Bertram & Sansone
[2021] FedCFamC1F 81
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bertram & Sansone [2021] FedCFamC1F 81
File number(s): MLC 1041 of 2020 Judgment of: MCEVOY J Date of judgment: 22 September 2021 Catchwords: FAMILY LAW – PROPERTY – Interim property – where the wife seeks partial property orders and the review of a senior registrar’s decision – where the husband seeks partial property orders and for a property to be sold – where the wife’s evidence was insufficient to support the orders she sought – wife’s applications dismissed – husband’s application granted Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Division: Division 1 First Instance Number of paragraphs: 8 Date of hearing: 22 September 2021 Place: Melbourne Counsel for the Applicant: Mr Hall Solicitor for the Applicant: T Solicitors Counsel for the Respondent: Self-represented Solicitor for the Respondent: Self-represented ORDERS
MLC 1041 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BERTRAM
Applicant
AND: MS SANSONE
Respondent
ORDER MADE BY:
MCEVOY J
DATE OF ORDER:
22 SEPTEMBER 2021
THE COURT ORDERS THAT:
Sale of H Street and partial property settlement
1.Within 21 days, the parties do all necessary acts and things to list the property H Street, Suburb B, Victoria …, more particularly described in the Certificate of Title Volume … Folio … (“H Street”), for sale.
2.For the purposes of the sale of H Street:
(a)the parties shall have joint conduct of the sale including the requirements that:
(i)both parties’ prior written consent shall be required before the Vendor’s Statement and contract of sale are provided to prospective purchasers; and
(ii)both parties be advised of all offers to purchase;
(b)the selling agent be as agreed forthwith, and failing agreement, the husband propose three agents, with the wife to select one agent from that list within 7 days, and in default the husband select the selling agent (“the Selling Agent”);
(c)the method of sale and reserve price be as agreed, and failing agreement as determined by the Selling Agent;
(d)the conveyancer be as agreed between the parties, and failing agreement as nominated by the Selling Agent;
(e)the parties be at liberty to provide a copy of these orders to the Selling Agent and conveyancer;
(f)the husband ensure H Street is tidy and presentable for the sale, with any reasonable costs incurred by the husband for this purpose, to be borne equally between the parties; and
(g)that notwithstanding the intervention order obtained by the wife on 20 May 2021, the Husband be permitted to attend H Street, including but not limited to all open inspections and any auction.
3.Upon the sale of H Street, the proceeds of sale be applied as follows:
(a)first, to pay all costs, commissions and expenses of the sale, including the Selling Agent’s commission and conveyancing expenses;
(b)secondly, to discharge Westpac home loan number … of approximately $1,122,550 (and the parties shall do all such things and sign all such documents to request that Westpac loan number …, of approximately $738,875 remain secured against S Street, Suburb B and J Street, Suburb B, until further order);
(c)thirdly, to Land Tax due and payable to the State Revenue Office (Assessment No. …) in the sum of $103,185, associated with properties jointly owned by the parties;
(d)fourthly to transfer $250,000, or any additional sum as may be required (“the tax fund”) to the husband’s solicitors, on trust for the parties, to meet the Capital Gains Tax (“CGT”) in relation to the sale of H Street, with such CGT to be calculated by an agreed accountant, in accordance with paragraph 6 herein, and in default of such calculation, the sum of $250,000;
(e)fifthly, to transfer $50,000 to the husband’s solicitors (“the shortfall fund”), on trust for the parties, to pay any shortfall that may arise from time to time between the rental income and the loan repayments in relation to the properties and loans/mortgages listed in Annexure D of the orders made 5 January 2021;
(f)sixthly, the balance to be divided between the parties by way of partial property settlement, as follows: and
(g)50% to the husband, payable to T Solicitors; and
(h)50% to the wife, payable to C Lawyers.
4.The parties execute all requisite documents to effect and complete the sale of H Street including all such documents and authorities that may be required to effect settlement of the sale via V Company, with the parties to be responsible for their respective costs associated with V Company, including verification of identity, workspace fee or other such fee charged by V Company.
