MACHOCKI and MACHOCKI
[2018] FCWA 90
•9 MAY 2018
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: MACHOCKI and MACHOCKI [2018] FCWA 90
CORAM: O'BRIEN J
HEARD: 6 MARCH 2018
DELIVERED : 9 MAY 2018
FILE NO/S: PTW 4365 of 2013
BETWEEN: MS MACHOCKI
Applicant
AND
MR MACHOCKI
Respondent
Catchwords:
FAMILY LAW – INTERIM FINANCIAL PROCEEDINGS – Where wife seeks interim property orders for payments of a lump sum pending resumption of delayed trial – Where wife seeks order for superannuation splitting by way of interim alteration of property interests and other orders for injunctive relief – Whether it is appropriate to exercise the power under s 79 of the Family Law Act 1975 (Cth) before a final hearing – Where husband did not deny his capacity to pay the lump sum amount sought – Where evidence did not permit the required valuation of superannuation interests – Turns on own facts.
Legislation:
Family Law Act 1975 (Cth) s 79, s 80, s 90MT(2)
Category: Not Reportable
Representation:
Counsel:
| Applicant | : | Mr Rynne |
| Respondent | : | Self-Represented Litigant |
Solicitors:
| Applicant | : | Paterson & Dowding |
| Respondent | : | Self-Represented Litigant |
Case(s) referred to in decision(s):
Machocki and Machocki & Anor [2017] FCWA 160
Citation omitted
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
1The Court is required to determine the wife’s application for interim relief in terms of the minute filed by her on 2 March 2018. That relief was pursued by the wife after the trial scheduled to commence on 6 March 2018 was vacated because of the late availability of a single expert witness report and issues associated with the husband’s health. The trial listing had been given after the earlier fixed trial listing of 17 January 2018 itself was vacated as the parties were unable to agree on the appointment of a single expert witness.
2The relevant background of the proceedings is set out in my judgment delivered on 17 November 2017 and my subsequent judgment delivered on 31 January 2018: Machocki and Machocki & Anor [2017] FCWA 160 and citation omitted. I incorporate those judgments into these reasons.
Relief sought by the wife
3The relief sought by the wife may be summarised as follows:
•She sought an immediate cash payment from the husband in the sum of $100,000 net of tax.
•In addition to the above, she sought either a further cash sum of $250,000 net of tax within 60 days or, in the alternative, a series of orders requiring the conversion into cash of all assets of [Superannuation Fund A] (“Superannuation Fund A”) and [Superannuation Fund B] (“Superannuation Fund B”) and superannuation splitting orders of 100% of the husband’s interest in those funds in favour of the wife.
•She sought a further order requiring the husband to produce documentary proof that he has made all required payments to [Bank A] set out in the accommodation letter from that entity dated 1 August 2017.
•She sought further orders requiring the husband to pay or cause to be paid to Bank A all sums required by that entity to avoid any further default in relation to loan repayments and ensure that no further legal action was taken by Bank A against the parties in the interim.
•She sought orders requiring the husband to pay or cause to be paid all outstanding rates and land tax in respect of various properties.
•In the event that the husband failed to comply with the three orders immediately preceding, she sought alternative orders for the sale of various properties and the distribution of proceeds of sale.
•She sought various injunctions restraining the husband from dealing with property, including money in the bank and his superannuation, and otherwise restraining the husband’s activities.
•Finally, she sought orders for ongoing disclosure of various banking statements.
The husband’s response
4The husband’s position in relation to the proposed immediate payment to the wife of the sum of $100,000 varied somewhat over the course of the hearing. At one point, he said:
“So is [the wife] entitled to $100,000 net of tax? Is [she] – what is [she] going to do with that $100,000?
I know what she’s going to do with it because I know her inside out and backwards. I know where it’s going to go, and your Honour, she can have her $100,000. You can document that. She can have her $100,000 and the easiest way is to take it from superannuation. So I’m happy to give her $100,000”.
