husband was represented by Mr Lazarevich and the respondent wife was represented by Mr Howe.  After hearing the submissions judgment was reserved.

2. By Application in a Case filed on behalf of the husband on 7 August 2009 the husband sought orders:

   “1.That pursuant to Section 114(1) of the Family Law Act or otherwise as the Court may determine and until further order:

   (a)the wife do pay all monthly mortgage payments as they shall fall due levied in respect of the former matrimonial home at [T];

   (b)the wife do pay all rates and taxes as they shall fall due levied in respect of the former matrimonial home;

   (c)the wife do pay all insurance premiums as they shall fall due levied in respect of the former matrimonial home.

   2.That in default of payment of any sum ordered in respect of paragraph 1 the former matrimonial home be sold upon such terms as may be ordered by the Court.

   3.Costs.”

3. The husband filed an affidavit on 7 August 2009 setting out his evidence in support of that application.

4. By Response to an Application in a Case filed on 10 September 2009 the wife sought the dismissal of the husband’s application, costs and such “further or other Orders as to this Honourable Court seems fit and proper”.

5. On the same day the wife also filed an affidavit responding to the husband’s affidavit.

6. As well as oral submissions on behalf of the parties, a summary of the wife’s submissions with respect to the husband’s application was filed on 15 October 2009 which contained references to previous documents, and in particular, previous affidavits filed in the proceedings generally by both the wife, the husband and the husband’s father.

Background

1. Property settlement proceedings between the parties were commenced in January 2007.  There have been previous interim proceedings, including proceedings commenced by the husband on 29 March 2007 seeking orders in similar terms to those in the current application by the husband.

2. The parties were married in 1981.  There is a dispute about the date the parties separated with the husband asserting the parties were residing at the matrimonial home but separated from March 2006.  The wife says that the correct date of separation is January 2007.

3. The husband has not been residing in the former matrimonial home since December 2007. 

4. There are four children of the relationship, all of whom are adult.  One of the adult children resides at the former matrimonial home with the wife.  Two of the adult children reside with the husband.  The husband currently resides at his parents’ home.  He has been residing there since December 2007.

5. The former matrimonial home is mortgaged to the National Australia Bank for $320,000.  Mortgage payments are approximately $1,460 per month. 

6. The husband works as a sales agent.  The sales business is operated by The Gardiner Family Trust.  The husband’s evidence asserts that this trust is controlled by his parents and that he is one of a group of potential beneficiaries.

7. The wife highlights and relies upon the differences in the evidence of the husband in relation to the payment of mortgage and other outgoings in relation to the former matrimonial home in various affidavits filed by the husband.  The wife asserts that in some affidavits the husband has claimed to have paid the mortgage, rates and taxes and in other affidavits claims that the trust has been paying the outgoings in relation to the former matrimonial home.  The affidavits of the husband also include suggestions that some of the outgoings (not necessarily including the mortgage payments) have been paid by the trust which has then debited the payments to the husband’s loan account with the trust.  Further affidavits, including the affidavit of the husband filed in support of the current application state:

   “…The actual mortgage payments are made from the account of [B] Pty Ltd direct to the mortgage account. …”

   (Paragraph 10 of the husband’s affidavit filed on the 7 August 2009)

8. At paragraph 11 the husband says:

   “I say that I have paid all council rates since the separation, and water and sewerage rates up until the end of 2007.  I paid the Emergency Services Levy in 2007 but not since then.  I say that I have made total payments of rates and taxes of about $3,500 since 26  December 2007.  I say that the payments have been made by [B] Pty Ltd in the same manner as indicated in the previous paragraph.  I say that the wife is not satisfactorily paying the water and sewerage rates which is affecting my credit rating.  Someone recently place the SA Water account in my father’s letter box.  I then posted it to the wife.  I understand that SA Water are now pursuing a collection process.”

   (B Pty Ltd is the trustee of The Gardiner Family Trust).

9. Notwithstanding this statement in his affidavit the husband also says at paragraph 20 that his weekly expenses include the “[T] mortgage of $345” and other rates and levies.

