VISSELL & VISSELL

[2018] FamCA 540

FAMILY COURT OF AUSTRALIA

VISSELL & VISSELL [2018] FamCA 540

FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks periodic payments or in the alternative a lump sum payment – Where the Court is not satisfied that the wife is unable to support herself – Application dismissed.

FAMILY LAW – INTERIM OR PARTIAL PROPERTY SETTLEMENT – Where the wife seeks interim or partial property settlement – Where the parties’ assets are almost wholly held by the husband – Court finds it is just and equitable that the wife receive a partial or interim property settlement – Orders made for the husband to pay the wife a sum to be characterised as interim or partial property settlement – Orders made for sale of matrimonial home in default of payment.

Family Law Act 1975 (Cth) ss. 72, 75(2)

APPLICANT: Ms Vissell

RESPONDENT: Mr Vissell

FILE NUMBER: SYC 2224 of 2018

DATE DELIVERED: 20 July 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 16 July 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Livingstone

SOLICITOR FOR THE APPLICANT: Marsdens Law Group

COUNSEL FOR THE RESPONDENT: Mr Harper

SOLICITOR FOR THE RESPONDENT: Abrams Turner Whelan Family Lawyers

Orders

Orders by consent and pending further order:

1. Pending finalisation of the proceedings for alteration of property interests, the husband is restrained from:

   1.1Increasing the mortgage debt secured on the title to the property situate at and known as B Street, Suburb C in the state of New South Wales ("the Suburb C property")

   1.2Utilising the redraw facility attached to the mortgage on the title to the Suburb C property

   1.3Obtaining additional loans or lines of credit using the Suburb C property as security

   1.4Selling, leasing or assigning his interest in the Suburb C property otherwise than in accordance with the requirements of the compulsory acquisition by the Roads and Maritime Services Department ("the compulsory acquisition")

   1.5Taking any other steps to reduce his equity in the Suburb C property, other than in compliance with the requirements of the compulsory acquisition, without the prior written consent of the wife.

2. The parties do all things and sign all documents necessary to obtain a valuation of the husband's business Vissell Pty Limited t/as D Pty Ltd and for the purposes of this valuation:

   2.1Mr E of F Pty Ltd is appointed as the valuer ("the valuer")

   2.2Within seven (7) days of the date of these Orders, the wife provide to the husband a draft joint letter of instructions

   2.3Within a further seven (7) days, the husband provide his amendments to the draft joint letter of instructions

   2.4Within seven (7) days of receipt by the wife of the husband's amendments the parties submit a joint letter of instructions to the valuer

   2.5The husband pay the costs of the valuation, provided that the parties cause 50 per cent thereof to be deducted from the wife's final property settlement entitlement and paid to the husband.

It is otherwise ordered pending further order

1. 3.1      Upon receipt by the husband of funds from the Roads and Maritime Services Department, as compensation for the compulsory acquisition of a portion of the Suburb C property, he pay one-half of that amount to the wife

   3.2Such payment by the husband to the wife is characterised as an interim or partial property settlement.

2. 4.1      Within 3 (three) months of the date of these Orders, the husband pay to the wife by way of interim or partial property settlement a sum of $100,000

   4.2In the event the husband fails to make such payment to the wife, both parties do all things and execute all documents required to effect the sale of the Suburb C property for the best price reasonably obtainable and to distribute the proceeds of such sale as follows:

   4.2.1in payment of agent's commission and expenses incidental to such sale

   4.2.2   in payment of legal costs and expenses incidental to such sale

   4.2.3   in discharge of the mortgage secured on the title to the property

   4.2.4in payment to the wife of a sum of $100,000 plus interest at the rate prescribed for the time being by the Family Law Rules

   4.2.5in payment of the balance to a controlled monies account with a solicitor agreed by the parties.

3. The wife's Application in a Case filed on 20 June 2018 and the husband's Response to an Application in a Case filed on 13 July 2018 are otherwise 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 Vissell & Vissell 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 SYDNEY

FILE NUMBER: SYC 2224  of 2018

Ms Vissell

Applicant

And

Mr Vissell

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Ms Vissell and Mr Vissell are parties to litigation in relation to parenting and financial issues.  On 20 June 2018 the wife filed an Application in a Case, by which she sought the following orders:

   …

   Spousal Maintenance

   2.That pursuant to Section 74 of the Family Law Act and within 14 days from the date of the Orders, the Applicant Husband pay to the Respondent Wife by way of spouse maintenance the sum of $1,319.00 on Monday each week for a period of two years.

