Tyers and Tyers

[2016] FCCA 3503

FEDERAL CIRCUIT COURT OF AUSTRALIA

TYERS & TYERS [2016] FCCA 3503

Catchwords:
FAMILY LAW – Interim property – orders made.

Legislation:

Family Law Act 1975, s.79

Cases cited:
Bault & Bault [2016] FamCA 126
Strahan & Strahan [2009] FamCAFC 166
Harris & Harris (1993) FLC 92-378

Applicant: MS TYERS

Respondent: MR TYERS

File Number: PAC 5142 of 2014

Judgment of: Judge Newbrun

Hearing date: 5 November 2015

Date of Last Submission: 5 November 2015

Delivered at: Parramatta

Delivered on: 14 March 2016

REPRESENTATION

Counsel for the Applicant: Self-represented

Counsel for the Respondent: Mr Wong

Solicitors for the Respondent: Constantine G Pavlis & Co

ORDERS

1. Orders are made in accordance with the document marked Exhibit A, a sealed copy of which is attached.

2. The solicitors for the Respondent Husband must prepare the form of order with a clean typescript of the Orders marked Exhibit A. 

3. Order 10 to Exhibit A, listing the matter for mention on 5 August 2016, shall be vacated and in its place, the proceedings be listed for mention at 9:30am on 14 October 2016 at Parramatta.

EXHIBIT A: MINUTE OF ORDER

1. The Husband be permitted to further encumber the property situated at Property A being the whole of the land comprised in Folio Identifier (omitted) up to an additional $100,000 in excess of the debt currently secured over the property.

2. Order 8 made on 8 May 2015 is suspended to the extent of Order 1 herein and the facilitation of Order 1 herein, but otherwise shall continue to operate.

3. Each party shall not hinder the operation of these Orders.

4. That within 7 days the Husband provide the Wife with a copy of a mortgage statement covering today’s date.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 5142 of 2014

MS TYERS

Applicant

And

MR TYERS

Respondent

REASONS FOR JUDGMENT

1. This was an interim hearing relating to the husband’s proposed interim orders that an injunction made by consent on 8 May 2015 over the property at Property A be discharged. Also the father sought an order that the wife do all such things and sign all such documents so as to remove any injunction, caveat and/or encumbrance placed by her or on her behalf as against the title to that property at Property A, and that the husband be at liberty to deal with the property and also he sought an order that the wife be restrained from placing any injunction, caveat and/or encumbrance as against the title to Property A.  The husband’s orders sought on this interim hearing were referred to in his Further Amended Response to Initiating Application filed 23 October 2015.  The wife opposed the making of these orders seeking, inter alia, the discharge of the injunction made by the Court on 8 May 2015. 

Material Relied Upon

1. The husband relied upon his Financial Statement filed 28 April 2015, his Affidavits filed 10 November 2014, 24 April 2015, and 23 October 2015.  The wife relied upon her Affidavits filed 28 October 2014, 18 March 2015, 24 April 2015.  There were certain documentary exhibits in evidence at this interim hearing being Exhibits A and B.

The Law

1. The Court refers to the judgment of Foster J in the matter of Bault & Bault [2016] FamCA 126, delivered 3 March 2016 in which decision his Honour referred to relevant legal principles to be applied by the Court on applications for interim property provision.

   6. The principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166) and require a two-step process.

   7. Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice.

   8. In Strahan (supra), the Full Court said:

   132.  In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1) (h) of the Act to make an interim property order the “overarching consideration” is the interests of justice.  It is not necessary to establish compelling circumstances.  All that is required is that in the circumstances it is appropriate to exercise the power.  In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

   9. Secondly, the Court is to have regard to relevant matters in s 79 of the Family Law Act 1975 (Cth).

   10. It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

   11. It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said (at 79929-79930):

   As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.

   12. In Strahan (supra), the Full Court said at [132]:

   … regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

   13. It is now well settled that in property cases the Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.  Such a consideration should not be guided by an assumption that the parties’ rights to, or interests in, property are, or should be, different from those that then exist. The question is whether those rights and interests should be altered.

   14. There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact.

   15. In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.

2. In particular, the Court notes paragraph 10 of the above decision in Bault where his Honour states:

   It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order.  Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

Chronology

1. (omitted) 2005 – date of marriage (at this time the wife already owned the property at Property B and the husband already owned the said property at Property A).

