Byrd and Byrd (No 2)

[2011] FamCA 437

FAMILY COURT OF AUSTRALIA

BYRD & BYRD (NO 2) [2011] FamCA 437

FAMILY LAW - PROPERTY – interim borrowings

Family Law Act 1975 (Cth)

Strahan and Strahan 42 Fam LR 203

APPLICANT: Ms Byrd

RESPONDENT: Mr Byrd

FILE NUMBER: SYC 767 of 2009

DATE DELIVERED: 1 June 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Fowler J

HEARING DATE: 27 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Rees SC

COUNSEL FOR THE RESPONDENT: Mr Campton

Orders

1. Orders 9 and 10 of the Minute of Order attached to the Orders made by

   
   

   Justice Cohen on 4-5 August 2010 be discharged.

2. For the purposes of the final proceedings the wife’s property situated at and known as R Street, Sydney Suburb 1 (“the Sydney Suburb 1 property”) will be included in the Balance Sheet at its unencumbered agreed value and that any mortgage liability secured against the Sydney Suburb 1 property will not be accounted for on the Balance Sheet.

IT IS NOTED that publication of this judgment under the pseudonym Byrd and Byrd (No 2) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 767  of 2009

Ms Byrd

Applicant

And

Mr Byrd

Respondent

REASONS FOR JUDGMENT

Introduction

1. The proceedings before the Court are interim proceedings in proceedings in which each of the parties seeks an adjustment of the property of them or either of them.

2. In the primary proceedings the husband and the wife consented to orders which were made by Justice Cohen on the 4-5 August 2010 inter alia in the following terms:

   ON 5 AUGUST IT IS ORDERED:

   5.That by consent, Orders are made in accordance with the document entitled “Minute of Order” marked Exhibit G in the proceedings and placed with the Court Papers as attached hereto.

   …

   MINUTE OF ORDER

   1.That Orders 3.2 and 3.3 made on the 1 September 2009 be discharged.

   [B] Property:

   2.That the Wife from this date have exclusive occupation of the property situate at [B], New South Wales and the Wife be at liberty to occupy or holiday let the property pending sale, subject to the terms of such letting permitting inspections by prospective purchasers in company with the selling agent on reasonable notice, and the Husband remain away from and not enter upon the said property except with the written consent of the Wife which shall not be unreasonably withheld provided that the husbands’ attendance at the property is in the presence of the letting or selling agent and the husband shall cause to be delivered to the Wife’s solicitors within 7 days all keys and garage remote controllers to the said property in his possession.

   3.That the Wife do all things necessary, including the appointment of a selling agent and solicitor to act on the sale, to cause the property situated at and known as [B] (“the [B] property”) to be sold at private treaty at the earliest practicable date at a selling price of not less than $2.2 million for a period of 3 months from this date or thereafter at such other price as the parties may agree in writing or in default of agreement by the 14 November 2010 at such price as may determined by a Valuer appointed for that purpose by the President of the New South Wales Division of the Australian Property Institute or his/her nominee (if any).

   4.That the Wife do all things necessary to cause the proceeds of sale be disbursed as follows and in that priority:

   a.In payment of agent’s commission and advertising expenses and legal expenses of the sale;

   b.In payment of costs in relation to determination of value or selling price by the President of the New South Wales Division of the Australian Property Institute or his/her nominee (if any);

   c.as to the sum of $1.0 million to the Husband or as he may direct the Wife or her solicitors on sale in writing;

   d.In payment of the balance to the Wife.

   and it is noted by the Court that the Wife will on sale of the property incur a taxable capital gain.

   5.That in the event there is not an exchanged sale of the
   [B] property by private treaty pursuant to the above Order within six (6) months from the date of these orders, then the Wife shall forthwith do all things necessary to cause the property to be sold by public auction at the earliest practicable date such price as may determined by a Valuer appointed for that purpose by the President of the New South Wales Division of the Australian Property Institute or his/her nominee (if any) and on completion of sale the proceeds of sale shall be disbursed as provided for in Order 4 above and that in the event that the property fails to sell pursuant to this order then the parties within 14 days after the auction date confer in bona fide endeavour to reach agreement in writing as to the future marketing of the property and in the event that agreement is not reached then the property shall be resubmitted successively to auctions until sold and the earlier provision as to auction shall apply and each successive auction shall be conducted at intervals of not less than 3 months and not more than 4 months after the last and the reserve price shall be decreased by 5% at each successive auction and at anytime prior to auction the Wife shall accept any offer to purchase the property that is equal to or above the last reserve price.

