CUNY & CUNY

[2014] FamCA 825

FAMILY COURT OF AUSTRALIA

CUNY & CUNY [2014] FamCA 825

FAMILY LAW – PROPERTY – INTERIM ORDERS – Interim application by the husband for sale of property owned by the parties – Where the wife agrees that the parties cannot retain the property but wishes the sale to be dealt with at the final hearing – Where the wife seeks to carry out capital works on the property prior to the sale – Where the husband asserts the property should be sold in its present condition – Where it is found that the postponement of the sale of the property and the draw-down of funds from the mortgage facility to fund the work will not cause financial difficulty to the husband – Orders made that the work on the property be done and the property be listed for sale upon completion of the work.

Family Law Rules 2004 (Cth) Rule 15.49

APPLICANT: Mr Cuny

RESPONDENT: Ms Cuny

FILE NUMBER: SYC 1927 of 2013

DATE DELIVERED: 11 September 2014

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 11 September 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd SC

SOLICITOR FOR THE APPLICANT: Broun Abrahams Burreket

COUNSEL FOR THE RESPONDENT: Mr Wheelhouse SC

SOLICITOR FOR THE RESPONDENT: Rockwell Olivier (Sydney) Pty Ltd

Orders

IT IS ORDERED

1. That forthwith upon his being notified by the wife that a payment is required, the husband do all acts and things to draw down from the National Australia Bank mortgage facility over the property at L Street, Suburb M (“L Street”) sufficient funds to pay for the re-instatement of the access area which work is the subject of a current Development Application (“the work”).

2. That the wife do all acts and things necessary to complete the work with all possible expedition, including but not limited to giving all necessary consents, obtaining all necessary permissions and certificates and retaining and instructing a contractor and to finalise a lease from the Roads & Maritime Services authority (“RMS”) .

3. That in the event that the husband so requests, the wife shall consent to the appointment by the husband of a suitably qualified project manager to supervise the work and report to the husband.

4. That within 14 days of the receipt of the appropriate Certificate of Compliance and the grant of a lease by the RMS, the parties shall do all acts and things to sell L Street by private treaty and to pay from the proceeds of sale the agent’s commission and legal expenses and all registered encumbrances and to pay the balance into an interest bearing account as agreed upon between them, pending further order or agreement in writing.

5. That to facilitate the sale:

   (a)    the husband shall, within 21 days, nominate three agents and three solicitors to handle the sale and the wife shall choose the agent and the solicitor to have the carriage of the sale;

   (b)  forthwith upon the wife’s nomination of the agent, each party shall sign the necessary document to appoint the agent and the solicitor; and

   (c)   the wife shall facilitate all reasonable requests for inspection for the purpose of marketing L Street from a date which is 21 days after the date when both the Certificate of Compliance is available and the lease has been executed.

6. That the matter is stood over to 10 October 2014 at 10am for spousal maintenance and interim property settlement.

IT IS NOTED

1. That the husband’s attendance is excused on hearing date of 10 October 2014.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Cuny and Cuny has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1927 of 2013

Mr Cuny

Applicant

And

Ms Cuny

Respondent

REASONS FOR JUDGMENT

1. The proceedings before the Court are brought by Mr Cuny, to whom I will refer as the husband, in relation to the marriage between himself and Ms Cuny, to whom I will refer as the wife. They are interlocutory proceedings and, of necessity, there can be no examination of the evidence and the matters which are essentially in dispute between them.

2. In the proceedings before me, the husband seeks an order for the sale of the property at L Street, Suburb M (“L Street”), which is occupied by the wife, and the discharge of mortgages secured over that property totalling some $920,000. The wife opposes that application.

3. Although it is common ground that the wife cannot retain L Street, she wishes the issue of its sale to be dealt with in the final hearing. The matter is not currently in the docket of any Judge waiting for hearing and I am not able to ascertain when it is likely to be allocated dates.  

4. It is agreed between the parties that they are able to draw down $1.23 million from a line of credit secured over L Street.

5. The wife seeks authority to carry out capital works on the access area of L Street. It is agreed that the existing access is unsafe and must be replaced.

6. The husband submits that L Street should be sold in its present condition and he relies upon a valuation report of the single expert, Mr N.

7. The wife sought to rely on the evidence of an adversarial expert valuer, Mr O. No leave had been sought pursuant to the rules to rely on the affidavit. The criteria set out in rule 15.49 of the Family Law Rules 2004 for the appointment of an adversarial expert were not established and on that evidence, the wife was not permitted to rely on Mr O’s report.

