TSAY & LOU

[2019] FamCA 8

FAMILY COURT OF AUSTRALIA

TSAY & LOU [2019] FamCA 8

FAMILY LAW – INTERIM PROPERTY – Where the wife is trustee for the sale of the former matrimonial home – Where the husband has remained in occupancy of the property – Where the husband seeks financial support from the wife to vacate the property – Where the husband is not financially constrained from vacating the former matrimonial home – Where the Court had made previous orders for the husband to vacate the property and he had not done so – Order for a warrant issue for the possession of the property - Order for any costs incurred by the wife as trustee for the sale of the former matrimonial home to be paid from the proceeds of sale.

FAMILY LAW – SPOUSAL MAINTENANCE – Where lump sum spousal maintenance had been stayed pending an appeal – Where that appeal was withdrawn – Where the lump sum payment has been made in full – Where the husband deposed that he was not in receipt of any income – Where there is no evidence that either party’s financial position has been relevantly altered – Application dismissed.

FAMILY LAW – COSTS – Where the proceedings were necessitated by the husband’s refusal to comply with orders of the Court that he vacate the former matrimonial home – Where the husband has been wholly unsuccessful in relation to the orders sought – Where the wife has no access to funds other than the spousal maintenance order which remains – Where the husband is in receipt of income – Order for the husband to pay the wife’s costs of these proceedings.

Family Law Act 1975 (Cth) ss 83, 117
Family Law Rules 2005 (Cth) r 20.54

APPLICANT: Ms Tsay

RESPONDENT: Mr Lou

FILE NUMBER: SYC 1304 of 2018

DATE DELIVERED: 15 January 2019

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 7 January 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hazelwood

SOLICITOR FOR THE APPLICANT: McLachlan Thorpe Partners

SOLICITOR FOR THE RESPONDENT: Lawside Lawyers

Orders

IT IS ORDERED

1. That pursuant to the provisions of Rule 20.54 of the Family Law Rules, a warrant issue for the possession of the property at B Street, Suburb D and the delivery of possession to the wife.

2. That the warrant referred to in Order 1 lie in the registry for seven days from the date of these orders.

3. That the husband pay the wife’s costs of this application as assessed or agreed, such costs to be paid from the husband’s share of the proceeds of sale of the property at B Street, Suburb D.

4. That the costs incurred by the wife as trustee for sale of the property at B Street, Suburb D be paid from the proceeds of sale of that property having priority immediately after any secured encumbrance.

5. That the applications sought in the response of the husband filed 30 November 2018 be dismissed.

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 Tsay & Lou 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

FILE NUMBER:  SYC 1304 of 2018

Ms Tsay

Applicant

And

Mr Lou

Respondent

REASONS FOR JUDGMENT

1. Proceedings relating to property settlement between Ms Tsay (“the wife”) and Mr Lou (“the husband”) have been before the Family Court of Australia (“the Court”) on a number of occasions.

2. The parties separated in January 2018 after a short relationship. The wife filed an application seeking, inter alia, spousal maintenance (“maintenance”). Orders were made for urgent maintenance.

3. The matter was again before the Court on 6 July 2018, in relation to arrears of urgent maintenance. The Court noted that the wife had become aware of the imminent sale of a property at Suburb B in which the husband had an interest.

4. The Court ordered that the husband pay, from the proceeds of sale of the Suburb B property, the arrears of maintenance of $13,840 and lump sum maintenance of $72,800. The orders for urgent maintenance then abated.

5. Further orders were made for the sale of the former matrimonial home at Suburb D by the husband, repayment of the mortgage and the investment of the balance of the proceeds, pending resolution of the proceedings.

6. In relation to the Suburb B property, the husband was required to direct the payment to himself of $100,000 to be held by his then solicitors pending further order. The matter was transferred to the Family Court of Australia.

7. The matter next came before the Court on 30 July 2018 when the order for the payment of lump sum maintenance was stayed pending the husband’s appeal against that order. Pending the determination of the appeal, the sum of $1,400 per week was to be payed to the wife from the sum of $72,800 held by her solicitors pursuant to the orders of 7 May 2018.

8. On 8 October 2018, the matter was again before the Court in circumstances where the Suburb D property remained unsold. On that day the wife was appointed trustee for sale of the Suburb D property and authorised to carry out work as recommended by the agent to prepare the property for sale. The husband was ordered to vacate the Suburb D property within four weeks.

9. The husband’s appeal against the orders of 7 May 2018 was withdrawn.

10. The husband did not vacate the Suburb D property and the wife brought a further application.

THE COMPETING APPLICATIONS

1. The wife sought an order that the Marshal of the Court be requested to remove the husband from the Suburb D property and that she proceed with the sale of the property. She also asked the Court to authorise the payment to her of the balance of the amount owed by way of lump sum maintenance, pursuant to the orders of 7 May 2018, be paid to her from the funds held by her solicitor, the husband having withdrawn his appeal against that order.

