Symes and Hawker

[2019] FamCA 993

FAMILY COURT OF AUSTRALIA

SYMES & HAWKER [2019] FamCA 993

FAMILY LAW – PROPERTY – Interim – Where the husband is incarcerated for a significant period and facing a further charge – Where the parties are both directors of a company that has now ceased to trade – Where the wife seeks to wind up the company and sell properties – Orders

APPLICANT: Ms Symes

RESPONDENT: Mr Hawker

FILE NUMBER: ADC 2753 of 2016

DATE DELIVERED: 20 December 2019

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 11 December 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Cocks

SOLICITOR FOR THE APPLICANT: Andreyev Lawyers

COUNSEL FOR THE RESPONDENT: Litigant in Person

SOLICITOR FOR THE RESPONDENT:

Orders

1. That the proceeds of sale of the property at B Street, Suburb C be disbursed as follows:-

   (a)To meet any costs associated with the sale, including agents fees and commission;

   (b)       To discharge any mortgages over the property.

   (c)       To meet any taxation liabilities arising from the sale of each property;

   (d)Subject to the advice of Mr D, accountant, as to the amount that is required to be disbursed to the Super Fund to repay the E Company loans in whole or in part firstly secured over the property at F Street, Suburb G and then in respect of the property at M Street, Suburb N.

2. That the monetary component of the assets of the Super Fund be invested as may be advised by Mr L but in any event in accordance with the said Super Fund’s investment strategy.

3. The parties are restrained from redrawing on the E Company loans.

4. That the wife is authorised to sign any taxation returns prepared by K Company for Q Pty Ltd (“the Company”), the Hawker Family Trust, (“the Trust”) and the Super Fund on behalf of the husband in his personal capacity or in his capacity as trustee in circumstances where a document has been presented to the husband and he has refused or neglected to sign the document for a period of seven (7) days.

5. That Mr H be released from her Undertaking given to the Court on 18 January 2019.

6. That J Company be provided with a copy of this order and that they do all things necessary to transfer the sum of THIRTY THOUSAND DOLLARS ($30,000) or such other sum as may be held for and on behalf of the husband, the wife or the Company to the Collector of Public Monies for the Family Court of Australia.

7. That the husband and wife instruct Mr D of K Company to do all things necessary to wind up the Company and to vest the property of the Trust PROVIDED THAT the costs of Mr L be paid from money held pursuant to order 6 herein.

8. That further consideration of paragraphs 3, 4, 7(d) and 16 of the Application in a Case filed 3 September 2019 be adjourned to 14 January 2020 at 10.00 am (Adelaide time).

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 Symes & Hawker 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 ADELAIDE

FILE NUMBER: ADC 2753 of 2016

Ms Symes

Applicant

And

Mr Hawker

Respondent

REASONS FOR JUDGMENT

Introduction

1. By Initiating Application filed 26 July 2016 Mr Hawker (“the husband”) seeks orders that the property of the parties be apportioned on the basis that he receives 60 per cent of the net tangible assets with the superannuation entitlements for each of the parties to be equalised.

2. By Response filed 8 August 2016 Ms Symes (“the wife”) seeks that she receive 90 per cent of the property and financial resources of the parties.

3. The parties married in 2002 and separated on 17 May 2016. There are two children of the marriage, however, the husband has two adult children from a previous relationship.

4. The parties are the directors of Q Pty Ltd (“the Company”). The company operates out of premises in B Street, Suburb C (“the Suburb C property”) which is owned as to 75 per cent by the Hawker Family Trust (“the Trust”) and 25 per cent by the Super Fund which is the self-managed superannuation fund of the parties.

5. The parties are the trustees of the Trust. The Company pays rent to the Trust for the use of the business premises.

6. The parties obtain accounting and compliance advice from Mr D of K Company.

7. The husband was charged and convicted of offences involving the parties’ daughter and the husband’s daughter from his previous relationship. He was convicted in December 2018 and sentenced to 15 years imprisonment with a non-parole period of 12 years.

8. The husband is subject to a current charge in respect of an offence in which the wife is the alleged victim.

9. The husband had representation for the criminal proceedings and until September 2019 for the Family Law proceedings.

10. Each of the parties allege that the other has misappropriated, or wantonly and recklessly disposed of matrimonial property, in particular by removing money from the Company.

11. In particular, the wife alleges that the husband funded his criminal proceedings and part of the matrimonial proceedings from company funds in excess of $175,000.

12. The proceedings have been referred to the list of matters awaiting a trial allocation. However, given the appalling circumstances in which the parties now find themselves resulting from the husband’s incarceration, I have invited them to consider whether the matter could be prepared for an expedited hearing.

13. On 11 December 2019 an order was made pursuant to s 102NA(2) of the Family Law Act 1975 (Cth) in respect of any cross examination that will occur in the proceedings. Further consideration of the matter has been adjourned to 14 January 2020.

14. By Application in a Case filed 3 September 2019 the wife seeks to sell the real property of the parties and crystallise the asset pool. Orders are also sought to enable the wife to effectively wind up the Company and the related entities in circumstances where it could not be reasonably expected that she could deal with the husband directly.

15. By his Response filed 24 September 2019 the husband consents to the sale of the Suburb C property but opposes the sale of M Street, Suburb N. The husband seeks that his former solicitor be released from an undertaken given on 18 January 2019 not to disburse the sum of $30,000 remaining in the solicitor’s trust account but that it be released to the husband’s previous solicitors to discharge his outstanding liability for legal fees.

