Dundas & Cliff
[2023] FedCFamC2F 1363
•12 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Dundas & Cliff [2023] FedCFamC2F 1363
File number(s): NCC 3136 of 2020 Judgment of: JUDGE BETTS Date of judgment: 12 October 2023 Catchwords: FAMILY LAW – Property settlement proceedings – interim orders – where there has been three final hearing adjournments, the most recent of which sought by the Wife and opposed by the Husband – where the Wife holds the overwhelming bulk of all of the assets that the parties have acquired – the Wife to pay the husband a sum of $50,000 by way of interim property settlement and there be a sale of the Suburb C property in default of the wife refinancing – just and equitable outcome. Legislation: Family Law Act 1975 (Cth) Cases cited: Strahan & Strahan (2011) FLC 93-466
Zschokke & Zschokke (1996) FLC 92-693
Division: Division 2 Family Law Number of paragraphs: 63 Date of last submission/s: 12 October 2023 Date of hearing: 12 October 2023 Place: Newcastle Counsel for the Applicant: Mr Bithrey Solicitor for the Applicant: Lea Smith Solicitor Solicitor for the Respondent Self-represented ORDERS
NCC 3136 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR DUNDAS
Applicant
AND: MS CLIFF
Respondent
ORDER MADE BY:
JUDGE BETTS
DATE OF ORDER:
12 OCTOBER 2023
THE COURT ORDERS THAT:
1.By consent, the Husband’s costs thrown away, of and incidental to the hearing of these proceedings on 11 and 12 October 2023, are reserved.
2.By consent, NOTING the Wife’s present intention to retain a new solicitor in these proceedings, upon two (2) business days of any new solicitor coming onto the record in these proceedings for the Wife, she is to cause that solicitor to instruct Mr D to complete the report that he foreshadows in his email to the parties of 18 September 2023 and thereafter for the release of that report to the parties (“the E Company Report”). To avoid doubt, the parties are to share the costs of the report equally.
3.By no later than 12 January 2024, the Wife will at her sole cost do all acts and things to refinance any mortgage against the property known as F Street, Town G (“the Town G property”) such that the Husband is removed as a borrower and removed from any liability thereunder and the wife will indemnify the husband in relation to all liabilities whatsoever relating to the Town G property.
4.By consent, simultaneously with the Wife’s compliance with order 3 hereof the Husband shall do all acts and things so as to transfer his interest in the Town G property to the Wife.
5.By consent, upon completion and release to the parties of the E Company Report, the parties are to instruct Mr H to prepare an update valuation of the Town G property at the equally shared expense of the parties, and in doing so provide a copy of the E Company Report to him – such instruction to be given to Mr H not later than seven (7) days from the release of the E Company Structural Engineering Report.
6.In the event that there is no new solicitor on record for the Wife by 24 November 2023, then the Husband has liberty to relist the proceedings on 48 hours’ notice to the Wife with such relisting to occur by email to the Chambers of his Honour Judge Betts.
7.By no later 12 January 2024 the Wife will at her sole cost do all acts and things to refinance any mortgage secured against the property known as B Street, Suburb C NSW (“the Suburb C property”) such that the Husband is removed as a borrower and removed from any liability thereunder and the Wife will indemnify the Husband in relation to all liabilities whatsoever relating to the Suburb C property.
8.Simultaneously with the Wife’s compliance with Order 7 hereof, the Wife is to pay the Husband the sum of $50,000 by way of interim property settlement and the Husband shall do all acts and things so as to transfer his interest in the Suburb C property to the Wife.
