Cordwell & Cordwell

[2021] FamCA 36

FAMILY COURT OF AUSTRALIA

Cordwell & Cordwell [2021] FamCA 36

File number(s):	PAC 6137 of 2018
Judgment of:	FOSTER J
Date of judgment:	12 February 2021
Catchwords:	FAMILY LAW – PROPERTY – INTERIM ISSUES – Where application for various interim property orders and orders for enforcement – Where consideration of applicable principles – Where matter awaiting allocation of final hearing dates – Where appropriate that some issues await final hearing – Where proper for order for sale of a property co-owned with the parties superannuation fund – Where otherwise other orders made by consent.
Legislation:	Family Law Act 1975 (Cth) s 114
Number of paragraphs:	54
Date of last submission/s:	2 December 2020
Date of hearing:	16 November 2020
Place:	Parramatta
Counsel for the Applicant:	Ms Spain
Solicitor for the Applicant:	LCI Legal
Counsel for the Respondent:	Mr Gardiner
Solicitor for the Respondent:	Coleman Greig Lawyers

ORDERS

PAC 6137 of 2018
BETWEEN:	MS CORDWELL Applicant
AND:	MR CORDWELL Respondent

ORDER MADE BY:	FOSTER J
DATE OF ORDER:	12 FEBRUARY 2021

THE COURT ORDERS THAT:

1.The husband and wife do all necessary things and sign all necessary documents in their personal capacity and as directors of Cordwell Pty Ltd as trustee of the Cordwell Super Fund to sell the property situate and known as B Street, Suburb C, New South Wales being the whole of the land described in Folio Identifier … at the best price reasonably obtainable by public auction and cause the proceeds of sale to be paid in the following manner and priority:

(a)in payment of agents commission and advertising and other expenses payable on sale;

(b)payment of legal costs on sale;

(c)payment of the share owned by Cordwell Pty Ltd as trustee of the Cordwell Super Fund to Cordwell Pty Ltd as trustee of the fund;

(d)in payment of the sum of $50,000 to the wife or as she may otherwise direct in writing with the categorisation of such sum to be reserved to final hearing;

(e)in payment of the balance then remaining to the credit of NAB home loan account …59 in the joint names of the parties.

2.That pending sale of the B Street property as provided for above, the husband and wife be restrained from further encumbering the said property.

3.That pending further order, the husband and wife be restrained from drawing down or in any way increasing the balance of NAB home loan account …59.

4.That the husband and wife do all necessary things and sign all necessary documents so as to cause Cordwell Pty Ltd as trustee of the Cordwell Super Fund to:

(a)within 14 days of these orders instruct GG Accountants or any other accountant jointly appointed by them to finalise and lodge the superannuation fund tax returns and prepare financial statements for the fund for the financial years ended 30 June 2018, 30 June 2019 and 30 June 2020;

(b)provide responses to all requests for information and documents requested by such accountants as soon as practicable and in any event not later than 14 days of such request;

(c)within seven days from the date of exchange of contracts for sale of the B Street property instruct the Accountants to provide advice to the parties regarding any and all tax liabilities of the fund arising from the sale of the said property including but not limited to CGT and provide advice to the parties regarding the sum required to be paid to the fund from the proceeds of sale of the said property representing the interest held by the fund in the said property;

(d)within seven days of settlement of the sale of the said property direct the Accountants to prepare updated financial statements including member balances in the fund as at the last day of the month in which the settlement of the sale of the property is to occur.

5.That the husband and wife do all acts and things and sign all documents necessary as and when required including providing all consents in order to give effect to the validity and operation of these orders in the time period as prescribed.

6.That in the event that a party refuses or neglects to sign and return the document within 14 days of a written request to do so, then the registrar of the Family Court of Australia at Parramatta is hereby appointed under section 106A of the Family Law Act 1975 to sign such document on behalf of that party upon lodgement of such document and the filing of an affidavit of a solicitor on behalf of the requesting party as to the said neglect or refusal.

