Nixon and Nixon - [2011] FamCA 919

FAMILY COURT OF AUSTRALIA

NIXON & NIXON

[2011] FamCA 919

FAMILY LAW – payment of spousal maintenance

APPLICANT:

Ms Nixon

RESPONDENT:

Mr Nixon

FILE NUMBER:

MLC

2061

2009

DATE DELIVERED:

14 November 2011

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Dessau J

HEARING DATE:

14 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr O'Shannessey

SOLICITOR FOR THE APPLICANT:

Kliger Partners

COUNSEL FOR THE RESPONDENT:

In person

SOLICITOR FOR THE RESPONDENT:

Orders

That the hearing date for this case being 19/3/12 shall be vacated and it is listed for a 5 day hearing from 10am on 26/3/12 before Justice Dessau.

That the husband owes to the wife the sum of $17,900 ("the outstanding sum") by way of arrears of maintenance.

That within 24 hours of the making of these Orders, the husband do all such acts and things and sign all such documents as may be required to direct and authorise L Asset Mgt Limited and all other related L entities to deduct from the salary due to the husband the sum of $1,700 per week, to be deposited into the wife's ANZ Bank account BSB … account number … ("the wife's bank account") being the wife's spousal maintenance ("the salary authority").

That, in the event the husband at any time ceases to receive a salary from L Asset Mgt Limited or any related L entity, the husband shall forthwith do all such acts and things and sign all such documents as may be required to direct and authorise L Capital Partners Pty Ltd, L Principal Finance Limited and L Asset Mgt Limited to pay to the wife the wife's spousal maintenance in the sum of $1,700 per week by drawing same against the husband's loan account/s ("the loan account authority").

That in the event of the husband's failure to sign the salary authority or the loan account authority or other documents required by these Orders pursuant to these Orders, then pursuant to Section 106A of the Family Law Act 1975, the Registrar of the Family Court of Australia at Melbourne is hereby appointed to execute the salary authority and the loan account authority in the husband's name.

That to meet the outstanding sum the husband forthwith:

(a) Cause to be delivered to the wife in excellent condition the porcelain dinner set ("the dinner set"); and

(b) Transfer to the wife the 2005 motor vehicle registration number … ("the car") and cause the car keys to be delivered to the wife and make the car available for collection by the wife from his business premises and co-operate with making the car available for collection by her;

(c) and the wife forthwith sell the dinner set and the car with the proceeds of sale to be deemed part property settlement to the husband and to be held on trust by the wife's solicitors for the husband and wife and applied as follows:

(i.) Firstly, to meet payment of the outstanding sum and any reasonably necessary expenses of sale;

(ii.) Secondly, the balance then remaining to be held on trust for the husband and wife pending final hearing.

That in the event that any part of the $1,700 per week obligation of the husband pursuant to paragraph 3 of the 10 June 2011 Orders is not paid, then the solicitors be and are authorised to pay to the wife from the funds held in trust so much of any $1,700 per week obligation as is unpaid 48 hours after such sum is due.

That the wife provide to the husband within 7 days of sale copies of all relevant sale and money receipt documents and otherwise account to the husband for the sales of the car and the dinner set and the solicitors account to the husband for any payments to the wife from the funds held on trust.

That the husband pay the wife's costs of and incidental to this application fixed in the sum of $4,695, payment to be stayed for 30 days.

BY CONSENT

That the husband's application for contravention filed 11 November 2011 be withdrawn with a right of re-instatement.

AND THE COURT NOTES

A. The husband and wife agree to recommence the children's time with the father commencing on the weekend of Friday 18 November 2011, with pick up from school (and each alternate weekend thereafter).

B. The husband and wife agree the children's time will recommence provided that on the weekend of 18 November 2011 the father ensure that his mother, or Ms BB or an employed nanny is present for at least the following times:

(a) On Friday 18 November 2011 from after school until 8:30pm;

(b) On Saturday 19 November 2011 from 10:00am until 8:30pm;

(c) On Sunday 20 November 2011 from 10:00am until 8:30pm;

and that prior to 4:00pm on Thursday 17 November 2011 the husband advise the wife's solicitor in writing as to the details including who will be present at what time including who the nanny will be.