9.In the event of any failure of the Wife’s part to comply with an obligation pursuant to orders 7 or 8 hereof (“Suburb C default”):
(a)Within fourteen (14) days of Suburb C default:
(i)The Husband is appointed trustee for the sale of the Suburb C property;
(ii)The Husband is to forthwith cause the Suburb C property to be listed for sale by private treaty with a listing agent of his choosing;
(iii)The listing price for any sale of the Suburb C property is to be as advised to the Husband by the listing agent;
(iv)The Wife is to comply with all reasonable requests made by the selling agent in relation to the sale;
(v)The solicitor with carriage of the sale of the Suburb C property is to be as selected by the husband;
(vi)The Husband is to execute a Contract for Sale of the Suburb C property for any amount greater than 95% of the listing price for sale;
(vii)In the event that a Contract for Sale has not been exchanged within three (3) months of listing the Suburb C property for sale by private treaty, then it is to be sold by public auction with the Husband to continue in his capacity as trustee for sale for that purpose;
(viii)Any auction of the Suburb C property is to be through a real estate agent and licensed auctioneer as selected by the Husband;
(ix)Any reserve price for the auction is to be as advised to the Husband by the auctioneer.
(b)Upon settlement of any sale of the Suburb C property the net proceeds of sale shall be paid in the following order and priority:
(i)Payment of agents’ commission, auctioneer’s fees and legal fees relating to the sale;
(ii)Adjustment of council and water rates;
(iii)Discharge of any mortgage secured against the Suburb C property;
(iv)The balance then remaining
A.$50,000 to the husband by way of interim property settlement pursuant to section 79 of the Family Law Act1975; and
B.The balance to be deposited into the trust account of Lea Smith, Solicitor on trust for the parties and pending further order.
10.By consent, save and except as is necessary to comply with an obligation created by these orders the Wife is restrained by injunction from:
(a)Severing the joint tenancy in relation to either the Town G property or Suburb C property.
(b)Transferring, assigning or otherwise alienating her interest in either the Town G property or Suburb C property.
(c)Otherwise selling the Town G property or Suburb C property.
11.Unless otherwise agreed in writing between the parties and at the equal shared expense of the parties:
(a)By consent, within seven (7) days of the Wife’s compliance with Order 7 that the parties are to engage Mr J of K Company to provide a valuation report in respect of the Suburb C property. To this end the parties are to provide Mr J with a joint letter of instruction.If Mr J is unwilling to prepare the report:
(b)If Mr J is unwilling to prepare the report, within seven (7) days of the Wife’s compliance with Order 7, the husband is to cause to be forwarded to the solicitors for the wife the names, curriculums vitae and rates of fee for three (3) persons suitably qualified by reference to their study, skill and experience to prepare such a report, and who are available to do so.
(c)Within seven (7) days of receipt of those details the Wife is to cause to be sent to the Husband a joint letter of instruction addressed to one of the persons listed thereon, as signed by her solicitor who is thereafter ‘the Single Expert’.
(d)Within seven (7) days of receipt of the joint letter of instruction referred to above, the Husband is to cause the said letter to be signed by him or on his behalf and thereafter forwarded to the Single Expert.
(e)The obligations created by this order are discharged in the event that the sale order for the property comes into effect.
Final hearing date/s:
12.The proceedings are listed for final hearing before Judge Carty with priority commencing at 10.00am on 7 March 2024 with two (2) days allocated.
Liaising with the any applicable single expert witness:
13.Within seven (7) days of these Orders, or where a single expert witness has not yet been appointed then within seven (7) days of being advised of their identity, the Applicant or Respondent must give them written notice of the final hearing dates and advise them that unless otherwise ordered:
(a)they will be required for cross-examination on the last day of the hearing;
(b)they are to give evidence in person or may give their evidence by videolink.
14.If the single expert witness raises any availability issues, then the parties are to contact the trial Judge’s Associate by email as soon as possible to request a re-listing of the proceedings. This is a continuing obligation up to and including the final hearing dates.
Filing and service of trial material:
15.Whenever practical, all documents required to be filed and served, and all other documents sought to be relied upon at the final hearing, must be filed or provided (as applicable) in a text-searchable PDF format to the Court and to each other party.
16.By no later than twenty-eight (28) days prior to the final hearing date, each party shall file and serve:
(a)any Amended Initiating Application or Amended Response to Initiating Application setting out with precision the final orders sought; and
(b)one (1) updated and consolidated trial Affidavit of each party;
(c)in property proceedings, an updated Financial Statement of each party;
(d)one (1) updated and consolidated trial affidavit of any witness/es whose evidence the party intends to rely upon;
with all such affidavits to comply with the requirements of the Federal Circuit and Family Court of Australia (Family Law) Rules, including as to spacing and font sizes.
