BADER & SPINNER

[2019] FCCA 575

FEDERAL CIRCUIT COURT OF AUSTRALIA

BADER & SPINNER [2019] FCCA 575

Catchwords:
FAMILY LAW – Wife refusing to comply with order for her to vacate former matrimonial home – wife asserting at trial that one of the two major matrimonial assets (the business) was deliberately rendered valueless by the husband – application under s 79A to set aside final consent orders settling dispute – application granted – proceeding regularised – trial refixed.

Legislation:

Family Law Act 1958, s.79A

Applicant: MR BADER

Respondent: MS SPINNER

File Number: MLC 6810 of 2015

Judgment of: His Honour Judge J D Wilson QC

Hearing date: 4 and 5 March 2019

Date of Last Submission: 5 March 2019

Delivered at: Melbourne

Delivered on: 5 March 2019

REPRESENTATION

Counsel for the Applicant: Ms E Swart

Solicitors for the Applicant: Davis Zucco Lawyers

Counsel for the Respondent: Mr A Sandbach

Solicitors for the Respondent: Lennon Lawyers

ORDER

By 4pm Thursday 7 March 2019 the parties submit a minute of proposed orders that give effect to these reasons.

IT IS NOTED that publication of this judgment under the pseudonym Bader & Spinner is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 6810 of 2015

MR BADER

Applicant

And

MS SPINNER

Respondent

REASONS FOR JUDGMENT

(ex tempore)

1. On 26 August 2016 consent orders were made by me on a final basis in this proceeding.  Of importance, the parties agreed that within seven days the property in Property A they owned would be sold under a relatively straightforward regime and upon the settlement of the sale, the net proceeds were to be applied as to half to the applicant and as to the other half to the respondent. 

2. That was August 2016. 

3. The Property A property has not been sold and events have moved to March 2019.  The division of property has not yet been ordered to finality.

4. This case has been before me since those consent orders very many times.  On 8 February 2017 this case was first before me following the consent orders.  On that day the husband sought orders on the return of an application in a case dated 31 January 2017 for the sole use and occupation of the former matrimonial home and until settlement of its sale and that a reserve price of $3 000 000 be set.  The husband also asked for the “redetermination” of paragraph 12 of the final orders made on 26 August 2016.  That order required the parties to do all acts and sign all documents so that the business known as Company B conducted by Company C could be sold. 

5. The former matrimonial home had not been sold in accordance with the consent orders made on 26 August 2016. 

6. On 8 February 2017 both parties were represented.  A debate ensued about why the property had not been sold.  It was apparent that whatever agreement had been reached on 26 August 2016 had been largely ignored.  It was apparent that a significant factual debate was involved to explain why the consent orders had broken down.  The parties requested me to resolve the impasse which I agreed to do by fixing the proceeding for trial for one day.  Court commitments permitted me to get to the case no earlier than 20 December 2017.  Orders were made for the filing of each parties’ affidavit material ahead of 20 December 2017.  In that order the expression “final hearing” was used in five paragraphs.  On no view was there scope to construe those orders as contemplating anything other than a full trial on all issues on 20 December 2017. 

7. Prior to the final hearing, on 27 November 2017 this proceeding was dealt with by her Honour Judge Williams as her Honour then was. The solicitors for each party appeared before her Honour. In order to regularise the status of the application advanced by the wife, her Honour ordered the wife file an application under s 79A of the Family Law Act (“Act”) together with material in support by 15 December 2017. Her Honour adjourned all applications (inferentially, the husband’s contravention application) to 28 February 2018 for determination of the s 79A application.

8. On 28 February 2018 the parties were again before me.  Each was represented.  Prior to that date the wife had filed a number of affidavits complaining about the husband’s conduct of the business and about deficiencies in documentation, especially financial documentation, concerning Company C Pty Ltd.  It was apparent to me that any agreement exhibited in the consent orders of August 2016 had or was in an advanced stage of evaporation. 

9. On 28 February 2018 I ordered the proceeding to go to mediation to be concluded by 14 March 2018 and I adjourned the proceeding to 15 March 2018 in case the proceeding did not settle. On 28 February 2018 I granted leave to file an amended application in a case. The wife’s amended application sought s 79A orders.

10. Confusion arose about the mention on 15 March 2018 so it was adjourned to 19 April 2018, there being no other orders made that day. 

11. It seemed to me that by April 2018 (20 months after the August 2016 consent orders were made) the parties’ intransigent attitude towards one another was beginning to bite.  Consent orders were made for the trustee of the unit trust to disburse $36 500 to each.  The wife was ordered, although not by consent, to sign an exclusion auction authority with a particular real estate agency.  Other more specific orders directed to the sale of the property were also made. 

12. The contravention application dated 20 February 2018 was dismissed. 

13. I fixed the trial of this proceeding for 4 March 2019 for three days and made the usual orders to facilitate a trial. 

14. It must be pointed out that a decision on the wife’s s 79A application had not been made.

15. The wife did not do as she was ordered in relation to signing an authority to appoint an agent to sell the property. 

16. On 3 May 2018 this case came again before me.  By consent, orders were made requiring the wife to sign an exclusive auction authority with a particular real estate agent by 2pm that day.  An order, not by consent, was made for the auction of the property to be held on 16 June 2018. 

