MARKSON & MARKSON

[2014] FCCA 3040

FEDERAL CIRCUIT COURT OF AUSTRALIA

MARKSON & MARKSON [2014] FCCA 3040

Catchwords:
FAMILY LAW – Property – interim orders – where respondent seeks interim distribution from amount held in trust for the parties to pay various debts – where amounts owing for private school fees – whether children should be re-enrolled at private schools – where respondent seeks payments to be made for amounts owing on credit cards – whether credit card debts are matrimonial liabilities.

FAMILY LAW – Property – interim orders – application for interim property order to defray anticipated legal costs – insufficient evidence.

PRACTICE AND PROCEDURE – Where respondent filed an affidavit two days after the hearing and one day prior to orders being made – where leave was not given to file additional material – where permitting respondent to rely on affidavit filed after the hearing would deny the applicant procedural fairness – where respondent represented by a solicitor but persists in filing self-prepared affidavits giving his own address as his address for service.

Legislation:

Family Law Act 1975 (Cth), ss.11F, 68L, 80

Cases cited:
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2009) 241 FLR 1; FLC 93-466

Applicant: MS MARKSON

Respondent: MR MARKSON

File Number: SYC 3742 of 2014

Judgment of: Judge Scarlett

Hearing date: 16 December 2014

Date of Last Submission: 16 December 2014

Delivered at: Sydney

Delivered on: 19 December 2014

REPRESENTATION

Applicant: In person

Solicitor for the Respondent: Mr Layson

Solicitors for the Respondent: Sarah Bevan Family Lawyers

ORDERS

UNTIL FURTHER ORDER

1. The Applicant and the Respondent are to do all acts and things and sign all such documents necessary to authorise Sage Solicitors to pay the following amounts out of the funds currently held by them in a controlled Monies Account on behalf of the parties:

   (a)As to the sum of $1647.12 being an amount owing to Energy Australia for power supplied to Property B;

   (b)As to the amount of $7,071.00 being school fees owed to [L] School; and

   (c)As to the amount of $9,747.00 to [S] School.  

2. The parties are to direct Sage Solicitors to pay the above sums to the payees on behalf of the parties within 21 days.

3. The Application is adjourned to 28 January 2015 for further mention and directions for final hearing.   

IT IS NOTED that publication of this judgment under the pseudonym Markson & Markson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 3742 of 2014

MS MARKSON

Applicant

And

MR MARKSON

Respondent

REASONS FOR JUDGMENT

Applicant

1. This is an Amended Application in a Case by the Wife, who is the Applicant in the substantive proceedings, for orders that:

   a)the hearing of the Application be expedited and time abridged;

   b)both parties do all things and execute all documents as are necessary to pay to the wife the sum of $191,011.95 from the controlled monies account held by Sage Solicitors and in the event that the Husband fails to sign all documents necessary to facilitate this order, then the Wife should be appointed in accordance with section 106A of the Act (presumably the Family Law Act 1975 (Cth) to sign instead; and

   c)the proceedings be listed for an undefended final hearing.

2. The Husband has, belatedly, filed a Response, seeking the following interim orders:

   1. That the parties forthwith do all acts and things necessary to authorise Sage Solicitors to release $254,353.61 to the husband from the funds held in trust or controlled monies held by them for the parties.

   2. That the parties forthwith do all acts and things necessary to re-enrol [X] and [Y] into their current schools, namely [S] School and [L] School for 2015.  

Background

1. The Wife commenced the substantive proceedings by filing an Application for property and parenting orders on 19^th June 2014. The Application was returnable on 4^th August 2014. The Wife, in her affidavit filed in support of her Application deposed that the parties had agreed that an amount of $901,557.84 was to be placed in a controlled monies account with her then solicitors.

2. The Husband attended Court unrepresented on the return date. He had not filed a Response or any other documents at that stage. He was ordered to file and serve a Response, a Financial Statement and an affidavit in support within 21 days. He did not do so until 17^th November 2014.

