Brie & Brie

Case [2021] FamCA 389

FAMILY COURT OF AUSTRALIA

Brie & Brie [2021] FamCA 389

File number(s): BRC 4255 of 2021
Judgment of: BAUMANN J
Date of judgment: 17 June 2021
Catchwords: FAMILY LAW – Where final property consent orders were made in 2019 – where the husband now seeks an extension of time to comply fully with his obligations under the final orders – where the final orders make provision for the appointment of a trustee of sale upon default of the orders – husband’s application dismissed.
Legislation: Family Law Act 1975 (Cth) s 79A
Cases cited:

Brie & Brie and Anor [2019] FamCA 230

Cawthorn & Cawthorn (1998) FLC 92-805

Fahmi & Fahmi (1995) FLC 62-637

Friar & Friar [2011] FamCAFC 71

Rohde & Rohde (1984) FLC 91-592

Watson & Watson (2013) FLC 93-530

Number of paragraphs: 40
Date of hearing: 21 May 2021
Place: Brisbane
Counsel for the Applicant: Mr S Neaves
Counsel for the Respondent: Mr P Hackett
Counsel for the Trustee for Sale: Mr A Fraser

ORDERS

BRC 4255 of 2021
BETWEEN:

MR BRIE

Applicant
AND:

MS BRIE

Respondent
AND:

MR R

Trustee for Sale

ORDER MADE BY:

BAUMANN J

DATE OF ORDER:

17 JUNE 2021

THE COURT ORDERS:

1.That the husband’s Initiating Application filed 1 April 2021 be dismissed.

Substitution of Trustee

2.That, to the extent an order is required, Mr R of B Accountants (“the Trustee”) be substituted in place of Mr C as Trustee for sale for the purposes of Order 16 of the Orders dated 9 October 2019.

Trustee remuneration and expenses

3.That the Trustee shall be entitled to be paid remuneration for his work undertaken in discharge of the duties of the trust he is appointed to, with such remuneration to be charged at the rates set out in the Schedule of Hourly Rates set out in the affidavit of the Trustee at Annexure A-7, which fees are to be borne solely by the husband.

4.That the Trustee be authorised to retain B Accountants to assist him in discharge of the duties of the trust he is appointed to and to pay to B Accountants their usual professional and business charges for their work done pursuant to that retainer, which charges are to be borne solely by the husband.

Disclosure and information

5.That within fourteen (14) days of the date of these Orders, the husband do the following (adopting the definition “entities” as that term is defined in Order 16(a) of the Orders dated 9 October 2019):

(a)Provide to the Trustee copies of the following documents that are within the possession or control of the husband for the entities:

(i)Copies of trust deeds for each trust entity (and/or if an entity acts as a trustee for a trust);

(ii)Copies of 2020 financial year statements (including balance sheets, profit and loss statements, depreciation schedules) or, if not yet lodged, management accounts for the period 1 July 2019 to 31 March 2021;

(iii)Copies of the most recently lodged taxation returns;

(iv)Any shareholder agreement in respect of BB…

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AGLC
Brie & Brie [2021] FamCA 389
Case
[2021] FamCA 389
Decision Date

CaseChat Overview and Summary

In the matter of *Brie & Brie*, Mr Brie (the husband) sought an extension of time to comply with final property consent orders made in October 2019, which required him to make substantial payments to Ms Brie (the wife). The wife asserted that the husband was in default of these orders, owing a significant sum. The husband's application sought to vary the payment dates and stay the default provisions, including the appointment of a trustee for sale to liquidate his assets.

The court was required to determine whether to grant the husband an extension of time to comply with the consent orders, and consequently, whether to stay the enforcement provisions of those orders. This involved considering the husband's application for variation under section 79A of the *Family Law Act 1975* (Cth) and the court's discretion in such matters.

Baumann J dismissed the husband's application, finding that he had not established grounds for variation under section 79A. The court held that it was not impracticable for the husband to comply with the orders, distinguishing "impracticable" from "impossible" and characterising the husband's financial difficulties as a "vicissitude of commercial life." The court also noted that the husband could not rely on his own default to seek relief under section 79A(1)(c). The court further ordered the substitution of Mr R as Trustee for Sale in place of Mr C, and set out detailed provisions for the Trustee's remuneration, expenses, and the husband's disclosure obligations to the Trustee.

