Zadenev & Zadenev - [2014] FamCA 693

FAMILY COURT OF AUSTRALIA

ZADENEV & ZADENEV

[2014] FamCA 693

FAMILY LAW – PROPERTY – Interim proceedings – Where the wife’s further application for an interim property order is dismissed – Where an order is made for enforcement of a spousal maintenance order – Where a dollar for dollar order is made in the wife’s favour in respect of future legal costs – Where an order is made to increase the gross weekly amount of spousal maintenance to be paid to the wife in lieu of a previous order for payment of particular non periodic sums to the wife –Where the husband’s application for the sale of the former matrimonial home is dismissed – Where requirement for a conciliation conference is dispensed with

Family Law Act 1975 (Cth)

Farnell and Farnell (1996) FLC 92-681

Iphostrou & Iphostrou and Ors [2011] Fam CA 20

APPLICANT:

Ms Zadenev

RESPONDENT:

Mr Zadenev

FILE NUMBER:

SYC

2142

2013

DATE DELIVERED:

27 August 2014

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

12 June 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Campton

SOLICITOR FOR THE APPLICANT:

Selvaggio Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Lloyd, SC

SOLICITOR FOR THE RESPONDENT:

Barkus Doolan

Orders

Within seven (7) days after any future payment by or on behalf of the husband of any money in payment of accounts rendered by his solicitors including in relation to expenses associated with the preparation of his case, the husband pay or cause to be paid the same sum of money to the solicitors for the wife.
Within 24 hours after the payment by or on behalf of the husband of any money referred to in paragraph 1 of these orders, the husband cause to be given to the wife’s solicitors, a memorandum stating the amount or amounts so paid to the solicitors.
All money paid to the solicitors for the husband including on his behalf pursuant to order 1, shall be held in trust by the solicitors for the husband and not applied in payment to the husband’s solicitors until such time as the same amount has been paid by or on behalf of the husband to the solicitors for the wife.
In the event that the payment referred to in paragraph 1 is not made within seven (7) days thereafter, the husband is to direct his solicitors to pay 50 per cent of whatever is received (as referred to in order 3 and held by them in trust), to the solicitors for the wife.
The amounts paid pursuant to these orders to the solicitors for the wife are to be applied by them in payment of the costs and disbursements incurred by the wife in the conduct of these proceedings.
The question of how payments to the wife under orders 1 and 4 are to be treated at the final hearing shall be matters for determination by the trial judge.
The wife’s application for interim property settlement is dismissed.
In relation to orders 2 and 3 of the orders made 24 October 2013, I find that as at 12 June 2014 the husband has failed to pay $34,800.
By way of enforcement the husband pay to the wife the sum of $34,800 within 14 days of the date of these orders.
In the event the husband fails to comply with order 9 then the husband is deemed to authorise and direct that S Pty Ltd pay to the wife the sum of $34,800 within 7 days.
That in the event the husband fails to comply with order 9 in full by the due date then the following shall apply:
11.1.Interest shall run at the prescribed rate on the unpaid amount from the date payment ought to have been made pursuant to order 9 to the date payment is made in full;
11.2.Declaration that for the purposes of this order S Pty Ltd is the ‘alter ego’ of the husband;
11.3.That S Pty Ltd and all related entities be restrained from making any payment to the husband or for his personal benefit or at the direction of the husband not associated with the day to day business operations of the company, until such time as the husband and/or S Pty Ltd have complied with orders 9 and 11.1 herein in full.
Orders 4.5, 4.12, 4.14 and 4.15 of the orders made 24 October 2013 are discharged from the date of these orders and order 2 made 24 October 2013 is to be varied from the date of these orders by increasing the weekly sum from $1,914 per week to $3,814 per week.
Pursuant to s 79(9)(b) Family Law Act1975 (Cth) the court is satisfied that special circumstances exist where it would be appropriate to make an order under s 79 of the Act notwithstanding that the parties to the proceedings have not attended a conference in relation to the matter to which the proceedings relate with a Registrar or Deputy Registrar of this court.
The husband’s further application for the wife to provide vacant possession of the Suburb C home and for that home to be sold is dismissed.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2142 of 2013

Ms Zadenev

Applicant

And

Mr Zadenev

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

These are interim proceedings in which the wife seeks an interim property order, the enforcement of obligations arising under orders made 24 October 2013 for the husband to pay periodic spousal maintenance, a dollar for dollar order and a variation of orders made on the last occasion relieving the husband of paying particular non-periodic amounts on behalf of the wife and giving the wife a further periodic payment in lieu. The husband renews his application for the sale of the property in which the wife and the children currently reside and that the parties be relieved of the obligation to attend a conciliation conference.

