Brie & Brie
[2021] FamCA 389
•17 June 2021
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 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).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Brie & Brie has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODUCTION
The parties in this matter separated in April 2017 after a marriage of nearly 20 years.
On 7 November 2017, final property alteration orders (“the first consent orders”) were made by a Senior Registrar which, inter alia, required the husband, Mr Brie, to pay to the wife, Ms Brie, the sum of $4,150,000 in instalments by 31 March 2019. The first consent orders made provision for a superannuation splitting order; transfer of a motor vehicle and the husband meeting various debts.
The benefit the husband retained under the first consent orders was the continued ownership and/or control (in some respects with his brother, Mr Y Brie) in a number of companies and trusts operating in the property industry.
By 6 June 2018 (merely six months later), the wife felt compelled to commence enforcement proceedings against the husband for alleged default in payment of monies under the first consent orders. That Application first came before me in a duty list on 26 November 2018.
The litigation journey thereafter proceeded for nearly 12 months during which various Applications were filed, including:
(a)an application to intervene by Mr Y Brie;
(b)the husband seeking to set aside the first consent orders under various provisions of s 79A of the Family Law Act 1975 (Cth) (“the Act”), which application was further amended on 25 March 2019;
(c)making Orders on 16 April 2019 dealing with a range of interlocutory matters and listing the competing applications for Final Hearing for four days commencing 8 October 2019 (see Brie & Brie and Anor [2019] FamCA 230); and
(d)making a “dollar for dollar” costs Order on the wife’s Application, on 19 September 2019.
On the second day of trial (9 October 2019) the parties entered into consent orders (“the second consent orders”) in the terms set out in Appendix One to these Reasons which effectively recast and vary the earlier obligations imposed upon the husband so that he was required to:
(a)pay $1,000,000 to the wife within 60 days;
(b)pay a further $1,000,000 to the wife by 31 December 2020;
(c)pay a further $1,000,000 to the wife by 30 June 2021;
(d)pay monthly payments to the wife, reducing after each instalment had been paid;
(e)consent to a superannuation splitting order to the wife with a base sum of $850,000 operative by 31 December 2021 or, at his election by 30 December 2021, payment of cash in part or in lieu.
However unlike the first consent orders, the second consent orders made provision for a default by the husband (see Order 16) and Order 17 provided the timetable within which the wife, at her election, could invoke Order 16.
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.
At the hearing on 21 May 2021, the husband was represented by Mr Neaves of Counsel who made oral submissions.
THE WIFE’S RESPONSE AND EVIDENCE
By her Response filed 13 May 2021, the wife seeks orders that the husband’s Application be dismissed with costs payable by the husband to the wife.
Apart from the wife’s evidence about the amount owing by the husband (which the husband disputes save for the acknowledgment he did not pay the second instalment of $1,000,000), the wife in her supporting affidavit deposes to the following facts:
(a)On or about 22 December 2020, the wife received correspondence from the husband’s solicitors seeking to vary the second consent orders because of the impacts of COVID-19 and that he had sold or was selling various commercial interests. The wife indicated through her solicitors on 23 December 2020 that she would not consent to a variation and would enliven the default provisions should the husband “continue to fail to comply”;
(b)Between 22 March 2021 and 31 March 2021, correspondence passed between the solicitors however the wife did not abandon her right to enliven Order 16 and did not agree with any variation to the orders;
(c)On 1 April 2021, the wife instructed her solicitors to write to B Accountants inviting their engagement in the matter and later that afternoon received notice of the husband’s intended application to the Court.
Whilst the wife challenges many of the assertions of fact raised by the husband in his affidavit about the reasons for the delay, and the Court is not in a position without testing the evidence in deciding those issues, the wife concludes with her own plea in these words:
55.I am seeking orders for Mr Brie’s Initiating Application to be summarily dismissed as I believe that it was made on a vexatious and frivolous basis purely to frustrate and delay the appointment of B Accountants (which is the pathway Mr Brie and I agreed to in the 2019 Orders)
The wife was represented by Mr Hackett of Counsel who made some oral submissions but principally relied upon written submissions.
INTERVENTION BY THE TRUSTEE
It is to be recalled that the Court ordered the appointment of a Trustee and, as a result, the Trustee sought to be heard, and in the event the husband’s application to stay Order 16 was unsuccessful, the Trustee sought some further procedural orders to enable Mr R (a Director of B Accountants) to continue with his role as trustee. In circumstances where the originally nominated Trustee was Mr C and he has been unavailable, Mr R as a Director of B Accountants has, as the order permits, taken up the role.
At paragraph 22 of Mr R’s affidavit filed 20 May 2021, he seeks certain procedural orders. Although the Trustee was not a party to the second consent orders, Order 16(f) specifically gave the Trustee liberty to apply.
