Wasley & Wasley
[2021] FedCFamC1F 108
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1
Wasley & Wasley [2021] FedCFamC1F 108
File number(s): ADC 230 of 2020 Judgment of: BERMAN J Date of judgment: 7 October 2021 Catchwords: FAMILY LAW – EVIDENCE – Objections to evidence – Where the wife objects to significant parts of the husband’s affidavit on the basis on relevance, hearsay, argument and scandalous content – Consideration of the evidence.
FAMILY LAW – ENFORCEMENT OF ORDERS – Where the parties finalised property matters by consent – Where the parties entered into a financial agreement in relation to spousal maintenance – Where the husband has not made payments pursuant to the financial agreement since December 2020 – Where the wife seeks that the financial agreement be enforced – Where the husband seeks that the financial agreement be declared not binding or that it be set aside on the basis of undue influence, duress and/or unconscionable conduct – Where the husband seeks that the financial agreement be stayed on an interim basis – Where until the vitiating factors are established the agreement is voidable – Where the agreement is enforceable until and unless it is set aside or declared not binding – Orders.
Legislation: Family Law Act 1975 (Cth) ss 90D, 90G, 90K Cases cited: Thorne v Kennedy (2017) 263 CLR 85
Seddon, Nicholas and Rick Bigwood, Cheshire & Fifoot Law of Contract (LexisNexis Butterworths, 11th edition, 2017)
Division: Division 1 First Instance Number of paragraphs: 70 Date of hearing: 28 June 2021 and 10 August 2021 Place: Adelaide Counsel for the Applicant: Ms Lewis Solicitor for the Applicant: Weatherly & Associates Counsel for the Respondent: the respondent appeared in person ORDERS
ADC 230 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS WASLEY
Applicant
AND: MR WASLEY
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
7 OCTOBER 2021
THE COURT ORDERS THAT:
1.Pursuant to paragraphs 7 and 10 of the consent order made 25 March 2020 the husband do forthwith pay the wife’s tax for the 2017/2018, 2018/2019 and 2019/2020 financial years.
2.Until further order the enforcement but not the operation of paragraphs 2(a)(i), 2(a)(ii) or in the alternative paragraph 2(b)(i) of the financial agreement dated 23 March 2020 be stayed.
3.That the financial examination of the husband and the enforcement application of the wife be listed for hearing on a date to be fixed in consultation with a Registrar of this Honourable 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 r 17.02 Family Law Rules 2004 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Wasley & Wasley has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
Ms Wasley (“the wife”) and Mr Wasley (“the husband”) were married in 1997. There are four children of the relationship one of whom is now an adult. The children live with the wife and spend time with the husband as agreed.
The parties separated on 1 October 2016 but remained living under the same roof until a divorce order was made on 6 April 2019.
The parties commenced their relationship with few assets. The parties were in gainful employment throughout the relationship except for those periods when the wife looked after the children.
The husband continues to own and operate a business known as B Pty Ltd (“the company”) trading as B Company (“the business”). The company is the trustee of the Wasley Family Trust (“the family trust”). Income is received by the family trust from the business.
At present the wife is in a volunteer role.
On 20 January 2020 the parties joined in an Application for Consent Orders.
The application provides the basis for the settlement of property and spousal maintenance. Item 38 of the Application for Consent Orders sets out the gross weekly income for each of the parties. The wife’s weekly income amount of $1,585 is explained in item 39 as follows:
The family business solely belongs to the husband however the base wage received by the wife will continue in the form of a spousal maintenance payment.
The Application for Consent Orders also details the assets and liabilities of the parties as follows:
Wife Husband Assets $326,750 $384,727 Liabilities $153,000 $153,000 Net Worth $173,750 $231,727 Superannuation $10,767 $344,005
The parties agreed that there should be a 60/40 division of property in favour of the wife to reflect that the wife will continue to provide primary care for the children whereas the husband will retain what is described as a profitable business.
Of relevance to the current proceedings are the following matters relevant to the division of property pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”):
The husband will retain the profitable business and income thereof and pay spousal maintenance to the wife and child support for the children as agreed between the parties and reflected in the draft Consent Order and Binding Child Support Agreement herein annexed.[1]
[1] Application for Consent Orders filed 20 January 2020, item 72.
