HILLIEr and HILLIEr (No 2)
[2009] FamCA 829
•3 September 2009
FAMILY COURT OF AUSTRALIA
| HILLIER & HILLIER (NO. 2) | [2009] FamCA 829 |
| FAMILY LAW – PROPERTY – Undefended proceedings – Husband aware of hearing but chooses not to return to Australia – Spousal maintenance, child support and property orders |
| Child Support (Assessment) Act 1989 (Cth) Family Law Act 1975 (Cth) |
| Brown and Brown [2004] FamCA 1067 Tate and Tate (2000) FLC 93-047 |
| APPLICANT: | Mr Hillier |
| RESPONDENT: | Ms Hillier |
| FILE NUMBER: | MLC | 4502 | of | 2009 |
| DATE DELIVERED: | 3 September 2009 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | THE HONOURABLE JUSTICE CRONIN |
| HEARING DATE: | 3 September 2009 |
REPRESENTATION
| THE APPLICANT: | NO APPEARANCE |
| COUNSEL FOR THE RESPONDENT: | DR INGLEBY |
| SOLICITOR FOR THE RESPONDENT: | KENNEDY WISEWOULDS |
Orders
That Mr John Mazzotta, Solicitor have leave to withdraw from the proceedings and cease to act on behalf of the husband.
That the said solicitor file a Notice of Ceasing to Act.
That all outstanding applications be adjourned to 22 September 2009 for a short hearing.
That the husband attend personally on 22 September 2009 in relation to his failure to comply with existing court orders.
That should the husband fail to attend pursuant to paragraph 4 of these orders the wife be at liberty to seek to issue a warrant for his apprehension.
That the wife be at liberty to issue a subpoena to Mr AH returnable on 22 September 2009 to give evidence in relation to all matters associated with the sale of the Y franchising business.
That until further order, the husband pay by way of urgent spousal maintenance, the sum of $500 per week the first of such payments to be made to the wife by 4.00pm on 4 September 2009.
That the payments referred to in paragraph 7 be made to the wife’s nominated account being Westpac BSB … Account Number … in the name of the wife.
That the U Trust document be marked as Exhibit “W1” and remain on the court file.
For the avoidance of doubt, paragraph 7 of the orders made on 10 July 2009 is varied as follows:
(a)until further order, the husband pay the rental on the wife’s residence at … as and when the payments fall due including any current arrears thereunder;
(b)until further order, the husband pay all school fees for the child J in respect of P School and for that purpose, this order is made pursuant to s 123 and s 124 of the Child Support (Assessment) Act 1989 and any payments thereunder are not be credited against any assessment for child support of the husband;
(c)until further order, the husband pay the health insurance cover for the wife and children at the existing level; and
(d)until further order, the husband pay the rental payments to Avis Rentacar for the vehicle currently in the possession of the wife.
That the husband forthwith sign any necessary document to give effect to the settlement of the sale of the parties’ former matrimonial home and in the event that the husband refuses or fails to sign any such documents, a registrar may sign any such document in the name of the husband and for that purpose, the registrar shall be satisfied of the husband’s non-compliance with this order upon receipt of an affidavit to that effect signed by the solicitor for the wife.
That the husband forthwith file a Notice of Address for Service.
That the wife’s costs of this day are fixed in the sum of $2020 and reserved to the next return date.
That the reasons for these orders be transcribed and released as soon as possible.
That the solicitor for the wife attempt to serve these orders upon the husband by email at his last known email address and a copy be also forwarded to Mills Oakley Lawyers of Melbourne.
IT IS NOTED that publication of this judgment under the pseudonym Hillier & Hillier is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 4502 of 2009
| MR HILLIER |
Applicant
And
| MS HILLIEr |
Respondent
REASONS FOR JUDGMENT
This is the sixth time this matter has been before a court in a space of two months.
Today, the husband did not attend. It is common ground he is in the United States of America.
Until today, the husband has been represented by his solicitor Mr Mazzotta. Today, Mr Mazzotta requested leave to withdraw on the basis that he had no instructions. The action of the husband in adopting that stance is very disconcerting for reasons which follow.
These proceedings relate to both parenting and financial issues.
