Timmins and Timmins

[2007] FamCA 1476

FAMILY COURT OF AUSTRALIA

TIMMINS & TIMMINS [2007] FamCA 1476

FAMILY LAW – PROPERTY – Interim orders – Pressing matrimonial debt – Orders for sale of assets

Family Law Act 1975 (Cth)

HUSBAND: Mr Timmins

WIFE: Mr Timmins

FILE NUMBER: MLC 8011 of 2007

DATE DELIVERED: 18 October 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Brown J

HEARING DATE: 18 October 2007

REPRESENTATION

COUNSEL FOR THE HUSBAND: Mr. McGowan, then
husband in person

SOLICITOR FOR THE HUSBAND: Alpass & Associates

COUNSEL FOR THE WIFE: Ms. Haag

SOLICITOR FOR THE WIFE: Lander & Rogers

Orders

1. That pursuant to the order made herein on 6 August, 2007 the husband do all things and sign all documents to forthwith sell the jet-ski registered in his name at a reserve price of $10,000 and :

   (a)in the event the jet-ski has not been sold within 14 days of these orders, it be offered for sale by the husband at the reserve price of $10,000;

   (b)the husband keep the wife’s solicitors informed in writing of the way and by whom (if not him) the jet-ski is being offered for sale (whether by Trading Post or otherwise); 

   (c)upon sale, the husband provide to the wife’s solicitors documentary evidence of the sale, including the full name and address of the purchaser;  and

   (d)the proceeds of sale be paid to the solicitors for the wife and held in trust pursuant to these orders. 

2. That the husband do all things and sign all documents to forthwith sell the utility vehicle in his possession at a reserve price of $24,500 (the court noting the evidence of the husband that he has put this vehicle on the market at a local      caryard for $26,500) and :

   (a)the husband keep the wife’s solicitors informed in writing of the way the vehicle is being offered for sale;

   (b)upon sale, the husband provide to the wife’s solicitors documentary evidence of the sale, including the full name and address of the purchaser;  and

   (c)the proceeds of sale be paid to the solicitors for the wife and held in trust pursuant to these orders. 

3. That unless the parties agree to the contrary in writing within fourteen days hereof, then, within a further fourteen days (a total of 28 days) the husband do all things and sign all documents required to transfer his interest in the assets listed in this paragraph to the wife on a trust for sale and, within seven days of transfer, the wife do all acts and things necessary to list the items for sale at the reserve price noted after each specified asset in this paragraph and :

   (a)the wife keep the husband’s solicitors (or if he is unrepresented, the husband) informed in writing of the way and by whom (if not her) the asset is being offered for sale;

   (b)upon sale, the wife provide to the husband’s solicitor (or if he is unrepresented, the husband) documentary evidence of the purchaser, including the full name and address of the purchasers;  and

   (c)the proceeds of the sales be paid to the solicitors for the wife and held in trust pursuant to these orders :

   Assets

   (i)the houseboat registered in the husband’s name (reserve price $110,000);

   (ii)the dinghy and motor in the husband’s possession and control (reserve price $3,000);  and

   (iii)the ski boat registered in the husband’s name (reserve price $34,000).

4. That in these orders “the proceeds of sale” in paragraphs (1), (2) and (3) mean the nett proceeds of sale after payment of :

   (a)any costs reasonably and necessarily incurred to put the asset in a saleable condition;

   (b)any commissions associated with a sale;  PROVIDED THAT  a commission only be paid if invoiced by a registered trader;  and

   (c)any loan to a financial institution either secured by the asset sold or specifically referable to the asset sold;

   and the party with the conduct of the sale account to the other party in respect of any such costs, commissions and loan payments and provide documentary proof of such payments..

5. That sums paid pursuant to these orders to the solicitors for the wife be held upon trust and disbursed as follows :

   (a)the sum of $15,000 to the solicitors for the wife, to be applied by the wife towards her legal and other costs of this litigation, including expert accounting evidence;

   (b)the sum of $15,000 to the husband;

   (c)to pay, as soon as practicable, sums due and payable to the Australian Taxation Office by the company S Pty Ltd (“the company”);

   (d)to pay, as soon as practicable, outstanding superannuation guarantee payments due and payable by the company;  and

   (e)the balance, if any, to be held in trust pending further order.

