SNIDER & SNIDER (No.2)

FEDERAL CIRCUIT COURT OF AUSTRALIA

SNIDER & SNIDER (No.2)

[2019] FCCA 1204

Catchwords:
FAMILY LAW – Enforcement orders – s.79A(1)(b) application.

Legislation:

Family Law Act 1975 (Cth), ss.79A(1)(b)

Applicant:

MR SNIDER

Respondent:

MS SNIDER

File Number:

HBC 873 of 2014

Judgment of:

Judge McGuire

Hearing dates:

31 January, 26 March & 30 April 2019

Date of Last Submission:

30 April 2019

Delivered at:

Melbourne

Delivered on:

15 May 2019

REPRESENTATION

Counsel for the Applicant:

Mr M Verney

Solicitors for the Applicant:

Mathew Verney Lawyers

Counsel for the Respondent:

Mr M Foster

Solicitors for the Respondent:

Murdoch Clarke

ORDERS

That in respect of the property at Property A in Tasmania:
(a)That the wife request of the current or otherwise agreed agent a written statement of requirements to bring the property to a preferred marketable condition;
(b)That the wife have responsibility for engaging tradesmen to attend to the agent’s conditions and payments of such costs be shared equally between the parties with each to make payment of their proportion within seven (7) days of accounts being rendered;
(c)That the wife then have the responsibility for deciding when and how the property is to be marketed including at prices for the property to be offered for sale;
(d)That the husband to allow access to the property, including internally, for any agent, agent’s photographer, or tradesmen engaged by the wife and including in the company of the wife within 48 hours of email notification from the wife or her solicitors to the husband or his solicitors;
(e)That any offers forthcoming on the property be provided for the consideration of each of the parties but with the wife to be able to ‘accept’ any offer at her discretion but that the husband then to have an option, to be exercised within seven (7) days of the wife notifying him of her ‘acceptance’, whereby the husband can retain the property at the same price. Should, however, the husband not notify the wife within seven (7) days of his election to retain the property at the said price then the wife have the ability to accept such offer on behalf of the vendors and that the husband shall sign and return to the wife's solicitors any contract for sale within 48 hours of provision of such contract;
(f)That the husband shall vacate the property at Property A within 14 days of the signing of an unconditional contract for sale leaving the property in a fit and proper condition but should the agent be of the view that the property is not left in such fit and proper condition then the wife be enabled to engage appropriate tradesmen to rectify the property to fit and proper condition and the costs of such to be ultimately borne by the husband; and
(g)That the parties or either of them have liberty to apply in respect of the implementation of this Order.
“The Business”:
(a)That the business “Business” remain in the hands of Real Estate Agent or such other agent as agreed between the parties in writing;
(b)That the husband at all times make the current financial statements for the business available to the wife;
(c)That the husband maintain all financial statements accurate and up to date at all times;
(d)That the wife be able to instruct the agent as to the details and mode of sale of the business without the consent or participation of the husband;
(e)That the wife be enabled by these Orders to accept any offer on behalf of the parties provided such is recommended by the agent;
(f)That the parties each execute and return any and all documents necessary for the sale of the business within seven (7) days of receipt of such documents;
(g)That the husband make the business premises available for inspection by any prospective purchaser, the agent, or the wife within 48 hours of receipt of any request by email or in writing to either the husband in person or to his solicitors; and
(h)That the parties prudently comply with any request by the agent as to the marketability of the business.

“Spousal Maintenance”

That the husband do all things necessary to continue to pay to the wife in the quantum of $1,500 per calendar month from the Business until the settlement of the sale of the property at Property A in Tasmania and the settlement of the sale of the said business.

“Superannuation”

That the parties do all such things to execute Order No. 6 of the final orders of 22 August 2017 and 23 October 2017 in terms as agreed between the parties or as noted at paragraph [44] of the reasons herein noting a quantum of $22,725 contribution required on behalf of the wife to rectify the fund.
That the parties and each of them have liberty to apply in respect of these Orders.

IT IS NOTED that publication of this judgment under the pseudonym Snider & Snider (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

HBC 873 of 2014

MR SNIDER

Applicant

And

MS SNIDER

Respondent

REASONS FOR JUDGMENT

Applications

I have before me competing financial applications in a matter that has consumed lengthy litigation both currently and historically.
Where the parties, to their credit, have reached consensus on the majority of issues during the course of these current proceedings, essentially, the husband leaves for my determination just the one issue from an Initiating Application filed 21 December 2018 which sought eleven separate substantive orders and which was preceded by no less than three Applications in a Case. He asks for the following order:
That order 7 of the final orders made 22 August 2017 be discharged pursuant to section 79(A)(1)(b) of the Family Law Act 1975 (‘the Act')
being specifically an order whereby the wife receives $1,500 per month from a business owned by the parties and operated under the Mr & Ms Snider Family Trust. Throughout these proceedings that particular order has been referred to as a 'spousal maintenance' order but which properly might have a different status?