The effect of the property orders sought is that the wife would retain the property situate at C Street, Suburb D, South Australia (“the former matrimonial home”) resulting in net property to be retained by the wife in the sum of $272,750 and by the husband in the sum of $132,727. In addition, there would be an adjustment in superannuation entitlement between the parties such that the wife would retain $182,762 in gross superannuation and the husband would retain $172,005.
Each of the parties completed a statement of truth confirming that the proposed orders were the subject of agreement and that each of the parties was aware of their right to obtain independent legal advice. The wife was represented by Ms Rachel Weatherly of Weatherly and Associates. The husband was a self-represented litigant.
On 25 March 2020, consent orders were made by a Registrar which gave effect to the agreement of the parties that the husband would transfer his estate and interest of the former matrimonial home to the wife and she would relinquish any interest in the company and the family trust. The consent orders are prefaced by a detailed notation as to the intention of the parties in respect of the continued financial support of the wife. The following notations are relevant to the current proceedings:
O.The parties have a Family Trust, namely the Wasley Family Trust (“hereinafter referred to as “the family trust”) of which B Pty Ltd is the trustee, and of which the parties are designated Beneficiaries and joint appointors.
P.The Family Trust derives its income from B Company.
Q.The parties each receive a set income of $1,200 net per week from B Company.
R.The parties also additionally receive additional profit distribution through the Family Trust, with the additional profits being between $100,000 - $300,000 per annum.
S.The parties intend that these profits continue to be divided between the parties as to 65% to the husband and 35% to the wife.
T.The parties intend that the wife continue to be paid $1,200 net per week and that it be formalised by a Financial Agreement Spousal Maintenance. Annexed hereto and marked with the letter “A” is a copy of the Agreement.
U.The parties seek to arrange their finances in a manner to ensure the ongoing care and maintenance of the children of the marriage and to ensure both parties are provided for.
Accordingly, the parties entered into a financial agreement pursuant to s 90D of the Act as to spousal maintenance for the wife. The financial agreement repeats the notations as set out in the order and in respect of spousal maintenance makes the following provision:
2. Periodic payments
That by way of spousal maintenance from the date of this Order until the husband’s 65th birthday the husband shall pay to the wife:
(a)In circumstances where B Pty Ltd (“the company”) remains registered and/or profitable (or any other entity in the husband’s name or control):
(i)by way of wage, such that she receives a net sum of $1,200 per week with the company (or such entity as the case may be) paying her income tax, mobile phone and superannuation; and
(ii)a sum of $800 per month or 35% of the monthly profit of the company (or such entity as the case may be), whichever is higher, to be paid on the 14th day of the following month;
(b)In circumstances where B Pty Ltd (or any other entity in the husband’s name or control) does not remain registered and/or profitable:
(i) a sum of $1,385 per week.
A consideration of the s 90G statements forming part of the financial agreement confirms that each of the parties received legal advice prior to entering into the financial agreement.
The husband sought advice from Mr E of F Lawyers and the wife sought and obtained independent legal advice from Ms Weatherly.
By Initiating Application filed 26 March 2021 and as amended on 8 July 2021 the wife seeks final orders summarised as follows:
(1)That pursuant to paragraphs 7 and 10 of the Consent Order made 25 March 2020 the husband do pay the wife’s tax for the 2017/2018, 2018/2019 and 2019/2020 financial years.
(2)That the financial agreement dated 23 March 2020 be enforced as if it were an order of the Court pursuant to s 90KA(c) of the Act.
(3)That pursuant to paragraph 2(a)(i) of the financial agreement the husband do pay to the wife:
(a)Net wages owing as at 25 March 2021 being the sum of $19,200 plus any further arrears as at the date the application is heard together with interest.
(b)Any arrears of Superannuation owing on wages paid to the wife from 23 March 2020 to present.
(c)Any arrears of withholding tax owing on wages paid to the wife from 23 March 2020 to present.
(4)That pursuant to paragraph 2(a)(ii) of the financial agreement the husband do pay to the wife the sum of $3,200 plus any further arrears as at the date the application is heard.
(5)In the alternative to the orders sought and pursuant to paragraph 2(b)(i) of the financial agreement dated 23 March 2020 the husband do pay to the wife the sum of $22,160 plus any further arrears as at the date the application is heard.
