GUYEN & GUYEN
[2019] FCCA 2982
•18 October 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| GUYEN & GUYEN | [2019] FCCA 2982 |
| Catchwords: FAMILY LAW – Property – application for interim property orders – where mortgages are in default – where hardship arrangement in place with mortgagee. |
| Legislation: Family Law Act 1975 (Cth), ss.65DAA, 72, 74, 75, 79, 80 |
| Cases cited: In the Marriage of Mee and Ferguson (1986) 10 Fam LR 971 |
| Applicant: | MS GUYEN |
| Respondent: | MR GUYEN |
| File Number: | SYC 1760 of 2019 |
| Judgment of: | Judge Morley |
| Hearing date: | 1 July 2019 |
| Date of Last Submission: | 18 October 2019 |
| Delivered at: | Sydney |
| Delivered on: | 18 October 2019 |
REPRESENTATION
| The Applicant appeared on her own behalf. |
| Counsel for the Respondent: | Mr Wong |
| Solicitors for the Respondent: | Cara Marasco & Company |
PENDING FURTHER ORDER, THE COURT ORDERS:
That the parties forthwith do all things necessary to have the ANZ 1 Offset account BSB … account number … (“the ANZ account”) in their joint names unfrozen by that bank, if there is any freezing mechanism in place by the bank that would prevent the parties attending and making withdrawal from that account, so that same can be operated by the parties jointly.
That forthwith upon the ANZ account being unfrozen the parties do all things necessary to have the credit balance in that account withdrawn and divided as to $12,000 to the wife and as to the balance to the husband and in the event that the bank requires that the ANZ account remain open with a minimum balance then this order shall still apply as to so much of the credit balance as can be withdrawn in those circumstances, the nature of such interim distributions to be a matter for final orders.
That the parties shall forthwith sign all documents and instruments and do all things necessary to list for sale the real property at A Street, Suburb B in the State of New South Wales being the whole of the land in Certificate of Title folio identifier … ("the Suburb B heights property") at a listing price agreed upon between them with a real estate agent agreed upon between them and shall proceed to a sale of the A Street, Suburb B property at a sale price agreed upon between them and following such sale the proceeds of sale shall be applied as follows:-
(a)In adjustment of rates on settlement;
(b)In payment of agent’s commission (if any) on sale;
(c)In payment of legal and all other proper costs of sale;
(d)In payment to the Australia and New Zealand Banking Group Limited of a sum sufficient to discharge the first registered mortgage over the A Street, Suburb B property;
(e)In payment of the then remaining net proceeds of sale into the Trust Account of Cara Marasco & Company, Solicitors & Attorneys, to be held upon trust for the parties jointly pending further orders, subject only to the order herein for release from those moneys of sums to each of the parties.
That in the event that the A Street, Suburb B property does not sell by private sale within two months from the date of these orders then the parties shall sign all documents and instruments and do all things necessary to list the A Street, Suburb B property for sale by public auction with an auction agent agreed upon between them at a reserve price agreed upon between them and shall proceed to a sale at a sale price agreed upon between them and the parties shall be equally responsible for all costs and expenses of the auction payable prior to the auction sale and following such sale the proceeds of sale be applied as provided in order 3 hereof.
That in the event that order 4 operates and the A Street, Suburb B property does not sell by public auction in accordance with order 4 hereof then the A Street, Suburb B property shall be resubmitted for sale by private treaty in accordance with the provisions of order 3 hereof and the A Street, Suburb B property shall be resubmitted for sale by public auction at six (6) monthly intervals from the last public auction and be resubmitted for sale by private treaty between such auctions, until the A Street, Suburb B property shall be sold and upon such sale either by public auction or private treaty the proceeds of sale shall be applied as provided in order 3 hereof.
That the parties shall forthwith sign all documents and instruments and do all things necessary to list for sale the real property at R Street, Property S in the State of New South Wales being the whole of the land in Certificate of Title folio identifier … ("the R Street, Property S property") at a listing price agreed upon between them with a real estate agent agreed upon between them and shall proceed to a sale of the R Street, Property S property at a sale price agreed upon between them and following such sale the proceeds of sale shall be applied as follows:-
(i)In adjustment of rates on settlement;
(ii)In payment of agent’s commission (if any) on sale;
(iii)In payment of legal and all other proper costs of sale;
(iv)In payment to the Australia and New Zealand Banking Group Limited of a sum sufficient to discharge the first registered mortgage over the R Street, Property S property;
(v)In payment of the then remaining net proceeds of sale into the Trust Account of Cara Marasco & Company, Solicitors & Attorneys (“the solicitors”), to be held upon trust for the parties jointly pending further orders, subject only to the order herein for release from those moneys of sums to each of the parties.
That in the event that the R Street, Property S property does not sell by private sale within two months from the date of these orders then the parties shall sign all documents and instruments and do all things necessary to list the R Street, Property S property for sale by public auction with an auction agent agreed upon between them at a reserve price agreed upon between them and shall proceed to a sale at a sale price agreed upon between them and the parties shall be equally responsible for all costs and expenses of the auction payable prior to the auction sale and following such sale the proceeds of sale be applied as provided in order 6 hereof.
That in the event that order 7 operates and the R Street, Property S property does not sell by public auction in accordance with order 7 hereof then the R Street, Property S property shall be resubmitted for sale by private treaty in accordance with the provisions of order 6 hereof and the R Street, Property S property shall be resubmitted for sale by public auction at six (6) monthly intervals from the last public auction and be resubmitted for sale by private treaty between such auctions, until the R Street, Property S property shall be sold and upon such sale either by public auction or private treaty the proceeds of sale shall be applied as provided in order 6 hereof.
That in the event that the parties are unable to reach agreement in relation to an auction agent, a real estate agent, a listing price, a reserve price or a sale price whether for a sale by public auction or by private treaty then the parties shall and do hereby appoint the President for the time being of the Real Estate Institute of New South Wales or his nominee to determine such disputed matter in relation to identification of a real estate agent and appoint the President for the time being of the Australian Property Institute New South Wales Branch to determine matters in relation to pricing, and the parties shall thereafter act in accordance with that determination or those determinations and the parties shall be equally responsible for the costs and expenses of the Presidents or their nominees in making such determination.
That forthwith upon the deposit of the net proceeds of sale of whichever of the A Street, Suburb B property and the R Street, Property S property sale settles first into the Trust Account of the solicitors, to be held upon trust for the parties jointly pursuant to these orders, the parties shall each instruct the solicitors to pay out from the moneys so held on trust for the parties such sum as, when combined with the moneys received by the parties each pursuant to order 2 amounts to a total not exceeding $50,000.00 each, the nature of such interim distributions to be a matter for final orders.
That forthwith upon the deposit of the net proceeds of sale of whichever of the A Street, Suburb B property and the R Street, Property S property sale settles second into the Trust Account of the solicitors, to be held upon trust for the parties jointly pursuant to these orders, in the event that the moneys received by each of the parties to that point pursuant to these orders as an interim distribution has not amounted to $50,000.00, the parties shall each further instruct the solicitors to pay out from the moneys so held on trust for the parties such sum as, when combined with the moneys received by the parties each pursuant to orders 2 and 10 amounts to a total not exceeding $50,000.00 each, the nature of such interim distributions to be a matter for final orders.
That following compliance by the parties with orders 2, 10 and 11 such that each of the parties has received the sum of $50,000.00 by way of interim distribution the parties are to each instruct the solicitors to deposit any sum remaining in the Trust Account held for the parties jointly into a Controlled Moneys Account pending further order.
That pending the sale of the A Street, Suburb B property and the R Street, Property S property the husband is solely responsible as between the husband and the wife for payment of all payments required by the Australia and New Zealand Banking Group Limited towards all of the loan accounts in the joint names of the parties secured on those properties.
That the husband is solely responsible as between the husband and the wife for payment of all payments required by the Australia and New Zealand Banking Group Limited towards all of the loan accounts in the joint names of the parties secured on the parties jointly owned property at C Street, Suburb D, NSW being the whole of the land in Certificate of Title folio identifier ….
By consent, any rental income received in relation to the C Street, Suburb D property be applied to outgoings relating to the C Street, Suburb D property, including payment of required payments of any loan accounts secured on the C Street, Suburb D property.
IT IS NOTED that publication of this judgment under the pseudonym Guyen & Guyen is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 1760 of 2019
| MS GUYEN |
Applicant
And
| MR GUYEN |
Respondent
REASONS FOR JUDGMENT
Introduction
On 1 July 2019 I heard interim proceedings between Mr Guyen as Applicant Wife (“the Wife”) and Mr Guyen as Respondent Husband (“the Husband”) in relation to financial matters arising from the breakdown of their marriage and in particular in relation to an Application for interim spouse maintenance orders sought by the Wife and an Application for sale of assets, interim property distribution and preservation of the proceeds of sale sought by the Husband.
The parties are each 40 years of age. The parties commenced cohabitation in 1998, were married on … 2001, and separated on either 19 July 2018, as asserted by the Wife, or on 26 July 2018, as asserted by the Husband. Nothing turns on which asserted date of separation is correct.
There are two (2) children of the marriage, X born … 2002, now 17 years of age, and Y born … 2008, now 11 years of age. Y spends regular time with his Father, though not amounting to substantial and significant time as defined in section 65DAA(3) of the Family Law Act 1975 (Cth) (‘the Act’).[1] X has not spend any time with her Father or, it seems, communicated with him since January or February 2019.
[1] Family Law Act 1975 (Cth) s 65DAA :
Since separation the Wife has continued to reside with the children in the former matrimonial home at A Street, Suburb B, New South Wales (‘the former matrimonial home’ or ‘the A Street, Suburb B property’). The Husband left the former matrimonial home on 26 July 2018 to reside elsewhere and he has not disclosed his current residential address in the evidence or on his filed Court documents.
The Husband is the sole director and sole shareholder of a private corporation, Company F (‘the company’), which has been the principal income generating tool for the family since 2010.
