AUSTIN & HONG - [2015] FamCA 1119

FAMILY COURT OF AUSTRALIA

AUSTIN & HONG

[2015] FamCA 1119

FAMILY LAW – PROPERTY – modest pool of assets and relatively short marriage – long period between final separation and property trial – where the husband has borrowed money from his family post-separation – debt secured over husband’s house property – where the wife will have sole care of the parties’ child – where the husband has mental health issues – where the husband is in receipt of a disability support pension – just and equitable.

Family Law Act 1975 (Cth)
Marriage Act 1961 (Cth)
Property Law Act 1974 (Qld)

Commissioner of Taxation v Worsnop (2009) FLC 93-392
Biltoft and Biltoft (1995) FLC 92-614
Petersens and Petersens (1981) FLC 91-095
Prince and Prince (1984) FLC 91-501
Mains v Redden (2011) FLC 93-478
Stanford & Stanford (2012) 247 CLR 108
Zalewski v Zalewski (2005) FLC 93-241.

APPLICANT:

Mr Austin

RESPONDENT:

Ms Hong

FILE NUMBER:

BRC

484

2008

DATE DELIVERED:

11 December 2015

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Kent J

HEARING DATE:

14 March 2013, 4 August 2015 and 11 September 2015

REPRESENTATION

FOR THE APPLICANT:

In person

COUNSEL FOR THE RESPONDENT:

Mr Carter

SOLICITOR FOR THE RESPONDENT:

Legal Aid, Queensland

Orders

it is ordered that:

The Husband pay to the Wife the sum of $20,000 within ninety (90) days of the date of these Orders, the Wife contemporaneously shall upon receipt of $20,000 do all acts and things necessary to release the caveat on the real property at B Street, Suburb A, Queensland, more particularly described as Title Reference – …, Lot …, …, County of C, Parish of D.
That if the said sum in paragraph 1 hereof is not paid in full within the period specified, the Husband is to pay the Wife interest on the said sum or so much of it as remains outstanding calculated from the due date on so much as is from time to time outstanding, in accordance with s 117B of the Family Law Act 1975 (Cth).
In the event that the Husband fails, omits, or neglects to comply with paragraph 1 of these Orders, that pursuant to s 80(1)(e) and/or s 80(1)(k) of the Family Law Act 1975 (Cth), that a trustee be appointed for the sale of the property situated at B Street, Suburb A, Queensland more particularly described as Title Reference – …, Lot …, …, County of C, Parish of D, that the said property vest in the trustee for the purposes of sale.
The Wife provide to the Husband within seven (7) days a list of three (3) solicitors to act as trustee for the sale of the property, the Husband within seven (7) days to provide notice by registered mail to the Wife of the solicitor selected as trustee, in the event the Husband does not provide such notice, the Wife shall appoint a solicitor as trustee from the panel.
If the Husband shall refuse or neglect to sign any document…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading AUSTIN & HONG

Details

AGLC: AUSTIN & HONG [2015] FamCA 1119
Case: [2015] FamCA 1119
Decision Date: 11 December 2015

CaseChat Overview and Summary

This matter came before Kent J of the Family Court of Australia concerning orders sought by the Wife against the Husband. The dispute centred on the payment of a sum of $20,000 by the Husband to the Wife, and the subsequent release of a caveat lodged by the Wife on real property located at B Street, Suburb A, Queensland. The orders also contemplated the potential sale of this property should the Husband fail to make the payment.

The primary legal issues before the court were the enforceability and terms of a Loan Agreement between the parties, the amount secured by a mortgage registered over the Husband's property, and how the value of this property should be assessed for the purposes of property settlement, particularly in light of the secured liability. The court was required to determine which of the amounts claimed by the Husband, as detailed in his mother's affidavit, constituted part of the Loan Agreement secured by the mortgage, and which were unsecured liabilities.

Kent J reasoned that while the Husband's mother's affidavit indicated additional liabilities owed to her by the Husband, not all of these formed part of the Loan Agreement that was secured by the mortgage. The court accepted that certain listed amounts were indeed liabilities owed to Ms M Austin, but found that at least some of these were unsecured. The court noted the wife's submission that the value of the property should be determined by deducting the secured liability from its gross value, as per the principles in *Biltoft and Biltoft*.

The court ordered that the Husband pay the Wife $20,000 within 90 days, at which point the Wife was to release her caveat on the B Street property. Provision was made for interest on any outstanding amount and for the appointment of a trustee for the sale of the property should the Husband fail to comply with the payment order. The proceeds of any sale were to be applied first to sale costs, then to discharge the registered mortgage, then to pay the Wife the $20,000 plus accrued interest, with any balance to be paid to the Husband.

Orders

Orders of the court

it is ordered that:

The Husband pay to the Wife the sum of $20,000 within ninety (90) days of the date of these Orders, the Wife contemporaneously shall upon receipt of $20,000 do all acts and things necessary to release the caveat on the real property at B Street, Suburb A, Queensland, more particularly described as Title Reference – …, Lot …, …, County of C, Parish of D.