7.Liberty to apply as to implementation or enforcement of these orders on short notice by application to the Court in chambers in appropriate circumstances.

8.That, otherwise, all outstanding interim applications be dismissed.

9.Costs reserved to final hearing.

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 Cordwell & Cordwell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

FOSTER J:

1. In the context of ongoing property proceedings, the primary applicant wife makes an application for further financial orders and orders as to enforcement.

2. On 13 February 2019 interim orders were made by consent in the following terms:

   That pending further orders:

   1. The husband shall continue to cause to be paid into the wife’s bank account held at Commonwealth Bank of Australia in her personal name with BSB … and Account Number …53 the amount of $1,325.00 per week net as interim spousal maintenance and child support.

   2. The wife shall continue to retain the rent of $500.00 per week for the cottage situated at the former matrimonial home at D Street, Suburb W by way of a further interim spousal maintenance and child support payment.

   3. Mr E of F Company be appointed joint expert valuer and be instructed by the husband and the wife to carry out valuations in respect of the parties companies and businesses.

   4. Mr G of H Valuers be appointed joint expert valuer and be instructed by the husband and the wife to carry out valuations in respect of all real estate properties.

   5. The husband either himself or where appropriate as a Director of the Company cause the company J Pty Ltd to do all things and sign all documents necessary to pay all premiums, invoices and register and maintain the registration and insurance of the following motor vehicles and watercraft:

   (i) Motor Vehicle 1 registration number …;

   (ii) Motor Vehicle 2 registration number …;

   (iii)Motor Vehicle 3  registration number …;

   (iv)The Boat registration number … together with the Trailer registration number …;

   (v) Boat registration number … and Trailer registration number …, and allow these to remain in the wife’s exclusive use and possession.

   6. The wife shall have the exclusive use and occupancy of the former matrimonial home, including the shed located on the property, provided that the husband and his employees have access to the property at times to be agreed to remove all company machinery, parts, files and items and the wife will absent herself from the property during such access.

   7. The husband will continue to ensure that sufficient funds are deposited into the Bank Accounts held at National Australia Bank, BSB: … Account Number: …50 from company revenue and/or rents received and payable from matrimonial properties (including but not limited to properties in parties individual names or in the name of the Company) to ensure that all outgoings including but not limited to mortgage payments, council rates, water rates, land tax, strata fees and all insurances are paid from the joint account and the wife will continue to ensure that she does not use any of the rental monies received from the investment units for her own purposes.

   8. That the property situate and known as:

   •B Street, Suburb C NSW;

   •K Street, Suburb Q;

   •L Street, Suburb C (M Street, Suburb C);

   •N Street, Suburb C,

   •P Street, Suburb S,

   •1 R Street, Suburb T,

   •2 R Street, Suburb T,

   •1 V Street, Suburb AA;

   •2 V Street, Suburb AA, and

   •D Street, Suburb W NSW

   in the State of New South Wales be valued by H Valuers.

   9. Within 14 days of receiving the Tax Invoice from each valuer, the Husband shall pay that Tax Invoice.

   Notation: That the parties have agreed that the matrimonial pool of assets of the parties be distributed as to 60% to the wife and 40% to the husband.

3. On 8 July 2020 certain further interim orders were made as follows:

   THE COURT NOTES THAT FOR THE PURPOSES OF THESE ORDERS

   A.“CGL” means the Respondent’s solicitors, Messrs Coleman Greig Lawyers.

   B.“the CMA” means the Controlled Monies Account established pursuant to Order 6.

   C.“LCI” means the Applicant’s solicitors, Messrs LCI Legal.

   D.“the Suburb W property” means the property situated at and known as D Street, Suburb W in the State of New South Wales and being described in Folio Identifier …, of which the Applicant and Respondent are joint proprietors.

