Jetson & Jetson

[2021] FamCA 314

FAMILY COURT OF AUSTRALIA

Jetson & Jetson [2021] FamCA 314

File number(s):

SYC 3602 of 2020

Judgment of:

REES J

Date of judgment:

19 May 2021

Catchwords:

FAMILY LAW – INJUNCTION – Application to restrain the wife from disposing of or further encumbering the matrimonial home – Where the wife drew down on the mortgage and applied funds to school fees – Where the husband asserts this payment should be categorised as one from joint funds – Application for restraining orders dismissed – Application for costs dismissed.  

Legislation:

Family Law Act 1975 (Cth) s 117(2A)

Cases cited:

Tsiang & Wu and Ors (2019) FLC 93–911

Waugh & Waugh (2000) FLC 93–052

Number of paragraphs:

49

Date of hearing:

17 May 2021

Place:

Sydney

Solicitor for the Applicant:

Ms Kyle, Kyle & McGowan Family Law

Counsel for the Respondent:

Mr Battley

Solicitor for the Respondent:

Proctor Phair Lawyers

ORDERS

SYC 3602 of 2020
BETWEEN:	MR JETSON Applicant
AND:	MS JETSON Respondent

ORDER MADE BY:	REES J
DATE OF ORDER:	19 MAY 2021

THE COURT ORDERS:

1.That the wife shall permit and facilitate the collection of the following items, by a courier or removalist arranged by the husband and at the husband's expense, within 14 days and at a time nominated by the husband on at least 48 hours' notice to the wife through the wife's solicitors:

(a)Painting

(b)2 DJ turntables and mixer

(c)Knives and knife block

(d)Pestle and Mortar

(e)Husband's collection of CDs

(f)Beer tankards

(g)Mac Pro Tower computer, inclusive of data belonging to the husband including the husband's collection of photos of the children.

(h)Pressure Washer.

2.That the Response filed by the husband on 13 May 2021 is otherwise dismissed.

3.That the Application in a Case filed by the wife on 28 April 2021 is withdrawn and dismissed.

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

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 17.02 Family Law Rules 2004 (Cth).

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

REASONS FOR JUDGMENT

Rees J:

1. Mr Jetson ("the husband") and Ms Jetson ("the wife") separated on 27 June 2019. The wife and the parties' two children remained in the home. Proceedings are on foot in relation to both property and parenting.

2. By a response filed 13 May 2021, the husband seeks interim orders restraining the wife from disposing of or further encumbering the former matrimonial home; orders for the delivery to him of certain chattels and indemnity costs.

3. In addition, the husband seeks a "Notation" to the effect that the children's 2021 private school fees have been paid from joint property. The purpose of the Notation is to use it in connection with representations relating to child support.

4. Some brief history is required to understand the dispute.

5. The parties commenced their cohabitation in 2003. For periods after their children were born, the husband was the primary carer of the children and the wife worked in a professional capacity. At other times, they were both employed.

6. In 2015 they purchased a home at Suburb B in the wife's name using joint funds and funds borrowed by way of mortgage. The mortgage included a fixed interest loan of $120,000 which was paid off in full in 2020.

7. The husband received an inheritance of about $240,000 in 2017.

8. The husband's father died in 2018 leaving a portion of his estate to the husband. The husband has received, thus far, from his father's estate some $198,000. He anticipates receiving a further amount of about $537,000.

9. The husband left the home in June 2019.

10. On 16 November 2020, the wife, without notice to the husband, withdrew $110,000 from the mortgage and used $76,000 of that amount to pay the children's school fees for 2021.

11. At the same time, the wife's solicitors wrote to the Child Support Agency, asking for the child support assessment to be varied to require the husband to pay half of the school fees.

12. The child support assessment was accordingly varied and increased from $21,336 per annum to $65,334 per annum.

13. The draft balance sheet suggests that the assets to be divided between the parties are the equity in the former matrimonial home of about $1,000,000, superannuation of about $360,000 and the husband's inheritance.

    THE INJUNCTION APPLICATION

14. I accept that the transaction whereby the wife drew down on the mortgage and applied funds to school fees was without any notice to the husband.

15. Whether, as is asserted by the husband, that payment should be characterised as a payment from joint funds, is in dispute.

16. Documents attached to the husband's affidavit support the wife's contention that she was drawing from the mortgage funds that she had paid in.

17. On 12 May 2021, in a letter from the wife's solicitors to the husband's solicitors, it was asserted that the mortgage balances at separation were $980,000 and $120,000. At the date of the letter, the respective balances were $952,899 and $110,848. Thus it was asserted that the total outstanding had been reduced by $36,252, notwithstanding the drawdown of $110,000 in November 2020.

18. Further, in a letter dated 27 April 2021, it was asserted on behalf of the wife that she had deposited $128,000 into the offset account in August 2017 so that, in withdrawing $110,000, she was effectively withdrawing her own funds.

19. The husband ceased making any contributions to the payment of the mortgage in May 2020, although he then commenced to pay child support.

20. The husband, in his affidavit sworn 13 May 2021, does not give evidence of any other withdrawals from the mortgage.

21. In the Case Outline document filed on behalf of the husband he states:

    … There is no inconvenience to the wife, other than in preventing her from dishonest acts such as the double dipping by having the father pay the school fees both from the matrimonial property and periodic child support.