Mr R gave evidence that:
(a)On 1 April 2021 he was contacted by the wife’s solicitors and requested to take steps to act in his role as Trustee;
(b)On 20 April 2021, the Trustee was provided with a sealed copy of the husband’s Application;
(c)Between 1 and 28 April 2021, he has liaised with the solicitors for the parties seeking information and documentation to assist him in discharging his duties as Trustee. He sets out enquiries made to date and searches conducted. Importantly:
(i)the Trustee was informed by the husband’s solicitor by letter dated 12 May 2021 that the $200,000 available to pay to the wife “belong to BB Pty Ltd”;
(ii)the Trustee requested payment of the $200,000 to the B Accountants National Trust Account but the husband has not responded to that request;
(iii)that in a meeting with the husband and his solicitor on 27 April 2021, the husband asserted a number of facts relating to his financial position including that he was “currently awaiting E Bank to approve an $800,000 loan secured by the WW Business Suburb D” and that he estimated “the property list for WW Business Suburb D is worth between $12 million and $14 million;
(iv)the financial information provide to the Trustee to date (albeit from 2019) appears to confirm that “the value of the entities lies within BB Pty Ltd trading as WW Business Suburb D” and further that the husband does not appear to have a direct interest in BB Pty Ltd but that he has shareholding in the entity Z Pty Ltd, which in turn is a partial shareholder in the entity AA Pty Ltd, which in turn owns 100% of the shares in BB Pty Ltd.
I note in passing that Order 16 identifies the Trustee has powers over the husband’s interests in BB Pty Ltd; Z Pty Ltd as trustee for the Z Trust and AA Pty Ltd.
Mr Fraser of Counsel appeared for the Trustee and made oral submissions.
As a result of the conflicting evidence about the deposit of $200,000 into the trust account of the husband’s solicitors, and apart from noting in my Order made 21 May 2021 that those funds were in dispute, the Court directed that by 4.00pm on 21 May 2021, the Trustee of funds, Legacy Legal, will provide by email to my chambers and to the solicitors for the wife and the Trustee, a copy of their trust account statement.
At 3.43pm on 21 May 2021, the Court received an email and copy of a trust account record (suitably redacted) which has been marked Exhibit 1, that identifies:
(a)a trust account receipt number 369, receipt account 10628443, issued on 6 April 2021 suggesting the funds of $200,000 for “Settlement Funds” were received from “Mr Brie” by way of electronic funds transfer; and
(b)the Solicitors Trust Account Statement issued by the Commonwealth Bank of Australia reveals a “Direct Credit” of $200,000 from “BB PTY LTD”;
(c)the email from the husband’s solicitors asserts “the Trust Account Receipt contains a clerical error in which it states that the funds were received from our client, Mr Brie” and further seeks an opportunity to be heard and make submissions in relation to any directions or orders relating to the funds.
DISCUSSION
The Applicant’s Application in my assessment was designed to delay the agreed Trustee, under the second consent orders, proceeding with their role.
Whilst it is clear the husband’s own evidence supports a finding that at least by 22 December 2020 he knew he would not be in a the position to pay the second instalment of $1,000,000 on 31 December 2020, apart from trying to negotiate a variation with the wife (which she was under no obligation to agree to) he waited until the wife had engaged Order 16 to file an Application.
There was nothing preventing the husband from bringing the application that he now relies upon after the wife made it clear on 23 December 2020 that she would enliven Order 16 if the default continued. She could not enliven the Trustee for three months under Order 17.
The husband’s conduct or tactic is further open to valid criticism, which I make, where he swears to being able to pay $200,000 but not only fails to do so to the wife before 1 April 2021 (when the Trustee’s appointment came into effect) as a show of good faith, but further refused to pay to the Trustee. He now, through his lawyers, claims others may have an interest in those funds.
When the Applicant seeks the Court to exercise a discretion in their favour, their conduct before that power is exercised is relevant to the exercise of a discretion.
Although Mr Hackett makes some persuasive submissions about whether the Applicant should even be heard on the Application (relying on Watson & Watson (2013) FLC 93-530; Fahmi & Fahmi (1995) FLC 62-637), it is my view, because the application for summary dismissal is also raised, and I find supported by the evidence, more appropriate to dismiss the Application on that basis.
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
As an experienced sales professional who, I accept on his evidence, has created a substantial number of interrelated businesses, he is used to doing “deals”. He may feel that the wife is being unreasonable in not giving him more time to pay.
However the wife is not satisfied he will do so even on his amended timetable. Even his revised timetable (a payment on 31 May 2021) has passed and he elects not to pay the sum of $200,000, which at one point in time was clearly under his control, to the wife prior to 31 March 2021 or since 1 April 2021, to the Trustee.
I accept the submission of Counsel for the wife that there is no utility, on an interim basis, in staying the order when the final relief sought is doomed to fail, as I find it is.
The husband’s Application will be dismissed accordingly.
TRUSTEE’S APPLICATION FOR PROCEDURAL ORDERS
I propose to now make the orders sought by the Trustee and set out at paragraph 22 of Mr R’s affidavit, save for order 4.
I will list this matter before me at 10am on 1 July 2021 to hear further submissions as to the funds of $200,000 deposited into the trust account of Legacy Legal, in circumstances where, when the matter was before me on 21 May 2021, Exhibit 1 had not been available.
I do not discount the possibility that the husband and the wife and Trustee may be involved in further negotiations, but that is not a matter for this Court at this point in time.
Courts must be prepared to enforce their orders, as a failure to do so without good reason can cause a loss of confidence by the citizens in the administration of justice and the work of their Courts.
The parties were bound by the terms of the order made with their consent. They have both known of their entitlements and their responsibilities. They both agreed on the consequences of any default and the timetable for performance.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 17 June 2021
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