The term “consolidated trial affidavit” is defined in Notation F.
17.A party who seeks to rely upon any material that has not been filed or served in accordance with these Orders, or which otherwise fails to comply with the Federal Circuit and Family Court of Australia (Family Law) Rules, will require the leave of the trial judge.
18.By no later than 4.00pm, one (1) clear business day prior to the final hearing, each party shall file and serve an Outline of Case Document setting out:
(a)A list of the documents to be relied upon by that party;
(b)A list of the issues for determination;
(c)A brief chronology listing significant events that are relevant to the issues to be determined by the Court;
(d)In a property case:
(i)a Balance Sheet listing all of the assets, liabilities and financial resources said to be relevant to the dispute and their values, and to include anticipated taxation or realisation costs if applicable;
(ii)a brief summary of that party’s main contentions in relation to:
A.any disputed Balance Sheet items or values;
B.whether it is, or is not, just and equitable to make a property settlement order;
C.each party’s respective contributions-based entitlements to the matrimonial property;
D.any potential adjustments pursuant to s.75(2) or s.90SF(3);
E.the overall form of the order that is proposed, particularly given the just and equitable requirement;
(e)A list of authorities which that party intends to cite to the Court during the presentation of any arguments, together with copies of any unreported decisions to which it is intended to refer;
(f)A precise minute of the orders sought by the party.
Parties are not obliged to use the approved form for the Outline of Case Document but may do so if they wish.
Objections to evidence:
19.By no later than 4.00pm, one (1) clear business day prior to the final hearing, the parties shall serve any objections to evidence. Parties are to confer about objections prior to commencement of the final hearing with a view to reaching agreement or at least narrowing those in dispute.
Subpoenas & Tender Bundles:
20.Any subpoenas for the purposes of the final hearing are to be issued by no later than three (3) calendar months prior to the final hearing and are to be inspected by not later than five (5) weeks prior to the final hearing.
21.By no later than seven (7) days prior to the final hearing, each party shall send to the trial Judge’s Associate a bundle of documents which that party proposes to tender at the hearing and for that purpose:
(a)the parties’ legal representatives and the Independent Children Lawyer (if appointed) are granted leave to copy all material marked as a subpoena packet in the proceedings. This leave does not extend to a self-represented litigant or to a party personally;
(b)the documents are to be indexed, arranged chronologically and paginated, with the index to identify for each document the subpoena packet number, and the page number for the packet;
(c)whenever practical, the bundle is to be filed electronically and in a text-searchable PDF format;
(d)the tender bundle is to remain in the possession of legal representatives only and no documents from the bundle are to be released directly to the parties or to any witnesses without an order of the Court;
(e)if either party becomes self-represented they may contact the Registry after today’s date they may arrange to view the tender bundle in the subpoena viewing room prior to the final hearing;
(f)the tender bundle will be initially marked for identification only. Documents from the bundle will only be admitted into evidence as directed by the trial Judge in the course of the hearing.
Payment of Hearing Fee
22.Unless a fee waiver has been obtained:
(a)the Applicant is to pay to the Family Law Courts at Newcastle the setting down fee/and the fee for day three of hearing, by no later than seven (7) days prior to the final hearing;
(b)the Respondent is required to pay the daily hearing fee for the second day of hearing/and the fee for day four of the hearing, by no later than seven (7) days prior to the final hearing;
(c)if the final hearing runs for longer than four (4) days, the Applicant is to pay the fee for day five (5) of hearing, the Respondent is to pay the hearing fee for day six (6) of hearing and so on.
Costs Notices
23.Pursuant to r.12.06(2) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, by no later than seven (7) days prior to the first day of the final hearing each party’s legal representative shall provide to their client written notice of:
(a)The client’s actual costs, both paid and owing, up to and including the final hearing. In the case of paid costs, the costs notice is to identify the source of the funds;
(b)The estimated final costs of the party up to and including the final hearing; and
(c)Any expenses paid or payable to an expert witness or, if those expenses are not known, an estimate of expenses.
