CURRAN & DURANT

[2015] FamCA 946

FAMILY COURT OF AUSTRALIA

CURRAN & DURANT [2015] FamCA 946

FAMILY LAW – PROPERTY – Interim – Where the husband seeks that the wife remove a caveat on the title of the former matrimonial home – Where the husband requires the Court’s permission to encumber the former matrimonial home by way of providing it as a security for a loan not exceeding $2 million – Where it is found that the orders sought by the husband should be made on an interim basis to preserve the property of the parties.

Family Law Act 1975 (Cth)

APPLICANT: Mr Curran

RESPONDENT: Ms Durant

FILE NUMBER: SYC 2036 of 2015

DATE DELIVERED: 27 April 2015

DATE ORDERS MADE: 29 April 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 27 April 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Williams, SC

SOLICITOR FOR THE APPLICANT: McLachlan Thorpe Partners

COUNSEL FOR THE RESPONDENT: Ms Coulton

SOLICITOR FOR THE RESPONDENT: Vizzone Ruggero Twigg Lawyers

Orders

27 April 2015

1. I order that all costs be reserved.

29 April 2015

1. That by consent orders are made in accordance with the Minute of Consent Order received on 29 April 2015 and signed by Johnston J and placed with the Court papers as set out hereunder:-

   BY CONSENT IT IS ORDERED

   1.That the Wife forthwith do all things and execute all documents, instruments and things necessary to withdraw the caveat AJ104196 against the former matrimonial home being the property situate at and known as B Street, Suburb A (the Home), within 7 days of the making of these Orders, and such costs to be paid by the Husband.

   2.That the Husband be restrained from encumbering the title of the Home without written consent of the Wife, excluding the Husband granting a mortgage in favour of a lender, securing a sum not exceeding $2,000,000, such sum to be borrowed by C Pty Ltd A.C.N. … for the purposes of funding the final construction and commissioning of the D Project in Queensland.

   3.That within 5 days of execution, the Husband provide copies of all executed loan documents and all documentation in respect of the mortgage referred to in Order 2 herein to the Wife including copies of any loan agreement entered into by C Pty Ltd and E Ltd.

   4.That:

   (a)the Wife have sole occupation of the Home;

   (b)by mutual consent, such consent not to be unreasonably withheld, the Husband have reasonable access to the Home as agreed between the parties and the Husband shall not attend the Home without the Wife's prior agreement.

   (c)The Husband pay or cause to be paid as and when they fall due in relation to the Home:

   (i)All rates and taxes;

   (ii)All household insurance that may fall due;

   (iii)All electricity, gas and telephone accounts;

   (iv)All payments in respect of the loan secured over the Home, as referred to in Order 0 above.

   5.That the Husband pay or cause to be paid all loan payments in respect of the loan secured over the property at F Street, Suburb G (the Suburb G Property) as and when they fall due.

   6.That until further order, or written consent of the Wife, the Husband be restrained from increasing the level of indebtedness secured over the Suburb G Property.

   7.That until further order, or written consent of the Wife, the Husband and C Pty Ltd as trustee of the Curran Private Super Fund (SMSF) be restrained from selling, mortgaging, encumbering or in any other way dealing with the Husband’s interest in the SMSF.

   8.That pending further Order the Husband continue to pay the sum of $4,000 per calendar month to the Wife.

   9.If the Wife refuses or neglects to execute any deed or instrument necessary to give effect to all or any of the orders made, that the Registrar of the Family Court at Sydney be appointed pursuant to s 106A to execute the deed or instrument in the name of the Wife and to do all other acts and things necessary to give validity and operation to the deed or instrument and that the Wife pay the costs of the Husband on a lawyer/own client basis, in relation to the obtaining of the Registrar’s signature.

   10.That both parties' costs in respect of the Application in a Case filed by the Husband on 7 April 2015 be reserved. 

   11.That the Application in a Case filed by the Husband on 7 April 2015 be otherwise dismissed. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Curran & Durant 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 2036 of 2015

Mr Curran

Applicant

And

Ms Durant

Respondent

REASONS FOR JUDGMENT

1. This is an application in a case by Mr Curran to whom for convenience I shall refer as “the husband”.  The respondent is Ms Durant to whom for convenience I shall refer as “the wife”.  The husband seeks orders, the effect of which would be to require the wife to remove a caveat which has been lodged against the title of the former matrimonial home, being the property at B Street, Suburb A. 

