Czeb and Czeb (No 3)

[2011] FamCA 333

FAMILY COURT OF AUSTRALIA

CZEB & CZEB (NO 3) [2011] FamCA 333

FAMILY LAW – PROPERTY SETTLEMENT – Where final orders divided the property pool 60:40 in favour of the wife and ordered the sale of the former matrimonial home – The husband has applied to stay the sale of the property – Where the husband has been granted an extension of time to appeal to the Full Court – Where the wife does not oppose the husband’s application to stay the sale until the appeal is determined –Permission previously granted for the former matrimonial home to be leased in the interim – Where the wife has continued to pay mortgage instalments on the property – Where the husband is incarcerated and has not made mortgage repayments – Where the husband seeks a stay of order granting wife right to lease the property pending determination of his appeal. – Where the husband submits he will need to reside in the property if his appeal to the High Court against criminal convictions is successful – The husband’s application dismissed – Matter to be transferred from the Brisbane registry once costs of this application have been finalised. 

Husband’s Application in Form 2 filed 19 April 2011

APPLICANT: Ms Czeb

RESPONDENT: Mr Czeb

FILE NUMBER: SYC 7329 of 2008

DATE DELIVERED: 10 May 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Barry J

HEARING DATE: 10 May 2011

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Hallas, solicitor appearing by telephone for the Wife

SOLICITOR FOR THE RESPONDENT: The Husband appearing by telephone (not legally represented)

Orders

IT IS ORDERED THAT:

Husband’s Application in Form 2 filed 19 April 2011

1. The Husband’s Application in Form 2 filed 19 April 2011 be dismissed.

1. The Wife’s legal representatives to file and serve submissions (including an assessment of the quantum of indemnity costs) by 4.00 pm on 17 May 2011 relating to their application for indemnity costs of and incidental to the costs incurred in contesting the Husband’s Application in Form 2 filed 19 April 2011.

1. The Husband to file and serve by 4.00 pm on 24 May 2011 any submissions in response.

NOTATION:

Aside from the issue relating to the Wife’s costs application referred to above the file is to be transferred back to the Family Court of Australia, Sydney Registry.

IT IS NOTED that publication of this judgment under the pseudonym Czeb v Czeb (No 3) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: SYC 7329 of 2008

Ms Czeb

Applicant

And

Mr Czeb

Respondent

REASONS FOR JUDGMENT

1. I propose to give a summary of the litigation history of this in this Court.  The Wife was the Applicant in property settlement proceedings.  The Husband was the respondent.  The matter proceeded to a two-day trial limited to the issue of property settlement in the Sydney Registry of this Court on 18 and 19 November last year.  The only major asset of the parties at the relevant time was the former matrimonial home at H.  The Wife at the hearing before me was represented by counsel who had been instructed by her solicitors.  The Husband was not legally represented.  The Husband is serving a lengthy term of imprisonment after being convicted of criminal offences relating to the inflicting of serious injuries on the Wife. 

2. For reasons delivered on 23 February this year I made orders that the former matrimonial home at H be sold, and after payment of the mortgage liability and various other liabilities attaching to the property the net proceeds be divided 60 per cent to the Wife and 40 per cent to the Husband.

3. On 24 March this year I heard an application that the Wife be awarded her costs of the property settlement trial on an indemnity basis.  Her total costs were in the vicinity of $37,000.  It is not the usual practice to order indemnity costs.  Special circumstances have to be established.  There are a considerable number of decisions of the appellate courts to that effect.  However, for reasons given on 6 April this year I acceded to the application and the Wife was awarded costs on an indemnity basis.  There were corresponding orders permitting her to deduct that sum of money, approximately $37,000, from whatever money the Husband was to receive pursuant to the property settlement orders.

4. In the meantime, the Husband had lodged an appeal against the property settlement decision.  The same date as I heard the application for indemnity costs, I heard an application by the Husband for a stay of the property settlement orders.  The major effect of the stay would be to stop the sale of the house.  Pursuant to the property settlement orders I made, the Wife was to be the trustee with power of sale, and she was to ensure the property was sold. 

5. As I noted during the course of today’s submissions, at the hearing on 6 April 2011, the Wife indicated through her counsel that the application for a stay was not opposed, subject to certain conditions being imposed.  The first condition was that the Husband be successful in his application for an extension of time within which to appeal.  I accept that Coleman J has now granted the extension of time within which to appeal and the matter is listed for August in the Full Court in Sydney.  

