Edgar & Edgar
[2024] FedCFamC1F 332
•17 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Edgar & Edgar [2024] FedCFamC1F 332
File number: SYC 6432 of 2023 Judgment of: HARTNETT J Date of judgment: 17 May 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Joinder application – Application for anti-suit injunction – Where the parties own property subject to three registered mortgages in favour of a third party – Where there is default under the mortgages – Where the third party has issued proceedings in the Supreme Court of New South Wales for possession of the property – Where the wife claims no liability in respect of the mortgages – Where not necessary for the joinder of the third party – Where appropriate for the Supreme Court of New South Wales to determine that matter – Application dismissed – Costs of the third party to be paid by the wife – No joinder of the third party. Legislation: Corporations Act2001 (Cth) s 9
Family Law Act 1975 (Cth) ss 79, 90AE, 90AF, 114, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.01, 3.03
Federal Magistrates Court Rules 2001 (Cth) r 11.01
Real Property Act 1900 (NSW) ss 42, 57
Cases cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Daire and Gamer [2021] FedCFamC1F 261
Riemann v Riemann (No 3) [2017] FamCA 911
Wayne & Dillon & Anor [2008] FamCAFC 204
Division: Division 1 First Instance Number of paragraphs: 71 Date of hearing: 3 May 2024 Place: Heard in Sydney, delivered in Melbourne Counsel for the Applicant: Mr Maroya Solicitor for the Applicant: Ramsden Family Law Counsel for the Respondent: Ms Edwards Solicitor for the Respondent: PW Lawyers Counsel for the Other: Mr Walsh Solicitor for the Other: Crompton Walsh Commercial Lawyers ORDERS
SYC 6432 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR EDGAR
Applicant
AND: MS EDGAR
Respondent
B LTD
Other
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
17 MAY 2024
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed by the respondent wife on 22 November 2023 be dismissed.
2.The respondent wife pay the costs of the proposed second respondent B Ltd as agreed and failing agreement as determined by the Court.
3.If costs are not agreed within 7 days hereof then the parties are to file and serve written submissions of no longer than 5 pages with B Ltd to file and serve such submissions within 14 days of the date of these orders and the respondent wife to file and serve such submissions within 21 days of the date of these orders.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonym Edgar & Edgar has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
B Ltd is a foreign company within the meaning of s 9 of the Corporations Act 2001 (Cth). It was incorporated in Country C. It is the registered mortgagee, with three registered (with the Titles Office) mortgages on the Certificate of Title folio identifier … of the real property known as and situate at D Street, Suburb E in the State of New South Wales (“the D Street property”). This property is owned by the parties as tenants in common in equal shares. The D Street property can be described as the parties’ former matrimonial home, and it is where the respondent wife (“the wife”) resides. It is an agreed fact that neither the wife nor the applicant husband (“the husband”) have met the mortgage obligations due to B Ltd by either, or both, since 2018, save the wife has made some payments from October 2023. There are considerable arrears owing to B Ltd. In those circumstances, B Ltd assert the parties are in default of their mortgage obligations and have sought possession of the land and a money judgment against the parties in the Supreme Court of New South Wales as detailed below.
The husband concedes the parties default and that monies are owed to B Ltd. The wife claims that none of the three mortgages are enforceable against her, but if it is found by the Court that such mortgages are so enforceable, then the wife seeks for the husband to be responsible for all debt and other monies owed to B Ltd.
The actions of B Ltd have resulted in the Application in a Proceeding as filed by the wife on 22 November 2023. The Application in a Proceeding seeks, relevantly, the joinder of B Ltd to the substantive proceeding, and interlocutory relief, inter alia, an anti-suit injunction that, until further order, B Ltd be restrained from taking any further steps in the Supreme Court of New South Wales proceedings numbered … against the wife, other than to discontinue those proceedings. I observe that the Supreme Court proceedings are against each of the husband and the wife, not solely the wife.