   3.The spouse maintenance referred to in Order 2 shall be paid into the Commonwealth Bank of Australia account standing in the name of [Ms Vissell] being account number …16 or as otherwise directed in writing by the Respondent Wife.

   4.That in the event the Applicant Husband is found to not have capacity, then the Respondent Wife be paid a lump sum payment in accordance with Order 5.4.1 below from the sale of the [Suburb C] property.

   Sale of Suburb C

   5.That within 7 days, the parties do all things necessary and sign all documents necessary to have the former matrimonial home situated at and known as [G Street, SUBURB C], NSW FOLIO: … ("[Suburb C] property") sold by way of private treaty at a reserve price of $3,500,000.00 or as agreed between the parties and that upon the sale the proceeds of sale be disbursed as follows:

   5.1Payment of agent's commission and advertising expenses and legal expenses of the sale.

   5.2Discharge of the mortgages on the existing property;

   5.3Payment 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.

   5.4The Respondent Wife receive an interim partial property settlement as follows:

   5.4.1$140,000.00 by way of lump sum spousal maintenance payment (in the event that Order 2 or 3 above are not applicable);

   5.4.2$170,000.00 by way of lump sum for legal costs and disbursements;

   5.4.3$100,000.00 by way of interim partial property settlement;

   5.4.4The balance be retained in joint names in a Controlled Monies account with Marsdens Law Group pending further agreement or Orders.

   6.That until the sale of the Suburb C property in Order 5 above, the Applicant Husband be restrained by injunction from dealing with the [sic] without prior written consent of the Respondent Wife, including but not limited to:

   6.1Further encumbering the mortgage over the property;

   6.2Making use of the mortgage redraw facility over the property;

   6.3Obtaining a further loan or line of credit in connection with the property;

   6.4Selling, leasing or assigning their interest in the property; or

   6.5Taking any other steps to reduce the parties' equity in the property.

   Valuation

   7.That the parties do all things and sign all documents necessary to conduct a valuation of the Applicant Husband's business [D Pty Ltd], and for the purposes of this valuation:

   7.1Within seven (7) days of the making of these Orders, the Respondent Wife provide to the Applicant Husband a list of three proposed valuers;

   7.2Within seven (7) days of receipt of the list of proposed valuers, the Applicant Husband shall nominate a valuer and shall notify the Respondent Wife;

   7.3Within seven (7) days of the Applicant Husband nominating a valuer, the Respondent Wife shall provide to the Applicant Husband a draft joint letter of instructions for the valuer;

   7.4Within seven (7) days of receipt of the draft joint letter of instructions from the Respondent Wife, the Applicant Husband shall advise of any amendments sought;

   7.5Within seven (7) days of receipt of the Applicant Husband's amendments, the parties shall submit a joint letter of instruction to the valuer;

   7.6That for the purpose of the valuation, the Applicant Husband pay the costs.

   8.That the Applicant Husband pay the legal costs for the Respondent Wife incidental to this application.

2. On 13 July 2018 the husband filed a Response to an Application in a Case, by which he sought the following orders:

   1.That the Wife's Application in a Case shall be and hereby is dismissed.

   2.That, upon receipt by the Husband of compensation from Roads and Maritime Services for the compulsory acquisition of part of the Husband's land at [B Street, Suburb C] (also known as [G Street, Suburb C]) ("[Suburb C]"), the Husband pay to the Wife 50% of the net proceeds thereof, with the categorisation of that payment to be as agreed between the parties or as determined by the Trial Judge.

