Garrett and Cowell (No. 2)

[2008] FamCA 390

FAMILY COURT OF AUSTRALIA

GARRETT & COWELL (NO. 2) [2008] FamCA 390

FAMILY LAW – PROPERTY – settlement of property
FAMILY LAW – MAINTENANCE – overseas spouse / child maintenance order – garnishee order

Family Law Act 1975 (Cth)

APPLICANT: MS GARRETT

RESPONDENT: MR COWELL

FILE NUMBER: SYF 3566 of 2006

DATE DELIVERED: 5 March 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan JR

HEARING DATE: 5 March 2008

REPRESENTATION

APPLICANT IN PERSON: Mr T, McKenzie Friend

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT: Blanchfield Nicholls Partners

Orders

1. Orders are made in terms of paragraphs 1 and 2, 2.1, 2,2 and 2.3 of the document titled “Minute of Proposed Orders” marked Exhibit 1 as set out hereunder:

“1.Order 2 of the orders made 12 February 2008 be extended till further order.

2.Until further order:

2.1The respondent husband do forthwith pay to Perpetual Ltd, the mortgagee of the [C] property, the sum of $6,582.93 and thereafter maintain on-going payments in compliance with the requirements of that mortgage.

2.2The wife be and is hereby authorized to enquire directly of the mortgagee as to the status of the mortgage and payments thereon.

2.3The wife be and is hereby appointed manager of the property at [C], with authority to deal with all persons in that capacity and that she collect and retain the rents from the property to be applied firstly, towards on-going spousal maintenance as ordered by the District Court at Laufenburg Switzerland on February 15, 2006 and secondly, as payment towards on-going child maintenance pursuant to the order of February 15, 2006 as may be amended from time-to-time and that she account to the husband on a three-monthly basis in respect of her management of the property.”

1. The proceedings are adjourned to the Judicial Registrar’s Call-over at 9:30 am on 21 April 2008.

1. That the husband file and serve a Response to the Application in a Case, an updated Financial Statement and all affidavits on which he seeks to rely in relation to the interim proceedings not later than 7 April 2008. 

1. In the event that the husband does not comply with Order 3 herein by 7 April 2008 then the wife is at liberty without further reference to the husband to notify the Court to cause the adjourned to be vacated.  Notice of that request for the vacation of the adjourned date is to be provided to the solicitor for the husband as soon as practicable thereafter.

1. The parties are to attend a conciliation conference at 9:30 am on 16 June 2008 AND leave is granted to either party or their representatives to attend at that conciliation conference by telephone or some other electronic means as they may be advised at their own cost.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF3566 of 2006

MS GARRETT

Applicant

And

MR COWELL

Respondent

REASONS FOR JUDGMENT

1. These are proceedings in aid of proceedings for settlement of property.  The parties were married in 2001 and they separated in 2005, in about April. The parties have three children, who are 10, 8 and 2.  There is another child of the wife, who is about 17 years of age. 

2. A court in Switzerland made some orders of 15 February 2006 whereby the husband was to pay 1100 Swiss francs a month in spousal maintenance and 3800 in child maintenance.  It is the wife’s evidence, unchallenged in these proceedings, that nothing has been paid.

3. She embarked on having the obligation registered in Australia for enforcement.  There were subsequent proceedings in the Swiss court, and on 21 December 2007 an order in the nature of a garnishment order was made against an entity which was identified as the husband’s employer. 

4. The wife was permitted to leave Switzerland and come to Australia with the children.  She understands that the husband lives and works in the Middle East. 

5. She brought the matter back before this Court in relation to interlocutory proceedings in February 2008 in circumstances where there was matrimonial property in the form of a property at C. That property is in the name of the husband. She discovered that although the parties had paid of the order of $130,000 from the net proceeds of sale of another property, off the mortgage on the C property, there had been further drawings on the mortgage securing that property.   

6. She said that the arrears under the Swiss orders are of the order of AUD$110,000, or that equivalent, that she also had other debts and she was concerned that one of few available assets, perhaps the only asset within the jurisdiction, was at risk.