The husband’s response to the Application in a Proceeding pursued by the wife, which I note was the only part of the litigation which proceeded before me on 3 May 2024, was, as submitted by his counsel, one where “the applicant recognises the utility or the sense in [B Ltd] being joined as a party to these proceedings, but the applicant takes what might be described as an agnostic attitude to the thing in general”.[1] The husband did not oppose the joinder application. The husband contends however, that the wife should have filed an application for the cross‑vesting of the Supreme Court proceedings to the Court, and in the absence of that application, the simple joinder of B Ltd to the proceeding, and the imposition of the injunction which the respondent wife contends for, would not avoid the complexity and costs of separate proceedings, the likelihood of overlapping evidence, and the risk of inconsistent findings in superior courts.
[1] Transcript 3 May 2024, p.9 lines 44-46.
As a further matter, the husband points to (to be dealt with at a subsequent time) his interim order for the sale of the real property as described in Certificate of Title folio identifier …, known as and situate at F Street, Suburb E in the State of New South Wales (“the F Street property”). This property is owned by the parties with their ownership registered as tenants in common in equal shares. The wife deposed in her financial statement filed on 10 November 2023, that the F Street property has a value of $2,700,000. It is unencumbered. The husband seeks for the net proceeds of sale to be applied by the parties to pay out the registered mortgages as held by B Ltd and secured over the D Street property, together with all interest, including default interest payments and any other sums as owed by the husband and wife to B Ltd. The husband deposed there will be sufficient sale proceeds to pay out B Ltd that which the parties owe, namely the full principal, interest and default interest in arrears. The husband claims B Ltd may not need to be joined to the proceeding if its claim against the husband and the wife is satisfied from the proceeds of sale of the F Street property. The wife opposes that application on the basis that she has not had sufficient disclosure from the husband.
B Ltd seeks the dismissal of the wife’s Application in a Proceeding and costs. In the alternative, and upon any joinder, B Ltd seeks that B Ltd’s claim be dealt with as a separate and preliminary question, apart from the issues in dispute between the husband and the wife. B Ltd seeks essentially those orders as sought in the Supreme Court of New South Wales proceedings.
B Ltd submitted that the husband’s proposal, as contained in the interim orders sought by him as set out above, was acceptable to B Ltd and that were the husband’s proposal to proceed, B Ltd would not exercise any power of sale with respect to the D Street property for a reasonable period.
MATERIAL RELIED UPON
The wife relies upon her Application in a Proceeding filed 22 November 2023; her affidavits filed 22 November 2023 and 3 April 2024; and Points of Claim filed 5 January 2024. The wife further relied upon an Outline of Case filed 2 May 2024; written submissions of counsel emailed to Chambers dated 3 May 2024; a tender bundle as handed up to the Court at the hearing; and correspondence to the parties of 17 October 2022 from Ms G on behalf of B Ltd.
The husband relies upon his Response to an Application in a Proceeding filed 24 April 2024; his affidavit filed 24 April 2024; and his Outline of Case filed 1 May 2024.
The proposed second respondent, B Ltd, relies upon a Response to an Application in a Proceeding filed 10 April 2024; Points of Defence filed 10 April 2024; an affidavit of David Mark Crompton filed 10 April 2024; and the wife’s Points of Claim filed 5 January 2024. There was further reliance upon written submissions filed 10 April 2024.
BRIEF BACKGROUND
In 1953, the husband was born. He is aged 70 years. He is retired.
In 1959, the wife was born. She is aged 64 years. She is retired.
The parties commenced cohabitation in 1980 and were married in 1982.
The parties separated on 26 July 2018, 38 years after the commencement of their cohabitation. They were divorced in 2023.
There are three children of the relationship, all now of adult age.
Relevantly, in or around 1984, the parties purchased the F Street property. The parties and their children lived in the F Street property between 1984 until late 1990, when the family relocated to Country C for the husband’s employment as a manager of then H Ltd (now B Ltd). The F Street property home loan, secured by mortgage to J Ltd, was paid out shortly after the family’s move to Country C. The property was tenanted by the parties whilst the family lived in Country C and following the wife’s return to Australia in or about 2006, and the husband’s return in 2007. Rental receipts were received by the parties from around the time of their departure from Australia.