THE INTERIM APPLICATIONS

The wife originally sought orders which she set out in an Application in a Case filed 29 April 2014. At the commencement of the hearing, the wife abandoned a number of the orders sought and by the end of final submissions, amended others. In oral submissions and following cross examination of the husband, senior counsel for the wife indicated the form of an enforcement order that was sought. The indication given in oral submissions was confirmed in a subsequent written minute which was provided by the wife. The consolidated form of the orders sought by the wife is set out in Schedule 1.
The husband seeks that the wife’s applications be dismissed. The husband seeks an order that the parties be excused from the requirement to attend a conciliation conference. The husband renews his application for the sale of the matrimonial home.
It is my understanding that other orders sought by the husband relating to discovery were not pressed as a result of a mutual agreement between the parties in relation to discovery.

INTERIM PROPERTY

The wife has previously unsuccessfully sought a property order.
The wife maintains an application for a payment to her of $150,000 to be paid by regular instalments of $7,157 per month by way of interim property payment.
The husband and his accountant still assert that there is a significant shortfall when liabilities are compared with assets. The wife has submitted that an analysis could be done based upon specific parts of the volume of material that has been presented which would allow a finding that the evidence of the husband and his accountant should not be accepted. Reaching such a conclusion in the confines of the opportunity that this extremely limited enquiry allows is not something with which I am comfortable. In this case:
7.1.An order will be made to secure for the wife monies that she is owed under previous spousal maintenance orders;
7.2.A dollar for dollar order will be made which should at least to some degree, level the playing field between the wife and the husband in respect of future legal costs;
7.3.The wife still has in her favour an interim order for spousal maintenance and the gross weekly amount will be increased as a result of these orders which on the wife’s case should mean that she can live comfortably until any final hearing;
7.4.The wife shall retain and maintain the use of the family home until further order.
Despite the best efforts of senior counsel for the wife to demonstrate that taking a conservative approach making an interim property order is safe, I am unable at this point to conclude that it is appropriate to make an interim property order.
Accordingly, the wife’s renewed application for an interim property order will be dismissed.

ENFORDEMENT OF SPOUSAL MAINTENANCE

Quantum of arrears

Exhibit 3 (12 June 2014) is a schedule of spousal maintenance and child support payments received by the wife since the 24 October 2013. That schedule on its face calculates arrears as at the 1 June 2014 in the sum of $56,792.64.
There are three matters in contention in respect of the schedule. The first is that the husband says that on the 13February 2014 a sum of $2,000 was paid to the wife. The wife does not disagree. The schedule that has been prepared by the wife notes that that $2,000 had as its purpose a gift for the cost of D’s birthday party. The wife however gives no sworn evidence to that effect, nor is there any concession by the husband that that was the purpose of the payment. Accordingly, I conclude that $2,000 should be counted in the husbands favour to reduce arrears as claimed by the wife.
The husband contends through his counsel that he paid to the wife a sum of $1,200 on 10 April 2014. The schedule records that the wife received $3,000 on that day. The wife through her counsel says she did not receive an additional amount of $1,200. The husband has produced no evidence of that additional payment. The husband further says that the payment recorded on the schedule of $1,200 on the 2 June 2014 was a payment in fact of $1,722. Again the husband produces no evidence of that payment.
Doing the best I can with the evidence that I have, I assess the amount owing as at the 12 June 2014, pursuant to the order, to be in the sum of $54,792.64 ($56,792.64 less $2,000).
That is not the end of the controversy in relation to the outstanding arrears. It is not controversial that prior to the order being made on 24 October 2013, the husband caused S Pty Ltd (“S Pty Ltd”) to pay to the wife a sum of $43,000 on 9 September 2013. The husband, in his affidavit filed 8 May 2014, says that in relation to these monies, he said to the wife “I will advance you money but only if you agree that it is set-off against anything you get under the interim judgment”, to which he says the wife replied “that is fine.” The husband caused to be transferred to the wife an amount of $43,000 on 9 September 2013.
In his affidavit filed on the morning of the hearing, 12 June 2014, at page 10 the husband sets out the conversation between he and the wife as follows:
[Ms Zadenev] telephoned me in about August 2013 saying “My credit card is at its limit and I need about $43,000 to clear my credit card accounts”. I said to her “How did your credit card debt become so high? I have been paying to $1,500 and paying the bills except food”. Ms Zadenev replied “I can’t pay the credit card. You can offset the payment against anything in the future that you owe me.” At the time, Judge Watts had reserved judgment in relation to [Ms Zadenev’s] interim financial application. I said to her “I will give you the money and offset it against any future repayment.” She said to me “Okay then, when will you transfer the money”. We then had an exchange of text message in early September 2013 about her providing the credit card statements and amounts owing so I could pay them based on our conversation set out above.
The wife, in her affidavit filed 5 June 2014, says that in August 2013 she telephoned the husband and told him that she needed his help as she was being sued by American Express because she could not make the payments on her David Jones card, and her Mastercard debt was over the limit at $43,000. The wife asserts the husband said to her “I offered to pay the Mastercard off before we split on the condition you gave up your ebay selling, but you said you’d handle it.” After further discussion the wife says the husband told her “I will think about it”, and she asserts that at no time was there a discussion between the husband and her about the $43,000 being for spousal maintenance or an advance payment on spousal maintenance, as now alleged by the husband. The wife annexed to her affidavit a series of text messages (which on their face do not make any mention of the payment being monies in advance of future spousal maintenance). The wife asserts that she never said to the husband that he paying her credit card was an advance on the orders this court was yet to make in relation to her application for spouse maintenance. The wife’s solicitor also did not receive any correspondence or communication from the husband’s solicitor to that effect. The wife confirms that the husband electronically transferred into her Westpac account $43,000. The wife says she used those funds to pay $35,000 off her Mastercard credit card debt and $1,868.90 to pay off her David Jones American Express debt. She used the remaining $6,131.10 for living expenses. The husband in his affidavit filed 12 June 2014, asserts that from no later than November 2013 the wife was aware that he was offsetting the amount of $43,000 against the spouse maintenance payments. He says that when he commenced paying to her spouse maintenance, once the interim orders were made on 24 October 2013, he started offsetting part of the payment. He also asserts that he confirmed with the wife directly that offsetting of the amount of $43,000 and there was no necessity for his solicitors to send letters regarding the alleged arrears, He contends to have said to the wife “As agreed when I gave you the $43,000 I am not offsetting that payment. You said I could offset the payments against any future payments due to you. The spouse maintenance payments are future payments.”
During cross examination the husband agreed that he did not use the words that he had specifically quoted in his affidavit and in particular he had never used the words “interim judgment”. The husband said that the statement that he had made related to the money being offset against future costs. The husband stated in oral evidence that he told the wife “I’ll give you this money on the basis I can offset it against any future costs”. His answer was repeated to him and he confirmed those were the words he used. The wife in her oral evidence indicated that what the husband said to her was “don’t ask him for any more money”.
As indicated, the wife’s evidence is that of the $43,000 she received, she used $35,000 to pay down debt and used the balance to assist her in paying living expenses. The spousal maintenance order was not backdated to the date of the hearing and there was a period of several months that passed prior to the reserved judgment being provided. There is some indication that the wife has used the credit created by the pay down of her credit card to run it up again for the purpose of living expenses.
The other matter upon which comment can be made is that in my previous reasons for judgment dated 24 October 2013 I indicated that the wife may well be able to justify a figure of $1,500 per week for child support for the children but no order for adjustment of the administrative assessment has been made. The husband gave an undertaking to the court that he would pay $750 per week in respect of the children but the arrears have been calculated on an assessment of $580 per week.
It seems the wife has used some of the credit created on her card by way of the payment of $35,000 to provide for living expenses in the period in which the arrears are being calculated. Using a broad brush approach I am prepared to give the husband credit for a sum of $20,000 towards the arrears. The arrears will therefore be assessed in the sum of $34,800.