6. That prior to making the payments referred to in paragraphs (5)(c) and (d) hereof the wife be at liberty to obtain advice from an independent expert as to the sums due and to meet the costs of such advice from the sum paid to her pursuant to paragraph (5)(a) hereof.

7. That a party be at liberty to purchase an asset named in paragraphs (1), (2) and (3) at the reserve price.

8. That until further order the wife pay all mortgage, rates, insurance and other outgoings in respect of the former matrimonial home situated at …, L (“the [L] property”) and, until further order, hold her interest in the L property upon trust for the parties.

9. That until further order the wife be at liberty to rent the L property  PROVIDED THAT  she account in writing to the husband on a monthly basis in respect of rental income and mortgage outgoings and nothing in this order shall prevent the husband from seeking an order for the sale of the L property, as either an interim or final order.       

10. That in the event a party refuses or neglects to comply with a provision of this order then, pursuant to s.106A of the Family Law Act1975:

    (a)the registrar of the Family Court of Australia in Melbourne is hereby appointed to execute all deeds and documents in the name of the party in default and do all acts and things necessary to give validity and operation to these orders; 

    (b)the party in default is ordered to pay any and all foreseeable damages to the other party caused by his or her default;  and

    (c)the party in default is ordered to pay all reasonable costs incurred by the other party for the purpose of enforcing this order and proving his or her damages.

11. That it shall be sufficient authority for a registrar to act pursuant to paragraph (9) hereof to have before him or her an affidavit sworn by the solicitor for the party seeking the order deposing that :

    (a)the relevant document was sent to the party in default with a request that it be signed;  and

    (b)seven days have elapsed since the request was made and the document has not been returned, signed. 

12. That until further order the husband retain use of the Range Rover in his possession and meet all costs associated with that vehicle, including insurance, registration, maintenance and running costs.

13. That until further order and save pursuant to these orders, each of the parties be and are hereby restrained by themselves, their servants and agents from selling, transferring, assigning, disposing of, damaging or further encumbering any asset referred to in these orders and until further order each of the parties and his/her servants and agents, maintain the said assets in good condition. 

14. That within 28 days each of the parties provide to the other (if he or she has not already done so):

    (a)copies of personal income taxation returns and assessments for the previous three years; 

    (b)copies of income taxation returns for any business, company or trust with which he or she has been associated for the previous three years;

    (c)copies of bank statements for any account (including any statements for any business, or trust with which the parties have been associated) for the previous 12 months;

    (d)details of wages and any other payments made to the party or on his or her behalf, by any business, company or trust in which he or she has been involved in the previous 12 months;

    (e)copies of any business activity statements for any business, company or trust in which the party has had involvement in the previous 12 months;

    (f)copies of any superannuation statements for any superannuation fund in which the party has an entitlement for the previous 12 months;  and

    (g)copies of any statements in respect of any loan held in the parties’ name or on his or her behalf for the previous 12 months.

15. That the costs of and incidental to the applications before the court this day be reserved.

16. That the applications for final orders be referred to the pool of cases awaiting allocation of trial notice directions.

17. That all applications for interim orders be otherwise dismissed. 

18. That there be liberty to apply in writing in the event an asset referred to in these orders is not sold at the reserve price within a reasonable period, including liberty to the husband to apply for the sale of the L property.

19. That the reasons for judgment this day be transcribed and that copies be made available to the parties.

20. That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel.

AND THE COURT NOTES

1. That the period of 14 days referred to in paragraph (3) hereof was included to give the husband an opportunity to formulate a proposal for him to have conduct of the sales of the assets described in paragraph (3) hereof and attempt to obtain the wife’s consent to such a proposal.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8011 of 2007

MR TIMMINS  

Husband

And

MS TIMMINS  

Wife

REASONS FOR JUDGMENT

1. Mr and Ms Timmins started living together in about 1989, married in 1992, and separated on 4 January 2007.  The wife is 51, the husband is 44.  The wife works in manufacturing at D Company, earning some $36,000 per annum.  The husband is a tradesman.  He has been self-employed for quite some time.