5.In the event the wife fails to do all such things and sign any documents to list and effect the sale of H Street, the husband be forthwith:
(a)at liberty to apply to the Federal Circuit and Family Court of Australia pursuant to section 106A of the Family Law Act 1975 (Cth) (“the Act”), for the Court to appoint an officer of the Court or other person to execute the document, deed, or instrument in the name of the wife; and
(b)appointed as trustee and authorised to do all things and sign all documents necessary on behalf of the wife in her personal capacity to give effect to paragraph 3 and 4, including but not limited to:
(i)client authorisation that may be required for V Company or W Company transactions;
(ii)discharge of mortgage documents;
(iii)Transfer of Land documents; and
(iv)State Revenue Office documents.
Payment Capital Gains Tax arising from sale of H Street
6.Within 14 days of the parties signing a contract of sale for H Street, the parties engage an agreed accountant, and failing agreement, the husband propose three (3) accountants, with the wife to select one (1) accountant from that list within seven (7) days, at their joint expense, for the purpose of calculating any CGT payable by the parties in relation the H Street.
7.Upon receiving the tax fund referred to at paragraph 3(d) herein, the husband’s solicitors invest the tax fund into an interest-bearing account, on behalf of the parties.
8.To give effect to paragraph 7 herein, the parties forthwith, from the date of these orders, provide to the husband’s solicitors, their respective tax file numbers.
9.Once the CGT in relation to H Street becomes due, the husband’s solicitors apply the tax fund to pay the said CGT directly to the Australian Taxation Office, with any:
(a)shortfall in the tax fund required to pay the CGT, to be met by the parties equally; and
(b)surplus remaining in the tax fund after the CGT has been paid, to be divided between the parties, by way of partial property settlement, as follows:
(i)50% to the husband, payable to T Solicitors; and
(ii)50% to the wife, payable to C Lawyers.
Regulation of Investment Portfolio Income
10.That paragraph 5(b) of the consent orders made on 5 January 2021, be deleted and paragraph 5(d) be amended to read:
5 (c) thirdly, to pay the loan repayments, as and when they fall due each month, to the following accounts associated with the following properties:
(i)T Financial Account
A.T Financial Account …17; and
B.T Financial Account …58, with these accounts associated with the Westpac loans registered over H Street, Suburb B, J Street, Suburb B and S Street, Suburb B.
(ii)ANZ Accounts
A.ANZ Account …56, associated with the ANZ loans registered over K Street, Suburb F, L Street, Suburb M and G Street, P Town;
B.ANZ Account …96, associated with the ANZ loans registered over N Street, Suburb B, K Street, Suburb F and G Street, P Town;
C.ANZ Account …86, associated with the ANZ loans registered over N Street, Suburb B and G Street, P Town; and
D.ANZ Account …82 associated with the ANZ loans registered over K Street Suburb F, G Street, P Town.
11.Until further order, pursuant to s106A of the Act the husband be and is hereby authorised to instruct Q (Real Estate), R real estate agencies, on behalf of the wife, to direct the payments of rental income in accordance with this order.
Wife’s disclosure – employment
12.Within 7 days, the wife provide full and frank disclosure in relation to any employment undertaken by her since separation, including but not limited to:
(a)commencement of employment;
(b)the role and/or job description;
(c)contract of employment; and
(d)payslips for the last 3 months.
Compliance
13.If a party fails to comply with their obligations pursuant hereto, the other party be at liberty to apply to the Federal Circuit and Family Court of Australia at Melbourne pursuant to section 106A of the Act for the Court to appoint an officer of the Court or other person to execute the document, deed, or instrument in the name of the party in default.
Costs
14.All questions of costs be reserved to the trial judge.
15.All extant interim applications be otherwise dismissed.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Bertram & Sansone has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX-TEMPORE REASONS FOR JUDGMENT
MCEVOY J:
Before the Court today in the Judicial Duty List are interim property applications made by both the wife and the husband. At the callover the wife indicated that although she retained solicitors in the proceedings she had dispensed with their services this morning and was appearing on her own behalf. The husband is represented by counsel. The matter was stood down initially to enable the parties to have discussions, but no agreement was able to be reached. At approximately 2.53pm the husband’s solicitors provided an amended proposed minute of orders, and I heard the parties shortly after 3.00pm.