Method of Enforcement

The husband was orally examined in relation to the income he received from S Pty Ltd. He said that he received remuneration of $12,000 per month and that in addition the company paid a further $5,000 towards his personal expenses. He agreed that the company had recently paid an amount of $106,000 in stamp duty in relation to two units which are currently respectively occupied by his two adult daughters of a previous relationship. On an ongoing basis S Pty Ltd pays the mortgage on each of those two units in an amount of $4,500 per month per unit.
The husband also has a boat moored at the bottom of his garden which he owns with two other associates (through their corporate structures). The husband, by way of drawing on S Pty Ltd, is making the monthly payments in respect of the financing of that boat in the sum of $6,400 per month, and two thirds of that amount is being offset against loans that the company owe the corporate entities of the two associates.
Recently the company paid $30,000 for legal fees on behalf of the husband and the husband indicated that the company would continue to periodically pay legal fees as needed if it had money in the bank. In his affidavit filed 12 June 2014 the husband says that the majority of monies he has used to pay his legal fees had been monies borrowed from a company owned by and controlled by Mr E (the accountant).
In or around December 2013 the husband disposed of the prestige motor vehicle that had previously been driven exclusively by him. At the same time he acquired a new prestige motor vehicle. The amount paid by T Pty Ltd (“T”) (a company which is the husband’s alter ego) towards the finance of this motor vehicle is an amount of $7,100 per month. Exhibit 8 (12 June 2014) indicates that part of the deal in relation to the exchange of the motor vehicle involved T providing a cash deposit of $10,000 and balance settlement monies of $47,500 (a payment of $57,500). The husband conceded in cross examination that the deal locked in a loss of about $200,000 on the first motor vehicle. Rather than discharging the monthly liability to U Finance on the sum of $450,000, T increased the debt to over $500,000. The husband also has available to him a European motor vehicle and the lease payments of that motor vehicle are part of the $5,000 per month that S Pty Ltd pays on behalf of the husband.
As already mentioned, the $43,000 that the husband paid to the wife in September 2013 was drawn from S Pty Ltd.
The husband is also paying rent in respect of his current accommodation at a rate of $2,800 per week. Initially the husband said that that came out of the $5,000 a month that S Pty Ltd is paying towards his personal expenses however when the husband realised how the mathematics did not work ($2,800 per week is $12,124 per month) he said that it was actually from the $12,000 a month he was being paid by the company by way of remuneration. In fact, given the rent is in excess of $12,000 a month, such a payment would leave the husband with nothing to live on. Where the rent is coming from remained unexplained and I infer the rent is being paid by S Pty Ltd.
Exhibit 9 (12 June 2014) are financial statements for S Pty Ltd for the six months ended 31 December 2013. They indicate that in the six months the company made a profit after income tax of $1,303,010 (although it wasn’t clear to me that income tax has in fact been factored into those accounts).
It is primarily from that cash flow and the use of facilities which are available to S Pty Ltd that the husband continues to conduct his lifestyle as a wealthy man, seemingly unconstrained by financial pressure.
The husband and his long time accountant still however assert that when the enterprises conducted by the husband through multiple corporate structures are looked at as a whole, whilst there has been an improvement since the first interim hearing, the position is that liabilities significantly exceed assets. Exhibit 11 (12 June 2014) is a document produced by Mr E, being a summary of the financial position of the F Group as at 31 December 2013. Overall it asserts that there is a negative equity in the corporate entities and business in excess of $5 million. The wife challenges the assessment of value of various assets on that document and puts liabilities into question, particularly liabilities to V Pty Limited; W Pty Limited; X Pty Limited; Y Pty Ltd and Z Pty Limited.