3. As the Wife had filed a Notice of Child Abuse, Family Violence or Risk of Family Violence with her Initiating Application, alleging that the parties’ two children had been exposed to family violence by witnessing physical and verbal abuse by the Husband on the Wife, an order was made on the first return date that the interests of parties’ two children should be independently represented by a lawyer under the provisions of s.68L of the Family Law Act 1975. The parties were also directed to attend a Child Dispute Conference with a Family Consultant in accordance with s.11F of the Act.

4. The parties entered into Interim Consent Orders on 4^th August relating to both parenting and property issues. Some of the parenting orders to which the parties agreed are relevant to the current proceedings, namely:

   1.  That in respect of schooling:

   (a)

   i)    [X] will remain enrolled at [S] School until the conclusion of 2014;

   ii)   [Y] will remain enrolled at [L] School until the conclusion of 2014; and

   iii) that [A] and [B] will remain enrolled at [O] School until the conclusion of 2015.

   b)That by 30 October 2014 (or 30 September if the schools do not agree) the Father will do all things necessary to inform [L] School and [S] School of his intention to withdraw the enrolment of the children from the said schools from Term 1, 2015.

   c)That in the event that the parties cannot agree upon the choice of the children’s schooling together, then the Mother shall elect the choice of school, taking into account travel, the affordability of schooling and the parties’ capacity to pay, and both parties will do all things necessary to sign all documents to facilitate the children’s enrolment at such schools, from time to time.

5. There were some interim property orders agreed which are relevant to these proceedings, being:

   …

   3.That until further order, the Respondent be restrained from selling, mortgaging, encumbering or disposing of any items of plant or equipment or other asset of the business [D] Pty Limited (“the Business”) and [S] Pty Ltd other than in the normal course of business, and save for $1,000 per week that the Respondent is permitted to withdraw on account of his weekly income.

   …

   That the Respondent do all necessary acts and things to cause and ensure that the Applicant is able to withdraw the sum of $300 per week from the bank account of the Business, into the Applicant’s account (details not published).

6. The proceedings were adjourned for mention at 10:00am on 16^th September 2014.

7. The Child Dispute Conference was scheduled for Monday 1^st September at 2:00pm. The Family Consultant reported to the Court that only the wife attended the appointment. There was no explanation for the Husband’s failure to attend.

8. By the time the proceedings came back to Court on 16^th September, the Wife’s representation had changed. The firm of Sage Solicitors filed a Notice of Address for Service on 4^th September 2014. The Wife’s former filed a Notice of Withdrawal as Lawyer on 15^th September 2014.

9. On the adjourned date, 16^th September 2014, Mr Tannous, solicitor, from Sage Solicitors appeared for the Wife. There was no appearance by or on behalf of the Husband. There was no explanation for the Husband’s absence.

10. That same day, the Wife filed an Amended Application seeking different property and parenting orders.

11. Orders were made ex parte providing that:

    a)the monies held on the parties’ behalf by the Wife’s former solicitors were to be transferred to a controlled monies account held by the Wife’s new solicitors, Sage Solicitors, in the names of both parties;

    b)the parties were to attend a child-inclusive Child Dispute Conference on 11^th November 2014; and

    c)the Application was adjourned to 18^th November 2014 for further mention at 10:00am.

12. On 17^th November 2014 the husband’s solicitors filed a Notice of Address for Service and a Financial Statement by the Husband.

13. When the matter came back to Court the following day, the Husband was represented by a lawyer for the first time. The Wife filed an Amended Application in a Case seeking the orders referred to in paragraph (1) above.

14. The Court ordered that:

    a)the Husband was to file and serve a Response and an affidavit within 7 days;

    b)both parties were granted leave to issue 5 subpoenas;

    c)both parties were to do all things and execute all documents necessary to pay to the Wife the sum of $191,011.95 from the funds held in the controlled monies account by Sage Solicitors.

    d)The Application was adjourned to 16^th December 2014 for further mention.  