   3.That pending the overall settlement/final Orders of the Court, the Husband be restrained by injunction from:-

   3.1Increasing the mortgage over [Suburb C];

   3.2Making use of the mortgage redraw facility secured against Suburb C;

   3.3Obtaining a further loan or line of credit in connection with [Suburb C];

   3.4Selling, leasing or assigning his interest in [Suburb C], other than in accordance with the requirements of the compulsory acquisition by Roads and Maritime Services;

   3.5Taking any steps to reduce his equity in [Suburb C], other than in accordance with the requirements of the compulsory acquisition by Roads and Maritime Services

   without the prior written consent of the Wife

   4.That the parties do all things and sign all documents necessary to obtain a valuation of the Husband's business [Vissell] Pty. Limited t/as [D Pty Ltd] and for the purposes of this valuation:-

   4.1That [Mr E] of [F Pty Ltd] be appointed as the valuer ("the valuer");

   4.2Within seven (7) days of the date of these Orders, the Wife provide to the Husband a draft joint letter of instructions;

   4.3That within a further seven (7) days, the Husband provide his amendments to the draft joint letter of instructions;

   4.4Within seven (7) days of receipt of the Husband's amendments to the draft letter of instructions, the parties submit a joint letter of instructions to the valuer;

   4.5The husband shall pay the cost of the valuation provided that 50% of the valuation fees shall be deducted from the Wife's share of her ultimate property settlement and paid to the Husband.

   5.That the wife pay the husband's costs of and incidental to these proceedings.

3. These competing applications came before me in a duty list on 16 July 2018.  The parties agreed to interim orders in the terms proposed by the husband in relation to restraints on his dealings with the Suburb C property, of which he is the sole registered proprietor.

4. There seemed no longer to be an issue with respect to caveats lodged by the wife on the title to the Suburb C property.  The husband gave uncontradicted evidence that these caveats had lapsed at the time he swore his affidavit on 13 July 2018.  Counsel for the parties indicated on 16 July 2018 that there was agreement as to orders for the appointment of a valuer of the husband's business as set out in his Response to Application in a Case.

Background

1. The husband and the wife, who are both aged 39, married in 2007 and separated on a disputed date in 2017.  The parties have three children:

   ·X born in 2008 (nine)

   ·Y born in 2010 (eight)

   ·Z born in 2013 (four).

2. After their separation the husband remained in occupation of the Suburb C property, from which he conducts a business known as D Pty Ltd or Vissell Pty Limited.  The wife and the children live in leased accommodation at Suburb H, for which the maternal grandfather currently pays rental of $650 per week.

3. The husband deposed that his business lost major contracts in June 2017 and April 2018 and, consequently, suffered a significant fall in turnover.  A draft Profit and Loss statement as at 30 June 2018 (Exhibit 2) showed a gross income of $1,868,542 and $904,850 for the years 2017 and 2018 respectively.  This draft document also showed net operating losses for each of these two years.

4. It was common ground that the Roads and Maritime Services Department has compulsorily acquired a portion of the Suburb C property.  The husband deposed that he has been offered compensation of $321,150 and is currently attempting to negotiate a greater amount.  The husband's uncontradicted evidence was that he anticipates that he will receive the compensation funds in approximately 6 to 8 weeks.  He proposed that each of the parties receive 50 per cent of these funds.

5. The wife holds no paid employment and her income consists entirely of social security benefits and child support.  The husband currently owes arrears of child support of about $6,000 (Exhibit 1) and is in dispute with the Agency as to his level of income.

6. By a Reply filed on 13 July 2018 the husband sought a final order that he pay to the wife a sum of $1.2 million and that he retain the Suburb C property and the business.  He deposed that he anticipates that his parents will advance to him sufficient money "to pay [Ms Vissell] her entitlements".

7. The parties agreed that the value of the Suburb C property is $3,315,039, after the compulsory acquisition, and the husband's Financial Statement indicated that the payout figure of the mortgage is approximately $825,000.  Accordingly, the property has a net value of about $2,490,000.  The husband deposed that the parties' assets consist otherwise of his business and two superannuation funds worth $130,799 and $20,000.

Consideration

1. The wife's applications for an order for sale of the Suburb C property, and payment to her of part of the net proceeds, together with periodic spouse maintenance must be considered in the context that she will receive approximately $160,000 from the compensation funds in six to eight weeks.  As appears below, I am satisfied that it is just and equitable that the wife receive this sum and an additional payment from the husband by way of interim or partial property settlement.

Interim spouse maintenance

1. Counsel for the wife did not concede that, when she receives approximately $160,000 from the compensation money, she cannot property contend that she is unable to support herself adequately for the purposes of section 72 of the Family Law Act 1975 (Cth) (“the Act”). It was submitted that these funds will be absorbed by the wife's existing liabilities, which she itemised in her Financial Statement as $122,809 to a litigation lender; $1,700 for a credit card and $44,352 as a HECS debt for an uncompleted degree in psychology.