In addition to the former matrimonial home at A Street, Suburb B, the parties are the joint registered owners of an investment property at C Street, Suburb D in New South Wales and an investment property at R Street, Property S in New South Wales. Shortly prior to the interim hearing, the parties completed the sale of another investment property at Town Q in New South Wales, the whole of the proceeds of sale of which were consumed in cost of sale and repayment of loan accounts secured on that property. Each of the properties are encumbered by registered mortgages to the Australia and New Zealand Bank (‘ANZ’) securing repayment of various loan accounts with that bank in the joint names of the parties.
The proceedings were commenced by the filing of an Initiating Application by the Wife on 20 March 2019 seeking final orders relating to property settlement and interim orders relating to spouse maintenance and mandatory injunctions relating to payment of required payments on loan accounts secured on the parties’ real properties.
The Husband filed his response on 9 May 2019 seeking final orders relating to property settlement and interim orders seeking:
a)The sale of the parties’ real properties;
b)Interim property distribution to each of the parties in the sum of $50,000 and preservation of the balance of the net proceeds of sale pending final orders; and
c)The handing over of a motor vehicle in the possession of the Wife to the family company, the owner of the vehicle.
The matter was before me for its first return date on 15 May 2019 at which time it was listed for interim hearing at 2:15 PM on 1 July 2019 and directions were made for the filing of affidavit material and any further Financial Statements to be relied upon at the interim hearing.
The interim hearing
At the interim hearing the Wife appeared for herself and the Husband was present at Court and represented by Mr Wong of Counsel.
The Wife relied on the following documents:
a)Initiating Application filed 20 March 2019;
b)Affidavit of the Wife affirmed 19 March 2019 and filed 20 March 2019;
c)Affidavit of the Wife affirmed 11 June 2019 and filed 12 June 2019 ;
d)Affidavit of the Wife affirmed 27 June 2019 and filed that day;
e)Affidavit of Ms G (the Wife’s Mother) affirmed 11 June 2019 and filed 12 June 2019; and
f)Financial Statement affirmed by the Wife on 19 March 2019 and filed 20 March 2019.
The Husband relied on the following documents:
a)Response to Initiating Application filed 9 May 2019;
b)Affidavit of the Husband sworn 9 May 2019 and filed that day;
c)Affidavit of the Husband sworn 11 June 2019 and filed that day;
d)Affidavit of the Husband sworn 28 June 2019 and from that day; and
e)Financial Statement sworn by the Husband on 11 June 2019 and filed that day.
At the hearing, the Husband’s Counsel tendered a number of documents each of which were entered as exhibits without objection, as follows:
a)Exhibit R2 – a Balance Sheet as at 1 July 2019;
b)Exhibit R3 – a letter dated 9 May 2019 from Cara Marasco & Company, the solicitors for the Husband, to Doolan Wagner Family Lawyers, at that time the solicitors for the Wife, relating to disclosure provided by the Husband and attaching a copy of a letter dated 19 March 2019 from H Marine Brokers to the Husband in relation to a sale of a Boat T;
c)Exhibit R4 – Profit and Loss for ‘Company E’ (the trading name for Company F) from 1 July 2018 to 30 June 2019 (a single page);
d)Exhibit R5 – A ring-binder folder containing Exhibit G-1 to the affidavit of the Husband sworn 11 June 2019 being tax invoices presented to ‘Company E’ and due between February and June 2019, but also including two Telstra tax invoices relating to a mobile telephone number and addressed to the Husband personally and an Australian Taxation Office payment schedule document that does not disclose the person or entity to whom it was addressed;
e)Exhibit R6 – Profit and Loss for ‘Company E’ from 1 July 2018 to 31 May 2019; and
f)Exhibit R7 – Financial Statement for Company F for the year ending 30 June 2018.
Mr Wong provided a Case Outline document on behalf of the Husband that was marked as Exhibit R1 only on the basis that it contained under the heading ‘Relief’ the orders sought by the Husband on interim hearing.
The Wife made oral submissions on her own behalf. Mr Wong made oral submissions on behalf of the Husband and then the Wife made short oral submissions in reply.
The parties’ proposals
Rather than setting out in full interim orders sought by the Wife I summarise them as follows:
a)That the Husband pay to the Wife interim spouse maintenance of $500 each week;
b)That the Husband cause the company to make the Motor Vehicle J vehicle available for the Wife’s exclusive use and to pay all registration and insurance costs for the vehicle and provide the Wife with a petrol card;
Or in the alternative:
a)That the Husband pay to the Wife interim spouse maintenance of $500 each week and within seven days of orders pay the Wife lump-sum spouse maintenance of $20,000;
b)That unless otherwise agreed in writing the Husband make all payments on the loan accounts secured on the parties’ real estate properties and pay the rates and utilities accounts for those properties;
c)That if the parties A Street, Suburb B property is sold, the Husband pay to the Wife spouse maintenance of $600 each week, and lump-sum spouse maintenance of $2,500 no less than seven days prior to settlement of the sale for payment of a rental bond, and lump-sum spouse maintenance $1,300 for removalist fees; and
d)Costs.
Similarly, I summarise the orders sought by the Husband on interim hearing (as set out in Mr Wong’s case outline) as follows:
a)That the parties sell the four real properties by public auction (though the Town Q real property had been sold and the sale settled prior to the interim hearing), with orders relating to the mechanisms for sale;
b)That upon sale of each of the real properties the proceeds be applied to costs of sale, payment out of loan accounts secured by way of mortgages over the properties so as to secure discharge of mortgages, payment of the balance into a controlled monies account through the trust account of the solicitors acting on the conveyance until final orders and partial distribution from those controlled monies of a sum of $50,000 to each of the parties by way of partial property settlement; and
c)Costs.
The Balance Sheet entered as Exhibit R2 indicated net assets of the parties, including superannuation entitlements, at $672,804 as asserted by the Husband or $692,673 as asserted by the Wife.
Accordingly, the issues on interim hearing were:
a)The Wife’s Application for periodic and lump-sum interim spouse maintenance orders; and
b)The Husband’s Application for the sale of assets, partial property distribution, and preservation of the balance of proceeds of sale pending final orders.
As one of the issues in the hearing was the Husband’s Application for an order for an interim property distribution of $50,000 to each of the parties from sales of the real properties, it is appropriate to indicate the final orders for property settlement sought by each of the parties.
The Wife seeks final orders that:
a)The former matrimonial home at A Street, Suburb B be sold and that she receive all of the net proceeds of sale;
b)That the real property at Town Q be sold and the net proceeds of sale be divided 70 percent to her and 30 percent of the Husband. I note that on settlement of the sale there were no net proceeds of sale, but a loss on sale of $104.06;
c)That the Husband transfer both the C Street, Suburb D and R Street, Property S properties to her and that she refinance all loan accounts secured on those properties into her sole name;
d)That there be a superannuation splitting order made whereby she receive a base amount of $75,000 from the Husband’s superannuation entitlements; and
e)That otherwise the parties retain such assets and resources as are in their individual power possession or control.
The Husband sought final orders that:
a)All four (4) real properties be sold, (but, unfortunately, he sought the same order as on the interim basis, that is that the net proceeds of sale be paid into a controlled monies account with a release to each of the parties are $50,000, accordingly not specifying an ultimate division of the matrimonial asset pool between the parties);
b)That the Husband retain his shareholding in Company F;
c)That the Wife repay to the Husband (but not the company) all money withdrawn by her from the company account (asserted by the Husband in his evidence to be $21,150); and
d)That the parties otherwise retain such assets and resources as are in their individual power possession or control.
The evidence relevant to the interim hearing
The following facts are not in contest unless otherwise indicated.
The Wife asserted that at the commencement of cohabitation neither party had any assets of any value. The Husband asserted that commencement he “had a motor vehicle”.[2] The Wife did not provide evidence of her employment and income earning history up to 2008. I note that, though, on an inferential basis, the Wife was in employment at some time during the period from cohabitation until 2008 as she details in her evidence a workplace accident suffered by her on … 2008.[3] That injury, a back injury, caused damage to her spine at L4 - L5 leading to an assessment of a 13 percent whole body impairment and implant of a Spinal Simulator at L4–L5.[4] The Wife asserts this has affected her capacity to engage in income generating employment.[5]
[2] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [50].
[3] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [3].
[4] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [15].
[5] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [16].
The Wife relied on a report by Dr K dated 24 October 2016 and a letter from Dr L dated 4 June 2019 stating that the Wife is “unfit for full-time work”.[6] The Wife is in receipt of payments from U Insurance for her medical expenses until 2023.[7]
[6] Wife’s Affidavit sworn 11 June 2019 and filed 12 June 2019, annexure ‘A’.
[7] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [18].
The Husband was employed in the building industry until 2008 when he and the Wife set up a business in partnership, Guyen trading as Company E.[8] Both parties worked in the business, though the extent of the contribution by each may be a matter for contention on final hearing. In July 2010 the parties dissolved the partnership, the Husband incorporated the company, and the company purchased a business ‘Company E’ for $105,000.[9] Thereafter the company traded as ‘Company E’ with both parties working in the business and drawing a wage.
[8] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [20]; Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [12].
[9] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [19]; Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [13].
The Wife attended to administrative duties including the bookkeeping and the Husband applied his work skills in trades until 2014 when degeneration in his right knee forced him to cease work and thereafter to conduct the business on a retail basis only from leased shop premises.[10] The Husband presented evidence that he was advised in 2014 by Dr M that his right knee was “worn out”[11] and that in 2018 an MRI imaging of his spine disclosed two bulging discs and arthritis.[12]
[10] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [22]; Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [9].
[11] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [9].
[12] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [10].
The parties separated in late July 2018, but both continued to attend at the shop premises and work as employees of the company until 23 January 2019, when the Husband asked the Wife to cease attending the business premises.[13]
[13] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [22].
Thereafter, the Wife continued to work for the company in the conduct of its business until 8 February 2019 when the Husband removed her access to the company accounts, company records, and information.[14]
[14] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [19].