15. The Husband filed a Response and an affidavit on 8^th December 2014. Curiously, although his solicitors had filed a Notice of Address for Service and a Financial Statement on 17^th November, the Husband’s Response and affidavit gave his address for service as his home address. The affidavit also states that the Husband prepared his own affidavit.

16. On 11^th December 2014 the Husband filed a further affidavit. The deponent was one Mr D, the parties’ Accountant. The affidavit states on its face that it was prepared by Mr D himself and gives Mr D’s own address as the address for service. As Mr D himself is not a party to the proceeding, it is clearly incorrect for him to give his own address as an address for service, as the address for service should be that of the husband.

17. Mr D’s affidavit contains an analysis of an affidavit of Ms O sworn on 17^th November 2014 and filed on behalf of the Wife. Mr D makes it clear that he was instructed to prepare his affidavit by the Respondent.

18. The Wife may have some concern that Mr D, who deposes that he has acted for both her and the Husband “and related entities” since 2002, has seen fit to take a partisan approach in litigation between two of his clients.

19. On 16^th December 2014, the Wife’s solicitor appeared only to withdraw from the proceedings. She was given leave to file in court a Notice of Withdrawal as Lawyer.

20. The Husband was represented by a solicitor, Mr Layson. The Wife continued as a self-represented litigant. Both made submissions about the interim orders sought in the Husband’s Response.   

Evidence and Submissions

1. The Husband relied on his Response and his self-prepared affidavit sworn on 6^th December 2014.  

2. In his Response, the Husband seeks:

   a)A payment to himself of an amount of $254,353.61 out of the funds held by the Wife’s former solicitors in the controlled monies account; and

   b)An order that the Husband and Wife re-enrol the parties’ two elder children, [X] and [Y], into their current schools, [S] School and [L] School respectively, for 2015.

3. Mr Layson submitted on behalf of the Husband that there was no agreement between the parties either on the parenting or the property issues. The Father seeks money to pay the children’s school fees. There are long-standing debts to be paid and, as the Husband is unemployed, there are no other funds available to pay the school fees. If the school fees are not paid, the children will have to go to a local high school.

4. The Wife submitted on her own behalf that the parties do not have the funds to keep the two older children at private schools. She has already made arrangements to enrol the children at a local high school. She, too, is unemployed. She is concerned about a possible tax debt of approximately $900,000.00 in respect of which they are awaiting a decision from the Australian Taxation Office.

The Husband’s further affidavit

1. I note from the Court file that the Husband filed a further affidavit on 18^th December 2014, affirmed that day. It is another affidavit which the Husband has prepared himself and where he gives his own address as his address for service.

2. The contents of the affidavit appear to refer to the matters that were argued before the Court on 16^th December, two days before. On the day of the hearing I informed the parties that I would deliver orders on 19^th December 2014. The Husband was not given leave to file a further affidavit in respect of the matters that were the subject of the hearing two days previously.

3. The Husband will not be permitted to rely on the contents of this affidavit. He did not seek to re-open his case. To permit the Husband to rely on this affidavit would be to deny the Wife procedural fairness. The affidavit will not be read.

The Husband’s affidavit of 6 December 2014

1. The Husband’s affidavit of 6^th December 2014 contains some 82 paragraphs and a number of annexures.  A great deal of the affidavit does not relate to the matter to be decided by the Court, and the Husband’s solicitor did not indicate which paragraphs of the affidavit were to be relied on.

2. Doing the best I can, it appears to me that paragraphs 66 to 82 of the Husband’s affidavit relate to his interim application set out in his Response. Paragraphs 66 to 70 inclusive appear under the heading “Parenting and Schooling”. Paragraphs 71 to 82 appear under the heading “Current Finances, Proposed Parenting and Requested Partial release from remaining Family asset pool”.

