FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Bhandari & Garrett [2024] FedCFamC2F 11
File number(s): MLC 7810 of 2021 Judgment of: JUDGE STEWART Date of judgment: 10 January 2024 Catchwords: FAMILY LAW – PROPERTY – Section 78 – Equitable interests – Property outside jurisdiction – Declarations – Orders made Legislation: Family Law Act 1975 (Cth) ss 31(2), 44(3), 78, 78(1), 78(2), 79, 111AA, 131(2)
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 25(2), 131(2)
Cases cited: Ali & Ali [2019] FamCA 1012
Archer v Preston (1672) 1 Eq Abr 133
Bosanac v Commissioner of Taxation [2022] HCA 34
Chen & Tan [2012] FamCA 225
Davies v The National Trustees Executors and Agency Co of Australasia Ltd [1912] VLR 397
Galloway & Midden (No.2) [2014] FamCAFC 60
Hamlin v Hamlin [1986] Fam 11
Lord ArglassevMuschamp (1682) 1 Vern 75; 23 ER 322
Lord CranstownvJohnston (1796) 3 Ves 170; 30 ER 952
Lord Kildare v Eustace (1686) 2 Ch Cas 188; 22 ER 905
Martin v Martin (1959) 110 CLR 297
Michael Wilson and Partners Ltd v Robert Colin Nichols [2008] NSWSC 1230
Pates v Pates [2018] FamCAFC 171
Teo & Guan [2015] FamCAFC 94
The British South Africa Company v The Companhia de Moçambique [1893] AC 602
Division: Division 2 Family Law Number of paragraphs: 78 Date of hearing: 10 May 2023 Place: Melbourne Counsel for the Applicant: Mr Howe Solicitor for the Applicant: Swiftly Legal Solicitor for the Respondent: The Respondent appearing in person ORDERS
MLC 7810 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS BHANDARI
Applicant
AND: MR GARRETT
Respondent
ORDER MADE BY:
JUDGE STEWART
DATE OF ORDER:
11 JANUARY 2024
THE COURT ORDERS THAT:
1.Pursuant to subsection 78(1) of the Family Law Act 1975 (Cth) (“the Act”), it is declared that the parties own the property known as B Street, Suburb C, in the State of Victoria (“the Suburb C Property”), as joint tenants as to 50% to the Applicant Wife and 50% to the Respondent Husband.
2.Pursuant to subsection 78(2) of the Act:
(a)An option be and is hereby granted to the Respondent Husband to purchase the Applicant Wife’s right title and interest in the Suburb C Property.
(b)The Respondent Husband must advise the Applicant Wife in writing within 30 days of the date of these orders whether he wishes to exercise the option granted under order 2(a) hereof.
(c)If the Respondent Husband notifies the Applicant Wife in accordance with order 2(b) hereof that he wishes to exercise the option granted under order 2(a) hereof, then:
(i)Within 90 days of the date of these orders (“the due date”), the Respondent Husband shall pay to the Applicant Wife amounting to 50% of the equity in the Suburb C property (“the Suburb C Purchase Payment”), which shall be calculated as follows:
A.($1,600,000 less the quantum of the National Australia Bank mortgage secured against the Suburb C Property on the…
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CaseChat Overview and Summary
The primary legal issue before the court was the equitable distribution of property and financial interests between the parties, in accordance with the provisions of the Family Law Act 1975 (Cth). Specifically, the court had to determine how to distribute the assets in a manner that was considered just and equitable, taking into account the contributions made by each party to the relationship and their respective needs. The court also had to decide on the appropriate terms for the sale of the Suburb C property, should the respondent choose not to exercise his option to purchase the applicant's share.
In its decision, the court declared that the parties held various properties and financial interests jointly or in trust for one another. The court granted the respondent an option to purchase the applicant's interest in the Suburb C property, with specific terms regarding the calculation of the purchase price and the discharge of the mortgage. If the respondent chose not to exercise this option or failed to notify the applicant within the specified timeframe, the court ordered that the property be sold by auction, with proceeds distributed equally between the parties after expenses and debts were settled. The court also addressed the division of other financial assets, including the joint bank account and personal bank accounts, and ordered the respondent to make certain payments to the applicant within 30 days of the decision. The court's orders provided for a detailed process for the sale of the Suburb C property and the distribution of its proceeds, ensuring that the assets were divided in a manner that was fair and just for both parties.