10. The husband asserts in support of his application that he wishes to move from his parents’ home and find other accommodation pending the determination of the property settlement proceedings outstanding in this Court.

11. The husband asserts that he cannot afford to find other accommodation and continue to pay, or make arrangements to have paid, the regular outgoings in relation to the former matrimonial home.  The husband asserts that his credit rating would be significantly affected if the wife did not make the regular mortgage payments due in relation to the former matrimonial home.

The Law

1. The husband relies upon the provisions of section 114 of the Family Law Act (“the Act”) and in particular section 114(1)(e) and (f) which provide:

   (1)    In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:

   …

   (e)an injunction in relation to the property of a party to the marriage; or

   (f)an injunction relating to the use or occupancy of the matrimonial home.

2. Sub-paragraph (e) of the definition of “matrimonial cause” in section 4(1) of the Act states:

   (e) proceedings between the parties to a marriage for an order or injunction in circumstances arising out of the marital relationship (other than proceedings under a law of a State or Territory prescribed for the purposes of section 114AB).

3. Sub-section (3) of section 114 provides:

   (3)    A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.

4. The provisions of section 114(1) enable the Court to “make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate” (emphasis added).  There are then examples given to include certain types of orders but the phrasing of the section does not limit the powers of the Court to make an order only in those categories.

5. The husband is seeking an order by way of injunction to require the wife to make payments in relation to the mortgage and other outgoings concerning the former matrimonial home which is an order readily categorised as “an injunction in relation to the property of a party to the marriage”.  It may also be possible to categorise the order as an injunction relating to the use of the matrimonial home although emphasis would have to be placed on the words “relating to”.  In any event, the provisions of sub-section (3) allow the Court to make an injunction by interlocutory order or otherwise in any matter which it appears to the Court to be “just or convenient to do so”. 

6. The husband refers the Court to the authorities of In the marriage of Davis (1976) FLC 90-062; Toomey and Toomey [2008] FMCAfam 654 and Pappas and Ebner [2009] FamCA 685.

7. The Court also relies upon the decision of In the marriage of Hughes (1984) FLC 91-549.

8. Judicial Registrar Loughnan in the unreported decision of M and M [2002] FamCA 365 considered an application in which the wife sought an order that would enable her to refinance the mortgage over a jointly held property and the husband sought orders that the wife meet the mortgage payments and pay all arrears. Judicial Registrar Loughnan referred to the powers under section 114 and stated:

   “The Court’s power under section 114 in relation to current proceedings includes any power but examples are given – an injunction in relation to the property of a party to the marriage. This power is often employed to preserve property and that can mean not only save a property from being destroyed or alienated but also save the parties from unnecessary waste such as might be incurred if a mortgagee gears up to take action to realise a security.”

9. I am satisfied that the Court has the power to make the order sought by the husband. 

Discussion

1. The husband has not resided in the former matrimonial home since December 2007.  The wife and one of the four children of the marriage continue to reside in the former matrimonial home.  The wife wishes to continue to reside there.  The home is security for a loan to the National Australia Bank for $320,000 and mortgage payments are approximately $1,460 per month.  The husband works but maintains that his income is substantially lower than the wife’s income.

2. The husband wishes to move out of the home he shares with his parents and live independently with two of the adult children of the marriage.  He says he cannot afford to make the mortgage payments as well as pay for independent rental accommodation.  He says that the trust which has previously been providing the mortgage payments by way of debit to his loan account cannot be required to make the further payments and that the trust should not be required to do so.  The husband also maintains that his credit rating would be adversely affected if the mortgage payments fell further into arrears.  He asserts that the wife can afford to make the mortgage payments, is occupying the former matrimonial home and that it would be just and equitable for her to make the payments of the mortgage and other outgoings pending the trial.

3. The wife refers to the previous proceedings commenced by the husband for orders in similar terms and the affidavits which she asserts disclose inconsistencies in reference to the payments of the mortgage and other outgoings by either the husband or the family trust.  The wife also maintains that there is no urgency because the husband has been residing in his parents’ home for a considerable time and the first day of trial has now been fixed.

