Wavers-Ors and Wavers-Ors

FAMILY COURT OF AUSTRALIA

WAVERS-ORS & WAVERS-ORS

[2007] FamCA 1551

FAMILY LAW – PROPERTY – Value of property – Expert evidence – Where expert makes preliminary conclusion of wastage of assets by Husband via gambling – Where Husband has failed to make adequate financial disclosure – Judge issued self-executing order restraining Husband from participation in proceedings until adequate disclosure made

FAMILY LAW – PROPERTY – Exclusive use and possession of matrimonial home – Whether case law thereto applicable to investment property where only one spouse resides – Where Wife appointed trustee in respect of investment properties of the marriage – Where Wife purported to oust Husband from investment property – Application denied

APPLICANT:

Ms Wavers-Ors

RESPONDENT:

Mr Wavers-Ors

FILE NUMBER:

BRF

2309

2006

DATE DELIVERED:

7 December 2007

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Barry J

HEARING DATE:

6 & 7 December 2007

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Mr Habermann, Solicitor of Habermann & Associates appeared for the Applicant Wife

COUNSEL FOR THE RESPONDENT:

Mr Hanlon of Counsel appeared for the Respondent Husband

SOLICITOR FOR THE RESPONDENT:

Rosen Lawyers

Orders

IT IS ORDERED THAT:

The Wife be appointed as Trustee for the Husband and the Wife to manage the three rental properties situated at:
·…, F, in the State of Queensland;
·…, B in the State of New South Wales;
·…, T, New Zealand.
The Wife to pay immediately into the Commonwealth Bank account any rental moneys received from the New Zealand property (the T property) from the date of Justice Carmody’s Order, being 11 October 2007, to the present time and every four (4) months thereafter.
The Wife to receive $35,000 from funds held in the Commonwealth Bank account by way of partial property settlement.
Within twenty-eight (28) days the Husband is to provide to the joint expert, Mr C, and the Wife’s legal representatives all documents in his possession or control or any document he is capable of obtaining from a financial institution, finance company or credit card company to allow clarification of the responses given by the Husband’s legal representatives in the document faxed to Mr C at 2.00 pm on 5 December 2007.
In the event the Husband has not complied with Order 4 above within twenty-eight (28) days he is not to be at liberty to take any further part in contesting the Wife’s claim without the express leave of the trial Judge.
All parties’ legal representatives given leave to photocopy the Husband’s handwritten journal and loose page of moneys expended.
Costs reserved.
The Wife’s Application in Form 1 filed 15 August 2006 be adjourned before the Honourable Justice Barry at 10.00 am on 16 January 2008 for review.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRF2309/06