The company continued to pay the Wife her usual wage of $855 net per week until 28 February 2019 when the Husband as director of the company caused such payments to cease.[15] The Wife asserts that as a result of the cessation of her wage payments she commenced these proceedings on 20 March 2019.[16]
[15] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019 [28]; Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [23].
[16] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019 [28].
The Wife attaches to her affidavit affirmed 11 June 2019 Profit & Loss Statements for Company F for the financial years ended 30 June 2015, 30 June 2016, 30 June 2017 and 30 June 2018 showing that the average net profit for the company over those four (4) years was $45,442.22.[17] When the net profit of the company shown on the Profit & Loss Statement of the company for the financial year ended 30 June 2019 (Exhibit R4) is included (that year showing a net loss of $79,259) the average net profit of the company over the five years is $20,502.[18]
[17] Wife’s Affidavit sworn 11 June 2019 and filed 12 June 2019, annexure C; “The business has made an average net profit of $45,000 per year based on the last 4 years Profit and Loss”, Wife’s Affidavit sworn 11 June 2019 and filed 12 June 2019, [13].
[18] Wife’s Affidavit sworn 11 June 2019 and filed 12 June 2019, annexure C; exhibit R4.
The Wife deposes in paragraph 34 of her affidavit of 19 March 2019:
I am currently without any consistent income and I do not have the capacity to be gainfully employed. My previous work history and skills prior to my workplace accident are in the employment industry and as such, I would be unable to secure a role which allows me to work for an hour or 2 per day. At present, I have been assisting a lady by the name of Ms V (I do not know her surname) with irregular bookkeeping. Ms V pays me the sum of $20 per hour for my assistance. My role is mainly to teach her how to use QuickBooks and after that, I presume that she will no longer require my assistance. As at the date of filing this affidavit, I have worked four (4) hours for her in March 2019 and I anticipate a further four (4) hours of work required. I have used this money to meet expenses for the children and myself.[19]
[19] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [34].
The Husband deposes that since the Wife “left the employment of the Company”[20] on 8 February 2019 he has engaged a contract bookkeeper at $110 per week for bookkeeping and $330 per month for BAS, bookkeeping and payroll.[21] That is a total of $806 per month.
[20] Husband’s Affidavit sworn 11 June 2019 and filed 11 June 2019, [9].
[21] Husband’s Affidavit sworn 11 June 2019 and filed 11 June 2019, [9].
I note that until 29 February 2019 the Wife was being paid a sum of $855 net per week. The Husband also deposes that where previously the Wife attended at the company’s shop premises when he was required to be absent to give quotes or for other supervisory purposes, he now employs casual employees for that purpose.[22] He does not give evidence of that cost.
[22] Husband’s Affidavit sworn 11 June 2019 and filed 11 June 2019, [9].
On 27 July 2018 Wife withdrew a sum of $20,000 from the company’s account and then redeposited that sum on 30 July 2018.[23] On 4 December 2018 the Wife again withdrew the sum of $20,000 from the company account and again redeposited that sum on 17 December 2018.[24] The Husband deposes in paragraph 23 of his affidavit of 9 May 2019 that between 7 July 2018 and 24 December 2018 the Wife withdrew, by varying amounts, a total sum of $21,150 from the company accounts by transferring those monies to an account in her sole name, the withdrawals being without authority.[25]
[23] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [25].
[24] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [25].
[25] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [23].
The Husband asserts that in February 2019 payments on the various loan accounts with ANZ bank secured by way of mortgages on title to the real property were in arrears and that the business conducted by the company was running at a loss.[26] On 23 February 2019 the Husband entered into a hardship arrangement with ANZ bank under which he paid significantly reduced monthly payments on condition that the property be sold and the loan accounts repaid from sales. In paragraph 12 of his affidavit sworn 28 June 2019 the Husband deposes:
At the time of swearing this affidavit it is my belief that the hardship arrangement with ANZ has been exhausted.[27]
[26] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [23].
[27] Husband’s Affidavit sworn 28 June 2019 and filed 28 June 2019, [12].
Following settlement of the sale of the Town Q property the parties still owe a total amount of $1,581,082 to the ANZ bank.
The Motor Vehicle J was purchased by the company and utilised by the Wife including for transport of the children to and from school. That is the only vehicle available to the Wife. X attends N High School and Y attends N Public School. The Wife deposes that if the children have to rely on public transport to get to school and home it will involve three (3) buses and a train in each direction.[28] The company borrowed funds on a finance arrangement for purchase of the vehicle and a sum remains owing in relation that finance, though no evidence is presented as to how much is owing.
[28] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [53].
Sometime in 2009 or 2010, the Wife received a gift of $40,000 from her Mother and applied that sum to purchase of a motor vehicle.[29]
[29] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [66].
In 2016 the Husband received an inheritance from the estate of his late Father of $176,000 and applied the whole of that sum toward the purchase of the former matrimonial home at A Street, Suburb B.[30]
[30] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [50].
On 5 February 2019 the Husband sold his Motor Vehicle O for $75,000. He placed those funds into the company’s account and deposed in paragraph 21 of his affidavit of 11 June 2019 that he then expended sum of $67,530.21 in payments to some of the company’s creditors, as detailed by him in that paragraph.[31]
[31] Husband’s Affidavit sworn 11 June 2019 and filed 11 June 2019, [21].
On 17 March 2019 the Husband sold the parties Boat T for $30,889.68, and then expended the whole of that sum by paying $800 to a mechanic who had work on the boat, $168 to pay out the parties’ joint ANZ credit card and close it, and by depositing $29,921.86 into the parties’ joint ANZ loan account ending # … secured on the C Street, Suburb D property, to reduce the balance owing on that loan account.[32]
[32] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [29].
The Husband asserts that at some time after that deposit into the loan account on 22 March 2019 the Wife transferred $25,000 from that account to the parties’ frozen joint ANZ account ending # …,[33] and then on 1 April 2019 so transferred a further $4,921.86.[34]
[33] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [29].
[34] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [30].
The Wife’s income is composed of Centrelink payments of the Family Tax Benefit Types A and B and child support paid to her by the Husband pursuant to an assessment under the legislation in the sum of $231.97 per week.
The Wife’s income from the person known to her as Ms V is not stated and the Wife’s evidence in this regard is set out above. The Wife’s expenses as detailed in her Financial Statement, and including expenses for the children set out in Part N thereof, total $1,562 or, if not including the children’s expenses, $1,014.
The expenses set out in Part N of the Wife’s Financial Statement include an amount of $200 per week for legal fees. If this is deducted from her weekly expenses inclusive of the children’s expenses of $1,562, then the total of the Wife’s expenses are $1,362, or $814 if excluding the children’s expenses.
The Wife’s relevant assets, other than her interest in the real property, is her superannuation entitlements in the Guyen Super Fund (a self-managed superannuation fund) in the gross amount of $67,078 and her entitlements with the Super Fund W accumulation interest account in the amount of $5,955, and $1,259 in her former solicitor’s trust account.[35]
[35] Wife’s Financial Statement sworn 19 March 2019 and filed 20 March 2019.
The Wife deposes that she has been lent money by her Mother between March and June 2019 to assist with a living expenses and legal costs. The Wife’s evidence in this regard is supported by the affidavit by her Mother, Ms G sworn 11 June 2019 and filed 12 June 2019. On the Wife’s evidence and that of Ms G, the Wife is under no immediate obligation to repay the debt.[36]
[36] Wife’s Affidavit sworn 11 June 2019 and filed 12 June 2019; Affidavit of Ms G sworn 11 June 2019 and filed 12 June 2019.
The Husband in his Financial Statement indicates that he receives a wage of $1,500 per week through his employment with Company F and $530 per week rental income in relation to the C Street, Suburb D and R Street, Property S properties, a total of $2,030 per week. The Husband indicates weekly expenses, including at Part N of his Financial Statement, of $2,197.[37]
[37] The total in the Financial Statement is listed as $2,156, which is an error in the calculation.
The assets, liabilities, and superannuation entitlements of the parties at the time of interim hearing are detailed in the Balance Sheet being Exhibit R2. I cannot make a finding in relation to the completeness of the list of assets and liabilities or in relation to the value of any asset or superannuation entitlement or the amount owing on any liability.
I was informed in submissions on behalf of the Husband that the values indicated for the three remaining real properties are as agreed between the parties for the purpose of the mention before me on 15 May 2019. For the purpose of making calculations in these Reasons, I will assume that:
a)The A Street, Suburb B property is valued at $1,150,000;
b)The C Street, Suburb D property is valued at $400,000; and
c)The R Street, Property S property is valued at $380,000,
thereby the combined value of the real properties being $1,930,000.
Each of the properties is encumbered by a registered mortgage securing loan accounts with ANZ, as follows:
a)Three loan accounts with a total debit balance of $507,262 are cross-secured on both the C Street, Suburb D and the R Street, Property S properties; and
b)Two loan accounts with a total debit balance of $1,023,820 are cross secured on the A Street, Suburb B, C Street, Suburb D and R Street, Property S properties,
thereby the total indebtedness of the parties secured on the properties being in the amount of $1,531,082.
On this basis, on the sale of all three properties and payment out on the secured loan accounts, there would be net proceeds to the parties (before any agent’s commission and costs of sale including legal costs are paid) of $398,918.
In the event of a sale of the A Street, Suburb B property at $1,150,000, after paying out the two (2) secured loan accounts (but before any payment of agent’s commission or costs of sale including legal costs) there would be net proceeds to the parties of $76,180.
The parties have an ANZ One Offset account ending # … with a credit balance of $21,014.28 at the time of the interim hearing, being, it would seem on the evidence, the remnant of the funds transferred from the loan account into which the bulk of the proceeds of the sale of the Boat T were deposited. That account has been frozen.
Other than some bank accounts in the name of the Wife and a bank account in the name of the Husband, each with only a nominal sum in credit, the parties’ other assets are a boat ‘Boat P’ valued at between $22,000 as estimated by the Husband and $25,000 as estimated by the Wife, the parties’ furniture and household effects, and the Husband’s shareholding in the company Company F of currently unknown value.
