Nixon and Nixon (No 3)
[2010] FamCA 1284
FAMILY COURT OF AUSTRALIA
| NIXON & NIXON (NO. 3) | [2010] FamCA 1284 |
FAMILY LAW – INTERIM ORDERS – enforcement
| APPLICANT: | Mr Nixon |
| FIRST RESPONDENT: | Ms Nixon |
SECOND RESPONDENT: | L Asset Management Limited |
| INTERVENOR: | L Capital Pty Ltd |
| FILE NUMBER: | MLC | 2061 | of | 2009 |
| DATE DELIVERED: | 1 October 2010 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Senior Registrar FitzGibbon |
| HEARING DATE: | 26 August 2010 |
REPRESENTATION AT THE HEARING ON 26 AUGUST 2010
| COUNSEL FOR THE APPLICANT: | Mr Mawson SC |
| SOLICITOR FOR THE APPLICANT: | Kennedy Partners |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr O’Shannessy |
SOLICITOR FOR THE FIRST RESPONDENT: | Kliger Partners | ||||
| Ms Coleman Lander & Rogers |
| COUNSEL FOR INTERVENOR: | Ms Coleman |
| SOLICITOR FOR THE INTERVENOR: | Lander & Rogers |
Orders
IT IS ORDERED
That the husband pay or cause to be paid to the wife as soon as practicable but by no later than close of business 8 October 2010 the sum of $60,573.40 (“the payment”) plus any accrued penalty interest and the costs of collection of monies, if any, claimed by CH Agency or any other debt recovery agency or firm with respect of monies owed arising from the expenses or sums ordered to be paid by the husband pursuant to any of paragraphs 8 and 9 of the orders made 27 March 2009; paragraphs 21 and 22 of the orders made 10 June 2009 and paragraph 8 of the orders made 24 August 2009 (“the particular orders”) such funds to be deposited into the ANZ Bank Account BSB … Account Number …668 in the name of the wife.
That upon the payment in paragraph 1 being received by the wife she be responsible for paying out any and all outstanding debts pursuant to the particular orders as set out in paragraph 1.
That subject to the preceding orders paragraphs 8 and 9 of the orders made 27 March 2009 and paragraphs 21 and 22 of the orders made 10 June 2009 be discharged.
That until further order the husband pay or cause to be paid to the wife for her interim maintenance the sum of $3000 per week calculated as and from 21 September 2010 and weekly thereafter such payments to be deposited on the same day each week to the ANZ Bank Account BSB … Account Number …668 in the name of the wife.
That as soon as practicable and by no later than close of business on 8 October 2010 the husband do all such acts and things and sign all such documents as may be required to direct and authorise K Capital Limited, L Asset Management Limited and L Principal Limited and all other L Group entities and G Group Entities to provide such documents and information required by Mr DF of XX Firm, being the appointed single expert pursuant to paragraph 2 of the orders made 20 April 2010 and as requested in the letter dated 22 June 2010 from Mr DF to the husband’s and wife’s solicitors and as set out in Appendix 3 to that letter together with any further information or documents as may be required by XX Firm from time to time on 7 days notice from the date of request.
That the documents so provided in paragraph 5 of these orders are not to be disseminated by the wife or anyone on her behalf other than to her legal advisors from time to time and the single expert as appointed by order of the court, without prior written agreement or further order.
IT IS ORDERED BY CONSENT
That within 7 days of the date of this order, the wife retract and withdraw the document described as “National Australia Bank Short From Credit Memorandum” sent to the single expert, Mr FD, under covering letter dated 1 July 2010, and the husband and wife otherwise do all such acts and things as may be necessary to facilitate the single expert valuation of their interest in the L Group of Companies.
IT IS FURTHER ORDERED
That the husband cause to be paid to the wife as soon as practicable and no later than 8 October 2010:
a.The sum of $6250 being the monthly payment due to the wife pursuant to paragraph 2(a) of the orders made on 20 April 2010 (in relation to the second respondent and intervenor) for the month of June 2010; and
b.That paragraph 3(c)(iii) of the orders made on 24 August 2009 be varied to provide an additional sum of $6220 (being the amounts due to TL Company and FR Pty Ltd) to be reimbursed to the wife from the proceeds of sale of the property at U Street, Suburb R in the State of Victoria, the characterisation and ultimate responsibility of such payment be reserved to the Trial Judge.
That all parties have liberty to apply by filing an Application in a Case supported by affidavit with respect to any issue arising from the orders made this day.
That all parties have liberty to seek to list the matter for mention before the Senior Registrar as to any matter arising from these orders and if unavailable, Registrar Field, on no less than 24 hours notice to all parties.
That any application as to costs be addressed by written submission on behalf of the applicant wife within 14 days of the date of these orders and the husband respond within 14 days thereafter and the wife be permitted to reply within a further 7 days and such issue be determined in chambers without appearance.
That the further Amended Application in a Case of the wife filed 12 August 2010 and the Response to an Application in a Case of the husband filed 18 August 2010 be dismissed.
That any further hearing or directions with respect to the applications for final orders be attended by Registrar Field who may list the matter at her discretion in court or in chambers to determine the future conduct of the case.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Nixon & Nixon 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 MELBOURNE |
FILE NUMBER: MLC 2061 OF 2009
| Mr Nixon |
Applicant
And
| Ms Nixon |
First Respondent
| L Asset Management Limited |
Second Respondent
| L Capital Pty Ltd |
Intervenor
REASONS FOR JUDGMENT
ISSUES
There are three broad issues to be determined.
A.The cumulative amount owed by the husband to the wife pursuant to orders made 27 March 2009, 10 June 2009, 24 August 2009 and 20 April 2010. She claims $60,573.40 and he claims it is $20,324.35.
B.What is the proper and adequate amount to be paid each week as interim maintenance to the wife following expiration of the current order 21 September 2010. The wife wants $3560 per week. The husband offers $2000 per week.
C.The production and exchange of further documentation required by Mr DF of XX Firm, the single expert jointly appointed to value the L and G Group of companies.
Ancillary to these are issues about the payment of private school fees for the three children of the marriage, orders to limit the husband’s access to funds, reimbursement of other monies spent or payment of putative joint debts and whether self-executing enforcement orders ought be made with respect of all monies ordered to be paid or things required to be done by the husband.
APPLICATIONS AND DOCUMENTS RELIED UPON
BY THE WIFE
Further Amended Application in a Case filed 12 August 2010, 3 affidavits and Financial Statement of the wife all sworn and filed 12 August 2010, documents W1 – 6 inclusive tendered at the hearing on 26 August comprising the wife’s reconciliation and comments against the husband’s response, handwritten letter from the wife to the Family Court dated 24 August 2010, tax invoices from German Auto Haus, letter from F Girls’ School dated 25 August 2010, copy of husband’s twitter.com page, four extracts of records produced by subpoena from LA Company.
BY THE HUSBAND
Response to an Application in a Case filed 18 August 2010, affidavit and Financial Statement of the husband both sworn 17 August and filed 18 August 2010, and reference to extracts of the husband’s affidavit sworn 11 March filed 12 March 2010 by the wife, documents “H 1” tendered at the hearing being the husband’s response to the wife’s dossiers and reconciliation filed 12 August 2010.
OTHER DOCUMENTS
The affidavit of Mr JD filed by leave 26 August 2010 on behalf of the intervenor and the second named respondents.
ORDERS SOUGHT
At the conclusion of submissions on 26 August counsel was requested to prepare, exchange and send to the court a precise minute of orders sought by agreement and otherwise specifying the paragraphs of their respective applications upon which they still relied and, if amended, redrawn to reflect the changes to orders sought including the alternate proposals put during submissions by counsel at the hearing.
The orders sought by the wife are:
1.That within 24 hours ("the due date") of the making of these Orders, the husband deposit the sum of $60,573.40 ("the outstanding sum") into the wife's ANZ Bank account BSB … Account Number …668, being outstanding obligations up to 31 July 2010 of the husband pursuant to paragraphs 8 and 9 of the Orders made on 27 March 2009 and paragraph 10(b) and paragraph 21 of the Orders made on 10 June 2009.
2.That paragraphs 8 and 9 of the Orders made on 27 March 2009 and paragraph 21 of the Orders made on 10 June 2009 (spousal maintenance payments to be made) be discharged and replaced with the following:
3.That the husband pay or cause to be paid all mortgage and/or loan repayments and/or ISDA rate swaps secured against or with respect to [Suburb R] and [SW] and all owners corporation fees with respect to Snowmass.