2. The husband in his response, sought an order that from the funds held by the wife’s solicitor from the proceeds of sale of the Suburb B property, that being the funds paid to her by way of lump sum spousal maintenance, he be paid $35,000. He sought a further order for payment, from the funds held by his own solicitor, that he be permitted to pay an outstanding legal bill, an accounting bill and any capital gains tax assessed on the sale of the Suburb B property.

3. The husband then sought to reduce the amount of weekly maintenance paid to the wife from $1,400 to $850.

4. In relation to the sale of the Suburb D property, the husband sought an order that a different agent be appointed.

DOCUMENTS RELIED UPON

1. The wife relied upon an affidavit sworn by her on 8 November 2018 and a Financial Statement sworn on 7 January 2019.

2. The husband relied upon an affidavit sworn by him and a Financial Statement sworn by him on 29 November 2018.

EVIDENCE OF THE HUSBAND’S FINANCIAL POSITION

1. In his affidavit sworn 29 November 2018, the husband deposed that he was not in receipt of any income. He deposed that, although he was still working for E Pty Limited (“EPL”) the “other directors” did not agree to pay him wages from June 2018. 

2. The husband did not file any evidence to support this assertion. There was no Minute of a meeting of the company. The husband deposed that he is a shareholder and a director but there is no evidence of the other shareholders or the other directors and their identities are not revealed.

3. The company operates a “vocational education” business. No financial information about the company was filed. In his Financial Statement sworn 29 November 2018, the husband made no attempt to estimate the value of his interest in the company.

4. In a judgment delivered on 9 July 2018, Judge Boyle raised concerns about the veracity of financial information provided by the husband. It is not necessary to detail her Honour’s findings but it is sufficient to say that her Honour did not accept that the husband’s account of his financial transactions was reliable and specifically referred to a number of purported loan agreements which were questionable as to their validity.

5. The husband deposed that his income in the years 2015 to 2017 inclusive was $55,000 per annum. However, annexed to his affidavit was a notice of Assessment for the year ended 30 June 2015 showing a taxable income of $11,047.

6. Against the husband’s unsupported assertion that, although he works for EPL, and needs to live in Suburb B so as to be close to his work, he is paid no salary, must be balanced an application he made to a rental agency in relation to a property. In that document he applied to rent a property for $1,000 per week and purported to be in a position to pay that rent. In the document, the husband stated that he was in receipt of income.

7. Also annexed to the husband’s affidavit were applications to rent five other properties. The husband deposed that he expected to pay rent of $900 per week.

8. Asked to explain the discrepancy between the husband’s sworn evidence and his statement to the real estate agent that he was in receipt of income, the solicitor for the husband said that it was necessary for the husband to lie about his income in order to secure a property.

9. I am not in a position, on the material available, to determine what the husband’s income is, or what his financial position is. I do not accept the husband’s assertion that he has no income.

10. Further, the husband appears to have a great capacity to borrow from private sources. He deposed that he has borrowed some $90,000 from his mother and some $1,147,500 from Ms F. He deposed that he owes Mr G $250,000. All of these loans appear to be unsecured.

11. In his Financial Statement sworn 29 November 2018, the husband deposed that his living expenses were paid by his mother.

12. I propose to deal with the husband’s applications first.

SELLING AGENT

1. The selling agent instructed by the wife in her capacity as trustee for sale is the agent whom the husband instructed when he undertook the sale of the property pursuant to the orders delivered on 9 July 2018.

2. The husband deposed that another agent was prepared to conduct the marketing of the Suburb D property for a smaller commission and had suggested that a larger selling price could be achieved.

3. There was no evidence from this alternate agent, either as to the commission she would charge or the basis on which she would achieve a higher price.

4. The husband has had ample opportunity to sell the Suburb D property and has not done so. The only evidence that another agent might be able to achieve a higher sale price for a lower cost is that of the husband. No detailed sales proposal was tendered. The husband’s evidence in relation to other financial matters is unreliable and his hearsay evidence alone cannot be accepted in relation to this issue.

5. The husband’s application will be dismissed.

PAYMENT TO THE HUSBAND OF $35,000

1. The source of the fund from which this payment can be made is identified by the husband to be the fund held by the wife’s solicitors as a result of the orders for lump sum maintenance of $72,800. Those funds were paid from the proceeds of sale of the Suburb B property pursuant to the Orders of Judge Boyle and the payment out to the wife was partially stayed by the order of Loughnan J on 30 July 2018. When the husband’s appeal was withdrawn on 15 October 2018, the stay ceased to have effect and those funds were the property of the wife.