24.Pursuant to r.12.06(3) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 a copy of the Costs Notice must be provided to the trial Judge’s Associate on the business day before the first day of the final hearing.
NOTATION:
A.The Wife offers to provide the husband’s solicitors by 5pm Monday 16 October 2023 with an Excel spreadsheet in respect of the Suburb C apartment prepared for taxation/negative gearing purposes with the intention that the husband obtain a tax refund in respect of the Suburb C apartment.
B.These Orders do not derogate from any registry requirement for the execution and production of an undertaking prior to copy access being permitted.
C.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
D.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such application must be made at least 12 weeks prior to the final hearing date.
E.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
F.If s.102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court and each other party.
G.A “consolidated trial Affidavit” refers to a “stand-alone” affidavit which contains a complete account of relevant factual matters known to the party or witness/es and it must not require the court to read the content of any earlier affidavit by that party or witness/es.
Example
A consolidated trial Affidavit cannot be in these terms:
“I repeat and rely upon my earlier affidavit filed on dd/mm/yy” or “This affidavit is to be read with my earlier affidavit of dd/mm/yy”.
The court will not read that earlier affidavit. Relevant content from an earlier affidavit must instead be incorporated into the consolidated affidavit.
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).
REASONS FOR JUDGMENT
JUDGE BETTS
These reasons were delivered orally. They have been corrected from the transcript in order to make them easier to read.
OVERVIEW
These are property settlement proceedings arising out of the breakdown of the marriage between the applicant husband and the respondent wife.
They have had a chequered history in terms of the trial dates that have been allocated. The matter was first set down for a trial in February 2022. However, it was listed as a reserve trial on that day and was unable to be reached. In the circumstances, the proceedings were set down for trial in December 2022.
Unfortunately, although it was a priority trial, the December date had to be adjourned. This was essentially for two reasons. Firstly, a complaint was made that the wife had furnished the single expert valuer of the major property in this case, being a property at Town G, with some evidence from an engineer in relation to some alleged structural defects at the property. Secondly, the trial had been listed for one (1) day only and it appeared necessary to allocate two (2) days.
In those circumstances, the proceedings were adjourned over for their third trial listing on a two (2) day basis - listed before me on 11 and 12 October 2023 with priority.
Unfortunately, as will become apparent, the trial has again had to be adjourned. To some extent it is a comedy of errors, although there is really nothing funny about it and it has caused, no doubt, significant stress and expense for both parties.
Pursuant to the consent orders that I made in December 2022, by no later than 14 August 2023 the parties were to commission L Company to prepare a joint single expert valuation of the Town G property. It was noted in that order that should any issues arise in relation to the valuation of the Town G property, that the parties were at liberty to relist the matter before me by contacting Chambers.
In the result, there were, in fact, significant problems and the matter ended up being derailed and unable to proceed.
In a nutshell, the wife attempted to, and did in fact, engage a structural engineer, whose report she wanted to be able to provide to the valuer. The structural engineer was engaged in May 2023 and a joint letter instructing the engineer was executed by the parties on 24 July 2023. That is to say, the wife’s then solicitors and the husband’s solicitors both signed a letter of instruction to the engineer, E Company.
Subsequently however, there was a problem. There was some delay in the engineer’s report being prepared, and it seems that it was quickly becoming difficult, if not impossible, for the parties to comply with the agreed timeline for the single expert valuation in respect of the Town G Property (the L Company valuation).
The wife did not want the L Company report to be commissioned until she had the report from the engineer, which is entirely understandable. Equally, the valuation report by Mr H had to be prepared in order for the matter to be ready to run to trial.
There then seems to have been some sort of dispute between the wife and her legal representatives, who the wife did not think were being sufficiently proactive on her behalf. The end result is that they wife’s solicitors withdrew. They filed a formal Notice of Withdrawal on 14 September 2023.
Their withdrawal created, perhaps, an unexpected problem. In particular, the engineer, Mr D of E Company, was then unwilling to provide a report in the absence of having a solicitor represent each party. That is to say, to quote from the email of Mr D of 18 September 2023:
I do not provide expert services without an instructing solicitor.