The Wife gives evidence that on 26 July 2018 the Husband assaulted her by grabbing her and pushing into a kitchen counter “a number of times”[38] and on 4 December 2018 when she attended the company’s shop premises the Husband verbally abused her, threatened her and, as she left, kicked the driver’s door of her car and hit the window.[39] As a result of this occasion a Provisional AVO was issued by police officer on 5 December 2018 for the protection of the Wife from the Husband. On 16 April 2019, when that matter was first before the Local Court at Suburb B, a final AVO for the protection of the Wife from the Husband was made for a period of two (2) years being the statutory orders only.[40] The Husband has appealed this result in the District Court of New South Wales.[41]
[38] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [38].
[39] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, [39].
[40] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, annexure G-8.
[41] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [33].
As indicated earlier, the Wife continues to reside in the former matrimonial home at A Street, Suburb B with the children and Husband resides at an undisclosed location. It is common between the parties that they seek a sale of the A Street, Suburb B property. The Wife asserts that in order to enable her to find rental accommodation for herself and the children upon sale of the A Street, Suburb B property, she would need a sum of $2,500 to provide a rental bond on entering the lease and a sum of $1,300 to cover removalist costs and assistance in the sum of up to $650 per week for payment of rent until she receives her share of the matrimonial assets following final property settlement orders.
Both parties have given evidence detailed above of their ill-health affecting their employment opportunities and therefore their incapacity. The Wife has day-to-day care of the children of the marriage, X being 17 years of age and Y 11 years of age. There is nothing to indicate other than that the Wife’s care of Y will continue until he attains the age of 18 years.
The Wife does not give any evidence of attempts to seek employment other than casual work undertaken by her for the person known to her as Ms V, and asserts that due to her ill-health she is unable to work. The Wife asserted at the interim hearing that she does not have any bookkeeping qualifications.
The law – interim spouse maintenance
Section 72 of the Act sets out the basis on which a party to a marriage is liable to maintain the other party or, conversely the basis on which a party to a marriage has a right to be maintained by the other party:
Section 72 Right of spouse to maintenance
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
(2) The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.[42]
[42] Family Law Act 1975 (Cth) s 72.
Section 74 of the Act provides:
Section 74 Power of court in spousal maintenance proceedings
(1) In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
(2) If:
(a) an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and
(b) either of the following subparagraphs apply to a party to the marriage:
(i) when the application was made, the party was a bankrupt;
(ii) after the application was made but before the proceedings are finally determined, the party became a bankrupt; and
(c) the bankruptcy trustee applies to the court to be joined as a party to the proceedings; and
(d) the court is satisfied that the interests of the bankrupt's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the bankruptcy trustee as a party to the proceedings.
(3) If a bankruptcy trustee is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the bankrupt party to the marriage is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
(4) The court must not grant leave under subsection (3) unless the court is satisfied that there are exceptional circumstances.
(5) If:
(a) an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and
(b) either of the following subparagraphs apply to a party to the marriage (the debtor party ):
(i) when the application was made, the party was a debtor subject to a personal insolvency agreement; or
(ii) after the application was made but before it is finally determined, the party becomes a debtor subject to a personal insolvency agreement; and
(c) the trustee of the agreement applies to the court to be joined as a party to the proceedings; and
(d) the court is satisfied that the interests of the debtor party's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the trustee of the agreement as a party to the proceedings.
(6) If the trustee of a personal insolvency agreement is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the party to the marriage who is the debtor subject to the agreement is not entitled to make a submission to the court in connection with any property subject to the agreement.
(7) The court must not grant leave under subsection (6) unless the court is satisfied that there are exceptional circumstances.
(8) For the purposes of subsections (2) and (5), an application for an order under this section is taken to be finally determined when:
(a) the application is withdrawn or dismissed; or
(b) an order (other than an interim order) is made as a result of the application.[43]
[43] Family Law Act 1975 (Cth) s 74.
As referred to in section 72, section 75 (2) sets out the only matters to be taken into account by a court in exercising jurisdiction under section 74:
Section 75 Matters to be taken into consideration in relation to spousal maintenance
…
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.[44]
[44] Family Law Act 1975 (Cth) s 75(2).
Section 75 (3) provides that:
In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.[45]
[45] Family Law Act 1975 (Cth) s 75(3).
The High Court of Australia in Hall v Hall[46] at paragraphs [3] to [10] and [52] to [58] said in relation to the spouse maintenance provisions in the Act:
[46] Hall v Hall (2016) 257 CLR 490.
[3] Part VIII of the Family Law Act governs, amongst other things, spousal maintenance. The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That sub-section provides that “[a] party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)”.
[4] The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That sub-section provides that, “[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part”.
[5] A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters (s 75(1)). Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as “the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment”. They also include, by virtue of s 75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
[6] A court in exercising its powers under Pt VIII may “make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order” (s 80(1)(h)). The power to make the second or last of those forms of order — an order pending the disposal of proceedings or an order until further order — is within the general power conferred by s 74(1). Such an order has now long been referred to, in nomenclature which has come to receive statutory confirmation, (s 74(8)(b)) as an “interim order” as distinct from a “final order”.
[7] It was established at an early stage in the history of the Family Court that the power to make an interim order under s 74(1) is separate and distinct from the power to make an urgent order that is separately conferred by s 77 (In Marriage of Pritchard (1982) 8 Fam LR 805 at 805-806; [1982] FLC ¶91-286 at 77,615). Section 77 allows the court to “order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable” if a two-part condition is met. First, it must appear to the court that a party to the marriage “is in immediate need of financial assistance”. Second, it must be “not practicable in the circumstances to determine immediately what order, if any, should be made”.
[8] Unlike a court exercising the power to make an urgent order conferred by s 77, a court exercising the power to make an interim order under s 74(1) must be satisfied of the threshold requirement in s 72(1) and must have regard to any matter referred to in s 75(2) that is relevant (In Marriage of Redman (1987) 11 Fam LR 411 at 414-415; [1987] FLC ¶91-805 at 76,081.) No doubt, on an application for an interim order “[t]he evidence need not be so extensive and the findings not so precise” as on an application for a final order (In Marriage of Redman (1987) 11 Fam LR 411 at 415; [1987] FLC ¶91-805 at 76,081.) But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth). A court determining an application for an interim order under s 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it, that the threshold requirement in s 72(1) is met having regard to any relevant matter referred to in s 75(2).
[9] If an order with respect to the maintenance of a party to a marriage is in force, whether that order be an interim order or a final order, a court has power under s 83(1)(c) to “discharge the order if there is any just cause for so doing”. An order discharging an order may be expressed to be retrospective to such date as the court considers appropriate (s 83(6). For the purpose of considering the exercise of the power to discharge an order, the court is specifically required to have regard to ss 72 and 75 (s 83(7)).
[10] It was again established at an early stage in the history of the Family Court that an applicant for discharge of a maintenance order can seek to satisfy the court that the party in receipt of maintenance does not meet the threshold requirement of s 72(1), but that the requirement of s 83(1)(c) that there be “just cause for so doing” imports a need for the court to be satisfied of circumstances which justify the court considering that threshold requirement again (In Marriage of Astbury (1978) 34 FLR 173 at 175-178; 4 Fam LR 395 at 397-398).
...
[52] The wording of s 72(1), it has been noted (In Marriage of Astbury (1978) 34 FLR 173 at 177-178; 4 Fam LR 395 at 398) seems to imply that each party should attempt to support himself or herself where that is reasonable having regard to the matters referred to in s 75(2).
[53] The matters referred to in s 75(2)(b) are matters which bear on the practical ability of one party to support the other, and of the other party to support himself or herself. Hence the concluding reference is to the matter of “the physical and mental capacity of each of them for appropriate gainful employment”. Hence also the opening reference to the matter of “the income, property and financial resources of each of the parties” cannot be confined to the present legal entitlements of the parties.
[54] The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency” (In the marriage of J A and C Q Kelly (No 2) (1981) 7 Fam LR 762 at 769; (1981) FLC 91-108 at 76,803 (Kelly (No 2))). The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation (In Marriage of Kelly [No 2] (1981) 7 Fam LR 762 at 769-770; [1981] FLC 91-108 at 76,803.)
[55] Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
[56] Here, on the Full Court’s finding of fact, the annual payment from the Group was a financial resource of the Wife so as to be a matter within s 75(2)(b). The payment was available to her if she asked for it. The availability of the payment was the subject of specific provision in the father’s will. The making of the payment was at least a moral obligation of the Wife’s brothers, who were in any case well-disposed towards her.
[57] Section 75(2)(o) plainly extends to any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account as showing that a party to the marriage is or is not able to pay spousal maintenance or is or is not able to support himself or herself. The paragraph has accordingly long been correctly interpreted by the Family Court as permitting consideration by a court of “all of the financial matters which are relevant to [a] particular case” (In Marriage of Beck [No 2] (1983) 48 ALR 470 at 475; 8 Fam LR 1017 at 1021; [1983] FLC ¶91-318 at 78,167) Nothing in the language or structure of s 75 prevents a fact or circumstance which falls within s 75(2)(o) being also a fact or circumstance which gives rise to a matter under another paragraph of s 75(2), including s 75(2)(b).
[58] Because it bore centrally on the ability of the Wife to support herself adequately, the availability to the Wife of the annual payment from the Group was also a fact or circumstance in respect of which it was open to the Family Court to form the opinion that the justice of the case required that it be taken into account. The analysis of the Full Court shows that it formed that opinion. There was thus, in addition to a matter within s 75(2)(b), a matter within s 75(2)(o).[47]
[47] Hall v Hall (2016) 257 CLR 490, [3]-[10], [52]-[58] (emphasis added).