5When questioned by me as to whether he was indicating consent to the proposed superannuation split, or to an order that he pay the wife $100,000, the husband responded that he “may consent” to paying that sum, subject to “other matters that we’re going to discuss here over the afternoon”.
6The husband later submitted that if the proposed payment of $100,000 was to be made, it should be characterised as an interim payment towards the wife’s ultimate property settlement entitlement.
7I subsequently sought to clarify the husband’s position and the following exchange occurred:
HIS HONOUR: Are you saying that you consent to an order that you make a payment of $100,000 to your wife by way of interim property settlement or not?
[HUSBAND]: Subject to the information that I bring to the Court in the next hour.
HIS HONOUR: Well
[HUSBAND]: No, I do not consent – if you want a pragmatic – I do not consent.
HIS HONOUR: Well, that’s all right. I just need to understand your position, in fairness to you.
[HUSBAND]: No, I do not consent, but I am open-minded.
HIS HONOUR: Well, by the time you finish making your submissions, you’re going to tell me one way or another whether you agree to the order or not.
[HUSBAND]: That’s a high probability.
8When I returned to that issue at the conclusion of the husband’s submissions, he said the following:
“I’m not a callous person. I understand her position. You know, but in life you need to negotiate. You need to trade sometimes. What’s good for her – what’s good for the goose is good for the gander. I need – I can’t access my super. So I ask your Honour that I have access to 100,000, she has access to 100,000 and we’re (indistinct) and they go into the asset pool as part of the pre-settlement figure.”
9As counsel for the wife pointed out, there was no denial by the husband of a capacity to pay the amount sought.
10The husband opposed the wife’s application for an additional payment, whether in the sum of $250,000 cash or by way of superannuation split.
11The wife’s application for an order requiring the husband to provide documentary proof of his payments to Bank A was, in the end, non-contentious. The husband maintained that he was, and would continue to be, entirely transparent in his dealings. He said that the wife already had online access to all the relevant accounts herself and could access all relevant information whenever she wished to do so. Counsel for the wife disputed both propositions. When I suggested to the husband that in those circumstances the appropriate course was for an order to be made that, to the extent necessary, he give any required authority to enable the wife to have access to the online banking with Bank A, in order to check the transactions herself as and when required, he readily agreed.
12Similarly, the husband did not oppose that part of the wife’s application which sought that he make all payments necessary to Bank A to avoid further default and to ensure that entity did not take further legal action against the parties. In response to a question from me, he said:
“Well, not only do I agree, it has been done”.
13He opposed that part of the wife’s application which sought the sale of real property in the event of any default by him.
14The wife sought orders requiring the husband to pay rates and land tax in respect of the various properties as and when they fall due. The husband appeared to accept that he should make those payments or cause them to be made, while reserving his right to do so in a tax effective way. He said that he is paying $20,000 a year in rates and taxes.
15In relation to the injunctions sought, the husband submitted firstly that he does not own any assets, and that in fact the wife owns most of them. He pointed out that the properties are joint assets, and made various other observations. Importantly, however, in response to the proposition that he should be restrained from dealing with property assets other than with the consent of the wife, he said:
“If I’m going to do anything, it will be conjunctional with the other person”.
16He said that he did not intend to borrow any more money or extend his credit card liabilities other than by rolling them over to try and attract a zero interest rate. He did not strenuously oppose the proposition that he be restrained from making loans or advances to any other person, but did observe that occasionally he might lend money to his clients in very modest sums for a short term. He said that he was happy to advise the wife’s solicitor if he intended to sell any shares then pointed out that the relevant shares were owned by the superannuation funds in any event.
17He opposed the order proposing to restrain him from undertaking any overseas travel.
18He did not oppose the order for ongoing disclosure sought.
19It will be seen from what is set out above that the matters requiring determination are:
•the application for an immediate payment of $100,000;
•the application for a further payment of $250,000 cash or, in the alternative, a superannuation splitting order whereby the whole of the husband’s entitlements in the two separate funds would go to the wife;
•the application in so far as it sought the sale of real property in the event of default on the part of the husband; and
•the scope of the injunctive relief sought by the wife.