The court's decision provided clarity on the division of property and financial interests between the parties, offering a structured approach to the sale of the Suburb C property and the distribution of its proceeds. The orders also addressed the immediate financial obligations of the respondent, ensuring that the applicant received her due share of the assets. The court granted the respondent the option to purchase the applicant's interest in the Suburb C property, with clear terms and conditions, and set out a process for the sale of the property if the respondent chose not to exercise this option. The decision reflects the court's consideration of the parties' contributions and needs, as well as the equitable distribution of assets in accordance with the Family Law Act 1975 (Cth).
Orders
Orders of the court
MLC 7810 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:
MS BHANDARI
Applicant
AND:
MR GARRETT
Respondent
ORDER MADE BY:
JUDGE STEWART
DATE OF ORDER:
11 JANUARY 2024
THE COURT ORDERS THAT:
1. Pursuant to subsection 78(1) of the Family Law Act 1975 (Cth) (“the Act”), it is declared that the parties own the property known as B Street, Suburb C, in the State of Victoria (“the Suburb C Property”), as joint tenants as to 50% to the Applicant Wife and 50% to the Respondent Husband.
2. Pursuant to subsection 78(2) of the Act:
(a) An option be and is hereby granted to the Respondent Husband to purchase the Applicant Wife’s right title and interest in the Suburb C Property.
(b) The Respondent Husband must advise the Applicant Wife in writing within 30 days of the date of these orders whether he wishes to exercise the option granted under order 2(a) hereof.
(c) If the Respondent Husband notifies the Applicant Wife in accordance with order 2(b) hereof that he wishes to exercise the option granted under order 2(a) hereof, then:
(i) Within 90 days of the date of these orders (“the due date”), the Respondent Husband shall pay to the Applicant Wife amounting to 50% of the equity in the Suburb C property (“the Suburb C Purchase Payment”), which shall be calculated as follows:
A. ($1,600,000 less the quantum of the National Australia Bank mortgage secured against the Suburb C Property on the date of the Suburb C Purchase Payment) divided by 2.
(ii) Contemporaneously with the Suburb C Purchase Payment:
A. The parties must do all things and sign all documents necessary to discharge the mortgage on the Suburb C Property (National Australia Bank account number …63) and release the Applicant Wife from her personal covenants in respect of that mortgage and from any guarantee by the Applicant Wife in relation to that mortgage;
B. The Respondent Husband shall be solely responsible for the moneys required to discharge the current mortgage on the Suburb C Property; and
C. The Respondent Husband shall indemnify the Applicant Wife against all future payments and liabilities pursuant to the current mortgage as well as all apportionable rates, taxes and outgoings with respect to the Suburb C Property of whatsoever nature and kind.
(iii) If the whole of the Suburb C Purchase Payment has not been made by the due date, then the parties shall do all acts and things required to sell the Suburb C Property and, to that end, order 3 hereof shall apply.
(d) If the Respondent Husband either notifies the Applicant Wife that he does not wish to exercise the option granted under order 2(a) hereof, or if the Respondent Husband fails to make the notification required by order 2(b) hereof, then the Suburb C Property shall be listed for sale in accordance with order 3 hereof.
3. Pursuant to subsection 78(2) of the Act, then within 14 days of either order 2(c)(iii) or order 2(d) hereof coming into effect, the parties shall do all acts and things and sign all documents necessary to list for sale and sell the Suburb C Property for the best price reasonably obtainable and in the following manner (except as otherwise agreed between the parties in writing):
(a) the parties will appoint an agent as agreed in writing (and in default of agreement as to agent, then within twenty-one (21) days the Applicant Wife shall nominate three agents and the Respondent Husband shall select one of those agents) (“the agent”) to list for sale and sell the Suburb C Property by auction, the costs of such appointment and any costs of the sale to be paid by the parties in equal shares s and when such costs become due and payable;
(b) the reserve price for the purpose of such auction will be as agreed by the parties in writing or, in the absence of agreement reached by fourteen (14) days prior to the date of the auction, as nominated as the fair market value by the agent;
(c) if bidding at the auction does not reach the reserve price, the parties or such of them as attends the auction (whether in person, by telephone, or by their nominee) is entitled to negotiate with the highest bidders or any other interested person at the auction and effect a sale of the Suburb C Property at such price as the parties agree upon in writing and in default of agreement by the date of the auction at a price which is not lower than 5 percent below the reserve price;
(d) if the Suburb C Property remains unsold following the auction, then the parties will do all acts and things and sign all documents necessary to immediately list the home for sale by public auction again on a date to be nominated by the agent, and at such auction the reserve price will be 5 per cent lower than the previous auction (or such other amount as agreed between the parties in writing);
(e) the parties will instruct D Law Firm to have the conduct of the sale, including preparing a sale contract, vendor’s statements and all other documents to effect the sale and settlement of the Suburb C Property; and
(f) upon settlement of the sale of the Suburb C Property, the Applicant Wife and Respondent Husband will forthwith cause the proceeds of sale to be applied as follows:
(i) to meet the costs and expenses of the sale, including legal fees of the conveyance and real estate agent fees and commissions;
(ii) to discharge the National Australia Bank mortgage, account number …63; and
(iii) to distribute the balance as follows:
A. 50 per cent to the Applicant Wife; and
B. 50 per cent to the Respondent Husband.
4. Pursuant to subsection 78(2) of the Act, pending either the Respondent Husband purchasing the Applicant Wife’s interest in the Suburb C Property in accordance with order 2 hereof, or the settlement of the sale of the Suburb C Property in accordance with order 3 hereof:
(a) the Respondent Husband shall have exclusive use and occupation of the Suburb C Property; and
(b) the Respondent Husband shall have sole responsibility for paying all mortgages, rates, taxes and similar costs concerning the Suburb C Property (as and when such fall due).
5. Pursuant to subsection 78(1) of the Act, it is declared that the parties are the joint owners of the chose in action constituted by the joint National Australia Bank account …58.
6. Pursuant to subsection 78(1) of the Act, it is declared that the Respondent Husband holds $50,000 on trust for the Applicant Wife’s benefit, in his personal bank account.
7. Pursuant to subsection 78(1) of the Act, it is declared that the Applicant Wife holds the title in the property at Town E, Country F (“the Town E Property”) on trust for the benefit of herself and the Respondent Husband in equal shares.
8. Pursuant to subsection 78(1) of the Act, it is declared that the Applicant Wife holds the title in the property at Suburb G, Country F, (“the Suburb G Property”) on trust for the benefit of herself and the Respondent Husband in equal shares.
9. Pursuant to subsection 78(2) of the Act, within 30 days of the date of these orders, the Respondent Husband shall pay to the Applicant Wife:
(a) $21,254;
(b) 50% of all interest received on the joint National Australia Bank account number …58 since 4 May 2023 (being the date on which the parties filed the statement of agreed facts in this matter); and
(c) 50% of all interest received on the Respondent Husband’s personal bank account since 4 May 2023.
10. Pursuant to subsection 78(2) of the Act, upon the Husband making the payment required under order 9 hereof, that payment will be taken to have the following effects:
(a) the Respondent Husband shall become solely entitled to all remaining moneys in the parties’ joint National Australia Bank account number …58;
(b) the Respondent Husband shall no longer be considered to hold any moneys on trust for the benefit of the Applicant Wife, and all moneys in his personal account shall be held solely for the Respondent Husband’s own benefit;
(c) the Applicant Wife shall no longer be considered to hold the Town E Property on trust for the benefit of herself and the Respondent Husband, and the Town E Property shall be held solely for the Applicant Wife’s own benefit; and
(d) the Applicant Wife shall no longer be considered to hold the Suburb G Property on trust for the benefit of herself and the Respondent Husband, and the Suburb G Property shall be held solely for the Applicant Wife’s own benefit.
11. Pursuant to subsection 78(2) of the Act, upon the Respondent Husband making the payment required under order 9 hereof, the parties shall forthwith do all acts and things and sign all documents necessary to transfer the joint National Australia Bank account number …58 to be in the Respondent Husband’s name solely.
12. Pursuant to subsection 78(2) of the Act, until the Respondent Husband makes the payment required under order 9 hereof and the transfer of ownership of the joint National Australia Bank account number …58 required under order 11 hereof is complete, neither party may remove any moneys from the joint National Australia Bank account number …58, save that the Respondent Husband may use moneys in that account to make the payment required under order 9 hereof.
13. Leave is granted to the parties to approach the Chambers of Judge Stewart by email (…@...) to have the matter listed within 14 days from the date of these orders for mention as to the form (but not substance) of these orders.
14. All extant applications be otherwise dismissed and the matter removed from the list of pending cases maintained by the Court.
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.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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