4.That the husband pay to the wife by way of spousal maintenance the sum of $3,560 per week ("the sum") into the wife's ANZ Bank account BSB … account number …668, the first payment to be made on 30 August 2010 and weekly thereafter.
5.That within 7 days the husband do all such acts and things and sign all such documents as may be required to direct and authorise [L Capital] Limited, [L] Asset Management Limited and [L] Financial Limited and all other [L] Group entities and [G] Group entities to provide such documents and information required by Mr [DF] of [XX Firm] being the appointed single expert pursuant to paragraph 2 of the Orders made on 20 April 2010, as requested in the letter dated 22 June 2010 from Mr [DF]to Kennedy Wisewoulds and Kliger Partners and as set out in Appendix 3 to that letter and any further information or documents as may be required by [XX Firm] from time to time within 7 days of request ("the document authority").
6.That in the event of the husband's failure to sign the document authority within 7 days, 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 document authority in the husband's name.
7.That a letter from the wife's solicitor and/or a letter from the single expert to the extent that the single expert has not received all information and documents required shall be sufficient proof of the husband's failure to sign the document authority for the purposes of the Registrar signing in the husband's name pursuant to these Orders.
8.That within 7 days the husband do all such acts and things and sign all such documents as may be required to ensure the children of the marriage, namely [N Nixon] born on … 2000, [S Nixon] born on … 2001 and [I Nixon] born on … 2005 are able to attend [F] Girls School until the final hearing of this matter, including any acknowledgment required by [F] Girls School as to the husband's liability to meet payment of school fees.
9.That within 7 days the husband do all such acts and things and sign all such documents as may be required to direct and authorise [L Capital] Pty Ltd , [L Financial] Limited and [L]Asset Management to pay all [F] school fees as and when they become due and record such payments as salary paid to the husband or, alternatively, as a loan to the husband ("the [F] authority").
10.That in the event of the husband's failure to sign the [F] authority within 7 days, 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 [F] authority in the husband's name.
11.That within 7 days the husband do all such acts and things and sign all such documents as may be required to direct and authorise [L Capital] Pty Ltd, [L Financial] Limited and [H] Asset Management to pay the weekly spousal maintenance amount as sought in paragraph 2(b) of these Orders directly into the wife's ANZ Bank account BSB … account number …668 and record such payments as salary paid to the husband or, alternatively, as a loan to the husband ("the weekly maintenance authority").
12.That in the event of the husband's failure to sign the weekly maintenance authority within 7 days, 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 weekly maintenance authority in the husband's name.
13.That within 7 days the husband do all such acts and things and sign all such documents as may be required to direct and authorise [L Capital] Pty Ltd, [L Financial] Limited and [L] Asset Management to pay the sum of $60,573.40 referred to in paragraph 1 of these Orders and record such payment as salary paid to the husband or, alternatively, as a loan to the husband ("the outstanding sum authority").
14.That in the event of the husband's failure to sign the outstanding sum authority within 7 days, 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 outstanding sum authority in the husband's name.
15.That the husband do all such acts and things and sign all such documents as may be required to direct and authorise [L Capital] Pty Ltd, [L Financial] Limited and [L] Asset Management to pay and/or make available to him by way of salary and/or loan account drawings no more than the sum of $3,560 per week over and above the amounts required pursuant to the [F] authority, the weekly maintenance authority, the outstanding sum authority and the husband's obligations pursuant to paragraph 2(a) of these Orders ("the limiting authority").
16.That in the event of the husband's failure to sign the limiting authority within 7 days, 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 limiting authority in the husband's name.
17.That within 7 days the husband provide copies of the document authority, the [F] authority, the weekly maintenance authority and the limiting authority to the wife's solicitors, Kliger Partners.
18.That a letter from the wife's solicitors to the extent that they have not received a signed copy of the [F] authority, the weekly maintenance authority, the outstanding sum authority or the limiting authority shall be sufficient proof to enable the Registrar to sign the said authorities in the husband's name pursuant to these Orders.
19.That the husband shall be and is hereby restrained from doing any act or thing in his capacity as Executive Director of [L Capital] Pty Ltd, [L] Asset Management and [L Financial] Limited and/or otherwise which would result in [L Capital] Pty Ltd, [L] Asset Management and/or [L Financial] Limited being unable to properly act upon and comply with the direction and authority given by the husband to them in the document authority, the [F] authority, the weekly maintenance authority, the outstanding sum authority and the limiting authority.
20.That the husband pay the wife's costs of and incidental to this Application.
Counsel for the wife acknowledged that some of the orders sought are beyond my power and move beyond what can properly be considered as spousal maintenance. That is addressed in these reasons under “Jurisdiction”.
The orders sought by the husband are:
1.That the further amended application in a case filed by the wife on 12 August 2010 and the response to an application in a case filed by the husband on 18 August 2010 be dismissed.
2.That the husband cause to be paid to the wife the following amounts, on or before 30 September 2010:
a)The sum of $20,324.35 being arrears pursuant to paragraphs 8 and 9 of the orders made on 27 March 2009; and
b)The sum of $6,250.00 being the monthly payment due to the wife pursuant to paragraph 2(a) of the orders made on 20 April 2010 (in relation to the second respondent and intervenor) for the month of June 2010.
3.That paragraph 3(c)(iii) of the orders made on 24 August 2009 be varied to provide an additional sum of $6,220.00 (being the amounts due to [TL Company] and [FR Company]) to be reimbursed to the wife from the proceeds of sale of the property at [U Street, Suburb R] in the State of Victoria, the characterisation and ultimate responsibility of such payment be reserved to the trial Judge.
4.That until further order, the husband cause to be paid to the wife, for the support of the wife, the sum of $2,000.00 per week ($8,666.67 per calendar month) commencing on 21 October 2010.
5.That paragraphs 8 and 9 of the orders made by the Family Court of Australia on 27 March 2009 and paragraph 22 of the orders made on 10 June 2009 be discharged.
6.That within 7 days of the date of this order, the wife retract and withdraw the document described as "National Australia Bank Short Form Credit Memorandum" sent to the single expert, [Mr DF], under covering letter dated 1 July 2010, and the husband and wife otherwise do all such acts and things as may be necessary to facilitate the single expert valuation of their interest in the [L] Group of Companies.
Paragraph 6 will be made as a consent order. There appears to be tacit acceptance that the debt referred in paragraph 3 above and payment of it do not fall under the spousal maintenance powers.
THE HEARING
The original hearing was fixed for 18 August 2010 and adjourned until 26 August 2010 on the application of the husband who had just returned from Europe and wanted time to consider the application and affidavits filed 12 August 2010 and particularly to reconcile the figures put by the wife in “W1” and her affidavits.
After ruling on and admitting the late filing of the affidavit by Mr JD on behalf of the second respondent and intervenor the case commenced and was conducted by submission.
BACKGROUND
It is necessary to set out the procedural history, litigation and orders made in some detail.
Mr Nixon is 37 years old and describes his usual occupation as an investor and Managing Director of L Group, a private funds management and investment firm. He has two degrees. He will hereafter be generally described as “the husband”.
Ms Nixon is 41 years old and a specialist valuer and was, until her services were terminated, employed by the Ll Group. She continues to undertake independent consultancy work. She will be generally described as “the wife”.
They married in December 1997 and final separation took place in September 2008, when the husband left the matrimonial home at U Street, Suburb R, Victoria (“the former matrimonial home”) in contentious circumstances. He now rents a house in Suburb R. The wife remained in the home but signed a lease on an apartment elsewhere commencing 20 August 2010 to which she will move with the children before settlement of the sale of the former matrimonial home on 13 October 2010. She signed the lease in August because at $1050 per week she believes it is below market rent.
They have three daughters N aged ten, S aged nine and I aged five. The children have been the subject of significant litigation about their care and parenting. The most recent interim applications were concluded by me on 25 May 2010. The children live with their mother and spend time with their father on alternate weeks from after school or kindergarten Friday until 6.30 pm Sunday and each week from after school or kindergarten Wednesday until 9.00 am or prior to school or kindergarten Thursday and at any other times by agreement. There are a range of other orders which I need not recite. The girls have an Independent Children’s Lawyer representing their interests. It is clear they love their parents and it is reciprocated. They all attend F Girls’ School. The husband assured the court and wife at the hearing that he will pay all education expenses. That has been problematic to date.
