LYONS & LYONS

[2011] FamCA 990

FAMILY COURT OF AUSTRALIA

LYONS & LYONS [2011] FamCA 990

FAMILY LAW – PROPERTY – use of sale funds of overseas property assets – use sale funds of company dividends and property items – bank funds to be applied to mortgage repayments.

APPLICANT: Ms Lyons

RESPONDENT: Mr Lyons

FILE NUMBER: SYC 5754 of 2011

DATE DELIVERED: 21 December 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 28 November 2011
14 December 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd SC

SOLICITOR FOR THE APPLICANT: Karras Partners Lawyers

SOLICITOR FOR THE RESPONDENT: Ms Edwards
Edwards Family Lawyers

Orders

1. That the parties do all acts and things so as to sell the Country B property known as C Street, City D Country B and to remit the funds to Australia and to pay these funds as follows:

   1.1such sum as is necessary to discharge any tax debt of the husband

   1.2school and boarding fees for the attendance of the parties’ sons E and F at G School for terms 1 and 2 of 2012

   1.350 per cent of the balance then remaining to each of the husband and the wife with the categorisation of such payment to be left for determination by the trial judge.

2. That the husband apply the funds received by him on account of dividends from H Pty Ltd in February 2012 only as follows:

   2.1in payment of any tax debt of the husband

   2.2in payment of school and boarding fees for the parties’ sons F and E at G School for terms 1 and 2 of 2012

   2.3in payment of 50 per cent of the balance then remaining to each of the husband and the wife

3. That the husband do all acts and things to sell the power boat and after payment of the costs of sale the net proceeds of sale be paid in the following manner and priority:

   3.1in payment of any tax debt of the husband

   3.2in payment of 50 per cent of the balance then remaining to each of the husband and the wife

4. That the husband do all things necessary to cause the funds in BankWest account No … to be applied only for the purpose of payment of instalments in respect of the mortgage recurred on the title of the property I Street, Suburb J in the State of New South Wales.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5754  of 2011

Ms Lyons

Applicant

And

Mr Lyons

Respondent

REASONS FOR JUDGMENT

the proceedings

1. By an Application in a Case filed on 21 November 2011 the wife, Ms Lyons, sought orders for interim spouse maintenance and payment of various expenses by the husband, Mr Lyons.  The wife sought that the husband pay a lump sum of $200,000; all outgoings in respect of the former matrimonial home at I Street, Suburb J;  registration and insurance for her motor vehicle;  all fees due to any single expert in the proceedings;  urgent child support;  school fees and expenses;  private health insurance and “gap” medical expenses.

2. By a Response to an Application in a Case filed on 28 November 2011 the husband sought orders for the sale of the former matrimonial home and the discharge of various debts of the parties from the proceeds, before payment to each of a sum of $100,000.  The balance of the funds would be lodged in a controlled monies account.

3. At the interim hearing on 15 December 2011 the husband sought the following orders: 

   1.That the parties do all acts and things so as to sell the Country B property know as C Street, City D Country B and to remit the funds to Australia and to pay those funds as follows:

   1.1such sum as is necessary to pay any money as may be owing by the husband to the Australian Taxation Office

   1.2pay school fees and boarding fees for the attendance of the parties’ sons E and F at G School for terms one and two of 2012

   1.3pay the balance then remaining as to 50 per cent to the wife and 50 per cent to the husband with the categorisation of such payment to be left for determination by the trial judge

   2.The parties pay one half of any fees incurred to any single expert appointed pursuant to the Rules for the purposes of these proceedings.

   3.That the husband do all acts and things to sell the power boat and after payment of the costs of sale the net proceeds of sale be paid in the following manner and priority:

   3.1to the ATO any money which may be owing by the husband at the date of the settlement of sale

   3.250 per cent of the balance then remaining to the wife or as she may direct

   3.3The balance then remaining to the husband

   4.Pending settlement of the sale of the Country B property

   4.1the interest payments on the mortgages secured on the Suburb J property being I Street, Suburb J be paid from the BankWest litedirect account No…. to the extent there are sufficient funds in that account

   5.Following receipt by the wife of her share of the proceeds of sale of the Country B property the wife pay all payments due and payable in respect of the mortgages secured on the Suburb J property.