7. A lapsing notice had been served on her in relation to caveats she registered on the title of the property. I understand that the wife recognised, although she had had some conflicting advice about it, that she may not have a caveatable interest in relation to the property.

8. All of that resulted in orders being made by this Court on an ex parte basis on 5 February 2008, replacing the caveat with an order of the Court restraining the husband. That order was then recorded with the Land Titles Office.

9. Then the matter came back on 12 February 2008 before a Judicial Registrar.  The wife was present and assisted by a McKenzie friend, and the husband was represented by a solicitor.  The matter was then adjourned to today’s date.  Orders were made until 6.00 pm today whereby the husband was restrained from disposing of, encumbering or otherwise dealing with the C property, including a prohibition on further drawing on the mortgage, any monies held to his credit in a pension or superannuation fund, and monies in a particular London based share trading account.  He was to file and serve documents, including a Response, Financial Statement and Affidavits, no later than 29 February 2008.  He did not do that. Today he is represented by a different solicitor from a different firm, and I accept that that firm has not had a chance to get proper instructions from the husband. However, there is no explanation at all as to why the husband has not done something through one of his solicitors or independently, to comply with the orders that were made on the last occasion insofar as him filing documents.

10. An application is made that the substantive order made on the last occasion be continued until further order.  It is said on behalf of the husband that he would prefer the orders made to continue until a particular date. I think in the circumstances, where there is some doubt about the husband taking a meaningful part in the proceedings, and given the fact that he is outside the jurisdiction, it is helpful if the onus is on him to have the orders changed rather than it being the continuing obligation of the wife. The obligation is always on her in relation to the merits of her claim but at the moment there is no challenge to the orders she seeks.

11. Nextly, she seeks some fresh orders.  Specific notice of these orders has not been given to the husband, although there was reference in the course of correspondence with him, or with his solicitors, to further orders being sought.  The situation is that the C property is being rented out.  The husband has been pocketing the rental and apparently not applying it to the mortgage for some period.  There is some evidence that the mortgage stood at $176,000-odd on 5 February 2008 and that there were arrears at that date of $5061. I think it is accepted that the arrears now stand at about $6521.55.  The specific dollar amount we will not know about necessarily because there will be additional costs no doubt accruing at the hands of the mortgagee, Perpetual Limited, and so we will not know the final figure without further enquiry.

12. An order is sought that the husband pay the outstanding sum of $6582.93, and thereafter maintain ongoing payments.  I think the order is formally opposed on the basis that the husband has not had notice of it. Such an order would seem to be something of a triumph of hope over experience. On the wife’s case the orders of the Swiss court have been completely ignored. Why there would be a change of heart here?  As Mr T says on behalf of the wife, that is not a reason for not making orders.  The proper course is that the husband make the payments. 

13. It is asserted in the wife’s case that he earns an income of the order of $170,000 a year.  It is asserted that there he pays no tax in the Middle East and there is no basis for finding that he cannot afford these payments. 

14. I will make the orders.  If there are to be property settlement proceedings then at least the arrears could be sought by way of adjustment in any final settlement.

15. Nextly, the wife is seeking to be able to make direct enquiries of the mortgagee as to the status of the mortgage and that is necessary.  She seems to be the only party interested in preserving this asset. 

16. Finally, she seeks that she be appointed manager for the parties in relation to the property so that she can intervene, receive and apply, the rent. It will be a matter for her how she applies the rental income. Certainly in proceedings for property settlement the Court could characterise the payments as something else, necessary payments to meet a joint debt, for example; payments to comply with the order for preservation of the asset, or spousal maintenance or some other payment. I am satisfied that of the two parties, if not protecting an asset in specie, the wife is the only one who seems to be interested in preserving the difference between what would be recovered on a measured sale of the property compared to a mortgagee sale. The latter can notoriously result in loss of value.  It seems to me that that is an appropriate order.

17. Then some limit is sought to be placed on the husband’s access to the Court. That will be dealt with in a different way. I will adjourn the proceedings to 21 April 2008 but put the onus on the husband to be ready.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan.

Associate: 

Date: 6 June 2008