Vissell & Vissell

[2021] FamCA 441

FAMILY COURT OF AUSTRALIA

Vissell & Vissell [2021] FamCA 441

File number(s):	SYC 2224 of 2018
Judgment of:	HENDERSON J
Date of judgment:	28 January 2021
Catchwords:	FAMILY LAW – PROPERTY – Interim property – Where the wife seeks an amount by way of interim property distribution – Where the husband is effectively in sole control of the parties’ assets – Consideration of applicable principles – Orders made for interim property distribution of $468,713.25 to be paid by the husband to the wife.
Legislation:	Family Law Act 1975 (Cth) s 79
Cases cited:	Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Number of paragraphs:	44
Date of hearing:	27 January 2021
Place:	Sydney
Counsel for the Applicant:	Mr Livingstone
Solicitor for the Applicant:	Marsdens Law Group
Solicitor for the Respondent:	Matthews Folbigg Pty Ltd

ORDERS

SYC 2224 of 2018

BETWEEN:

MS VISSELL

Applicant

AND:

MR VISSELL

Respondent

ORDER MADE BY:	HENDERSON J
DATE OF ORDER:	28 JANUARY 2021

THE COURT ORDERS THAT:

1.That the husband pay the wife the sum of $468,713.25 by way of interim property settlement within 14 days.

2.If the husband does not comply with Order 1, within a further 14 days the matrimonial home at Suburb C is to be placed on the market for sale as follows.

3.Unless agreed to, the agent and conveyancer to conduct the sale shall be selected by the wife providing 3 names of agents and 3 conveyancers to the husband and the husband selecting one name of each professional within 7 days. The Court notes that the wife has provided 3 agents and conveyancers names in Orders 5 and 6 of her interim orders sought filed 9 November 2020.

4.That within 14 days of the timeframe specified in Order 2, the husband is to do all things necessary and sign all documents necessary to have the former matrimonial home situated at and known as B Street, Suburb C NSW (Folio Identifier …), (“the Suburb C property”) sold by way of private treaty at a reserve price as agreed between the parties in the event of no agreement then as recommended by the nominated real estate agent and that upon the sale the proceeds of sale be disbursed as follows:

(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;

(b)Discharge of any mortgages secured against the Suburb C property;

(c)Payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee;

(d)The wife receive an interim partial property settlement of $468,713.25;

(e)The husband receive an interim partial property settlement of $200,000 with the husband to pay from this amount prior to receiving same:

(i)All the husband’s arrears of Child Support then existing as at the date of payment.

(ii)The balance remaining then to be paid to the husband.

(f)The balance of the proceeds of sale be retained in joint names in a Controlled Monies account with Marsdens Law Group pending further agreement or further Order.

5.That in the event the Suburb C property is not sold by private treaty within a period of 3 months of the date of listing then the husband shall do all such acts ad thing and sign and execute all such documents to list the property for sale by public auction with the nominated real estate agent and subject to the following terms and conditions:

(a)The auction shall take place at the earliest date recommended by the agent.

(b)The reserve price shall be as agreed between the parties and failing agreement as recommended by the real estate agent.

(c)Both parties shall attend at the auction or have a nominee represent them and in the event that the property I passed in they shall negotiate with the highest bidder and shall accept any offer to purchase the property at no less than 98.5% of the reserve price.

(d)That in the event that the property does not sell at auction or does not sell by private treaty within two weeks after the fate of the auction then the parties shall relist the property for sale by auction at intervals of no more than six weeks upon the same terms and conditions as set out herein until the property is sold.

(e)That upon the property being sold the parties shall distribute the proceeds of such sale as provided for in Order 4 above.

6.The husband shall co-operate in every way with the real estate agent including without limiting the generality of the foregoing:

(a)Making the key available for the real estate agent;

(b)Allowing inspection of the Suburb C property at all reasonable times requested by the real estate agent;

(c)Doing or saying nothing to hinder or prevent the sale being effected at the best possible price;

(d)Doing all things necessary to prepare the Suburb C property for sale including cleaning the internal and external areas of the property and carrying out any necessary repairs to the property with all repairs and/or improvements to be agreed upon by both parties or and recommended by the agent; and

(e)The husband shall meet as and when they fall due the cost of any necessary repairs and/or improvements to the property.

