Hewitson and Tierney

[2019] FamCA 720

FAMILY COURT OF AUSTRALIA

HEWITSON & TIERNEY [2019] FamCA 720

FAMILY LAW – PROPERTY – 79A application – Stay application – Stay on terms.

Family Law Act 1975 (Cth) s 79, 79A, 114(3)

APPLICANT: Mr Hewitson

RESPONDENT: Ms Tierney

FILE NUMBER: SYC 8162 of 2018

DATE DELIVERED: 20 June 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Henderson J

HEARING DATE: 19 June 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Fowler

SOLICITOR FOR THE APPLICANT: Robertson Saxton Osborne

COUNSEL FOR THE RESPONDENT: Mr Gardiner

SOLICITOR FOR THE RESPONDENT: Dettmann Longworth Lawyers

Orders

1. The wife’s application for a stay of orders made 17 January 2019 is dismissed.

2. The wife is injuncted and restrained from selling, transferring, mortgaging or in any way encumbering or otherwise dealing with the property situate at and known as C Street, Suburb B being the land described in Folio Identifier …, without first providing to the husband not less than 42 days’ notice of her intention to do so.

3. Orders 4(iii) g & h, 4(iv), 4(v) g & h, 6, 7g & h, 8 and 9 of Orders made on 17 January 2019 are stayed pending further Order.

4. These Orders will be stayed insofar the husband is not required to sell his vested and unvested D Company employee shares.

5. In the event the husband chooses to sell his vested and unvested D Company employee shares the orders will become operative and he will give the wife 14 days’ written notice of his intention to sell same.

6. Orders 6, 7, 8 and 9 of Orders made on 17 January 2019 will become operative in the event the husband’s employment with D Company ceases.

7. If the husband’s employment with D Company ceases he is to provide the wife 14 days’ notice of same and will provide her with details of any new employment forthwith.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hewitson & Tierney has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 8162 of 2018

Mr Hewitson

Applicant

And

Ms Tierney

Respondent

REASONS FOR JUDGMENT

1. This is an oral judgment in the matter of Hewitson and Tierney, is an application by the husband to set aside consent orders made on 17 January 2019 pursuant to an application for orders to be made lodged with the Court on 18 December 2018.

2. The evidence that is relied upon in the application is as follows:

   a)For the husband:

   i)Amended initiating application filed 6 June 2019;

   ii)Affidavits filed 6 June 2019 and 18 June 2019; and

   iii)Financial Statement of 8 May 2019.

   b)For the wife:

   i)A Response, Affidavit and Financial Statement filed 17 June 2019.

3. The basis of the husband’s application to set aside the consent orders and to stay or vary the current orders is that, shortly after the orders were signed by the wife, a DNA test was carried out for both children which result is that the husband is not the biological father of the two children X, born in 2013 and Y, born in 2017. They have the same father, although not the husband in these proceedings.

4. The paternity test was dated 7 January 2019, the consent orders lodged on 18 December 2019 and orders made on 17 January 2019. The wife provided the husband with the results of the paternity testing results on 2 March 2019. Suffice to say, this came as a complete shock to the husband.

5. The consent orders are yet to be perfected and are of some complexity. The wife has received her unencumbered home at Suburb B and received a sum of $58,408 by way of lump sum spouse maintenance. There was moneys in an account to pay the husbands 2018 and 2019 tax, and the wife received some $313,349 of vested and yet to be vested shares in the husband’s employers company D Company and her superannuation of $229,000.

6. Orders 4 to 9 of the consent orders have not yet been perfected in part. The husband received his Motor vehicle 1 and the wife received a Motor vehicle 2worth $76,000. The husband received his Motor vehicle 1 worth $41,900, $830,000 that the parties had in cash at the bank, and D Company shares of $847,203 vested and yet to be vested.

7. He has paid a tax, having received a tax liability for $230,000 and that liability was paid out of the $830,000. He received his super of $286,373. The wife has agreed to an injunction not to deal with or otherwise encumber the property at Suburb B without first giving the husband 42 days’ notice in writing of her intention so to do. Thus, as I said, the husband’s claim for an adjustment of the consent orders the parties entered into which was, at that time, a 60/40 split in favour of the wife, due to this new evidence is well protected by this valuable asset in the wife’s name.

8. I do not accept any further injunctions need to be placed on her assets pending the 79A[1] and then subsequent 79[2] application being heard, given the value of the home she owns at $2 million. Even if that was now reduced, given the Sydney house prices, to even, perhaps, $1.8 million, the husband’s claim to be paid an additional $1,070,000 is clearly supported by and protected by the value of this asset being the unencumbered home in the wife’s name. There is more than sufficient equity in this home to satisfy his claim.

   [1]Family Law Act 1975 (Cth), s 79A.

   [2]Family Law Act 1975 (Cth), s 79.

9. The wife seeks, ultimately, that the 79A[3] application be dismissed and that the orders remain as they are.

   [3] Above, note 1.

10. I do accept that there is some practical sense in staying orders which are yet to be perfected when we have the spectre of a 79A[4] application and/or a 79[5] further hearing. However, there are other factors which are relevant, to whether I stay any further orders or the carrying out of further orders yet to be perfected. The orders yet to be perfected provide for a payment to each party of a share of what was, at the time the consent orders entered into, matrimonial assets, namely, the D Company shares that had vested or yet to be vested in the husband due to his work whilst the parties were living together.