2. (omitted) 2007 – child X born (she is now aged 9 years).

3. (omitted) 2010 – child Y born (he is now aged 6 years).

4. 2010 - husband with one Mr W establish a company known as (business omitted).

5. July 2010 – husband involved in a car accident.

6. 13 August 2010 – separation of parties for about 3 months.

7. November 2010 – reconciliation occurs between parties.

8. April 2013 – (business omitted) ceases to trade.

9. 22 October 2014 – separation of parties.

10. 10 November 2014 – Court makes orders, inter alia, that wife have exclusive occupation of Property B property, children live with mother, children spend time with father, supervised by paternal grandmother, and other ancillary orders.

Evidence

1. The Court refers to the parties’ Affidavits filed and previously referred to in this Judgment. 

2. The Court notes the husband’s evidence that he has in recent times established a business known as (business omitted); this is a business conducted by the husband and involving (business omitted).  The husband asserts he has always operated this business at the former matrimonial home at Property B in its garage.

3. The husband asserts in his evidence that he does not have adequate storage space to remove his tools of trade, equipment and motor vehicles from the former matrimonial home at this time.

4. The husband asserts in his evidence that he needs to be able to deal with the property at Property A in order to pay prospective legal fees.  He asserts in his evidence that his prospective legal fees are some $80,000; some $6,500 for Apprehended Domestic Violence Order proceedings, proceedings in relation to the company (omitted) some $39,000, and family law proceedings legal costs of some $35,000.

5. The husband asserts in his evidence that in recent times he has received a demand from the official liquidator of the company known as (omitted) on 21 September 2015 for the sum of about $388,000. The husband asserts he disputes this demand from the official liquidator.

6. The Court notes in the Child Dispute Conference memorandum to the Court of 10 November 2014 annexed to one of the father’s affidavits, that the wife alleges the husband was involved in litigation with his ex-business partner as according to the wife he took some $400,000 out of the business for his personal use. The wife alleged to the family consultant that the husband had spent this money on hobbies such as (omitted). The husband for his part asserted to the family consultant that he spent the monies on the mortgage, on the home and for legal fees. He also said that his ex-business partner had also taken money out of the business. 

Submissions

1. The wife submits in relation to this interim hearing that it is open to the husband to move into the Property A property to conduct his business activities.  On the other hand, the husband asserts that there have been longstanding tenants occupying that property.  The wife is very concerned about the matrimonial assets being diminished if the husband’s application on this interim hearing are assented to by the Court.  In particular, she asserts that the husband could mortgage the Property A property to the detriment of her ultimate property settlement proceedings. Again, the wife submits the husband could move into the Property A property and establish his business and pay his legal fees from the business, or simply that he could return to work in his (occupation omitted) from which he used to earn some $400 per day.

2. The husband submits, inter alia, that he needs to be able to deal with the Property A property to pay for his prospective legal costs including these family law proceedings, Apprehended Violence Order proceedings instituted by the wife, the liquidators demand against him in respect of the company (omitted) and further he needs to have funds to restart his business (and in this latter regard it is noted that he submits that the wife presently has exclusive occupation of the Property B property and he used to run his business from the garage at that property.)

Consideration

1. On the evidence before the Court, the husband has probably established reasonable grounds to indicate that he has a need to raise capital from the Property A property to pay legal fees and restart his business.  However, as referred to by the Court previously in these reasons, as set out in the decision of Bault & Bault, which decision in turn refers to the well-established case of Strahan & Strahan (2009) FamCAFC 166, it needs to be kept in mind that the final outcome of property settlement proceedings should not be comprised by an interim property order. That decision confirms that either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

2. Accordingly, the essential issue to be determined at this interim hearing is for the Court to relevantly prognosticate as to what may well be the outcome in ultimate property proceedings between the parties, taking a conservative view, and ensuring that any interim order it now makes does not prejudice the legitimate expectations of the parties at a final hearing.

3. Conducting this exercise as best it can on the evidence presently before the Court, and noting that the evidence is in some conflict, particularly the parties’ respective balance sheets setting out what they regard as the existing assets and liabilities of the parties, the Court notes that the wife brought into the marriage at the time of commencement of cohabitation the property at Property B with an equity on the wife’s evidence of some $258,000.  For his part, the husband brought into the marriage the Property A property which, on his evidence, had an equity of some $115,000.  The wife also asserts that she brought into the marriage a car valued at some $14,000, superannuation at $23,000.  Accordingly, it can be seen that, at least on the evidence presently before the Court, that the wife’s initial contribution at the commencement of the relationship was significantly greater than the husband’s.

