WHITE & WHITE

[2016] FamCA 490

FAMILY COURT OF AUSTRALIA

WHITE & WHITE [2016] FamCA 490

FAMILY LAW – INTERIM PROCEEDINGS – amending orders - property

Family Law Act 1975 (Cth)

APPLICANT: Mr White

RESPONDENT: Ms White

FILE NUMBER: CAC 1775 of 2015

DATE DELIVERED: 16 June 2016

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 8 June 2016

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Self-represented

COUNSEL FOR THE RESPONDENT: Mr G Howard

SOLICITOR FOR THE RESPONDENT: Phelps Reid

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

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 1775 of 2015

Mr White

Applicant

And

Ms White

Respondent

Summary of Matter

This hearing relates primarily to interim orders sought to modify previous orders made by Watts J on 12 February 2016, and by Registrar Payget on 3 March 2016, and also to access to records.  The orders sought concern the husband’s access to items located at the former matrimonial home, the management of the finances and properties under dispute, and the husband’s ability to discharge his duties as director of the family company and trust and his ability to prepare the case whilst restrained from accessing the location where pertinent company and trust documentation is located.

REASONS FOR JUDGMENT

1. The material relied upon by the parties is as follows:

   a)For the husband:

   Exhibit H1 - email correspondence with NAB;

   Exhibit H2 - email correspondence with HSBC and;

   Exhibit H3 (Subject to relevance) - letter regarding US litigation.

   The husband further relied upon his affidavit and applications filed 7 April 2016.  The husband initially sought to rely upon an affidavit filed in prior proceedings between the parties in the Supreme Court to address generalised allegations of impropriety.  Mr Howard for the wife indicated that he was not going to seek any finding of impropriety in respect of the husband. When taken to specific matters within the affidavit material that the Supreme Court affidavit was said to address the Supreme Court material did not appear to assume significance and its admission was not pursued. 

   b)The wife relied upon her affidavit and application filed on 26 April 2016 and objections were taken to a number of items on the basis of relevance and a number of the paragraphs were not read.  These have been indicated in pencil markings on the sealed copy retained on the Court file.

2. The husband then proceeded through the orders sought. 

Husband’s Application for Orders 2.1 - 2.2.2

1. Orders 2.1 through to 2.2.2 dealt with access to the former matrimonial home and storage rooms in the parties’ rental properties to facilitate the collection of the items set out in Annexure A of the Consent Orders of 3 March 2016 made by Registrar Payget. 

2. The husband relied upon Annexure B in his affidavit to assert that the Consent Orders of 3 March 2016 did not properly represent the agreement between the parties.  I am unable to come to such a finding on the basis of the husband’s affidavit material. In particular, Annexure B does not lead to the conclusion sought by the husband. The husband’s evidence failed to clearly support his contention that the orders did not represent the agreement between the parties. 

3. I note that the particular issue of dispute between the parties is the method by which items will be identified and collected from the former matrimonial home as falling within Annexure A of the Orders of 3 March 2016.  The husband did not appear to identify items that were either added to or missing from the list that was agreed.  The issue was the mechanism.

4. The wife deals with the question of collection at [23] and following of her affidavit and further at Exhibit W1. 

5. The husband relied upon [1(c)] and [1(d)] along with [2] and [3] of his affidavit. 

6. This material indicates that the wife has prepared a collection of items that she asserts are in conformity with Annexure A of the 3 March 2016 orders, with the single exception of a bed.  She asserts that what she has provided exceeds what she was required to under those terms.  A number of offers have been made, on the evidence of the wife, to allow the husband to collect the items that she has set aside.  This is most clearly evidenced in Exhibit W1.  As yet it appears that the husband has taken no steps to collect the property, nor to ascertain whether the collection matches or does not match the description in the orders. 

7. The wife seeks relief from the provision of a queen bed and mattress in Annexure A of the Orders of 3 March 2016, although such relief did not form part of her response.  The wife seeks this relief on the basis set out at [27] of her affidavit that she mistook the bed in the spare room as being a queen sized bed when it was in fact a double bed.  She has packed the double bed instead of the queen sized bed that she currently sleeps on.  There is no dispute that the agreement between the parties was that the husband would be provided with a queen size bed.  I do not propose to amend the orders as they stand in relation to the bed.  The orders do not compel the wife to provide the bed that she asserts she is emotionally attached to.  The fact that the wife may have thought that compliance with the order could have been achieved by virtue of a particular bed does not negate the actual agreement between the parties that the husband would receive a queen bed.

8. At present an offer is open as set out in W1 that would allow the husband to collect the items until 8 July 2016. The arrangement allows for collection to occur during working hours. 