In In the Marriage of Redman,[48] the Full Court said that:
… on an application for interim maintenance the court conducts “not as final or exhaustive a hearing as would be the case if one were hearing the matter finally”: Williamson and Williamson [1978] FamCA 57; (1978) FLC 90-505; (1978) 4 Fam. L.R. 355 at FLC p. 77,650; Fam. L.R. p. 359 per Fogarty J. The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of s 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under s 83.[49]
[48] In the Marriage of J M and Y A Redman (1987) 11 Fam LR 411.
[49] In the Marriage of J M and Y A Redman (1987) 11 Fam LR 411, 415 (Evatt CJ, Lindenmayer and Nygh JJ).
There is no fettering principle that the pre-separation standard of living must automatically be awarded and reasonableness in the circumstances is the guiding principle.[50]
[50] See Bevan & Bevan (1995) FLC 92-600.
In Maroney & Maroney,[51] Coleman J said:
[56] … The “capacity” to meet an order for interim spousal maintenance is not confined to income. Once a party, such as the Wife in this case, establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.[52]
[51] Maroney & Maroney [2009] FamCAFC 45.
[52] Maroney & Maroney [2009] FamCAFC 45, [56].
Of relevance in this matter is what was said in In the Marriage of and A C Vautin:[53]
[42] Maintenance is a term of wide meaning directed to various forms of provision for the support of a spouse or child … In making the order which is appropriate in that context, the Court may make a periodic order or lump sum order or a combination of both and/or make any other orders of the kind referred to in s 80(1).
[43] … [In] the exercise of the power to order lump sum maintenance … [it] may be ordered, amongst other reasons, to meet non-periodic expenditure for the maintenance of that person where there is an established need and a capacity to pay. It is not confined to cases of the capitalisation of periodic maintenance and/or where periodic maintenance is unlikely to be paid because of concerns about the capacity or willingness of the liable parent to pay (as passages in the judgment in Clauson and Clauson (1995)FLC92–595 at pp 81,907 and 81,908 may suggest) or to cases where the need for or the capacity to pay periodic maintenance is demonstrated.[54]
[53] In the Marriage of A and A C Vautin (1998) 23 Fam LR 627 (Fogerty and Burton JJ).
[54] In the Marriage of A and A C Vautin (1998) 23 Fam LR 627, [42]-[43] (Fogerty and Burton JJ).
The task of deciding a spousal maintenance case, interim or final, involves three questions, with a ‘yes’ answer required to the first question before the Court can pass on to the second question, and a ‘yes’ answer required to the second question before the Court can pass on to the third question.
The first question is ‘does the Applicant for a spousal maintenance order have a need?’ Put simply, the test is to ascertain the Applicant’s relevant income (bearing in mind section 75 (3) of the Act) and the Applicant’s reasonably necessary and unavoidable living expenses.[55] If the Applicant’s said expenses are less than or equal to the Applicant’s relevant income, the Applicant does not have a need – a ‘no’ answer – and there the matter ends. If the Applicant’s said expenses are in excess of their relevant income, the Applicant has a need – a ‘yes’ answer – and one goes on to the second question.
[55] See In the Marriage of Mee and Ferguson (1986) 10 Fam LR 971; In the Marriage of Gyselman (1991) 15 Fam LR 219.
The second question is ‘does the Respondent have a capacity to pay?’ The test is the same – ascertain the Respondent’s income and the Respondent’s reasonably necessary and unavoidable living expenses. If the Respondent’s income is the same as or less than the Respondent’s said expenses, the Respondent does not have a capacity to pay – a ‘no’ answer – and there the matter ends. If the Respondent’s income is in excess of the Respondent’s said expenses, the respondent has a capacity to pay – a ‘yes’ answer – and one goes on to the third question.
The third question is, of course, how much of the Respondent’s excess of income-over-expenses should the Court order the Respondent to pay to the Applicant to assist the Applicant with his or her excess of expenses-over-income?
As I said, my description of the test for questions one and two is put simply, and in each case all of the relevant matters in section 75(2) of the Act, and only those matters, must be taken into account, [56] including any question relating to ‘earning capacity’ of either party if asserted by the other party to be greater than the party’s income. Though section 75(2)(b) does not refer to ‘earning capacity’ (unlike subsections (h), (j) and (k))[57] it is a matter properly to be taken into account under section 75(2)(o).[58]
[56] Family Law Act 1975 (Cth) s 75(1).
[57] Family Law Act 1975 (Cth) ss 75(2)(h), (j), (k).
[58] In the Marriage of DJM & JLM (1998) 23 Fam LR 396.
The law – interim property
There is no doubt that the Court has power to make interlocutory orders for the sale of assets forming part of the matrimonial asset pool in circumstances, amongst others, where the likelihood or certainty of a failure to meet payment obligations on loan accounts secured on that property will cause a diminution of the equity in the property and/or an action is likely or certain to be taken by the secured creditor to realise on their security.
Mr Wong for the Husband referred me to the following extracts from James & James:[59]
[3] The debt to the mortgagee has to be paid from somewhere. The consequence of doing nothing is for the bank to foreclose, for the bank to force a sale of that property and possibly, then, the other Are Street property afterwards. That would be a most unsatisfactory result from the Wife’s perspective and also likely from the Husband’s perspective. The parties need to be protected from that consequence.[60]
[59] James & James [2016] FamCA 1105 (Johns J).
[60] James & James [2016] FamCA 1105, [3] (Johns J).
Mr Wong also referred me to the comments of Loughnan J in Atwood & Atwood[61] where his Honour said in relation to the impact on the parties and the matrimonial asset pool of a mortgagee’s power of sale:
The concept of judicial notice is not without limits but it is not unfair to say that there is a risk that a mortgagee sale will not produce the highest value for a property. That could arise because, with the best will in the world, the motivation of the mortgagee is to cover the amount that is owing rather than to maximise the value of the property.[62]
[61] Atwood & Atwood [2017] FamCA 368, [14].
[62] Atwood & Atwood [2017] FamCA 368, [14].
In relation to the Husband’s Application for orders providing for an interim property distribution of $50,000 to each of the parties, the principles to be applied were set out by the Full Court in Strahan & Strahan (Interim Property Orders):[63]
[63] Strahan & Strahan (Interim Property Orders) (2009) 241 FLR 1 (Boland, Thackray, and O’Ryan JJ).
[132] In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
[133] In [In Marriage of Harris (1993) 113 FLR 472] at 479 the Full Court gave some examples of circumstances where it may be appropriate to exercise the power being “where both parties agree to the disposal of some assets pending the trial” and “[u]rgent situations” to avoid injustice. Another example is where, as in this case, one party requires funds to assist in defraying the costs of litigation without which funds an injustice may be caused.
[134] Then turning to the substantive step we adopt what the Full Court said in Harris at 479-480 in relation to the second and third matters which we will now discuss.
[135] In relation to the second matter, as the jurisdiction under s 79 of the Act is being exercised the provisions of that section must be considered and applied but with limitations given that it is not the final hearing. There is also no requirement of compelling circumstances in relation to the substantive step.
[136] As to the third matter identified at 480 by the Full Court in Harris, in discussion before us it was described as the “adjustment issue” or “claw-back issue”. It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant “more than they would be indubitably entitled to on a final hearing” or alternatively “would it give them so much that it could not be adjusted on a final hearing?” As we have observed the Full Court in [In Marriage of Zschokke (1996) 133 FLR 375] at 395-397 stressed the importance of consideration of the “adjustment issue” if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley [(2008) 221 FLR 270] at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be “capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power”.
[137] Once a court proceeds to exercise the power in s 79 of the Act , being in the substantive phase, a court is required to undertake consideration of the matters in s 79(4) including by reference to s 79(4)(e) the matters in s 75(2) so far as they are relevant. However consideration of such matters may be brief and if it is established that “it seems likely to the Court that ... the applicant ... will be likely receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made”: Zschokke; Polletti and Polletti [unreported, Family Court, Nygh J, 2 March 1990] per Nygh J and Wenz v Archer [(2008) 40 Fam LR 212]. As senior counsel for the Wife submitted, “provided scope can be found within the assets of the parties for an order of the size sought ... then that should be the end of the matter”. In other words, in such circumstances the applicant would only be receiving what he or she was entitled to receive when the power was exhausted.
[138] The legislation does not prescribe what the Full Court in Zschokke at 392 described as “preconditions” and nor would we seek to exhaustively prescribe matters that may be relevant to take into account in the exercise of the discretion under s 80(1)(h) of the Act. As to the three “criteria” identified by the Full Court in Zschokke, we accept that an inability on the part of an applicant for an interim property order to defray the costs of litigation to meet his or her litigation costs would be a relevant matter to take into account at the procedural or first stage. Senior counsel for the Wife submitted that it may be relevant at the substantive or second phase in reviewing the “necessarily limited and impressionistic budget for costs” to ensure that the application is bona fide. We are of the view that it may be that any issue about the bona fides of an application is relevant at the procedural phase in the context of considering if in the interests of justice it is appropriate to make an order before the final hearing.
[139] We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.
[140] As to the other matters being a position of relative financial strength on the part of the respondent to an application and the capacity of the respondent to meet his or her own litigation costs, there is no doubt that the financial circumstances of both parties are relevant at the substantive stage and may also be relevant at the procedural stage. Senior counsel for the Wife submitted that all of the matters discussed by the Full Court in Zschokke are self-evident and we accept that this is so in relation to at least two of the matters being the need for funds and the financial circumstances of both parties.
[141] As to the various matters discussed by Brereton J in Paris King Investments [v Rayhill [2006] NSWSC 578] which we have discussed above, we do not propose to deal with all of what his Honour said, however we make the following observations about some of the matters. Obviously the applicant should have “at least an arguable case for substantive relief which deserves to be heard”. Further, in determining at the procedural stage whether to exercise the jurisdiction there may need to be evidence of the applicant’s “likely costs of the litigation” given that the need for funds to defray litigation costs and expenses is the circumstance propounded as to why it is appropriate that an order be made. We also accept that “it is not an essential precondition” that the applicant’s legal representatives will not continue to act unless the costs are paid or secured on an ongoing basis.[64]
[64] Strahan & Strahan (Interim Property Orders) (2009) 241 FLR 1, [132]-[141] (Boland, Thackray, and O’Ryan JJ).
