Wortham and Wortham (No 2)

[2015] FamCA 1186

FAMILY COURT OF AUSTRALIA

WORTHAM & WORTHAM (NO. 2) [2015] FamCA 1186

FAMILY LAW – PROPERTY AND SPOUSAL MAINTENANCE – Interim – husband receiving and controlling the only available income to apply to support of parties – both parties now with significant health issues – formulation of orders to ensure each party receives an equitable share of available income for support – variation of mortgage repayments –  interim superannuation splitting order sought but not made.

APPLICANT: Ms Wortham

RESPONDENT: Mr Wortham

FILE NUMBER: SYC 5894 of 2014

DATE DELIVERED: 11 December 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE: 8 December 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton

SOLICITOR FOR THE APPLICANT: Mcdonell Milne Toltz Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Hodgson

SOLICITOR FOR THE RESPONDENT: Cameron Legal

Orders

1. The orders made 22 May 2015 are varied only as follows:-

   (a) Order (1) is discharged to the date it stands paid.

   (b) Order (5)(a) is suspended pending further order.

   (c) Orders (5)(b) and (5)(c) are to continue.

   (d) Order (6) is suspended pending further order.

   THE FOLLOWING FURTHER ORDERS ARE MADE PENDING FURTHER ORDER.

2. The husband is to pay to the wife’s nominated bank account the sum of $800 per month with the first payment to be made on 1 December 2015 and thereafter on the 1^st day of each subsequent month.

3. The husband and the wife are to forthwith and co-operatively, join in an application to the Westpac Banking Corporation for an accommodation, change or variation to the requirements of registered mortgages in favour of that bank secured over the former matrimonial home at Suburb B being registered numbers …56 and …32 together with any other loan secured against the former matrimonial home which provided funds which were used to acquire the Town C property (properties), in order to alter those mortgages so that the parties’ obligations under the mortgages are varied to require the payment of interest only as opposed to the additional repayment of capital. The husband is to meet the cost incurred by the parties in obtaining the consent of the Westpac Banking Corporation Ltd to the variation sought including any legal costs incurred by the parties in relation to signing any further documents required by the said bank.

4. Until there is a change (if any) in the amounts required by Westpac Banking Corporation Ltd to meet the parties’ obligations pursuant to the mortgages specified in order (7) hereof, the husband is to meet all the payments.

5. On the same day as the husband pays to the wife the said $800 monthly payment pursuant to order (6) hereof he may apply the same amount to his own support as he sees fit. Thereafter for the balance of that month whenever the husband applies any further sums to his support he can only do so if he is able to pay to the wife an identical sum at that same time.

6. In addition to the amounts which the husband is to pay pursuant to orders (2) and (5) hereof the husband is to pay the following expenses each month when they fall due:

   ·The payment of the minimum monthly amount required by The Westpac Banking Corporation Ltd to service the mortgages registered against the title of the former matrimonial home at Suburb B.

   ·The payments itemised at items 1.2, 1.3, and 1.6 of the Application in a Case filed by the husband on 16 November 2015.

7. Any payment made by the husband pursuant to order (5) hereof is not to be treated as a payment made for the benefit of the husband and thus require an equal payment to be made to the wife.

8. Order (5) here of is not to operate in relation to any payment made by the husband to his lawyer on account of legal fees incurred or to be incurred by him in relation to the proceedings in this court. Whenever the husband makes a payment to his lawyers in relation to such legal fees he is restrained from so doing unless he at the same time pays to the wife’s solicitors, on behalf of the wife, an identical sum. This order does not operate in relation to funds which are borrowed by the husband from a third party in an arms-length bona fide transaction. Evidence of any such borrowing is to be provided to the wife’s solicitors at the time the husband makes a payment to his lawyers asserted to be sourced in such manner.

9. Whenever the husband’s lawyers receive a payment from the husband of any nature, they are to forthwith notify the wife’s solicitor of same and include in that advice a statement of the husband’s representation as to the source of such funds.