Given the history of the husband’s drawings from S Pty Ltd since the orders for spousal maintenance were made, and given the overall profitability of the main trading entity, I find that the husband had the capacity to comply with the order that I had made but failed to do so. He also failed to honour the more general indication he gave at the first hearing to pay child support at a higher rate. In those circumstances it is appropriate that the wife receive some assurance that the husband will make payments as ordered. It is consequently appropriate to make the garnishment order that has been sought.

DOLLAR FOR DOLLAR ORDER

As indicated, counsel for the husband submitted that there was no power to make a “dollar for dollar” order as sought by the wife. I do not agree. For current purposes, it is sufficient to say that power can be found in s 117(2) of the Family Law Act 1975 (Cth) (“the Act”).
In Farnell and Farnell (1996) FLC 92-681, Kay J said:
In the Marriage of Gould, (Appeal EA 37 of 1994, judgment of 29 June 1994), the Full Court coram Fogarty, Kay and Graham JJ[1], overturned an order of the trial Judge wherein her Honour had ordered that pending trial, for every dollar that the husband had spent on his lawyers, he should provide the wife with a similar amount for costs. The trial Judge had ought to make that order to create what she saw as ''a level playing field''. The Full Court disallowed the orders on the basis that the wife had adequate finances to provide for her own costs by reason of a substantial recent inheritance. In the course of my reasons for judgment I said this:
“I wish to make comment on ... the general philosophical views expressed by her Honour about endeavouring to achieve a level playing field by providing the wife with a dollar for dollar basis for costs. Whilst I agree with his Honour's [Fogarty J's] observations that this may not be an appropriate approach to these cases, I would also like to make reference to an article from the Chicago Daily Law Bulletin of 20 April 1992 which indicated that wives in these circumstances often have to spend much more than dollar for dollar to achieve a level playing field, particularly, and I quote - this is in reference to a survey of the American Bar Association Family Law Section:
‘Most of the lawyers agree that women will face higher legal bills in a divorce. Accordingly to 91% of those surveyed women splitting from their husbands will have to pay more for discovery. Husbands traditionally have had full control over the family finances and economic information. This means the wife's attorney must often engage in discovery to gain equal knowledge about assets and income. The lawyer has an obligation to undertake discovery to find out if there are assets in just the husband's name, or if the wife has no knowledge of them.’”
[1] The published report incorrectly states the constitution of this Full Court which was actually Fogarty, Kay and Renaud JJ.
In Iphostrou & Iphostrou and Ors [2011] Fam CA 20, Cronin J quoted with approval, a reported decision of O’Reilly J in G & T (2004) FLC 93-176. In that decision, Her Honour referred to her previous unreported decision of McL & McL (30 January 2003) in which Her Honour said:
110. Section 117(2) provides that if the Court is of opinion that there are circumstances that justify it in doing so the Court may subject to subsection (2A) and the applicable Rules of Court make such order as to costs including by way of interlocutory order as the Court considers just. In my view, that provision provides sufficient power to make the “dollar for dollar” order subject to consideration of the matters in subsection (2A). That provision requires the Court to have regard to the financial circumstances of each of the parties to the proceedings, and certain other matters which are not relevant in this case.
The husband has paid legal fees of some considerable amount. The husband disclosed on a prior court event that he had paid $97,901.17 in legal fees. No document was provided by the husband at the interim hearing pursuant to the rules setting out the current level of legal fees paid. Some of the legal fees were paid by his accountants company. In more recent times the husband’s evidence is that the payments have been made by S Pty Ltd.
I accept that the wife has no current capacity to fund legal proceedings herself. The proceedings are likely to be complex and the wife would be greatly disadvantaged if she was forced to conduct legal proceedings herself. Her current lawyers have indicated that they would require to be paid for their work and disbursements incurred on the wife’s behalf in these proceedings. The husband is represented by experienced family lawyers and senior counsel.
As already indicated, I am unable to make an interim property order given the uncertainties raised by the husband about the lack of equity in the overall F Group. The husband has demonstrated an ability to access cash flow to pay legal fees or to have others pay legal fees on his behalf. In those circumstances, it is just to make a dollar for dollar order and I intend to do so.
In order to minimise the chances of the husband defaulting in relation to a dollar for dollar order, it is convenient to place some responsibility on the solicitors for the husband to ensure that the effect of the order is complied with. I intend making the dollar for dollar order in a form that is more detailed than the one applied for, the effect being that in the event that the husband fails to make a payment under the order, only one half of the amount that has been paid to his lawyers will be available to defray his costs and disbursements and the other half will be required to be forwarded to the wife’s lawyers.

