Benkie and Marlow

[2008] FamCA 423

FAMILY COURT OF AUSTRALIA

BENKIE & MARLOW [2008] FamCA 423

FAMILY LAW – PRACTICE AND PROCEDURE – Application for review

APPLICANT: Ms Benkie

RESPONDENT: Mr Marlow

FILE NUMBER: SYC 5637 of 2007

DATE DELIVERED: 1 May 2008

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: STEVENSON J

HEARING DATE: 18 April 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Batey

COUNSEL FOR THE RESPONDENT: Mr Richardson

SOLICITOR FOR THE RESPONDENT: McDonell Milne Toltz

Orders

1. That the wife’s application for Review filed on 8 December 2007 is dismissed.

2. That the wife’s application contained in the document headed “Amended Orders Sought by the Wife” dated 18 April 2008 is dismissed.

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: SYC 5637  of 2007

MS BENKIE

Applicant

And

MR MARLOW

Respondent

REASONS FOR JUDGMENT

THE PROCEEDINGS

1. On 4 December 2007 a Judicial Registrar dismissed the application of the wife, Ms Benkie, for orders to restrain the husband, Mr Marlow, from dealing with a property at S, except on certain conditions.  Essentially, orders in accordance with the wife’s application filed on 22 October 2007 would permit the husband to sell this property only with her agreement as to the sale price and appointment of an agent, with default provisions for a third party to determine these matters.  Upon completion of the sale all of the net proceeds would be held in a controlled monies account, pending finalisation of contested proceedings for settlement of property.

2. The husband opposed the wife’s application.  He sought orders to permit him to utilise the sale proceeds of the S property to purchase an apartment closer to the city.  Further, he proposed that he be at liberty to purchase furniture and contents for his new property from the sale proceeds and that he be permitted to borrow up to $200,000 on the security of the apartment.  Any funds then remaining from the proceeds of sale would be invested in a controlled monies account.

3. The proceedings came before me on 18 April 2008, by way of a Review of the dismissal of the wife’s application by the Judicial Registrar.  Counsel for the wife submitted an amended Minute of Orders Sought.  In summary, the wife proposed a sale of the S property, with the husband to nominate a real estate agent.  She sought to fix the sale price at $1,650,000 unless otherwise agreed or determined by a nominated third party.  Further, her proposed orders would regulate the sale process and require her agreement if there is an auction.  On completion of the sale, each party would receive $100,000 on account of legal fees and $175,000 from the net proceeds would be retained in a controlled monies account.

4. The husband sought that the wife’s application be dismissed.  Ultimately, therefore, the issues remaining for determination were as follows:-

   ·    To what extent, if at all, should the wife determine the sale price and selling process?

   ·    Should each party receive an amount of $100,000 from the sale proceeds on account of legal fees?

   ·    Should an amount of $175,000 from the sale proceeds be placed in a controlled monies account, pending finalisation of the proceedings for property settlement?

Consideration

The Wife’s Involvement in the Sale Process.

1. The husband has engaged Ms L as the selling agent and received advice from her in relation to the sale price and marketing program.  It seemed to be suggested that Ms L is the husband’s new partner.

2. The wife did not dispute the husband’s contention that Ms L has a great deal of experience with the sale of property in the S area.  If she is in a personal relationship with the husband, it seems to me to be most likely that she would try to achieve an optimal outcome from the sale for him.  In any event, the wife’s ultimate position was that the husband should appoint a real estate agent and she did not seek to prevent him from selecting Ms L.

3. Nothing in the evidence persuades me that the husband, with the assistance of Ms L, would do other than market the property appropriately and do all things necessary to achieve the best possible sale price.  I can see no reason for the wife to be involved in the mechanics of the sale or the fixing of the price.

Payment to Each of the Parties of a Sum of $100,000 On Account Of Legal Costs.

1. On behalf of the husband it was submitted that this claim was unsupported by any evidence, which would appear to be correct.  The wife acts for herself in these proceedings and has a direct brief arrangement with her counsel.

2. There was no evidence of payment by the wife of any fees to counsel to date or of any prospect that she would incur such a liability in the future.  There was no evidence of any fee agreement between the wife and her counsel.  Further, there was no evidence of any necessity for payment of fees to a proposed expert witness, such as a forensic accountant or real estate valuer.

3. For these reasons, I reject the wife’s claim that each party receive $100,000 from the proceeds of sale of the S property on account of legal costs.

Retention of $175,000 in a Controlled Monies Account

1. The husband is the sole registered proprietor of the S property.  His evidence was that he proposes to purchase an apartment close to the city from the sale proceeds of this property.  He would make this apartment available for occupation by the parties’ two adult children, who are currently doing university courses.  He proposes to live in an apartment at B owned by his current partner but he would return to live in his new property, with the children, if this relationship breaks down.

2. The husband proposes to spend part of the sale proceeds to purchase furniture for his new property.  He would carry out repairs to his partner’s B apartment and “perhaps” purchase furniture for their joint use.  In the event that all of the proceeds of sale of the S property are expended, he would arrange borrowings of “up to $200,000” on the security of his new property to meet any shortfall and to cover his legal fees.

3. On behalf of the husband it was submitted that he will purchase a property with substantial equity.  This submission would seem to be correct, as the proposed sale price of the S property is $1.7 million and the mortgage debt to the National Australia Bank is approximately $525,000.  The net equity in the S property would thus amount to approximately $1 million. 

4. The other substantial asset of the parties is a rural property at G, which is valued at approximately $1.1 million according to both parties.  It is common ground that the wife and/or her superannuation fund will take this property as part of her ultimate entitlement.  I was informed by senior counsel for the husband that he resigned as a director of J Pty Limited, a company which is the registered owner of the property, approximately one week prior to the hearing.  Control of this asset thus rests solely in the hands of the wife. 

5. Each of the parties has a superannuation fund.  The wife’s fund balance is approximately $415,000 and that of the husband about $28,000.

6. It must be that the wife contends that retention of $175,000 is necessary to protect her from a risk that orders in her favour will be defeated.  I can see no prejudice to her claim or an appreciable risk that orders in her favour will be defeated, if an amount of $175,000 is not preserved. 

7. The husband will have substantial equity in his new property, even taking into account his proposed borrowings of up to $200,000.  Nothing would prevent an order for sale of the new property to satisfy an order for payment of a lump sum by the husband to the wife. 

8. It seems to me that the husband would have the capacity to borrow up to $175,000.  The wife expressed concern that he would not have the capacity to service such a loan if he were to retire from his position with the public service.  In my view, this submission fails to give proper regard to his entitlement to a substantial government pension.  Further, the husband has approximately $28,000 in his superannuation fund, which he would presumably be able to access on retirement. 

9. I am far from persuaded that there is any real risk that the husband would be unable to raise an amount of up to $175,000 to satisfy any order for payment of a lump sum to the wife, whether by way of borrowings or sale of the new property.  I take into account also that there was no indication in her case as to how this figure was calculated and on what basis she may be entitled to payment of such a lump sum by the husband.

10. For these reasons I do not accede to the wife’s claim that a sum of $175,000 from the proceeds of sale of the S property be placed in a controlled monies account.

Result

1. The result is that I will make orders only that the application for Review of the decision of the Judicial Registrar on 4 December 2007 and, insofar as is necessary, her application contained in the document headed “Amended Orders Sought by the Wife” dated 18 April 2008 are dismissed.

I certify that the preceding twenty one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson

Associate:     

Date:              1 May 2008