The wife seeks enforcement/compliance orders on a Response filed 6 August 2018 and in respect of orders made 30 May 2017 and confirmed by the final orders of 22 August 2017 and in particular the following:
(a)The wife's interest in a self-managed superannuation fund be brought up to date by the payment of instalments totalling $22,725 or such quantum as is owing;
(b)That the wife have the sole or ultimate responsibility for the management of the sale of the former matrimonial home situate at Property A in Tasmania;
(c)That the wife have the sole or ultimate management for the sale of the business operated by the Mr & Ms Snider Family Trust.

Background

The parties commenced financial litigation as long ago as 20 November 2014.
They are both health care workers having operated a business in Town B known as 'Business' under the umbrella of a Family trust and trustee company.
The parties lived, until separation, in a home at Property A.
By interim or interlocutory Consent Orders of 30 May 2017 the parties agreed to market and sell their major assets being:
(a)Commercial property at Property B;
(b)The former matrimonial home at Property A;
(c)The business.
Further machinery orders were also made on that day by consent including:
(a)That for the purposes of consultation with each other and agreement in relation to the marketing and sale of the said items each party shall make a bona fide and prompt endeavour to respond to all communications from the other party and in any event will respond in writing within three days of receipt of a communication; and
(b)That the husband shall forthwith make the property at Property A in a condition suitable for marketing and sale.

The former matrimonial home – Property A

The wife asks for an order that she now have the ultimate responsibility for managing the sale of this property.
The husband has transparently changed his position in respect of the sale of the former matrimonial home in that he openly now expresses a wish to retain it. This has been his position for some time. He remains in occupation and possession of the home. The wife says that he has failed to positively participate in any genuine attempt to market or sell the property. She says that the property is not maintained in a fit and proper condition so as to attract a buyer at the optimum price. She says that the husband's intentions are transparent to retain the property at least return for her interest.
Essentially, I have only the evidence of the parties in respect of the issue of the home. The husband says that he has and will co-operate in the sale process but asks for an option to meet the ‘highest bidder’ and to retain the property.
The wife says that she negotiated with a keen potential purchaser being a Mr C. She says that the husband directly and deliberately thwarted the potential sale by direct contact with the potential purchaser indicating that he intended to keep the property himself. Mr Snider, in turn, suggests that Mr C was only 'interested' as opposed to being a genuine potential purchaser. Neither party brought Mr C to Court.
The wife says that the agent has suggested to her that the property is not in an optimum state of readiness for best marketing with numerous cosmetic matters needing attention. Ms Snider herself lists a number of the matters of cosmetic nature requiring attention. The husband does not agree and suggests in his evidence that the property is ready to be marketed and is in a fit and proper marketable condition. The wife says that a photographer engaged to assist in the advertising of the property had suggested using old rather than current photographs again suggesting that the property is not in a good condition.
Whilst I have no benefit of objective evidence as, for instance from the real estate agent herself, on the balance of probabilities I prefer the evidence of the wife in respect of these issues. Firstly, the husband is in residence of the home and has been since separation and, in particular, since the orders of May 2017. Mr Snider remains in residence in circumstances where the business effectively meets the mortgage payments for the property. It is indisputable that he did not prudently co-operate in the basic requirement of the May 2017 orders in authorising the instructions to an agent to market the property. Indeed, further enforcement applications were necessary to ensure that authority which did not come until January 2019. Further, it is now transparently clear that his preference is to retain the property with an obvious regret in him of consenting to its sale in May 2017. I am satisfied that his motivation to sell the property is negatively impacted accordingly.
The wife in her evidence volunteers that she does not, in fact, want the 'sole responsibility' for the sale of the property but more a right to 'manage' the sale and to make proactive decisions where the husband is non-responsive.
Whilst finding merit in the wife's argument in circumstances where the order to market and sell the property was made some two years ago but where the property is not yet actively marketed and with the husband in occupation, I propose to deal with the issue as follows: –
(a)That the wife request of the agent a written statement of requirements to bring the property to a preferred marketable condition;
(b)That the wife have responsibility for engaging tradesmen to attend to the agents conditions and payments of such costs be shared equally between the parties with each to make payment of their proportion within seven days of accounts being rendered;
(c)That the wife then have the responsibility for deciding when and how the property is to be marketed including at prices for the property to be offered for sale;
(d)That the husband to allow access to the property, including internally, for any agent, agent’s photographer, or tradesmen engaged by the wife and including in the company of the wife within 48 hours of email notification from the wife or her solicitors to the husband or his solicitors;
(e)That any offers forthcoming on the property be provided for the consideration of each of the parties but with the wife to be able to ‘accept’ any offer at her discretion but that the husband then to have an option, to be exercised within seven days of the wife notifying him of her ‘acceptance, whereby the husband can retain the property at the same price. Should, however, the husband not notify the wife that within seven days of his election to retain the property at the said price then the wife have the ability to accept such offer on behalf of the vendors and that the husband shall sign and return to the wife's solicitors any contract for sale within 48 hours of provision of such contract.
(f)That the husband shall vacate the property at Property A within 14 days of the signing of an unconditional contract for sale leaving the property in a fit and proper condition but should the agent be of the view that the property is not left in such fit and proper condition then the wife be enabled to engage appropriate tradesmen to rectify the property to fit and proper condition and the costs of such to be ultimately borne by the husband.