Despite my opening remarks about the approach of the husband, he has been vocal about wanting to participate in the parenting matters. His approach needs to be consistent.
In respect of the parenting matters, Mr Mazzotta inquired before leaving, whether there was any prospect of the wife altering her stance about the husband telephoning the children on a daily basis. He was assured by counsel for the wife that there was not. It is also noted that on 1 September, the husband filed an application in the Federal Magistrates Court of Australia for a divorce. In that document, he referred to the fact that a psychologist was addressing parenting issues.
The husband’s evidence about his approach to returning to Australia and the compliance with court orders leaves me with no choice but to conclude he is not going to comply. Whilst he might say that his words in the affidavit to which I shall refer have been misconstrued, his attitude in not providing instructions, not fulfilling obligations and not providing information, would suggest otherwise.
The matter came before me today from the Senior Registrar.
On 26 August 2009, with the husband represented by counsel, Senior Registrar Fitzgibbon adjourned all extant applications to 3 September.
The applications before me included parenting matters, spousal maintenance, child support and property matters. I shall not set out the complex set of orders sought because the husband was well aware at the hearing before the senior Registrar what those matters were.
Before the matter came before this Court, it had been before O’Sullivan FM in the Federal Magistrates Court of Australia. Orders were made by his Honour. During a previous hearing before me, I expressed some concern about the wording and nature of some of his Honour’s financial orders and because the matter is before me again today, I propose to clarify the orders so that there is no misunderstanding.
Today, the wife sought to proceed with her interim issues on an undefended basis. The husband clearly had notice of the wife’s application for the reasons I have outlined above.
The power to proceed to hear a case on what is often described as an undefended hearing is set out in Rule 11.02(2)(c) of the Family Law Rules 2004 which provides:
If a party does not comply with these Rules, the Regulations or a procedural order, the court may amongst other things:
…
(c) determine the case as if it were undefended
An undefended hearing means literally that the respondent does not participate at all.
In Tate and Tate (2000) FLC 93-047 the Full Court said:
The Family Court of Australia is all too frequently confronted with litigants who fail in their duties of full and frank (and prompt) disclosure of their financial affairs. Where such failure results in a Form 7A being struck out, as here, then that party ought have no further right to be heard without further order of the Court which is a matter for the judge in his or her discretion.
…
The attainment of justice is the over-riding objective in each individual case.
In Brown and Brown [2004] FamCA 1067, O’Ryan J said:
What is very clear from the case law and the provisions of the 2004 Rules is that it is fundamental that the rules of Court and/or procedural orders must be obeyed and the Court should not be reticent about exercising the powers in r 11.02(2) in appropriate cases. In my view, it is not necessary that the circumstances be “exceptional”. No litigant, whether legally represented or not, should harbour any doubt that manipulation of the Court's processes, through disregard of and deliberate non-compliance with its orders and directions will attract other than the strongest measures from the Court.
The case law prior to the 2004 Rules was relatively harsh in responding to non-compliance. The new rules have adopted these case law principles as they place great importance on case management and the need to comply with court orders. As such, in my view, the new rules provide severe sanctions for non-compliance.
The husband filed an affidavit on 26 August 2009 at a time when he was still in the United States. He filed a divorce application on 1 September when he was in the United States. In the divorce application, he referred to the proceedings on 26 August as the “next court date” and noted that they related to parenting, property and spousal maintenance. That application was prepared by his lawyers in Australia.
On the material before me, there is no reason for the wife not to proceed.
The simple details about the parties were set out in a judgment that I delivered in July 2009. That hearing was in a busy duty list in which the wife expressed concern about the husband leaving Australia. Various parts of the reasons for judgment of relevance now, were as follows:
The parties commenced living together in January 2003, married [in] December 2004 and separated on 1 September 2008.
There are three children of the marriage, [J] born […] September 2003, [C] born […] January 2006 and [L] born […] August 2008. The children live with the wife.
Both husband and wife have been involved in a […] store chain. They have limited assets and serious debts mostly to the Australian Taxation Office.
The husband describes himself as a company director but his work involves […] sales and development. Hence his current trip to the United States of America.