That if the said sum in paragraph 1 hereof is not paid in full within the period specified, the Husband is to pay the Wife interest on the said sum or so much of it as remains outstanding calculated from the due date on so much as is from time to time outstanding, in accordance with s 117B of the Family Law Act 1975 (Cth).

In the event that the Husband fails, omits, or neglects to comply with paragraph 1 of these Orders, that pursuant to s 80(1)(e) and/or s 80(1)(k) of the Family Law Act 1975 (Cth), that a trustee be appointed for the sale of the property situated at B Street, Suburb A, Queensland more particularly described as Title Reference – …, Lot …, …, County of C, Parish of D, that the said property vest in the trustee for the purposes of sale.

The Wife provide to the Husband within seven (7) days a list of three (3) solicitors to act as trustee for the sale of the property, the Husband within seven (7) days to provide notice by registered mail to the Wife of the solicitor selected as trustee, in the event the Husband does not provide such notice, the Wife shall appoint a solicitor as trustee from the panel.

If the Husband shall refuse or neglect to sign any document or do any such thing as may be reasonably required to give effect to these Orders within fourteen (14) days of the service of the demand upon him to execute such document or do such thing, the Registrar of the Family Court of Australia, Brisbane Registry is appointed to sign such document and to do all acts and things necessary to give validity and operation to the documents.

Upon completion of the sale the proceeds of sale to be applied as follows:

(a) The net balance of the proceeds of sale be paid into the trust account of the trustee, to be held in the joint names of the parties, the trustee then to pay:

(i) Firstly to pay all costs, commissions and expenses of the sale and

pay any rates and water levies outstanding on the property;

(ii) Discharge of the registered mortgage affecting the real property;

(iii) The Wife is to be paid $20,000 plus all interest accrued until the

settlement date; and

(iv) The balance to the Husband.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The Loan Agreement relevantly provides:IN CONSIDERATION OF The Lender loaning certain monies (“the loan”) to the Borrower, and the Borrower repaying the Loan to the Lender, both parties agree to keep, perform and fulfil the promises and conditions set out in this agreement: Loan amount and interest1.The Lender promises to loan one hundred and twenty-three thousand ($123 000) AUD, to the Borrower and the Borrower promises to repay this principal amount plus the outstanding loan amount of seventy thousand dollars ($70000)AUD being for :personal loan($10000), loan for printer($13000), loan for [Japanese motor vehicle] ( $15000), Rates ($5000), Home loan repayments ($5000), renovations ($10000), new kitchen ($12000) to the Lender, at such address as may be supplied in writing within interest payable on the unpaid principal at the variable interest rate according to the [V Credit Union] variable home loan interest rate at the time of repayment, (currently 8.57% pa). The total loan amount of one hundred and ninety-three ($193000)AUD to be paid in full on sale of property at [W Street Suburb A] Queensland ...2.The Borrower agrees to pay the Lender the amount of one hundred and ninety-three thousand ($193000)AUD in full on the sale of his property at [W Street Suburb A] ...3.The Borrower leaves as security the deeds of the property at [W Street Suburb A], Queensland … with the Lender until such time as the loan is repaid.4.The Borrower agrees that if he/she should default, the Lender may sell the property to procure the balance of the loan.(errors and omissions in original) On 25 February 2008 a mortgage was registered over the husband’s Suburb A property in favour of Ms M Austin as mortgagee pursuant to the Loan Agreement. The loan consisted of two loans, one being for the amount of $123,000, and the other being for an outstanding amount of $70,000 which was for the following: a)Personal loan - $10,000; b)Loan for printer - $13,000; c)Loan for [Japanese] motor vehicle - $15,000; d)Rates - $5,000; e)Home loan repayments - $5,000; f)Renovations - $10,000; andg)New kitchen - $12,000. In respect of the outstanding amount of $70,000, in her affidavit of 5 October 2012 at sub-paragraph 28(c), the wife deposes that at the time of cohabitation the husband “… never mentioned that he owed any money to his family.” By way of his written submissions, the husband submits that the Loan Agreement now totals $283,257.20. In support of this, he relies on the affidavit of his mother, sworn and dated 4 March 2013. While I accept that the additional amounts listed in the schedule, marked as “Annexure I” of Ms M Austin’s affidavit dated 4 March 2013, are liabilities and are owed to Ms M Austin by the husband, at least some of them do not form part of the Loan Agreement secured by mortgage. They are unsecured liabilities of the husband and are discussed below. In written submissions on behalf of the wife it is acknowledged that the Court must have due regard to the encumbrance to the property, and determine its value, according to the approach in Biltoft and Biltoft (“Biltoft”)[9] “… by deducting the amount of the secured liability from the gross value of the asset”. On that basis the wife contends that the value of the property is to be taken in at $375,000 less the mortgage liability of $193,000 to arrive at the net figure of $182,000.[9] (1995) FLC 92-614.