7.Simultaneous with settlement of the Suburb C property the husband is to do all things necessary to vacate the Suburb C property.

8.The husband shall provide all necessary authorities to the nominated real estate agent and conveyancer/solicitor appointed to enable the wife or her nominee to be provided with all information regarding the sale, copies of all documents and to allow the wife or her nominee to speak with the agent and/or conveyancer/solicitor.

9.That the husband shall ensure he communicates to the wife’s solicitor the details of all offers to purchase the property, copies of contracts relating to the sale, copies of any settlement sheets and copies of any correspondence relating to the sale of the Suburb C property either from the agent or the solicitor/conveyancer appointed.

10.That until the sale of the Suburb C property in Order 4 and 5 above, the husband be restrained by injunction from dealing with the Suburb C property without prior written consent of the wife, including but not limited to:

(a)Further encumbering the mortgage over the property unless such mortgage is necessary to enable the husband to comply with Order 1 above;

(b)Making use of the mortgage redraw facility over the property unless such redraw is necessary to enable the husband to comply with Order 1 above;

(c)Obtaining a further loan or line of credit in connection with the property unless such mortgage is necessary to enable the husband to comply with Order 1 above;

(d)Selling, leasing or assigning their interest in the property; or

(e)Taking any other steps to reduce the parties’ equity in the property unless this occurs to enable the husband to comply with Order 1 above.

11.Within 14 days, the husband shall comply with his obligations under Rule 13.04 of the Family Court Rules 2004 for full and frank disclosure including but not limited to providing:

(a)Documentary evidence supporting the dissolution of T Pty Limited t/as D Company (“the business”).

(b)Copies of Certificates of registration for all equipment still owned by the business if any.

(c)Copies of all documents for any equipment, plant or machinery currently listed for sale or listed for sale in the last 6 months which include:

(i)The advertised sale price;

(ii)The platform on which the equipment, plant or machinery was advertised for sale;

(iii)All offers received by the business or the husband; and

(iv)All associate liabilities owing on any of the said equipment, plant or machinery and in the event any liabilities have been paid out of discharged since the equipment, plant or machinery was advertised, the source of such funds to pay out or discharge the said liability.

(d)Copies of all documents in relation to the sale, transfer or disposal of any equipment, plant or machinery owned by the business or the husband in the last 6 months, inclusive of:

(i)All Bills of sale, transfer documents, invoices and receipts showing the:

1. Sale price;

2. The method of payment;

3. Proceeds of sale received by the business or husband and the source of where any proceeds have been deposited and since applied; and

4. The payment and/or discharge of any loan, lease or purchase/hire agreement.

(e)A copy of the email from HH Pty Ltd to T Pty Ltd t/as D Company dated 23 June 2020.

(f)A copy of his employment contract with his current employer.

(g)His 3 most recent pay slips form his current employer.

(h)His run sheets and logbooks from the commencement date of his current employment to date.

(i)Copies of the statements in the husband’s name showing the child support payments paid by him direction from accounts in his sole name or from any entity controlled by him for the last 12 months.

(j)Copies of statements showing the child support payments made on behalf of the husband for the last 12 months from any other account which may not be in his sole name or controlled by him.

(k)In the event the husband is unable to access the accounts by which any child support payments made on his behalf for the last 12 months are unavailable, then that the following be made available to the wife and her solicitor as follows:

(i)The source of the child support payments being made by the husband or on his behalf;

(ii)The name of any account any child support payments are being made from; and

(iii)The bank details of any account any child support payments are being made from including the BSB number and account number.

THE COURT NOTES

A.The husband has filed an Application in relation to seeking interim parenting orders and that return date will be the next date before the Court.

Note:   The form of the order is subject to the entry in the Court’s records.