9. The Orders of 3 March 2016 were made by consent while both parties were legally represented. The orders provide for the collection of items from premises with such collection to operate as an exception to the restraint from the husband attending at the Suburb B property.  They make no provision for the mechanism by which the items are to be accumulated for collection and make no provision for an attendance other than for the purpose of collection. 

10. At present the wife asserts that she has collated the items in accordance with the Orders.  No evidence is put to suggest that this has not in fact occurred.  Given that the husband has not yet either collected or even examined the items no such assertion can yet be properly made.  It cannot be established that the order ought to be amended due to a lack of compliance, nor due to a lack of facilitation on the part of the wife.  In fact the terms which were arrived at were the product of settlement of the Domestic Violence Order proceedings in the Magistrates Court of the Australian Capital Territory.  Under circumstances where there is no change of circumstances since the making of Consent Orders which resolved interim proceedings in the Family Court and final proceedings in the Magistrates Court, and in the absence of any deficiency being identified in the operation of or compliance with the orders, I decline to vary the orders in the manner sought by the husband. 

11. However, given that the time has now lapsed for the collection as set out at Order 3 of the Orders of 3 March 2016, that Order is varied such that it incorporates the offer as set out in Exhibit W1.  That is, the husband is at liberty to attend and collect the items collected by the wife on any Tuesday, Wednesday or Thursday, after the giving of one weeks’ notice of his intention to collect the items on a specific date and at a specific time between 10am and 5pm, up until 8 July 2016.  This should not be seen as preventing the parties from arranging an alternate time for the collection of items and an order will be made to authorise this.

Husband’s Application for Order 2.3

1. The husband relied upon [8-13] of his affidavit along with Exhibit H2.  He orally amended the order sought to replace the figures of $7,200 with a figure of $13,520, and a period of 12 February to 8 April 2016 with a period of 12 February to 3 June 2016.

2. He likewise amended the figure at [12] of his affidavit, which was read in support of this order sought, so the figure of $76,656 was changed to $67,656, the figure of $958 was changed to $845, and the figure of $38,328 was changed to $33,828.  These changes were occasioned by a recalculation in the payments that were due in respect of the HSBC loan, as the HSBC loan had become a principal and interest loan. 

3. The essence of the justification of this order sought was the assertion that the wife’s conduct was not in compliance with the Order made by Watts J on 12 February 2016.  In particular it was said not to be compliant with Order 8 that dealt with the payment of rental income.  I set out the terms of the relevant below:

   Unless the parties otherwise agree, both parties are to receive any surplus from the rental income from the rental properties after the wife has retained from gross rental incomes, sufficient monies to attend to anticipated outgoings from time to time being mortgages, rates, insurances and regular maintenance but excluding major capital items.

4. Two complaints were made by the husband.  The first is the method of calculation of expenses by the wife.  He asserted that she had calculated expenses on an accrual rather than a cash basis while retaining the income on a cash basis rather than an accrual basis.  The effect of this might not impact on the ultimate amount of money that he would receive across a year but would affect the immediate receipt of income.  That is, the expenses claimed on an accrual basis would mean that there would be no excess income for him to receive.  This appeared to relate to a cash flow issue rather than an issue as to how much he would ultimately receive. 

5. This characterisation was disputed by the wife, who asserted that the amounts claimed were in fact amounts that were paid, which appears to find some support in the tables of payments annexed to the wife’s affidavit. 

6. In any event, the terms of the order made by Justice Watts related to the retention of “sufficient monies to attend to anticipated outgoings”.  Whether this is being calculated on the basis of expenses as they fall due each month or on a forward calculation of expenses, it is in either case compliant with the terms of the orders and compliant with the substance of the orders. 

7. The second complaint is that the wife claims that in calculating the surplus for the rental properties, the expenses ought to take into account the current interest payments and principal payments faced by the parties.  Given his amendment of [12] of his affidavit, the husband reasonably concedes that the conversion of the HSBC loan to a principal and interest loan ought to be taken into account in respect of calculating a surplus.  He resists the idea that other increases in the parties’ indebtedness, and the interest thereby accrued, ought to be held as an expense as against the rental properties.  The wife says that the increasing indebtedness for this financial year, set out at [40]-[46], means that the projected interest to be paid is $97,392 as opposed to, in the previous financial year, a sum of $21,548.  If such an amount is to be taken into account then it certainly decreases the surplus that is available for distribution to the parties.  The wife deposes to the indebtedness being against two lines of credit, one being with the National Australia Bank (NAB) and one with HSBC.  Exhibit H1 shows correspondence from the NAB that indicates that the loan is an at-call line of credit facility that is supported by mortgaged security.  H1 represents that there is no set principal and interest repayment, but it is rather an interest-only facility which is in order as long as the loan account balance is below the approved limit.  The father asserts that because of this aspect there is no requirement to make any interest payments, but that they can be capitalised upon the loan amount.  Exhibit H2 sets out the HSBC facility and notes that it requires both capital and interest payments.  HSBC describes it as a mortgage. 

