Rogers and Rogers

[2018] FamCA 1092

FAMILY COURT OF AUSTRALIA

ROGERS & ROGERS [2018] FamCA 1092

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the wife sought orders for interim spousal maintenance, interim property settlement and sole occupation of the former matrimonial home – Orders made to redraw $200,000 on the mortgage – Where the wife will receive $150,000 and the husband $50,000 –  Where this payment is characterised as partial property settlement - where the husband has access to ongoing income stream while the wife has no similar source of funds – Where the wife can adequately support herself with interim property settlement - Where the husband has already taken voluntary steps to vacate the former matrimonial home.

Family Law Act 1975 (Cth)

APPLICANT: Ms Rogers

RESPONDENT: Mr Rogers

FILE NUMBER: SYC 7085 of 2018

DATE DELIVERED: 19 December 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 12 December 2018

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Meredith

SOLICITORS FOR THE APPLICANT: Gayle Meredith & Associates

COUNSEL FOR THE RESPONDENT: Ms Gillies SC

SOLICITORS FOR THE RESPONDENT: Branston Neville

Orders

Pending further Order:

1. 1.1      Each of the parties forthwith do all things and execute all documents necessary to cause a redraw in the sum of $200,000 on the mortgage secured on the title to the property situate at B Street, C Town in the State of New South Wales ("the C Town property") and to distribute such amount of $200,000 as to $150,000 to the wife and the balance of $50,000 to the husband.

   1.2Such payments of $150,000 to the wife and $50,000 to the husband are characterised as interim or partial property settlements.

2. The husband pay promptly:

   2.1all amounts referable to loans secured on the title to the C Town property

   2.2lease payments, registration, maintenance and insurance for Motor vehicle 1 registered number …

   2.3all outgoings and maintenance due for the C Town property

   2.4private health insurance for each of the parties.

3. The wife has sale and exclusive use of Motor vehicle 1 registered number ... and she is solely responsible for all costs referable to tolls, petrol and fines in respect of such vehicle.

4. The husband is responsible in the first instance for all professional costs and fees incurred by single experts to be retained to value the husband's interests in companies and trusts including but not limited to D Pty Ltd, E Pty Ltd, F Pty Ltd and G Pty Ltd.

5. The competing applications of the parties for interim relief are otherwise adjourned to a duty list on 6 May 2019.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7085 of 2018

Ms Rogers

Applicant

And

Mr Rogers

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Ms Rogers and Mr Rogers are engaged in litigation concerning financial issues.  On 26 November 2018 their competing applications for interim orders came before me in a Duty List.  The parties engaged in negotiations during the course of the day but were unable to reach agreement in relation to any interim issues.  Accordingly, I adjourned the interim applications in the wife's Initiating Application filed on 6 November 2018 and the husband's Response of 23 November 2018 for hearing on 12 December 2018.

2. The applicant wife sought the following interim orders

   1.That pending further order that the husband pay or cause to be paid:

   1.1.all repayments referable to loans secured by mortgage on the property situate and known as [B Street, C Town], NSW ("the [C Town] home");

   1.2.all outgoings and repairs and maintenance referable to the [C Town] home including but not limited to the electricity, gas, telephone, internet, Foxtel, home and contents insurance, council and water rates, monthly pool cleaning, weekly house cleaning and lawn and garden maintenance;

   1.3.the premiums referable to the private health insurance policy currently held of which the husband and wife are members;

   1.4.the gap between the medical, dental, specialist doctors, hospital and psychologists expenses relating to the wife and those paid by Medicare and the private health fund;

   1.5.the lease payments, registration, third party and comprehensive insurances, and maintenance and repairs referable to the [Motor vehicle 1] used by the wife;

   1.6.the telephone account relating to the wife's mobile phone;

   1.7.the sum of $12,540 per month to the wife, the first payment to be made within seven days of this order.

   2.That within seven days of these orders the husband vacate the [C Town] home and that pending further order the wife have sole occupation of the home.