2. In 1993 a company was established to conduct the husband’s business, being S Pty Ltd. (“the company”).  The husband has conducted his business through that company in the outer-eastern Melbourne area ever since.  The wife is the sole director of that company.  As is not unusual, each of the parties hold shares in the company.

3. Before the court are an application and response in which the parties seek interim orders.  The evidence relied on by the wife is her amended form 2, filed 12 October 2007, her statement of financial circumstances and an affidavit filed on the same day, and an earlier affidavit, filed on 16 July 2007.  The husband relied upon a form 2A response filed on 27 July 2007, an affidavit and form 13 filed on that day, and a subsequent affidavit sworn on 16 October 2007, which I granted leave to file today.

4. The case was argued at some length this morning;  I adjourned it for judgment at 1:00 pm., as I had to hear another matter at that time.  The hearing was interrupted until about 2:30 pm.  When I returned to this court, I was told by counsel for the husband that his services had been dispensed with and he asked that the husband be able to make brief submissions to me.  Although I had intended to rule on the applications at that time, I gave him an opportunity to make submissions, the gist of which I will summarise later. 

5. After separation, the wife remained in the former matrimonial home in L.  The husband paid her the sum of $350 a week, plus outgoings, for a period.  At that stage, the wife was driving a Range Rover, probably owned by the company, and the husband was meeting the maintenance costs of that, through his business.  The husband initially lived with a friend and then obtained some rented accommodation, in the central eastern suburbs area.  Around the end of June 2007, the arrangements that had been put in place after separation ceased operating.  On 16 July 2007 the wife filed an application for final property orders.  Shortly prior to that, the husband had stopped making payments to her.  It is clear that, from that time on, the parties' relationship has been increasingly acrimonious.

6. There is evidence before the court of the parties’ current assets.  It may not be conclusive.  The former matrimonial home is in L.  The parties bought a houseboat in February 2006, for $135,000, refinancing the mortgage over the former matrimonial home to acquire funds to buy the boat.  The L home has been valued recently at $470,000; the mortgage debt is some $336,000.  There is a ski boat, for which there is an insurance valuation of $50,400, and an Esanda loan of $37,000.  There is a jet ski, which the parties valued at around $10,000.  There is a dinghy, with a motor, to which a value of some $3,000 was attributed earlier.

7. There is much contested evidence about the company through which the business was conducted.  The bottom line is that there are significant business-related tax liabilities.  The Australian Taxation Office is owed around $100,000.  As at 2004, some $17,000 was owing by the company on a superannuation guarantee liability.

8. When referring to the matrimonial assets I should have said that there is also the Range Rover, to which reference has been made.  That vehicle was returned to the husband's possession in May, in circumstances which are hotly contested.  The husband subsequently provided the wife with a BMW, with which there were problems; he then gave her a Magna to drive. The parties do not agree about the appropriateness or the roadworthiness of the Magna vehicle.  There is a Ford utility, as I understand it, which may or may not be an asset of the company; the husband valued it at $24,500.  In respect of it there is a loan to Esanda, in the parties’ joint names, secured by way of a floating charge.

9. Since July, the wife has been meeting the mortgage payments on the former matrimonial home.  Those payments exceed her net income.  The husband's obligation was to pay expenses relating to other assets;  he took on that obligation which included the obligation to insure them.  There is a deal of argument about whether they have, or have not, been insured.   Certainly, the letter provided by the husband’s solicitor yesterday does not constitute proof they are insured; indeed, it does not say that.  The husband’s counsel advised of instructions that the boats and other items are insured.