   E.“the Suburb W Property Loan” means the National Australia Bank Loan Account, being BSB … and Account Number …60, held in the parties’ joint names and secured by way of mortgage over the Suburb W property.

   F.“Cordwell Partnership” means the partnership of the parties known as Ms Cordwell and Mr Cordwell ABN ...

   G.“the 2 V Street property” means the property situated at and known as 2 V Street, Suburb AA in the State of New South Wales and being described in Folio Identifier …, of which the Applicant and Respondent are joint proprietors and forms part of the Cordwell Partnership.

   H.“the 2 V Street Loan” means the National Australia Bank Loan Account, being BSB … and Account Number …70 held in the parties’ joint name and secured by way of mortgage over the 2 V Street property.

   I.“the Suburb T property” means the property situated at and known as 2 R Street, Suburb T in the State of New South Wales and being described in Folio Identifier …, of which the Applicant and Respondent are joint proprietors and forms part of the Cordwell Partnership .

   J.“the Suburb T Loan” means the National Australia Bank Loan Account, being BSB … and Account Number …02 held in the parties’ names and secured by way of mortgage over the Suburb T property.

   BY CONSENT AND PENDING FURTHER ORDER, IT IS ORDERED

   Sale of Real Property

   1.That the parties shall forthwith do all acts and things and sign all documents necessary to cause the Suburb T property to be sold in accordance with the sale conditions contained in Order 5 below, and cause the proceeds of sale to be paid in the following manner and priority:

   1.1Payment of the agent’s commission, auctioneer’s fees, advertising and other expenses payable on the sale;

   1.2Payment of the legal costs on the sale;

   1.3In payment of sufficient funds necessary to discharge in full the Suburb T Loan;

   1.4The balance thereafter to be paid into LCI’s Trust Account to be later transferred into the CMA established by LCI pursuant to Order 6 below.

   2.That the parties shall forthwith do all acts and things and sign all documents necessary to cause the 2 V Street property to be sold in accordance with the sale conditions contained in Order 5 below, and cause the proceeds of sale to be paid in the following manner and priority:

   2.1Payment of the agent’s commission, auctioneer’s fees, advertising and other expenses payable on the sale;

   2.2Payment of the legal costs on the sale;

   2.3In payment of sufficient funds necessary to discharge in full the 2 V Street Loan;

   2.4The balance thereafter to be paid into LCI’s Trust Account to be later transferred into the CMA established by LCI pursuant to Order 6 below.

   Restraints

   3.That pending the sale of the properties referred to in Orders 1 and 2 above, the parties are hereby restrained from further encumbering the Suburb T property and the 2 V Street property from drawing down or increasing the Suburb T Loan and the 2 V Street Loan.

   4.That pending further Order, the parties are hereby restrained from further encumbering the Suburb W property and from drawing down or increasing the Suburb W Property Loan.

   Conditions of Sale

   5.That subject to the preceding Orders in relation to the sale of any real property as contemplated by Orders 1 and 2 above, the parties shall give effect to the following conditions of sale:

   5.1Unless otherwise agreed between the parties in writing from time to time, the parties are to:

   5.1.1jointly instruct X Real Estate to sell the Suburb T property by auction;

   5.1.2jointly instruct Y Real Estate to sell the 2 V Street property by auction.

   5.2The parties shall instruct:

   5.2.1LCI to act on the conveyance of the Suburb T property and 2 V Street property.

   5.3The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making a set of keys available to be held by the agent to allow inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer;

   5.4The parties shall execute all documents requested by the agent and conveyancer appointed pursuant to orders 5.1 and 5.2 respectively for sale of the property;

   5.5The reserve price of the property shall be such amount as is agreed between the parties and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the agent;

   5.6The parties shall give such instructions as are necessary to the conveyancer/solicitor appointed pursuant to Order 5.2, to prepare a contract of sale and provide it to the agent appointed pursuant to Order 5.1;

   5.7The sale price of the property shall be any amount in excess of the reserve price but in the event of the reserve price not being reached the sale price of the property shall be such amount as is agreed between the parties or failing agreement any offer received after the auction to buy the property at a price that is at least 95% of the reserve price shall be accepted by the parties;

   5.8The contract of sale shall provide for completion within 42 days after the date of the contract, unless otherwise agreed between the parties in writing.

