Calleja & Abayan
[2024] FedCFamC2F 688
•24 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Calleja & Abayan [2024] FedCFamC2F 688
File number(s): MLC 793 of 2022 Judgment of: JUDGE O'SHANNESSY Date of judgment: 24 May 2024 Catchwords: FAMILY LAW – Property – Party withdrew consent to previous signed consent minute – Former solicitors seeking to intervene – Where potential liabilities exceed asset pool – Where there is a substantial debt owed to the ATO – What constitutes sufficient service on the ATO – whether “posting” on the “portal” is service to the ATO – Orders to lie in Registry until service effected on ATO Legislation: Family Law Act 1975 (Cth) Division: Division 2 Family Law Number of paragraphs: 20 Date of hearing: 24 May 2024 Place: Melbourne Counsel for the Applicant: Ms Ben-Simon Solicitor for the Applicant: Massi Ahmadzay and Associates Counsel for the Respondent: Mr Puyol Solicitor for the Respondent: Satori Law Counsel for the First Intervener: Mr Jackson Solicitor for the First Intervener: B Law Firm Solicitor for the Second Intervener: C Law Firm ORDERS
MLC 793 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR CALLEJA
Applicant
AND: MS ABAYAN
Respondent
B LAW FIRM
First Intervener
C LAW FIRM
Second Intervener
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
JUDGE O'SHANNESSY
DATE OF ORDER:
24 MAY 2024
THE COURT ORDERS THAT:
1.These orders made this day lie in the Registry until 8 June 2024 and in the event that both parties provide evidence that the Australian Taxation Office (‘ATO’) have been served in the manner that satisfies the ATO of these proceedings by 1 June 2024, these orders will issue.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR EX TEMPORE JUDGMENT
These are the settled reasons of a judgment delivered ex tempore. These reasons were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected, citations and/or passages of authorities and evidence added discursive or otiose comments omitted, and an attempt has been made to make the orally delivered reasons easier to read, but the substance is unchanged.
Background
The matter of Calleja & Abayan comes before me on Friday 24 May where, after a long day's negotiations, four different interested parties (two of whom are parties to the litigation before me) either press or do not oppose that orders proposed in a minute of consent be made and be regarded as just and equitable. The scheme of those orders is unremarkable when the context is considered. The scheme of the orders is that the proceeds of sale of the parties only significant and remaining asset, the real property known as D Street, Suburb E, be applied as $40,000 to the respondent wife and the remaining part applied to the husband.
The applicant husband in this matter, Mr Calleja (‘the Husband’), is 49 years of age, and the respondent wife, Ms Abayan (‘the Wife’), is 38 years. The background of the matter is that the parties married in 2008, separated in about October 2021, and the Husband issued proceedings on 31 January 2022. The parties have two children, one 15 and one 11. The parties have reached final orders as to their children's living arrangements by orders which the Senior Judicial Registrar found to be just appropriate on 20 December 2023.
On 20 December 2023, the Senior Judicial Registrar was provided with a signed minute of proposed consent orders but was not able to make orders that day because procedural fairness had not been provided to the trustee of the superannuation fund where a superannuation payment split was provided. The Senior Judicial Registrar took submissions from the parties and found that the orders proposed were just and equitable but was awaiting, in chambers, procedural fairness to the trustee of the super fund. Before that procedural fairness was provided, or at least before the orders were pronounced or sealed by the Senior Judicial Registrar, one of the parties withdrew their consent to those orders. Thereafter, the other party pressed that orders be made in the exact terms as had been agreed on 20 December 2023.
The asset pool that the orders would operate on was not that complicated. In broad parameters, there remains only a real property in Suburb E, which had previously been sold for $1.6 million, and is encumbered by a first mortgage in the sum of about $625-odd thousand, plus legal costs, interest and so on. That property is currently about to be sold again by the mortgagee in possession. The mortgagee had previously sold the property, but that sale "fell over". The parties otherwise have very little assets, real or personal. Essentially, it was agreed that the Wife would retain the Motor Vehicle 1 in her possession, and the Husband would retain the Motor Vehicle 2 in his possession.
The complicating factor is that the potential liabilities exceed the remaining asset pool. The most significant aspect is that of the roughly $1 million that will be left over from the sale of the home by the mortgagee – a bit more or a bit less depending on costs and interest – the Husband has a debt in regard to his personal tax assessed in the sum of something in the order of $900,000 and increasing with interest on a daily basis. In addition to that, a company that operated a business conducted by the Husband (‘the Company’), of which he is the sole director and sole shareholder, is indebted to the Commissioner in the sum of, roughly, $750,000, which sum is also escalating on a daily basis.