So the unhappy situation arose that:
· the engineering report, which was something the wife was very keen to put before the Court and certainly put before the valuer, could not now be obtained without the wife having a solicitor;
· equally, the husband wanted to have the L Company report progress in accordance with the orders I had made, albeit that the report would be late.
Ultimately the wife was unhappy about signing the letter of instruction to Mr H, so she did not. The solicitors for the husband, on 20 September 2023, instead wrote to Mr H a very neutral and entirely appropriate letter, in my view, which really did no more than ask Mr H to prepare the report. There was nothing controversial in the letter, and the wife can not really criticise the husband’s solicitors about its contents.
The end result is that the L Company valuation report rolled in on or about 26 September 2023, just a few weeks out from the trial; the Town G property was valued it at $1.25 million, making it far and away the major asset in this case.
ADJOURNMENT OF TRIAL IN OCTOBER 2023
In accordance with the December 2022 orders, the matter came before me yesterday for trial. Mr Bithrey of counsel appeared for the husband. The wife regrettably was, and in fact remains, self-represented.
Although the wife is self-represented, I would put on record that she conducted the case in what I consider to be an articulate way. I attempted to, as best I could, explain the process to her, and she made submissions to the Court that were responsive to the issues that were relevant.
Essentially, Ms Cliff, the wife, asked me to adjourn the hearing on the basis that the engineering report was an absolute essential element of the evidence.
After hearing Mr Bithrey [who opposed the trial being adjourned] and Ms Cliff, it struck me what an unfair situation had arisen. The problem is that the wife wants to retain the property at Town G. She does not want it sold. She has been living in the property exclusive of the husband since separation in around mid-2015, some eight (8) years or so; in more recent times she has been living there with her new partner. I can understand why she wants to keep the property; it is her home.
That said, it is also clear that if there are any engineering issues in relation to the Town G property which impact its value, there has been a rather significant, if not remarkable, delay in such evidence being provided to the Court. The wife says that some adjoining neighbours commenced construction on the block next door to the Town G property around four (4) years ago. So it is something that has been a problem, according to the wife, for quite some time. She told me yesterday there was a significant crack in the home. And clearly, she raises issues that need to be addressed.
It struck me that whatever I did about the trial, there was not really any good option.
If I forced the matter onto trial, in circumstances where the wife is not strictly at fault for the fact that the engineering report is not available, then this may result in a miscarriage of justice. By the same token, if I adjourned the trial off to a future date, the husband had the legitimate argument that this was the third time around for him preparing for a trial, which is very stressful and expensive. Moreover, his case is that he makes no admissions about any alleged damage (caused by the neighbours) that impacts the value of the Town G property. That is to say, the engineering report is very much the wife’s issue, not the husband’s.
It was appropriate and proper for the husband’s solicitor to sign the letter of instruction to the engineer, so as not to be obstructive and to let the wife run her case. And, indeed, it was agreed that the parties would share the engineering costs equally, which was also entirely appropriate. But the fact remains that it is the wife who seeks to agitate the engineering issues, not the husband. And the reason the wife seeks to do it is because she wants to retain the property. So although there is a joint problem in terms of the trial proceeding as such, and although the wife is not strictly at fault for the absence of the engineering report, the fact remains that, in a practical sense, it is very much the wife’s application to adjourn and the engineering issue is very much the wife’s issue that she seeks to raise.
In the course of the argument, the wife tendered a bundle of documents that I marked as exhibit 1; some letters to the engineering report writer which I marked as exhibit 2; and exhibit 3, which was the email sent by the engineer back to the legal representatives from which I earlier quoted. I ultimately decided after hearing argument that I should not proceed to conduct the trial but should adjourn it one last time, and I emphasise one last time. The matter has been adjourned for a two (2) day hearing before her Honour Judge Carty at Newcastle on 7 and 8 March 2024, being dates that are convenient to both parties and to the husband’s legal representatives.
I did indicate, however, to the wife that, given the circumstances of the case, I considered that there would be ‘a price payable for any adjournment.’