   3.That within 14 days of these orders that the husband pay to the solicitors for the wife on her behalf the sum of $206,000 by way of interim costs.

   4.That the husband pay the costs referable to all single expert valuers to be retained to value the husband's interests in companies and trusts including but not limited to [D] Pty Ltd, [F] Pty Ltd, [E] Pty Ltd and [G] Pty Ltd including to value any real property, plant and equipment and motor vehicles held by those entities.

3. The respondent husband sought the following interim orders:

   1.That within 7 days of date of these orders the husband and wife do all things and sign all documents to increase the Westpac Mortgage currently registered on the property [B Street, C Town] ("[C Town] property"), NSW to such amount to allow the payment of $200,000 to the parties.

   2.That upon the approval of the increase in the mortgage referred to in Order 1, the parties sign all documents to cause the following payments:

   2.1.     $100,000 to the wife;

   2.2.     $100,000 to the husband.

   3.Pending further order or agreement the Husband is to pay the following:

   3.1.The lease payments, registration, maintenance, an insurance for the [Motor vehicle 1] Registration Number … ("[Motor vehicle 1]")

   3.2.The mortgage payments due and payments on the [C Town] property;

   3.3.All outgoings and maintenance due and payable for the [C Town] property;

   3.4.     Private health insurance for the parties.

   4.The wife shall have sole use of the [Motor vehicle1] , and will be responsible for all fines, fuel, and tolls for the said motor vehicle.

   5.That within 14 days of the date of these orders that wife vacate the [C Town] property and pending further order the Husband have sole occupation of the home.

   6.That the Husband maintain the [C Town] property in preparation for sale.

   7.The parties appoint of [Mr H] of [H Valuers] to value the husband's interest in the following companies:

   7.1.     [E] Pty Ltd;

   7.2.     [D] Pty Ltd

   7.3.     [G] Pty Ltd;

   7.4.     [F] Pty Ltd.

   8.The husband to pay the costs of the joint valuer [Mr H] in the first instance.

   9.That within 21 days of the date of these Orders the parties will do all things and sign all documents to list for sale the property at [B Street, C Town], New South Wales being the whole of the land comprised in title reference … and for that purpose the following shall apply:

   9.1.The parties appoint [J] Real Estate as the agent to sell the property;

   9.2.The parties shall give such instruction as necessary to [K Lawyers] to prepare the contract and act on the conveyance.

   9.3.Upon sale, the sale proceeds of the property shall be paid in the following manner and priority:

   9.3.1.To discharge the mortgage secured over the property in favour of the Westpac Banking Corporation;

   9.3.2.Payment of the agent's commission and advertising or other expenses, if any, payable on the sale.

   9.3.3.Payment of legal costs and disbursements relating to the sale.

   9.3.4.Balance to be paid into a Controlled Money account with the Respondent's lawyer pending agreement of (sic) Order of the court."

4. During the interim hearing on 12 December 2018, the legal representatives of the parties indicated that they had agreed to obtain necessary valuations and engage in a mediation by approximately April 2019.  Accordingly, the parties have embarked upon a constructive pathway forward and may be able to resolve their disputes at a relatively early stage in the proceedings.

Background

1. The husband and the wife, who are both aged 59, began to live together in June 1980 and married in 1983.  They separated for a few weeks in September 2010 and again for about 19 months from December 2015.  They reconciled in August 2017 but separated on a final basis in September 2017 or January 2018, according to the wife and the husband respectively.  Both parties lived in the former matrimonial home at B Street, C Town until 25 November 2018, when the husband vacated the property.

2. The parties have four children, whose ages range from 27 to 33 years.  All of the parties' children live independently.

3. The wife has been out of the paid workforce for approximately 34 years and has no current employment skills.  The husband has qualifications as a tradesman and operates a business in conjunction with his brother, Mr L Rogers.  The wife has joined two corporate entities operated or held by the husband and his brother as respondents to the proceedings.