In addition to that, the Husband has alleged unsecured loan to one Ms F and also to an accountant for the preparation of tax returns which he was ordered to do. The Company would appear to have no assets save for theoretical debts due to it from the Husband. As a result of the manner in which the parties or, alternatively, the Husband (there is a dispute as to the extent of the Wife's knowledge of the way the Husband conducted his affairs) conducted their/his affairs, the Company's debts are in the order of $750,000. The Company is not in liquidation but is not trading. It is asserted a Directions penalty notice may issue.
The parties only have a modest sum of about $240-odd thousand thereafter. The orders that were agreed on 20 December provided for the Wife to receive only the sum of $40,000 but with a superannuation split of less than half of the Husband's superannuation.
Interveners
The matter came before me today where previous solicitors for the Wife and previous solicitors for the Husband sought to intervene in the proceedings to protect their asserted lien on funds. The matter has been stood down for most of the day, and there have been discussions between the lawyers for each of the former solicitors of the Husband and Wife, counsel for the Wife and counsel for the Husband. The end result of that is that the parties, the Husband and Wife, are again in agreement as to what orders should be made.
The orders are in almost identical terms to those of 20 December, save that the superannuation split will be a little larger so that it is roughly equal to half. The orders would permit, but not compel, the Husband to pay his former solicitors – to whom he owes a substantial sum, in excess of $100,000. Represented in this hearing today, being an application to intervene, the Husband’s former solicitors do not speak against those orders. The former solicitors for the Wife, represented by counsel appearing today on an application to intervene as parties to protect a lien on proceeds of litigation (both parties' loans are alleged to be secured by written charge and caveat), having acted for the Wife when the original agreement was made on 20 December, do not now speak against the agreement that has again been reached between the Husband and Wife.
It appears to me that those solicitors are taking a very ethical approach to their involvement in this case, including as officers of the Court.
Service on creditors
On 8 March 2024, orders were made requiring service of certain documents on the ATO. Those orders included the following:
4.By 10 May 2024, the applicant file and serve any affidavit(s) in reply addressing only the evidence presented in the affidavit(s) filed by the respondent.
5.By no later than 17 May 2024, having conferred via their lawyers, the parties submit to the chambers of Judge O’Shannessy, a joint balance sheet listing all assets, liabilities and financial resources claimed to be relevant to the dispute, with the values contended by each party in respect of any items in dispute: [email protected].
6. The parties serve, upon filing, each of:
a.Their Amended Initiating Application and Response respectively, along with a copy of these orders; and
b.The balance sheet as described in order 5, (once available), on the below identified creditors:
a. Australian Tax Office;
b. Tax Accountant;
c. Westpac Banking Group;
d. [C Law Firm];
e. [B Law Firm]; and
f. [Ms F].
The only party that did anything about that was the Husband, who posted on what is known as the ‘portal’ – that being the same portal from which the Commissioner had posted a demand that the Husband pay a debt of $857,000 which, I am told, was back in early 2024. On 18 March 2024, the Husband posted the orders of 8 March on the portal, a screenshot of which was tendered and exhibited as ‘F1’.
In addition to that, on 18 March 2024, the Husband posted on the portal the amended response filed in April, which was, effectively, in the same terms as the agreement of the orders reached on 20 December. Also posted was the Wife's amended application where she sought to have the ATO debt removed from the asset pool and, otherwise, the proceeds of sale of the remaining real property to be divided 70/30 in her favour. Those documents were posted on the portal back on 18 March. The 18 March email referred to recent discussions with respect to the two above documents. Subsequent to the early 2024 (or thereabouts) demand on the portal, the Husband received a phone call from the debt collectors of the ATO. He attempted to refer to that discussion when he posted on the portal. There has been no response.
The Husband did what he could to comply with order number 5. He prepared a draft joint balance sheet and sent it to the Wife; she disagreed with the contents, and there was no response. Hence, there was never a joint balance sheet. I propose to discharge order number 5 for the preparation of a joint balance sheet, that is, order number 5 of the orders of Judge Humphreys on 8 March 2024.
A question has arisen as to whether posting on the portal would, in fact, be service of the documents on the ATO. I was troubled about whether, in substance as opposed to mere form, the ATO has, in fact, been served, that is, properly put on notice, of these orders. I am satisfied that C Law Firm and B Law Firm have been put on notice. I am told from the bar table, and accept, that the Husband also delivered documents to Westpac Banking Group, as ordered, and that he emailed the Tax Accountant with these orders and documents to bring the proposed orders that he sought to their attention.
With his duty to the Court, Mr Puyol has brought to my attention the practice statement on the website of the ATO known as … which appears to be directions to employees of the Commissioner as to how they are to accept service. One inference of that is that service on the Commissioner should be by GPO Box …, Melbourne. It has been suggested that the Husband's affidavit, together with the applications, and responses and the minute of the orders proposed to be made this day, could be sent by post to the address referred to in the attachment. I do not propose to let this matter drift for 28 days. Because the parties agree, and because I am almost, but not completely, certain the ATO (the major creditor) has been notified, I am satisfied that the orders are just and equitable if the ATO has actually had real notice as opposed to theoretical notice.