6. The other condition which counsel for the Wife proposed was that in the intervening period the property at H be leased.  It has been vacant for many years, at least since the incident which led to the Husband’s imprisonment. 

7. There is a report from a valuer that the property has deteriorated somewhat because it has not been occupied.  The Wife has managed to keep up the mortgage instalments, although it would not be surprising if there were some arrears of the mortgage and other liabilities such as rates.  She has done her very best to keep up with those payments.  The husband has opposed the wife being given the right to rent the property out.  His stance was that she should continue to pay the mortgage and all other outgoings on the property, but the property not be rented for two reasons.  Firstly tenants may damage the property, and secondly the Husband would wish to reside in the property in the event that his application for leave to appeal to the High Court against his convictions was successful. 

8. A further matter raised by the Husband related to the fact he had clothing, personal papers and other property in the home.  He has had three or four years to make arrangements through friends or through his lawyers in the criminal hearing or by other means, or by a direct approach to the Wife’s legal representatives for any of his property to be bundled up and stored somewhere or forwarded to him at his present address. 

9. The final reason advanced was some sort of cost-benefit analysis, that in view of the relatively brief period of time involved, it was not worth the risk and the effort.  I do not need much convincing that where a property has not been income producing for many years, any amount of rental income is going to produce a positive benefit.  I appreciate that with the appeal listed for August this year, the wife may have limitations in being able to give a long-term lease.  She may have difficulty attracting tenants, but it seems a house in a desirable location and if the property can be rented for four to six months, that would all be to the good. 

10. In relation to the criminal charges the husband’s appeal to the Court of Criminal Appeal in New South Wales has already been dismissed.  His only avenue is to seek leave from the High Court and I understand that he is in the process of doing that.

11. The order granting the wife authority to rent provided for the disbursements of the rental proceeds as follows (paragraph 6 of the order of 6 April 2011):

    (a) in payment of the mortgage instalments;  (b) in payment of any other outgoings on the property including rates and council charges to include any arrears of rates and charges;  (c) subject to any order made in the determination of the appeal, the surplus, if any, is to be deposited in an account in the wife’s name to be distributed 60 per cent to the wife, 40 per cent to the husband.

    I do not see any prejudice to the husband at this point in time as he is not being called on to meet any shortfall between outgoings and income. 

12. On 19 April this year the Husband filed yet another application in a case with a supporting affidavit.  The application in a case seeks that all orders on

    
    

    23 February 2011 be stayed, and the Court stay all orders of 24 March 2011.  The effect of order 2 that he has filed is that he opposes the Wife being appointed trustee of the property, and the order allowing her to rent the property out.  As I have noted during the course of submissions, the order appointing her trustee really does not need to be stayed because, by consent, the property is not to be sold until the appeal is determined.  There is nothing to be trustee about, if a trustee is appointed with authority to sell, and the sale by court order is not to take place.  The only relevant issue for today is whether the property is to be rented out.  So far as the chattels, documents and other material, it is a matter for the Husband to make his own arrangements as he could have done at any time in the last few years if his possessions have been left in the former matrimonial home. 

13. In the affidavit which was filed with that application, at paragraph 4, he deposes:

    I am very concerned that the wife may dispose of some or all of the property or change legal ownership of the property if all orders are not stayed.  In that case I believe on successful appeal I would not be able, or have problems to retrieve the property. 

14. This concern is no longer relevant as the wife is enjoined by court order from selling the property.  The reason why I appointed the Wife to be the trustee for sale was to save the parties some money.  In my experience, it is quite an expensive exercise to engage an accountant or a solicitor to act as trustee with power of sale.  There are too many complications with appointing a real estate agent because of conflict of interest issues and generally it is not much cheaper.  In any event, I had every confidence that the Wife would act appropriately as she has done at all relevant times.  In paragraphs 5, 6, 7 and 8 of his affidavit, the Husband says as follows:

    5.   At the hearing of the wife’s application in a case on 24 March 2011, the renting out of the matrimonial property arose.  The wife did not raise that matter before.  I vigorously opposed using words to the following effect, “I heard many stories where the tenants caused substantial damage to the property.  I strongly oppose renting out the property.

    6.   On 4 June 2007, when I left the property, all my clothes and valuables remained.  I refer to the annexure of my affidavit amended 29 April 2010, Table 1-3, at page 165-167.  In addition, all documents related to my business and the NSW Supreme Court case against my 1^st employers in Australia remained at the house.  The furniture is antique and fragile.  I intend to live at the property when released.