4. Until approximately November 2018 the husband and his brother were directors and shareholders of four companies.  At that time, the husband agreed to resign as a director of all of these entities.  The husband contended that he did so on the insistence of his brother, after Mr L Rogers had been provided with a psychiatric report dated 15 November 2018 by Dr M.  Mr L Rogers gave a similar account of the husband's resignation of his directorships in his affidavit of 22 November 2018.

5. The wife alleged that the husband resigned as company director for reasons of convenience in these proceedings.  In particular, she contended that the husband elected to relinquish his position as director in order to put an end to his capacity to drawn loan funds from the companies.  It is impossible to make any determination of that issue in the context of these interim proceedings.

6. During the marriage the parties utilised an income-splitting arrangement for tax minimisation purposes.  On approximately 11 December 2018 some $19,810 was deposited into the wife's bank account by the company E Pty Ltd.  This sum was characterised as follows in a letter dated 11 December 2018 from the company's solicitor to the wife's lawyer:

   11 December 2018

   Gayle Meredith & Associates

   PO Box …

   … NSW …

   Attention:  [Ms N]

   Dears Sirs,

   Re: [Ms Rogers] and [Mr Rogers] – SYC 7085/2018 – [E Pty Ltd]

   We act for [E Pty Ltd].  We refer to your without prejudice letter to our client 5 December 2018.

   In response we are instructed that the breakdown of the calculations is as follows:

   Payment in lieu  $3,658.75

   Redundancy  $8,781.00

   Long Service Leave         $12,6681.23

   $25,120.98

   Tax withheld  $5,310.50

   Net Payment  $19,810.48

   We are further instructed that the amount of $19,810.48 has been paid into your client's bank account, the details of which are as follows:

   Account Name:  [Ms Rogers]

   Bank:  Commonwealth Bank of Australia

   BSB:  …

   Account No:  …75

   Yours faithfully

   [K LEGAL]

Consideration

The husband's application for orders for the immediate sale of the C Town property

1. The wife seeks to retain the C Town property on a final basis.  I am unable to make any determination as to whether or not this proposal is realistic in the absence of evidence of the value of the husband's corporate interests.  The value of the net pool of property will remain unknown until the agreed valuations are available to the parties and their lawyers.

2. In these circumstances, I am not prepared to order an immediate sale of the C Town property.  During the interim hearing on 12 December 2018 I indicated that I would list the competing interim applications in a Duty List after the proposed mediation.  This listing is fixed for 6 May 2019 and it is open to the husband to pursue his application for a sale of this property on that date.

The wife's application for payment to her of a lump sum and the husband's application that each of the parties receive an amount of $100,000 from a mortgage redraw

1. As noted, the husband proposed orders which would see each party receive a sum of $100,000 from a redraw on the mortgage secured on the title to the C Town property.  The wife sought an order that the husband pay to her a sum of $206,000 by way of interim costs.  Alternatively, she sought an order that she receive the whole of these redraw funds by way of an interim costs order.

2. It was submitted on behalf of the husband that he should receive a sum of $100,000, in part because he will fund the valuations initially and thus incur a liability of some $35,000 to $40,000.  I accept that the husband should receive a portion of this sum of $200,000, at least so as to permit him to cover the cost of the valuations necessary to progress the proceedings to a mediation.

3. It does not follow that there should be an equal division of the mortgage redraw funds of $200,000.  I take into account that the husband has access to an ongoing income stream from the companies, while the wife currently has no similar source of funds.

4. I propose to make orders to the effect that the wife receive a sum of $150,000 and the husband the balance from these redraw funds.  I will order that the parties receive these payments by way of interim or partial property settlement.  The application of these funds will then be a matter within the discretion of each of the parties.

5. I would observe that while the companies may hold relatively large cash reserves, these funds simply are not available to the husband to facilitate a payment of a lump sum to the wife.  Even if the husband had remained a director, his brother has identical voting rights and could impede any such proposed payment to the wife.