The Business

The wife argues similarly that the husband has not been co-operatively active in the marketing and sale of the business which he still operates with obvious advantages of income and other benefits accruing to him.
The husband argues that the business is on the market with a reputable agent and in circumstances where similar businesses are also for sale and where the potential purchaser pool is limited. He also says that generally the profitability of the business has dropped due to government and other circumstances beyond his control.
The wife agrees that the property is in the hands of commercial agents for sale and that the market is limited. She says, however, that the husband has again been dilatory in the provision of financial information to allow up-to-date financials to be completed and in turn to more vigorously market the business to informed potential purchasers. She says that she herself has been proactive in securing genuine interest from at least one potential purchaser whose interest has stagnated due to the lack of up-to-date financials.
Significantly, in his application to this Court the husband initially sought an order ‘That the Court allocate the value attributed to the business operated by Mr & Ms Snider Family Trust ('the business') as nil.' This together with the husband's general dilatory efforts in respect of updating financial information comfortably satisfies me that he has not and does not intend to be active in the sale of the business and certainly not as active as the wife in the process and leading me to conclude that there is some merit in the submissions of the wife's Counsel that, like the former matrimonial home, the husband is perhaps regretting of his decision to consent to its sale and his preferred position is now to retain the business and at its lowest possible value to the wife.
Whilst acknowledging the market difficulties, I am satisfied that the wife, as distinct from the husband, is motivated in the sale of the business as to its best possible return and hence more likely to source a purchaser. The wife acknowledges that the property should remain in the hands of agents but asks for sole responsibility to generally instruct those agents including attempting herself to obtain purchasers.
I intend to order that she has such responsibility in terms similar to the marketing and accepting of offers as ordered above in respect to the former matrimonial home.

'Spousal Maintenance'

The genesis of the husband's obligations stem from interim orders of 4 September 2015 which provide that:
The parties shall do all things so as to cause the Trust to distribute to the wife the sum of $1,500 per calendar month commencing from 11 August 2015 and payable on the same day of each month thereafter.
Order 7 of the final orders of 22 August 2017 preserve that, and other, interim orders 'in full force and effect until the sale of the business and real estate…’
The husband argues the discharge of this interim or conditional order pursuant to section 79A(1)(b) of the Act, which provides:
Where, an application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
…
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out;
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the orders so set aside.
At the substantive trial the wife sought an order that she be paid spousal maintenance of $1,000 per week or, alternatively, lump sum spousal maintenance of $100,000. At [57] of my reasons appears the following:
In all of those circumstances, and given the current and potential income of the wife, I am not satisfied that she would be unable to meet her own reasonable expenses as disclosed on her financial statement. As such, she does not cross the threshold imposed by s72 of the Act and her application for spousal maintenance will be dismissed. I consider, however, that the wife should continue to receive her entitlement under the orders of 4 September 2015 until the sale of the real estate and business.
Consequently, and despite the reference by Counsel during these proceedings to 'spousal maintenance', I think, strictly speaking, order 2 references the continuing receipt by the wife of $1,500 per calendar month from the business until the sale of the real estate and business. It follows, in my view, that the nature of the current order need not necessarily attract the indications and considerations for or against spousal maintenance orders.
The husband argues generally that the business is no longer as profitable as it was in 2017. He says [49] – [56] of his affidavit of 20 December 2018 the following:
[49] Since the September 2015 orders there has been a decrease in the income generated by the business.
[50] I am working the same number of hours (approximately 50 hours) as previously, however, I am not able to generate the same income. The reason for this is due to an increase in patients using the rebate scheme rather than privately funding their work.
[51] The majority of patients of our practice are pensioners or veterans. As such, they are eligible for Government assistance in obtaining the procedures. The rebate that is provided by the Government for this work remains low.
[52] We charge $2,700 for procedures for private patients. For pensioners or veterans, the rebate received is approximately $1,548 for the procedure. The cost of materials, overheads and time spent completing the work is still the same. The impact on our profitability is obvious.
[53] The scheme that is in place is that pensioners and veterans go through the … Service through the hospital and pay a gap of $300 and receive a 'voucher'. They then choose a private firm to use for this service. Before this scheme is in place, the hospital undertook the work and as such patients were either waiting years for their procedures or paying out of their own pocket. By effectively outsourcing this work to private practices the waiting list is now only months.
[54] The criteria to be eligible to receive this service is that if you have a part or full-time pension or a health care card holder, or you are in receipt of a gold card. There is no other means testing applied.
[55] I have patients that have private health insurance, but because it is cheaper for them to pay the $300 rather than the excess for their health insurance they opt to be a patient under the Government rebate system rather than private patients.
While this work used to be approximately 15% of our business, it is now approximately 40% of the work we do. As a result, our profits have decreased by approximately 25% in the last financial year.