The parties own 91 per cent of the shares of L Capital. The owner of the remaining 9 per cent is a company controlled by Mr JD.
The wife is the sole registered owner of the former matrimonial home which sold for $6.5 million. Their other property is “SW”, a holiday home, which is yet to be sold. There are significant encumbrances and other debts on both properties which must be paid out at settlement.
The valuation of their interests in the various companies comprising what is styled as the L Group is not yet complete. The single expert requires further documents in order to do so.
The case is in the list awaiting issuance of trial directions and a first day of hearing before a Judge, likely to be Justice Dessau, when it is ready.
The wife has an Apprehended Violence Order (AVO) that will last until further order, made on 17 February 2009 following conflict and an incident which occurred when the parties were living under the one roof. Until then the husband thought they had agreed upon the terms of financial settlement and that those instructions were being acted upon by their respective solicitors. He was mistaken.
The result of the conflict was that the husband had to vacate the former matrimonial property. He initiated proceedings on 12 March 2009 for final and interim parenting orders including sole use and occupation of the matrimonial home.
On 25 March 2009 the wife filed her response seeking final and interim orders was with respect to parenting, property and spousal maintenance. This hearing is the culmination of a raft of interim and interlocutory applications.
THE INTERIM AND INTERLOCUTORY HISTORY
There are five operative sets of orders relevant to this hearing. For ease of repeated reference to them they will for convenience generally be referred to as either “Orders 1, 2, 3, 4, 5 or 6”. The most relevant paragraphs referred to are alongside the relevant order as follows and in these reasons.
The orders are:
27/03/2009 - Order 1 - (paragraphs 8 and 9)
10/06/2009 - Order 2 - (paragraphs 10(b), 21 and 22)
24/08/2009 - Order 3 - (paragraphs 3(c)(iii) and 8; Notation A)
12/03/2010 - Order 4 - (urgent orders for sale of former matrimonial home
and holiday home)
20/04/2010- Order 5 - (confined to wife’s support by second respondent and intervenor paragraphs 2, 3, 4 and 5; Notations A-D)
20/04/2010 - Order 6 - (confined to appointment of single expert)
There are other orders made on different days but which are not relevant.
The interim orders sought were extensive insofar as the terms of financial provision the wife wanted, including injunctions to prevent the husband from in any way dealing with personal or corporate assets and entities save in the usual course of business.
On 27 March 2009 the parties compromised and had consent orders made by her Honour Justice Dessau (“Order 1”). Those orders restrained both the husband and wife from doing a number of things insofar as selling or in any way adversely affecting both real and personal property and importantly at paragraphs 8 and 9 provided as follows.
“8. The husband ensure that the wife continue to receive her wage from [L] Asset Management Limited and that the costs of [Ms O] and housekeeping to her, as well as the outgoings of the home and “[SW]” be paid by the husband as and when they fall due at the current level of support, together with all lease payments, registration, insurance, maintenance, petrol, comprehensive car insurance costs and repair costs with respect to the BMW … motor vehicle currently driven by the wife.
9. That within 21 days the husband ensure that the minimum payment be made on all of the wife’s credit cards and THE COURT NOTES that orders 8 and 9 and (sic) made without prejudice to the rights of either party at any further hearing of this case.”
On 10 June 2009, the date to which the initiating proceedings had been ultimately adjourned, orders were made by consent to sell the matrimonial home by expressions of interest and thereafter public auction if recommended by the selling agent (“Order 2”).
Paragraph 10(b) provided as follows:
That as soon as practicable the parties do all things reasonably necessary to effect such maintenance and cosmetic improvements as recommended by Kay and Burton so as to make the former matrimonial home fit for sale and the costs of such improvements be met by the husband as and when they fall due.
Other orders were made to enable the marketing and sale by the husband of the holiday home with settlement, if sold, not before 1 October 2009; production of documents to or by the parties and to respective accountants; and payment of $40,000 to the wife as a Barro Order, it being equivalent to a sum asserted to have been used by the husband.
At paragraph 21 outgoings for the purpose of clarification of paragraph 8 of Order 1 was agreed and defined as follows:
Outgoings for the purpose of paragraph 8 of the order dated 27 March 2009 shall include electricity, gas, telephone, water, rates, garden and pool maintenance and payment be facilitated through [Mr KM] or his successor.
The proceedings were adjourned for mention before Registrar Field in October 2009 to determine readiness for a final hearing.
On 14 August 2009 the wife filed an Application in a Case seeking enforcement of Orders 1 and 2 for her maintenance, and giving her responsibility to sell the former matrimonial home as she claimed that the husband had either entirely refused, failed or only partially complied with orders resulting in significant and mounting debts and arrears of payments plus problems with respect to the marketing and sale of the former matrimonial home.
It was listed on 24 August 2009, before Justice Dessau and by consent, L Capital Pty Ltd were given leave to intervene in the proceedings. (“Order 3”)
The wife assumed responsibility to instruct agents handling the sale of former matrimonial home and orders were made as to how the proceeds of sale were to be applied when sold.
Paragraph 3(c)(iii) provided for the wife, as a third charge in the application of the proceeds of sale of the former matrimonial home at settlement, to receive the sum of $6117.85 in reimbursement of the husband’s obligations pursuant to paragraph 10(b) of Order 2 with such sum to be deemed part property settlement to the husband. There were a range of other orders affecting the sale of the holiday home.
Paragraph 8 provided:
That within 24 hours of the making of these orders the husband deposit the sum of $9267.23 into the wife’s ANZ Bank Account BSB … Account Number …668, being outstanding obligations up to 31 July 2009 of the husband pursuant to paragraphs 8 and 9 of the orders made 27 March 2009 and paragraph 21 of the orders made 10 June 2009.
In Notation A to the orders the wife asserted that there were further amounts owing pursuant to Orders 1 and 2 apart from the sum of $9267.23 ascribed in paragraph 8.
On 29 September 2009 L Capital filed applications to formally seek leave to intervene in the proceedings and to become a party (despite the consent order for it on 24 August) and if granted then orders against both the husband and wife in their capacity as directors and share holders of certain of the L Group Entities restraining them from distributing proceeds of sale other than those sums specified in the orders; and to apply the proceeds to discharge all monies owing by each of them personally or as directors and shareholders of G Holdings Pty Ltd, L Asset Management Limited, L Financial Limited and / or L Capital Ltd.
The applications were listed on 6 October and 24 November 2009 for mention before Registrar Field for the purposes of discussions with all parties concerning the sale of the former matrimonial property and generally. Another mention was set for 19 January 2010 with the prospect of making orders to advance the case to trial. That did not eventuate.
On 12 March 2010 the Application in a Case by the wife filed 10 March 2010 came urgently before his Honour Justice Young who made orders concerning the sale of the former matrimonial home and the holiday home. (“Order 4”)
The husband’s solicitors had filed a Notice of Ceasing to Act and he appeared in person.
The Intervenors were also represented as was the second named respondent.
The applications for final orders were otherwise referred to the Docket Registrar to fix them before Justice Dessau. She adjourned the case to 20 April to determine objections to production of documents sought pursuant to subpoena. She made orders for filing affidavits outlining the objections and any response to them by 14 April.
The issues were compromised on 20 April 2010. Two sets of consent orders were made. The first, and made by Justice Dessau (“Order 5”), was between all parties and altered arrangements for financial support of the wife. The second, and made by me (“Order 6”), was about appointing experts and listing the case for this hearing.
Order 5 provides at paragraph 2:
2.That the Second Respondent pay to the wife and / or for the benefit of the wife the following:
(a)The sum of $6250 per month commencing 21 April 2010 and on the 21st day of each month thereafter; and
(b)All lease payments with respect to the BMW … motor vehicle driven by the wife in the estimated sum of $1396.99 per month, plus a one off hire purchase establishment fee in the sum of $434.50 pursuant to the National Australia Bank Quote …10A dated 15 April 2010 (“the payments”).
3. The payments shall be made by the Second Respondent by way of the establishment of a new loan account (“the said loan account”) with [L] Asset Management, against which the payments will be drawn.
4. The payments shall be made for a period of 6 months or until settlement of the sale of the property situate at and known as [U Street, Suburb R] (“the [R] property”) whichever occurs first in time.