   5.9That in the event that the property is not sold on the date of auction or within 14 days after the date of the auction by further negotiation, then the parties shall cause a further auction of the property to be held and for that purpose the conditions of sale pursuant to Order 5 shall apply and in the event the property remains unsold, the property shall continue to be re-submitted for auction at 3 monthly intervals until sold.

   CMA Account

   6.That upon receipt of the proceeds of sale of the properties referred to in Orders 1 and 2, the parties are to do all acts and things and sign all documents necessary to establish a CMA held with LCI and to direct LCI to transfer the proceeds of sale held in LCI’s Trust Account to the CMA.

   Other Orders

   7.That each party shall do all acts and things and sign all documents necessary as and when required in order to give effect to the validity and operation of these Orders.

   8.That each party shall do all things necessary including providing all consents to give effect to these Orders in the time periods prescribed in these Orders.

   9.If any party refuses or neglects to sign or execute and return a document within 14 days of a written request to do so then the Registrar of the Family Court of Australia is hereby appointed under Section 106A of the Family Law Act 1975 to sign or execute such document on behalf of that party upon lodgement of such document and the filing of an affidavit of a solicitor on behalf of the requesting party as to the said neglect or refusal.

   10.Liberty to each party to relist the matter with 7 days’ notice in writing as to any issues of compliance with these Orders.

   Context

4. Trial directions to facilitate the matter proceeding to final hearing were made on 12 May 2020.  Trial affidavits were to be filed by 28 August 2020.  The wife complied in that regard and the husband filed his trial affidavit on 9 September 2020.  The matter was again before the compliance registrar on 24 September 2020.  As a consequence of this further interim application filed by the wife, the matter was not referred to the list clerk to await allocation of final hearing dates.  The matter was adjourned to 17 December 2020 for a further compliance listing. 

5. On 24 September 2020 the wife filed an Application in a Case seeking a raft of orders by way of enforcement and otherwise.  In summary, the wife sought the following orders:

   (a)That within seven days the husband as director of J Pty Ltd, Z Pty Ltd and E Pty Ltd remove all plant, equipment and machinery and vacate premises at B Street, Suburb C, N Street, Suburb C and K Street, Suburb Q.

   (b)That within seven days the husband pay to the applicant wife the sum of $71,504 by way of lump sum payment pursuant to Order (1) made 13 February 2019 being arrears accumulated for the period 7 May 2019 to 14 September 2020 and continuing at a daily rate of $189.29.

   (c)That within seven days the husband pay to the wife the sum of $7,010 being reimbursement to the wife of registration and insurance payments in relation to motor vehicles and two boats paid by her being arrears pursuant to Order (5) made 13 February 2019.

   (d)That within seven days the husband pay to the wife the sum of $1,603 being arrears pursuant to Order (7) made 13 February 2019 being reimbursement of home insurances.

   (e)Certain orders seeking the appointment of a Chapter 15 single expert to value and report on the investment portfolio of the parties, the parties’ self-managed superannuation fund Cordwell Super Fund and that the husband and wife do all things necessary to cause such payments to be made so as to render the Cordwell Super Fund a complying fund.

   (f)That within seven days the parties jointly appoint FF Real Estate to manage properties comprising the parties’ investment portfolio and that rental payments be paid on a monthly basis to the trust account of the wife’s solicitors.

   (g)That funds deposited to the trust account of the wife’s solicitors be applied to pay property mortgage payments as they fall due and payable, insurance premiums as they fall due and payable, land tax assessments as they fall due and payable, the sum of $1,325 per week to the wife being payments pursuant to order (1) made 13 February 2019 and that surplus funds be accumulated pending further court order or agreement.