   6.That prior to settlement of the sale of the property at [B] the Husband do all things necessary to discharge the present mortgage encumbrance presently secured thereon and pending such discharge pay all payments due and payable under the said mortgage and be restrained from further encumbering the said property or permitting the increase of the mortgage debt secured thereon over and above the outstanding balance as at this date.

   Controlled Moneys Account:

   7.That within seven (7) days of the date of these Orders both parties shall do all acts and things and execute all documents necessary to cause the balance of sale proceeds of the former matrimonial home at [E] property together with any interest accrued thereon (“the fund”) held in the in the (sic) controlled monies account on behalf of the parties by the Wife’s solicitors to be distributed as follows:

   a.the sum of $2.0 million from the capital of such fund to the Wife and as to the balance of the capital of the said fund to the Husband,

   b.as to interest paid and accrued to date of distribution in the said fund to the Wife and Husband in the same proportions as the capital is divided and the parties shall each indemnify the other from any liability to income tax payable on the interest so received by each of them.

   8.That the categorisation of the payment of the funds to be received by the Wife and Husband pursuant to these orders be reserved to the Trial Judge.

   Injunctions:

   9.That pending further order the wife be restrained from using the funds received by her pursuant to Order 7 herein other than for the purchase of the property at [R Street, Sydney Suburb 1] (“the property”) pursuant to the Option Agreement exhibited before the Court and marked Exhibit “C” and costs incidental to the purchase of the property including payment of:

   a.Stamp Duty;

   b.Legal costs incurred with respect to the purchase of the property;

   c.Any disbursements reasonably incurred in relation to the purchase of the property; and

   d.Removal and relocation expenses incurred.

   and that upon settlement of the purchase of the property the Wife pending further order be restrained from encumbering the property by way of mortgage or charge without the written consent of the Husband and this regard the Husband have liberty to register this Order under the Conveyancing Act 1919 (NSW).

   10.That pending further order the Husband be restrained from encumbering the property situate at [N Street, Sydney Suburb 2] by way of mortgage or charge without the written consent of the Wife save for the transfer of the mortgage presently secured over the property at [B], such mortgage to be secured by way of registered first mortgage over the [Sydney Suburb 2] property and be in a sum not exceeding the balance due and payable under the mortgage presently secured over the property at [B] as at this date and this regard the Wife have liberty to register this Order under the Conveyancing Act 1919 (NSW) and the Wife shall sign any consent necessary to permit the registration of any mortgage contemplated by these orders.

   11.That within 7 days from this date the Husband cause to be delivered to the Wife’s solicitors 2 White Lace Vases and Nautilus Shell Print.

   12.That within 14 days from this date the Wife cause to be delivered to the Husbands home the following items presently in the
   [B] property:

   1.1 white longboard

   2.1 Surf Ski

   3.2 Mantra Boogie boards

   4.the husbands clothing

   5.the husbands two pillows

   6.the husbands toiletries

   7.the husbands sheet set

   8.the husband 6foot surfboard

   13.That the Court notes that the parties each withdraw all outstanding interim issues before the Court and to that effect all such applications are hereby dismissed with no order as to costs.

1. Relevantly an order was made for the sale of a property owned in the name of the wife at B (“the B property”).

2. In orders 9 and 10 of those orders restraints were placed on the parties encumbering certain of their property.

3. In making those orders the parties expected that the B property would sell for something in the order of $2,200,000.  This has not occurred.  The court has been informed that the present value of the property has been assessed in the sum of $2,000,000 although other opinion has had it that the property should be marketed for $1,900,000 and $1,800,000.  The wife was by the orders appointed as person in charge of the sale and she listed the property for sale in excess of the expected price.  The property, perhaps unsurprisingly, has not sold.

4. Each of the husband and the wife sought the transfer of the property to them in specie and the order which was made was part of an overall settlement of an interim issue in which each party received benefits and undertook burdens by consent.  The wife does not now wish to proceed with the sale of the property but seeks instead that its fate be the subject of determination in the final proceedings between the parties.

5. Those proceedings are listed in September 2011 for hearing.  They had been the subject of listing before Justice Le Poer Trench on 20 May 2011 and on that date His Honour made orders consolidating with the final hearing, the application by the wife for orders enabling her to raise funds contrary to the order of Justice Cohen and for the sale not to proceed.  In addition the application which had been filed by the husband for enforcement of Justice Cohen’s order was also adjourned to the hearing before His Honour.  On the dates fixed for the hearing for reasons unrelated to any fault of the parties the matter was unable to proceed.

6. The matter was subsequently listed before me in those circumstances for hearing.  The counsel for the husband who was new counsel in the matter was unable to proceed by reason of his unfamiliarity with an abundance of material filed in the matter and accordingly without opposition from the wife other dates were fixed for hearing before Justice Le Poer Trench in September of this year.