10. By her amended application, the wife seeks today that, within 14 days, the houseboat, the ski boat, the jet ski, the utility and, indeed, the dinghy be transferred to her, on a trust for sale, and sold.  She seeks that after sale, the proceeds be first applied to provide $15,000 to the solicitors for each of the parties by way of a Barro order.  Her submission is that the balance should be held in trust and be used to pay outstanding tax for the company and payment of the outstanding superannuation guarantee.  She sought that she obtain independent advice from an accountant (using some part of the $15,000) and attempt to negotiate the best possible arrangements with the Australian Taxation Office and superannuation authorities.  She sought that the husband deliver the Range Rover to her and ensure the vehicle is registered, insured and is roadworthy. 

11. The wife did not press paragraphs 1 and 2 of her application. She abandoned paragraphs 5(b)(i) and 5(b)(iii)(e), as interim orders. She sought the order in paragraph 3 only in the event that she was unsuccessful in obtaining the order in paragraph 4. She sought an amendment to paragraph 5(2)(b) to add the words "to the husband's solicitor in lieu of the wife" and to add the word "husband" in paragraph 8 after the word "wife".

12. In response, the husband filed a form 2A in which he sought that, until further order, the wife make all mortgage payments and meet all rates, insurance premiums and other outgoings in respect of the L property as they fall due; that she make full disclosure of her bank records, tax records and other relevant documents; and such other orders as deemed appropriate.  He did not specifically respond to the amended application but did swear an affidavit which I granted leave to file today.

13. The transcript of the hearing would show that there was considerable discussion between counsel and the bench in the course of the morning.  I stood the matter down for Mr McGowan to have some time to speak with his client, which he did.  At that point, Mr McGowan returned to court and said that his instructions were that all of the assets should be sold; that is, the home, the houseboat, the jet ski, the ski boat, the dinghy, the utility.  The only thing that should not be sold was the Range Rover. 

14. There was then considerable discussion as to appropriate reserve figures for particular items.  Instructions were taken from clients at both ends of the bar table, and argument concluded.  By that stage, the hearing must have taken perhaps an hour and a half.

15. Late in his submissions, counsel for the husband put another proposition.  He said the husband would be prepared to pay to the wife one-half of the asserted values of the houseboat, jet ski, ski boat and dinghy within 60 days.  He would then retain those assets.  Only if he did not manage to raise that money, should they be sold.  In the course of that discussion, the relevant valuation figures were $110,000 for the houseboat, $10,000 for the jet ski, about $14,000 (the equity) in the ski boat and $3,000 for the dinghy, a total of $137,000.  Half would be $68,500.

16. In yet another alternative, it was put (on behalf of the husband) that if the court did make orders for the sale of these assets, and they did not meet the reserve prices, the husband should be allowed to pay the wife half of the price. 

17. These submissions were, in my view, misconceived.  I have no doubt such an outcome would have pleased the husband; if he could raise those funds he would then retain those assets.  That would be an effective determination of final property proceedings between the parties in relation to those assets, and the wife would be left responsible for the debt. 

18. What the wife seeks is that matrimonial assets be sold to pay pressing matrimonial debt.  What the husband sought, by those orders, was that he pay the wife one-half of the value of the matrimonial assets and she apply the whole of those funds to matrimonial debts, he retaining the assets.  It could not be done at this point in the proceedings.  First, it would mean one party was left with responsibility for those debts paid by those funds.  Second, it would assume an eventual fifty-fifty split, something which could not be determined today.

19. When the case was resumed and Mr McGowan was granted leave to withdraw (the husband having dispensed with his services) the husband put a completely different proposition.  He then said that he does not want any of these chattels sold; what should be sold is the former matrimonial home. 

20. The central aspect of the wife's submission is that these are pressing debts, and depreciating assets should be sold, rather than an appreciating asset. She agrees that she is about to vacate the former matrimonial home.  The husband alleged, in his most recent affidavit, that he had been told by her adult son that she was now in a relationship;  she was spending time at her friend's home and he at hers and she was planning to move out of the former matrimonial home.  She was not given a chance to reply to that and I say nothing further about it, save that her instructions, conveyed to me, are of an intention to rent the former matrimonial home.

21. It may be that that property needs to be sold and consideration needs to be given to that.  But no application was made for that, in the course of the hearing, until today, and on the evidence presently before me, it is not an order I am prepared to make today.  I add that the parties have obtained a valuation of that property, pursuant to another order.