MS WAVERS-ORS

Applicant

And

MR WAVERS-ORS

Respondent

REASONS FOR JUDGMENT

The litigation before the Court was initiated by the wife when she filed an application seeking orders for property settlement. The orders that she seeks appear to be contained in an application for final orders of 15 August last year where she seeks an order that the property of the parties be divided 75 per cent to herself, 25 per cent to the husband. She also seeks an order that the husband pay to the wife by way of periodic spouse maintenance the sum of $500 per week for a period of five years. She also seeks an injunction restraining the husband from coming within 200 metres of any place at which the wife is either residing or working. She seeks an order for payment of her costs.
For his part, the husband filed a response to an application for final orders on 27 September last year. He seeks orders that Orders 1, 2, 3, 4 and 5 sought in the application be dismissed. An order pursuant to the property settlement provisions of the net property and financial resources of the parties be divided 45 per cent to the wife, 55 per cent to the husband. He also seeks an order for costs.
On today's date I am asked to consider three applications filed by the wife on 13 November, 27 November and 6 December respectively. The last two applications were filed by leave. In the first application the wife seeks orders in the following terms:
(1)That the wife be appointed as the trustee for the husband and the wife to manage the real estate properties of them, being the properties situated at [F], [B] and [T].
(2)That a mandatory injunction be granted directing the husband to require and direct all tenants of the property situated at [F], all tenanted from time to time, to deal with in respect of payments of rentals of that property or any other matter affecting that property with the wife only.
(3)That Order 5 of the order of the Honourable Carmody J of 11 October 2007 be varied by adding at the end thereof
Save and except in respect of the property at [T], New Zealand.
She also seeks an order for costs.
In the second application I am asked to deal with par 1 is not pursued.
Paragraph 2 where the wife sought that the husband pay $10,200 into a Commonwealth Bank account is also not pursued.
Paragraph 3 is:
That the husband within 14 days comply with the request to the single expert, Mr [C], to answer queries and provide documentation as set out in his report dated 26 November 2007.
It would seem that that is at this point in time simply a repetitive order and I indicated that if persuaded to do so I would, in making such order, draft it in terms of a self-executing order.
There was an order sought for a conciliation conference with priority. Paragraph 6 was:
An injunction was sought restraining the husband from attending or residing at the property situated at [F].
She also seeks an order for payment of her costs.
The application filed yesterday sought that a sum of money outstanding to Mr C, the single expert accountant in this matter, be paid and that there be released to the wife the sum of $35,000 and that the nature of the latter payment be reserved to the trial Judge and an order that the husband and wife authorise the Commonwealth Bank to make such payments and an order that the directions be given for the closure of this matter with priority. Again, an order for costs was sought.
By way of background on 11 October 2007 Carmody J made an order that the parties were to ensure all rental moneys from the three rented properties were paid to the parties' joint account with the Commonwealth Bank. I am informed that so far as the F property is concerned to date the husband has only made one payment of $70. It is clear for her part in so far as she has got control of the property the wife has been non-compliant with the order in relation to the T property.
The husband has not filed a response to any of the three applications brought. On yesterday's date counsel appeared for the husband. He informed the Court the husband's position was that he opposed the wife being appointed trustee to manage the parties' rented properties. He said the husband undertook to pay all rental moneys for the F property backdated as from the date of Carmody J's order, namely 11 October, and in future to comply in full with the terms of Carmody J's order, which I note was in fact a consent order.
The husband opposed the T property being excluded from the terms of the order of 11 October. He opposed the payment of $35,000 to the wife as sought by her. Counsel's final submission was that if a self-executing order was to be made then the husband should be given 28 days in which to comply with the terms of that order rather than any lesser period. In relation to costs orders sought counsel advised he was unable to make any submission on the issue of costs. It was not made clear why this was the case.
I turn to consider the various orders sought by the wife. I deal, firstly, with the application that she be appointed trustee for the parties to manage the rental properties. Mr C, the forensic accountant appointed as a single expert, has prepared four reports. There is an earlier report of July this year, a detailed report, of 26 November 2007 and there are two letters - a letter of 30 November and a letter of 5 December.
At paragraph 4.2 of the letter of Wednesday this week Mr C has this to say:
A summary of my results so far are set out hereunder
Unresolved and unexplained transactions
The left-hand column then is "withdrawals" the right-hand column is "deposits" and he lists a whole series of unresolved and unexplained transactions under the following headings:
Superannuation fund, [W] Pty Ltd, business for cheques, [W] Pty Ltd, deposits, transfer between [W Pty Ltd] and the husband, transfers from CBA loan, from the loan account, cash transactions, unaccounted transfers from the husband's accounts and [W Pty Ltd] account and unbanked rent. The total of withdrawals is $2,127,690. Unaccounted for deposits $204,480.
The wife accuses the husband of gambling large sums of money. She accuses him of forging her signature on certain bank documents. She says he has failed to provide proper disclosure. He has failed to account properly for large sums of cash. He has failed to account properly for rental moneys received from the F property contrary to the express terms of Carmody J's order.
I have to say that I have read the affidavits of the husband that were relied on. The husband’s blatant non-compliance with Order 5 of Carmody J's order is not properly explained in my view. If the husband believed he only had to bank rental moneys after the deduction of all expenses he should have been disabused of that interpretation by a letter from the wife's solicitors to his solicitors of 25 October. That letter is referred to in paragraph 10 of the wife's affidavit of 13 November. She says in paragraph 10:
On 25 October 2007 my solicitors on my instructions wrote to Mr Rosen, my husband's solicitor, and in that letter stated:
'We're informed by our client that inquiries made of the bank reveal that no moneys have been paid into account by the husband in respect of rental receipts of his notwithstanding the order of the Court. Please provide an explanation why your client has not complied with the orders within 24 hours.’
The pool of assets which remains is said to be in the order of $700,000 net. I have not had the opportunity to verify that, but it appears to be common ground.
There is evidence, some might say strong evidence, in Mr C's reports that large sums of money have been lost in gambling transactions by the husband. There is either direct evidence of that or evidence from which a reasonable inference could be drawn. The husband for his part denies this is the case, but has not provided an explanation to satisfy Mr C of the whereabouts of unaccounted for funds. In the whole of the circumstances I find it appropriate to make an order appointing the wife as trustee to manage the three rental properties.
I turn to consider whether the T property should be excluded. In her affidavit of 13 November the wife says at paragraph 14:
In respect of the rental income of the [T] property and in respect of Order 5 of Carmody J's order of 11 October 2007 I say that my son does not pay rent by agreement between he, myself and my husband on that property. He pays his mortgage of his one-third interest in the property. The property is rented out to others from time to time, the rentals are not great. I have told my son of the particulars of Order 5 of Carmody J's order, however, as the rental incomes from the property are not great there would be a loss to myself and my husband in having to transfer from New Zealand to an Australian bank account two-thirds, my husband and my share, of any rental income. The minimum transfer bank charges to transfer moneys from New Zealand to Australia are $28.