The wife alleges that the husband made spousal maintenance payments pursuant to the agreement until 1 December 2020 but not thereafter.
On 3 December 2020, the wife received an email from the husband advising that he was unable to make the spousal maintenance payment for the following week and possibly the week after that. On 14 December 2020, the wife received communication from the husband’s solicitor Mr G seeking that the wife enter into a renegotiation of the spousal maintenance provisions of the financial agreement.
The husband contends that the financial liability of his business is at risk and he is not in a position to pay spousal maintenance either as set out in the financial agreement or at all.
The wife’s response is that the agreement is comprehensive and should the company not be viable or profitable then the agreement provides for a payment to the wife of $1,385 per week.
A further aspect of the wife’s claim is that she has an outstanding tax debt of $13,387.75 which she contends pursuant to the consent orders should be paid by the husband.
On 22 June 2021 the husband filed a Response to Initiating Application seeking the following final orders:
1.That pursuant to s90K of the Family Law Act, 1975, that the Financial Agreement dated 23 March 2020 (“Financial Agreement”) entered into between the Applicant and the Respondent be set aside.
2.That pursuant to s90K(3) of the Family Law Act, 1975, that all monies paid by the Respondent to the Applicant pursuant to the Financial Agreement be:
2.1repaid by the Applicant to the Respondent within 6 months of the date of making of this Order; or
2.2in the alternative to the order sought in paragraph 2.1 herein, be repaid by the Applicant to the Respondent in such sum and upon such terms as this Honourable Court deems fit and proper.
3.In the alternative to the order sought in paragraph 1 herein that there be a stay of any proceedings brought by the applicant by her Initiating Application filed on 26 March 2021.
4.A declaration that the Financial Agreement does not comply with the requirements of s90G of the Family Law Act 1975 and is not binding.
5.That the Applicant pay the Respondent’s costs.[2]
(As per the original)
[2] Response to Initiating Application filed 22 June 2021, page 5.
The husband also seeks interim relief that the financial agreement be stayed until further order or in the alternative that the enforcement of the financial agreement be stayed upon condition that the husband continue to comply with terms of a binding child support agreement dated 20 January 2020.
The basis for the husband’s application to set the financial agreement aside pursuant to s 90K of the Act or in the alternative that there be a declaration that the financial agreement does not comply with s 90G of the Act is set out in the husband’s affidavit filed 18 June 2021.
The husband contends that he received the proposed consent order and financial agreement from the wife’s solicitors on 3 March 2020. The husband instructed F Lawyers to provide him with independent advice as to the effect of the agreement on the rights of the parties and the advantages and disadvantages to the husband of entering into the agreement.
The husband provided the documents to his solicitors on 6 March 2020 and then received advice in relation to the financial agreement dealing with spousal maintenance of about twenty or thirty minutes duration. The husband asserts that he was not given advice as to the amount of spousal maintenance that the wife would have been awarded by a court if she had been successful in bringing a separate application.
The husband’s position is that he signed the consent order without getting advice on it but acknowledges that because of his state of mind he said to his lawyer that he just wanted to sign the document.
The husband acknowledges that on 18 March 2020 he received a letter of advice from his solicitors which advised that he should not enter into the financial agreement. The husband admits that he did not fully absorb the contents of the written advice from his lawyers and on 23 March 2020 attended upon his lawyers for a further fifteen minutes before he signed the financial agreement.
The husband summarises his position at paragraph 186 of his affidavit filed 18 June 2021:
I did not get accounting or financial advice on the terms of the Financial Agreement, [nor] was I advised to do so. I did not know what amount a court would have ordered me to pay [the wife] by way of spousal maintenance in all of the circumstances. I was not advised if and how the terms for the payment of spousal maintenance set out in the Financial Agreement would be different to an order by a court for me to pay spousal maintenance. I was not advised on the effect of any bankruptcy I went through, [or] my obligations to pay spousal maintenance under the Financial Agreement.
The husband further explains his position in a case outline document dated 31 August 2021 where he states that the advice provided by his solicitors was insufficient to overcome the effects of undue influence exercised over him by the wife.
The husband also argues that irrespective of any deficiency in the advice given by his solicitors the agreement should be set aside on the basis that he was subject to undue influence, duress and/or unconscionable conduct by the wife.