In Medlow & Medlow,[65] the Full Court said:
The onus was clearly upon [the applicant for relief] to establish that there were sufficient assets available for the interim distribution and that the effect of any interim order was capable of being reversed as part of the final hearing or at least would not defeat [the respondents]’s property claim.[66]
[65] Medlow & Medlow (2016) 306 FLR 183.
[66] Medlow & Medlow (2016) 306 FLR 183, [86].
I also note the thorough analysis of the issue of an interim “distribution” of part of a matrimonial asset pool under the available powers – interim spousal maintenance, interim property settlement, or costs – by A Kelly J in Candlin & Candlin[67] at paragraphs 19 to 144 of that judgment.
[67] Candlin & Candlin [2017] FCCA 2211, [19]-[144].
As succinctly put by Foster J in Nsair & Gyaw & Anor:[68]
[50] Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice.
[51] Secondly, the Court is to have regard to relevant matters in s 79 of the Family Law Act 1975 (Cth) (“the Act”). It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.
[52] A detailed inquiry is not required, but there must be some assessment of s 79 factors.[69]
[68] Nsair & Gyaw & Anor [2018] FamCA 418 (Foster J).
[69] Nsair & Gyaw & Anor [2018] FamCA 418, [50]-[52] (Foster J).
The Wife’s interim spousal maintenance application – does the Wife have a need?
Has the Wife demonstrated a need to be maintained by the Husband by reason of being unable to support herself adequately, by reason of having the care and control of X and Y, or of age or physical or mental incapacity for appropriate gainful employment, or for any other adequate reason? In examining the evidence towards making a finding an answer to this question I must have regard to the relevant matters referred to in subsection 75(2) of the Act, and only those matters.
The Wife is 40 years of age and presents evidence that for medical reasons she is currently unable to engage in full-time work by reason of an injury to her lower spine occurring in … 2008, leading to an assessment by Dr K in October 2016, for workers compensation insurer purposes, that she has a total whole person impairment of 13%, after reaching “maximum medical improvement”.[70] There is no evidence that she has any formal tertiary qualifications and on the evidence of both parties, she has not been in formal employment outside the family company since 2008 and has fulfilled an office administrative and bookkeeping role for the family business.
[70] Wife’s Affidavit sworn 19 March 2019 and filed 20 March 2019, annexure ‘A’.
I am to disregard the income stated in her Financial Statement affirmed 19 March 2019 from the Family Tax Benefit Part A and Part B.[71] If I go on to include all of the expenses asserted by the Wife in her Financial Statement at Part G and Part N, which include expenses for the children, then I would find that her income consists only of the amount she receives weekly from the Husband by way of child support payments, being $300 per week according to her Financial Statement, but being, on the whole of the evidence, $231.97 per week. If I disregard those expenses that relate to the children, then I would not include the child support as relevant income.
[71] Family Law Act 1975 (Cth) s 75(3).
For the purpose of these proceedings I will take the latter course and accordingly I find that for the purposes of the spousal maintenance Application the Wife has no income. In making this finding I am mindful of the occasional payments the Wife received for undertaking some bookkeeping teaching work for the person known as “Ms V” and I find that on the evidence such payments are too uncertain to be included as relevant income of the Wife.
In line with the approach I have taken to the Wife’s relevant income, I find that the Wife’s reasonably necessary and unavoidable expenses are those that relate to the Wife by excluding the expenses set out in the “For Children” column in Part N of her Financial Statement. No evidence was presented by the Husband and no submissions were made for the Husband to the effect that any of the expenses claimed by the Wife in her Financial Statement were beyond reasonably necessary and unavoidable expenses and should not be taken into account in relation to deciding her Application for spousal maintenance. I find that such of the Wife’s expenses set out in the Wife’s Financial Statement as are still being paid by her are reasonably necessary and unavoidable expenses.
Included in the expenses of the Wife set out in her Financial Statement, in Part G is an item for rates with an expenditure estimated at $123 per week. I asked the Wife during her submissions if she currently pays towards council rates and she replied that she does and that she makes such payments by instalments. I asked the Wife during her submissions if she currently pays for or towards the building insurance premiums in relation to the C Street, Suburb D and R Street, Property S properties. The Wife replied that she is not paying toward those premiums at the present time, and so I deduct the amount of $61 shown as an expense for that purpose in her Financial Statement. I also deduct the amount of $24 shown as an expense for the building insurance on the now sold Town Q property. The total expenses in Part G and Part N of the Wife’s Financial Statement that relate to the Wife, excluding those for the children referred to above, total $1,014 per week. After deduction of $85 the total expenses are $929 per week.
The Wife has ongoing day-to-day care and control of the children of the marriage, X and Y, though given that X is 17 years of age (though still at school in 2019) the Wife’s parental obligation to provide supervision for her is considerably less than it is for Y. Nevertheless, the need for the Wife to provide day-to-day care for the children must have an effect on either her capacity to engage in appropriate gainful employment or, if she were to engage in appropriate gainful employment across a period of time when the children (particularly Y) are in need of care, it would have a resultant effect on her expenses by providing another commitment to financial expenditure for the support of the children.
The Wife is not responsible for the support of any other person other than herself and the children.
I do not have evidence on this interim basis to make a finding relation to a standard of living that are all the circumstances is reasonable for the Wife.
I have not been presented with evidence by either party that would enable me to make any finding in relation to the extent to which payment of maintenance of the Wife by the Husband, in whatever amount, would increase the Wife’s earning capacity by enabling her to undertake a course of educational training, or to establish herself in a business, or otherwise to obtain an adequate income.
On the evidence of both parties, the Wife worked with the Husband in the family business from 2008 until the February following the party’s separation. In that regard I find that the Wife, during that time, contributed to the Husband’s income, earning capacity, property and financial resources, as the Husband so contributed to the Wife’s. However, I do not find that this matter to be taken into account assists me in determining the Wife’s Application for spousal maintenance, despite the reference in the relevant subsection to “the party whose maintenance is under consideration”.[72]
[72] Family Law Act 1975 (Cth) s 75(2)(h).
The parties’ marriage (that being the word used in subsection 75(2)(k)) was from … 2001 up to the present time as they are not divorced. More relevantly, the parties period of cohabitation was from 1998 until late July 2018 (as stated, the parties differ across a period of about a week as to the actual date of separation), a period of 17 years. The Wife was the primary caregiver for the children and principally responsible as between the parties for the homemaker role within the family throughout the period of the parties’ cohabitation. Given those responsibilities, combined with her work in the family business, this would inevitably mean that the Wife did not pursue formal qualifications or work experience beyond the administrative and bookkeeping role she had on an ‘unqualified’ basis within the family business. To this extent, the ‘duration of the marriage’ has affected the earning capacity of the Wife.
The Wife is continuing her role as sole caregiver, so far as that is needed, for X and principal caregiver for Y in the context of Y not spending what would amount to substantial and significant time with his Father as is defined in section 65DAA of the Act. The effect of this on the Wife’s Application for spousal maintenance has been referred to above.
There is no evidence of the Wife cohabiting with any other person and the Wife swears that there is no other income earner in a household in Part E of her Financial Statement.
The other main issue in the interim hearing is, of course, the Husband’s Application for an interim partial property distribution, which would be an order under section 79 of the Act,[73] exercising the Court’s power under section 80(1) of the Act.[74] In the event that I make a finding that I should make such an order I would then, if necessary, reconsider in the light of any such order any finding I have made in relation to the Wife’s Application for spousal maintenance.
[73] Family Law Act 1975 (Cth) s 79.
[74] Family Law Act 1975 (Cth) s 80(1).
I have already referred to the payment by the Husband to the Wife of the sum of $231.97 per week by way of child support as assessed under the relevant legislation and I note that this sum is less than the expenses exclusively for the children estimated by the Wife in the “For Children” column of Part N of her Financial Statement.
In relation to “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account” under subsection 75(2)(o),[75] I find that the only such fact or circumstance is the earning capacity of the Wife, and I have already referred to matters in the evidence relating to the effect of the Wife’s back injury on any capacity. The Wife has not presented any evidence of any efforts made on her part to identify and seek to obtain any appropriate gainful employment, but on the other hand, the Wife’s ongoing responsibility for day-to-day care of Y, and to a lesser extent X, combined with medical difficulties and her lack of formal qualifications are sufficient for me to find on the interim basis, where the evidence has not been comprehensive or subjected to testing, that the Wife is currently incapable of engaging in appropriate gainful employment.
[75] Family Law Act 1975 (Cth) s 75(2)(o).
Accordingly, I find that the Wife has a need to be maintained by the Husband to the extent of $929 per week.
The Wife’s interim spousal maintenance application – does the Husband have a capacity to pay?
Having found that the Wife has a need to be maintained by the Husband by reason of being unable to support herself adequately I now ask is the Husband reasonably able to maintain the Wife by reason of having a capacity to contribute financially to the Wife’s need?
The Husband asserts in his Financial Statement sworn by him on 11 June 2019 that he receives a salary or wages before tax of $1500 per week from his employment by Company F. He further asserts that he receives the sum of $530 per week income by way of rent payments from the tenants of the “3 properties”.[76] One of the three properties he refers to, the Town Q property, has been sold with that sale settling subsequent to him swearing his Financial Statement. Accordingly that amount must now be less, though I do not have evidence to enable me to recalculate the figure. On the Husband’s case, he now has income of something less than $2030 per week.
[76] Husband’s Financial Statement sworn 11 June 2019 and filed 11 June 2019, item 10.
As referred to above, the Wife annexed copies of the Profit & Loss statements for Company F for the financial years ended 30 June 2015 to 2018 inclusive to her affidavit sworn 11 June 2019 and filed 12 June 2019,[77] and the company’s Profit & Loss Statement for the year ended 30 June 2019 was tendered on behalf of the Husband and enter into evidence as Exhibit R4.
[77] Wife’s Affidavit sworn 11 June 2019 and filed 12 June 2019, annexure ‘C’.