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 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Vissell & Vissell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

1. The matter of Vissell was an application by the wife for further interim property orders.  In the husband's response, filed 25 January 2021, he also seeks an interim property distribution to himself in the event the home is sold by order.

2. On 20 July 2018, Stevenson J made extensive interim property orders including that the husband pay the wife $100,000 together with 50 per cent of a compensatory amount paid to the parties by K Organisation for acquisition of part of their land.  The total amount paid for that acquisition was $314,000.  50 per cent is $157,000 to each party.  The wife has received $257,000 by way of interim property distribution and the husband $157,000.

3. The facts are, the husband has remained in occupation of the former matrimonial home, in control of the parties' business and in fact, in control all of the parties' wealth, as the home, and land at Suburb C is in his name, as is the business.

4. There are three children:  X, aged 12.5, Y, 10.5, and Z, seven and a half.  The children live with their mother and despite interim orders for them to spend weekend time with their father, they do not spend time with him and have not from at least September 2020 for Z and perhaps earlier in time for the older children.

5. The material I read for the parties was as follows.

6. For the mother:

   (1)Application and Case Outline filed 9 November 2020 supported by an affidavit sworn 4 November 2020;

   (2)Financial statement of the same date;

   (3)Counsel's case outline.

7. The mother was represented by Mr Livingstone of counsel.

8. For the father:

   (1)Further Amended Response filed 25 January 2021;

   (2)Affidavit of 24 January 2021;

   (3)Financial Statement of the same date;

   (4)A case outline by Mr Ridley, solicitor, who represented the father.

9. The wife seeks the home be sold and she receive $468,730.25, a very specific sum, and the balance of the monies from the sale of the home, which would, as best we can determine today, after paying the mortgage be in the vicinity of $1.8 million to be held in a controlled monies account pending further order or by agreement of the parties.

10. The husband resists the wife's application.  He says the wife should be paid $200,000.  He will pay that money to her within 14 days or pay such sum as the Court would determine is an appropriate amount.  He seeks to be able to vary Stevenson J's orders to further encumber the property to comply with his position to pay the wife $200,000.  Interestingly, in his Response, he says if he defaults in paying her the $200,000 then the property in Suburb C is to be listed for sale, and after payment of the usual expenses including the mortgage, the parties would each receive $200,000 from those proceeds of sale, with the remainder be placed in an interest-bearing account in both parties' name.

11. This matter has taken a very dangerous turn of events, which will have a negative impact on the parties financially if it continues.  Litigation has been ongoing since 2017, and it has been unable to be progressed for the following. 

12. The parties separated in February 2017.  The parties agreed to value the husband's business, known as T Proprietary Limited, trading as D Company.  That was agreed to in July 2018.  The first valuer retired and did not complete the valuation, due to a conflict by December 2018.

13. A fresh valuer was appointed, as agreed on 21 February 2019, and on 18 March 2019 this valuer wrote to the parties as follows:

    …It appears to me that the relationship between L Proprietary Limited, trading as U Company, and CC Proprietary Limited (CC Company) [companies of which the husband's parents are directors] may not trade at arm's length.  On this basis the operations and transactions of U Company and CC Company may affect the valuation of D Company.  The potential non-arm's length transactions do affect the costs of operating business and therefore the profits…a proper valuation cannot be carried out until these issues are addressed and investigated in full.

14. Due to this opinion the conciliation conference allocated in March 2019 could not take place.  The wife then obtained orders for the issue of nine subpoenas to gather the information the valuer required, including the subpoenas addressed to L Proprietary Limited, M Proprietary Limited, CC Company, P Pty Ltd, Ms V of S Pty Ltd, N Pty Ltd, J Pty Ltd, K Organisation. 

15. On 7 June 2019, the wife received information via letter from lawyers indicating they acted for the paternal grandparents in their capacity as directors of the entities L Proprietary Limited, M Proprietary Limited, and CC Company, and they objected to production of the documents.  Registrar Ryan dismissed their notices of objection on 4 July 2019.  A review was filed.