8. Returning to the Orders made by Watts J, the anticipated outgoings included “mortgages”.  The husband asserted that there was a difference between mortgage security and a mortgage.  I find no relevant distinction for the purposes of the orders made by Watts J.  The orders envisage interest being supported by the rental income.  It ought be noted that the husband pointed to the payment of legal fees from the rental account by the wife.  He noted that payments were in relation to a MSW Litigation account.  The wife’s response referenced pages 34 and 35 of her affidavit that indicated that the payment of any legal fees predated the Watts J orders.  Finally on this point, the husband noted his [13] and indicated that previously there had been a float of $10,000 associated with the rental properties.  He made the point that the previous operation of the rental properties had allowed an excess sufficient to retain such a float.  He reasoned from there that an inference ought be drawn that the income is sufficiently higher than the expenses as to support such a float and that therefore it should be found that there is in reality a greater surplus as referred to in paragraph 8 of the Watts J orders.  Given the evidence presented of increased interest payments and decreased rent I am unable to conclude, on the basis of a previous float, that a greater surplus exists.

9. Increased loan amounts secured by the two mortgages appear to have been in existence at the time of the making of the Watts J orders.  The Watts J orders also anticipated that each party would further draw upon the HSBC account in the sum of $100,000 USD.  It therefore appears that further drawings than were in existence at the time of the orders were contemplated by the orders, and the deduction of interest payments was likewise contemplated. Furthermore,  neither party has identified either a deficiency in the orders, or a problem in their implementation.  I therefore do not consider it appropriate to amend the operation of the orders so that the interest might be capitalised by increasing the amount of the loan, nor to cause payments to be made to the husband that have this effect.  Given the orders specifically dealt with the interest payments related to the mortgages, and specifically dealt with an increase of the indebtedness, the effect complained of by the husband was within the direct contemplation of the orders and I decline to amend the orders in the absence of other justifying circumstances.

Husband’s Application for Order 2.4

1. Order 2.4 sought the payment of arrears of maintenance to the husband.  The amounts sought by the husband were varied from $1,485 for the weeks beginning 26 February, 4 and 11 March 2016 to being $998 for the weeks beginning 26 February and 4 March.  The wife asserted that all necessary maintenance payments had been made and relied upon [29] of her affidavit that showed payments being made on 16 March, 24 March, 1 April, 8 April, 14 April, 15 April and 20 April 2016.  Counsel for the mother pointed out that this represented seven payments and that a period of seven weeks had occurred from the date of the making of the orders on 3 March 2016 until the swearing of the affidavit on 22 April 2016.  Counsel’s calculation is correct.  Noting that the orders were made on 3 March 2016 and were purely prospective in operation in relation to the payment of the amounts to the husband, there was no obligation to make a payment in respect of 26 February 2016.  On the wife’s affidavit material it appears that she did not make the first payment to the husband until 16 March 2016.  At that stage he was left with a legitimate complaint that the first payment had not been made.  However, payments made on 14 and 15 April 2016 corrected this noncompliance. 

2. Accordingly, I decline to make the orders sought in 2.4 (as amended).

Husband’s Application for Order 2.5

1. Order 2.5 is a machinery provision to support orders sought 2.3 and 2.4.  Given that I have declined to make the orders in 2.3 and 2.4, it is not necessary to consider 2.5.

Husband’s Application for Order 2.6

1. The husband sought an amendment of Order 2.2 of the Consent Orders of 3 March 2016.  Order 2.2 indicates that the husband is not eligible to receive the weekly payments during periods that he is not in Australia.  The husband sought that this be changed such that the payments ought to continue during such periods.  However, given the circumstances that the Consent Orders were entered into was a compromise of two sets of proceedings, being the protection order and the family law proceedings, I am reluctant to interfere with the operation of those orders unless sufficiently strong justification is brought forward as to why the orders ought to be changed.  Such a justification could be supported by a significant change in circumstances.  None was pointed to by the husband to support the change that he sought in relation to being paid while he is not in Australia. 

2. However, it became clear in the proceedings by virtue of Annexure C of the husband’s affidavit that demands were being placed upon him to provide material to verify that he is in Australia at any given point in time.  This was not a requirement of the Consent Orders and the demand was unjustified.  Counsel for the wife properly conceded that such demands were made wrongfully, and would not be repeated. 

