Holbert and Holbert (No 2)
[2020] FamCA 601
•24 July 2020
FAMILY COURT OF AUSTRALIA
| HOLBERT & HOLBERT (NO. 2) | [2020] FamCA 601 |
| FAMILY LAW – PROPERTY – Interim – Where it is agreed that the husband will no longer pay for the children’s school fees – Where the husband seeks to be relieved of his obligation to pay for expenses related to the former matrimonial home, as under interim spousal maintenance orders of 2018, on the basis that his financial situation has significantly deteriorated and no longer has capacity to meet these payments – Where order made in 2019 for the sale of two properties in the UK as husband not able to comply with 2018 orders and part of the proceeds of this sale set aside to meet mortgage payments on the former matrimonial home – Where the mother asserts that the husband’s financial position is not as dire as he alleges – Where it is found that in light of the 2019 orders for the sale of the UK properties, the husband ought to be relieved of his obligation to pay interim spousal maintenance – Where the husband seeks for the wife to meet half the expenses associated with one of the UK properties pending settlement – Husband’s application in this respect dismissed having regard to the fact that the husband has had control of all of the rental income from the UK properties since separation, and may not have fully disclosed how these funds have been applied, and has been relieved of obligation to pay interim spousal maintenance. |
| Family Law Act 1975 (Cth) |
| Holbert & Holbert [2019] FamCA 566 |
| APPLICANT: | Ms Holbert |
| RESPONDENT: | Mr Holbert |
| FILE NUMBER: | MLC | 2024 | of | 2018 |
| DATE DELIVERED: | 24 July 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | McEvoy J |
| HEARING DATE: | 7 May 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dixon SC |
| SOLICITOR FOR THE APPLICANT: | Scanlan Carroll |
| COUNSEL FOR THE RESPONDENT: | Ms Lakey, Solicitor |
| SOLICITOR FOR THE RESPONDENT: | Lakey Family Law & Mediation |
Orders
BY CONSENT:
The husband contact the children via telephone or electronic means at the following times:
(a) when the husband is working:
(i)Tuesday at 5.30 pm AEST or 6.30 pm AEDT;
(ii)Thursday at 5.30 pm AEST or 6.30 pm AEDT;
(iii)Sunday at 5.30 pm AEST or 6.30 pm AEDT;
(b) when the husband is not working:
(i)Tuesday at 6.30 pm AEST or 7.30 pm AEDT;
(ii)Thursday at 6.30 pm AEST or 7.30 pm AEDT;
(iii)Sunday at 6.30 pm AEST or 7.30 pm AEDT.
Neither party, their agents nor servants denigrate the other in the presence or hearing of the children and shall not discuss adult matters including these proceedings with the children or in the earshot of the children.
The husband’s obligation in respect of paying school fees pursuant to the order of 18 July 2018 shall continue until the end of term 2 and that at the end of term 2 the children will change to Suburb K School unless otherwise agreed between the parties.
The parties attend upon a family consultant pursuant to section 11F of the Family Law Act.
Order 2(b) of the orders dated 18 July 2018 be discharged.
THE COURT ORDERS:
Order 2(a) of the orders dated 18 July 2018 be discharged.
Insofar as the wife has sought further interim or procedural orders in her Second Further Amended Initiating Application filed 5 March 2020, and insofar as the husband has sought further interim or procedural orders in his Amended Response to Initiating Application filed 14 April 2020, those applications be otherwise dismissed.
The matter be listed for hearing before the Honourable Justice McEvoy on 26 October 2020 for five days.
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 Holbert & Holbert 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 MELBOURNE |
FILE NUMBER: MLC 2024 of 2018
| Ms Holbert |
Applicant
And
| Mr Holbert |
Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court are applications for certain interim orders made by the respondent husband (“the husband”) in an Amended Response to Initiating Application dated 14 April 2020.
On 7 May 2020 the Court heard argument in relation to limited aspects of the wife’s Amended Application in a Case dated 5 March 2020, and the husband’s Amended Response to Initiating Application of 14 April 2020. On that day the parties were able to reach agreement on most of the issues remaining in dispute between them on an interim basis, and this agreement is reflected in a minute of consent orders which has been provided to the Court by the parties. Orders in the terms of this minute will be made.