Orders

Orders of the court

BRC 4255 of 2021

BETWEEN:

MR BRIE

Applicant

AND:

MS BRIE

Respondent

AND:

MR R

Trustee for Sale

ORDER MADE BY:

BAUMANN J

DATE OF ORDER:

17 JUNE 2021

THE COURT ORDERS:

1. That the husband’s Initiating Application filed 1 April 2021 be dismissed.

Substitution of Trustee

2. That, to the extent an order is required, Mr R of B Accountants (“the Trustee”) be substituted in place of Mr C as Trustee for sale for the purposes of Order 16 of the Orders dated 9 October 2019.

Trustee remuneration and expenses

3. That the Trustee shall be entitled to be paid remuneration for his work undertaken in discharge of the duties of the trust he is appointed to, with such remuneration to be charged at the rates set out in the Schedule of Hourly Rates set out in the affidavit of the Trustee at Annexure A-7, which fees are to be borne solely by the husband.

4. That the Trustee be authorised to retain B Accountants to assist him in discharge of the duties of the trust he is appointed to and to pay to B Accountants their usual professional and business charges for their work done pursuant to that retainer, which charges are to be borne solely by the husband.

Disclosure and information

5. That within fourteen (14) days of the date of these Orders, the husband do the following (adopting the definition “entities” as that term is defined in Order 16(a) of the Orders dated 9 October 2019):

(a) Provide to the Trustee copies of the following documents that are within the possession or control of the husband for the entities:

(i) Copies of trust deeds for each trust entity (and/or if an entity acts as a trustee for a trust);

(ii) Copies of 2020 financial year statements (including balance sheets, profit and loss statements, depreciation schedules) or, if not yet lodged, management accounts for the period 1 July 2019 to 31 March 2021;

(iii) Copies of the most recently lodged taxation returns;

(iv) Any shareholder agreement in respect of BB Pty Ltd;

(v) Any shareholder agreement in respect of AA Pty Ltd;

(vi) A copy of the trust deed for Z Trust (ABN …) (including any documents amending that trust deed); and

(vii) Copies of any charts or other documentation prepared by F Accountants that summarises the relationships between any of the entities.

(b) Provide to the Trustee the following information if known by the husband as to each of the entities:

(i) ACN and/or ABN for each entity registered in Australia;

(ii) LLC number for each corporate entity registered in the United States of America;

(iii) Complete legal entity name and current trading address for any entity not registered in Australia or the United States of America;

(iv) An overview of the current operations of the entities being whether the entity trades and the nature of the business carried out by the entity; and

(v) If any of the entities have ceased trading within the last 12 months, the approximate date the entity ceased trading.

(c) Provide to the Trustee copies of the following documents that are within the possession or control of the husband:

(i) Copies of any application for a loan or finance made by the husband from any financial institution within the last 12 months, including any supporting documentation.

(d) Direct F Accountants to liaise with the Trustee and to provide to the Trustee any information or documentation in their possession relating to the entities that the Trustee requests.

THE COURT DIRECTS:

6. That these proceedings be adjourned for Further Submissions at 10.00am on 1 July 2021 in the Family Court of Australia at Brisbane.

7. That the parties have leave to appear by telephone on 1 July 2021 by using the Microsoft Teams telephone conferencing system as follows:

(a) They shall each telephone +61 2 … by 9.55am on 1 July 2021;

(b) They shall each then enter the pass code …#; and

(c) Hold the line until the Court is ready to connect and proceed with the matter.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