In particular, to be clear, the wife is in sole occupation of the Town G property and has been for the past eight (8) years. Her partner/boyfriend lives in the home with her and has done so now, apparently, for the last four (4) years or so. The property at present has a value, at least according to Mr H, of $1.25 million, with a mortgage of $217,032, or thereabouts. It is a jointly owned property. The husband is jointly liable for that mortgage, although, apart from a number of years post-separation, the husband has not made financial contributions to the mortgage. It is common ground that the wife is meeting the mortgage and continues to do so.
There is also a real property known as B Street, Suburb C. This, also, is a joint property, valued at $400,000 on the best estimate of the parties, although it is really only an estimate, with an associated mortgage of $277,346. This, too, is a property in the joint names of the parties. This, too, is a property which is jointly mortgaged.
To put it plainly then, the wife has the practical benefit of living in the property at Town G, which has a value, at least for now, in excess of $1 million, as well as having the effective control and deriving all the income from the investment property at Suburb C. Those two assets combined have a net value well over $1 million, in the context of what is effectively in this case a net pool of marital property in the order of about $1.2 million. That is to say, the wife holds the overwhelming bulk of all of the assets that these parties have acquired.
The current asset holdings do not, in any sense, reflect, as best I can discern on the material, what would be a just and equitable division of the property between the parties.
Moreover, the husband is left potentially legally liable for the mortgage expenses, noting, that although he is not paying the mortgages himself, that the combined joint mortgage liability is around $494,000. This is a significant prejudice to the husband. It also, no doubt, impacts on his capacity to borrow money somewhere else, and to be able to get on and live his life.
I also note from the husband’s Costs Notice, exhibit 5, that the husband has incurred significant legal expenses. He has paid some $13,000 to his legal representatives to date, but his current legal costs up to the end of today are around $94,000, which means he owes about another $81,000. As I understand it from Mr Bithrey, he and his instructor are generously, at the moment anyway, ‘carrying the matter’. That is to say, they have not been enforcing the husband’s payment of their fees at this time.
I indicated earlier that it seemed to me that if the adjournment was to be granted, particularly, where it is the wife’s argument in relation to the engineering and the wife’s fervent desire to retain both of these real properties, that I considered that ‘a price should be paid’.
INTERIM APPLICATION BY THE HUSBAND
To that end, I invited Mr Bithrey to prepare a draft document, setting out some interim orders that he proposes. This was done and marked as exhibit 4. I asked the wife, or suggested to her, that she take the opportunity to obtain some legal advice. I gather from her that she has not been able to access legal advice at this time.
Out of an abundance of caution, I adjourned the interim application to today at 2.15 pm, where Mr Bithrey has again appeared, and Ms Cliff has appeared representing herself.
In the course of today’s hearing, we have, at some length, addressed the competing orders proposed by the parties, or at least the husband’s order with such amendments as proposed by the wife, as were advanced by her in the course of argument.
It ultimately emerges that the issues are more narrow than they at first appeared. The wife indicates that, with the assistance of her partner, who apparently has some form of estate claim coming to him, that she is able, or believes she is able, to refinance the relevant mortgages out of the husband’s name.
The husband’s application, as set out in exhibit 4, is that the wife should refinance the Town G mortgage, such that he is removed as a borrower, and that if she cannot do so then the property should be sold. Likewise, in relation to the property at Suburb C, the husband’s position is that the wife should refinance that mortgage as well, but, at the same time, that he should receive from the wife an interim payment of $75,000 by way of an interim property division.
The wife is agreeable to making every reasonable effort to refinance both of the properties and she intends to do so. In the course of the argument today, she asked for a little more time, which I am minded to give her, because it seems to me that it is to everyone’s advantage that she has this opportunity.
I also indicated in the course of the hearing that I do not propose to order the sale of the Town G property at this time as a default order for a few reasons. Primarily, because the matter is going to be listed before Judge Carty in some five (5) months or so, which is not a very long time away. And it seems to me, particularly with the engineering issues swirling in the breeze, as it were, that it may potentially be possible for the wife to retain that property. It is not immediately obvious to me that she can do so, to be fair, but I cannot rule it out. And given that it is her primary place of residence, I do not intend to take that further step and order a default sale.