Husband’s Application for Order 3 - Tenant payments of rent and division of net rental receipts

1. The husband identified these as machinery provisions, however agreed that a substantive change was sought by him, namely that he manage the rental properties rather than the wife.  The primary justification put forward by the husband was that two of the six rental properties were left vacant for a period of seven months.  He asserted that this had never previously occurred.  He accepted that a rental property had been left vacant for a period whilst under his supervision but that had been a period during which repairs were effected to the property (this was not the subject of evidence, but appeared as a concession made by the husband).  He also asserted concern that there was no proper lease in place for the properties and that this was not acceptable.  For the wife it was said that there was no need for a change from the orders put in place by Watts J.  It was conceded that the wife had an obligation to responsibly account for these properties, and that any deficiency could be accounted for in the final proceedings.  It was also conceded that the husband had a right to access all of the documents in respect of the rental properties.  To this the husband responded that the records that he would produce and had produced in the past were superior to those being produced by the wife. No deficiency was identified in the operation of the orders.  The final proceedings may reveal that the husband’s disappointment in the non-rental of the properties is justified. In the context of interim proceedings, however, I am unable to come to a conclusion at this point that grounds exist, for example because of mismanagement, that warrant a change to the interim orders.

Husband’s Application for Order 4 – Disclosure and ambit claim

1. In relation to 4.1 the husband did not pursue this matter on the basis that it was a matter that had been resolved between the parties prior to appearing before me. 

2. In relation to 4.2 the husband sought that the wife be compelled to give answers as set out in Annexures K and L of his affidavit.  For the wife it was pointed out that there are provisions within the Rules which deal with the answers to specific questions.  At this point no reason was advanced that justifies a departure from the Rules on this matter and I decline to make an order. 

1. In relation to 4.3 it was sought that a direction be given for the wife to amend her response as filed on 2 February 2016.  Again, no reason was given for the making of such a direction sufficient to justify it.  I decline to give any such direction. 

2. Sought orders 4.4 and 4.6 deal with the payment of the mediation fee.  This is a matter dealt with in the Regulations and no sufficient justification was made as to why the Regulations ought to be departed from in this case. 

3. In sought order 4.5 the husband sought that the date for a Conciliation Conference be given no sooner than 28 days from the date of these orders and after the respondent wife has complied with the orders that he sought in 4 and 5.  The matter will be listed for Conciliation Conference on the usual directions. 

Husband’s Application for Order 5 – Access to the records and books of C Pty Ltd

1. The husband sought a number of orders that would allow him to discharge his director’s duties in respect of  C Pty Ltd and the C Family Trust.  He further sought these orders so that he might be able to properly prepare for the case, particularly in relation to the identification of contributions.  The orders that he sought in support of this were predicated on the notion that he may need to inspect the various items at the former matrimonial home.  This would necessarily involve change to the order prohibiting him from being within a hundred metres of the wife as contained in the orders of 3 March 2016, orders being made in part compromise of the Domestic Violence proceedings.  The husband helpfully noted that the issue is not one of  the place at which he would inspect the items that related to the two entities, but rather his ability to inspect the documents.  That is, it was not his objective to inspect them at the former matrimonial home, but if that was to occur then it would require a modification of the restraint orders to allow this.  For the wife it was suggested that documents could be scanned and provided to the husband in accordance with his request for classes of documents.  It is by no means clear that such an arrangement would be sufficient to enable the husband to prepare properly for the Family Court case.  He reasonably noted that his memory was not sufficient for him to be able to identify all documents that existed over the period of time in question, identified as approximately eleven years of the marriage.  An alternate proposal was raised by counsel for the wife whereby the items outlined by the husband, being all records, files, papers and the computer habitually used by the applicant husband for the maintenance of the records of C Pty Ltd could be made available to the husband for inspection at the office of Phelps Reid, solicitors for the wife. 

2. I propose to make orders that support the reasonable inspection of these items at Phelps Reid Lawyers, rather than facilitate their inspection at the former matrimonial home and rather than provide for a mechanism of request and provision of scanned copies.  It appears that the husband would be unduly hampered in his preparation of the case if he were unable to fully access these materials in order to identify what might be appropriate for him to use at the proceedings. However, the terms of such order will be designed to both facilitate proper preparation and to ensure that the burden placed upon the legal representatives for the mother is not unduly onerous.  Given the offer to provide scanned documents to the husband, it would be sensible for the husband to identify such documents through the inspection process such that he might receive scanned copies to complete preparation in his own time.

3. At the end of these proceedings the husband made two further oral applications regarding the wife providing the marriage certificate to the husband.  There was no evidential basis for me dealing with that matter.  The husband further sought the Court’s comments on how he is to communicate with the wife, noting that he was communicating through the wife’s solicitor, although the wife communicated directly back to him.  He asked what the status of such communications would be. 

4. It is not for the Court to give legal advice to the parties.  I noted however that he was entitled to continue to communicate with the wife’s solicitors until advised by them that he should not do so and that the weight to be placed upon communications received from his wife will be a matter for the evidence. 

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 16 June 2016.

Associate:

Date:  16 June 2016