Following the parties’ separation in 2018, the F Street property became occupied by the parties’ son for approximately two and a half years. Thereafter, it again became commercially leased to tenants and is until mid-2024, with rental income of approximately $43,000 being paid to the wife in lieu of spousal maintenance. The husband asserts such monies are insufficient for the wife to meet the parties’ obligations to B Ltd. I note the wife’s evidence that her total income is approximately $65,000.
From 1991 to 2007, B Ltd provided housing in Country C to the parties at no cost.
In or around 2006, as deposed to by the husband, the parties purchased the D Street property for a purchase price of approximately $1,400,000. The wife has lived in the D Street property since 2006.
The husband deposed that the parties borrowed monies from B Ltd to help fund the purchase of the D Street property. B Ltd, he claimed, was able to assist the parties in circumstances where Australian banks were hesitant to lend to the parties due to the husband’s income being received in Country C currency. Otherwise, the parties applied the husband’s savings and the rental receipts from the F Street property to the purchase. The husband does not dispute that he was employed at the time by B Ltd as a senior executive and was authorised to approve the loan on behalf of the mortgagee. The loan advanced was carefully constructed as to the security to be provided by the parties. Since about March 2006, the borrowings have been secured by way of registered mortgage over the D Street property in favour of B Ltd, and in addition, there was further required security in the form of pledges with respect to life and term assurance policies to be held by the husband. On the husband’s evidence, the loan agreement entered into was dated 17 February 2006 and was in writing. It was between the husband and B Ltd. The sum advanced to the husband was 11,500,000 in Country C currency (approximately $508,107.63 Australian Dollars). Interest was payable in respect of the loan advanced with such interest to be paid by monthly instalments. The principal was due to be repaid in December 2012 and January 2013.
On or about 15 March 2006, K Lawyers, acting for B Ltd, wrote to the husband and the wife, noting the parties’ instructions as claimed by them, and saying, in part “...The parties have agreed to a substitution of security whereby the pledge will be released and a mortgage will be granted over the [D Street] property in favour of [B Ltd]”.[2] Earlier, the F Street property had been envisaged as security in the signed loan offer between the husband and B Ltd additional to the pledges. The wife claims she did not see this communication until disclosure was made in this proceeding.
[2] Husband’s affidavit filed 24 April 2024, Annexure G, p.55.
The wife claims she was unaware the registered first mortgage over the D Street property was a foreign currency loan. It appears the wife also disputes her signature on the various loan and registration documents.
On 4 May 2006, the first mortgage was registered.
On 20 May 2006, a statutory declaration was executed by the husband on behalf of the mortgagee as the senior executive of B Ltd.
On or about 31 May 2006, it was agreed between B Ltd and the husband that the loan agreement be further amended to extend the principal repayment dates to conclude in March 2028, and to include as one of the components of the security to be provided to B Ltd a pledge in favour of B Ltd of L Life Insurance policy number … contracted by the husband with B Ltd for a sum assured of 6,500,000 in Country C currency.
In 2007, the husband moved back to Sydney and took up residence with the wife and children in the former matrimonial home, being the D Street property, and took an early retirement from his employment with B Ltd. The husband thereafter worked from Sydney as an independent director of Country C companies and otherwise joined M Organisation. The husband was unable to secure a role equivalent to the role he had in Country C as he had no Australian directorship experience. The husband’s lack of career progress in Sydney and reduction in income caused financial strain in the family.
In or around 2012, the husband’s evidence is that he redeemed two of his policies and applied those funds toward reduction of the mortgage. The husband also borrowed a further sum from B Ltd, with the security provided for the borrowings being a second mortgage registered against the D Street property together with a further pledge in favour of B Ltd, being a further life insurance policy as contracted by the husband. The wife claims that her signature as placed on the various documents to obtain these borrowings is not her own and/or that her signature has been added without her consent and/or knowledge.
In or around 2013, the husband moved back to Country C due to being unable to obtain work in Sydney on a suitable income.
The wife and the parties’ children remained living at the D Street property and would travel to Country C for holidays.