8. The wife also sought to rely on evidence of Mr Chapman, who is a solicitor with an expertise in such development. Over the objection of the husband, she was permitted to rely on that affidavit. However, when the inadmissible portions of the affidavit were excised, the affidavit was of little assistance. The wife relied on paragraph 14 to this effect:

   In my opinion if the freehold is sold, based on my experience, RMS will almost certainly not issue a new lease to the incoming purchaser unless the works under DA development application 13/1 (so far as they relate to [L Street]) have been completed to RMS satisfaction and an Occupation Certificate provided. (The initials “RMS” refer to the Roads and Maritime Services.)

9. Senior Counsel for the wife submitted that the only interpretation of paragraph 14 is that only the wife can complete the works and secure a lease from the Roads and Maritime Services. If that were the evidence of Mr Chapman, it was open to him to state that explicitly. I infer that Mr Chapman says that an incoming purchaser will be able to secure a lease from the Roads and Maritime Services once the work is completed. 

10. Mr N expresses his opinion that the completion of the work will add perhaps $100,000 to the current value of L Street, which he estimates to be $6 million. Senior Counsel for the wife wishes to challenge Mr N’s opinion in relation to the increase in value consequent upon the completion of the work. That could not be done in the limited context of an interim determination.

11. I am satisfied that it would be inappropriate to require the sale of the most significant asset of the parties where I cannot be satisfied that the performance of capital work would not significantly enhance the value of the asset.

12. The husband submits that he cannot afford the increased interest costs that would flow from a draw down on the existing facility to fund the capital works. I do not accept that that is so. The wife’s evidence is that she has a quote to perform the work for $89,000. The husband’s evidence is that he is not currently paying the interest on the facility and in fact the interest is being paid by the application of rent from a property owned by the wife. If the husband continues not to pay interest, the effect is that the parties ultimately will bear interest in the proportions in which they take the L Street property subject to the payments made from the wife’s rental property. The wife accepts that position should apply to the proposed draw down.

13. The husband discloses a gross income of $1,072,000 per annum. That income includes a distribution from the Cuny Family Trust. It is an agreed fact that the Cuny Family Trust is an alter ego of the husband. There is no evidence of the current income or assets of the Cuny Family Trust. In the year ended 30 June 2013, the Cuny Family Trust made distributions totalling $255,000 to the husband’s adult children. In that year, the income of the Cuny Family Trust was $352,380. All of that income was available to the husband.

14. Bank statements tendered in the wife’s case show that at least in July and August 2013 the spousal maintenance that was paid for the benefit of the wife pursuant to the orders made 22 July 2013 was paid from the Cuny Family Trust. Credit card statements for the husband tendered in the wife’s case showed substantial discretionary spending including $31,955 to P Jewellers in September 2013. Between 16 October 2013 and 1 August 2014, some $260,000 was paid into the husband’s American Express account.

15. Bank statements for the husband’s National Australia Bank account ending in the numbers …88 show that in 2013 the husband paid his daughter Q $42,500. The husband has superannuation entitlements in a self managed fund valued at $2,111,000. He draws a pension from the fund of $82,576 per year which is disclosed as part of his income in his financial statement. However, there is no evidence of the maximum amount that the husband would be entitled to draw.

16. I am not satisfied that the draw down of $89,000 from the L Street facility would cause any hardship to the husband. Nor am I satisfied that to postpone the sale of L Street for about three months to allow the access area to be replaced would cause the husband any financial difficulty. However, in circumstances where each party concedes that L Street will have to be sold and the issue about its sale is the improvement of its value consequent upon the capital works, there is no reason that the L Street property should not be put on the market as soon as the works are completed. 

17. In the course of submissions, each party was asked to tender a minute of the order that should be made if I determined that the capital works should be done. The husband sought an order that he be appointed the wife’s attorney for the purpose of overseeing the work. The wife sought orders binding her to complete the work in a timely fashion. 

18. L Street is currently the wife’s residence. There is a current apprehended domestic violence order against the husband for her protection. It is not practicable in my view for the husband to oversee the work. The husband asserts that the wife has been dilatory in arranging for the work to be done. That is an issue of fact which will no doubt have to be determined at some time in the future, but I note that the wife has been seeking the husband’s consent to draw down on the L Street mortgage facility since 2013 and for various reasons contended for by the husband, his consent has not been forthcoming. 

19. I propose making orders for the work on L Street to be done and to be overseen by the wife and funded by the mortgage facility. L Street will be listed for sale on completion of the work. Once contracts for the sale of L Street have been exchanged, the issue of the wife’s periodic support can be revisited. I propose to consider the question of a partial property settlement at the same time as the application to vary spousal maintenance which will be listed shortly.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 11 September 2014.

Associate: 

Date:  11 September 2014