7. The wife still wanted to agitate given the delay in the hearing the questions referred to above and the matter came before the court this day for that purpose.

8. In the event it seems given Justice Le Poer Trench’s order and without opposition from the husband the issue of the enforcement of the sale of the B property was seen as being able to be addressed on the new hearing dates.  In the circumstances in and in order to regularise the situation (it not being seen as being a matter where any prejudice said to be occasioned to the husband cannot be adjusted by the trial judge on the hearing) I will grant until the first day of the trial before Justice Le Poer Trench an order staying the operation of the order of Justice Cohen in relation to the sale of the B property.

9. The further orders sought by the wife were that orders 9 and 10 of the “Minute of Order” attached to the orders made by Justice Cohen on the 4 and 5 August be discharged.

10. The wife further sought an order:

    “that for the purposes of the final proceedings the Wife’s property situated at and known as [R Street, Sydney Suburb 1] will be included in the Balance Sheet at its unencumbered agreed value and that any mortgage liability secured against the [Sydney Suburb 1] property will not be accounted for on the Balance Sheet”.

1. The wife in a provision of symmetry proposed that the order placing restraint upon the husband in relation to borrowing on his property also be discharged.

2. It was submitted by the wife that:

   a)the orders of the 5 August 2010 were Interim Orders

   b)the authority of Strahan and Strahan 42 Fam LR 203 in which their Honours say:

   “There is only one exercise of power under s 79 of the Act”.  However, this power may “be exercised by a succession of orders until the power … is exhausted” and the power is exausted “when there remains no property … with respect to which orders by way of alteration of interests in property could be or have been made.”:  Gabel v Yardley per Bryant CJ and Coleman J … “it is only the final order, which deals on a final basis with all known property of the parties, which completes the one single exercise of the s 79 power”.  Further, an earlier order whether made under s 79(6) or s 80(1)(h) (emphasis added) is capable of alteration at any time prior to, or as part of the final exercise of the s 79 power.”

1. It was submitted by the husband that the interim order is only capable of alteration by way of a final order.  This seems inconsistent with the above quoted authority.

2. The case of Strahan does not require to be confined to cases involving interim costs and the case of Gabel was explicitly a case where the interim property distribution was unrelated to costs.

3. The desire by the wife to retain the B property will not, nor will this order, prevent on a final hearing the court from determining that it be sold or indeed passed in specie to the husband or the wife.  All those options are retained.

4. In all the circumstances, and considering the position and possible prejudice to each of the parties, it seems to me that the court’s options could be kept open until the hearing of this matter which is but four months away.

5. The wife in anticipation of being permitted to pay the husband the sum of $1,000,000 and keep the property spent considerable money (some $15,000) in procuring a loan in that sum.  She asks that she be permitted to proceed with that loan which she proposes would be secured on her property at Sydney Suburb 1.  She in her material describes how she might meet the charges applicable to that loan.  She offers the order that it not be included in the Balance Sheet on hearing.

6. In argument the husband’s counsel fairly conceded that should the pool of assets be found to be as the husband asserts it to be (which is less than that asserted by the wife) and should the court on the hearing of the matter accede to his proposal for what might on the surface seem a modest percentage of the assets to pass to the wife that at least she will retain her property at Sydney Suburb 1.

7. Accordingly, the wife’s claim as the husband sees it should be met by an order which will mean that the wife will have significant assets notwithstanding the borrowing.

8. Her property at Sydney Suburb 1 is of a value significantly in excess of that sum and unencumbered.  The second of the wife’s orders sought means that in the consideration of the wife’s assets the liability will not be taken into account in the Balance Sheet.

9. Given that concession by the husband, it seems that the wife in effect is asking that she might have her own property to a limited extent and in those circumstances it does not seem unreasonable to permit that to happen.

10. The reasons for making an order need not be compelling.  The wife wishes to invest the sum she says and derive income from it and otherwise apply it to her use.  All the court has to do is to determine that it is appropriate to exercise its power in the manner sought.  The court finds that the exercise of that power in this way is appropriate given the matters referred to above.

11. The husband says that the wife has a history of excessive spending and that this should not be permitted.  The wife says she wants to procure income for her use.  Obviously if the sum is spent unwisely, that is a matter which could be taken into account by the trial judge.  People however in our community have a right to be foolish with their money.

12. It should not be expected by the wife however that if she were foolish with it and wasted that sum any such waste would be recompensed by the husband.

13. In all the circumstances the court finds the proposal of the wife within the ambit of what is just and equitable and able to be implemented without prejudice to the husband.

14. The Court makes the orders set forth above.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 1 June 2011.

Associate: 

Date:  1 June 2011