I am seeking an order that Order 5 of Carmody J's order be varied ab initio in light of the other applications that I make relevant to my being trustee of myself and my husband for the management of the properties and in respect of the other properties and in respect of the undertaking that I am prepared to give to this Court.
What I propose to do is to order the wife to pay immediately into the Commonwealth Bank account any rental moneys received from the date of Carmody J's order to the present time. I will make an exception that thereafter she only has to account every four months, that is three times a year, three times 28 is $84. It's not going to break the bank in this whole matter and it at least accords with the principle if it is good for one party it is good for the other. In any event, the wife is going to be the trustee for all properties, but she is going to have to account for all properties.
The orders, I note, of Carmody J were consent orders, they were only recently made. I am not minded to vary them on the basis of the explanation put forward by the wife. Under the trusteeship order that I have just made the wife will have sole control as to whether any property is rented and, if so, on what terms.
I turn to consider the application filed on 27 November. The wife does not press for paragraph 2, I have indicated that, that is the $10,200. In relation to paragraph 3 as to whether the husband complies within 14 days I have indicated I will be dealing with that separately in terms of a self-executing order.
The wife seeks that an injunction be granted restraining the husband from attending or residing at the property at F. The wife says her belief is he does not permanently reside at that address. She says he normally resides at other premises, but she does not know where. I could not find any reference to that. The property at F I am informed consists of two apartments. The husband says he occupies one apartment solely, it is a two bedroom apartment, the other apartment has four bedrooms and that apartment is individually rented out in a boarding house type arrangement so that each occupant of a bedroom pays separate rent. The property is rented to friends of the husband.
I do not accept that the Court has power to make an order as sought. The case law on exclusive possession of the matrimonial home is clearly distinguishable in so far as the current matter does not involve the matrimonial home but rather an investment property where only one party is presently residing.
Further, exclusive possession orders have only been made in circumstances where it was unreasonable or impractical for parties to continue living in the same house (Fedele (1986) FLR 1069). I cannot find any reported case law or any unreported cases where the kind of orders proposed have been made. I asked for any such reference but was not provided with same. The view that I take is it would create a dangerous precedent. I cannot find any statutory basis for making the order. I expect to have this matter finalised before a Judge in the space of three to four months, probably six months at the outside. The amount of income payable by the husband over that period of time is a relatively minor amount.
For the reasons given I decline to make an order in terms as sought. I find that I do not have the power to do, but even if I did in the exercise of my discretion I would decline to do so.
I term to consider the application of 6 December. The wife seeks an order that she receive $35,000. This was described in rather scathing terms by the respondent's counsel as a Christmas gift for either the wife or her solicitor. The wife in her affidavit sworn on 6 December has this to say - paragraph 10 onwards:
I am seeking an order that part of the moneys held in the Commonwealth Bank of Australia in a joint account be released to me because of my urgent needs. In this regard I say I have borrowed moneys through Impact Funding for litigation lending of some $85,000. These have been used to partly allay my legal costs to date of over $130,000 to $140,000. In addition, there has been paid to me.
I assume that means "by me"
directly to Mr [C] approximately $10,000.
Joint account $18,000 to $19,000 gone to Mr C. She has recently received an account for the month of November from the solicitors for $14,340. She says that she has paid from income that she has earned, savings and borrowings from friends, a total of some $60,000 to reduce the mortgages on various properties.
She has paid $27,000 on M and B properties for improvements, preparation for sale, et cetera, $2000 on the F property, $6000 on T property. She points to the fact that the husband has not accounted for any rental income from the F property. She says she has borrowed some $17,000 in credit card debts and she owes family and friends approximately $30,000.
I will make the order as sought. I do so on the basis that it would appear prima facie from Mr C's report that the husband has gambled away a large sum of money. If that be the case it would seem the wife is entitled to the lion's share of the remaining assets.
The distribution by way of partial property settlement would in all the circumstances seem perfectly reasonable given the financial position the wife finds herself in vis-a-vis the position of the husband as set out in Mr C's report, that seemingly he has squandered large sums of money and does not account for same. The husband's position may be perfectly justified at some later point in time, but the fact that the wife has received $35,000 out of a total pool of some $700,000 would be neither here nor there in the long-term. The wife has made out a case that she has considerable debts and has paid large sums of money for the joint benefit of the parties.
I turn to consider the terms of the self-executing order. Clearly, Mr C was far from satisfied with the level of disclosure by the husband. He had this to say in his letter of 5 December under the heading page 1, paragraph 2:
Husband's compliance.
(a)Prior to the issuance of my report on 26 November 2007 I presented both parties, through their respective solicitors, with a list of queries in order to aid in the completion of my report.
(b) [The wife] complied with this request and her answers were included in my report, however, no response was received from [the husband].
He says this at paragraph 2(d):
I have been provided with a letter signed by both solicitors dated 29 November 2007 requesting me to advise the level of compliance by [the husband] to my request. At 2 pm today I received a facsimile from the husband's solicitors with responses to my queries. A copy of the responses, together with a legend to comments, is attached.
And he then tabulates headings of responses, the source in the report, the deposits and withdrawals, I do not need to recite all that.
He concludes:
"I am not satisfied with the responses provided as most of them are not able to be followed through.
For example, he says in (ii) at the bottom of that page:
Item 4(f) relating to withdrawals totalling $951,279.73. The husband says to refer to his affidavit. I do not have a copy of the affidavit.
It seemed to be general consensus from counsel for the husband, legal representative for the wife and myself that having perused various affidavits of the husband on even the most generous of interpretations one is unable to find any reference in those affidavits by way of an explanation for these unaccounted for transactions.
So in the whole of the circumstances I find a line has to be drawn in the sand if a party is deemed by the single expert not to be complying. In relation to the term of a self-executing order I have relied on my legal associate, to provide me with the following cases. Feurae v Tidwell, a decision of the Full Court Nicholson CJ, Lindenmayer and Joske back in 1995, and that is reported at 19 Family Law Reports at 346. There is a decision of the High Court in FAI General Insurance Company v Southern Cross Exploration and that is at 165 Commonwealth Law Reports at page 268. There is a recent case in the Supreme Court of Queensland by Wilson J Mango Boulevard v Spencer and that is at (2007) QSC 276. I have also referred to an English Court of Appeal decision of Arrow Nominees v Blackleach.