10. On the last day of each month the husband is to provide to the wife’s solicitors, by email, copies of the bank statements and credit/debit card statements for accounts conducted by or on behalf of, or in the sole name of, the following entities:

    ·The husband.

    ·G Pty Ltd.

    ·P Pty Ltd.

    ·The G Unit Trust.

    ·Y Pty Ltd.

    ·The Wortham Family Trust.

    ·Each of the accounts specified in exhibit H3 to the extent that the accounts do not stand in the husband’s sole name.

    ·Each credit card or debit card on which a transaction (debit or credit) has been conducted by or on behalf of, or for the benefit of, the husband in that month.

11. The court notes the notice provided to the husband by the wife that should it transpire evidence establishes the husband has failed to comply with this order or the spirit of this order she will seek the court appoint her a trustee for the husband’s interests in each entity controlled by the husband which generates income, which is available for his use, or which controls assets capable of being liquidated for the purpose of meeting an interim property, costs or maintenance order.

12. Each party has liberty to apply on 48 hours’ notice for any further urgent order.

13. The balance of the orders sought by the wife in her Second Amended Application in a Case filed 3 December 2015 is referred to the Docket Registrar for the matter for his/her determination at a time to be fixed.

14. Each party’s costs are reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Wortham & Wortham 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 SYDNEY

FILE NUMBER: SYC 4894 or 2014

Ms Wortham

Applicant

And

Mr Wortham

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 22 May 2015 I made orders following hearing an urgent application filed by the wife on 4 February 2015. On that occasion the orders were in the nature of spouse maintenance and/or interim property. I adjourned to a date in September 2015 the wife’s application for interim costs and the sale of property. That hearing was adjourned and finally came before me on Tuesday 8 December 2015.

2. On 13 November 2015 the husband filed an Application in a Case in which he sought to discharge/vary the orders made 22 May 2015. The reason for the variation sought by the husband is largely based upon his stated deterioration in health and consequently a reduction in his work hours. Such circumstances, the husband says, will reduce the amount of income he has available to service the orders of 22 May 2015.

3. The wife opposes the order sought by the husband.

4. On 3 December 2015 the wife filed a “Second Amended Application in a Case”. By that application she sought enforcement of the orders of 22 May 2015. She sought further orders which included an interim superannuation splitting order. She sought an order for costs to enable her to prosecute her property application. She sought sale of the Town C properties. The wife also sought orders for disclosure and an injunction restraining the husband accessing his superannuation. There was also an order sought for the appointment of a single expert valuer.

5. The hearing on 8 December lasted all day. The parties made submissions and tendered documents.

6. The wife tendered a financial record produced by P Australia Pty Ltd. She also tendered documents relating to the G Trust and bank statements for various bank accounts standing in the husband’s name or under his control.

7. The wife also provided the court with her updated version of the balance sheet together with a map of the corporate and trust entities which will be the subject of the property proceedings.

8. Both parties provided cost disclosure documents.

9. The husband provided a printout of the balances of all his bank accounts including balances of mortgages/loans with Westpac.

Background Facts

1. Each of the parties provided affidavit evidence. The husband complained about the form of the affidavit filed by the wife and tendered, at my invitation, a list of the paragraph numbers, of the wife’s affidavit, in respect of which the court was urged to attach no weight.

2. This proceeding is an interim hearing and the provisions of section 75 of the Evidence Act apply. The weight to be given to each party’s affidavit evidence is viewed through the lense of that section in addition to all other sections having application to the determination of an interim application.

3. The wife was invited to direct the court’s attention to a fund against which an attachment order might be made to meet the arrears of maintenance owed to her by the husband. There is no fund immediately available in a bank account of the husband as can be seen in exhibit H3. The husband has about $1,700 in available cash in the disclosed accounts however his credit card debt is $9,474.

4. Exhibit W4 discloses the entities owned completely or controlled by the husband and wife. Additionally the parties own, through those entities, interests in other commercial entities.