The real issue relates to the property at Suburb C. According to the most recent iteration of the wife’s Response, being the Further Amended Response filed by her previous lawyers on 17 November 2022 in anticipation of the December 2022 trial, the wife had specifically proposed that she would discharge the mortgage at Town G at her sole cost and that the property at Suburb C be sold within thirty (30) days of the date of orders being made on the basis that, after the various expenses were paid, that the net proceeds of the property, in broad terms, would be paid to the husband. There are various other deductions included in the wife’s proposed payment arrangement that aren’t presently relevant.
On the basis of her Further Amended Response, I asked the wife – and, indeed, Mr Bithrey pressed the point – as to why, in the event that it cannot be refinanced, the Suburb C property should not simply be sold in the interim.
The wife, as I indicate, intends to refinance the property if at all possible, and I am happy to give her the opportunity to do so. The question is whether the Suburb C property ought to be sold in default.
On the face of the Further Amended Response filed by the wife, her position, certainly coming into what would have been a trial this week, was that the husband was entitled, in practical terms, to pretty much all of the equity in the Suburb C property. However, it became apparent in the course of yesterday and today that Ms Cliff does not in fact now want to sell that property. She very much wants to keep it, and she very much contests that the husband has any claim to the equity or any claim of any real significance.
She said that she relied upon a ‘Binding Financial Agreement’, to which I was taken in the course of argument both yesterday and today. It is attached to the affidavit of the husband of 2 February 2022.
I have explored that document in submissions both yesterday and in more detail today, and in my view there is nothing in that document which assists the wife in relation to this interim argument. The document makes clear that if the parties acquire property jointly during the marriage, the property shall be held by them as provided in the document conveying title or evidencing title. But if the document does not specify otherwise, or if there is no document, the property shall be held as tenants-in-common in proportion to their direct financial contributions. In this case, there is no doubt that the relevant transfer document conveying title to each property records that it was a joint tenancy.
There are other provisions in the BFA which are of no real assistance to the wife’s argument either, and I do not propose to restate those. The document speaks for itself.
In short, the BFA, in my view, is plainly a ‘red herring’ in terms of any attempt that could be made to suggest that it formally regulates the arrangements with respect to the two real properties. There are also very serious questions as to whether it would comply with the relevant formalities that were set out in the Family Law Act at the time that the document was entered into. It would not appear to satisfy the formalities, but even if it did, the document itself does not, in my view, constitute any serious ousting of the Court’s jurisdiction for present purposes. It may potentially assume some relevance on a debate about what would ultimately be a ‘just and equitable’ division, but that would be a matter for the trial Judge, who is now, as I have indicated, her Honour Judge Carty, but I do not regard the BFA as being decisive or of any particular significance today.
I would also add in this respect that, even though the husband is not currently paying the mortgage and outgoings for the Suburb C property, that he did make payments towards that property post-separation, and that, as has been established in case law, he has clearly made indirect contributions – and, arguably, direct contributions - in the form of taking out a joint mortgage with the wife, both for the Town G property but also for the property at Suburb C. The husband has a contributions-based entitlement. The exact quantification of this entitlement is a matter for another day.
As I have indicated, most of the orders proposed by the husband in exhibit 4 were ultimately agreed upon. The major issue in dispute is whether the Suburb C property should be the subject of a default sale in the event that the wife is unable to refinance the property. I accept the wife’s submission that she wants to keep property, that it is her income-producing vehicle, that in a practical sense she runs the property – she cleans it, she organises bookings that run through to October next year she tells me. I accept also, and having seen her have little doubt, that she is passionate about the property and wants to retain it. She described it as being like her “baby”. She never had a child of her own. It is something to which I accept she is attached.
As I have indicated, the difficulty for the Court is that the husband does have some form of contributions-based entitlement, and he has, on any view, been left, for the last eight (8) years or so, exposed to joint liabilities in respect of which he does not appear to have received any corresponding benefit. I do not say that to be critical of the wife per se; merely to record that, for eight (8) years, the husband has effectively been prejudiced in a practical sense. He is also prejudiced by the fact of this trial being adjourned by reason of the need for an engineering report, in circumstances where, though his solicitors signed the letter requesting the report, it is very much the wife’s barrow to push. The husband has no interest in the outcome himself, and indeed would take the position that he makes no admissions that there are any problems about which an engineer is required, and, moreover, he would have been quite content to proceed to run the hearing this week.