   6.Pending further order the wife pay all outgoings including water and council rates, insurance, telephone, electricity and gas in respect of the Suburb J property.

4. The husband has an interest in a Country K company known as H Pty Ltd from which he receives dividends.  He attended a directors meeting in Country K on 2 December 2011, which resolved that a dividend of $7,000,000 would be declared for the year ended 31 October 2011. 

5. From this dividend the husband will receive approximately $249,000 which will be taxed at the rate of 37 per cent.  The directors resolved that the dividend will be paid in a number of tranches, to be determined by the company’s cash flow position from time to time.  The first instalment is expected in February 2012 but the amount to be paid has yet to be determined.

6. The husband proposes to pay a tax debt of $112,815 and to discharge a loan of $105,000 from his mother from this dividend.  The debt to his mother has existed since 2009 and the husband’s only explanation as to why this money should now be repaid is that his mother has recently made this request.  He did not explain why this debt continued despite payment of a dividend of approximately $277,000 in June 2010.  It could be, however, that the substantial costs of renovation of the former matrimonial home prevented the husband from discharging the debt to his mother.

7. The parties have an interest in a property in Country B which is held through an overseas trust.  This asset has recently been sold and the parties’ share of the proceeds will amount to approximately €200,000.  The husband’s solicitor informed me that the purchasers hope to pay €300,000 in January 2012 and €100,000 in February 2012.

8. The husband owns a speedboat with an agreed value of $60,000.  His solicitor informed me that he has attempted unsuccessfully to sell this boat.  His proposed orders included the sale of this asset and a sharing of the proceeds between the parties.

9. The wife has a very limited income of $375 gross per week.  It may well be that she is capable of earning a larger amount but, obviously, it was not possible to test that proposition in the limited context of these proceedings.  In any event, on the evidence available to me the wife established a need for funds.  The real question is whether the husband has the capacity to make all or any of the payments sought by the wife. 

10. As noted, the husband sought an order for the sale of the former matrimonial home and discharge of the parties’ liabilities.  I must say that this proposal seems sensible to me but was resisted by the wife.  She seeks to retain the property but gave no indication whatsoever of the financial arrangements which she proposes to make to enable her to do so.  Nonetheless, I cannot see my way clear to order a sale of the property at this stage of the proceedings.

11. Contrary to the submission put on behalf of the wife, it is inaccurate to suggest that approximately $500,000 will come into possession of the husband in January 2012.  The fact is that an as yet unknown proportion of the dividend will be paid to him in 2012 and the parties will probably receive the A$ equivalent of €150,000 in January 2012 and €50,000 in February 2012. 

12. The husband’s affidavit of 14 December 2011 stated that approximately $36,300 is currently lodged into an account from which the mortgage payments are made each month.  I propose to order that the husband apply the funds in this account only for the purpose of making mortgage repayments.

13. I propose to order that the husband pay only income tax and school fees from the proceeds of sale of the Country B property and the dividends.  As noted, there was no explanation as to why previous dividends were not utilised to repay the debt to the husband’s mother.  It may be, as noted, that the explanation was the cost of renovations to the former matrimonial home.  In any event, there was no evidence from the husband’s mother to the effect that she has made a request for repayment and/or that she has an immediate need for these funds. 

14. On the evidence available to me I can do no more than make orders essentially as proposed by the husband, with the addition of a payment to the wife from the dividend which will be received in February 2010.

15. With the wife thus placed in funds, I see no reason why the parties should do other than contribute equally to the fees of any single expert engaged in the proceedings.  That issue could be revisited by the trial judge if necessary.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 21 December 2011.

Associate:     

Date:              21 December 2011