OBJECTIONS TO THE HUSBAND’S AFFIDAVIT FILED 18 JUNE 2021
The wife has objected to significant parts of the husband’s affidavit on the basis of relevance, hearsay, argument and scandalous content.
The parties were members of the H Church (“HC”). Paragraphs 6 to 18 of the husband’s affidavit set out the husband’s understandings of the beliefs of the HC that hell is understood to be “a fiery furnace in which sinners burnt for eternity and would never have an opportunity to have a relationship with a loving God”[3] and that whilst a member of the HC could gain salvation, the HC leadership considered that salvation could be lost by the commission of sin. The husband states that the parties had engaged in pre-marital sex which caused embarrassment and ultimately suspension from the HC for six months in or around 1999.
[3] Affidavit of the husband filed 18 June 2021, paragraph 10.
Paragraphs 6 to 15 of the husband’s affidavit have no relevance to any issue in the proceedings and in particular the husband’s contention that the wife’s conduct was such that the financial agreement should be set aside.
Paragraphs 35 to 129 set out the husband’s observations of the family life in their home but more specifically the husband’s assertion that the wife gained a position of authority, influence and ascendancy over the husband by her ongoing criticism of the husband not being an appropriate spiritual head of the family and what he perceived to be her superior knowledge of biblical scripture.
The husband alleges that from late 2014 the wife was involved in a different church called “the J Church”. The husband refers to the wife volunteering at K Health Service where she came into contact with a patient. The husband alleges that the wife formed an emotional attachment to the patient and had fallen in love with him.
According to the husband, the wife’s conduct with the patient was such that she was refused entry to K Health Service.
The reference by the husband to an alleged relationship between the wife and the patient can be considered as scandalous, prejudicial and with no probative value.
At paragraphs 94 to 101, the husband refers to cosmetic surgery undertaken by the wife in or about 2017. The alleged medical procedure undertaken by the wife has no relevance to any issue in the proceedings and could not be a basis to support the husband’s contention that he entered into the financial agreement as a result of the wife’s undue influence, duress or unconscionable conduct.
The husband refers to a diagnosis in July 2018 that he was diagnosed with a sexually transmitted disease. Apparently, the husband’s guilt was such that he felt compelled to enter into the property settlement discussions resulting in a consent order and a financial agreement.
Paragraphs 35 to 129 are not relevant to an issue in the proceedings.
Paragraphs 130 to 166 set out the husband’s version of the property and financial settlement negotiations.
At paragraph 150, the husband summarises his apparent inability to speak against the wife’s proposal for property settlement and spousal maintenance as follows:
Throughout December 2019, [the wife] and I continued to discuss a financial settlement mainly by [the wife] raising issues and asking questions and I responding. I was feeling anxious, guilty, upset and depressed because:
a) I was not able to see my children;
b)Of my feeling through statements [the wife] had been making as set out earlier in this affidavit that I was not a good father or husband;
c)I was feeling guilty about the events of the massage in February 2018 and feeling despair that I might be going to hell because I had lost my salvation;
d)Of being told by [the wife] that I had to choose between seeing my children or seeing Ms L; and
e)The continual pressure by [the wife] to reach a financial settlement without being able to have a proper discussion about it and to reflect about the terms of the settlement properly.
The husband alleges that from January 2020 he was under increasing pressure from the wife to sign off on the financial settlement given that she was applying to refinance the former matrimonial home. The husband’s position was set out in paragraph 166 in the following terms:
I was worried that if I did anything but agree to the terms of the settlement, that [the wife] would launch into an emotional attack on me and continue to impede my wanting to see our children, which I was not in any state of mind to deal with. However, I had never agreed that B Company was valued at $100,000, and I did not agree with a 35% profit distribution. The Motor Vehicle 1 was not a personal asset but belongs to B Pty Ltd. The figure of $100,000 to $300,000 supposedly available profit for distribution, after payment of wages to [the wife] and I was also incorrect.
The husband states that in November 2019 the wife moved from the J Church to another Christian church called “M Church”. The pastor at the church was the wife’s solicitor Ms Weatherly. It is a matter that Ms Weatherly ought to reflect upon as to whether it is appropriate that as the wife’s pastor, she should also be the wife’s solicitor.
Paragraphs 130 to 160 have no relevance to any issue in the proceedings.