22. That statement is clearly incorrect. If the husband's case is accepted, and he is entitled to half of the property of the marriage, then only half of the school fees have been paid from his entitlement. Further, the child support assessment does not have the effect that he paying the whole of the school fees as a portion of the assessment is referable to the other costs of supporting the children.

23. The husband, in the Case Outline filed on his behalf, relies on the decision of the Full Court in Tsiang & Wu and Ors (2019) FLC 93–911 where the Full Court stated:

    20.The grant of an injunction is discretionary and the basis on which such an order is made is well established. A purpose, as in this case, is to preserve the status quo pending resolution of the controversy. An applicant must demonstrate first that there is a serious issue to be tried. While that statement has been the subject of various iterations, in essence it requires the demonstration of an arguable case or as was said in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65], the applicant must “show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo”.

    21.Next the applicant must demonstrate that the balance of convenience favours making the order sought.  As part of this, the applicant must show that there is a “danger” or risk of dissipation of or dealings with assets which will frustrate any judgment in favour of the applicant.

    22.In Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319, Gleeson CJ said after discussing the discretionary nature of the remedy at 321–325:

    … as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that, by reason of the defendant’s absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied.

    ...

    It is not difficult to imagine situations in which justice and equity would require the granting of an injunction to prevent dissipation of assets pending the hearing of an action even though the risk of such dissipation may be assessed as being somewhat less probable than not.

    (Footnotes omitted)

24. On behalf of the husband, it was submitted that the fact that the wife withdrew $110,000 from the mortgage account, paid the school fees then asked the Child Support Agency to amend the child support assessment, all without telling him, is indicative that she will further deal with the property, even to the extent of selling it, in order to disadvantage him.

25. I do not accept that submission. The risk of disposal and thus of frustrating the eventual orders of the Court, must, as was made clear by the Full Court in Waugh & Waugh (2000) FLC 93- 052, be objectively demonstrated.

26. I do not accept that the wife's actions in drawing from the mortgage to pay the school fees is suggestive of, "…'danger' or risk of dissipation of or dealings with assets which will frustrate any judgment in favour of the applicant". Particularly in circumstances where the balance owed under the mortgage has been reduced, not increased, despite the withdrawal.

27. The wife's application in the substantive proceedings is that she retain the former matrimonial home and a portion of the husband's inheritance.

28. The husband's application is that he receive half of the value of the former matrimonial home and retain his inheritance.

29. On the information currently available, both are likely to be disappointed but in neither scenario does the withdrawal by the wife of $110,000 jeopardise the desired outcome, particularly in circumstances where it is not asserted that there is any evidence that she has made any other withdrawals.

30. The application for restraining orders will be dismissed.

    ORDER FOR THE RETURN OF THE HUSBAND’S PERSONAL POSSESSIONS

31. The husband seeks the return to him of a number of personal items.

32. The wife, in her response filed 9 December 2020, seeks by way of final orders, an order that she arrange for the items to be delivered to the husband.

33. However, the wife refuses to allow the husband to have the chattels until final orders are made.

34. Counsel for the wife, properly, in my view, did not seek to make any submissions in support of the wife's position. Indeed, it is hard to imagine what submissions could have been made in support of a position that is so manifestly unreasonable.

35. Orders will be made as sought by the husband.

    THE NOTATION

36. For the reasons expressed above, I do not propose to make the notation which the husband seeks.

37. Setting aside the question of what effect such a notation might have, it is not possible to establish on the limited evidence before me that the school fees were, in fact, paid from joint funds. They were paid from a mortgage in the sole name of the wife over a property in the sole name of the wife.

    COSTS

38. The husband seeks costs, on an indemnity basis, in relation to this application and in relation to an Application in a Case filed by the wife on 28 April 2021.

39. In that application, which the wife has sensibly withdrawn, she seeks orders restraining the husband from dealing with his inheritance and causing the balance which will be paid to him to be held by her solicitors, pending the determination of these substantive proceedings.

40. Counsel for the wife submitted that the wife's application suffered from the same deficiencies as did that of the husband. That is, that no danger or risk of dissipation had been demonstrated. I accept that submission.

41. However, I accept that the lawyers for the husband had no alternative but to prepare to defend the application until it was withdrawn.

42. This application is governed by the provisions of s 117(2A) of the Family Law Act 1975 (Cth) which provides:

    (2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:

    (a)       the financial circumstances of each of the parties to the proceedings;

    (b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

    (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

    (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

    (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

    (f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

    (g)       such other matters as the court considers relevant.

43. Neither party relied on a Financial Statement and I am not in a position to make a comparison of their respective financial positions.

44. Neither is in receipt of legal aid.

45. I do not accept that the conduct of the wife in filing her Application in a Case and in refusing to compromise the husband's application for an injunction is any more or less meritorious than the conduct of the husband in perusing the present application, except in one particular.

46. I consider the conduct of the wife in seeking a final order in relation to the husband's chattels but refusing to allow him to have them to be egregious.

47. The wife withdrew her Application in a Case and, in that sense, it was wholly unsuccessful. The husband was unsuccessful in all but one aspect of his application but that aspect occasioned minimal work.

48. I have read and considered the eight pages of correspondence between the solicitors which were tendered in support of the application for costs. Nothing contained therein is persuasive of an order for costs in circumstances where both applications lacked merit.

49. No order for costs will be made.

I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees.

Associate:

Dated: 19 May 2021