5. That the second respondent be repaid the payments and full discharge of the said loan account upon settlement of the sale of the [R] property.
AND THE COURT NOTES
A.That the wife reserves her rights against the husband with respect to the payments and the repayment of the said loan account from the proceeds of sale of the [R] property.
B.It is anticipated by the wife and the second respondent that the National Australia Bank quote referred to in paragraph 2(b) herein will be approved by the said bank. It is agreed that the second respondent will do acts and things necessary to assist the wife in obtaining approval for finance in accordance with the said quote and that the second respondent will meet payment of all lease payments in the quantum ultimately required by the bank.
C.The husband consents to these orders on the basis that it is his case that paragraph 2 is in full satisfaction of his obligations under paragraphs 8 and 9 of the orders of 27 March 2009 (as amended by the orders of 10 June 2009) and entirely without prejudice to his rights to argue that he is fully complied with his obligations under the order.
D.The wife intends that these orders only relate to part of the husband’s obligations pursuant to paragraph 8 (only) of the of 27 March 2009, being:
(a)“Her wage from [L] Asset Management Limited”; and
(b)“all lease payments, registration, insurance, maintenance, petrol, comprehensive car insurance costs and repair with respect to the BMS (sic) … motor vehicle currently driven by the wife”.
Order 6 adjourned the case to 13 May, appointed Mr DF as a single expert to value the interests of the parties in the L / G Group of entities at the joint and equal cost of the husband and wife but requiring them to do everything necessary to cause the wife’s half to be paid by the second named respondent and those costs to be drawn against the same loan account that had been referred to in paragraph 3 of Order 5 and on the same conditions as contained in paragraph 5 of those orders.
The remaining outstanding issues were adjourned for a one day hearing on 18 August 2010 before myself subject to further directions being made on 13 May.
The issues of parenting and arrangements for the children to spend time or live with their father were very active at that time as well and were dealt with at separate hearings.
THE HEARING
An oral application on behalf of the husband made on 18 August resulted in an adjournment to 26 August as a part-heard matter. My reasons have been published.
It was made because the husband had only recently returned to Melbourne from overseas and claimed that he had thus not been in a position to give full instructions in response to the Further Amended Application in a Case, affidavits and attached dossiers and Financial Statement of the wife filed 12 August 2010. His response and supporting affidavit on 18 August was drawn in light of that.
He had urged that it was necessary for him and Mr TT of the L Group to look closely at the recent affidavits of the wife particularly styled as “Numbers 2 and 3” with annexed dossiers to reconcile the figures, if possible.
The original reconciliation dossier of the wife had been available for months. These were updates, she having sent the dossier to the husband on 5 March 2010, 20 April 2010 and 28 April 2010.
On 26 August the second named respondent and intervenors sought leave through Ms Coleman of counsel to file an affidavit by Mr JD, who is an independent director of a number of the L group of companies. That was opposed but ultimately allowed. I carefully read the affidavit and was addressed about it by counsel for the parties. Ms Coleman did not do so other than for the purpose of leave to file but remained at the bar table throughout the hearing. She did not seek to make any further submissions.
The second respondent and intervenor did not ask for any orders nor to be heard on the issue of any proposed orders of the wife or husband which might directly affect them or include them. It will be referred to later in these reasons.
JURISDICTION
A number of the orders sought by the wife were acknowledged by her counsel as most likely beyond my jurisdiction. And they are.
As Senior Registrar I derive my judicial power from s 37A of the Act which permits the judges to delegate the powers of the court through that section and by the Judge made Rules of Court.
Chapter 18 of the Family Law Rules 2004 permit me to determine urgent, interim or final spousal and child maintenance applications including variations to or enforcement of them and exercise the powers in Chapter 20 of the Rules as delegated to enforce orders of the court.
Having heard submissions and considered the evidence it is appropriate that it is made clear at this point which orders sought I consider beyond my power and thus need not address further in these reasons.
Orders sought by wife not within power.
Paragraph 3 –as it extends to “SW” and given the imminent settlement of the former matrimonial home is more akin to orders to preserve property than maintenance.
Paragraphs 8, 9 and 10 - a discrete child support issue. The husband at the hearing advised he would assume responsibility for these payments.
Paragraphs 11, 13, 15, 18 and 19 – the orders seek to compel the husband or in default the second respondent, intervenor or other third parties to take steps to secure or make payments as ordered and further in the event of failure by the husband to comply with the things ordered to appoint a Registrar under s106A to do what is required in his name and on his behalf. It is not entirely clear that the second respondent and intervenor have received a minute of the precise orders sent after the hearing but in any event they do not markedly differ from what was sought at the hearing.
Whilst it is assumed that the rationale for them is to avoid further applications to enforce the particular order and thus save costs, the import and effect of them, if made now, impacts procedural fairness and the right of the husband and all parties to be heard. The evidence for this hearing was not tested and as such I cannot conclude with any confidence that the husband is unlikely to comply with orders and in effect grant a “blanket’ order under s106A.
Orders sought by the husband.
Paragraph 3, unless by consent, is a property order and beyond power.
Paragraph 6, was agreed at court and will be made by consent.
EVIDENCE AND SUBMISSIONS ON BEHALF OF THE WIFE
The wife made certain concessions which are confirmed by the terms of and sums specified in paragraphs 1 and 4 of her amended orders sought.
Those concessions reduced the lump sum arrears to $60,573.40 and her periodic maintenance claim to $3560 per week. How she calculates the arrears is set out in her affidavits filed 12 August 2010 and in document “W1” tendered as an “aide memoire” on her behalf. It is lengthy and much of its content conceded by the husband in “H1”. It is not practicable to recite the detail and individual entries in these reasons. I have considered them carefully and was addressed about each of them.
The periodic payments in paragraph 2(a) of Order 5 cease on 21 September 2010. As settlement on the sale of the former matrimonial home is not scheduled until 13 October 2010 at which the second respondent is to be repaid all payments made to the wife by Order 5 then she is in a hiatus and entirely without funds other than her consultancy work or child support.
The manner in which payments were ordered to be made by the husband and the uncertainties about payment of accounts once sent to him by her is traversed in detail in her affidavit. An example of her concerns is the monthly payment in June which when drawn from her loan account was misdirected, whether deliberately or not, to the child support agency and credited against the husband’s assessed obligations. She sets out the chain of events about it in paragraph 4. All this results in the wife wanting to control her finances and pay her own bills.
The second respondent, intervenor and husband never properly explained why it was done.
She suggests in Part O of her Financial Statement that it happened again in July. The husband in paragraph 2 a) of his orders sought concedes that the June payment should be made to her. If it is not then her loan account debt to be repaid must reflect that fact.
Capacity of the wife to support herself
Her Financial Statement filed on 12 August 2010 sets out that on average, calculated between 25 November 2009 up to and including 12 July 2010, she earned $407 per week from consulting. She continues to pursue and engage in that employment. It is not guaranteed work.
She did it and other things whilst employed by the L Group however the scope and quality of her work is an issue.
She is assessed to receive $516 per week or $2236 per month child support by the husband. The misdirection of the payment due to her on 21 June 2010 is referred to above. She was left without funds for that month and had to borrow money.
All other sources of income, or indirect payments and support for her have come either from the husband or by the drawings from her loan account by the second respondent, and borrowings from family and friends.
Her personal expenditure is claimed at $4067 per week and reflects adjusted figures once the former matrimonial home settles.
Payments of various expenses, fixed or one off pursuant to court order have, she says, only been partially complied with by the husband. The dossiers attached to her recent affidavits and the “W1” aide memoire are reconciliations of payments. “W2 – 6” support her contentions about debt and expenses properly incurred.
The responsibility for payment of outgoings and other sums has always been with the husband pursuant to Order 1 and as varied in Order 2, facilitated by Mr KM, or his successor, employed by the L group of companies. As a result she promptly sent the accounts for payment but did not always or at all receive timely confirmation of payments of them. Some were paid in full; some partially as deemed appropriate by the husband, or not paid at all. She has relied upon her own enquiries of the various service providers and / or bank statements and as reflected in the reconciliation dossiers. She believes the husband is deliberately trying to wear her down.
The basis for the adjournment on 18 August was to allow time for the husband to check her reconciliation of payments. She justifiably complained that most of this could and should have been done before 18 August. The document “H1” tendered reflects the sums conceded or disputed by the husband.