Significantly, however, I have no evidence of any expert nature before me as to any specifics in respect of an asserted downturn in profitability and the duration of any asserted downturn. Of equal significance is the evidence of Mr Snider in his sworn financial statement of 21 December 2018 that he apparently continues to take benefits from the business himself pursuant to the orders of September 2015 and 31 May 2017.
In conclusion, I see the $1,500 per month payments to the wife being as a consequence of her retained interest in the business rather than strictly 'spousal maintenance'. Those payments come to an end automatically by reason of the sale of the business and the real estate. I have already commented above as to my views in respect of Mr Snider lack of motivation in the sale of the assets. Frankly, had he been more active in the marketing and sale of those assets then the payments would already have ceased. In summary I see no ground for the removal of an order which preserves some rights for the wife from the business where the husband has had, and continues to receive, otherwise the benefits of that business and the use of the home. Certainly, I do not see any evidence to cause me to consider the provisions of s.79A(1)(b) of the Act.

Superannuation

My final orders of 22 August 2017 provided at order 6:
That the corpus of the parties’ self-managed superannuation fund known as ‘'Snider Superannuation fund’ be forthwith divided equally between the parties on terms as agreed and that the parties or either of them have liberty to apply as to the implementation of this order.
On 23 October 2017 further machinery orders were made in Chambers in usual terms for the splitting of the self-managed superannuation fund.
Orders 6 and 7 of the orders of 23 October 2017 provide and notations (a), (b) and (c) assert:
6.That the preceding two paragraphs shall have effect from the operative time and the operative time shall be the beginning of the fifth business day after the day upon which a sealed copy of this order is served upon the trustee of the Snider Superannuation fund.
7.That the parties shall forthwith do all things and sign all such documents as are necessary to cause the financial statements of the Snider Superannuation fund to 30 June 2017 to be completed and all necessary tax returns lodged and for this purpose each party will promptly comply with all requests made by Mr D (the accountant engaged by the parties to complete the returns) and such fees and disbursements as may be incurred shall be paid by the parties equally through the Snider Superannuation fund.
AND THE COURT NOTES:
(a) These orders are made for the purposes of implementing an equal division between the parties of the assets of the Snider Superannuation fund pursuant to paragraph 6 of the orders made in the Federal Circuit Court of Australia at Launceston on 22 August 2017.
(b)At the date of this order financial statements for Snider Superannuation fund have not been completed for the period since 30 June 2014.
(c)The parties agree that as at 30 June 2014 the interest of the wife in the Snider Superannuation fund has a value of $146,328 and the interest of the husband in the Snider Superannuation fund has a value of $244,629.
The husband in his affidavit of 20 December 2018 deposes at [62] – [63] under the heading 'superannuation’:
[62] By virtue of Orders that were made in this Honourable Court on 23 October 2017 the superannuation in our self-managed superannuation fund has been divided on an (sic) 50/50 basis.
[63] The accountant has completed the superannuation returns and related documents. Once this is done, all matters in relation to our superannuation are finalised.
The simple statements in those paragraphs are, in my view, misleading as to what has occurred since the orders of 23 October 2017 and it is clear that the formalities of ‘splitting’ the superannuation fund have not been finalised.
It is clear from the evidence now before me that, firstly, the financial documents to allow the execution of the superannuation orders were not prudently completed and provided by the husband. Mr D, accountant, provided an affidavit for the husband in these proceedings dated 14 August 2018. He gave evidence and was cross-examined. He deposes [11] – [12]:
Superannuation
11.The completion of the superannuation returns and related documentation, has been a long process. Much of the required information was not initially available and as a result it had to be located and made available over time. My priority was resolving the parties’ business tax issues before embarking on the four years of superannuation documents that need to be completed. I anticipate that this additional work will be completed in the short term.