LEGAL PRINCIPLES
The husband seeks an order that pursuant to s 90K of the Act the financial agreement is void, voidable or unenforceable and that it should be set aside.
The relevant section provides:
90KCircumstances in which court may set aside a financial agreement or termination agreement
(1)A court may make an order setting aside a financial agreement or a termination agreement if, and only if, the court is satisfied that:
(a) …
(aa) …
(ab) …
(b) the agreement is void, voidable or unenforceable; or
(c) …
(d) …
(e)in respect of the making of a financial agreement – a party to the agreement engaged in conduct that was, in all the circumstances, unconscionable; or
(f) …
(g) …
The reference in s 90K(1)(b) to the agreement being void, voidable or unenforceable encapsulates the common law and equitable principles of misrepresentation, undue influence, mistake and duress.
The husband contends that the wife engaged in unconscionable conduct in respect of the making of the agreement. It is argued that the husband’s consent to the agreement was obtained as a result of duress and/or the undue influence of the wife.
Duress
In Thorne v Kennedy (2017) 263 CLR 85 (“Thorne v Kennedy”) the plurality of the High Court provide a convenient summary of the relevant principles of duress, undue influence and unconscionable conduct.
In relation to the factors necessary to establish duress, the following is of assistance:
26.The vitiating factor of duress focuses upon the effect of a particular type of pressure on the person seeking to set aside the transaction. It does not require that the person's will be overborne. Nor does it require that the pressure be such as to deprive the person of any free agency or ability to decide. The person subjected to duress is usually able to assess alternatives and to make a choice. The person submits to the demand knowing "only too well" what he or she is doing. As Holmes J said in Union Pacific Railroad Co v Public Service Commission of Missouri:
"It always is for the interest of a party under duress to choose the lesser of two evils. But the fact that a choice was made according to interest does not exclude duress. It is the characteristic of duress properly so called."
27.Historically, the primary constraint upon an action based on duress was the threats that were recognised as sufficient for an action. The early common law rule was that the duress which was necessary to set aside an agreement required an unlawful threat or conduct in relation to the person's body, such as loss of life or limb. Even duress in relation to a person's goods was not a basis upon which an agreement could be avoided at common law, although it was a basis for restitution of a payment of money. The abandonment of this common law restriction introduced a difficult question. This question is whether duress should be based on any unlawful threat or conduct or, alternatively, whether other illegitimate or improper, yet lawful, threats or conduct might suffice. In 1947, Dawson described that question as one "which has chiefly arrested the modern development of the law of duress".
(Footnotes omitted)
Unconcionability
The plurality of the High Court in Thorne v Kennedy (supra) discussed the relevant legal principles in relation to unconscionable conduct as follows:-
38.A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage “which seriously affects the ability of the innocent party to make a judgment as to [the innocent party’s] own best interests”. The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring “victimisation”, “unconscientious conduct”, or “exploitation”. Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage.
39.In Commercial Bank of Australia Ltd v Amadio, Deane J said that the equitable principles concerning relief against unconscionable conduct are closely related to those concerned with undue influence. The same circumstances can result in the conclusion that the person seeking relief (i) has been subject to undue influence, and (ii) is in a position of special disadvantage for the purposes of the doctrine concerned with unconscionable conduct. For instance, in Diprose v Louth [No 1], the trial judge, King CJ, observed that both doctrines were satisfied where the defendant "was in a position of emotional dominance which gave her an influence over the [plaintiff] which she exercised unconscientiously to procure the gift of the house". Before the High Court in that case, Mr Diprose relied only upon the ground of unconscionable conduct.
39.Although undue influence and unconscionable conduct will overlap, they have distinct spheres of operation. One difference is that although one way in which the element of special disadvantage for a finding of unconscionable conduct can be established is by a finding of undue influence, there are many other circumstances that can amount to a special disadvantage which would not establish undue influence. A further difference between the doctrines is that although undue influence cases will often arise from the assertion of pressure by the other party which might amount to victimisation or exploitation, this is not always required. In Commercial Bank of Australia Ltd v Amadio, Mason J emphasised the difference between unconscionable conduct and undue influence as follows:
"In the latter the will of the innocent party is not independent and voluntary because it is overborne. In the former the will of the innocent party, even if independent and voluntary, is the result of the disadvantageous position in which he is placed and of the other party unconscientiously taking advantage of that position."