1. I understand the husband's position to be that he would very much like, at the end of the day, to retain these assets worth - on the figures before me, excluding the utility – some $137,000.  However, it looks as if the net equity in the real property, if the valuation is accurate - and some concern has been expressed as to whether it might be over-enthusiastic - is a bit less than that.  It is thus not a case where the court could say the husband should take those assets and the wife take the equity in the home because that would be to ignore the fact these parties have very significant debts.  The court cannot ignore that reality.  In those circumstances, some assets must be sold, and I am satisfied that orders need to be made for the sale of the chattels.

2. In terms of who should have the conduct of the sale, I do not propose to vary the existing order, made at the case assessment conference, which left the sale of the jet ski with the husband.  He was ordered to sell it at the case assessment conference.  I note, as his counsel said, that the wife was given an opportunity to have the conduct of that sale and declined.  I draw no adverse inference from the fact he listed it for $12,000; I do not doubt he hoped to get a good price.  But his obligation pursuant to that order was to realise a minimum of $10,000.  If he wants to buy it himself for $10,000 he can do so, but the $10,000 has to go into trust to pay debts. 

3. In relation to the utility, both parties say it should be sold.  Again, I will order that the husband sell that car.  There is evidence that it is already on the market with a local car yard at $26,500.  The net proceeds will go into the pool.  The parties need to understand that the purchasers and any agent involved in selling these assets can be called as witnesses; proper documentation will be required.

4. In relation to the houseboat, the dinghy and motor and the ski boat, I am satisfied that the only practical orders are to transfer those to the wife on a trust for sale, and the eventual proceeds placed in the trust.  I will give the parties a fortnight to make other arrangements between them. For example, if the husband can borrow funds, as foreshadowed at one stage by his counsel, he could buy the assets, and those sums go into the pool.

5. In relation to the Range Rover, I do not propose at this stage to make any order for its return to the wife.  The husband is running a business.  The evidence is too contested and inconsistent to make any orders relating to the Range Rover now. 

6. I will order that the wife, until further order, be responsible for the mortgage payments and outgoings on the former matrimonial home; that she account on a monthly basis in writing to the husband or, if he is legally represented, his solicitors, in respect of that property (by that, I mean an accounting in respect of mortgage payments and other expenditure on the property as well as rental received);  and, until further order, she will hold her interest in that property on trust for both parties.

7. I will order that, from the proceeds of sale, each of the parties will receive $15,000.  I propose to characterise the payment to the wife as a Barro order.  Without that sum she cannot adequately prepare her case.  I do not know if the husband has dispensed with his solicitor’s services (or only those of his counsel).  I will not characterise the sum to be paid to him.  If the parties do negotiate further in the next fourteen days he could notionally use that sum towards the purchase of an asset, understanding it will almost certainly end up as a part property payment on his side of the ledger.  It is likely the wife’s $15,000 will, likewise, be on her side of the ledger.  It will be open to the trial judge to consider the characterisation of those funds, so the issue is not finally determined.  But the parties should not assume the figures will not be brought into account.  The payments will not defeat the parties’ legitimate expectations.   

8. I will then make orders relating to company tax and the superannuation guarantee payments, and providing for the wife to be at liberty to obtain independent advice subject to any later order for costs, at her expense.  She can use some part of that $15,000 to obtain that advice.  That is a matter for her.

9. I will also make an order pursuant to s.106A(1). It will be sufficient authority for a registrar to have an affidavit from the wife's solicitor deposing to a request to sign and a failure by the husband to provide or return the documents signed.

10. Each of the parties has sought that the other provide financial documents.  I will make orders in terms of paragraph 10 of the wife's application.  The applications for final orders will be put into the pool of cases awaiting trial notice directions.  Each party will be restrained from disposing of any interest in property referred to in the orders, including the former matrimonial home, save pursuant to the orders and the various assets are to be maintained in their current condition. 

I certify that the preceding 31 paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Brown AM.

Associate

Date: 18 October 2007