Interim spouse maintenance

1. On any realistic view, the wife seeks that the husband pay a large amount by way of spouse maintenance.  Senior counsel for the husband submitted an

   
   

   aide-memoire entitled "Schedule of Effect of Wife's Spousal Maintenance Orders" in the following terms:

DESCRIPTION	AMOUNT	SOURCE
Mortgage	$500	HF13 (says E$300 on current)
Electricity	$155	HF13
Gas	$30	HF13
Telephone	Unknown
Internet	Unknown
Foxtel	$38	WF13
Home and contents insurance	$48	HF13
Council and Water rates	$3	HF13
Pool Cleaning	$20	HF13
Lawn mowing	$20	HF13
Lease on car	$242	HF13
Insurance (green slip and comprehensive)	$62	HF13
Health Insurance	$25	HF13
Motor vehicle registration	$12	HF13
Household repairs	$50	HF13
Wife's mobile	UNKNOWN
Maintenance on motor vehicle	UNKNOWN
Gap payments on medical	UNKNOWN
Periodic Weekly payments	$2893
TOTAL KNOWN EXPENSES	$4134.00 ($214,968)+

1. It did not appear that senior counsel for the husband disputed that the wife has a need for spouse maintenance for the purposes of section 72 of the Family Law Act.  It was submitted on the husband's behalf that the wife has "made no effort to find work which she could undertake and done nothing to curb her spending".

2. In my view, the interim orders proposed by the husband might properly be construed as a concession that the wife has some degree of need for spouse maintenance.  To his credit, the husband conceded that he should meet mortgage instalments, outgoings and maintenance in respect of the C Town property, private health insurance for both parties and the wife's motor vehicle expenses.  I appreciate that the husband made this proposal in contemplation of an order for the immediate sale of the property.  As noted, however, a mechanism was put in place on 12 December 2018 whereby the husband will be able to pursue that application on 6 May 2019.

3. It seems to me that there is some force in the submission on behalf of the husband that the wife has made no attempt to curb her expenditure.  In my view, the expenses set out in Part N of the wife's Financial Statement suggest that she fails to recognise that the parties must now meet the cost of two households.  The wife's application for interim relief included an order that the husband forthwith vacate the C Town property.

4. In this regard, the wife continues to assert weekly expenses such as "hairdressing skin care" $421, "personal trainer and gym" $217, "treatments" $179, "entertainment/hobbies/eating out" $397 and "holidays" $192.  The total weekly expenditure asserted by the wife in her Part N amounts to $2,883.  By contrast, the husband's estimated total cost for the same outgoings is $1,140 per week.

5. According the husband's Financial Statement of 5 November 2018, his estimated gross weekly income is $1,634.  His brother deposed, however, that he may take steps to increase the husband's salary following his resignation as a director.  Accordingly, I consider that the figure of $1,634 per week for the husband's income should be regarded as a bare minimum.

Exclusive occupation

1. The husband has now taken steps on a voluntary basis to vacate the C Town property.  I will not make an order which would see the husband excluded entirely from access to a substantial asset of the parties.  He deposed that the wife failed to maintain the property to a satisfactory standard prior to his return to the premises in August 2017.  I expect that the husband would seek access to the property only for the purpose of ensuring that it is maintained to a satisfactory standard.  As the husband has seen fit to vacate the premises on a voluntary basis, I infer that he would enter the property only on necessary occasions for that purpose.

Conclusion

1. The wife received approximately $20,000 in mid-December 2018 and shortly will have access to an additional sum of $150,000 from the mortgage redraw funds. In these circumstances, I am not persuaded that she is unable to support herself adequately for the purposes of section 72 of the Family Law Act.  Additionally, I am conscious that the husband proposes to continue to make certain payments and that the wife will remain in rent-free occupation of the C Town property.

2. I am not prepared to make orders which would see the wife receive sufficient money immediately to fund her litigation to the conclusion of a trial.  In any event, I am unable to identify a source for payment of a lump sum by the husband to the wife of $206,000.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 19 December 2018.

Associate:

Date:  19 December 2018