    7.   I am very concerned about the property and strongly oppose letting or renting it out.  I decline my consent to any third party to access the property.

    8.   His honour gave the wife permissions to rent out the matrimonial property.

1. I assume that the Husband is aware that there are hundreds of thousands of properties throughout Australia which are the subject of rental each and every week.  For a party to apply to a court and say that damage may be caused by tenants, therefore a vacant property should not be rented, seems a preposterous suggestion.  There are many ways for an owner to alleviate the risk of damage to a property by a tenant.  One is to obtain references from the tenants to confirm they have a good rental background;  another is to ensure that the tenants are appropriate people who are in employment, and have good reputations.  A third safeguard which is invariably done is to obtain a bond so that to the extent there is any damage to the property the damage can be made good from the bond.  The tenants in this matter will only be occupying the property for a relatively short period of time.

2. I find no merit whatsoever in this preposterous suggestion by the Husband that because he has heard rumours that some tenants damage property, the property at H should therefore never be rented.  As to his claim that he wants to have the property for his use, I do not wish to prejudge whether the High Court will grant special leave to appeal, but in any event I suspect the best outcome the Husband could hope for would be a retrial which would involve a criminal trial process for quite some considerable time to come. 

3. The prospects of him being able to utilise the property in the intervening period I would gauge, as remote in the extreme.  So far as paragraph 6 is concerned, he talks about his clothes and his valuables.  I have already made comment about that. I would trust the Wife implicitly that if there was anything of any value she would put it to one side somewhere and make arrangements through her lawyers that that property be preserved.  Nothing has been done to date and it is many years since the Husband has been in a position to go anywhere near the property.  At paragraph 7 he says: 

   I am very concerned about the property and strongly oppose letting or renting it out.  I decline my consent to any third party to access the property. 

4. I propose to take no notice of that.  If the property is going to be rented, obviously third parties are going to be there to inspect, including real estate agents.

5. So far as the transcripts issue is concerned, that has been resolved by Coleman J, and the balance of the affidavit relates to his leave to extend time to file the appeal and material which has appeared in a number of his affidavits in the past.

6. I reject the husband’s concerns about the wife not acting appropriately, that she may dispose of the property or change the legal ownership.  If the appeal is dismissed, that is precisely what the orders provide for that there be a change of legal ownership and that she dispose of the property in accordance with the directions of the Court.

7. I find it highly likely that the Wife would continue in her present employment.  She has a good work record.  She has excellent qualifications.  She is in receipt of a reasonably high income, although the income is somewhat less than it has been in the past, according to the information provided by her legal representative.  In the unlikely event it was later established (if the property was rented) that the Wife had been in any way negligent in carrying out her duties as trustee for the purposes of rental, or, heaven forbid, had actually been dishonest in dealing with the rental moneys, I would be confident legal redress would be forthcoming, because she is on a relatively high income, and an audit or a criminal inquiry would quickly ascertain the true situation.  For my own part, I find it inconceivable that the Wife would act in anyway contrary to court orders or directions.

8. The orders that I make today will only have effect for a relatively short period of time.  It is a question for the Wife whether she is able to find appropriate tenants.  It was a final submission on today’s date, not previously made by the Husband, that, in the event the Full Court does not grant him the orders he was seeking at the trial before me, namely the whole of the property, with the Wife to pay the mortgage, and that he only receives a percentage of the property, he still wants the right to buy the property.  Why he would have that right, at a greater right than the wife, was not made clear, other than his assertion, “I love the property.”

9. The reality is the Husband does not have any assets, other than his interest in his house.  In the event, for example, that the Full Court of this Court increased his award from, say, 40 per cent to 60 per cent, he would still have to find the wherewithal to pay out the Wife 40 per cent of the value of the property.  In my view, where he is in a position where he cannot earn income, he has no assets, and no indication that he has any other source of funds, it is highly unlikely that he would be able to raise any loan to pay out the Wife’s interest in the property, pursuant to any possible Full Court orders.  In the whole of the circumstances, I dismiss the application in a case filed on 19 April 2011.

RECORDED  :  NOT TRANSCRIBED

ORDERS DELIVERED

1. I will decide the costs issue.  I propose to direct the transfer of any further proceedings to the Sydney Registry.  The Appeal Court is going to need the file. 

ORDERS DELIVERED

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry delivered on 10 May 2011.

Associate: 

Date:  10 May 2011