The Suburb C property

1. The Company has ceased to trade and the wife has taken steps to wind up its affairs.

2. There has been a clearing sale of the physical assets of the Company and the wife has commenced the winding up process with the assistance of Mr L. The wife considers that a sum of $15,000 will be required to finalise the Company’s affairs including outstanding and anticipated accounting fees. The Company does not have sufficient money in its accounts to cover the likely shortfall and accordingly the wife seeks that $15,000 be released from the money held in J Company Trust Account.

3. The Company operated from the Suburb C property until it ceased to trade. The parties agreed that the Suburb C property should be sold and that has now occurred.

4. Whilst there remains some uncertainty as to how the proceeds of sale will be disbursed it is likely that $150,000 will be attributed to the Super Fund’s portion of the property. The taxation liabilities will be minimal given there has been little or no capital gains upon which tax could be levied.

5. The wife resides in the jointly owned property at F Street, Suburb G (“the Suburb G property”). It is intended that the wife will retain the property. However, the current mortgage is in the sum of approximately $625,000 with interest only repayments of approximately $2,600 per month.

6. Given that the Company has now ceased to trade, the wife has no other source of income and is not able to make the repayments as they fall due. Since the husband’s incarceration the wife’s parents have provided her with financial assistance.

7. Given the amount that is required to be attributed to the Super Fund, the balance of the net proceeds of sale will not be sufficient to discharge the mortgage over the Suburb G property which secures the three outstanding loans.

8. I propose to order that the net proceeds of sale of the Suburb C property be used in such manner as may be advised by Mr L to enable the loans the subject of the mortgage over the Suburb G property to be discharged or reduced to give effect to the best advantage to the parties.

Wife’s parents loan

1. The parties are the joint registered proprietors of the former matrimonial home at M Street, Suburb N (“the Suburb N property”). Following separation the husband continued to reside in the property until he was incarcerated in December 2018.

2. The wife required a court order to enable her to gain access to the property and found that it was in a run down and poorly maintained condition.

3. The damage to the property was such that it cannot be rented and consequently it has remained unoccupied for over two years.

4. The wife wants to sell the property, however, the husband resists and indicates that he would wish to retain the property as part of his property settlement.

5. The wife has taken advice from an agent and understands that the property should sell for between $500,000 and $515,000.

6. The husband does not agree to the sale.

7. The wife does not consider that it is financially viable for the Suburb N property to remain without tenant or early sale. She does not have the ability to discharge or pay the outstanding utilities and considers it unlikely that on any reasonable consideration of the likely outcome of the proceedings that the husband would be able to retain the property.

8. In anticipation of the property being placed on the market for sale the wife’s parents provided a total sum of $19,495.37 towards the repairs and improvements to the Suburb N property; on behalf of the Company for labour and a skip bin to tidy up the Suburb C property before the clearing sale and to clear a negative balance on the overdraft for the Trust.

9. The husband does not dispute the money paid by the wife’s parents but does not agree that they should be reimbursed at this time.

10. A preliminary indication would suggest that it is reasonable that the wife’s parents be repaid. The difficulty is that at present the net proceeds of sale from the Suburb C property will likely not discharge the loans secured over the property and as such it is only upon the sale of the Suburb N property that there would be funds available to repay the wife’s parents.

11. I am not confident that there is sufficient agreement as to a likely pool of property available for division to determine whether it is viable for the husband to retain the Suburb N property.

12. It is also not reasonable that the wife be obliged to pay any outgoings and further expenses in respect of the Suburb N property from her own resources.

13. The husband contends that there was significant work undertaken by  the Company that has resulted in invoices being sent but not paid, or that are yet to be the subject of invoice.

14. The wife considers that the husband’s position is without merit. The books of account are considered by her to have been left in a chaotic state and it is likely that if there is any work that has not been billed, collection would be difficult and not reasonable for her to undertake.

15. Even were the Suburb N property to be placed on the market for sale, it is unlikely that there would be any effective marketing until 2020.

16. I am attracted to the wife’s proposal that the Suburb N property be sold. If that is done the pool of property will be crystallised save as to the separate argument of the parties as to any amount that should be the subject of notional add back.

17. It would be a matter for the husband to set out the circumstances by which he reasonably considers the orders he seeks would enable him to retain the Suburb N property and the manner in which he proposes to pay the outgoings and expenses in respect of the property.

Spousal maintenance

1. The wife seeks the sum of $1,280 per week from the sale proceeds of the Suburb C and Suburb N properties to enable her to support herself and the children.

2. Until and unless Suburb N is sold there will be no surplus funds available other than the balance of monies that are to be transferred from the husband’s solicitors trust account that are not required for the winding up of the Company and related entities.

Conclusion

1. I propose therefore to make orders that will give effect to the following:-

   (1)That the net proceeds of the sale of the Suburb C property be disbursed to discharge the loans secured over the Suburb G property.

   (2)That pending final determination, the husband be responsible for the payment of all outgoings in respect of the Suburb N property.

   (3)That the parties are restrained from redrawing on the E Company loans.

   (4)That the wife is authorised to sign any tax returns for the Company, Trust and Super Fund for and on behalf of the husband in his personal capacity or as trustee as may be prepared by Mr L of K Company.

   (5)That the money held in J Company Trust Account be transferred to the fund managed by the Collector of Public Monies for the Family Court of Australia.

   (6)That the husband and the wife instruct Mr L of K Company to forthwith do all things necessary to cause the winding up of the Company and to vest the property of the Trust.

2. I make orders as appear at the commencement of these reasons.

I certify that the preceding forty four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 20 December 2019.

Associate:

Date: 20 December 2019