VARIATION OF ORDER IN RELATION TO NON-PERIODIC SPOUSAL MAINTENANCE

This particular part of the wife’s application attracted minimal focus in the wife’s oral submissions. The husband said something about these issues in his written case outline document but these issues were not mentioned in the husband’s oral submissions.
The wife complains that the husband is not properly attending to compliance with the existing orders. The wife seeks that she take over the responsibility of providing those goods and services to herself on the basis that the husband pays her an additional weekly amount to cover the provision of those goods and services.
As set out in the Reasons for Judgment of 24 October 2013, the husband sought an order that pending the sale of the former matrimonial home he be responsible for:
…
Such costs of reasonable repairs and maintenance as required to keep the [Suburb C] home in a state of good repair and such other repairs and maintenance as recommended by the real estate agent marketing the property for sale;
…
Gardening service by [AA Pty Ltd] to perform gardening maintenance one day per week;
Pool maintenance costs on a weekly basis for “[BB Pty Ltd]”.
The husband also sought an order, and the order was made, that in respect of the motor vehicle in the wife’s possession, all lease or hire purchase repayments, petrol usage each week and maintenance, repairs and regularly services, be paid by the husband. He estimated the cost of this to be $1,153 per week. Of that amount, the husband particularised motor vehicle maintenance to be in the sum of $186 per week.
On 24 October 2012 an order was made that the husband continue to pay or alternatively cause entities that he controls to continue to pay amongst other things:
42.1.Order 4.5: House repairs of the Suburb C home;
42.2.Order 4.12: Motor vehicle maintenance;
42.3.Order 4.14: Gardening/lawn mowing;
42.4.Order 4.15: Cleaning house and pool.
The wife seeks a variation in the non-periodic spousal maintenance order so that it is increased by an amount of $1,900 per week on the basis that the husband is relieved of certain obligations under the orders made 24 October 2013.
The wife does not seek to be relieved of all costs in relation to the Suburb C home and is not seeking to vary orders 4.1 through to 4.9, 4.11, 4.13, 4.16 to 4.18. She is seeking that she be able to be responsible for attending to and paying the following items referred to in those orders:
44.1.House repairs of the Suburb C home (order 4.5)
44.2.Motor vehicle maintenance (order 4.12)
44.3.Gardening/lawn mowing (order 4.14)
44.4.Cleaning house and pool (order 4.15)
The additional amount of $1,900 per week requested by the wife is calculated in the following way:
45.1.Order 4.5: Repairs to Suburb C home in an average sum of $500 per week;
45.2.Order 4.12: Maintenance costs to the wife’s motor vehicle in an average sum of $100 per week;
45.3.Order 4.14: Gardening/lawn mowing of the Suburb C home in an average sum of $700 per week;
45.4.Order 4.15: Cleaning of the Suburb C home and pool in an average sum of $600 per week.
In relation to that claim, the wife refers to assertions made by her in paragraph 20 of her affidavit filed 29 April 2014 and to Part N of her financial statements. The wife filed a financial statement on 29 April 2014 which for relevant purposes is in identical terms to the financial statement she filed 22 April 2013. The financial statements contain similar assertions to those set out at paragraph 20 of her affidavit.
The wife concedes in note 60(a) that the husband currently pays these expenses and the bills are sent directly to the husband so the wife is not aware of the exact cost and gives her best estimates only. In the husband’s case outline, the submission is made that the calculations by the wife are not the subject of invoices or quotations, but rather, “guestimates” of the “average” weekly costs the wife contends were appropriate for these obligations. This submission is somewhat surprising given the husband’s evidence.
In his financial statement filed 20 May 2013 the husband provides his own estimates as to the costs of the relevant items:
House repairs of the Suburb C home             No figure provided
Motor vehicle maintenance   $66 + $45 + $75 = $186
Gardening/lawn mowing   $650
Cleaning house and pool   $60 + $400 +$75 = $535
Using the house repair figure provided by the wife ($500) and the husband’s figures for the other expenditure, the total is ($500 + $186 + $650 + $535 = $1,871 per week; which is close enough to the wife’s estimate of $1,900 per week).

Failing to pay for the cleaning of the Suburb C home and the pool pursuant to order 4.15

The wife says that after the orders were made on 24 October 2013, instead of re-hiring previous contractors that the parties had engaged during their relationship to perform the cleaning of the pool and the gardening, the husband instead sporadically sends either his brother or various employees from his S Pty Ltd business who are untrained to do these jobs. The wife asserts that four weeks after the orders were made the swimming pool was green and unfit for the children to swim in, and was not cleaned again. She states that there is now a terrible mosquito problem around the pool.
The husband’s case outline comments that the wife’s complaint in relation to cleaning appears to be in relation only to external cleaning. That however is not the case.
The wife asserts the husband no longer pays for any cleaner to attend to clean the interior of the home. She says the husband cancelled the contractor who cleaned the windows of the home and has not re-hired him or caused the windows to be cleaned since the orders were made. The husband said that the wife fired the cleaner saying she was breaking too many things. He says he changed the cleaners who had been previously attending the home as they were too expensive, however the wife terminated those cleaners and told the husband she would clean the home herself. The husband says he acted on her representation. Again I am unable, in the context of this interim application, to say whose version is more reliable.
I note in passing, as set out above, specific pool maintenance service was nominated by the husband in the interim application that I previously heard and orders were made at the husband’s invitation (without specifically referring to that service). Although the general way in which the order was framed allowed the husband to discontinue the service to which he referred during the previous hearing for a cheaper service, it is understandable how such an action would create a feeling of dissatisfaction in the wife.

Failing to pay for Gardening/Lawn mowing of the Suburb C home pursuant to order 4.14

The wife asserts the husband said to her in July 2013 that he was cancelling the gardeners (as well as cleaners, car washers, pool cleaner and window cleaner). She says that despite the husband’s brother or his workers occasionally attending, they do not do a proper job, and the lawns at the former matrimonial home have not been mown since late November 2013.
Again as noted above, a specific gardening service was proposed by the husband (although that specific service was not incorporated in the formal order that was made). The husband says he changed the gardeners and lawn mowing service as they were too expensive. He engaged his brother and two other persons who attended the property on one or two occasions each week to do the lawn and pool. He says the cleaning continued up until Christmas 2013 but ceased in circumstances where the wife went away on holidays for about three weeks without notice and locked up the premises. He contends that further to this, the wife was keeping the interior of the property in a “terrible state”.

Failing to pay the house repairs of the Suburb C home pursuant to Order 4.5

The wife asserts the back door lock is broken and despite her telling the husband of this in October 2013 the husband only sent his brother to repair it, but the door remains in need of repair and cannot be opened or closed properly.
The wife says that four of the five external doors of the Suburb C home, which are electronic, are broken and cannot be opened or shut. One of the doors that does not shut allows direct access to the pool and the wife has concerns that her two year old daughter may go through that door and fall into the pool. The wife says the husband has told her he does not have anyone to fix it.
Further, the wife claims one ceiling panel has fallen off into the media room which remains unrepaired, and the centralised electrical system has been broken since March 2014.
The husband says that he arranged for appropriate personnel to attend the property to inspect the alleged repair issues and provide estimates of the costs to repair matters. He asserts that the wife has not confirmed availability for access by that personnel so the repairs can be attended to.

Failing to pay the wife’s motor vehicle maintenance costs pursuant to order 4.12

The wife says that in December 2013 she needed two new tyres for her motor vehicle, and a wheel alignment, and that the husband told her to use her own credit card to purchase the tyres and he would reimburse her. She asserts to have paid $1,331 for the tyres, but the husband has not reimbursed her for this. The husband asserts in his affidavit filed 8 May 2014 that he reimbursed the wife the sum of $1,331. I am unable to say who is correct.
The husband has paid for a service and major repairs to the brakes of the wife’s motor vehicle in the sum of $4,507 on or about 11 March 2014.
The wife also asserts that until June 2013 (prior to the interim hearing) the husband paid to have the wife’s car cleaned every fortnight, but since that interim hearing has not paid for the car to be cleaned. The husband concedes that he told the wife she should be responsible for cleaning the car herself but contends that this is because on about three occasions when he sent the car cleaner to the wife’s home she was not there.
In his written case outline, the husband asserts that the order in relation to maintaining the wife’s motor vehicle does not include an obligation to pay for the cleaning of the wife’s car. That attitude is demonstrative of the attitude of which the wife complains. The husband in his financial statement filed 20 May 2013 lists cleaning of the wife’s car as a regular weekly expense (in the sum of $75) immediately after a place where he has particularised weekly amounts for servicing the wife’s car and tyres for the wife’s car. It is disingenuous of him to now claim cleaning is not part of maintenance.

Conclusion about variation of non-periodic spousal maintenance

As mentioned, the wife complains about the manner in which the husband has gone about complying with orders 4.5, 4.12, 4.14 and 4.15. She seeks an order that she be able to take over those responsibilities herself and receive an amount from the husband to enable her to do so.
It goes without saying that in the context of an interim hearing, no detailed findings can be made on contested evidence. It is uncontroversial that the wife finds it quite unsatisfactory that she has to negotiate with the husband in relation to things that he has otherwise been ordered to do in respect of the Suburb C home and the wife’s motor vehicle. I am satisfied pursuant to s 83(2) of the Act that there is a just cause for discharging the current order and that the husband’s apparent attitude and his changing of existing contractors and the obvious angst that exists between the parties about these issues are all circumstances which have arisen since the original orders were made which justifies a change in those orders. Given that there is little difference on the written evidence of each of the parties as to the cost of those services, I find that it is proper to vary the current interim order to remove any need for the parties to negotiate about these things in the future. That has the clear advantage of reducing the potential of conflict between the parties. The wife can take over responsibility for maintaining Suburb C and her own motor vehicle and the husband is to provide her with additional funds to do so in the sum sought by the wife.
The current spousal maintenance order is in the sum of $1,914 per week. It shall be increased to $3,814 per week pending further order and the husband will be relieved of his obligations under the relevant sub-orders of order 4 made 24 October 2013.

THE HUSBAND’S FURTHER APPLICATION FOR THE SALE OF THE FORMER MATRIMONIAL HOME

I dealt with the husbands application for the sale of the former matrimonial home in the Reasons for Judgment of 24 October 2013:
SALE OF MATRIMONIAL HOME
88.    The Suburb C home is owned by [F Investments] as trustee for the [CC Trust]. The [Suburb C] property is part of the real estate portfolio which the husband says has a value of about $17 million.
89.    The husband relies in part, upon a letter from NAB to him dated 24 April 2013 which is in the following terms:
Further to our recent conversation we wish to confirm that extension of your loan facilities is subject to your confirmation that property [Suburb C] has been placed on the market and that 100% of full net sales proceeds will be used as permanent debt reduction.
This is consistent with existing loan conditions that all sales proceeds historically have been applied to permanent loan repayment.
If you have any questions please do not hesitate to contact us.
90.    This letter was a product of a request from the husband’s chief financial officer in the following terms:
Further to office and mobile VM.
Please confirm that [Mr R] has requested that you draft a letter to [Mr Zadenev] in relation to various matters as they relate to the bank and to [Mr Zadenev’s] current divorce proceedings.
Please call me on mobile to confirm status or otherwise forward letter to [Mr Zadenev] in the first instance.
91.    The weight to be placed upon this letter of 24 April 2013 is diminished somewhat given the circumstances in which it has been produced.
92.    The communication between the husband and the bank is one that does not suggest any urgent situation currently exists. It is unclear as to what “extension of your loan facilities” actually means. The bank has allowed the husband to trade his way out of any current difficulties by selling down his trading stock on a discounted basis (although it is conceded that on the face of it, part of that arrangement now seems to be a preference by the bank that the matrimonial home be sold).
93.    Counsel for the husband referred to annexure Y of the wife’s affidavit filed 22 April 2013 and an NAB corporate letter of offer of 24 February 2012. At page 7 the facilities are broadly set out. At page 20 the following words appear, “the constraint at all times” – “maintain a maximum property finance loan, the value ratio of 75% for the group”.
94.    The husband gives evidence that he is subject to requirements of the NAB to sell down properties and to bring the group back within the 75% ratio set out in the finance loan. The husband asserts that he needs to sell the [Suburb C] property in order to achieve that.
95.    Both parties relied upon the fact that between 1 January 2012 and 22 April 2013 entities associated with the husband disposed of $58 million worth of property.
96.    Some sales seemed heavily discounted and I do infer that the husband has been under some pressure from his bank (that is also evidenced by documents which seem to be a regular reporting to the bank in respect of sales).
97.    In relation to the husband’s application for a sale of the [Suburb C] property, counsel for the husband relies firstly upon the platform of what he says is the financial position of the group. He next points to the NAB security and facility documentation and the requirements in that documentation. He also relies upon the letter of 24 April 2013; that the requirement of the NAB is consistent with the loan to value ratio in the security documents if one accepts the husband’s assertion as to the valuation of the real estate portfolio of the husband’s entities. Counsel for the husband also points to a sell down of real property of the group over a lengthy period commencing from about 1 January 2012.
98.    Counsel for the husband attempted to reality test the wife’s application. He submitted that if she was to get 65% of the pool which is her primary application (and he notes in passing that she does not in the terms of the application actually seek to retain the [Suburb C] property as part of the overall adjustment of property), in order to retain the [Suburb C] property at $7 million, the overall pool of assets would have to be close to $11 million dollars. This is to be compared to a circumstance where the husband asserts he is currently over $7 million in deficit.
99.    In relation to the husband’s ability to comply with an order that he pay $2,000 per week by way of rent for the wife if the [Suburb C] property is liquidated, the saving in interest seems to be $7 million x 9% per annum (the facility is an interest only facility). This is an equivalent of $12,115 per week.
100. Counsel for the wife submitted that I would be comforted by the knowledge that the bank had received a repayment of about $58 million as a result of sale of assets within the last two years.
101. There is no indication by the bank that they are about to commence proceedings against the entity that owns the [Suburb C] property to liquidate that property or to generally liquidate all of the properties in the husband’s group.
102. There is an insufficient basis at the current time to force the wife and children to leave the matrimonial home.
CONCLUSION
103. The price of real estate fluctuates from time to time. It might be that when the court receives proper evidence of the current value of the portfolio of real estate that it may be worth significantly more than the husband is asserting on the face of the documents at the current time. I am unable to say. It is appropriate however, as discussed during final submissions, for this matter to be case managed so that if some urgent development occurs, then the husband’s application for the sale of the matrimonial home can be looked at afresh. Otherwise it is important to get to a point in this litigation where the parties are able to either agree or otherwise be confident in asserting what they respectively say is the value of the [S Pty Ltd] business and the portfolio of real estate. In order for that to happen, there may need to be management of the gathering and sharing of information.
104. As already noted, counsel for the husband agreed to make the valuation which the bank is requiring the husband to carry out in relation to the [S Pty Ltd] business available to the wife as soon as it becomes available to husband.
105. The husband can come back to court if in fact things change and the bank takes a more aggressive position in relation to the sale of the [Suburb C] property.
106. Both parties seemed to agree that this matter should be listed for mention shortly after the delivery of these reasons. I will relist the matter before myself. The purpose of the relisting will be to focus upon valuation issues, both in relation to the [S Pty Ltd] company and in relation to real estate.
107. In the event the financial position of the husband’s group of companies becomes clearer in the future, then the wife is not precluded from making a further appropriate application for interim financial relief.

As earlier indicated the husband’s position seems to have improved since the first interim hearing. The husband has brought no evidence that there is any pressing need arising from his relationship with the National Australia Bank to sell the matrimonial home. There is no basis to revisit my decision not to require the wife and children to move out of the matrimonial home pending the finalisation of the hearing of the property settlement. The husband’s renewed application for the sale of the wife’s residence will be dismissed.

SECTION 79(9) OF THE ACT

The parties join in an application to be relieved of the statutory requirement to participate in a conciliation conference. The basis upon which they do so arises from their attempt to resolve the matter on an overall basis through private mediation with an eminent mediator. It is appropriate that a finding be made that would allow an order to be made under s 79 of the Act notwithstanding the fact that the parties have not attended a conciliation conference with a Registrar or Deputy Registrar of the court.

I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 27 August 2014

Associate:

Date: 27 August 2014

SCHEDULE 1

Orders sought by the wife

.....
That immediately preceding any payment of any professional fees and/or disbursements being made by or on behalf of the husband of any monies in relation to these proceedings, the husband shall do all things necessary to pay or cause to be paid the same amount of money into the trust account for the solicitors for the wife Selvaggio Lawyers, such monies:
(a)Shall be held in trust, then
(b)Applied for the payment of the professional costs and disbursements of the wife incurred in these proceedings including but not limited to the payment of expert’s fees.
That the sums paid or caused to be paid by the husband to the solicitors for the wife pursuant to the preceding order shall be applied by the lawyers for the wife in payment of the costs and disbursements incurred or to be incurred by the wife in the conduct of and incidental to these family law proceedings.
That the husband pay to the wife the sum of $150,000.00 by way of interim property settlement, such payment to be made by instalments in the sum of $7,157.00 per month, the first such payment to be made within 28 days of the [prestige] motor vehicle identified in order 5 herein being sold.
That the determination as to whether the sums referred to in orders 2 and 3 are to be treated as part of the wife’s entitlement to property settlement or in payment by the husband of the wife’s costs be adjourned to the final hearing of these proceedings.

.....

That in the event that the husband refuses or neglects to execute any document necessary to give effect to all or any of the orders within 48 hours of being requested to do so, then the wife be appointed to execute any document necessary on behalf of the husband to do all acts and things necessary to give validity and operation to the said document.
That in relation to orders number 2 and 3 of the orders made by this Honourable Court on 24 October 2013:
(a)By way of enforcement the husband pay to the wife the sum of $56,792.00 by way of arrears of spouse maintenance within seven (7) days from the date of these orders

.....

That by way of variation of orders 4.5, 4.12, 4.14 and 4.15 of the orders made 24 October 2013 and in addition to any other monies the husband is obliged to pay to the wife by way of spouse maintenance and child support the husband shall pay to the wife the sum of $1,900 per week.
(a) That in the event the husband fails to comply with order 13(a) then the husband is deemed to authorise and direct that [S Pty Ltd] pay to the wife the sum of $56,792.00 within 7 days.
(b)     That in the event the husband fails to comply with order 13(a) in full by the due date then the following shall apply:
(i)     Interest shall run at the prescribed rate on the unpaid amount from the date payment ought to have been made pursuant to order 13(a) to the date payment is made in full; and
(ii)    Declaration that for the purposes of this order [S Pty Ltd] is the ‘alter ego’ of the husband;
(iii)   That [S Pty Ltd] and all related entities be restrained from making any payment to the husband or for his personal benefit or at the direction of the husband, until such time as the husband and/or [S Pty Ltd] have complied with order 16(a) and 16(b)(i) herein in full.
(c) Such further or other order as this Honourable Court deems fit.