I also note just how hard it is to contact the ATO. The ATO contacts a taxpayer by whacking something on the portal. It is not clear to me if something is whacked back on the portal that that is, in substance, brought to the attention of the ATO. Common sense would suggest it is, but I am unconvinced of that. In those circumstances I am satisfied that a copy of this proposed minute of orders, a copy of the orders that I make now, a copy of only the husband's affidavit together with copies of the exhibits labelled F1, F2 and F3 be posted to the Commissioner of the ATO at GPO Box …, Melbourne, together with a note advising that Judge O'Shannessy is seized of the matter in the Federal Circuit and Family Court of Australia and intends to make final orders in the matters, as the parties press, on or about 8 June, that is, seven days from Monday, subject to any further applications.
In the event that either of the parties provide evidence that those documents described, that is, the Husband's affidavit filed 8 April 2024, F1, F2, and F3 and the orders that I make today, have been posted on Monday 1 June to the Commissioner at that address, I intend to make those orders.
POST SCRIPT
The proposed orders were made on 8 June 2024.
AND THE COURT ORDERS BY CONSENT THAT:
Real Property
1.That the nett proceeds from the mortgagee sale of the property situated at and known as [D Street, Suburb E] in the State of Victoria (“[Suburb E] property”), more particularly described in land Certificate of Title Volume […] Folio […], be divided to pay:
(a) As to $40,000 to the Respondent, and
(b) The balance payable to the Applicant.
2.The Respondent transfer to the Applicant all her rights title and interest in [Motor Vehicle 2] registered number […] presently in the Applicant’s possession.
3. The Applicant otherwise retain for his sole use and benefit absolutely:
(a)Funds held in any bank and/or financial accounts in the Applicant’s sole name;
(b) Furniture, chattels and personal belongings currently in his possession;
(c)[Motor Vehicle 3] registered number […] presently in his possession;
(d)The company [G Pty Ltd] and associated entities under his control and any assets, debts, liabilities and encumbrances associated therewith and hereby indemnifies the Respondent as to same.
4. The Respondent otherwise retain for her sole use and benefit absolutely:
(a)Funds held in any bank and/or financial accounts in the Respondent’s sole name;
(b)Furniture, chattels and personal belongings currently in her possession;
(c) Any Superannuation entitlement held in her sole name;
(d)[Motor Vehicle 1] registered number […] presently in the Respondent’s possession.
5.Unless otherwise specified in these Orders and save for the purposes of enforcing any monies due or transfer assets under these or any subsequent Orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these Orders;
(b)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other, unless otherwise specified in the Orders herein;
(c)Each party foregoes any claims they may have to any inheritances to which the other party is entitled to either presently or in the future;
(d)Insurance policies remain the sole property of the owner named therein;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed
Superannuation
6.In accordance with s.90XT(4) of the Family Law Act 1975 (the Act) a base amount of $120,000 is allocated to the Respondent out of the Applicant’s interest in the [Super Fund 1] (“the Fund”).
7.In accordance with paragraph 90XT(1)(a) of the Act, whenever a splitable payment within the meaning of section 90XE of the Act becomes payable to or on behalf of the Applicant from his interest in the Fund, the Respondent is entitled to be paid (by the Trustee of the Fund) the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $120,000 and there is a corresponding reduction in the entitlement the Applicant would have but for these Orders.
8.The trustee of the Fund (“the Trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulation 2001, the entitlement allocated to the Respondent created by the preceding clause; and
(b)Pay the entitlement whenever the Trustee makes a splitable payment out of the Applicant’s interest in the Fund.
9.The Order have effect from the operative time and the operative time is four (4) business days from the date that a sealed copy of the Orders is served upon the Trustee.
10. Orders 6-9 herein are binding on the Trustee.
11.Liberty is reserved to the parties and the Trustee to apply to the Court with respect to Orders 6-9 herein.
12.Pending compliance with these Orders, the Applicant is restrained by injunction from:
(a)Taking any steps or making any elections to the effect of which would convert his present entitlement in the Fund to an entitlement whereby he would receive only a pension or annuity in lieu of a lump sum; and
(b)Receiving, disposing of, encumbering or otherwise dealing with his superannuation entitlements with the Fund save as specified in these Orders.
13.The Respondent forthwith cause a copy of these Orders to be served upon the Trustee of the Fund and request the Trustee to note the Orders and act in relation to any payment in accordance with the Applicant’s obligations.
14. That all previous costs be discharged.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 13 June 2024
0
0
1