In February 2014, the husband’s evidence is that he redeemed a further policy and applied the monies to the mortgage liabilities.
On or about 30 July 2015, B Ltd and the husband entered into a further loan agreement wherein B Ltd agreed to provide a loan to the husband in the amount of 8,000,000 Country C currency. This agreement was conditional upon the husband providing to B Ltd, as security, a first ranking charge or mortgage in favour of B Ltd over the D Street property, and further pledges of policies in favour of B Ltd. In September 2015, some amendments were made by the parties to the loan agreement including relevantly a reduction in the loan amount to 7,300,000 Country C currency.
On 6 October 2015, the parties further mortgaged the property to B Ltd (the third mortgage) to secure all monies and damages owing (actually or contingently) by the parties to B Ltd under or in relation to the 2015 loan agreement. This followed the procedure adopted by the parties in respect of the earlier two loans. The wife claims that her signature was applied to documents in respect of this third loan without her consent or knowledge.
The parties separated in August 2018. The wife remained in the former matrimonial home and the husband stayed either with the children or in hotel accommodation when in Australia. After commencing property settlement negotiations, the husband requested of B Ltd a moratorium on the payment of the mortgages secured by the D Street property for two years, given the additional expenses in finding adequate housing in Australia, and payment of his legal fees.
Around October 2018, B Ltd agreed to a moratorium period in which the husband was not required to meet his obligations under the mortgages as secured by the D Street property until October 2020. The interest arrears nevertheless continued to accrue in a compounding of the debt. The wife deposed she did not consent to a loan moratorium, despite her signature on the respective mortgage documents, and claimed that she did not become aware of the husband’s hardship application to B Ltd until late December 2021. The wife expressed she had concerns regarding the hardship granted by the mortgagee in circumstances where the husband was Chairman of N Ltd and earning over 9,000,000 in Country C currency from N Ltd.
In November 2018, the husband did not make the payments due under policy …97 and under the O Life Insurance Policy …42.
In early 2019, the husband was appointed to the Board of Directors of N Ltd.
In mid-2019, the Board nominated the husband to be Chairman of the Board.
In mid-2020, the husband was required to resign his position with N Ltd.
In October 2022, B Ltd indicated to the parties in correspondence, that it intended to bring a Supreme Court of New South Wales action against them, in the face of their ongoing default in respect of the mortgage payments due and payable, as secured by the D Street property. It is the wife’s evidence that she did not receive this correspondence.
In early 2023, the husband suffered a medical episode. The husband underwent surgery at the hospital in Country C. The surgical intervention was carried out in emergency conditions funded by the husband’s partner of $8,000. The husband was not covered by any health insurance.
In May 2023, the wife claims she first observed the documents pertaining to the third mortgage as secured over the D Street property dated 6 October 2015.
On or about 1 January 2024, B Ltd gave notice to the husband pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) demanding repayment of the principal sum of 6,324,000 Country C currency together with accrued interest totalling 1,705,598.37 Country C currency pursuant to the 2006 mortgage.
On or about 1 January 2024, B Ltd gave notice to the husband pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) demanding repayment of the principal sum of 6,000,000 Country C currency together with the accrued interest totalling 2,121,308.21 Country C currency pursuant to the 2012 mortgage.
On or about 1 January 2024, B Ltd gave notice to the husband pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) demanding repayment of the principal sum of 8,652,123 Country C currency together with accrued interest totalling 1,352,123 Country C currency pursuant to the 2015 mortgage.
As of 1 January 2024, the debt owed by the husband to B Ltd, and as secured over the parties D Street property, when converted to Australian Dollars, was approximately $815,000. Interest is accruing at 6.325 per cent per annum. The husband’s evidence is that he has no capacity to meet this debt or make any ongoing payments in respect of it. The husband will be 71 years of age this year and does not anticipate earning any greater sum than that which he presently earns. The husband works part-time as a consultant with B Ltd. His current contract is on an annual basis rolling over every April and the current income he receives equates to approximately $1,199 per month.