2. The basis of the husband’s application is not specified. The order he seeks could be made as a maintenance order or as an interim property order. There is no evidence presently before the Court upon which the husband could establish his entitlement to any amount by way of property settlement since he deposes that he owes almost $4.5 million and the gross value of his assets is yet to be determined. His shareholding in EPL is unvalued.

3. I propose to treat the husband’s application as an application for lump sum maintenance.

4. I have already explained that I do not accept the husband’s evidence about his financial position. He is in full time employment. He deposed that his mother pays some $700 per week towards his living expenses.

5. I am unable to find that he cannot support himself.

6. His application will be dismissed.

APPLICATION TO VARY PERIODIC SPOUSAL MAINTENANCE

1. There is no order on foot for the payment of periodic spousal maintenance.

2. Consequent on the withdrawal of the husband’s appeal against the order for lump sum maintenance, that order was perfected and the payment released to the wife.

3. In order to vary an order for spousal maintenance, the Court must be persuaded that the conditions in s83 of the Family Law Act 1975 (Cth) (“the Act”) have been satisfied. Specifically, the Court must be satisfied of the matters in s83(2) of the Act. There is no evidence that the wife’s financial position has relevantly altered. Because I am not satisfied that the husband has properly disclosed his financial position, I am unable to find that his financial position has relevantly changed.

4. In any event, the amount has already been paid.

5. The application will be dismissed.

PAYMENT OF VARIOUS EXPENSES 

1. In relation to the alleged expense for Capital Gains Tax, there is no evidence that the husband has filed a tax return in which he returns the capital gain on the Suburb B property as his income. There is no evidence that any assessment of Capital Gains Tax has been made or levied.

2. Although the husband annexed accounts for legal and accountancy fees to his affidavit, there is no evidence that he is being pressed for payment of those accounts.

3. In relation to the amount owed to his former lawyers, the husband deposed that he intends to seek an assessment of their costs.

4. The accountancy advice in relation to the capital gains liability on the sale of the Suburb B property is addressed to the husband in his capacity as trustee of the H Unit Trust which was the registered proprietor of the property. The liability would, prima facie, appear to be the liability of the trust and not the personal liability of the husband.

5. Similarly, the account for the preparation of the financial reports and tax returns of the H Unit Trust for the years ended 2016 and 2017 would appear, prima facie, to be liabilities of the trust, not the husband.

6. In relation to the application for payment to J Lawyers of $11,586, those accounts are also rendered to the husband in his capacity as trustee and would appear, prima facie, to be liabilities of the trust, not the husband.

7. The application for the payment of those sums will be dismissed.

WIFE’S APPLICATION FOR POSSESSION

1. The wife was appointed trustee for sale of the Suburb D property on 8 October 2018. The husband has remained in occupation of the property.

2. Although the husband appeared by his solicitor in response to this application, he gave no undertaking to move out of the property and indicated that he would not do so unless he was paid a sum of money by the wife to cover his expenses of moving and his rent for six months in advance.

3. For reasons already given, I do not accept that the husband is financially constrained from vacating the Suburb D property. He may have to settle for a standard of accommodation that is less than that to which he is accustomed but no evidence suggests that he is required to occupy a two bedroomed apartment in the inner city.

4. The wife cannot proceed with the work necessary to present the property in the face of the husband’s continued occupation.

5. A warrant will issue for the possession of the property. I will order that the warrant lie for seven days to give the husband the opportunity to leave voluntarily. Thereafter, he will be removed by the Sheriff.

COSTS

1. The wife seeks orders for the costs of these applications and the payment of any costs incurred by her as trustee for sale.

2. No submissions were addressed to this issue by either party but I propose to deal with her application to save further expense.

3. The provisions of s 117(2A) of the Act govern the application.

4. I am satisfied that the wife has no access to funds other than such of the amount of the lump sum maintenance order which remains. I am unable to say what the husband’s financial position is except that I do not accept that he is not in receipt of any income.

5. The proceedings in relation to the issue of a warrant are necessitated by the husband’s refusal to comply with orders that he vacate the subject property.

6. In relation to the orders sought in the husband’s response, he has been wholly unsuccessful.

7. Having regard to all of those matters, the husband should pay the wife’s costs of these proceedings.

8. The wife as trustee for sale is entitled to be reimbursed for any costs incurred by her in the execution of that role and those funds should come from the proceeds of sale of the Suburb D property before any other distribution to the parties and take priority over any distribution other than to secured creditors.

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 15 January 2019.

Associate: 

Date:  15 January 2019