   (h)That following appointment of the managing agent as provided for above, Order (7) made 13 February 2019 be discharged.

   (i)That the husband be restrained from dealing with, encumbering, drawing down funds and/or disposing of assets being personal assets, company assets, assets belonging to the superannuation fund, superannuation and any matrimonial real estate property in the portfolio without prior written consent of the wife.

   (j)That the husband shall not for his own benefit encumber or pledge as security any of the assets of J Pty Ltd, Z Pty Ltd and E Pty Ltd.

   (k)That the husband as director of the said corporate entities be restrained from incurring or causing any expense in the said entities to acquire any asset including but not limited to plant and equipment, motor vehicles, real estate property, shares, investments in excess of the amount of $3,000 without the prior written consent of the wife and be restrained from incurring or causing to be incurred any liability, encumbrance, borrowing or pledge of any asset of the entities or personal asset of the parties without the prior written consent of the wife and be restrained from disposing of any assets in the said entities without the prior written consent of the wife.

   (l)That in the absence of the husband complying with Order (5) made 13 February 2019 then pursuant to section 106(A) of the Act a registrar be appointed to sign such document or documents on behalf of the husband.

   (m)That the husband and wife do all things necessary to give effect to these orders including but not limited to signing all documents and in the event of default a registrar be appointed pursuant to section 106(A) of the Act to sign such document(s) on behalf of the defaulting party.

   (n)Costs.

1. In support of the orders sought in her Application in a Case, the wife relied upon her affidavit filed 22 September 2020.

2. A draft Balance Sheet sees the property of the parties being in excess of $13 million.

3. The husband, for his part, filed on 22 October 2020 a Response to the wife’s Application in a Case.  The husband, in summary, sought the following orders:

   (a)That the wife’s Application in a Case be dismissed.

   (b)That Orders (1), (5), (7) and (8) made 13 February 2019 be suspended.

   (c)That the husband and wife do all necessary things to cause Cordwell Pty Ltd to sell the property situate at B Street, Suburb C and that the proceeds of sale after agents commission and legal costs on sale be paid as follows:

   (i)in payment of such sum determined to represent the share owed to the Cordwell Super Fund;

   (ii)in payment of a sum equivalent to estimated capital gains tax plus 10 per cent to the husband’s solicitors to be held in a controlled monies account;

   (iii)in payment of the sum of $50,000 to the wife or as she may direct with the categorisation of that some reserved to final hearing;

   (iv)in payment of the balance thereafter to NAB home loan account ...59.

   (d)That the husband and wife be restrained from further encumbering the B Street property.

   (e)That the husband and wife be restrained from drawing down or increasing the NAB loan account ...59.

   (f)That upon income tax assessments issuing that include an assessment of additional capital gains tax payable as a consequence of the sale of the B Street property, such additional capital gains tax liability is to be paid from the controlled monies account established for that purpose.

   (g)That the husband and wife do all necessary things to instruct accountants to finalise and lodge Cordwell Super Fund income tax returns and financial statements for the financial years ended 30 June 2018, 2019 and 2020 and that consequent upon sale of the B Street property instruct such accountants to prepare updated financial statements including member balances.

   (h)That within 14 days the husband be permitted to attend at the property D Street, Suburb W to collect certain items of personalty and that pending same the wife be restrained from having the use of, removing or causing damage to such items.

   (i)That the husband and wife do all acts and things and sign all documents necessary to give effect to the validity and operation of these orders and in default a registrar be appointed to do so pursuant to section 106(A) of the Act.

4. In support of the orders sought by him, the husband relied upon his affidavit filed 22 October 2020 and his Financial Statement filed 22 October 2020.