The legal principles
20The principles relevant to the determination of an application for interim property orders are set out in the decision of the Full Court in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”).
21In summary:
•there is only one exercise of power under s 79 of the Family Law Act 1975 (Cth) (“the Act”) and it is preferable that there be one final hearing of s 79 proceedings;
•nevertheless, the Court may make an order pending the disposal of the proceedings (s 80(1)(h));
•there are two stages to the hearing of such an application. The first is to resolve whether to exercise the power before a final hearing, and if it is resolved to do so then the second step involves the exercise of that power (at [118]);
•in relation to the first stage, when considering whether to exercise the power to make an interim property order, the overarching consideration is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that, in the circumstances, it is appropriate to exercise the power. Nevertheless, regard should be had to the fact that the usual order pursuant to s 79 is an order made once and for all after a final hearing (at [132]);
•in relation to the second stage, the provisions of s 79 must be considered and applied, but with limitations given that it is not the final hearing;
•the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal (at [136]); and
•in order to establish an appropriate case for an interim property settlement order, more is required than the mere fact that upon a final hearing, the applicant would receive the property being sought (or an amount in excess of the amount being sought) from the other party (at [139]).
The first question – whether it is appropriate to exercise the power before a final hearing
22In short, I conclude that it is appropriate to exercise the power in this case. As outlined in my earlier judgments referred to above, the substantive proceedings have a long and difficult history and their completion has been significantly delayed through circumstances not entirely of the parties’ making. I accept that the wife is in difficult financial circumstances. I accept also that the most recent delays in the proceedings, and the uncertainty as to when they will be completed, relate primarily to the circumstances of the husband and to actions taken by him both in the conduct of the proceedings and in relation to his health.
23The proceedings have been on foot since 2013. The forward progress of the proceedings is presently stalled, notwithstanding the Court’s efforts to accommodate fixed trial listings in both January and March of this year. There is considerable uncertainty as to the timeframe within which the proceedings might be expected to be completed, not least because of the uncertainty surrounding the husband’s health, the treatment he requires, and the timeframe within which he might reasonably be expected to resume conduct of the proceedings in a substantive sense.
24Having reached that conclusion, I turn to address individually the various elements of the relief sought by the wife in the form of interim orders for the alteration of property interests.
25I note in that regard that it is not in dispute that the wife’s contribution based entitlements will significantly exceed by value the amounts sought by her on an interim basis. It is not, therefore, necessary to individually analyse the matters to be taken into account pursuant to s 79(4), it being common ground that such analysis would lead to that conclusion.
The proposed immediate payment of $100,000
26As already noted, the husband did not deny his capacity to pay the amount sought. While he questioned the wife’s need for the payment, he did not dispute her entitlement to it. He sought at various times to make his position in that regard conditional, but did not actively pursue any relief himself.
27I am satisfied not only that the wife has a need for the payment (to the limited extent such a finding is necessary in any event) but, more importantly, that it is just and equitable that such payment be made.
28I propose to order the immediate payment sought. It will, as sought by the husband, be characterised as an interim payment towards the wife’s eventual property settlement entitlement.
The proposed alternatives for additional payment
29I am not satisfied on the evidence that the husband has the capacity to pay the additional amount sought without possibly triggering the sale of assets which he would seek to retain as part of his overall entitlement.
30On balance, I do not consider it just and equitable to make the order sought.
31I am not prepared to make the order sought whereby 100% of the husband’s superannuation entitlements in two separate funds would be the subject of a splitting order in favour of the wife. While I am satisfied that the Court has the power to make an order for superannuation splitting at any time, such an order may not in my view be “capable of variation or reversal without resort to s 79A of the Act or appeal” (Strahan at [136]). If that is so, it would be inappropriate to make such an order prior to trial other than by consent. Quite apart from the obvious difficulties presented by any inability to subsequently vary or reverse such an order, that inability itself would call into question whether such an order could properly be characterised as “interim” and, if not, whether it might be argued that the Court’s power under s 79 has been exhausted.