16. Loughnan J dismissed the review on 30 September 2019.  An appeal was filed and is likely to be heard the week of 17 February 2021.

17. These events have stalled the matter and caused the wife to incur significant legal costs in pursuing the subpoena she has issued to produce documents and information as sought by the joint expert.  This is a very dangerous turn of events for the parties.

18. Secondly, the second dangerous turn of events or continuum of fact is that the husband has been continuously late or always in arrears of child support.  As at 7 January 2021, he had arrears approaching $22,146.55, which as at the hearing date before me, the last week of January 2021, reduced to $16,000. That information comes from his own affidavit material.

19. This is in circumstances where the wife supports the parties' three children; does not currently work;  is completing a course of study, which will give her employment prospects; fortunately, has parents who were able to purchase a property which she and the children live in rent free at Suburb H. The wife owes her parents $20,000.  When she initially moved into the property it was owned by third parties, and prior to her father purchasing the property some time after she moved in, he had paid $20,000 in rent for her occupation of the property.

20. The wife used some of the $100,000 she had received by way of interim property settlement to renovate the property to make it more suitable for the children after her father purchased it, and she sets out clearly at paragraph 57 of her affidavit her parlous, and therefore her children's parlous, financial position.  From her initial interim property settlement, she has paid legal fees, renovations for Suburb H approaching $100,000, and purchased a car by paying down a personal loan of $34,000. 

21. The wife paid JJ Company, a firm she had engaged to make payments of legal fees on the basis that she would pay those costs from her verdict, at a significant interest. The wife used $117,000 from her interim property monies to minimise the interest payment; still has outstanding legal fees; had a trip overseas; paid for the children's costs and given the husband's dilatory child-support payments, this is hardly surprising; put $40,000 into her solicitor's trust account and she has about $12,000 left; thus the 257-odd thousand dollars received has been expended by her.

22. Her current legal costs and the costs of the appeal are now at $152,223.  JJ Company is owed $118,000.  She has taken $10,000 out of her superannuation and is intending to take a further $10,000 out as X needs urgent orthodontic work.

23. The husband asserts that since June 2020, his business has not effectively been trading.  Due to either COVID or changes in what was happening, he no longer had the profitable contract he had had with HH Pty Ltd.  He is now working for his parents, earning about $400 per week, and his parents are paying all the outgoings on the home, including the mortgage - about $1,500 a week on his behalf.  He says in his material, and this was a submission to me, he is looking for a new business opportunity that will resurrect or resuscitate his business.  There was not one skerrick of evidence that I could see in his material to support his contention that this is what he is doing.  As far as I can see, he has done very little, if anything.  He asserts his parents have paid child support to the wife that he has paid at times.

24. The husband's application is that the wife receive, ultimately, $1.5 million. The wife seeks $1.9 million.  She has received the $257,000 and seeks a further $468,000, being a total of some $750,000.  Thus, there is no question of the wife receiving more than is her entitlement to property settlement if I order that she receive the $468,713 that she seeks, as she would still be entitled to a further 400/450 thousand dollars, even on the husband's application, if that be the order that the Court makes.

25. The husband made much in his submission and his material of wanting to retain the home.  He has no capacity to do this on his own current financial circumstances as set out in his financial form 13.  His parents are supporting him.  He earns $400 a week working for them.  He says he needs to retain the home for the following:  it's where he runs his business or where he is going to run his future business.  No evidence of what this future business would be or steps he has undertaken to resuscitate his current business was forthcoming.  He is emotionally attached to the home, having sold a property owned prior to the relationship to build the former matrimonial home on the property.  It is close to where his parents live.  It has been specifically designed by him - in particular, a shed, where he has all his equipment for his work and it provides accommodation for machinery and other items he needs to run his business.  He also says it is the children’s home and when they spend time with him, it is important that they return to the former matrimonial home.