C. The husband and wife agree that the children's Wednesday time will commence on Wednesday 23 November 2011 unless the weekend of 18 November 2011 does not proceed satisfactorily.

D. The husband has provided a signed transfer of registration of the car.

RECORDED : NOT TRANSCRIBED

The solicitor for the applicant wife will prepare the orders within seven days.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2061 of 2009

Ms Nixon

Applicant

And

Mr Nixon

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

Mr and Ms Nixon’s property case is to be concluded before me in the week starting 26 March 2012, now that I have advised the parties that it has been moved back just one week from 19 to 26 March.
Until now, there have been various interim hearings with a substantial focus on spousal maintenance for Ms Nixon, particularly as to enforcement of spousal maintenance orders.
Today’s application by Ms Nixon is brought pursuant to liberty to apply set out in consent orders made by me on 8 September this year. Broadly, the orders that day provided that Mr Nixon was restrained from drawing a salary from the L Entities of more than $320,000 per annum plus superannuation, F School fees, his rent, various business expenses, tax, GST, fees connected with this case, child support and (at paragraph 2(viii)) the Court ordered spousal maintenance of $1700 per week and arrears as at 12 September 2011 of $11,900.
Otherwise, the 8 September 2011 orders provided for a further business valuation report and a mediation to take place before the hearing in March.
Ms Nixon filed this application in a case on 12 October 2011. It is supported by two affidavits. One is filed on 12 October, the other on 8 November. She set out in her application or affidavits that the arrears were $15,300. They are now $17,900. According to her, Mr Nixon says he does not dispute it, in the sense that he offers no alternative amount but says simply that he does not know. She seeks that the arrears be paid immediately, that the L Entities be instructed by Mr Nixon to deduct the $1700 per week from his salary, and that he transfer to her particularised chattels (a dinner set, and a motor vehicle), in order to meet the arrears. She had sought that he ensure that the L Entities also transfer certain artworks to her, but that application was withdrawn this morning.
Mr Nixon filed no material until last Friday, 11 November 2011, when the case was due to go ahead. In his response, he sought that the wife’s application be dismissed, that her maintenance be reduced to $400 per week and that she be declared in breach of orders for selling a particular painting. His affidavit filed the same day supported his response. He is now representing himself. Ms Nixon remains represented.

BACKGROUND

Briefly, by way of background, the parties married in 1997 and had three daughters aged now 11, 10 and six who live with Ms Nixon. Until recently the girls spent about three nights per fortnight with Mr Nixon.
The parties separated in about September 2008.
Mr Nixon has degrees in law and mathematics. He is aged 38. He is an investor and managing director of a private funds management and investment firm. The various entities involved have been described here already by me and in other places as the L Group or the L Entities.
Ms Nixon is 42, and she works as an art consultant for approximately $78,000 per year.

