Dias & Dias
[2023] FedCFamC1F 879
•13 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Dias & Dias [2023] FedCFamC1F 879
File number(s): CAC 261 of 2023 Judgment of: GILL J Date of judgment: 13 October 2023 Catchwords: FAMILY LAW – PROPERTY – where the second respondent was previously appointed trustee in relation to the sale of the parties’ investment properties – alleged non-disclosure by trustee in relation to obligations – where houses have been sold significantly under value – application by applicant to appoint a new trustee – second respondent’s appointment as trustee discharged – new trustee appointed – applicant must make an undertaking as to costs regarding appointment of new trustee Division: Division 1 First Instance Number of paragraphs: 4 Date of hearing: 13 October 2023 Place: Canberra Counsel for the Applicant: Ms Haughton Solicitor for the Applicant: Elringtons Lawyers Solicitor for the First Respondent: Litigant in Person Solicitor for the Second Respondent: Litigant in Person ORDERS
CAC 261 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR DIAS
Applicant
AND: MS DIAS
First RespondentMR B DIAS
Second Respondent
ORDER MADE BY:
GILL J
DATE OF ORDER:
13 OCTOBER 2023
THE COURT ORDERS, UNTIL FURTHER ORDER, THAT:
1.The second respondent’s appointment as trustee pursuant to order 1 of the orders made on 6 July 2023 is discharged, noting that these orders are made at 1.23 pm on 13 October 2023 and nothing in these orders prevents the second respondent for being dealt with for breach of any of the orders made on 6 July 2023 and/or prevent him being dealt with for any breaches of his obligations and duties during his appointment as trustee.
2.Orders 1 to 6 of the orders made on 17 March 2023 are discharged.
3.Orders 2 to 12 inclusive of the orders made on 6 July 2023 are discharged.
4.Mr C, chartered accountant, registered trustee in bankruptcy, registered liquidator and partner principal of the firm D Accountants in City E is appointed as trustee, with power of sale to the extent that sale has not already been effected of the real property situated at and known as:
(a)F Street, Suburb G;
(b)H Street, Suburb J.
(c)K Street, Suburb G; and
(d)L Street, Suburb G (“the sales”).
5.The conveyancing solicitor shall remain Mr M of N Lawyers of Suburb O (“the conveyancing solicitor”).
6.Pending further order, the trustee is at liberty to continue the appointment of Ms P of Q Company in Suburb R (“the listing agent”).
7.The trustee shall keep the parties updated and informed in writing in relation to the sales.
8.The first and second respondents be and are hereby restrained from communicating with the trustee and/or the listing agent other than when the trustee is complying with his obligations pursuant to the above order.
9.The husband through his legal representatives is at liberty to communicate with the trustee and the listing agent and it is noted that nothing in these orders prevents the husband through his legal representatives from requesting and being provided copies of all documents referring to or relating to the sales from the listing agent and/or the conveyancing solicitor.
10.All parties be and are hereby restrained by injunction from any act or thing which reduces or may reduce the value of the properties referred to in order 4 these orders.
11.Upon settlement of the sales the sale proceeds shall be paid in the following manner and priority:
(a)payment of the agent’s commission and advertising or other expenses (if any) including but not limited to payment of any council and water rates and maintenance levies outstanding in respect of the properties and other outgoings payable on sale;
(b)payment of the legal costs and outlays relating to the sale.
(c)payment of any expenses to be reimbursed to the auctioneer (if any);
(d)payment of the trustee’s reasonable remuneration and disbursements (if any); and
(e)the balance to be held in the trust account of the conveyancing solicitor pending further order of the court.
12.The above orders will lapse unless prior to 4 pm today the applicant files in the Canberra Registry of Division 1 of the Federal Circuit and Family Court of Australia an undertaking to pay the reasonable damages incurred by the discharge of the second respondent as the trustee for sale and the appointment of Mr C.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
GILL J
Application has been orally made on the last day of the trial to discharge interlocutory orders that appointed the second respondent as trustee for sale for various rental properties owned by the three parties to these proceedings. It is now the case that almost all of those properties have been the subject to settlement of sale or exchange of contracts for sale. That has occurred against a background where there has apparently been non-compliance in relation to disclosure obligations that were placed upon the second respondent as the trustee for sale or at best delayed disclosure despite orders setting out such obligations that further occur against a wider background in the substantive case that is suggestive of significant nondisclosure and of disposal of significant cash sums under the control of the wife and the second respondent.
The further context is that it now appears that a number of the sales have occurred significantly below the reserves that were set at auction. This may have been justified as an appropriate course of action. It is not able to be determined one way or another at this point. Contracts are about to be exchanged on the H Street property at a rate that is over $100,000 below the advertised price, a discount that constitutes a significant percentage of the value of the property. While there has been a purported acceptance of the offer, I am informed that there has not yet been any exchange of those contracts. Again, this is a process that has involved little disclosure on the part of the trustee for sale other than disclosure of the proposed acceptance of the offer.
It is under those circumstances that the applicant makes application to have the second respondent discharged as the trustee, to be restrained along with the wife, from interference with the disposal of the properties and that a professionally qualified person be appointed as the trustee for sale, being a Mr C, Chartered Accountant, Registered Trustee in Bankruptcy, Registered Liquidator.
Under the circumstances that I have just outlined, the appointment of such a person as the trustee for sale is appropriate despite the expense, at present unidentified, that it may bring to bear upon the parties in the sale of whatever properties remain to be sold. His appointment will be protective of the interests of all parties as he will be able to bring professional judgement to the disposal of those properties. It is appropriate under the circumstances that I have outlined above that the second respondent be removed forthwith as the trustee for sale of the property pending further orders. That will be contingent upon the applicant by 4 pm today filing a relevant undertaking. Should he fail to file that undertaking then the orders will automatically discharge.
I certify that the preceding four (4) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Gill. Associate:
Dated: 18 October 2023
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