32The matter not having been argued before me in any comprehensive way, it is unnecessary to reach a concluded view in relation to those matters, as I am unable to make a superannuation splitting order at this stage in any event.
33Before making a superannuation splitting order, the Court must determine the value of the superannuation interest to be affected by the order: (s 90MT(2) of the Act). There is no agreement between the parties as to the value of the relevant superannuation interests in this matter, nor is there evidence to enable me to determine that value in the absence of agreement.
34It follows that even if I was satisfied that it would be just and equitable to make the order sought by the wife (which I am not), I could not do so in any event.
The application in so far as it sought the sale of real property in the event of default on the part of the husband
35In short, I do not consider it an appropriate exercise of discretion to make pre-emptive orders for the sale of all the real property which the husband would seek to retain as part of his overall entitlements, even if such an order would only be triggered by a default on his part from his obligations pursuant to the orders to be made.
36I recognise, however, the possibility that the wife may need to take enforcement action if the husband does default, and the possibility that in those circumstances an order for sale of one or more of the properties might potentially be appropriate.
37I therefore propose to adjourn that part of the wife’s application, leaving it open to her to seek a relisting if required.
The scope of the injunctive relief sought by the wife
38I consider it appropriate to grant injunctions directed towards the preservation of the assets and superannuation of the parties. Such preservation is consistent with the stated intention of the husband in any event. The wife concedes that if such injunctions are to be granted, they should be mutual.
39In reaching that view, and in crafting the orders to be made, I take into account the admissions by the husband during his cross-examination on 9 July 2015, and drawn to my attention by counsel for the wife. During that cross-examination, the husband conceded that he had knowingly breached a court order preventing him from applying superannuation funds in a particular way. He explained his actions by saying that he “saw it as a positive to the asset pool” and that he “made sure there was no damage to the asset pool”. He said that he acted without the wife’s consent as he “realised that [he] would not be given approval” and he “had to move quickly”, saying in summary that he “thought it was a very prudent decision, but [he] did break the law, yes”.
40I do not propose to make orders which would prevent the husband from taking steps in the ordinary course of his business. Similarly, I do not propose to make orders which would have the effect of preventing him from paying statutory and other expenses properly incurred by the superannuation fund, nor do I propose to make orders either limiting his weekly expenditure or prohibiting him from travelling overseas. The wife has not established that injunctions of that nature are appropriate.
Other orders
41I propose otherwise to make the orders sought by the wife which are not contentious.
Proposed orders
42Subject to any submissions as to form, I propose to make the following orders:
1.Within 7 working days of the date of these orders, the husband pay or cause to be paid to the wife the sum of $100,000 net of tax by way of interim alteration of property interests.
2.To the extent he has not already done so, the husband promptly execute all necessary authorities to enable the wife and her solicitors to receive in paper form, and access online, statements for all accounts of the parties or either of them with [Bank A].
3.Until further order, the husband pay or cause to be paid to [Bank A] all sums required by [Bank A]:-
(a)to avoid any further default in relation to and/or late payment of loan repayments relating to all credit facilities held by the parties or either of them with [Bank A]; and
(b)to ensure that [Bank A] does not take any further legal action against either or both of the parties including, but not limited to, any action by [Bank A] for monetary judgment and/or possession of the following properties:-
(i)[Property B];
(ii)[Property E]; and
(iii)[Property C],
(collectively referred to as “the security properties”).
4.Within 21 days of the date of these orders, the husband do pay or cause to be paid all outstanding rates and/or land tax owed by the parties or either of them including rates and land tax in respect of:-
(i)the security properties; and
(ii)[Property D].
5.Save as is necessary to comply with an order of this Court, the husband be restrained by injunction and an injunction is hereby granted restraining the husband from taking any of the following actions without first giving the solicitors for the wife 21 days’ notice in writing of his intention to do so:-
(a)exercising any rights and/or authorities he may have as a:-
(i)trustee for the [Superannuation Fund A] (“[Superannuation Fund A]”); and/or
(ii)director of the corporate trustee for [ Superannuation Fund B] (“[Superannuation Fund B]”),
(other than to pay tax, and statutory and other expenses properly incurred by such funds in order to maintain compliance) absent the wife’s written agreement and that the wife be permitted to serve the injunction against the husband dated 15 August 2013 on any banks and/or financial institutions and/or any other third parties controlling assets of [Superannuation Fund A] and/or [Superannuation Fund B];
(b)dealing with [Property F] in any way whatsoever including, but not limited to, encumbering and/or extending any loan facility secured by mortgage against title of the apartment and/or otherwise entering into any loan agreement and/or the like using [Property F] as security whether by way of mortgage, caveat or otherwise;
(c)withdrawing or causing to be withdrawn any monies from any bank account held in the names or styles of:-
(i)[Company A];
(ii)[Company B];
(iii)[Company C]; and
(iv)any other companies, trusts and/or entities in which the husband has a direct or indirect interest
(“the entities”) except in the usual course of his financial planning business or to meet his own reasonable living expenses or with the prior written consent of the wife, with such consent not to be unreasonably withheld;
(d)dealing with any property or assets owned by him and/or the companies and/or the entities in any way whatsoever other than in the ordinary course of business or to meet his own reasonable living expenses including, but not limited to, selling, disposing, assigning, transferring, leasing, encumbering by mortgage or otherwise except with the prior written consent of the wife such consent not to be unreasonably withheld;
(e)entering into any contract for the provision of finance or credit;
(f)extending the limit of any existing finance, credit including any credit cards, overdraft or loan facility;
(g)making any loan or advance to any other entity or person; and
(h)purchasing and/or disposing of any shares whether in the name of the husband or any of the entities.
6.Save as is necessary to comply with an order of this Court, the wife be restrained by injunction and an injunction is hereby granted restraining her from taking any of the following actions without first giving the husband 21 days’ notice in writing of her intention to do so:
(a)dealing with [Property G] in any way whatsoever including, but not limited to, encumbering and/or extending any loan facility secured by mortgage against title of the property and/or otherwise entering into any loan agreement and/or the like using [Property G] as security whether by way of mortgage, caveat or otherwise;
(b)withdrawing or causing to be withdrawn any monies from any bank account held in the names or styles of any companies, trusts and/or entities in which she has a direct or indirect interest (“the entities”) except to meet her own reasonable living expenses or with the prior written consent of the husband, with such consent not to be unreasonably withheld;
(c)dealing with any property or assets owned by her and/or the companies and/or the entities in any way whatsoever other than in the ordinary course of business or to meet her own reasonable living expenses including, but not limited to, selling, disposing, assigning, transferring, leasing, encumbering by mortgage or otherwise except with the prior written consent of the husband such consent not to be unreasonably withheld;
(d)entering into any contract for the provision of finance or credit;
(e)extending the limit of any existing finance, credit including any credit cards, overdraft or loan facility;
(f)making any loan or advance to any other entity or person; and
(g)purchasing and/or disposing of any shares whether in the name of the wife or any of the entities.
7.The husband do cause to be sent to the wife’s lawyers on the 7th day of each calendar month copies of all banking and financial institution statements including credit card statements [in their entirety and without alteration] for the preceding month for all accounts into which monies of the husband and/or the entities are deposited or withdrawn.
8.Both parties shall forthwith do all acts and things and sign all documents necessary to give full force and effect to these orders.
9.The application of the wife in so far as it sought interim orders for a further payment of $250,000 or superannuation splitting be and is hereby dismissed.
10.The application of the wife for interim relief otherwise stand adjourned generally, with liberty to relist in the event that the husband defaults on any of his obligations pursuant to these orders.
11.The costs of both parties in relation to interim matters be reserved to trial.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
LH
ASSOCIATE9 MAY 2018
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