RELEVANT HISTORY OF FINANCIAL PROCEEDINGS

The substantive proceedings started back in March 2009. The first hearing before me was on 27 March 2009. The parties agreed on that day to be restrained from further encumbering their R Suburb home or their SW ski property, or selling or encumbering assets in their names or the names of various entities with which they were associated. They also agreed to be restrained from divesting any control in the various companies and trusts. The husband was to ensure that the wife continued to receive her wage from the L Asset Mgt Limited, the costs of the nanny and housekeeping, outgoings on the R Suburb home and SW, all the costs of her European car, and minimum payments on her credit cards.
On 16 June 2009, I made further consent orders to effect the sale of the R Suburb home and SW holiday home, for the holding of sale proceeds, and for $40,000 to be paid to the wife to equalise moneys that the husband had received from the L Group towards his own legal fees.
On 24 August 2009, again by consent, I ordered that the reserve price for the R Suburb home be set at $7.5 million and for SW at $1.5 million. The husband was to pay $9267.23 in relation to outstanding sums he had not met pursuant to the earlier orders. Ms Nixon at that time asserted that there were further sums owing, but the order was for the amount I just mentioned. Otherwise, the orders granted leave to L Capital Partners and L Asset Mgt Limited to intervene in the proceedings.
Then on 12 March 2010, upon Ms Nixon’s urgent application, Young J made orders to effect the sale of those same two properties, the parties having failed to agree on how the sales should occur. His Honour ordered that the husband pay $10,000 towards the wife’s costs of that hearing.
On 20 April 2010, I made further consent orders, Young J having adjourned the balance of the wife’s applications back before me. L Asset Mgt Limited, the second respondent, was to pay $6250 per month to the wife plus her European car lease payments of 1396.99 per month via a loan account in her name. They were to be paid for six months or until the R Suburb property settled, whichever occurred first.
The wife filed a further application on 12 August 2010 seeking arrears of the payments previously ordered in her favour and for spousal maintenance to be formally set.
On 1 October 2010, Senior Registrar FitzGibbon ordered that the husband cause to be paid to the wife $60,573 plus interest as moneys owing under the previous orders of 27 March, 10 June and 24 August 2009. Until further order, he was to pay $3000 per week interim maintenance to Ms Nixon. He was also ordered to pay several other small sums, about $12,500 in total, arising from previous orders.
The Senior Registrar’s findings in relation to Mr Nixon’s capacity to pay the maintenance are relevant here in light of Mr Nixon’s assertions today that he faces really straitened financial circumstances. It is apparent that he made a similar claim in October 2010. The Senior Registrar referred to Mr Nixon’s “protestations about his straitened financial circumstances” (see para 193). The Senior Registrar noted however that Mr Nixon had continued to enjoy “by whatever means” an “affluent and privileged lifestyle”. He referred to the husband’s “recent acquisition” of a new sports car, for which he was paying $805 per week, as sitting “uncomfortably” with his claim of financial constraint.
In February 2011, it seems that the wife brought another proceeding in relation to arrears of maintenance. It was said from the bar table that the arrears were paid and the application did not proceed.
On 10 June 2011, there were further consent orders made. They discharged the order for $3000 per week, and instead Mr Nixon was to pay $1700 per week, by way of spousal maintenance.
The matter was finally before me again on 8 September, just a matter of some weeks ago, resulting in the orders that I briefly referred to above. Relevantly, arrears of spousal maintenance were then set at $11,900, and the orders that I made on 8 September 2011 provided for them to be paid in three tranches by 26 September 2011. Those three payments were in fact at Mr Nixon’s request, to ease the burden of just one lump sum to meet the arrears.