By an amended application of 23 March 2021 the wife seeks partial property settlement in lieu of spousal maintenance, together with certain other ancillary orders. She had also sought, as I understand it, to review orders made by the senior registrar on 25 March 2021, although this application was not actively pressed before me today and it would seem that the orders which are the subject of the review have largely been satisfied. The wife has not filed, as she was directed to do, an outline of submissions for the purposes of the hearing today. Nonetheless, she relies on her affidavit of 23 March 2021 and an affidavit filed at about 9.00am this morning.
Having read the wife’s affidavit material and heard argument from her in the course of today, I am not satisfied in all the circumstances that there is a proper basis to make any of the orders which are the subject of her applications. I have formed this view having regard, in particular, to a number of troubling features of her evidence. The first is the fact that she has not filed a financial statement since 27 October 2020. This makes it difficult to understand with any clarity the nature of her financial position. Another is what I accept to be the wife’s failure to respond to a request for answers to specific questions, which was due to be filed in March 2021. The wife had been ordered to answer certain specific questions in circumstances where some $2.8 million worth of payments had been authorised by her in the three-year period prior to separation, including in person cash withdrawals for which bank records show her to have been responsible. In all the circumstances I am not satisfied on the basis of the evidence presently before me that the wife does not, in fact, have sufficient funds to meet her ongoing living and legal expenses. The uncertain position in relation to the various withdrawals which it is said the wife has made and which have not, as matters presently stand, been accounted for by her is significant in this regard.
For his part the husband seeks orders for the sale of one of the parties’ properties (H Street). He relies on his Response to an Amended Application in a case filed 19 July 2021 (which itself is amended in accordance with the revised orders provided this afternoon), his outline of case filed 16 September 2021, as well as affidavits filed 19 July 2021, and 20 September 2021, and an affidavit of Mr C affirmed on 7 May 2021. The husband also relies on a Financial Statement filed 3 August 2021. It is said by the husband that there is sufficient equity in H Street to enable the payment of mortgage arrears, land tax, Capital Gains Tax, and the balance to the parties as to 50 per cent each by way of partial property settlement were that property to be sold. He says also that there is no ability for the amount sought by the wife to be paid from liquidity in the parties’ business, D Company, and he does not accept that she does not have sufficient funds to meet her ongoing living and legal expenses.
The husband maintains that H Street is the obvious property to sell, and that a sale of it would not prejudice the wife. Although the wife says that she wishes to develop that property, I am not satisfied that there is any other property that could feasibly be sold in place of H Street. Indeed, of the two properties which the wife suggests could be sold instead, one of them, as I understand it, is a property in which the husband is presently residing. The other property, a property in P Town, is apparently one that would not realise sufficient funds to bring the parties’ present debt levels under control. I note also the submission by counsel for the husband that there has previously been some level of agreement in open correspondence for the sale of H Street, and that up until today the only issue between the parties in relation to the sale of H Street had been the mechanics of sale and how the application of the proceeds of sale is to occur.
In all the circumstances I accept that it would be appropriate for H Street to be sold so as to enable the parties to have an interim distribution of funds by way of partial property settlement. I am satisfied that the orders which the husband has proposed today would be appropriate, would enable the retirement of a significant amount of debt once the H Street property is sold, and would also serve to relieve the cash flow pressure which is presently bedevilling the parties. Although the wife says there will be some level of prejudice to her, it is not at all clear on the wife’s material what this will be, and it is plain that at least one property needs to be sold. I am satisfied that H Street is the most suitable property to be sold, and that if it does not realise a sufficient amount for the purposes of interim property settlement (as the mother insists it will not) another property will need to be sold.
Accordingly, I will make the orders as set out in the minute sent to my chambers earlier this afternoon, save that the husband does not press order 10 in relation to the scope of the single expert business valuer’s report. The balance of the orders accommodate the need for regulation of the parties’ investment property income, which I am satisfied is necessary, for further discovery from the wife which I accept is also necessary, and for ancillary matters.
After the conclusion of the hearing and my pronouncement of the orders sought by the husband, the husband’s solicitors wrote to my Associate, pointing out that paragraph 7 of the orders referred to paragraph 3(c), which should in fact have been a reference to paragraph 3(d). I accept that this is clearly correct, and so pursuant to Rule 10.13(1)(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 the orders will be made with this minor amendment, notwithstanding the wife’s groundless objection to the adoption of this course by email to my Associate at 6.33pm on 22 September 2021.
I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy. Dated: 22 September 2021
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