The failure to pay her rendered accounts and most particularly with respect to the general maintenance and preparation for sale of the former matrimonial home has resulted in demands to and court proceedings initiated against the wife.
She has an estimated tax liability from her salary received from the L Group until March 2010 of approximately $285 per week. That is not immediately liable for payment. No other details were elaborated.
In anticipation of the settlement on the former matrimonial home she has executed a lease for a year on a property at $1050 per week.
A significant expense is the costs of rearranging the continued use of the BMW motor vehicle which she puts at $322 per week. Those lease payments are currently paid by L Asset Management Limited and that arrangement ceases from 21 September 2010 at which time she will be responsible for meeting those payments which total $1396.99 per month. She will also pay for her petrol and all associated costs.
The issue of payment of her credit cards is most contentious as the husband under Orders 1 and 2 was responsible for ensuring payment of the minimum monthly balances due on all her accounts. They were or are still held with American Express, a David Jones American Express Gold Card and an ANZ Visa card. But as a result of his failure to pay them when due or at all AMEX, through CH Agency, issued final demand notices on 21 June 2010 for $10,889.30 and $16,599.40 respectively to be paid as a minimum payment and extinguish the debt. Default interest and penalties continue to accrue.
The wife disputes the claim by the husband that he ought not be liable for those two sums as part of the lump sum debt due to her as they are the final balances of the respective cards together with interest accrued thereon and so the end result would be the payment out of the debts in full when his obligation was for minimum monthly payment. The balances were largely accrued during the marriage and otherwise used modestly after separation. She sets out the detail in paragraphs 12 to 14 of her 12 August 2010 affidavit.
The wife submitted that if the husband met his obligations pursuant to the orders and made the minimum monthly payment his claim would be correct. But his failure to do so resulted in breach of the terms of credit provision so that two of the cards have been cancelled and payment of outstanding balances in full demanded. It would be iniquitous and unjust if because of his failures, she is required to bear or payout the debts and at best pursue reimbursement of them at trial. She does not have the money to do so now and resists drawing on the former matrimonial home settlement proceeds, which are capital and form part of any property entitlements.
Her discretionary expenditure outlined in Part N is $1,870 per week. The costs of house repairs, gardening and house cleaning totalling $195 per week are recurrent until the settlement of the former matrimonial home. The estimated weekly cost for gas and electricity currently average $118. She estimates that they will reduce from 13 October 2010 to approximately $29 per week. The lower figures are what she included in her Part N total.
Having regard to their past lifestyle she submitted that none of the sums contained therein are in the circumstances inappropriate or excessive. They are proper and particularly so in comparison with what she submitted was the continuing affluent lifestyle and inevitable associated expenditure by the husband, or on his behalf, to support it. This is so despite what the second respondent and intervenor state through Mr JD.
Her expenditures are comprised of her personal indebtedness or debts for which she is liable and many of which will be repaid on settlement of the former matrimonial home. They comprise the home mortgage to G Holdings Pty Ltd at $5.2 million, plus advertising of $65,000, agent’s commission of $135,704 and conveyancing costs of $1500. She conceded that monies for preparation of the property for sale and the subject of paragraph 10(b) of Order 2 do not fall within her maintenance entitlements and at this time will also be paid at settlement and argued at trial.
Otherwise the sums of $28,222 to the National Australia Bank with respect to the BMW, the personal loan from her mother Ms NS of $92,758, a personal loan from friends Mr and Ms SL of $10,000, a personal loan from Mr TY of $2518, outstanding legal fees as at 23 July 2010 of $282,602, forensic accounting fees to AAA Forensic Accounting of $133,402, and various outstanding invoices but excluding the disputed credit card liabilities as at 31 July of $22,315. She estimates therefore her total liabilities are just on or over $6 million.
Her savings are negligible and stand at approximately $1380.
Her case is that she is wholly dependent upon the periodic payments made by or on behalf of the husband plus her income from work as a specialist valuer. She continues to actively pursue that work and on the day of hearing was in Sydney doing so. She has accepted as much work as has been offered to her but also wishes to continue meeting her obligations as primary caregiver of their three daughters which limits her options.
Any outstanding and continuing school fees and education expenses to F Girls’ School have been agreed to be paid by the husband, or as had been the case, by the L Group. Correspondence from F School makes it clear that the fees must be paid as and when due, and in advance, and if they are not then the girls will not be permitted to be re-enrolled at that school. It has been a source of great anxiety to the wife. I have set out the assurances of the husband to pay them.
The cost of the lease for her new apartment is significantly less than the home leased by the husband.
She does not accept, or at least is not in a position at this time to do so, the general tenor of the evidence from Mr JD claiming the L Group is in a delicate balance insofar as its income, cash flow and ability to meet various regulatory requirements to enable it to trade. The recent resolutions and actions taken by directors in August, as deposed by Mr JD, are ones to which she was not privy and does not accept what is claimed and in the absence of the documentation which might permit her to do so. It is one reason why she seeks further production of documents for the single expert.
Her misgivings with respect to the claimed impecuniosity of the husband have been heightened by his recent actions or things said by him. To that end she relies on Annexures “LNN-3” and “LNN-5” to her affidavit of 12 August 2010.
The first is the tax invoice for the delivery to the husband at his home of a luxury motor vehicle worth $171,878.36 and with a repayment debt totalling $270,735 as at 10 June 2010, with monthly rental payments of $3,487.25.
The second is a printout of the husband’s entries on twitter.com, a public internet site, between 22 June and 2 August 2010. These entries range across dining at high-end restaurants, his recent first class international travel, contemplating leasing a yacht in France and discussion about wearing or buying expensive designer clothing. The entries give no indication or hint of fiscal restraint and in fact point in the opposite direction.
The wife urged that the claimed limited capacity of the husband and purported limits on his spending are entirely at odds with his actions and personal statements. It is therefore appropriate and open to the court, even in the event that unequivocal findings of fact as to his capacity are not made, that on balance there is sufficient doubt as to his bona fides and sworn evidence to, on balance, make the interim orders she seeks.
The process for payment of accounts by the husband facilitated by an employee of the L Group have proved entirely unsatisfactory. It was urged that a periodic sum sufficient for her to pay her own bills and ensure payment is best.
New maintenance orders ought be made against the husband personally and in turn orders requiring him to take steps to direct and authorise the L Group or particular companies within the group to pay the weekly spousal maintenance to her and record those payments as salary or loan to the husband and include orders which, in the event he declines to do so, permit, under section 106A of the Act a registrar to do whatever is necessary in his name.
EVIDENCE AND SUBMISSIONS ON BEHALF OF THE HUSBAND
CAPACITY OF THE HUSBAND
The husband’s Financial Statement and affidavit filed 18 August 2010 set out his financial position. His total average weekly income is $4317 or $224,484 per annum. From this he pays his “ordinary day to day expenses”, and will pay assessed child support of $2236 per calendar month.
In addition the expenses paid by others for his benefit are listed as the G Trust 1 which pays the rent on his home of approximately $2000 per week, compulsory superannuation of $389 by L Asset Management, life and disability insurance of $67, motor vehicle insurance of $68, Foxtel connection of $20, a total of $2544.
He estimates his income tax at $1546, health insurance premiums of $69, the costs of his Holden motor vehicle at $272 and the luxury vehicle hire purchase at $805 per week.
He has a National Australia Bank Visa Card with a balance owing of $8000 requiring $35 per week minimum payment. He has an American Express Card. He claims no personal weekly payments on it, so it is assumed that the L Group or he pays it in full each month. That is what the wife claims.
Otherwise his maintenance payments for the children are $515 per week giving a total personal expenditure of $5,237 per week.
He states at paragraph 18 of his affidavit that after tax and child support his weekly disposable income is $2256.
He claims that he spends $615 per week in living expenses for the three children when they are with him.
He has similar minimal savings to those of the wife in Westpac and the NAB Banks.
He sets out that the value of his interest in G Holdings and G Properties who holds the 91 per cent shareholding in the L Capital as trustees as described in paragraph 41 of his Financial Statement as “NIL” and otherwise has about $20,849 in his lawyers, Kennedy Partners, trust Account.
His liabilities are $2,059,000.40 principally comprised of credit cards debts of $10,065;, Hire Purchase Lease Agreement to the NAB of $27,992; to the Commonwealth Bank of $205,000; to L Capital Limited of $1,517,281; to L Asset Management Limited of $280,749; and $17,927 to Kennedy Partners. He says loans to Westpac total $6.6 million and to L Capital of approximately $1.2 million are attached to the G entities.