1. He tells me at paragraph 9 of his affidavit that his mother will advance funds to pay the wife her entitlement to property, and he will give his mother a mortgage over the home, therefore, his plan to keep this home is backed by his mother who, he tells the Court, can provide him with sufficient funds to pay the wife what he says is her entitlement of $1.2 million all up.  I note there is no affidavit by the grandmother confirming this is the case, however, I accept what the husband tells me, that she is a woman of means.  Thus, I am puzzled by his resistance to the wife's application to be paid $468,000 today, given it will give her less than what he says is her entitlement to their property, and where he tells me his mother will advance him sufficient sums of money to buy her out of her interest in that property ultimately.

2. He has known since November 2020 the amount the wife claimed.  He knew this was the position she took.  She set out clearly why she wants this money and what she will do with it.  It is not a matter for the husband to determine what the wife can spend her entitlement to property on. It is clear, significant amounts of the money that have been provided to her and would be provided to her, if I so order, will be eaten up in legal fees and the interest on those fees under the JJ Company agreement she entered into.

3. The husband asserts her application must fail because he wants to retain the home.  She initially seeks it be sold and this will defeat his claim.  I accept that argument.  However, his own evidence is that his mother will advance money to buy her out and the broad discretion I have allows me to do justice and equity to each party.

4. Going to the law and the decision of Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”).  It is clearly appropriate I make an interim costs order, if in so doing I do not jeopardise either party's ultimate claim.

5. The wife ultimately seeks $1.9 million of the matrimonial pool. Other than the value of Suburb C, which the parties, at this stage - and I'm not holding them to this - says is worth about $3 million, with a mortgage of about $750,000, a net of about $2.25 million. I accept that the matrimonial pool cannot yet be quantified fully.  The husband's business, D Company, is not valued and has been held up in being valued by the subpoena argument run by his parents.  There are various items, such as machinery and other items necessary to run a business, tools, equipment, and the like, and that would be part of the asset pool and have a value.  The pool is, at minimum, no less than $2.25 million net.

6. The husband seeks $200,000 be paid to him by way of interim property distribution if I order a sale of the property, and his own application says I should do so if he defaults in paying the wife the money he says she is entitled to of $200,000.  I am struggling with this argument as he is also resisting a sale.  I apprehend the husband's claim must be on some sort of fairness basis or a dollar-for-dollar basis rather than telling me what his needs are and why he requires this money, given he appears to be fully supported in every endeavour by his generous parents.  He did not set out in his material any of the matters the wife did in hers in support of her claim.

7. However, in interim property applications, doing justice and equity between the parties is a very important principle.  The ratio of Strahan is that it must be appropriate to make an interim property order, and that in so doing I am making an order which is in the interests of justice as between the parties.  In so making an order the interest of justice is an overarching principle which I must have regard to.

8. Going specifically to the decision of Strahan [at 85,645], their Honours say that the power I am exercising is found at section 79 of the Family Law Act 1975 (Cth) (“the Act”):

   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. There is authority that the power under section 79 can be exercised on an interim basis until it is exhausted, and I can exercise that power today without exhausting it. There is still significant matrimonial property left. Thus the interests of justice is important, and also that it must be appropriate for such an order to be made.

10. The husband submitted to me it was not appropriate for the Court to exercise the power under sections 79 and 80, on an interim basis, and order for sale of a former matrimonial home and a payment to the wife of $468,713 and to do so would not be just and equitable.

11. The submission of the husband, that is not in the interest of justice, to order sale of the home and pay the wife $468,713.25 flies in the face of his default provision, that if he does not pay the wife $200,000 in 14 days, the property is to be sold and he and each receive $200,000. 

12. If, as he says, his mother will buy out his former wife's interest in the home up to $1.2 million then, as long as the amount ordered to be paid is under $1.2 million there is no reason for me to make an order to sell the home for the wife to be paid her money, and I can make that order straight away.  I find this solution in the husband's own evidence, as he tells me his mother is going to assist him to buy out his former wife's interest in the property.  As she is not on affidavit evidence, I can only accept that which he tells me and I will accept his evidence.