THE PARTIES’ ARGUMENTS

I have recited that history because it provides an important backdrop to today’s application. In his affidavit, Mr Nixon complains of the number of applications brought by Ms Nixon and that they are vexatious, harassing and an abuse of process. He complains that the current spousal maintenance regime was secured by “misleading the Court”. He complains of being “ambushed” when the Senior Registrar heard the maintenance application. And he swears that he cannot now afford the spousal maintenance nor the F School fees. He says the business is chronically short of working capital. He swears that “given the state of the business, I do not expect to continue to receive my salary of $320,000 per annum”. He swears that he does not “lead a lavish lifestyle”. He says expenses, presumably ones referred to by the wife in her affidavit as expenses incurred by him in the course of this year, were “incurred when the business was in much better shape and was making money”.
He continues at paragraph 18 of the affidavit:
The [L] business has since lost over $600 million in funds under management. This cash flow negative has lost key staff, breached its AFSL licence conditions, had its banking facilities cancelled and had to transfer the [L] Absolute Return Fund to another firm. [L] has endured catastrophic investment performance. The outlook is for things to get worse, not better.
He also refers to his incapacity to meet a particular American Express bill, and there is correspondence attached to his affidavit to which the affidavit refers me. It shows that an Amex bill of just under $15,000 is owing. It does not give me any insight in itself as to why it has not been paid from the not insubstantial drawings agreed to by Mr Nixon only weeks ago in September.
Mr Nixon refers to trade creditors as at 4 November of $220,000 plus and only $3000 plus cash at bank. He refers, too, to $87,000 owing to the ATO.
He sets out that there are third party interests in assets that the wife seeks to be sold, although I suspect that that has now been resolved by Mr O’Shannessy withdrawing the part of his client’s application in relation to artworks. He complains about the wife selling art, and he says that he wants to retain the dinner set, as he uses it “to eat my dinner from”, and he wants to retain the motor vehicle, as it is “very special” to him.
Mr Nixon says quite simply he cannot afford all the payments. He accuses the wife of some sort of sham when she says that she is so financially stretched that she is about to be evicted from her own rental premises.
In submissions, Mr O’Shannessy for Ms Nixon emphasised that although Mr Nixon says his financial situation has worsened since 8 September, there is no independent evidence of it.
Mr O’Shannessy points to the affidavit of Mr Y, a business partner, showing that the L Board in fact resolved to increase Mr Nixon’s salary to the 320,000 plus super as recently as 26 July 2011. He pointed also to the fact that on 15 July this year, Mr J, the Group’s compliance manager, swore that Mr Nixon’s total remuneration for 2011 would be $651,000 and that he would draw $410,000 from his loan account.
Mr O’Shannessy pointed to the pay received by Mr Nixon since that recent hearing, and that, for example, from his November salary he received the net sum of $12,852, after outstanding child support of $3495 was deducted.
Although Mr Nixon has been requested to provide various ledgers as to various loans, he has not done so, but it is clear from the various documents he has produced that he paid a solicitor, Mr Hargreaves, $9000 the day immediately after the last hearing, and yet he remains behind in the wife’s payments. At the heart of Mr O'Shannessy’s submission about that payment, is that Mr Nixon has chosen his own priorities, and they are not for the wife’s support, nor for compliance with these Court orders.
Mr Nixon submitted that the business can no longer support the $1700 per week spousal maintenance. He talks of changes in bank arrangements, that the ATO might issue a statutory demand, that ASIC may step in against the L Group, and that he may have to take a reduced salary. There is no independent evidence that those things will occur. The only evidence from any bank is the evidence referred to by Mr O'Shannessy late in the piece, and accepted by Mr Nixon, that there has been correspondence as recently as at the end of last week from Westpac. Westpac advised the parties that they could restructure or continue their facility over the SW property. The parties apparently owe about $500,000. Mr Nixon said that will be a problem with that loan going ahead, because he cannot provide the relevant guarantees that the bank will require. Again, there was no evidence of that.
This is an interim hearing. As such, there is no cross-examination. The hearing proceeds on the papers. I am conscious that I am reflecting on orders for a short period, given that the trial is due to proceed in March.
I do not propose reducing the spousal maintenance. I propose fixing the arrears at the sum sought by Mr O'Shannessy, and I propose making orders to see them paid.
Mr Nixon complains of repeated returns to Court. Central to a number of them has been Ms Nixon’s repeated attempts to enforce spousal maintenance orders against him and his repeated failure to pay even when, as recently, he has agreed to do so.
When the Senior Registrar made the spousal maintenance orders after a judgment of some 43 pages, and a trial at which Mr Nixon was represented by senior counsel, there was no appeal.
As recently as June, with Mr and Ms Nixon both still represented, as I have noted, the spousal maintenance was reduced by consent to $1700 per week, with an agreement that if Ms Nixon’s earnings reduced below a certain figure, the spousal maintenance would increase.
When the case was before me only eight or nine weeks ago, the intervenor, L Partners Proprietary Limited, and the second respondent, L Asset Mgt Limited, were discharged from the proceedings, and as set out above, a restraint on the husband’s drawings was set. It was, in terms of a restraint, an extremely generous restraint. He was still to draw enough to pay school fees, child support, his nearly $9000 per month rent, spousal maintenance, and various other expenses over and above his $320,000 salary plus super.
When I consider the context, I am not satisfied that Mr Nixon is presently unable to pay the spousal maintenance. It was agreed at the reduced rate only very recently. It is not an immodest sum in the circumstances of the parties’ lifestyle and the husband’s drawings. He has consistently claimed parlous business circumstances, including in front of the Senior Registrar, who, as I have said, noted that at the time Mr Nixon had nevertheless just committed to the $800 per week sports car.
Ms Nixon now particularises expenditure by the husband, in the course of 2011, several months after his claim to Senior Registrar FitzGibbon of straitened circumstances. Hs expenditure includes $21,000 on clothes in February this year, $22,000 in in March of this year, and just under $9000 in a store in City CC in May of this year.

