Aguilar & Carbone
[2025] FedCFamC1F 80
•14 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Aguilar & Carbone [2025] FedCFamC1F 80
File number(s): SYC 3934 of 2022 Judgment of: CURRAN J Date of judgment: 14 February 2025 Catchwords: FAMILY LAW – PROPERTY – Consent orders made regarding division of property interests – Where limited issues in dispute were mechanics as to timing of implementation of the orders and costs associated with redevelopment – Orders made Legislation: Family Law Act 1975 (Cth) ss 75, 79 Cases cited: Barnell & Barnell (2020) 60 Fam LR 377 Division: Division 1 First Instance Number of paragraphs: 53 Date of hearing: 10 – 12 February 2025 Place: Sydney Counsel for the Applicant: Ms Kennedy Solicitor for the Applicant: Swaab Solicitor Advocate for the Respondent: Mr Reeve Solicitor for the Respondent: Marsdens Law Group ORDERS
SYC 3934 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS AGUILAR
Applicant
AND: MR CARBONE
Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
14 FEBRUARY 2025
THE COURT ORDERS THAT:
1.Orders by way of alteration of property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) be made in terms of this document in order to address the consequences of the breakdown of the marital relationship and the injustice that would occur given the circumstances of the relationship if legal and equitable title were not altered.
Property Division
2.Within 30 days from the date of these orders the Respondent Husband (and the Husband in his capacity as the sole director and shareholder of B Pty Ltd) shall do all things necessary and sign all documents necessary to cause the sale of the property known as and situated at C Street, Suburb D NSW being the whole of the land in folio identifier … (“the Suburb D property”)
3.In relation to the sale of the Suburb D property, the Respondent Husband shall do all acts and things and sign all documents necessary to sell the property to give effect to the following conditions of sale:
(a)The Suburb D property shall be listed for sale by private treaty with such real estate agent as agreed between the parties in writing and, failing agreement, the parties will request the Real Estate Institute of New South Wales to nominate an agent and the parties will appoint the agent to act (“the agent”) and the cost of and incidental to that appointment will be borne equally by the parties.
(b)The Respondent Husband shall do all acts and things and sign all documents necessary to direct the agent and conveyancer to take instructions from both parties and / or their legal representatives.
(c)The parties shall jointly instruct a solicitor/conveyancer to act on the conveyance of the property as agreed between them in writing and, failing agreement, the parties will request New South Wales Law Society to nominate a conveyancer/solicitor and the parties will appoint that conveyancer/solicitor to act (“the conveyancer”) and the cost of and incidental to that appointment will be borne equally by the parties. With regard to this order the Respondent Husband shall direct the conveyancer to liaise with and provide all information to the Applicant Wife.
(d)The sale of the property shall be at a price agreed between the parties in writing and, in default of agreement, in accordance with the valuation provided by a registered valuer appointed by the Real Estate Institute of New South Wales.
(e)The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale, including making any keys available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.
(f)That the Respondent Husband shall execute the contracts of sale and all other documents necessary to complete the sale forthwith upon the submission to them by the agent or solicitor.
(g)The contracts for sale shall provide for completion within 42 days after the date of the contract.
4.In the event of the Suburb D property is not sold by private treaty on or before six months from the date of listing then the Respondent Husband shall do all acts and things and sign all documents as are necessary to sell the property by auction and the following shall apply, unless otherwise agreed between the parties in writing:
(a)The property shall be listed with the agent appointed under Order 3(a) above for sale by auction within a further three months.
(b)The parties shall execute all documents requested by the auctioneer for the sale of the property by auction.
(c)The reserve price shall be such amount as agreed between the parties in writing and, in default of agreement, the amount nominated by the registered valuer appointed in accordance with Order 3(d) above.
(d)The parties shall each pay to the auctioneer one half of the sums requested for advertising or auction expenses and, if one of the parties pays all the expenses, that party shall be reimbursed from the other party’s share of the proceeds of sale.
(e)The parties shall give such instructions as are necessary to a solicitor to prepare contracts of sale and provide such contracts to the auctioneer prior to the auction no later than the date sought by the auctioneer.
(f)The parties agree to co-operate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the property and ensuring that the property is in good order at the time of any inspection and on the day of the auction.
(g)The parties are to attend at the auction and negotiate with the highest bidder in the event of the reserve price not being reached.
(h)The sale price of the Suburb D property shall be any amount in excess of the reserve price but, in the event the reserve price is not reached, the sale price of the Suburb D property shall be any offer received after the auction to buy the property at a price that is at least 95% of the reserve price shall be accepted by the parties.
5.Upon the sale of the Suburb D property, the sale proceeds shall be distributed as follows:
(a)Payment of the agent’s commission and advertising and/or expenses payable on the sale;
(b)Payment of the legal costs of the sale;
(c)Payment of any outstanding council, water rates or levies on the Suburb D property;
(d)Payment of an amount calculated pursuant to Order 6 below into a Controlled Monies Account established in the joint names of both parties by Swaab (the Controlled Monies Account) to be paid towards any Capital Gains Tax on the sale including the Respondent Husband’s Capital Gains Tax and any tax payable by B Pty Ltd as a result of the sale of the Suburb D property;
(e)Payment of $400,000.00 into a Controlled Monies Account established in the joint names of the parties by Swaab (the Controlled Monies Account) to be paid towards any costs associated with works and renovations undertaken for the purpose of obtaining occupational certificate for the Suburb F property, provided that any amount to be paid over $5,000 is to be agreed between the parties in writing. In the event that the Respondent Husband shall seek to be reimbursed for payments he has made then he shall provide receipt for any other amount spent.
(f)The balance of the proceeds (if any), be distributed as follows:
(i)$110,000 to the Respondent Husband; and
(ii)the balance of the proceeds to the Applicant Wife; and
(g)That 60 days after the sale proceeds are distributed in accordance with order 5(f) above, the Respondent Husband be granted exclusive occupancy of the property situated at E Street, Suburb F NSW.
Accounting orders
6.Within seven days of the sale of the Suburb D property the parties are to do all acts and things and sign all documents necessary to instruct an accountant agreed between the parties in writing and, in default of agreement, the Respondent Husband is to propose three accountants and the Applicant Wife is to select one, to calculate any estimated capital gains tax and/or taxation payable by B Pty Ltd and for this purpose:
(a)The Respondent Husband shall ensure that he has filed all taxation returns for the financial years ending 30 June 2022, 30 June 2023, 30 June 2024 and 30 June 2025 by no later than 30 July 2025; and
(b)The estimated amount calculated by the accountant, plus the accountant’s estimated fees is to be paid into the Controlled Monies Account pursuant to Order 5(d) above; and
(c)On the Australian Taxation Office (ATO) issuing a request for payment of the Capital Gains Tax, or any tax payable by B Pty Ltd stemming from the sale of the Suburb D property is to be paid from the funds in the Controlled Monies Account and both parties are to do all acts and things and sign all documents necessary to cause this payment to be made; and
(d)The cost of the accountant is to be met from the funds in the Controlled Monies Account and both parties are to do all acts and things and sign all documents necessary to cause this payment to be made within seven days of an invoice being issued by the accountant and, in the event there is insufficient funds in the Controlled Monies Account to meet these fees, the parties shall equally share the fees; and
(e)Forthwith, following the payment of any and all Capital Gains Tax calculated on the sale of the Suburb D property, the balance of funds held in the Controlled Monies Account are to be paid to the Applicant Wife and the Controlled Monies Account closed and, in the event there are insufficient funds in the Controlled Monies Account to meet Capital Gains Tax or taxation payable by B Pty Ltd as a result of the sale pursuant to this Order, the parties are to equally pay any balance of the taxation remaining after the funds from the Controlled Monies Account have been exhausted.
7.In the event that the Applicant Wife does not leave the Suburb F property, until the sale of that property, the Respondent Husband shall be injuncted from entering the main house at E Street, Suburb F NSW and the Applicant Wife shall be injuncted from entering the granny flat at that property, noting that both parties are permitted to access the laundry.
Sale of the Suburb F Property
8.Within 18 months of the date of these Orders or as otherwise agreed, the Respondent Husband shall be permitted, at his cost to do all acts and things and sign all documents necessary to cause the property located and situate at E Street, Suburb F NSW (presently Folio Identifier …) (“the Suburb F property”) to be re-zoned and approved for subdivision such that the property/properties can be sold and, for this purpose, the Respondent Husband shall ensure that the re-zoning and subdivision is appropriately registered with the New South Wales Land and Registry Services.
9.Within 18 months of the date of these Orders, or as otherwise agreed in writing between the parties, the parties are to do all acts and things and sign all documents necessary to cause the Suburb F property to be sold at the earliest opportunity in accordance with the sales conditions contained in Orders 10 - 12 inclusive and for the proceeds of sale to be distributed in the following manner and priority:
(a)Payment of the agent’s commission and advertising or any expenses payable on the sale;
(b)Payment of the legal costs on the sale;
(c)Payment of any outstanding council, water rates or levies on the Suburb F property;
(d)Payment of an amount calculated pursuant to Order 14 below into a Controlled Monies Account established in the joint names of both parties by Swaab (the Controlled Monies Account) to be paid towards any Capital Gains Tax on the sale of the Suburb F property;
(e)In the event there remain funds in the Controlled Monies Account pursuant to order 5(e), then those funds shall be disbursed between the parties 55% to the Applicant Wife and 45% to the Respondent Husband;
(f)In payment to the Applicant Wife of a sum which will provide to the Wife an amount equal to 55% of the net sale proceeds of the Suburb D and Suburb F properties, including any and all subdivided lots;
(g)Payment from the Applicant Wife to the Respondent Husband of 50% of the total costs paid by the Respondent Husband associated with re-zoning and subdivision costs of the Suburb F property, provided:
(i)the Respondent Husband has provided evidence of those costs;
(ii)the costs have been agreed in writing with such response to any request for agreement to be provided by the Applicant Wife within 7 days of a request being received from the Respondent Husband; and
(iii)the re-zoning or the subdivision has been approved; and
(h)The remainder to the Respondent Husband.
Sale Conditions
10.In relation to the sale of the Suburb F property, the parties shall give effect to the following conditions of sale:
(a)The Suburb F property shall be listed for sale by private treaty with such real estate agent as agreed between the parties in writing and, failing agreement, the parties will request the Real Estate Institute of New South Wales to nominate an agent and the parties will appoint that agent (the agent) to act on their behalf and the costs of and incidental to the appointment of the agent shall be borne equally by the parties.
(b)The parties shall instruct a solicitor/conveyancer to act on the conveyance of the property as agreed between them in writing and, failing agreement, the parties will request the New South Wales Law Society to nominate a solicitor/conveyancer and the parties will appoint that solicitor/conveyancer to act (the conveyancer) and the cost of and incidental to that appointment will be borne equally by the parties.
(c)The list price of the subdivided properties shall be agreed between the parties in writing and, in default of agreement, as nominated by a registered valuer nominated by the President of the Real Estate Institute of New South Wales.
(d)The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making keys available, allow an inspection of the property at all reasonable times requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.
(e)The parties shall execute the contracts of sale and all other documents necessary to complete the sale of the subdivided lots including all transfer documentation forthwith upon submission to them by the agent or solicitor.
(f)The contract for sale allow be for completion within 42 days after the date of the contract unless agreed otherwise by the parties.
11.Upon the sale of the Suburb F property, Order 9 shall apply.
12.In the event the Suburb F property is not sold by private treaty or on or before six months from the date of listing then the parties shall do all acts and things and sign all documents as are necessary to sell the property by auction and the following shall apply, unless otherwise agreed to between the parties in writing:
(a)The property shall be listed with the agent appointed under Order 10(a) above for sale by auction within a further three months.
(b)The parties shall execute all documents requested by the auctioneer for the sale of the property by auction.
(c)The reserve price shall be such amount as agreed between the parties in writing and, in default of agreement, as nominated by a valuer appointed by the Real Estate Institute of New South Wales.
(d)The parties shall each pay to the auctioneer one half of any sums requested for advertising or auctioneer expenses and, if one of the parties pays all the expenses, that party shall be reimbursed from the other party’s share of the proceeds of sale.
(e)The parties shall give such instructions as necessary for a solicitor to prepare contract of sale and provide such contract to the auctioneer prior to the auction no later than the day sought by the auctioneer.
(f)The parties shall co-operate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the subdivided lots at all times reasonably requested by the auctioneer and ensuring that the subdivided lots are in good order at the time of any inspection and on the day of auction.
(g)The parties are to attend at the auction and negotiate with the highest bidder in the event the reserve price not being reached.
(h)The sale price of the property shall be any amount in excess of the reserve price but in the event the reserve price is not being reached, the sale price of the Suburb F property shall be any offer received from the auction to buy the property at a price that is at least 95% of the reserve price shall be accepted by the parties; and
(i)Upon the sale of the property, Order 9 shall apply.
13.In the event the Respondent Husband elects not to proceed with the re-zoning and subdivision of the Suburb F property, then the Husband shall advise the Applicant Wife in writing, and within 21 days that parties are to comply with order 9.
Accounting Orders
14.In the event that the Respondent Husband elects to cause the Suburb F property to be zoned or approved for subdivision in accordance with Order 8 then within 14 days of the sale of the Suburb F property, the parties are to do all acts and things and sign all documents necessary to instruct an accountant agreed between the parties in writing and, in default of agreement, the Respondent Husband is to propose three accountants and the Applicant Wife is to select one to calculate any estimated Capital Gains Tax payable on the sale of the subdivided lots and for this purpose:
(a)In the event it is necessary, the parties are to each ensure that they have filed all tax returns for the financial years ending 30 June 2022, 30 June 2023, 30 June 2024, and 30 June 2025 by no later than 30 July 2025; and
(b)The estimated value calculated by the accountant plus the accountants estimated fees is to be paid into a Controlled Monies Account pursuant to Order 9(d) above; and
(c)Upon the Australian Taxation Office (ATO) issuing a request for payment of Capital Gains Tax or any other taxation, the amount requested by the ATO is to be paid from the funds in the Controlled Monies Account and both parties are to do all acts and things and sign all documents necessary to cause this payment to be made; and
(d)The cost of the accountant is to be met from the funds in the Controlled Monies Account and both parties are to do all acts and things and sign all documents necessary to cause this payment to be made within seven days of an invoice being issued by the accountant and, in the event there is insufficient funds in the Controlled Monies Account to meet these fees, the parties are to equally share the fees;
(e)Forthwith, following the payment of any and all Capital Gains Tax calculated on the sale, the balance of any funds held in the Controlled Monies Account are to be paid to the parties 55% to the Applicant Wife and 45% to the Respondent Husband and the Controlled Monies Account closed and, in the event there are insufficient funds in the Controlled Monies Account to meet Capital Gains Tax or any other taxation payable in relation to the sale of the Suburb F property pursuant to this Order, the parties are to equally pay any balance of Capital Gains Tax or taxation remaining after the funds from the Controlled Monies Account have been exhausted.
Bank accounts and payment of funds
15.Within 14 days of the date of these Orders, the parties are to close any joint bank accounts and provide the funds to the Applicant Wife.
16.Other than as provided for in these Orders, the Respondent Husband shall retain, as against the Applicant Wife, his sole right, title and interest in, and legally beneficial ownership of the following:
(a)The company B Pty Ltd.
(b)The property situate at and known has G Street, City H, Country J (“the Country J property”).
(c)The furniture of the Suburb F property but for the furniture to be retained by the Applicant Wife in Order 18(b) below.
(d)Any real property, motor vehicles, plant and equipment, chattels, goods, furnishings, interest in any trust, company or business and any other property which are, at the date of these Orders, in his sole possession or sole name.
(e)Any monies, shares and debentures which stand in his sole name as at the date of these Orders.
(f)Any interest in superannuation which stands in his sole name as at date of these Orders.
17.The Respondent Husband shall indemnify and keep indemnified the Applicant Wife against any and all liabilities of the entities and property named in the immediately preceding Order and will unconditionally release the Wife from any actions, claims and suits which arise in respect of the property to be retained by the Husband pursuant to the immediately preceding Orders.
18.Other than as provided for in these Orders, the Applicant Wife shall retain, as against the Respondent Husband, her sole right, title and interest in, and legal or beneficial ownership of the following:
(a)Any real property, motor vehicles, plant and equipment, chattels, goods, furnishings, interest in any trust, company or business and any other property which are, at the date of these orders, in her possession or sole name.
(b)The furniture being the large dining room table and chairs, the washing machine, the dresser in the main bedroom and the television all situated at the Suburb F property.
(c)Any monies, shares and debentures which stand in her sole name or in the joint names of the parties as at the date of these Orders.
(d)Any interests in superannuation which stands in her sole name as at the date of these Orders.
19.The Applicant Wife shall indemnify and keep indemnified the Respondent Husband against any and all liabilities of the entities and property named in the immediately preceding Order and will unconditionally release the Husband from any actions, claims and suits which arise in respect of the property to be retained by the wife pursuant to the immediately preceding Order.
Enforcement
20.In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders then the Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act 1975 to execute such deed, document or instrument in the name of the said party and to do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
NOTATION
A.Orders 5(f), 5(g), 6(e), 9(f) and 9(g) were made following judicial determination and the balance of the orders were made by consent.
B.The parties are to be guided by the real estate agent with respect to any works to be undertaken to improve the Suburb D property.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Aguilar & Carbone has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTCURRAN J:
These reasons for judgment were delivered orally and have been corrected from the transcript.
INTRODUCTION
These proceedings concern the division of property between the applicant wife, Ms Aguilar (“the wife”), and the respondent husband, Mr Carbone (“the husband”).
To the parties’ credit, on the third day of the final hearing, they reached agreement on most issues in dispute. However, there were some limited issues that required judicial determination.
The orders that required judicial determination were limited to the timing of the distribution of sale proceeds of the property situated at C Street, Suburb D, NSW (“the Suburb D property”) to the parties and whether the wife should pay one half of the costs incurred by the husband seeking re-zoning and approval for subdivision in the event the re-zoning or subdivision is not approved.
BACKGROUND
The parties’ relationship commenced in late 1999. The parties commenced cohabitation in 2000 and were married in 2002. There are two adult children of the relationship, namely:
(a)Mr L born 2000, currently 24 years of age; and
(b)Mr M born 2003, currently 22 years of age.
In early February 2020, the parties separated on a final basis as the husband moved into the granny flat at the property situated at E Street, Suburb F NSW (“the Suburb F property”), while the wife remained living in the main house on this property. The parties divorced in early 2022. The wife commenced property proceedings on 9 June 2022 by way of filing an Initiating Application in the Federal Circuit and Family Court of Australia (Division 2). The matter was listed for hearing in that court but was not reached and was transferred to Federal Circuit and Family Court of Australia (Division 1).
The wife is presently 61 years of age and, following separation, has not been in paid employment. She says this is due to her age and the amount of time she has been out of the workforce. The wife’s source of income is from her investment portfolios of $574 per week.
The husband is presently 70 years of age and is semi-retired. He deposes in his financial statement that his sources of income are $600 per week from the rental income from part of the Suburb D warehouse, and $600 per week from his other business income from providing media services. He works on the days he has customers, and his hours can be anywhere between an hour and 6 hours a day.
MATTERS NOT AGREED ON BALANCE SHEET
At the commencement of the trial, the parties provided a joint balance sheet which was tendered and marked Exhibit 1 which identified numerous areas of dispute. By the third day, the parties had agreed to the value of all items on the balance sheet other than two items. The final balance sheet is set out as follows:
Ownership Description Wife’s Estimated Value Husband’s Estimated Value ASSETS REAL PROPERTIES 1 J E Street, Suburb F, NSW (‘Suburb F Property’) 3,550,000 6,840,000 2 H Husband’s one-half interest in C Street, Suburb D, NSW (‘Suburb D Property’) 1,880,000 1,880,000 3 H Husband’s one-third interest in G Street, City H, Country J (‘Country J Property’)
Separate Pool B1,501,166 NIL B PTY LTD 4 H Husband’s interest in B Pty Ltd See items 5, 6 & 7 5 H B Pty Ltd’s Westpac Business One Bank Account (#...90) 86,256 86,256 6 H B Pty Ltd’s Westpac Business Cash Reserve Account (#...40) 101,141 101,141 7 H B Pty Ltd’s Westpac Cash Management Account (#...62) 10,659 10,659 8 H B Pty Ltd’s one-half interest in the Suburb D Property 1,880,000 1,880,000 9 H B Pty Ltd’s Motor Vehicle 1 11,225 11,225 BANK ACCOUNTS AND SHARE TRADING ACCOUNTS 10 J CommSec Share Portfolio Account (#...68)
(Linked to CBA Direct Investment Bank Account #...60)35,050 35,050 11 W CommSec Share Portfolio Account (#...61)
(Linked to CBA Direct Investment Bank Account #...35)123,735 123,735 12 W Market Value of Wife’s K Bank Margin Loan Account (#...73) as at 6 Feb 2025 $996,900.68. $996,900 $996,900 13 W N Bank Spend Account (#...04) 900 900 14 H O Bank Cash Management Account (#...77) 369,000 369,000 15 H Westpac 55+ and Retired Account (#...06) 22,000 22,000 MOTOR VEHICLES 16 W Motor Vehicle 2 7,000 7,000 Total 10,575,032 12,363,866 LIABILITIES 17 W Loan for Wife’s K Bank Margin Loan Account (#...73) 131,975 131,975 Total 131,975 131,975 SUPERANNUATION Member Name of fund Type of interest Wife’s estimated value Husband’s estimated value 18 W Superannuation Fund 1 Accumulation 8,572 8,572 19 W ATO Held Super Unclaimed Superannuation 509 509 Total 9,081 9,081 TOTAL ASSETS (including Pool B) 10,575,032 12,363,866 TOTAL ASSETS (excluding Pool B) 9,073,866 12,363,866 TOTAL LIABILITIES 131,975 131,975 TOTAL SUPERANNUATION 9,081 9,081 NET TOTAL (including Pool B) excluding Superannuation (Assets – Liabilities) 10,443,057 12,231,891 NET TOTAL (excluding Pool B) excluding Superannuation (Assets – Liabilities) 8,941,891 12,231,891 NET TOTAL (including Pool B) (Assets – Liabilities + Superannuation) 10,452,138 12,240,972 NET TOTAL (excluding Pool B) (Assets – Liabilities + Superannuation) 8,950,972 12,240,972 The Country J property
The first item not agreed was whether the property at G Street, City H, Country J (“the Country J property”) the husband had inherited from his mother in 1988 should be included in the balance sheet as a “NIL” value (as contended by the husband) or at the agreed value of $1,501,166 as determined by a single expert valuation.
The Value of the Suburb F property
The second matter of dispute was the value of the Suburb F property and whether it would be included at the valuation opined by the single expert of $3,550,000 or at the “hypothetical development value” of $6,840,000 (at Exhibit 4).
Since commencement of the proceedings the wife has sought to retain the Suburb F property where she lives. The husband has sought it be included at its hypothetical development value or that orders be made that he be permitted to seek it be re-zoned prior to sale.
The parties ultimately reached agreement such that a judicial determination as to its value was not required. The agreement as set out in the consent orders permits the husband, at his cost, to seek to have the property re-zoned and approved for subdivision within 18 months, and for its sale to occur as soon as practicable after this occurs, or if it does not occur, its sale at that time.
PROPERTY ADJUSTMENT
The consent position reached was that the Suburb D and Suburb F properties are to be sold and the net proceeds are to be divided 55 per cent to the wife and 45 per cent to the husband, and the husband is to retain his interest in the Country J property, and otherwise, the parties are to retain all assets and liabilities in their respective names.
In oral submissions it was explained that the parties agree the effect of this outcome is that, overall, the total pool of assets and liabilities will be divided approximately 48 per cent to the wife and 52 per cent to the husband, using the agreed values contained in the balance sheet. It was agreed that in order to achieve such a result the net sales proceeds of the Suburb D and Suburb F properties are to be divided 55 per cent to the wife and 45 per cent to the husband. The ultimate sale result is not yet known but such an outcome has the parties sharing in any rise or fall in the property sales.
The husband initially contended that there should be an adjustment in his favour by reason of his superior initial contributions. The wife initially contended that there would ultimately be no adjustment after considering holistically the direct and indirect financial and non-financial contributions of the parties over their long marriage.
The task of assessing the myriad of contributions requires a holistic approach as enumerated by the Full Court in Barnell & Barnell (2020) 60 Fam LR 377.
I am satisfied that it is just and equitable to make an order altering the parties’ property interests, and after consideration of the parties’ contributions which results in the husband receiving a small adjustment, and noting the parties agreed that there were no relevant s 75(2) factors warranting any further adjustment, I am satisfied that the consent position as reached between the parties is just and equitable.
The issues in dispute did not go to the ultimate division of property and whether it was just and equitable, but in relation to two discrete issues as to timing of payment and the payment of anticipated costs in respect of the possible re-zoning and subdivision. It was necessary to determine what orders would be just and equitable in respect of the overall finalisation of the dispute.
ISSUES IN DISPUTE
Suburb D property proceeds
The first issue in dispute was whether the entirety of the balance of the sale proceeds from the Suburb D property, which is to be sold first in time pursuant to the consent orders, should distributed to the wife (as sought by her) or be divided 55 per cent to the wife and 45 per cent to the husband as sought by him.
The wife contended that the entirety of the funds should be distributed to her in order that she could purchase a home in which to live and enable her to move from the Suburb F property. Her desire was not to rent. She does not have a rental history which may impact her capacity to secure a rental. She has a modest income from her share portfolio agreed to be $574 per week.
In support of her position the wife relied on her (untested) evidence as to a long history of financial control by the husband. She also gave evidence of the stress she continues to experience in the current living situation requiring her to take prescription medication to sleep.
The wife contends that the distribution of the balance of the Suburb D property proceeds as sought by her would be less than the total funds she will receive in order to affect the overall agreed distribution of 55 per cent of the sale proceeds of the Suburb D and Suburb F properties to her. She says this is the case if the value of the Suburb F property is $3,550,000. If the Suburb F property sells for higher than the figure of $3,550,000, as the husband asserts is likely to occur, this position is strengthened.
Assuming the Suburb D property sells at the agreed valuation figure of $3,760,000, after deducting the agreed $400,000 pursuant to Order 5(e), and allowing a sum for reasonable sales costs, the sum available would be likely to be something in the range of $3,250,000 to $3,300,000.
Assuming the Suburb F property sells at the agreed valuation figure (if not re-zoned or subdivided), it is contended by the wife that distribution to her of the balance of the Suburb D proceeds will result in her receiving only part of the sum that will be ultimately be paid to the wife, being 55 per cent of the net sales of both properties.
The husband contended that, as net amounts are not yet known, there is the possibility that the wife’s application will result in her receiving more than the agreed 55 per cent total net sales of both properties. He further contended there was a possibility that if that occurred, he would be unable to clawback any overpayment.
I accept the wife’s submission that the sum she seeks is likely to be less than that she will ultimately receive upon the sale of both properties, relying upon the agreed valuations. That is on the basis of the valuation evidence in respect of the Suburb D property of $3,760,000 and the Suburb F property of $3,550,000 (in the event the husband’s application to change the zoning is unsuccessful). I reject the husband’s submission that the unlikely possibility of a clawback being unable to be met lends against the order sought because, in addition to the 55 per cent division of the total net sales of the Suburb D and Suburb F properties, pursuant to the consent orders the wife retains shares and cash assets agreed at $1,156,583. The wife will also likely have the property that she intends to purchase with the sale proceeds or the balance of the sale proceeds to adjust against such an unlikely outcome of a clawback being necessary.
Secondly, the husband contended that the court had no evidence that 55 per cent of the Suburb D proceeds would be insufficient to rehouse the wife. That is true. Indeed, I have no evidence as to value of houses other than the value of the home that the wife currently lives in, if not re-zoned, being $3,550,000. On the evidence I can make no finding as to the likely cost of a home to be purchased by the wife. I cannot find that 55 per cent is sufficient or insufficient for the wife to rehome herself.
It is significant that 60 days after receipt of the net proceeds from the sale of the Suburb D property for the wife to purchase a home, she consents to an order for sole occupation of the Suburb F property by the husband. The husband may continue to live at the Suburb F property or may derive income through renting the home once vacated by the wife. There is no evidence upon which I can make any finding as to the likely rental income that would be received. That the husband will have a home in which to live pending the re-zoning application being finalised or the agreed 18-month period elapsing, lends in favour of the wife’s application.
The wife’s desire to purchase a home in the circumstances of this matter, particularly given the consent position set out in Order 8 that the husband shall be permitted, at his cost to seek to re‑zone the Suburb F property for a period of 18 months, is relevant to the determination of the timing of the distribution of the Suburb D property funds. To distribute the funds to the wife to enable the purchase of a home rather than potentially requiring her to wait for a period of 18 months due to the husband’s desire to re-zone the property albeit by consent is, in the circumstances, an order that is just and equitable, particularly having regard to the other assets available to the parties pursuant to the consent orders.
The husband gave evidence in relation to the timing and cost of the re-zoning application. He said:
I will be able to submit the application to council by mid-May 2025. At this stage I have spent $14,750.00 in cost in preparing the application and I estimate that the remaining report and application will cost approximately $60,000.00 by the time it is submitted.
Although the wife initially objected to the evidence, she did not press the objection. I accept the husband’s evidence as to the likely costs to be incurred as being $60,000.00.
The husband contended that he required a capital sum in order to pursue the application in respect of the Suburb F property and says, as he will be required to meet such costs in the first instance, that lends against the wife’s order sought. I accept his evidence that such sum is likely to be $60,000.00 as he deposed.
The husband will lose the income from the Suburb D tenant upon the sale of the Suburb D property. It was contended and I accept that the husband may also lose some of the balance of his income if the sale of the Suburb D property impacts his business operation. There was, however, no evidence in respect of this and the extent of any loss other than the rental income is unknown. The wife through her counsel, however, accepted the husband may suffer the loss of income of $600 per week over the 18-month period and proposed that a payment to the husband from the Suburb D property funds of $50,000 would address this contingency until final distribution of all the sale proceeds occurs.
The husband may earn some income by rental when the wife vacates the Suburb F property and in the event he rents the property out, however, I have no evidence of the likelihood of the property being able to be rented or the rental income likely to be received. The husband will have sole occupation of the home from 60 days after the Suburb D property settles and will not incur rehousing costs until the Suburb F property settles. It is an agreed position that he will retain cash and shares in the agreed settlement of $589,056. It is an agreed position that the husband will retain his interest in the property in Country J worth $1,501,166. He will have over $2,000,000 in assets available to him. His evidence is that he would not require his older brother to vacate the home in Country J. This is entirely a matter for the husband.
The dispute is in some ways akin to a partial property order application. That is, the issue is limited to the timing of the receipt of the property that is to be distributed by consent between the parties.
In the circumstances of the case, I am satisfied it is just and equitable that the wife should be able to rehouse herself at the earliest opportunity and that she should receive the net sales proceeds from the Suburb D property, less the sum of $110,000 which should be paid to the husband. The sum of $50,000 as proposed by the wife will provide a buffer against the husband’s possible income loss over the 18 months when he will lose the rental income from the Suburb D property. In addition, the husband should receive the further sum of $60,000 from the net sales proceeds from the Suburb D property, being the anticipated capital sum necessary to pursue the re-zoning of the Suburb F property. This sum should be provided so that the husband is not required to reduce his share portfolio/cash, from which he may derive income and so he is not required realise his interest in the Country J property. Accordingly, as set out in Order 5(f), I order that the net sales proceeds from the Suburb D property be distributed by payment of $110,000 to the husband and the balance of the proceeds be distributed to the wife. Order 6(e) will be as sought by the wife, that the balance following payment of any Capital Gains Tax or taxation payable upon sale of the property be paid to the wife.
The third argument of the husband was that it may be “complicated” to calculate the actual payment to be made following a re-zoning or subdivision when amounts have already been distributed. He contended that to maintain a 55 per cent to the wife and 45 per cent to the husband on every transaction will avoid this issue. I reject this argument. Solicitors who hold funds in trust have obligations to account to the parties on whose behalf they hold funds and to arrange distribution in accordance with orders made. Both parties are legally represented
This application goes to the mechanics of the timing of the implementation of the orders that I have found are just and equitable. The reality of the justice and equity of the timing of the payment in the facts of this case supports the orders that are made herein. It is not certain when the Suburb D property will sell and it is not certain when the husband will complete the necessary steps to seek the re-zoning and redevelopment of the land. However, after consideration of the fats of this case and the circumstances of these parties, the justice and equity in this case supports the orders that have been made in respect of the distribution of the sale proceeds from the Suburb D property for the reasons set out above.
It follows that in order to affect the ordered division of the net proceeds of the Suburb D and Suburb F properties that Order 9(f) will be made as sought by the Wife.
Should the wife meet half of the costs associated with the re-zoning and subdivision regardless of the outcome?
The second issue in dispute between the parties was as to the circumstances in which the wife should meet half of the costs associated with the re-zoning and subdivision. The husband sought an order that the wife is to repay 50 per cent of the costs incurred provided he has provided evidence of the costs. The wife sought that she should meet half of the costs of associated with the re-zoning and subdivision provided the costs had been agreed in writing and that the re-zoning or subdivision had been approved.
Consent in writing
In respect of the need for the costs to be agreed, the husband maintained that he should not require the wife’s agreement in respect of the costs to be incurred. The husband contended that the orders having been made by consent indicated that the wife should bear the expenses as she will ultimately bear the benefit of the increased sale price if the applications are successful. Those costs should not be all costs he elects to incur, but all agreed costs provided notice has been given. To order otherwise would be to give the husband capacity to make unilateral decisions, reasonable or otherwise, as to expenses to be incurred in pursuit of the application.
To ensure accountability and transparency the husband should provide notice in writing to the wife of the costs he proposes to incur and seek her consent which she should provide within 7 days.
Reimbursement only in the event of approval of re-zoning or subdivision
The wife contended that she had expressed from the outset of these proceedings her desire to retain the home and considered the husband’s project to re-zone or subdivide to be somewhat of a pipedream. Her Initiating Application filed supports her contention.
There was no evidence I was taken to addressing the likelihood of the success of the application. The husband relied on the P Valuers valuation and a Scoping Proposal dated October 2023 in support of his position that it was a rational decision to attempt to secure the highest price point.
I infer from his submissions that he contends the application will result in the highest and best use of the property. The highest and best use may well be achieved in the event the applications to re-zone or subdivide are successful.
The husband contends that the wife should share in both the risk as well as the benefit of the applications. This point has some merit, particularly as the orders have now been made by consent for that endeavour to be attempted. If there was evidence that the applications had a reasonable likelihood of success, the position that the wife should share in the expense irrespective of the outcome, would have more merit.
The difficulty with his position is due to the lack of evidence as to the merit of the venture. The valuation contains caveats and limitations on the rationale supporting the hypothetical development. Part A the Valuation Methodology and Part G Development Costs Analysis each identify limitations. The Scoping Proposal dated October 2023 sets out the proposal and next steps but does not provide an opinion as to the likelihood of proposed changes being approved. The husband’s own evidence about the steps he has taken to date is non-specific and general, and provides no basis to find or even infer that the project is likely to be successful. While he contends I should find it must be a rational decision, the same might be said of the wife’s reluctance to expend substantial funds on the unknown.
The husband uniquely was in a position to provide evidence of the merit of the application but has not. Accordingly, on the evidence relied on I can only conclude that the re-zoning and development application is, at present, speculative.
In short, the husband contends the cost is worth the investment and the wife does not. The wife has consented to permitting the husband to attempt to achieve his endeavour at his cost over the next 18 months, necessitating a delay in the sale by 18 months. There is no evidence before me that supports the finding that the project is likely to result in the parties making a gain arising from the proposed changes to the land zoning and minimum lot size.
The wife contends that the husband has not provided any evidence of the likelihood of success. Her contention is made out. It would not be just and equitable for the wife to bear the cost of the venture that is being championed by the husband in the absence of evidence of its prospect of success. For her to maintain a conservative approach to the cost of an investment being pushed by the husband is, in my view, her entitlement.
The husband contended that the orders having been made by consent indicated that the wife should bear the expenses as she will ultimately bear the benefit of the increased sale price if the applications are successful. If either the re-zoning or subdivision application is successful, the wife will share in the costs incurred because she will share in any financial benefit that will flow. This is the only outcome that is just and equitable in the absence of evidence otherwise. Given the husband’s confidence as to the likelihood of the application being successful, it may well be a moot point in which both parties enjoy the benefit of the delay in the sale.
CONCLUSION ON PROPERTY ORDERS
For the reasons set out above I am satisfied that the orders set out herein are just and equitable.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 14 February 2025
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