5. The interim application was listed for judicial determination on 16 November 2020.

6. On 16 November 2020 orders and directions were made as follows:

   1.The Applicant wife provide to the Court in chambers a hard copy of documents exhibited to her affidavit sworn 22 September 2020 by close of business on Friday, 20 November 2020.

   2.The Respondent husband provide to the Court in chambers a hard copy of his tender bundle relied upon by close of business Wednesday, 18 November 2020.

   3.Upon noting that the Applicant wife’s Case Outline comprised as Exhibit “A” in the proceedings, the wife file and serve short supplementary submissions by Monday, 23 November 2020 and any short written submission in reply to those of the husband by Wednesday, 2 December 2020.

   4.Upon noting that the Applicant husband’s Case Outline comprised as Exhibit “B” in the proceedings, the wife file and serve any short supplementary submissions by Friday, 27 November 2020.

   5.Upon completion of written submissions, judgment is reserved to chambers.

7. Subsequently, judgment was reserved on 2 December 2020.

8. The proceedings were again before the compliance registrar on 17 December 2020.  In expectation that valuation evidence will be updated in a timely manner prior to trial, leave was granted to approach the list clerk for hearing dates.  At present, the primary proceedings await allocation of final trial dates.

   The wife’s contentions

9. The wife is presently aged nearly 44 and the husband nearly 49.

10. The wife resides in the property at D Street, Suburb W.

11. The parties commenced cohabitation in about 1998 and married in 2006.  They separated in August 2017.  There are two children of the parties’ relationship who are both now over 18 years of age and reside with the wife.

12. The company J Pty Ltd trades from premises at L Street, Suburb C.  The husband and wife are equal shareholders of the company and registered proprietors of the L Street property.  The L Street property is a partnership of the husband and wife, the Cordwell Partnership.  As at separation, the company was paying rent of $10,835 per month to the partnership. The wife, somewhat surprisingly, asserts that she is not aware as to the current status of rental payments, she having not been provided with a reconciliation of payments since separation, this notwithstanding the obligation of the parties to file personal income tax returns.

13. Otherwise, situate on the L Street property is a small shop.  At the time of separation the tenant was paying $2,625 per month rent, it is assumed, to the partnership.  Again, the wife asserts that she has no knowledge of the current status of those rental payments.

14. The wife complains that since separation the husband has terminated third-party tenancies at properties B Street, Suburb C, N Street, Suburb C and K Street, Suburb Q.  The husband asserts that the premises are required for the purposes of the business.  The wife complains that the husband has failed to occupy the property and pay rent to the partnership or to the parties’ Cordwell Super Fund that holds a significant interest in the property at B Street, Suburb C.

15. J Pty Ltd is the registered proprietor of property at DD Street, Suburb S.

16. The husband, she asserts, complains that J Pty Ltd and its related companies are in financial difficulty. She further complains that the husband has failed to provide an accurate reconciliation of rent monies received in relation to the parties’ investment property portfolio, and notwithstanding that she is substantially a joint registered proprietor of those properties, the husband has denied her access to same.

17. As at 17 August 2020 the wife says that loan facilities with NAB were in arrears of about $83,500.  She further complains that as a consequence of the husband terminating third-party tenancies as referred to above, rental losses total approximately $10,566 per month.  Rental payments are necessary to meet loan commitments.

18. Her recent attendances at the Suburb C properties did not reveal any business activity being undertaken thereon.  She seeks orders that the husband remove any business plant and equipment from the three vacated properties to facilitate the properties being leased to a third-party at market rent.

19. The wife further complains that by reason of the husband’s default in his obligation to pay her the periodic sum provided for in earlier orders, she directed that rental payments from the Suburb Q property of $3,300 per month be paid to her account.  Such payments were paid to her account for the period 23 August 2019 to 15 April 2020.  From those funds the wife met some outgoings in relation to that property and has used about $22,500 for the living expenses for herself and the children.  The wife’s receipt of those payments will in due course be accountable in the financial statements of the Cordwell Partnership.