4. The Court file indicates that on 29 March 2007 the husband filed an application seeking interim orders which included an order that:

   “in the event that the wife does not vacate the [T] property that she pay one half of all household expenses associated with [T] property including mortgage payments, water rates, council rates, emergency services levy, gas, electricity and security”

5. On 12 July 2007 Judicial Registrar Forbes made a consent order that the husband’s Form 2 Application filed on 29 March 2007 be dismissed and that the wife’s costs of and incidental to that application be adjourned.  Subsequently, orders were made in relation to costs.

6. When those orders were made both parties were residing in the former matrimonial home.  Since December 2007 the husband has been residing at his parents’ house and now wishes to obtain independent accommodation by renting a property in his own name.

7. The significant passage of time and the change of circumstances since the consent order was made in July 2007 clearly distinguishes the application the husband is now making from that which was dismissed by consent in 2007.

8. I accept that the affidavits filed by the husband at different times provide different versions as to the source of payments by or on behalf of the husband of the mortgage payments and other outgoings in relation to the former matrimonial home.  In particular there are parts of the affidavits filed which suggest that the mortgage payments have been made by the husband, that the mortgage payments have been made by the trustee of the trust and that the other outgoings have either been paid by the trust or the husband.

9. In the most recent affidavit filed by the husband on 7 August 2009 he says:

   “10.  I have made all monthly mortgage payments (interest only) since we separated and more particularly since 28 December 2007.  I say that I have made total payments of $41,000 or thereabouts since 28 December 2007.  The wife has refused to make the mortgage payments or to contribute to them despite the fact that she has exclusive use of the property.  The actual mortgage payments are made from the account of [B] Pty Ltd direct to the mortgage account.  [B] Pty Ltd is the trustee of The [Gardiner] Family Trust.  The [Gardiner] Family Trust is controlled by my parents (particularly my father).  I am a director only of [B] Pty Ltd and a beneficiary of The [Gardiner] Family Trust.

   11.    I say that I have paid all council rates since the separation, and water and sewerage rates up until the end of 2007.  I paid the Emergency Services Levy in 2007 but not since then.  I say that I have made total payments of rates and taxes of about $3,500 since 26  December 2007.  I say that the payments have been made by [B] Pty Ltd in the same manner as indicated in the previous paragraph.  I say that the wife is not satisfactorily paying the water and sewerage rates which is affecting my credit rating.  Someone recently place the SA Water account in my father’s letter box.  I then posted it to the wife.  I understand that SA Water are now pursuing a collection process.

   …

   14.    I say that my last filed tax return was for the 2008 financial year.  For the 2009 financial year my income has been similar to the previous year.  As a consequence of payments made on my behalf by [B] Pty Ltd I have a substantial debit loan account in The [Gardiner] Family Trust.  I say that the debit balance of my loan account at 6 August 2009 was $325, 547.14.

   15.    I say that my capacity to draw from The [Gardiner] Family Trust is not unlimited and is at the discretion of my father.  My father appears to me to be unhappy about the level of my debt.”

10. Any inconsistencies in relation to the payments of the mortgage and other outgoings, how such payments have been categorised and who has directly made the payments are matters which will need to be determined after the appropriate evidence has been tested at the final hearing.

11. It is clear however from the evidence of both parties that the mortgage payments are approximately $345 per week and the other outgoings include council rates of approximately $45 per week and water and sewerage rates, Emergency Services Levy and insurances.

12. I accept the submissions of the husband that the credit rating of both the husband and wife may be adversely affected if the mortgage falls into further arrears.

13. This is a factor which is appropriate to take into account when considering whether the order is proper and whether it is just to make such an order pending the final determination of the proceedings in this matter.

14. The affidavit filed by the wife on 10 September 2009 responds to the affidavit of the husband filed on 7 August 2009 and in particular takes issue with the husband’s evidence in relation to his assessment of his income and outgoings.  These are matter which will need to be determined after the evidence has been appropriately tested at the final hearing.

15. Paragraphs 11, 12 and 13 of the wife’s affidavit state:

    “11.  With respect to paragraph 10 and 11 of the said affidavit, I agree that my former husband has made mortgage payments and payments of rates, or caused them to be made.