The Wife asserted in her submissions and I have inferred from her evidence that the Husband’s income was greater than that sworn to by him in his Financial Statement. On this interim basis, without the testing of evidence, and given that the latest Profit & Loss statement indicated an operating expense for wages $132,150 in the year, but without there being any evidence before the Court of how many wage earners shared that amount, I cannot assume that the Husband was the only wage earner and I must be mindful that the statement shows a net loss to the company over the year of $79,259.[78] As outlined above, when all five Profit & Loss statements are taken into account, they show an average net profit for the company of $20,502.
[78] Exhibit R4.
What is not explained in the evidence adequately for the purposes of this exercise is why the family business, which had sustained the family and led to a gradual increase in their wealth by the acquisition of real properties over the period from 2008 up to the separation of the parties, is suddenly unable to continue on that course when the only real change would seem to be that the company is now spending about $806 per month to pay for bookkeeping, payroll, and BAS assistance where previously it was paying $880 per week to the Wife as a wage to undertake those duties.
On the basis of the evidence available on the interim hearing I am not able to make a precise finding as to the Husband’s income.
In his Financial Statement the Husband sets out at Part G and Part N his expenses. At Part N he includes some modest expenses for the children when they are in his care:
a)Food $30;
b)Children’s activities $30
c)Medical dental and optical costs not including health insurance premiums $40
d)Entertainment and hobbies $20;
e)Holidays $15
f)Education expenses $10;
g)Gifts $15; and
h)The children’s part of health insurance premiums which, on the Husband’s evidence, covers them, being a total of $182.
I find that these expenses for the children should be included in calculating the Husband’s reasonably necessary and unavoidable expenses as he spends time with Y. I find that none of the expenses set out by the Husband in Part N of his Financial Statement are other than reasonably necessary and unavoidable expenses.
In relation to his expenses set out in Part G, the amounts stated to be paid weekly as payments on the various ANZ loan accounts secured on the real properties are at the reduced amounts allowed by the bank in accordance with the hardship plan between parties and the bank referred to in the Husband’s affidavit.[79] Were the Husband to be paying the required payments outside of the hardship plan, or even paying half thereof, then his total expenses would be greater than as currently reflected in his Financial Statement.
[79] Husband’s Affidavit sworn 11 June 2019 and filed 11 June 2019, [6].
The Husband includes as a weekly personal expenditure in Part G the $231.97 paid by him weekly as child support pursuant to an assessment to the Wife. I find that it is proper to include this sum in the Husband’s reasonably necessary and unavoidable living expenses as the payment of that sum under an assessment is a legal obligation on the Husband.
Accordingly, I find that the commitments of the Husband necessary to enable him to support himself and Y when he is in his care are $2,197 (not the miscalculated total of $2,156 put by the Husband in his Financial Statement).
The Husband is 40 years of age and asserts that there are certain health matters that affect his ability to engage in appropriate gainful employment, being his “worn out”[80] right knee that prevents him engaging in his previous occupation of trades work and his two bulging discs and arthritis, though the Husband does not present evidence as to how the latter does or may affect his capacity to engage in appropriate gainful employment. I find that the Husband does have a capacity to engage in appropriate gainful employment and in particular to continue as an employee of and as the sole director of Company F and to continue to earn an income through the business conducted by that company.
[80] Husband’s Affidavit sworn 9 May 2019 and filed 9 May 2019, [9].
The Husband does not have day-to-day care or control of either of the children of the marriage and he spends less than substantial and significant time with Y and no time with X.
The Husband’s evidence is that he is in a new relationship, but that he does not cohabit with that person. There is no other income earner in the Husband’s household.
As already stated when considering the Wife’s circumstances, there is not sufficient evidence available to me, on the interim hearing, to make any finding in relation to a standard of living that all the circumstances is reasonable for the Husband.
In relation to any other fact or circumstance which in my opinion the justice of the case requires to be taken into account, I again refer to earning capacity, this time for the Husband, and I find that on all of the evidence, I am not able to find on an interim basis that the Husband’s earning capacity is greater than that which he currently asserts.
Accordingly, I find that the Husband currently does not have a capacity to maintain the Wife, and he does not have an ability to pay spousal maintenance.
Having found that ‘no’ is the answer to the second question I do not proceed to the third question.
The Husband’s interim property application
The Husband asks the Court to do two things in his interim property Application:
a)To make orders for the sale of all three remaining real estate properties; and
b)From the proceeds of such sales, to order a partial property distribution of $50,000 to each of the parties.
The Wife does not oppose orders for sale of the A Street, Suburb B property provided she receives from the Husband lump-sum assistance of $2,500 toward a rental bond, $1,300 for removalist fees and up to $600 per week towards her payment of rent.
As detailed above, there are now five loan accounts in the joint names of the parties with ANZ cross-secured variously on the real properties. The total owing, on the evidence, is $1,531,082. On the Wife’s evidence she does not have any capacity to service those loans at all at the present time, even under the hardship arrangement with the bank. On the Husband’s evidence he does not have the capacity to service those loans at the present time under the hardship arrangement, his asserted gross income being less than what I have found to be his expenses.
The Husband gives evidence that the hardship arrangement with ANZ is coming to a close and that the bank will require full regular payments on each of the loan accounts. If payments as required by the bank on the loan accounts fall into arrears then it will be open to ANZ to take steps to realise on its securities by issuing the required notices under the National Credit Code[81] under the National Consumer Credit Protection Act2009 (Cth) and the Real Property Act 1900 (Cth).
[81] National Consumer Credit Protection Act 2009 (Cth) sch 1.
The parties agree that the A Street, Suburb B property should be sold. If the A Street, Suburb B property is sold at $1,150,000 and the proceeds of sale applied to discharge the two loan accounts secured on all three properties ($535,346 and $538,474) then net proceeds of sale of $76,180 will remain, from which agents commission, if any, and all other costs of sale would be deducted.
After a sale of the A Street, Suburb B property, the C Street, Suburb D property and the R Street, Property S property would remain, as would the remaining three loan accounts cross secured on both of those properties – $204,401, $205,434, and $97,427. If one of those properties, say the R Street, Property S property, is sold at $380,000 and, with the cooperation of the bank, two of the three loan accounts are discharged – the $205,434 loan account and the $97,427 loan account – then net proceeds of sale of $77,139 will remain, from which agents commission, if any, and all other costs of sale would be deducted.
That would leave the R Street, Property S property in the matrimonial asset pool and still subject to a mortgage securing the remaining loan account owing $204,401.
The combined net proceeds of sales of the A Street, Suburb B property and the R Street, Property S property would be $153,319 and after payment of the agent’s commissions, if any, and all other costs of the sales, there would be a sum left over available for a partial property distribution on an interim basis between the parties.
On the evidence, as referred to above, there is an ANZ One Offset account ending # … in the joint names of the parties with a credit balance at interim hearing of $21,014.28. That sum can also be available for a partial property distribution and in particular to provide the lump sums needed by the Wife for a rental bond, removalist fees and living expenses, including rent.
As neither party on the evidence has a current capacity to maintain the required payments on the loan accounts once the hardship plan expires, it is then likely that the parties will be in danger of action being taken by ANZ as mortgagee to realise against its securities with a consequent loss to the parties of at least the bank’s costs in doing so. In addition, there is a possible loss to the parties of a sale in a mortgagee’s hands netting less than that which the parties may be able to achieve in a sale in their hands.
Accordingly, I find that it is appropriate to make orders for a sale of the A Street, Suburb B property and at least one of the investment properties and I find that the appropriate investment property to be sold is the property of lesser value, the R Street, Property S property. It would be up to the parties to do what they can to convince the bank to leave one of the loan accounts owing, between $204,000 and $206,000 secured on the C Street, Suburb D property, whilst the remaining two loan accounts are paid out on the sale of the R Street, Property S property.
Turning then to the other issue in the Husband’s Application, being a partial property distribution, I first must decide the ‘overarching consideration’ of the interests of justice by deciding if there are circumstances that render it appropriate to exercise the Court’s powers under sections 79[82] and 80(1)(h) of the Act.[83]
[82] Family Law Act 1975 (Cth) s 79.
[83] Family Law Act 1975 (Cth) s 80(1)(h):
Before commencing on that exercise I have regard to the fact that the usual order pursuant to section 79 is a once-and-for-all order made after a final hearing. I find that in the circumstances of this matter:
a)There is property available to satisfy an order for interim property provision; and
b)That there is a pressing need, certainly on the part of the Wife, for a capital sum to apply to the necessary expenses she will incur in relocating on the sale of the A Street, Suburb B property, and for living expenses pending final order in circumstances where her income is inadequate to meet her expenses; and
c)I have found that the Husband is not liable to maintain the Wife in consequence of not having an ability to pay.
Accordingly I find that it is appropriate to consider a partial property distribution and not to leave all distribution to a final hearing.
In deciding whether there are circumstances that render it appropriate to exercise the Court’s powers to make orders for interim property provision I do not have to find ‘compelling circumstances’, but only that it is in the interests of justice to take that course. The reasons outlined in the last paragraph for proceeding on an interim basis rather than waiting for final hearing to make property orders apply so far as the Wife is concerned to satisfy me that there are circumstances that render it appropriate to exercise the Court’s powers in that way. Further, as I found above, neither party is currently capable of meeting and sustaining the payments that will be required at the end of the hardship plan on the loan accounts, but one of the parties, or both of them, will need to make such payments on any loan account or accounts that remain after the sales of the A Street, Suburb B property and the R Street, Property S property. I find on the basis of the evidence outlined above and my examination of that evidence that the Husband will be in a better position than the Wife to meet those payments, and any consideration of his contribution in that regard is a matter that can be considered on final hearing.
The Wife has not sought a sale of either the C Street, Suburb D or the R Street, Property S properties and indeed opposes orders for sale of those properties. Nevertheless, the Wife deposes that she is currently self-represented in the proceedings as she cannot afford to continue to pay for the cost of legal representation. An interim property order pursuant to which she receives the capital sum may enable her to afford legal representation to assist her in engaging in a mediation and/or preparation for and conduct of final hearing.