4. The Court notes that this was a nine year marriage. The Court notes that there are two children, presently aged nine and six years, who, on one view, will remain in the wife’s primary care looking forward. 

5. The Court notes the husband’s assertion that he contributed some $78,000 to a reduction of the Property B property mortgage.  The Court notes there is some dispute between the parties as to the extent of the husband’s alleged renovations to the Property B property.  The husband asserts that he spent some $91,000 in respect to these renovations.  The wife asserts that the parties, on the contrary, jointly contributed some $30,000 towards these renovations.

6. The wife asserts that the husband did not work for some two years during the relationship, during which time, he earnt no income.  She asserts that her homemaker and parent contribution was a very significant contribution by her and, in addition, she worked part time in paid employment during the marriage doing (omitted) work.  She asserts that she has received no child support since separation from the husband; she has, on her evidence, paid herself her living expenses and that of the children.  In relation to the wife’s spending of some $55,000, and referred to in her contended balance sheet in these interim proceedings, she contends that at least $25,000 of that $55,000 sum was spent for marital purposes. 

7. Accordingly, on the evidence presently before the Court, taking into account the wife’s superior property brought into the relationship compared to the husband’s and noting that it is arguable that otherwise the parties’ respective personal contributions (on the wife’s side, her homemaker and parent contribution and part-time income-earning contribution; and, on the husband’s part, his income-earning financial contributions to the relationship) are equal. 

8. It seems – again, taking a conservative view – that the parties’ respective contribution-based entitlements under section 79(4) of the Family Law Act are some 55 per cent in favour of the wife and 45 per cent in favour of the husband. When one then turns to section 75(2) of the Family Law Act, noting that the wife may well have the care of two young children, looking forward, and allowing at least 10 per cent in her favour as an adjustment under section 75(2) of the Act and also noting the wife’s position that there is presently – and looking forward – a disparity of income-earning capacity of the parties, it seems to the Court that, overall, taking into account relevant potential adjustments under section 75(2) of the Act in favour of the wife, that it is eminently arguable that the wife might achieve a final figure in her favour of some 70 per cent as opposed to 30 per cent on the husband’s side. For the moment, and for the purpose of this interim hearing, the Court will leave superannuation entitlements of the parties to one side.

9. Again, the parties have contended in terms of what they regard as the relevant present assets and liabilities of the parties.  They have put forward quite different contentions.  Again, the Court needs to take a conservative view on this interim hearing and ensure that the wife’s position is not prejudiced at any final hearing.  If one accepts for the moment the wife’s contended balance sheet set out at Exhibit A, but instead of what she contends is the current value of the Property B property of $830,000, accept the husband’s present contended value for the Property B property in the sum of $650,000, and if one accepts that the Property A property is presently valued at some $350,000, then the total net assets of the parties, excluding superannuation, is some $926,024. 

10. If one takes 70 per cent of that figure as being a prospective property settlement entitlement of the wife, one reaches the figure of some $648,217.  If one accepts that the property presently in the wife’s name, adopting a value for the Property B property of some $650,000, then the wife presently has property in her name to the tune of some $482,500.  If one deducts that figure from the said figure of $648,217, one is left with a figure of some $166,000 that the husband would be required to pay the wife by way of property settlement. 

11. The husband presently has at least the Property A property, taking a value of some $350,000, has a mortgage of some $100,000 on it, leaving an equity of some $250,000. If one deducts the aforementioned figure of $166,000 that the husband may well be required to pay to the wife by way of property settlement, one is left with a figure of some $84,000. 

12. Accordingly, it seems to the Court – taking a conservative approach whereby the wife may well be entitled to some 70 per cent of the net asset pool, excluding superannuation, it seems to the Court that – and, again, so as not to compromise the wife’s prospective property settlement entitlements, it is appropriate that the husband be permitted to borrow some $84,000 against the Property A property.  Taking into account the factual differences in the parties’ evidence, both as to the balance sheet issues and otherwise, the Court is of the view that it is proper that the husband be permitted to borrow a sum of $100,000 against the Property A property.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Date:  28 November 2017