(Footnotes omitted)
Undue Influence
The High Court in Thorne v Kennedy (supra) summarised the relevant principles with respect to undue influence as follows:-
30In Allcard v Skinner, Lindley LJ said that "no Court has ever attempted to define undue influence". One reason for the difficulty of defining undue influence is that the label "undue influence" has been used to mean different things. It has been used to include abuse of confidence, misrepresentation, and the pressure which amounts to common law duress. Each of those concepts is better seen as distinct. Nevertheless, the boundaries, particularly between undue influence and duress, are blurred. One reason why there is no clear distinction is that undue influence can arise from widely different sources, one of which is excessive pressure. Importantly, however, since pressure is only one of the many sources for the influence that one person can have over another, it is not necessary that the pressure which contributes to a conclusion of undue influence be characterised as illegitimate or improper.
31. …
32.The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated". Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly sub-standard" as a result of the effect upon the person's mind of the will of another.
(Footnotes omitted)
Where the vitiating factor as asserted by the husband is undue influence, unconscionable conduct or duress, until the relevant ground is established, the agreement is voidable.[4]
[4] Nicholas Seddon and Rick Bigwood, Cheshire & Fifoot Law of Contract (LexisNexis Butterworths, 11th edition, 2017) 777, 808, 823.
The husband does not assert that the agreement is either void or voidable by reason of mistake, misrepresentation, uncertainty or incompleteness.
A voidable contract exists where a party establishes that the agreement to enter into the contract was based upon a false premise and that if the true nature of the elements of the contract were known then a party would not have entered into the agreement. The agreement is enforceable until a party establishes that grounds exist for it to be voided.
A void contract is inherently unenforceable and cannot be rectified or ratified. The husband is seeking a declaration that the agreement is not a binding financial agreement pursuant to s 90G of the Act and if binding that it be set aside pursuant to s 90K of the Act.
If the husband is successful then the agreement is not binding on the parties and does not oust the jurisdiction of the court.
CONCLUSION
The husband seeks that the enforcement of the financial agreement be stayed until further order. The wife argues that the contract whilst voidable, is legally valid and binding unless until it is rescinded or set aside. Moreover, the wife contends that there is little substance in the husband’s contention that the advice given by his solicitors both orally and in writing could be considered as being no advice at all. The wife argues that she was entitled to rely upon the relevant certificate of advice given that the content of the financial agreement was entirely consistent with the intention of the parties as set out in the Application for Consent Orders and the notations in the final order for property settlement.
I consider that the husband presents no argument as to paragraphs 7 and 10 of the consent order requiring the husband to pay the wife’s tax for the 2018, 2019 and 2020 financial years.
The financial agreement is enforceable until and unless the husband is successful in having the agreement either set aside pursuant to s 90K of the Act or that it be declared non-binding.
It must be remembered that the periodic payments that are to be made to the wife pursuant to paragraph 2 of the financial agreement provide that the spousal maintenance is to be paid by way of a wage in the sum of $1,200 per week and a further sum of $800 per month or 35 per cent of the monthly profits of the company. If the company is not financially viable or ceases to exist then the husband is to pay the sum of $1,385 per week.
The financial circumstances of each of the parties is poor. The wife’s income is $1,020 per week being the child support paid by the husband which is offset by the wife’s personal expenditure in the sum of $2,551.
The husband discloses his average weekly income in the sum of $1,755 from B Company which is offset by personal expenditure of $2,100 per week. Of greater relevance to the circumstances of the parties is that the husband is possessed of property to the value of $7,937 but has liabilities of $153,521.
The parties should give careful consideration to the reality of their circumstances. An order that would enforce the amounts currently claimed by the wife is unlikely to be satisfied from the assets of the husband.
Enforcement of the order and the financial agreement, whether upon the terms and conditions of the agreement or by treating the relevant terms as an order, will ultimately result in proceedings involving an exercise of the Court’s discretion as to whether to enforce.
I consider that the proceedings should be listed for a financial examination of the husband and an enforcement of the wife’s outstanding taxation liability as set out in paragraph 2 of the Initiating Application. Enforcement of paragraphs 4, 5 and 6 will be stayed as to enforcement but not operation pending the financial examination of the husband and the enforcement hearing.
I make orders as appear at the commencement of these reasons.
I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 7 October 2021
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