However the parties were not able to agree in relation to aspects of the relief sought by the husband in paragraph 9 of the interim or procedural orders in his 14 April 2020 Amended Response, and the relief sought in paragraph 10 of the interim or procedural orders in his Amended Response.
The orders sought by the husband in those paragraphs are in the following terms:
9. That order 2 of the orders dated 18 July 2018 be discharged.
10.That pending the settlement of the property B Property, Town F, the UK, the parties equally share the following expenses:
(a)Mortgage;
(b)Phone and internet;
(c)Electricity;
(d)Insurance;
(e)Council Tax.
For the sake of clarity, the reference to order 2 of the orders of 18 July 2018 is a reference to an order made by consent on that date by a registrar in the following terms:
2. Until further Order:
(a)the Husband continue to pay, by way of interim spousal maintenance, the mortgage instalments, rates, house and contents insurance in respect of the property at J Street, Suburb K as and when they fall due;
(b)the Husband continue to pay:
(i)the M School fees and associated education expenses for Y born in 2010; and
(ii)the current childcare fees, not exceeding the equivalent cost of 3 days per work [sic], for X born in 2014, until such time [as] X commences Kindergarten in which case the Husband will pay the fees and associated educational expenses for X to attend M School.
Following the limited hearing on 7 May 2020 the parties filed written submissions in relation to the matters which were not able to be agreed: the husband on 25 May 2020, and the wife on 1 July 2020.
They rely on the following material:
a)the wife:
i)Second Further Amended Initiating Application filed 5 March 2020;
ii)Affidavit of the wife sworn 5 March 2020;
iii)Financial Statement filed 5 March 2020; and
iv)Reply Affidavit of the wife sworn 24 April 2020;
b)the husband:
i)Amended Response to Initiating Application filed 14 April 2020;
ii)Affidavit of the husband affirmed on 14 April 2020; and
iii)Financial Statement filed 14 April 2020.
The wife consents to the discharge of order 2(b)(i) and (ii) of the 18 July 2018 orders, noting that the parties have now agreed that the children will attend the local primary school, and that she is meeting these expenses solely. Accordingly there will be orders by consent discharging order 2(b) of the orders of 18 July 2018. However the wife does not consent to the discharge of order 2(a) of the 18 July 2018 orders.
For the reasons that follow it is appropriate in all the circumstances that order 2(a) of the 18 July 2018 orders should also be discharged. There will not, however, be an order that pending settlement of the B Property the parties equally share the expenses listed in paragraph 10 of the interim or procedural orders in the husband’s 14 April 2020 Amended Response.
Husband’s liability to pay the expenses of the Suburb K property
The husband says that he should no longer have to continue to pay, by way of interim spousal maintenance, the mortgage instalments, rates and house and contents insurance in respect of the Suburb K property as and when they fall due. This is essentially because he says he no longer has capacity to meet these payments. The husband contends that this reality was recognised by the orders of 22 August 2019 for the sale of the two UK properties and the requirement that the sum of $100,000 be set aside from the sale for the payment of mortgage instalments. The husband says that it was implicit in such an order that he was not able to meet the requirements of the orders of 18 July 2018 insofar as they required him to fund the mortgage and related costs. In support of his argument that he does not have the capacity to make these payments the husband refers to his new Financial Statement filed 14 April 2020.
The husband contends that his financial position has deteriorated dramatically since 18 July 2018. He says that because $100,000 has been set aside for future mortgage payments and that this will last until the hearing of the matter on a final basis commencing on 26 October 2020, and the fact that the parties have agreed that the children will now attend the local school, he should no longer be required to make the payments which he agreed to make in July 2018.
For her part the wife says that she is continuing to make mortgage repayments from the fund of $100,000 obtained from the sale of one of the UK properties and that this fund has a remaining balance of around $71,000. However she notes that the husband is not paying either child support (periodic or non-periodic) or spousal maintenance. The wife says that she cannot have the husband assessed by the Child Support Agency to pay child support due to the Binding Child Support Agreement which the parties entered into at the time of the 18 July 2018 orders and which sets the husband’s liability to pay child support at nil. On this basis the wife says that she will not consent to discharge order 2(a).