2. The wife's own evidence was that her litigation lender will take payment only upon a final settlement, hence this debt need not be deducted from her share of the compensation money.  There was no evidence to suggest that the wife has any current need to pay the HECS debt for a degree which she will complete only in approximately 2 years.  Accordingly, I reject the submission that the wife will be unable to support herself adequately despite her receiving approximately $160,000 from the compensation money.

3. In these circumstances, I find that the wife will be able to support herself adequately once she receives a lump sum of approximately $160,000 in 6 to 8 weeks.  Accordingly, the wife cannot meet the threshold test for an order for interim spouse maintenance and I will dismiss this application.

Interim or partial property settlement

1. As noted, the agreed value of the Suburb C property is $3,315,039 and the net equity is approximately $2,490,000.  The value of the husband's business is a matter in dispute but should be resolved by expert evidence in the near future.  It may be that the parties can and will then focus on constructive negotiations toward an overall financial settlement.

2. In my view, the husband advanced convincing reasons why he wishes to retain the Suburb C property.  He deposed that he stores his equipment at the property and that he wishes to continue to operate his business.  I have no reason to doubt his evidence that he anticipates that his parents will assist him financially in making an appropriate payment to the wife.

3. The husband's application for final property orders is predicated upon a payment by him to the wife of $1.2 million.  It thus seems to me that I may assume that the husband is able to make such a payment to the wife.  In my view, it is arguable that justice and equity would be served if the wife receives a portion of that sum at this stage of the proceedings.  There is no doubt that she is in a difficult financial situation, with her income consisting solely of social security benefits and child support.

4. The amount sought by the wife from the proceeds of sale of the Suburb C property was $410,000, which she itemised as follows:

   ·$140,000 lump sum spouse maintenance

   ·$170,000 for legal costs and disbursements

   ·$100,000 as to interim or partial property settlement.

   As I have found above, the wife cannot establish that she is unable to support herself adequately for the purposes of section 72 once she receives her share of the compensation money. That being so, there is no basis upon which an order could properly be made that she receive a lump sum on account of spouse maintenance. Further, there was no quantification of the sum of $140,000 by reference to a notional weekly or monthly periodic payment.

5. The wife's evidence was that she has put in place arrangements to fund her litigation, by way of payment to the lender upon final settlement.  That being so, I see difficulty in her obtaining an order that the husband pay to her a lump sum to meet legal costs and disbursements.

6. I take a different view in relation to the wife's application that she receive a sum of $100,000 on account of interim or partial property settlement.  As noted, the husband's proposal for final orders contemplates a payment by him to the wife of $1.2 million.  It is clear that the wife currently lives in straightened financial circumstances and is dependent upon financial assistance from her father.

7. Practically the whole of the parties' assets and superannuation are held by the husband, either personally or through the company Vissell Pty Limited.  In these circumstances, I am satisfied that it is in the interests of justice that there be an exercise of the court's power to order an interim or partial property settlement.

8. The parties cohabited for approximately ten years and are the parents of three children. The affidavit of the husband sworn on 13 July 2018 suggests that the parties adopted traditional roles of major breadwinner and principal homemaker and carer for the children during their relationship. Accordingly, both the husband and the wife made contributions which will be recognised for the purposes of Part VIII of the Act.

1. It seems to me that it is likely that section 75(2) factors will favour the wife.  By his Initiating Application filed on 11 April 2018, the husband sought orders to the effect that the children live with the mother and spend time with him on alternate weekends, special occasions and for half of school holidays.  The wife is in the process of completing a degree but she has not held paid employment for some ten years.  The husband, on the other hand, has a history of successful operation of a small business.

2. I am of the view that it is just and equitable that the wife receive a portion of the asset pool at this stage of the proceedings, particularly in light of her straightened financial circumstances.  I will order that the husband pay to the wife, within three months, a sum of $100,000 which will be in addition to the amount equal to half of the compensation money.  Both of these sums will be characterised as interim or partial property settlements.

3. I will make an order for sale of the Suburb C property in default of such a payment to the wife by the husband.  I expect that there will be no such sale, having regard to the evidence of the husband that he anticipates that his parents will make available to him a sum of $1.2 million to facilitate a financial settlement with the wife.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 20 July 2018.

Associate: 

Date:  20 July 2018