His Part N expenditure is $1995 per week.
He says that he has no other financial resources.
THE ARREARS
Sale of Home
The costs of preparation of the former matrimonial home for sale and the sums spent by the wife are contentious because he cannot be certain that they were recommended or reasonably necessary for there is no documentation from the agents confirming it. In any event they are not part of the maintenance orders and the debt ought be paid by the wife at first instance from the former matrimonial property settlement proceeds.
There appeared to be grudging agreement about that course from the wife as there is no other option. Advice to those who are owed these funds of imminent payment might result in the court proceedings against the wife being stayed pending the settlement.
His obligation to payment of Council Rates for the former matrimonial home was not conceded by him despite paragraph 21 of Order 2. He claims that they had either been paid or should be adjusted and paid at settlement and left for determination at final hearing.
Periodic Payments
The ultimate arrears and sums claimed are comprised of debts or non-payments of the following; ANZ Gold card, David Jones Amex, Amex, petrol, pool maintenance, garden, outgoings for utilities and council rates. It was agreed figures for the holiday home and preparation for the sale of the former matrimonial home.
He submitted that he was not privy to the negotiations between the wife, the second named respondent and intervenor which resulted in Order 4. As to how the sum of $6,250 was settled upon between the wife and those parties he claims is not known to him save as asserted in Notation to the orders that the differential between her $4466 per month salary received until March and this sum was to relieve him of all the other payments previously ordered. The wife had not offered any independent evidence or explanation about how that sum was arrived at.
In the notations to the orders, and at “C” the wife contended they only related to part of his obligations pursuant to paragraph 8 of Order 1 and her submissions that the periodic sum reflected her wage and other monies that she had been due to receive but had not been paid by the husband.
The husband claimed to have consented to the orders on the basis of the payment in paragraph 2 substituting in full his obligations under paragraphs 8 and 9 of Order 1.
Insofar as payment of the credit cards “H1” tendered sets out sums conceded by him and those not.
Insofar as the monthly payment made to the Child Support Agency instead of to the wife he offered at the hearing to take steps necessary with the Agency to reverse that credit and to immediately commence paying his monthly liability of $2237 per calendar month. He proposes an order to repay it.
That will be had regard in the orders to be made.
The husband says that a periodic sum of $2000 or $8667.70 per calendar month is adequate in the circumstances for the wife. This has him commencing child support payments of $516 per week and her average $407 per week earnings. She will have $2,916 per week, excluding payment of the school fees.
Many of her expenses appeared excessive to him.
He submitted that on settlement of the former matrimonial home the wife will have funds to pay out the credit card debts and will also receive adjustment back in her favour of other sums as conceded. The weekly payments will cease. Therefore her fixed costs can be reduced accordingly.
He pays the last three items for the holiday home in Part N of her Financial Statement totalling $86 per week which ought also be deducted from her expenses.
He claims to pay total “extras” of $590 per week and that her expenditure he estimates as around $2764 per week. Therefore her income from all sources will enable her to adequately support herself, leave a modest surfeit and so the sum she seeks is excessive and what he offers is adequate.
He denies that he has received or earns income of $80,000 per month. He agreed with the evidence of Mr JD as to the delicate balance involved with the continued trading of the L Group and meeting its legislative and / or regulatory obligations. His evidence generally was that he is not able to simply draw at will from the L Group against loan accounts or otherwise to support an affluent lifestyle as asserted by the wife.
He expected the wife to be prudent with the ongoing use of her credit cards and did not expect her to incur additional charges. If not incurred the outstanding balances on the credit card debts would have “progressively reduced”.
He joined issue with the assertion that he, the second respondent or intervenor had been anything less than cooperative in provision of all relevant financial information to the single expert.
The value of the L Group subsequent to the Global Financial Crisis (GFC) and the impact which it had had upon them was relevant and that assessments or assertions about its worth prior to the GFC are wholly inaccurate. The wife agrees with that caution.
THE EVIDENCE OF MR JD
Mr JD owns the 9 per cent of L Capital but through T Pty Ltd as trustee for T Pty Ltd Superannuation Fund. He wholly controls these companies. He and Mr Y are non-executive directors of the second named respondent and intervenor companies.
Mr JD swore his affidavit on 24 August 2010. He sets out the requirements that must be met for the purposes of the various corporate entities holding an Australian Financial Services Licence issued by the Australian Securities and Investments Commission (ASIC). It is by those that it is authorised to conduct an investment management business.
In paragraph 12 of his affidavit he says that for the period June to August 2009 it failed to meet it surplus liquid funds and cash needs licence conditions test. The breaches were recorded in the register of the company and the matters were not reported to ASIC because the board considered them not to be significant.
At paragraph 13 he says that on preparation of the April 2010 management accounts it was found they had again failed to satisfy surplus liquid funds licence conditions test. He says this failure was considered to be significant and breach report was lodged with ASIC on or around 24 May 2010. The failure to meet its surplus liquid funds test was he says because it held insufficient cash to meet its current liabilities. There has been an increase in creditor arrears over the years.
He sets out at paragraph 18 to 28 resolutions made in 9 August 2010 and the implications of them, most particularly that it has failed to meet certain conditions or covenants under loan agreements. “Additionally it does not possess sufficient net tangible assets to be awarded the APCL Australian Financial Services licence”.
He states at paragraph 25 to 28 inclusive
[L Asset Management] and [L Financial Limited] generate all revenues for the [L] group of companies and these entities have financed the lifestyles enjoyed by Mr and Mrs [Nixon]. However, the companies possess little in the way of tangible assets because all cash generated by the businesses have been borrowed by upstream entities. This cash has been used to purchase properties and fund lifestyle. The abilities of the operating entities to continue to fund the interest costs of the upstream debt and lifestyle has been reduced by the reduced revenues enjoyed by these companies since the commencement of the global financial crisis.
[L Asset Management Limited] and [L Financial Limited] do not and cannot meet critical and financial conditions on their licences. The history of [L Asset Management Limited] not meeting its licence conditions over the past year is indicative of a significant breach and this company is now at risk of losing its licence.
[L Capital Limited] has breached a material loan covenant with the NAB. Creditors of these businesses have been paid and the directors are of the view that they are growing concerns.
However, [L Capital Limited], [L Asset Management Limited] and [L Financial Limited] are not in a position to provide any further significant loans to either Mr or Mrs [Nixon] and in fact they require further capital investment of at least $745,000 in order to meet their borrowing and licence obligations.
He does not comment at all on the orders sought by the wife even though they may affect the Intervenor and second respondent.
THE LAW
The power to make any maintenance order at all lies in section 80 of the Family Law Act 1975 (Cth) (“the Act”).
Section 74 permits the court to make such orders as it considers proper.
Section 80(1)(h) permits the making of a permanent order or an order pending the disposal of proceedings or until further order.
The distinction between an interim and final hearing for a maintenance order is that for the latter the applicant would be expected to provide expansive evidence to satisfy ss 72 and 75 and the respondent be given the opportunity to test that evidence. Maintenance hearings may be conducted in a summary fashion where the parties rely upon the documents which they have filed with the court and submissions about them.
As the duration of an interim order for maintenance is limited then the scope of the evidence and nature of the interim hearing are generally less onerous and precise findings of fact not a necessity particularly where the evidence is not settled and the whole issue be reconciled.
Section 72 requires the court to be satisfied that the applicant is unable to support him or herself adequately whether by reason of having the care and control of a child of the marriage who has not obtained the age of eighteen years or by reason of age or physical or mental capacity for gainful employment or for any other reason having regard to the matters referred to in s 75(2).
Section 75(2) requires the court to take into account only the matters referred to in that subsection in determining the amount of spousal maintenance payable.
Subsection 75(3) requires the court to disregard any entitlement of the party whose maintenance in under consideration to an income tested pension allowance or benefit in exercising its jurisdiction under s 74.
Where there is in force an order with respect to maintenance made by the court the court may modify that order subject to taking into account the provisions of s 83(2).
It is reasonable to expect that, funds permitting, a party be permitted to continue to live the same or similar lifestyle or in rare cases an increased quality of lifestyle to that which was enjoyed during the marriage. See Mitchell & Mitchell (1995) FLC 92-60.