17. On 19 November 2018 yet another application in this case came before me.  The wife had not vacated the property.  I ordered her to leave by 5 January 2019.  I also ordered the husband to have sole control of the sale. 

18. The wife did not comply with those orders either. 

19. This proceeding came before me on 4 March 2019.  It was listed for a three day trial.  Mr Sandbach of counsel appeared for the wife.  Ms Swart of counsel appeared for the husband.  Mr Sandbach told me he relied on an amended application in a case filed at 8:54am on Friday 1 March 2019.  That amended application was supported by the wife’s most recent affidavit sworn 1 March 2019.  Relevantly paraphrased, in that amended application and affidavit the wife –

    a)again sought leave under s 79A of the Act to vary the 26 August 2016 consent orders but this time in respect of different provisions of those consent orders;

    b)sought orders appointing her as trustee for the sale of the property and orders for the husband to execute documents to vest her as trustee for sale; 

    c)sought orders for the sale of public auction; and

    d)applied for the net proceeds of sale to be divided as to 80% to her and 20% to the husband. 

20. The wife sought sole occupancy of the property pending sale and a stay of the 19 November 2018 orders requiring the wife to vacate the property by 5 January 2019 and the husband to have sole control over the sale. 

21. In her affidavit sworn 1 March 2019 the wife among other things deposed to the destruction of the value of the business conducted by Company C Pty Ltd.  She deposed to the husband unilaterally transferring $187 500 from bank accounts maintained by the business.  She said the husband permitted a lease in respect of which the business was tenant to lapse and to the destruction of the value of the business.  She said she feared the husband would sell the former matrimonial home below market value if he were permitted to control the sale.  She conceded breaches of court orders.  She said she has no option but to continue to live in the former matrimonial home. 

22. Ms Swart of counsel for the husband said I should hear her client’s contravention application and refuse leave to entertain the s 79A application as it was filed significantly out of time.

23. Against that background I now rule on the competing versions urged before me. 

24. First, let me address the s 79A application.

25. The Honourable Justice Williams, when a member of this court, ordered on 27 November 2017 as part of the callover of cases conducted by her Honour and the Chief Justice that the wife had until 4pm on 15 December 2017 to file and serve any applications she was minded to bring pursuant to s 79A. She did comply. She amended that application by amendment filed 28 February 2015. It was wrong to proceed on the basis that the wife did not comply with the orders made by her Honour Judge Williams, as the Honourable Justice Williams then was, to file the s 79A application by 15 December 2017. She did. No order granting that leave has been made. It seems readily apparent that the parties have proceeded on the footing that the leave application would be heard as part of the trial ordered on 4 March 2019 when a full and exhaustive examination was to be conducted into the appropriateness of the consent orders made in August 2016. That should have happened as it was intended to happen on the hearing the trial previously ordered to commence on 4 March 2019. The late filing of the wife’s amended application, especially with its radically different formulation of the percentage division of the assets has caused this case to take a very different course. Among the many areas of novelty in the new course proposed by the wife is her application to become trustee for the sale of the property. It will be recalled that the husband had been ordered to take control of the sale of the property and in order to effect that sale the wife was to vacate the property by early January this year. She has refused to go.

26. By reason of the late filing of material by the wife the husband has had no opportunity to respond beyond saying that he opposes the order sought.  I have some sympathy for his position.  After all, the wife has persistently failed to comply with orders for the sale of the property.  I do not accept her explanation that she fears that the former husband will sell at a price that does not realise the best possible price.  The wife has been wholly uncooperative since August 2016 in taking steps to sell the property.  The time for such obstructive conduct to stop is now upon her. 

27. The wife has made allegations about deficiencies in the conduct of the business run by Company C Pty Ltd.  Those allegations began with complaints about tax returns and other financial documentation not being supplied.  The wife then complained that the lease pursuant to which the business had operated was wrongly permitted to lapse.  She then said the business was once valuable and had it been sold as previously ordered it would have realised a favourable price to be divided as contemplated by the August 2016 orders.  If she is correct in those contentions there may be force in her proposition that the overall asset base for division in this case should be divided in proportions different to half-half as was once thought fit. 

28. It seemed to me that facts surrounding the wife’s grievances about the fate of the business have not yet been adequately explained.  They need to be. 

29. The time has come to pronounce upon the application made under s 79A. I grant leave for the wife to file and serve the amended application issued on 1 March 2019. I make orders in terms of paragraph 1 of the amended application in a case. I further order as follows –

    a)by 4pm on 12 March 2019 the must wife vacate the property at Property A and at that time she must give vacant possession of the property to the husband;

    b)paragraph 2 of my orders of 19 November 2018 is hereby pronounced afresh;

    c)upon the property being sold the net proceeds are to be held in an account in the names of the parties with the solicitors controlling it and no amount is to be disbursed therefrom without further order of this court;

    d)the question of the percentages by which the net proceeds of sale are to be divided is to be determined after a trial limited to whether the business previously conducted by Company C Pty Ltd was conducted in a manner that compromised the realisation of the best price available as was contemplated by paragraph 12 of the orders made on 26 August 2016;

    e)the parties are to bring in minutes by 4pm on Thursday 7 March 2019 to give effect to the orders in the subparagraphs immediately above; and

    f)the trial of that remaining issue will be heard over no more than two days.

30. I reserve costs.  It will be appropriate to make a costs order in this case.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of his Honour Judge J D Wilson QC

Date:     7 March 2019