Further, if there was any serious dispute about the value of the property at Town G, the reality is that I could have ordered a sale of the property, and the market would decide what its value was. I would add that the wife could have bid on the property herself in order to purchase it. In that sense, the point I am making is that the reason for the trial adjournment, in my view, though it cannot be exclusively sheeted home to the wife, is that she wants to keep the property and she wants to put engineering evidence before the court. Those two facts, individually and collectively, have weighed the discretion to adjourn the trial in her favour, in return for which – or in response to which – I indicated that there would be ‘a price to pay’.
In exercising the Court’s power to make an interim property settlement order, I am familiar with the decision of the Full Court in Strahan & Strahan(Interim Property Orders)[1] as well as earlier authorities such as Zschokke & Zschokke. [2] But this is a case in which the wife is agreeable to refinance the property, that is, the Suburb C property.
She is also agreeable to pay the husband a sum of money by way of interim property settlement. The husband seeks $75,000, which leaves him a little behind in terms of his legal costs, but significantly meets those costs. The wife concedes that a sum of $50,000 would be appropriate, although she very much says that is the maximum.
The Court should act cautiously in making interim orders. I accept that the usual process is for the Court to make a ‘once and for all’ order. That said, it is not necessary to establish compelling circumstances before the Court can make an interim order. All that is required is that it is appropriate for the Court to exercise the power.
In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order is a ‘once and for all’ proposition. One example of where it may be appropriate to exercise the power is where there is a party who requires funds to assist in defraying the costs of litigation, without which funds an injustice may be caused. The husband is in serious debt at this point, with a significant liability for legal expenses. In a practical sense, if his lawyers were not ‘carrying’ the litigation for him, he would in every respect be insolvent.
In my view, the circumstances absolutely and comfortably fit within the range of circumstances which would warrant the Court exercising its interim power to make an order, particularly against the backdrop of the adjournment of this trial for the reasons I have already indicated.
It is impossible at this point to say for certain what the husband’s property entitlement might be. However, I regard both the wife’s conceded figure of $50,000 and the husband’s requested figure of $75,000 as both being within the range of an appropriate exercise of the Court’s discretion.
Out of an abundance of caution, and noting the nature of the power being exercised, I propose, for present purposes, to adopt the figure conceded by the wife, which is less than the husband wants, but will significantly defray his costs. The matter will otherwise proceed to hearing before Judge Carty in March 2024.
And I will specifically say here as well, that I do consider that it would be just and equitable and appropriate for an order that there be a sale of the Suburb C property in default of the wife refinancing. I say that because I want this money paid to the husband. If there is no order for sale in default, the order is hollow and empty, and of no value at all. The wife tells me that she has some confidence that she can refinance. She is clearly a very well-educated, very articulate woman. She wants to keep this property, and I am convinced she will do all she can in order to do so. But in my view there has to be a default order in case that she does not.
CONCLUSION & ORDERS
For these reasons, and turning to exhibit 4, I propose to make the orders set out at the commencement herein.
In relation to order 6, because I am familiar with the matter, for now I think it is better that the proceedings remain before me until they come on for trial before Judge Carty. So if any issue arises, which I hope does not happen, this little debate can be listed before me. The reason for the listing is simply that the engineer will not prepare a report without a lawyer. The wife does not have a lawyer. So we need to put a date in the orders for that to occur. I hope the matter does not have to be re-listed. And I am sure the wife will take every step to get a lawyer before then. The date I have selected for the wife to obtain a lawyer is not quite as long as she was seeking, but longer than what the husband was proposing. I consider it is an appropriate date.
I am not going to make an order for sale of the Town G property at this time, for the reasons I have indicated.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 12 October 2023
[1] (2011) FLC 93-466
[2] (1996) FLC 92-693
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