Mr Nixon’s claim that expenses were incurred when the business was in much better shape and making money rings hollow in light of his previous claim to the Senior Registrar of “straitened circumstances” in October 2010, but then the subsequent spending this year.
In that light, Mr Nixon’s claim of trade creditors and little cash at bank at present can be no more than a snapshot on a particular day in what he says is a very complex business structure. That structure and its worth will soon be determined by me at trial. In the meantime, Ms Nixon is entitled to live with some dignity. She is entitled to receive the spousal maintenance in the context which I repeat is really not an immodest amount by any means.
The material cannot satisfy me of a parlous downturn in the last eight to nine weeks so that Mr Nixon has not been able to meet amounts that he agreed to meet. I note there is no material at all from his business partners to support a recent downturn. I note too that Mr Nixon pays $8800 per month by way of rent for a house in which he lives in Q Street, R Suburb. It is a month-to-month tenancy. He is able to sever that tenancy at any time and could easily free up the $1700 or some of it to meet the spousal maintenance. I note in that respect that Ms Nixon is housing herself and the three children in premises for about half that sum of rental.
Moreover, despite several agreements and orders to meet arrears, Mr Nixon has simply not met them and has not continued to pay. There has not been any real dispute as to the amount. The situation warrants orders today that are swift and conclusive in ensuring that Ms Nixon gets money that is owing to her.
Mr Nixon says that she should sell artworks that are in her possession. Mr O'Shannessy says, in light of Mr Nixon’s own claim as to the significantly diminishing assets, that the artworks and the SW property may be the only assets available to her to satisfy a property settlement, and from that perspective they are not the assets that should be sold.
I am satisfied that the dinner set and the car should be sold. Mr Nixon says that the car is dear to him or special to him, and he says he eats from the dinner set. So far as the dinner set is concerned, he can make other arrangements to have crockery to eat from. So far as the car is concerned, in the absence of the payments that he must make, it is a pity for him, but it will have to occur.
One thing that occurred to me and it was not discussed – so I will give you the time to discuss it – is that I could at least allow him 24 hours’ grace. If in 24 hours he pays the outstanding moneys, then the car and the dinner set need not be sold. In those circumstances, I would put a restraint on dealing with those items in the meantime.

RECORDED : NOT TRANSCRIBED

So far as the ongoing payment is concerned, again I think it is fair to say that “enough is enough” of promises and failures to comply. I am strongly inclined towards the application that has been made by Mr O'Shannessy.

RECORDED : NOT TRANSCRIBED

And I agree too, in the circumstances, that the section 106A order should be made so that in the event that within 24 hours, so that everything is nice and clear and crisp in everyone’s minds, if Mr Nixon does not sign the authority to the company to provide the first $1700 of his salary for his wife - although, sorry, just having said that, I have hesitated because if there is still outstanding child support, it would probably come behind that…

RECORDED : NOT TRANSCRIBED

But if he does not sign the appropriate document, then a Registrar of the Court can do so.

RECORDED : NOT TRANSCRIBED

The costs provisions of the Act provide that each party bears their own costs, but there is a discretion for the Court. I have to take into account a range of factors, including the financial positions of each party, the conduct of each party, the course of the proceedings, and the outcome of the proceedings.
This is a case that is quite straightforward. There have been numerous orders for spousal maintenance. There have been orders for arrears of spousal maintenance to be paid. The last order was made by me as recently as 8 September. Spousal maintenance either in part has not been paid or has been allowed to accumulate further. There is every reason, when Ms Nixon has succeeded in her application, for her costs to be met. Now, the issue is how much they are or whether they need to be assessed.

RECORDED : NOT TRANSCRIBED

ORDERS DELIVERED

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau delivered on 14 November 2011.

Associate:

Date: