Atwater & Segreti
[2024] FedCFamC1F 458
•9 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Atwater & Segreti [2024] FedCFamC1F 458
File number(s): MLC 14169 of 2023 Judgment of: WILLIAMS J Date of judgment: 9 July 2024 Catchwords: FAMILY LAW – PROPERTY – Interim proceeding – Application by the wife for partial property settlement – Agreement reached as to sale of the former family home, business valuations and attending mediation – Where the husband opposed the partial property settlement unless orders were made providing for payment of outstanding tax liability – What orders are just and equitable – Orders made for payment to the wife as partial property settlement – Orders otherwise made by consent Legislation: Family Law Act 1975 (Cth) ss 75, 79 Cases cited: Bearup & Bearup (1993) FLC 92-412; [1993] FamCA 72
Furtado & Furtado [2011] FamCA 1018
Harris & Harris (1993) FLC 92-378; [1993] FamCA 49
Strahan & Strahan (2009) FLC 93-466; [2009] FamCAFC 166
Zadenev & Zadenev [2013] FamCA 838
Division: Division 1 First Instance Number of paragraphs: 26 Date of hearing: 14 June 2024 Place: Melbourne Counsel for the Applicant: Ms Southey Solicitor for the Applicant: John Snodgrass & Associates Counsel for the Respondent: Ms Teicher Solicitor for the Respondent: Taurus Legal Management ORDERS
MLC 14169 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ATWATER
Applicant
AND: MR SEGRETI
Respondent
ORDER MADE BY:
WILLIAMS J
DATE OF ORDER:
14 JUNE 2024
THE COURT ORDERS THAT:
Sale of B Street, Suburb C
1.Within 14 days of the making of these orders, the Husband and Wife do all acts and sign all necessary documents to place on the market for sale the property located at B Street, Suburb C (“the Suburb C Property”) in accordance with the following sale protocol:
(a)The Suburb C Property will be listed for sale by private treaty or auction as recommended by the real estate agent with a real estate agent as agreed between the parties, and in default of agreement as to the agent, with such agent as the CEO of the REIV appoints, with the costs of and incidental to such appointment (including advertising costs) to be deferred and paid from the sale proceeds of the Suburb C Property.
(b)The listing price will be as agreed between the parties or, in the absence of agreement, the price nominated as the fair market value thereof by a Valuer appointed by the CEO of the REIV, the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when they fall due.
(c)The parties will each co-operate in every way with the real estate agent, including but not limited to:
(i)Making a key available to the agent;
(ii)Allowing inspection of the property at all reasonable times requested by the agent;
(iii)Doing or saying nothing to hinder or prevent a sale being effected;
(iv)Ensuring that the property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(v)Signing all documents requested by the agent in relation to the listing for sale of the property; and
(vi)The Husband and Wife will execute a contract for sale in the form prepared by the conveyancer who shall be appointed by agreement between the parties, and failing such agreement by the wife selecting one of three conveyancers to be proposed by the husband within 7 days of the Husband’s proposal.
2.Within 14 days of execution of the contract of sale for the Suburb C property, the parties do all acts and sign all documents necessary to facilitate the release of the deposit funds for the Suburb C property pursuant to s 27 of the Sale of Land Act 1962 (Vic), such funds to be paid to the Wife be way of part property settlement to Taurus Legal Management Trust account.
3.Upon settlement of the sale of the Suburb C Property, the sale proceeds are to be applied as follows:
(a)To pay costs and commission of sale;
(b)To discharge the mortgage encumbering the property;
(c)To pay the cost of business valuations pursuant to Order 5;
(d)To pay the sum of $100,000 to the Wife by way of part property settlement to Taurus Legal Management Trust Account less any amount received pursuant to Order 2;
(e)The balance to be held on trust by Taurus Legal Management pending written agreement between the parties or an order of the Court.
Subpoenas
4.That the Wife have leave to issue up to ten subpoenas.
Business valuations
5.The parties do all acts and things and sign all documents as may be required to jointly engage a single expert forensic accountant herein for the purpose of valuing the Husband’s business known as D Pty Ltd and the Wife’s business known as E Pty Ltd and such other entity as agreed between the parties, with the cost of the valuations to be paid from the net proceeds of sale of the Suburb C property.
6.For the purpose of Order 5, the Wife propose three forensic accountants and the Husband select one of the three.
Mediation
7.That the parties shall attend a private mediation in September 2024 on a date to be determined and for that purpose, the cost of the Mediator and any venue costs shall be paid by parties equally.
8.For the purpose of Order 7, the Husband propose three mediators and the Wife select one from the three.
9.That no later than 7 days prior to the mediation, the parties shall exchange with each other or if represented, their legal representatives, and the nominated Mediator, copies of:
(a)All relevant Applications, Responses, Affidavits and Financial Statements filed in these proceedings;
(b)Any relevant documents exchanged between the parties;
(c)A Confidential Outline of Case (Dispute Resolution) document;
(d)Copies of any market appraisals or valuations of any asset or financial resource, the value of which is in dispute, and valuations of any superannuation interests; and
(e)A Minute of Orders sought.
AND THE COURT FURTHER ORDERS THAT
10.All applications for final orders be adjourned for hearing before the Hon. Justice Williams on 20 February 2025 at 10.00am as a 2 day matter and that the evidence in chief of all witnesses be given by affidavit.
11.The matter be adjourned to Division 1 of Federal Circuit and Family Court of Australia on 25 October 2024 at 10.00am for Mention Hearing before the Hon. Justice Williams.
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 Atwater & Segreti has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Williams J
INTRODUCTION
This matter came before the court as a contested interim hearing about property, parenting, an anti-suit injunction, a stay application, spousal maintenance, and an objection to a subpoena.
Fortunately, the parties were able to reach agreement about the proposed sale of their former family home in Suburb C (“the Suburb C property”), business valuations, and attending mediation. The husband’s counsel advised the court that the husband did not intend to pursue the subpoena objection, parenting orders, the anti-suit injunction nor the stay application, on either an interim or final basis.
A Minute of proposed interim orders was submitted to the court and the orders sought, were made by consent, with the exception of paragraph 3(d) of the proposed Minute. The remaining dispute between the parties was the distribution of the proceeds of sale of the Suburb C property. Depending on the sale price ultimately achieved, it is estimated the net proceeds of sale of the Suburb C property will be between $430,000 and $440,000.
The wife sought a payment of $100,000 from the proceeds of sale of the Suburb C property as a partial property settlement pursuant to s 79(4) of the Family Law Act 1975 (Cth) (“the Act”). The husband opposed the payment to the wife unless orders are also made providing for a payment of his outstanding personal tax liability of $142,470 and the wife’s personal tax liability of $60,361.
On 14 June 2024, an order was made for payment of $100,000 to the wife as a partial property settlement. These are my reasons.
Background
The parties commenced a relationship in mid-2011 and married in Country F in late 2011. In 2013 they moved to Melbourne. In late 2015 they established a business, which the husband continues to operate. In 2015 their first child was born.
In December 2018 they separated, prior to reconciling in May 2019. In late 2020 they purchased the Suburb C property as the family home.
The wife alleges the husband abused her and the child whilst they were reconciled. However, after an alleged incident of family violence, when she was pregnant, the wife obtained an interim intervention order in 2021, with the wife and child named as aggrieved family members.
Subsequently both parties established business. At the end of 2022 the family travelled overseas, via Country F. In early 2023 the husband signed a 12-month lease on a property in Country F, where the family lived. The husband established another business in Country F, which he continues to run.
In early 2023 the oldest child was enrolled in school in Country F, which he continues to attend. In mid-2023 the husband returned to Australia, whilst the wife and children remained in Country F. In mid-2023 the family proposed to holiday in Australia, but according to the wife, following an asserted incident of family violence, she decided to remain in Country F with the children. Following a further asserted incidence of family violence involving the husband retaining the younger child, the husband returned to Australia in mid-2023, whilst the wife and children continued to live in Country F.
On 4 December 2023, the wife filed an application in this court seeking financial relief. On 19 February 2024 the husband filed a response to the wife’s property application and sought parenting orders and injunctive relief.
On 19 April 2024, the wife filed a subpoena addressed to the Department of Home Affairs seeking the husband’s immigration records. On 2 May 2024 the husband filed a Notice of Objection to the subpoena. The objection was withdrawn by the husband during the interim hearing.
During the hearing of the interim applications, counsel for the husband advised the court the husband was in Country F, where he was required to remain whilst on bail from charges.
Documents relied upon
The wife relied upon the following documents:
(1)Outline of Case document filed 10 April 2024;
(2)Amended Application for Final Orders filed 5 April 2024;
(3)Affidavits filed 5 April 2024 and 15 May 2024;
(4)Financial Statement filed 1 December 2023;
(5)Documents produced pursuant to subpoenas; and
(6)Costs Notice.
The husband relied on the following documents:
(1)Case Summary Document filed 10 April 2024;
(2)Response to Final Orders filed 19 November 2023;
(3)Affidavits of husband filed 5 April 2024 and 16 April 2024; and
(4)Financial Statement filed 19 November 2023.
Relevant Legal Principles
The relevant legal principles pertaining to orders for partial property settlement are well established.
As to the court’s power to order interim funding and the principals to be applied, the Full Court of the Family Court in Strahan & Strahan (2009) FLC 93-466 stated at [132] and [137] that:
[132]In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the "overarching consideration" is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
…
[137]Once a court proceeds to exercise the power in s 79 of the Act, being in the substantive phase, a court is required to undertake consideration of the matters in s 79(4) including by reference to s 79(4)(e) the matters in s 75(2) so far as they are relevant. However consideration of such matters may be brief and if it is established that "it seems likely to the court that … the applicant … will be likely receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made”…
As to the restraint and caution which should be exercised by a trial judge, the Full Court said at [136]:
[136]As to the third matter identified at 79,930 by the Full Court in Harris, in discussion before us it was described as the "adjustment issue" or "claw-back issue". It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant "more than they would be indubitably entitled to on a final hearing" or alternatively "would it give them so much that it could not be adjusted on a final hearing?" As we have observed the Full court in Zschokke at 83,220–221 stressed the importance of consideration of the "adjustment issue" if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be "capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power".
See: Bearup & Bearup (1993) FLC 92-412, Harris & Harris (1993) FLC 92-378, the decision of Murphy J in Furtado & Furtado [2011] FamCA 1018 at [10]-[11] and Watts J in Zadenev & Zadenev [2013] FamCA 838 at [21].
Discussion
Counsel for the wife submitted it was just and equitable to make an order as sought by the wife, particularly having regard to the husband having previously retained the proceeds of sale of both two properties in Queensland ($160,000) and Motor Vehicle 1 ($50,000) and the addbacks claimed by the wife arising from the husband’s asserted transfer of funds. Counsel for the wife conceded $110,000 of the Queensland property sale proceeds was paid to the ATO, in accordance with the statements of the husband at paragraph 85 of his affidavit filed 5 April 2024.
There were no submissions by counsel for the husband that there should not be an interim property distribution, or that the interests of justice dictate no distribution should be ordered. Counsel referred me to the allegations of the husband deposed to at paragraph 76 of his 4 April affidavit that the wife had moved $40,000 between her accounts and had been transferring amounts of $2,000 per month to a third party.
Counsel for the wife addressed the court about the s 79(4) considerations, including the 11‑year length of the relationship, contributions by both parties to the acquisition of the joint assets, the discrepancy in the respective incomes of the parties and the wife’s contributions as primary career of the two young children, aged 8 and 2, including now being solely financially responsible for the children. Counsel for the husband appropriately conceded the s 79(4) factors.
As to whether the interim property order was capable of reversal at the time of ultimate exercise of the s 79(4) power, counsel for the wife submitted the wife’s entitlements would far exceed the amount currently being sought by her and if she were wrong, because the pool has yet to be finally valued and determined, there would be sufficient proceeds of sale remaining in trust, to more than adequately address the husband’s entitlements. Counsel for the wife conceded, again appropriately, that the wife would be entitled to at least the amount proposed to be distributed to her.
Counsel for the wife submitted that if the court acceded to the husband’s proposal to distribute funds to the parties to enable payment of the combined tax liabilities (approximately $202,000) there would most likely be insufficient remaining funds to pay the wife her ultimate entitlement, irrespective of whether her claims for addbacks of funds allegedly transferred out of the pool by the husband were successful. That was so because the only other substantial asset of the parties is the business conducted by the husband, which he estimates to be worth $35,000 (per his Financial Statement filed 19 February 2024).
Having taken into consideration the submissions of both counsel, I am satisfied in the circumstances of this case, it is in the interests of justice to exercise my power to make an order for a partial property settlement in favour of the wife. I am also satisfied, upon consideration of the s 79(4) factors, and as conceded by counsel for the husband, the wife will be likely to receive the sum of $100,000 as sought by her, and that payment to her would be reversable, if applicable, at the time of final property orders. I am not satisfied at this juncture, any additional payment to the husband of $160,000, as sought by him is either warranted or capable of reversal.
Because of the above reasons, orders were made for the wife to receive a partial property settlement of $100,000 from the sale of the Suburb C property. Orders were otherwise by consent, in accordance with the Minute prepared by the parties marked Exhibit “A” and placed on the court file.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 9 July 2024
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