The pre-separation standard of living is not automatically awarded and requires a full examination of the evidence and findings under s 72 and the consideration of ss 74 and 75(2).
It is not unreasonable for a wife not to wish to seek employment until the children commence school see Rouse & Rouse (1981) FLC 91-073.
In determining an application for interim maintenance the court conducts not as a final or as exhaustive hearing as would be the case as for a final hearing. The evidence need not be so extensive and the findings not so precise. See Redman & Redman (1987) FLC 91 – 805.
Retrospective spousal maintenance orders may also be made if it is necessary to do justice in all circumstances of the case see Levis & Mavilla (1997) FLC 92-740.
There is a long line of authority which support the principle that the court has a wide discretion at an interim hearing not otherwise fettered by the evidential requirements that must be adhered to at a final maintenance hearing. But at the same time the decisions must be based on the evidence and only by it.
In Rollins-Wallis & Wallis [2008] FamCA 1272 his Honour Justice Cronin examined the full court decision in Brown & Brown 2007 Fam LR 59, most particularly in relation to how the words “adequately” and “properly” are to be approached in determining these applications. At paragraphs 68 and 69 he stated:
The Full Court made some observations about spousal maintenance with which it is hard to argue:
·The word “adequately” is not to be determined according to any fixed or absolute standard.
·The idea “adequate” means a subsistence level has been firmly rejected.
·Where possible both spouses should continue to live after separation at a level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
·In some circumstances it may be reasonable for the parties to live at a higher standard then previously enjoyed.
·It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he / she is unable to support himself / herself adequately.
·However an applicant is not entitled to live at a level of considerable luxury or comfort merely because the other party is very wealthy.
What the full court did not say was that any of those considerations could be based on anything other than evidence of some sort.
The trail judge in that case was O’Ryan J. His Honour comprehensively examined not only the authorities but also the legislation. When examining s74 of the Act, his Honour said:
(C)onsistently with s74, an order for maintenance should be proper. The word proper is defined in the Macquarie Dictionary 2nd Edition to mean appropriate to the … circumstances and this definition was adopted in Wilson and Wilson (1989) FLC 92-033. The maintenance should be at a level sufficient to enable the applicant to support him or herself adequately, since an order below that level would not remove the need for maintenance, as defined in s 72.
The Full Court in commenting on this said:
…the argument may remain that the discretion under s 74 as to what is “proper” is so broad that no greater particularity than that provided by O’Ryan J was necessary.
Their Honours went on to say that what was meant by “proper” in 74 was circumscribed by the provisions of the Act relating to maintenance. I would add that it is circumscribed also by evidence that the parties present.
In saying that, the Full Court went on to say:
Adequacy is the key concept in determining whether the threshold set by s 72 has been crossed. But that concept is not left behind once the step into the s 74 enquiry as to what is “proper” is taken. Though application of the factors set out in s 75(2) may, in a given case, lead to a generous interpretation of needs that are “adequate” and of what is “proper”, the nexus between “adequate” and “proper” must remain. As Asche J said in Robinson and Willis (1982) FLC 91-215:
“An order which is either insufficient or excessive in the circumstances in not “proper”
To determine what is sufficient let alone excessive, one has to look to the evidence. To do otherwise would not be proper. It is not permissible to “pluck a figure” or to arbitrarily and subjectively say what is sufficient.
The court does not have to necessarily make specific and precise findings of fact as to the capacity of either party to proceed to determine an interim application and, for instance, make an order where on balance the court is satisfied that it is open to the person paying to take the necessary steps to arrange their financial affairs to pay the order, just as they may have been found to or suspected of arranging their financial affairs to avoid their likely obligations.
CONCLUSION AND ORDERS
Payment of Arrears
The husband admits that he owes $20,324.35 in accord with document “H1” tendered. The wife sets out her claim in her 12 August 2010 affidavits and at document “W1” tendered and most particularly in the two pages entitled “Wife’s: Footnotes to handwritten reconciliation and aid memoire”. It is $60573.40.
It is not practicable nor necessary to set out the minutiae of the claims in “H1” and “W1”.
He offers in paragraph 3 of his proposed orders to vary orders to enable to debts arising from preparation of the former matrimonial home for sale to be paid from at settlement the characterisation of them left to trial.
The difference is derived from a range of things, not least of which are the credit card debts and whether the husband was relieved of his obligations to pay “extras” by the Order 5.
It is clear and conceded in “H1” by the husband that he did not pay all minimum monthly credit card balances or other accounts when they were due or sent to him. His failure to make the minimum monthly payments resulted in the credit providers exercising their rights and demanding that all monies owed be paid in full. The liability for the payment claimed by AMEX depends on whether by the order only requiring minimum monthly payments to be made by him, he is relieved of any liability for other sums incurred arising from the default.
The wife urged that the husband by his failure to comply with the orders caused the problem. There is no option but to payout the sums owed. She resisted the suggestion from the husband that she apply settlement proceeds of the former matrimonial home to payout the debts and subsequently argue liability at trial.
Paragraph 9 of Order 1 read as follows:
That within 21 days the husband ensure (emphasis added) that the minimum payment be made on all of the wife’s credit cards AND THE COURT NOTES that orders 8 and 9 and (sic) made without prejudice to the rights of either party at any further hearing of this case.
Order 2, paragraph 22 reads as follows:
That paragraph 9 of the order dated 27 March 2009 shall continue each month until further order and payment be facilitated through [Mr KM] or his successor.
The obligations of the husband are clear on the face of the two orders in that he was to ensure that the minimum payments were made on all of the wife’s credit cards. The only role of Mr KM, or his successor, was to facilitate the payments implicit being that the husband do or put in place whatever was needed to “ensure” it.
Ensuring that something is done can have a number of meanings. Some of the definitions of “ensure” according to the New Shorter Oxford English Dictionary, 1993 Edition, are as follows.
Make sure, … guarantee…secure, make safe…Make certain the occurrence of (an … outcome)
Therefore there can be no doubt I conclude that obligations to pay the minimum monthly sums rested with the husband. As a consequence it must follow that because of his failure to do so the repercussions must also rest with him.
There is no evidence about what processes were put in place by him to ensure the payments were made or anything that might mitigate his failure to comply. His initial failure was compounded by repeated failure to make the payments. It is fair to surmise that penalty interest is accruing on the debts and there are likely legal or collection agency fees included in it or to be added to it the collection agency letters of 21 June make that clear. The credit providers are at liberty to take steps to cancel credit and the card/s which they did, and demand full payment of the account.
The husband consented to the terms of Order 4. He signed the minutes of proposed orders. He was legally represented, and by Senior Counsel. A notation to an order is not enforceable. It is a note of expression of views or of things asked to be placed on the record for future reference. They do not have any force as against an order. When in dispute it is left to the court to give them such weight as it deems appropriate. The court has not had the benefit of testing the assertions.
The terms of Order 4, paragraph 2 ought perhaps to have been drawn differently. Had the husband insisted on greater specificity or a breakdown about how the $6250 was comprised or notionally settled upon or there would not have been any issue. There is no evidence, from the wife, nor the second respondent and intervenor about it. No variation of the orders nor application for variation of the orders for payment of minimum monthly credit card balances or to restrict the use of the cards or to in some way reflect the husband’s position was made or filed. The court cannot look behind the face of the orders.
It is not appropriate that a party in whose favour an order is made, and in this instance being for certain payments to be made, should as a result of them not being made, and repeatedly so, find themselves with their credit cards cancelled, being sued for recovery of the debt and then expected to assume liability for it without first recourse to the person who was meant to do so.
It follows I conclude that, the quantum due and payable is as a result of the husband’s failure to ensure the minimum payments were met and he ought therefore be responsible for the debt.
His complaint that the wife continued to use the cards and so minimum monthly payments never reduced is hollow. There was no order restricting their use. And in any event the wife answered that complaint satisfactorily in her most recent affidavit.
It is not safe to fix a precise sum because of the accruing penalties. My order will provide that the sum is to be fixed in accord with Annexure “LNN-1” of 12 August 2010 affidavit of the wife plus any additional costs including interest, fees and charges up to and inclusive of the date on which the debts are paid by the husband or on his behalf.
Arrears Pursuant to Paragraph 8 of Order 1 and Paragraph 21 of Order 2
Not long after Order 1 was made conflict arose as to the interpretation of what constituted an “outgoing”, as was expressed in paragraph 8.
The order as drawn provided that she
…continue to receive her wage from [L] Asset Management Limited which was at that time $4466 nett per month together with the costs of [Ms O] and housekeeping to her as well as outgoings of the home due at the current level of support together with lease payments, registration, insurance, maintenance, comprehensive car insurance costs and repairs with respect to the BMW motor vehicle.
Problems arose shortly thereafter and paragraph 21 of Order 2 defined “outgoings” as including “electricity, gas, telephone, water, rates, garden and pool maintenance”. Despite that order problems continued and the outgoings or other associated costs were not paid resulting in paragraph 8 of Order 3 for the payment of the lump sum of $9267.23 to the wife being the notional quantum of those obligations to 31 July 2009.
The wife has as far as practicable kept largely meticulous ledger records of these expenses and whether or not they have been paid pursuant to the orders. It ought not to have been a complicated process. The husband was given the opportunity by the adjournment on 18 August 2010 to examine these records and did so. Documents “H1” tendered on his behalf sets out the amount claimed, the sums conceded and / or those that were in dispute or required further explanation as footnoted.
His dispute is whether or not the $6250 per month “loan” in paragraph 2 of Order 5 encompassed and subsumed his obligation to pay the wife’s minimum credit card payments and outgoings of the former matrimonial home. The order was silent about it and any of the items referred to in Orders 1 and 2. I reiterate what has been said about the weight of a “Notation” as against an order. His own evidence is he was not privy to the negotiations and there is nothing on the court record to indicate that what he says is in fact correct. The wife concedes none of it and claims the difference did not include costs of car maintenance, insurance, registration and the like. The second respondent and intervenor are also silent on this issue.
In the absence of evidence to satisfy the court otherwise then I prefer the evidence of the wife and the order should stand and be read as the husband having a continuing obligation to make these payments as and when they fell due. If on testing the evidence at trial a different conclusion is reached by the court then it is open to him to seek retrospective adjustment in his favour.
The outstanding obligations of the husband pursuant to paragraph 8 will reflect the concessions from the wife.
OTHER MONIES OWED
There were various sums owed to do with the car, matrimonial home and its upkeep and maintenance including council rates. I accept and prefer the evidence of the wife in that regard. I accept her calculations elaborated in Tendered Document “W1”. I reject the response and footnoted explanation of the husband. I note the sale expenses cannot be the subject of an order by me.
As a matter of legal principle the capital from the former matrimonial home settlement should not be a “first point of call” to settle his obligations unless done so by agreement.
SUM OWED
The sum owed is I am satisfied $60,573 plus interest, penalties and costs accrued from any of the sums which are now subject of debt recovery and litigation against the wife. She ought not have to bear those costs. They should be added to the ultimate calculation of the lump sum to be paid.
NEEDS AND CAPACITY OF THE WIFE
The wife has demonstrated her capacity to obtain appropriate gainful employment and contribute towards her support. The money which she has earned to date is insufficient to enable her to wholly support herself. She is not eligible for any other form of benefit. Her Financial Statement shows a preparedness to rationalise and reduce wherever practicable her fixed and discretionary expenditures. She has taken the lease on a property to house herself and the three children of the marriage for whom she has primary care at a cost of nearly half that for which the husband has entered into a lease to accommodate himself. She has assumed responsibility for the continued use and costs by hire purchase of her BMW vehicle.
She has indicated she anticipates making savings on the costs of utilities and other outgoings on the rental property.
She will no longer require the use of gardeners and other home help to maintain her home.
I am satisfied and find that for the purpose of an interim hearing she has satisfied the requirements of section 72 of the Act in that she has the care and control of children under the age of 18 and that her work skills are such that she is unable at this point in time to secure a source of income sufficient to meet all of her actual and / or reasonable anticipated costs.
Her fixed and discretionary expenditure was documented and in particular those sums claimed at Part N of her Financial Statement, are, having regard to the background and general living circumstances of the parties prior to and immediately after separation, not unreasonable in the circumstances.
Clearly some things may have to be adjusted, foregone or deferred. Her expenses will have to be closely monitored by her.
Given the level of detail which she had embarked upon in tracking and maintaining records of payments due and monies received it is likely I conclude that she will continue to do so in terms of managing her own financial affairs with a view to doing so independently and without recourse to her husband particularly as a result of the problems experienced to date.
I find therefore that her income presently is as deposed by her in her Financial Statement as are her expenses and estimates of them both fixed and discretionary as contained therein. I accept the estimates of her costs which she gives in anticipation of settlement of the former matrimonial home and have regard to a degree of uncertainty about what debts she may be responsible for payment of pending this judgment and the ultimate need to repay monies borrowed from family and friends. Any periodic sum ought permit some possible leeway for unforeseen expenses.
CAPACITY OF THE HUSBAND
It is difficult to conclude anything other than the husband has continued to enjoy by whatever means available to him an affluent and privileged lifestyle. An example is his two week overseas holiday prior to the August 2010 hearing and into which a window is provided by the extracts from his Twitter account. These entries sit most uncomfortably with his claimed straightened financial circumstances and inability to generate the income necessary to pay what is sought by his wife on an interim basis.
It is acknowledged that in the absence of oral evidence and cross-examination some benefit of doubt must be left to him but no submission seeking to explain the twitter entries as hyperbole or self aggrandisement, for instance, was made.
I have no reason to doubt the matters deposed by Mr JD as director and minority shareholder through his corporate entity. That evidence came late and could not otherwise be verified by the wife. He cautions that the Nixons’ lifestyle was funded by loan accounts and cannot continue. He is also positive about the future prospects of the L Group.
Regardless of the above, the terms of the prior orders for payments were clear and unambiguous. At the point at which there was contention about them the issue of what comprised an “outgoing” was defined. The conditions upon which he was to meet payments was also defined by the use of the word “ensure”. There is no excuse for those things not being paid as and when they fell due as it was his responsibility to do so.
The husband is a professional trading with and investing on behalf of clients huge sums of money. He has two university degrees and so it is fair to impute that he is an intelligent and clever man used to reading complex financial documents or contracts. That skill should extend to something as basic as the terms and conditions of agreements for the use of a credit card.
The problems have continued since at least mid 2009. Had he ensured that the minimum payments were made each month and which could have been arranged quite easily and with a minimum of effort, then the wife would not be facing, and nor would he, the spectre of debt recovery in court and all its ramifications as to credit ratings and his personal and professional standing within their professional and social milieu.
His recent acquisition of the new luxury motor vehicle also sits uncomfortably with his protestations about his straightened financial circumstances. Paying $805 per week for it does him no credit insofar as an indicator of his priorities. There is some indication of the other directors being unaware of it until “after the event”.
I conclude and find the husband has capacity to pay or cause to be paid a sum which having regard to all the foregoing, particularly the intended receipt of child support and her ongoing art advisory work, ought be fixed at $3000 per week payable from 21 September 2010.
This sum will permit the wife to manage her finances. It also caps what the husband has to pay.
I decline to make orders requiring the husband to direct payments from the corporate entities as urged by the wife. At this point he “is to pay or cause them to be paid”. I will make orders for liberty to apply on short notice in relation to compliance and / or orders pursuant to section 106A. I caution that careful thought must be given to whether any orders sought in such circumstances are within my power to make and if not steps must be taken to list the application before a Judge.
Production of Documents to enable completion of Single Expert Valuation
The likelihood that this case will soon be ready for trial is unrealistic. This order will most likely continue for many months, especially if the single expert valuation is not able to be completed.
Full and frank disclosure is the cornerstone of litigation. It is incomplete. The valuation is not done.
I heard no submissions of force as to why the order should not be made. There is a pattern of silence and failure to respond to correspondence between solicitors and likely because instructions are not given to enable that to be done.
The orders sought by the wife in paragraph 5, 7 are necessary save that the documents will not be permitted to be copied or disseminated to anyone bar her solicitor, counsel and the single expert valuer Mr DF unless agreed or ordered.
Costs
The wife has been wholly successful. She sought her costs. I will take written submissions on the issue. She is to file her submissions within 14 days, any response by the husband 14 days thereafter and any reply by the wife 7 days thereafter.
I certify that the preceding two hundred and one (201) paragraphs are a true copy of the reasons for judgment of Senior Registrar FitzGibbon.
Associate:
Date: 1 October 2010
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