The wife describes herself as being occupied in home duties but she set out in her affidavit that during the marriage (that is, from 2004 to 2008) she ran the regional office of the [store] chain operated by the husband including a role as general manager. That plays some part in my concern about the wife’s allegation that the husband’s debt avoidance by changing corporate entities. It has limited weight because some of that activity occurred during her general manager tenure.
The wife’s opposition to the husband leaving the country without security revolved around three things:
(a)The husband’s potential not to pay financial support as provided by various court orders;
(b)His potential not to return to Australia which would then enable the wife to use the funds to get him back; and
(c)The wife has a taxation debt of $130,000 arising out of the tax minimisation procedures used by the parties. That debt was pressing with the Australian Taxation Office pursuing litigation and judgment against the wife.
…
The wife knows much about the sale of the business because of her knowledge of its operations. She is sceptical about the whole settlement concept but maintains that she does not wish to derail it. For the purposes of that contract, the husband is required to go to [America] from 11 August 2009 to 15 August 2009 but after that, he desired to travel in the Unite States to see his family. The husband has two other daughters living there who had previously been in Australia until June having been raised in Australia. He has indicated a desire to assist in resettling the children before they start school in the United States.
Based upon unequivocal statements by the husband that his trip to the United States was temporary to sort out the business issues and settle his children from a former relationship, there was no doubt that I was being assured he was returning. I said:
all indicators are that the husband has three children in Australia as well as business obligations which would require his future attendances.
The first disconcerting issue relates to the husband’s absence. In an affidavit he swore on 25 August 2009 and filed on 26 August 2009, he said:
I expect to be returning to Australia in approximately seven days time.
The husband then said that he was no longer in receipt of commissions because they had been assigned to the purchaser of the business. He then said that he had been offered a position of employment run by his step-brother which would suit him because he could be close to his elderly mother and his Australian-born children who had recently moved there with their mother. He attached to the affidavit a letter requiring him to attend for employment purposes on 7 September.
According to Dr Ingleby for the wife, the husband “has done a runner”. There may be other explanations but I have not been provided by the husband with the courtesy of knowing them.
The absence of any explanation from the husband may not be much of a problem save that I heard evidence from the wife that:
(a)the sum of $355,000 which I ordered the husband to transfer to the wife’s solicitor’s trust account has not been paid;
(b)Apart from a payment by the husband of $7,482 received some days ago, there is no certainty about on going payment of school fees, spousal maintenance, health insurance or car payments all of which had been obligations undertaken by the husband and which had been the subject of orders;
(c)the health insurance had not been paid;
(d)the Hyundai motor car which was the subject of the orders of O’Sullivan FM had been repossessed but the husband obtained a substitute vehicle through Avis Rent a Car and had committed himself to those payments have ceased as well.
The wife gave evidence that otherwise, her financial position had not altered.
On the hearing in July, I ordered the husband to make a lump sum payment to cover the urgent spousal maintenance sum for the period that I had then anticipated would be the absence of the husband. That was paid but I had also made it a condition of the release of the husband’s passport.
In respect of the spousal maintenance, I determined the matter in some detail in July after hearing some evidence from the husband. The wife’s evidence is now that her position is still the same. Just what the husband’s capacity to pay is now, remains in doubt because he has not attended.
In respect of the maintenance, I said in July:
Urgent maintenance orders are intended to meet the daily needs of the applicant and for a specific period. They are not intended to cover all of the range of expenses set out in the check list in paragraph N of the financial statement provided for in Chapter 13 of the Family Law Rules. They are clearly not intended to cover for example holidays and hobbies; they are clearly intended to cover food and necessities. By the same token, I do not think there is any justification for a “food voucher” standard nor “keeping the wolf from the door” because every case must take into account the individual circumstances of both parties. That is a particular consideration in s 75(2)(d),(g),(k) and (o).
The discretionary judgment therefore must take into account the standard of living that the parties enjoyed if the evidence suggests that the respondent has the capacity to continue that. Urgent spousal maintenance is therefore not simply intended as something to be viewed at subsistence level.
I also take into account what the husband is otherwise contributing and has agreed to continue to contribute. Of the expenses claimed by the wife, some will not fall to be paid in the weeks until the return date. In those circumstances, when I look at the husband’s offer of $500, it can be seen to cover all of the wife’s necessary expenses bearing in mind the lifestyle to which she had been accustomed. The husband’s offer paid in advance for five weeks in the sum of $2500 is an appropriate amount.
The basis for the wife’s application remains the same. I see no reason to alter the position that I then ordered.
In relation to the $355,000 ordered to be paid into the wife’s solicitor’s trust account, the husband acknowledged in his affidavit filed 26 August 2009 that he had been provided with a copy of the order. He said he then asked the holding bank to tell him what needed to be done to transfer the money to Australia. The bank referred to a United States law about money transfer. He then said he asked his lawyer to provide him with “a letter detailing the reason why these funds are to be transferred”. This same question was raised by Mr Mazzotta at the time that the orders were made. I indicated at the time that the order spoke for itself.
Another week has gone by and according to the wife, the transfer of money has not occurred. The husband did not give instructions to Mr Mazzotta to explain the non-compliance. The husband has not appeared to explain either. Having regard to the financial position of the parties and the husband’s attitude to date, I can only conclude that he has chosen not to do anything further about the matter.
That is not the only matter relating to non-compliance. I was told by counsel for the wife that the husband had also not complied with paragraph 7 of the orders I made on 17 August relating to the provision of documents concerning the sale of the business. In his affidavit, the husband said he had practical difficulties providing the documents but he had authorised “[W Accountants]” to provide whatever information the wife might require. He then said that anything the wife did not have “prior” to his return to Melbourne, would be provided when he returned. The messages about his return or otherwise are mixed and confusing.
To that end, I propose to agree to the wife’s request for the husband to attend on 22 September failing which, a warrant may be sought by the wife for his arrest for failing to attend and for failing to comply with court orders.
This mixed message problem also gives rise to the question of whether the husband will effect the sale of the former matrimonial home and to ensure that occurs properly, I will make orders that if the husband does not sign any document to give effect to the sale, the registrar may sign the document in his name.
The purchaser of the business has also apparently indicated some reluctance to assist in the provision of information. Whilst one might have some sympathy for the privacy of a person unconnected with the court proceedings, this situation appears different. The wife was a significant person in the business and knew of the purchaser and his corporate activities. If it is correct that he has denied the wife access to information in circumstances where he must have known of the wife’s concern, then I have little sympathy for his position and he can respond to a subpoena like all good citizens to assist the administration of justice. The purchaser has signed a letter saying that he was holding money rather than it being paid to the husband. It was suggested at the time that the purchaser had requested the letter be written but it would seem that the husband was the author of the document.
The wife also applied for the payment by the husband of private school fees. I see no reason why the husband’s previous commitment should not be incorporated into the order that was clearly intended by O’Sullivan FM but perhaps not specifically stated. In this case, the wife has an application under s 123 of the Child Support (Assessment) Act 1989 (Cth) and there is amply evidence that the husband wanted the child J to attend the school. There ought therefore be an order that the husband pay the fees which he seems to have in part acknowledged in the recent money transfer. He will not be given any credit for the payment of those sums in any assessment.
The wife’s counsel also sought her costs. Having regard to the fact that the husband knew that the hearing was taking place and that he chose not to participate, he has put her to considerable expense.
Section 117 of the Act provides that each party should bear their own costs unless there are circumstances where the court says that it is justified in making an order in which case, the factors in s 117(2A) need to be applied. I am uncertain about the financial circumstances of the husband although he said in the recent affidavit material that he now has a job. He seems untroubled by the rising debt position. In respect of the conduct of the parties, the husband has not assisted the wife nor the court and all of the matters this day may have to be revisited if the husband returns. The husband has therefore been wholly unsuccessful. He should pay the costs thrown away this day. The wife is being charged by her practitioners an hourly rate above the scale but in the circumstances of this case, I see no reason why she should be out of pocket because of the conduct of the husband in failing to comply with orders and not being present. It is significant that the husband indicated that he intended to be back in Australia at the time of the return date before the Senior Registrar. The quantum of the costs seems reasonable.
I certify that the preceding Thirty Eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin
Associate:
Date: 3 September 2009
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