3. The Husband deposes that:

   67.Both my eldest children want to continue at their current private schools. They are confused by the Applicant claiming it is not affordable. I am prepared to carry the financial burden of the children’s education going forward, as proposed in paragraph 79 and 80 below. It is important for the children to remain in their current school environments, especially with the family challenges to hand.

   68.The children need and want to spend more time with me. I am prepared to care for the children 50% of the time.[1]

   [1] Affidavit of Mr Markson 6.12.2014 at paragraphs [67]-[68]

4. Whilst the Husband refers in paragraph 67 to paragraphs 79 and 80, it appears more likely that he is referring to paragraphs 78 and 79, as paragraph 80 refers to amounts which the husband claims are owing.

5. Paragraphs 78 and 79 say:

   78.I propose to have 50% equal care for the children. Children to be dropped off and picked up from Schools on Monday mornings by parent in children’s care and picked up by other parent on Monday afternoons.

   79.I propose to take on the financial responsibility of the school fees from term 3 next year.[2]

   [2] Ibid at [78]-[79]

6. Paragraph 80 sets out a list of amounts that the Husband claims are outstanding, saying “The following to be paid out now from controlled monies account before distribution between the parties as financial independence occurred on 28 February 2014…”

7. The Husband goes on to depose at paragraph 81:

   35% of funds released to the Applicant to date to be released to me now to provide for payment of debts to family, legal fees, living expenses and rental home within 15min from children’s schools. As per paragraph 71, the Applicant has received $367,011.95 since 28 Feb 2014. Therefore I request $128,454.18 to be released to me now together with the payment of the outstanding liabilities in paragraph 80 above.[3]

   [3] Ibid at [81]

8. The amounts set out in paragraph 80 of the Husband’s affidavit total $430,899.43. as he states that he seeks a further sum of $128,454.18 to be paid to him, the total amount sought to be paid out would be $559,353.53.

9. However, in his Response filed on 8^th December 2014, the same day as his affidavit, the Husband claims an amount of $254,353.61. The Husband’s affidavit does not explain how he arrives at this figure.

10. The amounts referred to by the Husband in paragraph 80 of his affidavit are:  

    Energy Australia for Property B  $6,034

    Citibank Platinum card  $27,868.56

    Citibank Ready credit  $15,141.25

    NAB credit card  $9,646.94

    WBC Overdraft  $14,934.68

    Mercedes Finance (approx.)  $15,000.00

    Outstanding school fees  $18,274.00

    School fees for term 1 next year  $19,000.00

    Loan to Mr U  $250,000

    Loan to [M]  $25,000.00

    Loan to Mr R     $30,000.00.[4]

    [4] Ibid at [80]

11. One of the difficulties here is that most of the amounts claimed as outstanding are not supported by the documents annexed to the affidavit. In a number of instances, the Husband does not distinguish between amounts he says are outstanding and amounts that have already been paid.

12. As an example, the Husband claims an amount of $6,034.00 as being owed to Energy Australia for electricity supplied to the property in Property B, but the documents forming Annexure “L” do not support that amount. There is a letter of demand from Geoffrey Mendelson Lawyers dated 29^th September 2014 claiming “that there is currently $4,387.62 overdue” whereas there is also a later statement dated 17^th October 2014 claiming that an amount of $1,647.12 has not been paid from the final bill. The two amounts appear to have been added together.

13. Similarly, the amounts claimed as outstanding by [L] School and [S] School at Annexure “M” of the affidavit are less than the husband claims. Whilst he claims a total of $18,274.00 to be owing, the correspondence from [L] School and [S] School’s at Annexure “M” show the following amounts to be outstanding:

    a)[L] School         $7,071.00

    b)[S] School     $9,747.00

    TOTAL  $16,818.00.

14. The Husband is also claiming “school fees for term 1 next year $19,000” and states in his affidavit at paragraph 79:

    I propose to take on the financial responsibility of the school fees from term 3 next year”.

15. The Husband is silent as to who will be responsible for the children’s school fees for term 2.

16. More importantly, the Husband ignores the fact that on 4 August 2014 he consented to an order that said:

    b) That by 30 October 2014 (or 30 September 2014 if the schools do not agree) the Father will do all things necessary to inform [L] School and [S] School of his intention to withdraw the enrolment of the children from the said schools from Term 1, 2015.

17. Why, then is the Husband seeking school fees for 2015?

18. As to the amounts outstanding to [L] School and [S] School’s, Notation 1 to the Consent Orders of 4^th August 2014 said:

    That the Father has agreed to pay the cost of [X] and [Y]’s school fees until the conclusion of 2014 and that the parties will do all things necessary to arrange for the withdrawal of the sum in respect of the fees from the funds held in the controlled monies account with the Wife’s solicitor, this sum to be categorised as an interim distribution to the Husband upon settlement or final hearing.

19. Why was this not done? The Husband’s affidavit of 6^th December makes no mention of those Orders at all.

20. The Husband also claims loans to, presumably he means “from”, Mr U, [M] and Mr R as having been invested into the business. If they are indeed debts of the parties jointly, there is no evidence of them.

21. I am not satisfied that the Husband has showed that the other amounts claimed, including credit card debts, are in fact joint debts.

22. The Husband also claims an amount of $128,454.18 to provide for “payment of debts to family, legal fees, living expenses and rental home within 15 min of children’s schools”. He provides no particulars of these amounts. If he is seeking an interim property order to defray anticipated legal costs, as discussed in Strahan & Strahan (Interim Property Orders)[5], the Husband will need to provide some details of those legal costs he has incurred already and what his anticipated legal costs might be. He has not done so.

    [5] [2009] FamCAFC 166; (2009) 241 FLR 1; FLC 93-466

Conclusions

1. It appears that the only amounts that are clearly identifiable on the evidence before the Court are the amount of $1,647.12 owing to Energy Australia for power supplied to the Property B property and the amounts of $7,071.00 and $9,747.00 owing to [L] School and [S] School respectively. The solicitors holding the parties’ funds will be ordered to pay those amounts directly to the payees on behalf of the parties.

The future progress of this matter

1. The parenting and property proceedings between the parties have not proceeded in a satisfactory way to date. The Wife’s case has not been helped by the fact that she has had two different solicitors acting for her and is now self-represented.

2. The Husband’s participation in this case has been less than satisfactory. His failure to file a Response and supporting documents when ordered has hindered the progress of the matter, especially as he was first ordered to do so on 4 August and did not comply fully with that direction until 8 December. This delay is unacceptable. His failure to attend court on occasions has also created difficulties.

3. The husband needs to work out whether he is actually represented by his solicitors or not. The filing of a Notice of Address for Service and a Financial Statement by his solicitors on 17^th November 2014 was followed on 8^th December of a Response and an affidavit by the Husband giving his own address as his address for service. To make matters worse, the Husband then filed an affidavit of Mr D on 11^th December, giving Mr D’s address as the Husband’s address for service, and then on 18^th December he filed a further affidavit of his own, again giving his own address as his address for service.

4. The Husband’s conduct of the matter has been entirely unsatisfactory to date. The Response which he chose to file on 8^th December sought an interim parenting order and no final parenting order. It will not do for the Husband to set out in his affidavit what parenting orders he wants the Court to make. If he persists with a Response that does not seek any final parenting orders, the Husband may find that the Wife will seek to proceed with her Application for parenting orders on an undefended basis.

5. The property proceedings need to progress in an orderly way now that the Husband has finally filed his documents. The parties will be directed to attend a Conciliation Conference before a Registrar. They would be well advised to consider their financial position carefully before this litigation proceeds much further.  

I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  19 December 2014