5. These are interim proceedings which are heard at a time when the court is very stressed by delay. Realistically it may take up to two years before the parties’ property proceeding can be determined by the court. The challenge therefore is to create a set of orders which build equity between the parties, provide each with access to a fair proportion of the available income and resources which were otherwise available before their separation. It was with such an aim in mind that I asked each of the parties’ legal representatives why it would not be appropriate for the court to make orders which would see those funds which might be available to the husband, paid in such manner which will meet fixed mortgage and property payments and then divide the balance equally between the parties. Neither party provided any opposition of substance to such a proposal.

6. Both parties have significant health issues. The wife is 65 years of age and has retired from employment. She has drawn most of her superannuation since retirement in order to meet expenses including legal costs. She has no other available (or at least disclosed) asset or resource to draw upon in order to meet her ordinary living expenses. She resides in the former matrimonial home at Suburb B. The husband is now residing at Town C on the property owned by the G Trust.

7. The husband promotes a case which claims his health does not permit him to work the hours he has worked until recently. The wife’s counsel cast doubt on that claim however, an interim hearing is not the place to test such matters. It suffices for the husband to provide some medical evidence, which he has done, thus putting the wife on notice that he will call his medical advisors should that be necessary at a final hearing. The court moves cautiously then on the assumption that the husband will be able to establish the case he presses now as to his health and his reduced ability to work and still maintain reasonable health.

8. The husband receives a wage for his employment with P (Australia) Pty Ltd. It is the hours of work which he has traditionally engaged in with that company which he now says he is unable to fulfil. The husband has other sources of income which include the Wortham Family Trust. That trust is controlled by the trustee P Pty Ltd. That trustee company is controlled by the husband.

9. The husband has the only steady stream of income from traditional employment as between the parties. He also controls all of the other avenues of income which might otherwise be available to the marriage partners.

10. The husband’s evidence is that he can only reasonably afford to pay the wife $800 per month as spouse maintenance. The affordability of that payment is affected by the husband’s ability to have Westpac Banking Corporation Ltd facilitate interest only payments on the parties’ loans/mortgages with that bank. The husband says he has had a conversation with an officer of the bank and based upon the conversation the husband proposes that such an arrangement is possible. Clearly each will need to engage in the process of causing such a circumstance to be achieved if it is possible.

11. There is no apparent prejudice to the wife of changing the mortgage and loan commitments the parties have with the Westpac Banking Corporation Ltd, to one where interest only is paid on the loan facilities. To the extent that the husband has been paying down capital on the mortgages that will probably fall into the category of a contribution on his behalf. If interest only is paid on the mortgage then the capital required to be repaid should not grow.

12. I propose to make orders which will see each of the parties receive a basic payment of $800 per month for self-support. The husband will need to pay $800 to the wife as a monthly payment on the first day of each month. He can then pay himself the same amount. Thereafter he is to pay money to himself only when he can pay the same amount to the wife at that same time. There will be an exception from that requirement for the fixed mortgage and property payments which the husband has agreed to pay.

13. The husband sought that the variations of the orders made 22 May 2015 commence upon 1 November 2015 however I propose to commence the variation effective from 1 December 2015. For my part too little is known about the consequence (financial) of the husband reducing his hours of work due to poor health for a determination to make the variation of the 22 May order date from 1 November 2015 as sought in the husband’s Application in a Case. For example, does the husband hold income protection insurance? Is the reduction in work time a “work related injury”?

14. The same approach which applies to the payment of monthly maintenance to the wife will be ordered to operate in relation to legal costs. The husband will only be able to pay legal costs incurred by him if at the same time he can pay the same amount to the wife’s legal representatives.

15. With orders framed to achieve the above as an interim measure, neither party will be advantaged or disadvantaged pending the settlement of the property dispute or the determination of same by the court. Should some unforeseen consequence of the orders arise, the disadvantaged party may apply to the court for a variation or at least relief from such circumstance should that prove appropriate.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 11 December 2015.

Associate: 

Date:  11 December 2015