I am satisfied that providing there is the ability to review the guillotine type order that in appropriate cases such an order can be made. The Court has the power to make such an order. What I do need to see before I make any order is the husband's solicitor's letter forwarded to him on 5 December.
RECORDED: NOT TRANSCRIBED
Mr C says in his letter of 5 December:
At 2 pm today I received a facsimile from the husband's solicitors with responses to my queries.
RECORDED: NOT TRANSCRIBED
The husband's comments down the - he has made notations down the right-hand column
Refer New Zealand sale.
something
refer affidavits, deposits for real estate purchases
et cetera borders on the facile as being an adequate explanation endeavouring to explain to one and all all of the financial dealings.
In these circumstances I propose to make orders in the following terms. Within 28 days- - -
RECORDED: NOT TRANSCRIBED
ORDER DELIVERED
I propose to adjourn this matter through to 16 January 2008 at 10.00 am when I will review personally what I consider to be the level of compliance by the husband. The matter can be taken up again at that point in time.
I am making the wife trustee in relation to the F property - well, all of the properties. If the wife wishes to terminate the tenancies for those occupants with what I think is described as apartment 1 she is at liberty to do so. She can give directions that she wants payments made by automatic bank transfer, I assume they are currently being paid in cash because there does not seem to be any cheques cashed anywhere. But anyway, that is all part and parcel of her duties as trustee, they are very broad powers for her to act on behalf of - but she has obligations as trustee to act appropriately I am confident her solicitor will explain those duties.
At this stage I will reserve on costs in relation to these various matters. The matter is back on before me on 16 January.
RECORDED: NOT TRANSCRIBED
Copies of that document, the loose page and the other page, any other part of the document that they wish to photocopy they are at liberty to do so.
RECORDED: NOT TRANSCRIBED

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry

Associate

Date: 7 December 2007

[2007] FamCA 1551

7 December 2007

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Equity & Trusts

Legal Concepts

Costs

Discovery

Injunction

Remedies

Procedural Fairness