2. The husband requires the Court’s permission to encumber the property by way of providing it as security for a loan not exceeding $2 million, and I will come to that shortly.  The purpose of that is to assist him for what I might broadly describe as his business purposes.

3. The husband also seeks an order that that home be sold, pending completion of the sale the wife have sole occupation, there would be provision for him to have an occasion of access to the property, that he would continue to meet rates and taxes, insurance, utilities, and mortgage repayments in respect of his loan of up to $2 million. 

4. Upon completion of the sale the husband seeks an order to the effect that, after payment of agents’ fees and advertising expenses, legal costs, on the sale, the usual adjustments and discharge of the mortgage, the sum of $2 million be paid to the wife.  And then a sum calculated as the difference between the $2 million and the sum paid to discharge the mortgage, 50 percent of the balance of that be paid to the wife and the remaining balance be paid to him.

5. That application is resisted in its entirety by the wife. 

6. The brief background matters are as follows.  The husband was born in 1950, the wife was born in 1951.  They commenced cohabitation in approximately June 2000, they married in 2009 and they separated in approximately June 2014.   There may be some issue in respect of that.   But broadly speaking they cohabited for a period of approximately 14 years.

7. At the commencement of cohabitation the husband estimated that his net worth was approximately $15 million.  Within a couple of years of the parties commencing their cohabitation, the husband had a property settlement with his former wife.  He said in broad terms his former wife received approximately $2.5 million in assets.  So what the husband is really saying to this Court is at the commencement of cohabitation he had assets with an approximate value of $12.5 million. 

8. The wife had a property at Suburb H.  Ultimately, that property came by way of an inheritance in its entirety or close thereto to her.  She sold the property in about 2010 for an amount of about $882 000 and she inherited somewhere between $450 000 or $500 000 dollars, largely represented from the sale of properties in her mother’s estate.

9. The parties have had a couple of matrimonial properties.  Initially there was a home at Suburb I purchased, and then the purchase of the matrimonial home, which is the subject of these proceedings.  There is no question that very significant contributions were made to the acquisition of that home by the wife.  It was purchased for about $3 million.  There was subsequently a lot of money spent on renovating that property, but I do not think there is any issue that the wife contributed somewhere between $1 million and $1.5 million to that property.

10. Very late in the marriage the husband purchased a property which is unit 7 of numbers F Street, Suburb G for $2.43 million.  On the husband’s estimate there has been an increase in the value of that property.  He estimates that its current value is about $2.65 million with a mortgage of approximately $1.3 million.  So there appears to be equity in the Suburb G unit of approximately $1.3 million. 

11. From the husband’s financial statement and from his evidence in his affidavit, there appears to be matrimonial property currently with a value of around about $13.6 million.  There appear to be liabilities – at least on the husband’s version – of approximately $1.8 million, giving, at least on my calculation, a net value of property available for division between the parties of about $11.8 million. 

12. The husband’s application is for substantive property orders which would represent to him 70 percent of the available property and superannuation.  I am not sure what the wife’s position is, but she is seeking orders considerably more favourable to her than that. 

13. The husband is a business person.  He has been carrying on business.  He is the owner and director of various corporations.  He is the chief executive officer of a corporation J Pty Ltd, and he is a director of that corporation.  That corporation is the Australian subsidiary of a company J (Country K).  J is involved in trading and financing. 

14. The husband is also a managing director of L Pty Ltd, which is involved in growing, trading and processing raw materials in Country M and in the Country n.  L Pty Ltd is the subsidiary of C Pty Ltd.  C is the holding company of C Pty Ltd Consolidated Group.  C owns a property in Country M which the husband estimates has a value of $750,000. 

15. I pause just to make the observation that that property was purchased as a couple of lots and then a residence, or perhaps a residence and other improvements have been erected there.  There is no question that both of the parties have been involved in that and the wife has spent considerable time making contributions – significant contributions – to that project. 

16. C Pty Ltd is the largest shareholder in E Ltd.  The husband is a director of E Ltd and other companies in the E Group.  E is currently an equal joint venture partner with O Ltd. They are developing a venture in Queensland called the D project, and the project would involve shipping raw materials from Queensland to P Town, Tasmania for processing.