12.Both Mr & Ms Snider have been co-operative in the process of trying to obtain the information in respect to the super fund and I do understand their urgency in having this work finalised.
In his evidence in Court Mr D deposed that the superannuation fund documents have now been lodged. Clearly they had not been completed as of him swearing his affidavit on 14 August 2018.
Order 3(a) of the consent orders of 4 September 2015 provides:
That the parties shall do all things as are necessary to cause the business to pay a weekly net income in the sum of $1,680 per week from the date of this order and the parties shall do all such things as are necessary to cause the Trust to pay:
(a)The periodic superannuation contributions presently made for the husband each month and an identical sum for the wife, such sum to be paid into the parties (sic) self-managed superannuation fund.
Order 7 of my final orders of 22 August 2017 provides:
That the interim orders of 4 September 2015 remain in full force and effect until the sale of the business and real estate pursuant to the orders of 30 May 2017 and hence until the execution of order No. 3 herein, in respect of orders No. 2,3 (b)-(g), 7, 8, 14 and 16 and in all other respects the orders of 4 September 2015 be dismissed provided that the parties or either of them have liberty to apply in respect of the variation or discharge of this order.
It seems, therefore, that prima facie the continuation of the superannuation payments for the wife pursuant to order 3(a) of the orders of 4 September 2015 is not captured in its continuation by order 7 of the final orders of 22 August 2017.
My reasons for judgment handed down the 22 August 2017 state at [48]:
I intend to treat the property pool, however, on a 'two pool' basis. The superannuation entitlements sits in a self-managed fund. It remains, however, subject to the usual stringent rules in respect of dealing with the corpus of superannuation funds. The proceeds of that fund would not normally be immediately available to either party save as to hardship provisions. Although the benefits in the fund are distributed on paper favourably to the husband, it is clear that the parties have jointly contributed to the fund in accordance with my findings as to contributions set out above. In all of those circumstances I prefer that the fund be divided equally. I will leave it to the parties to obtain proper accounting advice as to the most prudent way in which to deal with the fund moving forward.
Nevertheless, order 7 of the final orders reserved a 'liberty to apply' in respect of variation or discharge of order 7. The wife's Response seeks at [12] an order in respect of superannuation which I accept as being pursuant to the liberty to apply provisions reserved in order 7 of the substantive orders.
It is clear to me that my orders of 22 August 2017 anticipated an actual splitting of the superannuation interest forthwith and hence the absence of reference to continuing contributions (order 3(a) - 4 September 2015) in final order 7 and contemplate to the 'splitting' of the wife's entitlement from the self-managed fund. This did not occur because of the tardiness in the completing and lodgement of financial documents which, as mentioned above, obviously did not occur until sometime after 14 August 2018 according to Mr D. I am satisfied that this delay was in no way the fault of the wife. It follows that the delay has had or potentially does cause a detriment to the wife. Put simply, she has not had the benefit of the corpus of the superannuation fund contemplated by the 2017 orders. I am comfortably satisfied, therefore, that the wife's 'contributions’, should therefore have continued in the same sense as those made on the husband's behalf and in the same sense as the other payments/benefits contemplated by order 7 of the final orders of 22 August 2017.
The evidence as to the quantum of 'unpaid' superannuation entitlements varied throughout the evidence before me and, on the wife's initial evidence, were as high as $35,000. I accept, however, the calculations of the wife's Counsel in his final address of $22,725. I now understand the parties to agree (in the event of me finding that the wife's unpaid contributions are to be paid, which I do so find) for the issue to be rectified by a 50/50 division of the total entitlements but to take into account those monies as an 'underpayment' by the fund rather than by any positive contribution by the husband where in her evidence in Court the wife volunteered: ‘I assume the easiest way would be for the superannuation to be split 50/50 and for Mr Snider to pay out of his share.'

I certify that the preceding forty four (44) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 15 May 2019

[2019] FCCA 1204

15 May 2019

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Remedies

Costs

Jurisdiction