The wife is generally critical of the husband’s claims of impecuniosity, and she emphasises her own parlous financial circumstances, including that she has recently become unemployed.
Whether or not the wife is able to have the husband pay child support or spousal maintenance, the reality is, as the husband submits, that the 22 August 2019 orders were made because it was apparent that he was no longer able to comply with the 18 July 2018 orders. The 22 August 2019 orders provided for the sale of two of the UK properties, with a payment from the net sale proceeds of $250,000 to be made to the wife, including $100,000 to be set aside for the payment of the mortgage. The balance of the net sale proceeds from the properties was then to be divided equally between the parties.
These orders were sought by the wife because the husband was no longer paying the mortgage on the Suburb K property. His position was that the Suburb K property would need to be sold, but the wife contended that as this property had been the matrimonial home, and that she and the children were continuing to live in it, it would have been premature at that time to have sold the property when there were other assets that could be realised to make the mortgage payments: see Holbert & Holbert [2019] FamCA 566, [2]-[4], [26]-[27], [31]-[32].
Although the wife does not accept that the husband’s position is as dire as he contends, in all the circumstances I accept that it follows from the orders that the UK properties be sold that the husband should be relieved from compliance with order 2(a) of the 18 July 2018 orders, and there will be an order to this effect.
Expenses of the B Property
The B Property was one of the properties ordered to be sold by the 22 August 2019 orders. It is a property that is (or was) jointly owned by the parties. The husband points out that in consequence of the orders requiring the sale of this property, together with what is said to be the wife’s unilateral withdrawal of the sum of £10,000 from a joint account associated with the management of that property, there are no longer funds to meet the expenses of mortgage payments, telephone and internet charges, electricity charges, insurance and council tax. The husband claims that these costs are about $2,500 per month.
The husband contends that the settlement of the B Property should occur within the next few months and that it has been delayed due to COVID-19. The wife says that this property was due to settle on 9 July 2020. Whether this has occurred is not clear. The husband maintains that as there is no rental income to meet the ongoing expenses of this property, and because both parties are on the title and will benefit equally from the sale proceeds, both he and the wife should meet these costs as they fall due. The husband says that because the wife is in receipt of $150,000 extra from the sale of the other UK property, as well as being in employment, she can afford her half of these expenses and should be required to pay them. It is the husband’s position that he has received no funds from any sale of matrimonial assets but that despite his financial difficulties he is able to commit to paying his half of the expenses pending settlement.
The wife opposes an order in the terms sought by the husband. She points out that since separation the husband has had the benefit of 100 per cent of all the rental income from all the properties in the UK and that without disclosing how those funds have been applied for the past two years he now seeks that the wife contribute 50 per cent of the B Property expenses. The wife points to the fact that she is currently paying the cost of all the utilities for the Suburb K property where she lives with the children of the relationship, and that she has already committed to paying certain other fees associated with the sale of the B Property. The wife says that insofar as she withdrew £10,000 from the B Property account, she did so only for the purposes of ongoing living expenses and leaving sufficient monies to pay the mortgage secured against that property.
Although there is some force in the husband’s submission that as the B Property is jointly owned the parties should share the ongoing expenses prior to the sale, it would appear that since separation this is not the way that the parties have ordered their affairs as they concern the UK properties. In circumstances where it would seem that the husband has had control of all of the rental income from all of the UK properties since separation, and may not have fully disclosed how these funds have been applied for the past two years or so, I do not consider that it would now be appropriate to order that the wife pay 50 per cent of the expenses being incurred in relation to the B Property until it is sold (if, indeed, it has not already been sold). In coming to this view I also have regard to the fact that the husband has been relieved of his obligation to pay, by way of interim spousal maintenance, the mortgage instalments, rates, house and contents insurance in respect of the Suburb K property, and that it would seem that he is not paying any child support.
Accordingly the husband’s application for an order in the terms of paragraph 10 of his Amended Response dated 14 April 2020 will be dismissed.
Conclusion
There will be the orders in relation to these matters and otherwise in relation to the relevant extant applications which are set out at the commencement of these reasons.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McEvoy delivered on 24 July 2020.
Associate:
Date: 24 July 2020