17. On the husband’s evidence E Ltd has run out of funds to complete the project.  He says C Pty Ltd has invested more than $3.6 million in the project.  The husband wants to raise funds by securing those borrowings against the former matrimonial home.  As I say, the wife has lodged a caveat over the home.  Initially the wife agreed to a sale of the home on certain bases which included that the Suburb G property be sold.

18. In any event, to the extent that there appears to have been some agreement between the parties previously about selling the former matrimonial home, that is no longer the case and the wife is most concerned not to be subject to an order at this point for sale of the former matrimonial home.

19. In January 2015, receivers and managers were appointed for E Ltd.  That was, as I understand it, at the behest of J.  The husband says if E Ltd is not put into funds, the joint venture partner O Ltd will almost certainly terminate the joint venture agreement.  And he says most of the investment by C Pty Ltd of $3.67 million in the joint venture will be lost.

20. The husband says it is necessary to have a sale of this property.  He says the wife is not going to be able to keep the former matrimonial home, in the sense that the value represented by that home is in excess of what the wife could anticipate being awarded in the substantive proceedings. 

21. It is said that the husband is offering a generous arrangement to the wife in the orders that he proposes, as I have referred to them, in respect of the sale of the property. That is, that there would be a distribution to the wife well in excess of $2 million and she could use those funds to re-accommodate herself or find a rental property and use those funds in whatever manner that she might wish.

22. It is said on behalf of the husband that in the event that he is unable to arrange the loan secured over the former matrimonial property, then as I have indicated, the investment which C Pty Ltd has in this venture of $3.67 million or the greater part thereof is likely to be lost.  So it is said on his behalf that in considering the relevant matters in this sort of injunction application the Court is asked to note that it would be preserving assets of the parties, at least to that extent of $3.67 million. 

23. There is no evidence before the Court that the husband is acting or intending to act to diminish the pool of assets.  It is said that the husband has been engaged in this sort of business – that is, this sort of commodities business – over a long time and that the husband is prepared to provide an indemnity to the wife in respect of the $2 million and sign himself up to orders, under which it would be made clear that any loss from him borrowing the $2 million and directing it to this project would be sustained by him.  He would be prepared to have that loss taken into account on his side of the ledger in the substantive property proceedings, as I understand his application.

24. On the other hand, Ms Coulton says that the wife should not be subjected to such orders.  She says the husband has not given a full and frank disclosure.  He sold the business or the company shortly after the parties separated.  There have not been appropriate documents produced in respect of that matter and there has not been appropriate production of documents in relation to all sorts of matters which have been the subject of correspondence between the parties. 

25. In particular it is said that there is no explanation by the husband about how this loan would be repaid.  He says in his affidavit that it would be repaid out of earnings or moneys available to the corporation very early in the new financial year. 

26. My overall view about this matter is that, provided that the wife can be appropriately protected by a package of injunctions, I accept that the Court would be using its powers to preserve matrimonial property, and to avoid the risk to the property which would be involved if further money could not be found for the joint venture.

27. It seems on the wife’s account that she is taking somewhat of a punt, if I can use that expression, that somehow, if the husband does not receive these funds, he will be able to fund or find the necessary funds from other sources.  That assumes that he has not made a proper disclosure about his financial circumstances. 

28. It is said that he could use the $1.3 million of equity in the Suburb G property, and he could somehow fall back on wherever else he might be able to find the balance of the funds to make up the $2 million.  I do not accept that on the basis of the material that is currently before the Court. 

29. I accept the husband’s submissions that, in the event that these moneys are not able to be forthcoming then there is considerable risk to the investment that C Pty Ltd has.  It would be catastrophic for these parties to lose the best part of $3.67 million, and especially in circumstances where the husband says that what he is really asking for is the preliminary distribution of part of his property.  I do not need to repeat myself about the safeguards that he says the wife would have and that he is prepared to sign up to.

30. In my view, the balance of convenience – and particularly bearing in mind, as Mr Williams has said, the need for the Court to make orders to preserve the property of the parties, falls clearly in favour of the husband’s proposal.  

31. However, having said that, I respect the wife’s submission that she does not want the property sold.  It is not an essential part of this for the property to be sold.  There would be a lot of sense in the property being sold, because I am told that this is a particularly good time for selling properties, although I’m hardly an expert in that area.  It would have the benefit of crystallising some funds, which could then be available to each of the parties, and hopefully facilitate a resolution of the substantive proceedings.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 27 April 2015.

Associate:     

Date:              30 October 2015