20. At present the wife’s only source of income is the sum of $500 per week received by way of rental for a cottage on the matrimonial property. 

21. Otherwise, the wife asserts as to her payment of registration and insurance payments for motor vehicles and boats and home insurance, where such payments were, otherwise, the responsibility of the husband.

22. Otherwise, the wife seeks orders as to the appointment of a forensic accountant as it were to undertake a reconciliation of income from rentals and use of those funds.  In this regard, it is noted that the parties have an obligation to prepare and lodge personal income tax returns up to the date of trial, together with income tax returns for their personal partnership and corporate returns in relation to the various corporate entities.  It appears that such returns have not been done and it is to be reasonably expected that they will be completed in good time prior to the hearing.  Otherwise, the wife refers to funds withdrawn from the parties self-managed superannuation fund.  The superannuation fund would be the subject of a single expert report for the purposes of hearing and clearly such issues will be ventilated at final trial, and if relevant, appropriate orders made remedying any default.

23. The wife further gives evidence as to her funds withdrawn by her from the parties’ joint NAB account.  She concedes various withdrawals and transfers to meet various living expenses including property outgoings, loan payments, tax, and land tax instalments.

24. The wife complains that the husband has unilaterally used significant cash reserves of J Pty Ltd for various purposes without consulting her and has, otherwise, in his management of the parties’ rental properties made unilateral decisions in relation to the application of rental income and the eviction of third-party tenants.

    The husband’s contentions

25. The husband asserts that he ceased meeting his periodic financial obligations to the wife as a consequence of her commencing a new business, her retaining rental income in relation to the Suburb Q property, cash flow difficulties experienced by J Pty Ltd, his daughter attaining 18 years of age and the wife’s delay in the sale of certain properties. 

26. He concedes that rental income had previously been paid into the joint NAB business account …50 but he subsequently changed the payment of rental payments to NAB account …03 in his own name.  He complains that the wife would withdraw funds from the joint account which, as a consequence, would mean there were insufficient funds to meet property mortgage repayments and outgoings.  The husband facilitated transfer of funds from his sole NAB account to the joint account to service mortgage payments when due.

27. He asserts that the wife has been responsible for managing rental properties comprising units 1 and 2 V Street, Suburb AA and unit 2 R Street, Suburb T, although he complains that these properties have been untenanted for extended periods.

28. The husband asserts that J Pty Ltd is in occupation of the Suburb Q property and is paying $3,300 per month to the parties’ partnership.

29. The NAB had granted a moratorium on mortgage payments until 30 September 2020.  On 1 September 2020 the husband caused the sum of $40,992 to be transferred from J Pty Ltd to remedy arrears as a consequence of such moratorium.

30. The husband asserts that he did in October 2019 seek a sale of the Suburb AA, Suburb T, B Street and Suburb Q properties that would result in a capital surplus.  No agreement was reached with the wife in relation to sale until interim orders of 8 July 2020 referred to above.  The 2 V Street property sold in October 2020 giving rise to a mortgage shortfall of $81,750 that was, by agreement, incorporated into the NAB facility secured over the Suburb W Street property occupied by the wife.

31. The husband complains that the wife has withdrawn from the parties joint NAB account $62,824 over the period from March 2018 to June 2020.

32. In July 2018 the wife registered the company BB Pty Ltd in which she is sole director and shareholder. The wife, he asserts, along with her partner registered the company CC Pty Ltd in May 2019.  The wife is a director and equal shareholder of that entity.  The registered office of the company is the former matrimonial home in which the wife resides with her partner.

33. Notwithstanding requests for disclosure as to these entities, the husband complains that the wife has not appropriately responded.

34. The husband complains as to the deteriorating financial circumstances of J Pty Ltd and its related entities.  Clearly, those circumstances will be the subject of a report by the Chapter 15 single expert that has been appointed.  Notwithstanding the husband’s assertions as to the company circumstances, he says that in September 2020 the company entered into a lease for a commercial premises at Suburb EE and is in the process of completing a fit out to enable it to commence operations at those premises.