    [4] Above, note 1.

    [5] Above, note 2.

11. The orders provided for the tax to be paid on the sale of those shares and also provided a default provision that if the husband left D Company before 2023 and, therefore, did not receive the share bonuses it was anticipated he would receive when the consent orders were entered into, and if there was a sign on bonus to be paid to him, the wife would receive a percentage of any sign on bonus. The parties have planned for the future by these orders and may well have taken steps on this basis and made decisions based upon this future that the consent orders contemplated.

12. The question for me is, is it proper that I stay the continuation of orders yet to be perfected which are orders 4(iii) g & h, 4(iv), 4(v) g & h, 6, 7 g & h 8 and 9 concerned with the vesting of shares?

13. I have formed the view that given we have proceedings on foot for a 79A[6] application, that it is appropriate that I vary by way of ordering a stay of orders 4 (iii) g & h,4 (iv),4 (v) g & h, 6, 7g & h, 8 and 9. However, the stay will be on the following terms: namely, if the husband determines to sell any of the D Company shares currently vested in him or to be vested in him, then the provisions of the orders relating to that share sale in the year they are sold, as set out in the consent orders of 17 January 2019, will apply. So the wife would be protected if, in fact, the husband chose to sell the shares, they would be sold in accordance with the consent orders entered into.

    [6] Above, note 1.

14. Similarly, if the husband does relinquish or is no longer employed by D Company, then the order 6, 7, 8 and 9 of the consent orders would apply for his new employment. That, then, provides the wife with protection that if assets are to be dealt with by the husband or he changes his job or assets are lost because of the change of a job, her entitlement is protected, pending the proceedings being determined, but does not, therefore, require the husband to sell shares should he not wish so to do, pending the determination of these proceedings.

15. I find that that sets out a balance between the wife’s needs and the husband’s rights and the strength of his 79A[7] application which, as I see it, is a strong case given what I regard as a significant non-disclosure or a significant change in factual circumstances from that upon which the husband entered into the consent orders and upon which his lawyers gave him advice to enter into the consent orders. Consistent with the provisions of stay applications and in trying to do justice and equity between the party, looking at the hardship to one party versus the hardship to the other of granting the stay or not, the wife’s position is protected while these proceedings go on by these orders and she still remains in the home.

    [7] Above, note 1.

16. If the husband chooses to deal with the shares, her rights and entitlement under the consent orders will continue, but I have given the husband the option not to deal with his shares if that is the position he wishes to take, now that the circumstances of this matter have changed. On balance, I find that these are the orders that are appropriate in all the circumstances and balance the competing hardships.

17. The wife also seeks an injunction in relation to the husband’s assets where she says he has gone on a spending spree post the consent orders being made and the revelation he is not the father of the children.

18. She says if the Court re-exercises its discretion, she may receive more than the consent orders provided, and her claim must also be protected. I accept the wife’s claim must be protected. However, the husband is the moving party in this matter. The wife seeks the orders remain as they are, and I have done my best to ensure by the orders I have made that they would so remain if that be the order of the Court. The wife says the husband has purchased a property at Suburb E with his partner as joint tenants, purchased a new Motor vehicle 1 for $163,000, dissipated his $180,000 to $90,000 and cannot account for $300,000. This is all according to the wife. The husband disagrees with this and that is really a matter for a final hearing basis.

19. If the Court does not readjust – as the wife says, I should not prejudice the wife’s position. If the orders are set aside and, accordingly, the exercise of its section 79 jurisdiction readjusts favourably to the wife, she may receive more than she received by virtue of the consent orders and she says the husband, if he continues to dissipate the assets, may, in fact, affect her entitlement and it could well be defeated.

20. The net asset pool, when the parties entered into the consent orders in November, was about $3,878,619, exclusive of superannuation, and the wife received 60 per cent of the pool. The wife says, unlike the husband, she is still in the similar financial position today as she was at the time the consent orders were made.

21. Her concern is the husband may dissipate his vested and non-vested D Company shares. I have made provision that if he does that, the consent orders will prevail and those orders will come back into force and no longer be stayed if he chooses to sell those shares.

22. The consent orders provide the parties are to continue their financial arrangement up to 2023. In addition, order 6 provides the wife is to receive a percentage of the husband’s sign on bonuses in 2019, 2020 and 2021, if he ceases to be employed by D Company up to 2023 on a sliding scale. These parties’ financial relationship will not end until the end of the tax year 2023 by virtue of the consent orders unless the new orders made by the Court set these orders aside completely and new orders are entered into.

23. These are the facts as I see it. The husband is clearly a high-income earner. He is proficient at his job. He has maintained his high level of work capacity post-separation and post the DNA test results. I reject the wife’s claim that, in some way, her entitlement to an adjustment of the property settlement is at risk from the husband’s behaviour or that, indeed, there is any basis to grant the injunction or stay of orders.

24. My power under section 114(3) of the Family Law Act 1975 to grant an injunction is wide. It must appear just or convenient to do so. There must be a risk of disposal of assets which would defeat the wife’s claim and that the wife would be prejudiced in some way by not granting the stay. On the evidence today, as I see it, I do not see any basis upon which I would grant any injunction over the husband’s assets, and I dismiss the wife’s application in that respect.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Henderson delivered on 20 June 2019.

Associate:

Date: 9 October 2019