13. Thus, other than for the purpose of a default provision, to ensure any order I make for the payment of money is complied with, I find little utility in ordering a sale of the home as a first order, and then payment to the wife.  Rather, I will order a payment to the wife, and then make provision for a default order, in the event this does not occur.  The husband says, at paragraph 11 of his affidavit:

    …[T]o meet the [wife's] interim application, my mother…has [agreed] to lend me… $200,000.

14. The husband knew in November the claim his wife made was for $458,000, yet only offered to pay her $200,000. Again, flying the face of reality, when he has agreed and not resiled from paying her $1.2 million at the end of the day. The husband's disingenuous submissions are further supported by his position at paragraph 13 of his affidavit that the payment to the wife of child support is a payment to the wife for her support, when it is not and her only source of income are Centrelink benefits which are not income under the Act.

15. The reality is the wife has not been able to progress the matter due to the husband's parents' attitude to the subpoena addressed to the companies they are directors of.  She has incurred and will continue to incur significant legal fees in seeking information vital to the ultimate determination of this matter, for the Court as well as the parties.

16. The husband is, in effect, in sole control of all the assets and wealth of the parties, all income producing assets, and has been in sole occupation of the home, to the exclusion of the wife and children, since 2018.  He has been consistently and seriously late in paying his ongoing child support liability.  It is apparent that, to use the words of Strahan, in the circumstances it is appropriate to exercise the power, that I should so exercise this power.

17. The wife's case is clear and compelling, and it is just that I order the husband to pay the interim property settlement she seeks, given his conduct and the concerning pathway the matter is now on, in the wife's endeavour to provide the information needed, by the joint valuer, to enable him to value the business she and her husband undertook during the marriage.

18. Therefore, I will make the following orders:

    (1)That the husband pay the wife the sum of $468,713.25, by way of interim property settlement, within 14 days.

    (2)If the husband does not comply with Order 1, within a further 14 days, the matrimonial home at Suburb C is to be placed on the market for sale as follows.

    (3)Unless agreed to, the agent and conveyancer to conduct the sale shall be selected by the wife, providing three names of agents, and three conveyancers to the husband.  The husband selecting one name of each professional within 7 days. The Court notes that the wife has provided three agents in conveyances in Orders 5 and 6 of her interim orders as sought, and filed 9 November 2020.

    (4)That within 14 days of the timeframe specified in Order 2 so, effectively, 30 days, after he should have paid the wife the monies to which I have said she is entitled, the husband is to do all acts and things necessary, sign all documents, to have the former matrimonial home placed on the market for sale.  I've made the usual provision for payment of costs and expenses and mortgage and the like:

    (a)The wife receive an interim partial property settlement, $468,713.25.

    (b)The husband receive an interim partial property settlement of $200,000.

    (i)For the husband to pay, from this amount, prior to receiving same, all the husband's arrears of child support, then existing as at the date of payment, and the balance to be paid to the husband.

    (c)The balance of moneys then to be placed in controlled monies account of Mssrs. Marsdens.

    (5)I then make provision for auction, if the property doesn't sell by way of private treaty. 

    (6)The husband to cooperate with the sale, including allowing the wife to contact the agent and have copies of the contract for sale, and the like.

    (7)Until the sale of Suburb C, the husband is restrained, by injunction, from dealing with Suburb C property without prior written consent of the wife, including but not limited to:

    (a)Further encumbering the mortgage over the property, unless such mortgage is necessary to enable the husband to comply with Order 1;

    (b)Making use of the mortgage redraw facility over the property, unless such redraw is necessary to enable the husband to comply with Order 1;

    (c)Obtaining a further loan or line of credit in connection with the property unless such mortgage is necessary to enable the husband to comply with Order 1;

    (d)Selling, leasing or assigning their interest;

    (e)Taking any other step to reduce the equity in the property, unless this occurs to enable the husband to comply with Order 1.

    (8)I have made orders that the wife sought interim to her application about full and frank disclosure at Order 11 through to Order 11(k).

I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson.

Associate:

Dated:       28 June 2021