    12.    With respect to paragraph 12 of the said affidavit, I say that:

    12.1My former husband alleges that he receives a fortnightly salary of $1,280 net of tax.  However, in paragraph 23 he asserts he is expecting to pay $450 per week in rent, being a total expenditure of $900 from a total income of $1,280.

    12.2The Child Support Agency have assessed my former husband’s effective salary at $92,500, and I have paid $10,333 per annum in child support, a fact which is not mentioned by my former husband.  Furthermore, in paragraph 12, my former husband alleges that he has been “permitted drawings from the [Gardiner] Family Trust which have included school fees for the children”.  However, in paragraph 20(m) he asserts that he has a liability for school fees to [S School].

    13.    With respect to paragraph 15 of the said affidavit, I say that my former husband has never been obliged to repay any portion of his loan account.  The second sentence of paragraph 15 is clearly hearsay.  Given the fact that my former husband and his father work together, one would have thought that my former husband would be in a better position to assess his father’s attitude than to assert that he “appears to me to be unhappy …”.”

16. In paragraph 16 of the husband’s affidavit he says:

    “16.  The wife is employed full time by [G Business].  I estimate that her salary package is in the order of $90,000.”

1. The wife does not respond to that paragraph of the husband’s affidavit in her affidavit filed on 10 September 2009.

2. On behalf of the wife her solicitor filed an affidavit on 4 February 2009 to which is annexed the decision of the Social Security Appeals Tribunal dated January 2009 in which the members of the Tribunal heard a review of the decision made by the Child Support Registrar in relation to a decision setting the child support income of the husband and the wife.  That decision of January 2009 set the husband’s adjusted taxable income at $92,500 and the wife’s adjusted taxable income at $91,501 for the child support period from the 1 July 2008 until 18 November 2008.  When disallowing the objection the Social Security Appeals Tribunal took into account to a substantial extent monies paid by the Family Trust to the husband or on his behalf.  The tribunal took into account the “income property and financial resources” of the husband and found that these “significantly exceeded his taxable income” (See paragraph 54 of the tribunal’s decision).

3. The Family Court of Australia will be required to make a determination of the assets and liabilities, income, expenses and financial resources of each of the parties in determining the final orders to be made by way of property settlement. 

4. The evidence currently before the Court, however establishes that the wife and one of the adult children are residing in the former matrimonial home.  The wife has an income of approximately $90,000 per annum.  The wife has not contributed directly to the mortgage payments, water rates, council rates or emergency services levy for the former matrimonial home since at least December 2007.

5. The Court must consider whether the interim order sought by the husband is an order which is proper in the particular circumstances of this case and whether it is just to make such an order. As an interim order in relation to property settlement proceedings it is also appropriate to give some consideration to section 79 of the Family Law Act 1975 (Cth) upon which the property settlement proceedings are based, including whether it is just and equitable to make such an order in all of the circumstances surrounding the application for interim injunctions.

6. Any payments made by the husband or the wife in relation to the mortgage and other outgoings in relation to the former matrimonial home will of necessity be factors taken into account when determining the final orders to be made by way of property settlement between the parties.

7. It was not maintained on behalf of the wife that she could not afford to make the payments from her current income.

8. The wife is occupying the former matrimonial home.  The wife has had the benefit of the sole use and occupation of the former matrimonial home since December 2007.  The husband has until recently paid or caused to be paid the mortgage and other outgoings in relation to the former matrimonial home.  The husband now asserts that he cannot continue to make such payments or cause such payments to be made and at the same time find independent accommodation for himself.

Conclusion

1. At this interim stage of the proceedings it is not possible or appropriate to determine the facts surrounding the payments of the mortgage and how they have been or should be categorised.

2. The wife has not maintained that she cannot make the payments.  She wishes to continue to reside in the property.  She has the benefit of a substantial asset.

3. Considering all of the factors and notwithstanding that the matter is being prepared for final determination of all of the issues in relation to the property settlement and financial proceedings in relation to the parties I am satisfied that it is proper, just and equitable to make orders as contained herein pending the final judgment in the property settlement proceedings between the parties.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe

Associate: 

Date: 25 November 2009