35. The husband complains of difficulties in finalising returns for the parties’ self-managed superannuation fund (that he asserts owns 65 per cent of the B Street property) and for the parties’ rental property partnership.

36. The husband seeks that the B Street property be sold so as to crystallise in cash terms the self-managed superannuation funds interest in that property to allow ultimately a splitting of the parties’ respective member entitlements in that fund.  He asserts the property as at March 2019 had a value of $850,000 and is unencumbered. A mortgage in the sum of $308,000 relating to the purchase of the property is presently secured over the former matrimonial home at Suburb W.

37. The Suburb Q property is now vacant, the husband having procured vacant possession from the third-party tenant in August 2020.  The company is in occupation and various plant and equipment has been moved to those premises.  The husband asserts that the company will continue to pay the previous commercial rent to the parties’ rental partnership.  As a consequence of the wife endeavouring to gain access to that property, a provisional Apprehended Domestic Violence Order was made for the protection of the husband on 14 August 2020.

38. The husband gives evidence of a number of items of personalty including plant and equipment being the property of J Pty Ltd remaining at the Suburb W property.  Such issue can be the subject of determination at final hearing, those items having been at the property for some years since separation.

39. Otherwise, the husband seeks a sale of the B Street property so as to facilitate the completion of self-managed superannuation fund accounts as to the funds percentage interest in that property, and that from the balance of the proceeds of sale there be paid $50,000 to the wife with the balance applied in reduction of that property loan secured against the Suburb W property.

    Discussion

40. It is common ground that the parties owned nine investment properties through their property partnership.  Two of those properties have been sold, with the first referred to above and the second due to settle on 14 December 2020.  It is expected that the net proceeds of sale will be applied in reduction of outstanding secured debt.

41. At present, final property proceedings await allocation of trial dates and it is expected that final hearing dates will be allocated at worst within the next six to nine months.

42. Questions of reconciliation in relation to rental income received by both the husband and wife and rental income forgone by reason of the husband’s occupation of several of the rental properties will be a matter for final hearing and, if necessary, questions for the single expert.

43. Of concern is the enmeshment of the self-managed superannuation fund within the personal assets of the husband and wife by reason of co-ownership.  It is readily apparent that the Court will be unable to deal with the self-managed superannuation fund on a final basis unless arrangements are made for the fund to crystallise in cash terms its co-owned real property interest.  Such a consideration is supportive of the husband’s orders sought as to the sale of the B Street property.

44. Otherwise, it is noted that orders have been made for a Chapter 15 expert for the purposes of valuing the parties’ interests in the various corporate entities.  Once that report is to hand, it is appropriate that, if necessary, questions be administered to the single expert touching upon issues raised by both the husband and wife.  Otherwise, as noted above, it is incumbent upon the parties to remedy the parlous state of their taxation affairs well prior to trial.

45. Section 114 of the Family Law Act 1975 (Cth) (“the Act”) provides that the Court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate. In this matter, of course, the proceedings relate to the property of the parties and to the use and occupation of various properties.

46. The grant of an injunction is discretionary and the basis upon which an order or injunction may be made is well settled.

47. Otherwise, issues arising from the husband’s asserted default under orders made in February 2019 can be the subject of factual findings at final trial that will facilitate consideration of the discretion to enforce if the husband is unsuccessful in what is expected to be his application to discharge such orders.

48. It is thus appropriate to make orders only as to the sale of the B Street property for the reasons set out above. Otherwise, certain other orders sought by the husband are not opposed by the wife and orders will be made to implement that agreement.  It is to be noted that a cooperative approach to the sale will facilitate a capital sum to be made available to the wife at an early date.

49. Orders will be made accordingly.

I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster.

Associate:       

Dated:       12 February 2021