I find that it is appropriate in the interests of justice to make an interim property order. I must now undertake consideration of the matters referred to in section 79 of the Act to ensure that any amount provided to either party in interim property order seems likely to be within an amount that the party will be likely received by way of property settlement sum on final hearing, or is recoverable on final orders being made.
With attention to section 79(2), I find that it is just and equitable in all the circumstances to make a property order under section 79 in circumstances where the remaining real properties are in the joint names of the parties, their only liquid capital sum is in a joint bank account currently frozen by the parties, and the parties’ marital relationship has broken down such that they can no longer pursue joint enjoyment of their marital property, both parties having made contributions during the marital relationship of the kinds referred to in section 79 (4)(a) to (c).
The Husband has made the principal financial contribution during the relationship as principal income earner and is the main participant as between the parties in the conduct of the business of the parties’ partnership between 2008 and 2010 and thereafter of the company. The Wife has made the principal contribution as homemaker and parent. The Wife made a contribution of the $40,000 gift received from her Mother in 2009-2010. The Husband made a contribution of the $176,000 inherited by him from his late father’s estate in 2016. If a partial property distribution of $50,000 to each of the parties is made from what remains of the net proceeds of sale of the A Street, Suburb B property and the R Street, Property S property after payment of all of the costs of sale and from the frozen joint ANZ bank account, then at least the parties’
a)equity in the C Street, Suburb D property of about $195,000;
b)The boat ‘Boat P’ valued at about $23,500;
c)The superannuation pool of $262,160; and
d)The value of the Husband’s shareholding in Company F, whatever that may be and if any,
will remain in the matrimonial asset pool for distribution on final orders.
Without any value being stated for the Husband’s shareholding in the company, the remaining asset pool is valued at about $480,660. If a partial property distribution totalling $100,000 is added the pool would be $580,660. The $50,000 to each party would represent 8.6% each of that pool. On the basis of the very superficial summary of the parties’ contributions stated above, the remaining pool of 82.8% is adequate to meet the legitimate expectations of both parties at final hearing. Furthermore, the partial property distribution to each party is eminently capable of being reversed or adjusted in circumstances where it is subsequently considered necessary to do so, even taking into account the significant individual contribution by the Husband represented by his inheritance applied by him to the purchase of the A Street, Suburb B property when all of the parties contributions of all types are considered on a holistic view.
In considering the matters under section 75(2) as directed by section 79(4)(e) there is, on the evidence currently before me, a basis to anticipate that there could be a finding on final hearing that an adjustment in favour of the Wife based upon disparity in income and earning capacity, and upon the ongoing day-to-day care of Y is appropriate. Any such adjustment, if found appropriate on final hearing, would lessen the effect on the overall final division of property between the parties of the Husband’s possible greater contribution through his inheritance.
The Husband’s Application in a Case
On 17 October 2019, the Husband filed an Application in a Case in which he sought
a)Leave to relist the matter on an urgent basis, either that day or today, before me;
b)To serve short notice of the Application prior to 24 October 2019, which is an expiration date of default notices under the National Credit Code issued by ANZ bank in relation to four of the loan accounts variously cross-secured on the properties;
c)Seeking leave to reopen the interim case that was heard on 1 July 2019;
d)Seeking to rely on an affidavit filed with the Application in a Case;
e)Seeking, in lieu of order 3 sought in his Response, orders appointing specific persons as conveyancers and real estate agents in relation to any orders made for sale of the A Street, Suburb B property, the R Street, Property S property, and the C Street, Suburb D property; and
f)Seeking that the Wife pay the costs of the proceedings.
Those documents were, I understand, conveyed to the Wife yesterday, necessarily late in the day, including the affidavit the Husband filed with the Application in a Case. Yesterday at 9:13PM the Wife filed an affidavit, a copy of which was served to the legal representatives for the Husband, and a copy of which has been provided the Court today by Mr La Cava, solicitor advocate appearing for the Husband, as it had not reached the Court file from the e-filing system. I have read each of those affidavits and I have taken into account the evidence contained therein.
At the commencement of considering the matter today I indicated the first time I would have to deal with the question of reopening the evidence of the interim hearing would be Thursday 31 October 2019, and, subsequent thereto, I asked the Wife if she opposed or would agree to the order being made granting leave to reopen the interim case, and Ms Guyen indicated that she did consent to and agree to the interim case being reopened. It was on that basis that I considered the material in the affidavit – one filed by the Husband, one filed by the Wife.
Attached to the Husband’s affidavit filed 17 October 2019 are part copies of three default notices relating to various of the credit contracts, and a full default notice with information pages relating to a fourth loan contract. Apparently, there has been no default notice under the National Credit Code, served on the parties by ANZ in relation to the fifth loan account. The loan accounts are secured variously on the properties as I have already outlined in detail in these Reasons. The balance of the annexures to the Husband’s affidavit, and a good deal of the material contained in the affidavit, goes to the issue of the matter being listed and dealt with on an urgent basis, which was going to happen, whether it was dealt with on 31 October 2019 or today, because in the normal course, this interim hearing would be taking place sometime in March 2020.
Therefore, the only new evidence that I need take into account in these Reasons is the part default notices and the full default notice issued under the National Credit Code. I note in relation to those notices that they are issued under section 88 of the National Credit Code,[84] and that the parties have opportunity, in relation to those notices, pursuant to section 94 of the National Credit Code, to contact the bank and make a request for postponement (known as a ‘postponement request’) either orally or in writing, the effect of which will be to gain for the parties a period of 14 days from the postponement request being made, during which the bank cannot take any enforcement proceedings.[85] Depending when that postponement request is made as to how much extra time from now the parties would have over and above the 30 day period given in the default notice served upon the parties. I will leave that as a matter for the parties.
[84] National Consumer Credit Protection Act 2009 (Cth) sch 1 s 88.
[85] National Consumer Credit Protection Act 2009 (Cth) sch 1 s 94.
I note that the National Credit Code in section 88(8) specifically provides that other laws, including state laws in relation to mortgages, and the enforcement of mortgagee security under mortgages, is not affected by the National Credit Code.[86] I query whether the bank can take any action based upon the default notices under the National Credit Code if they have not complied with section 57 of the Real Property Act1900 (NSW).[87] That is not a matter I am called on to decide in this matter.
[86] National Consumer Credit Protection Act 2009 (Cth) sch 1 s 88(8):
[87] See, esp, Real Property Act 1900 (Cth) s 57(3).
I find that the evidence presented by the Husband and the Wife as additional evidence, pursuant to the leave granted today to reopen the interim hearing and receive further evidence, does not alter the conclusions I have reached in the course of these Reasons for the orders that I will make. I will make the following orders.
Conclusions
In relation to the Wife’s Application for spousal maintenance orders for both periodic payments and lump sum payments I have found that, in the terms of section 72 of the Act, the Wife is unable to support herself adequately by reason of having care and control of a child of the marriage who has not attained 18 years of age, by reason of some incapacity to engage in appropriate gainful employment that may be open to her if she did not suffer a physical incapacity and for other adequate reasons.
I have also found that the Husband is not liable to maintain the Wife as he is not reasonably able to do so by reason of my finding that he does not have any capacity through any excess of income over relevant expenses or any greater capacity for appropriate gainful employment.
According I find that there is no basis to make an order for periodic spousal maintenance payable by the Husband to the Wife. I find that there is a basis upon which an order for lump sum spousal maintenance can be made for the benefit of the Wife from that part of the monies in the frozen ANZ account in the joint names of the parties to which the Husband is entitled, but that is a matter of the exercise of the Court’s discretion. In all the circumstances, it is more appropriate to deal with those funds (and other assets in the matrimonial asset pool) by way of an interim property order making a partial distribution to each of the parties.
I find that it is appropriate to exercise the Court’s discretion and make an order pursuant to section 79 of the Act on an interim basis for distribution between the parties of the moneys standing to their credit in the ANZ One Offset account ending # … on an immediate basis, being as soon as the parties can organise same with that bank, such as the Wife receives $12,000 therefrom and the Husband the balance.
I also find that it is appropriate to exercise the Court’s discretion and make an order pursuant to section 79 of the Act on an interim basis for the sale of the A Street, Suburb B property and the R Street, Property S property and application of the proceeds of sale of those properties to the cost of sale, repayment of certain of the loan accounts secured on those properties and distribution of the then remaining proceeds of sale between the parties such that the total amount received by the parties from the distribution of the ANZ One Offset account ending # … and from the proceeds of sale of the said properties comes to a maximum of $50,000 each.
Accordingly, I make the orders as set out at the start of these Reasons.
I certify that the preceding one hundred and fifty-two (152) paragraphs are a true copy of the reasons for judgment of Judge Morley
Date: 31 October 2019
Court to consider child spending equal time or substantial and significant time with each parent in certain circumstances
…
(3) For the purposes of subsection (2), a child will be taken to spend substantial and significant time with a parent only if:
(a) the time the child spends with the parent includes both:
(i) days that fall on weekends and holidays; and
(ii) days that do not fall on weekends or holidays; and
(b) the time the child spends with the parent allows the parent to be involved in:
(i) the child's daily routine; and
(ii) occasions and events that are of particular significance to the child; and
(c) the time the child spends with the parent allows the child to be involved in occasions and events that are of special significance to the parent.
(emphasis added)
General powers of court
(1) The court, in exercising its powers under this Part, may do any or all of the following:
…
(h) make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order; …
Section 88 Requirements to be met before credit provider can enforce credit contract or mortgage against defaulting debtor or mortgagor
…
Other law about mortgages not affected
(8) This section is in addition to any provision of any other law relating to the enforcement of real property or other mortgages and does not prevent the issue of notices to defaulting mortgagors under other legislation. Nothing in this section prevents a notice to a defaulting mortgagor under other legislation being issued at the same time, or in the same document, as the default notice under this section.
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