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Evidence

Evidence Before The Court

Simply stated, the wife deposes at paragraph 24 of her affidavit filed on 13 May 2021 that the husband:(a)paid the first instalment on time;(b)has not paid the second instalment of $1,000,000 due on 31 December 2021; and(c)has defaulted, or paid late, instalments under Order 3(d),such that she now asserts the husband owes her $2,006,000 as at 13 May 2021. This includes the last instalment of $1,000,000 due on 30 June 2021.THE HUSBAND’S APPLICATION AND EVIDENCE On 1 April 2021, the husband filed an Initiating Application seeking the following orders:(a)By way of final orders:1. That paragraph 3(b) of the Consent Order made on 9 October 2019 in this Honourable Court (the Consent Order) be varied to the effect that the sum of $1,000,000 is to be paid on or before 31 May 2021.2. That paragraph 3(c) of the Consent Order be varied [to] the effect that the sum of $1,000,000 is to be paid on or before 31 August 2021.(b)By way of interim orders:1. That paragraph 16 of the Consent Order made on 9 October 2019 be stayed until the determination of the Final Orders sought in this Initiating Application. It is noteworthy that although the husband sought to delay payment of the instalment of $1,000,000, due under Order 3(b) to be paid on 30 December 2020, to 31 May 2021, there is no evidence the husband has done so. The effect of the interim order was to stay the default provisions coming into effect – particularly the appointment of Mr C or such other Director of B Accountants, “as trustee of sale to liquidate the Husband’s assets and the Husband’s interests” in certain named entities. The husband in his affidavit filed 1 April 2021 deposes to the following facts:(a)Admits to not making the second payment of $1,000,000 on 31 December 2020;(b)Acknowledges that under the second consent orders the Trustee can be appointed on 31 March 2021;(c)Seeks to explain the delay in compliance and seeks “the Court’s indulgence to further extend time for compliance with the Consent Orders”;(d)Between paragraphs 10 and 22 of his affidavit he gives evidence of a range of asserted factors outside of his control (he claims) stemming from COVID-19 issues and other commercial events, but importantly deposed that:(i)he has a preliminary indication from E Bank that there is “sufficient business assets in BB Pty Ltd to facilitate additional borrowings of $800,000”, which of course, was subject to the Bank’s standard assessment process; and(ii)as to the balance of $200,000 “I am in a position to deposit the sum of $200,000 to the Respondent in satisfaction of the Consent Order”;(e)At paragraphs 23 to 26 the husband details the ramifications that arise from the appointment of a Trustee under Order 16 and concludes with a plea in these terms:Ultimately, I am at the mercy of this Honourable Court. I want to avoid any potential adverse impacts for my brother and our 250 employed staff. I fully intend to pay the Respondent the full amount under the Consent Orders, I just simply require a bit more time to do so.

Decision

Reasons for decision

On the basis of the evidence and submissions made on that evidence, I find:(a)I accept that the principles which guide the exercise of discretion to dismiss an application summarily, is relief “rarely and sparingly provided”, and guided by the factors identified by Finn J in Friar & Friar [2011] FamCAFC 71 (and the authorities detailed by her Honour);(b)I accept that the husband’s “pleadings”, which essentially is his Application, does not identify with any particularity the power relied upon under s 79A or the grounds relied upon to vary or set the order aside. Only when the Court decides to vary or set the order aside, is the Court required to consider further discretion of making another order under s 79, if considered appropriate;(c)The Application before me is not analogous to, for example, a situation where the party with the benefit of the order seeks its enforcement. Such an application would usually enliven the discretionary power under s 105 of the Act.Relevantly in this matter the parties had agreed on the manner and timing of enforcement when making the second consent orders in October 2019. There was no utility, in these circumstances, in the wife bringing an enforcement application.(d)In the absence of particularisation, but accepting the principle that the husband’s evidence should be taken at its highest, I find from his affidavit evidence that:(i)s 79A(1)(a) (miscarriage of justice) is not available; and(ii)s 79A(1)(d) does not apply; and(iii)s 79A(1(e) does not apply.The only possible relief is either s 79A(1)(b) or s 79A(1)(c). I deal with these sections next.(e)If the Court is satisfied that “in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out…” then the discretionary relief flowing from s 79A(1)(b) may be granted. However, in this case I am not satisfied it is impracticable for the husband to carry out the order. The expression “impracticable” is different from impossible (Rohde & Rohde (1984) FLC 91-592). Furthermore, even if there has been some downturn in some of the businesses in which the husband has an interest or derives income, this is a “vicissitude of commercial life” (see Cawthorn & Cawthorn (1998) FLC 92-805). The husband claims to have interests in other entities, including a property list worth over $12 million. He was able to access $200,000 from some source, but elected not to pay it to the wife. He sees to have made some sort of application for finance – which may be successful – but at the very last moment. I find he has regarded his obligations to pay the wife under the second consent orders as a lower priority than he should have; and(f)Even if the husband was seeking to rely on s 79A(1)(c), the husband could not take advantage of his own default. The wife, despite she says agreeing to the second consent orders as a compromise, does not seek another substituted order. She merely wants the order put into effect.CONCLUSION

Ratio Decidendi

Legal Principle Established

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