On or about 14 January 2024, B Ltd gave notice to the wife pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) demanding repayment of the principal sum of 6,324,000 Country C currency together with accrued interest totalling 1,705,598.37 Country C currency pursuant to the 2006 mortgage.
On or about 14 January 2024, B Ltd gave notice to the wife pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) demanding repayment of the principal sum of 6,000,000 Country C currency together with accrued interest totalling 2,121,308.21 Country C currency pursuant to the 2012 mortgage.
On or about 14 January 2024, B Ltd gave notice to the wife pursuant to s 57(2)(b) of the Real Property Act 1900 (NSW) demanding repayment of the principal sum of 8,652,123 Country C currency together with accrued interest totalling 1,352,123 Country C currency pursuant to the 2015 mortgage.
In early 2024, B Ltd commenced proceedings in the Supreme Court of New South Wales for possession of the D Street property and a money judgment. The proceedings are in the Common Law Division property list, being a specialist list for possession of land proceedings.
On 3 May 2024, the matter proceeded before me for hearing.
In mid-2024, the Supreme Court of New South Wales made an order that the husband and the wife were to give possession of the D Street property to B Ltd and pay B Ltd the sum of $24,803,029.58 Country C currency.
Two days later, the wife filed a Notice of Motion in the Supreme Court of New South Wales proceedings seeking to set aside the default judgment entered two days prior. She sought an order for costs.
LEGAL PRINCIPLES
Section 79(10)(b) of the Family Law Act 1975 (Cth) (“the Act”) states that “any other person whose interests would be affected by the making of the order”, as sought by the parties, are entitled to be joined as a party to the proceeding.
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) sets out the procedure for the joinder of a party to the proceeding. Rule 3.01 states that:
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.
The word “necessary” was described by Warnick J in Wayne & Dillon & Anor [2008] FamCAFC 204, (I note in reference to the then Federal Magistrates Court Rules 2001, r 11.01, which was similar to the current rule), as meaning:[3]
...something more than “useful” or “expeditious”. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified “case”, joinder is unlikely to be “necessary”.
However, if a cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be “necessary for the court to completely and finally determine all matters in dispute.”
[3] Wayne & Dillon & Dillon [2008] FamCAFC 204 at [18]-[19].
Pursuant to r 3.03(4) of the Rules, a party who seeks to add another party to the proceeding, after the first court date, may only do so with the leave of the Court. Rule 3.03(4) of the Rules is as follows:
4)A party may only add another party after the first court date with the leave of the court.
The party must also comply with r 3.03(5) of the Rules. There is no issue about the husband’s compliance with that rule.
To determine that application, in accordance with the principles established in r 3.01 of the Rules, I must consider:
(a)Is the person sought to be joined a person whose rights may be directly affected by an issue in the proceeding; and
(b)Is the participation of that person as a party necessary for the Court to determine all issues in dispute in the proceeding?
Section 90AF(3) of the Act provides, amongst other things, that the Court may only grant an injunction under ss 90AF and 114 if:
(a)the granting of the injunction is reasonably necessary, or reasonably appropriate and adapted to effect a division of property between the parties to the marriage;
(b)if the injunction concerns a debt of a party to the marriage, it is not foreseeable at the time the injunction is granted, that the debt will not be paid in full;
(c)for an injunction under s 114 (1), the court is satisfied that, in all the circumstances, it is proper to grant the injunction; and
(d)for an injunction under s 114 (3), the court is satisfied that, in all the circumstances, it is just or convenient to grant an injunction.
In equity an applicant for an interlocutory injunction must establish there is a prima facie case in the sense of a serious question to be tried. This means that the wife must at least show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.[4]
[4] Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65]; Castlemaine Tooheys Limited v South Australia (1986) 161 CLR 148 at 153.
CONSIDERATION
Should the Court refuse the joinder application of the respondent wife, then no question arises in respect of the anti-suit injunction as sought by the wife, though I shall address some of those matters. B Ltd, not being a party to the proceeding in this Court, being a proceeding as to the alteration of property interests between the parties, will proceed with its claim in the Supreme Court of New South Wales as against the parties in circumstances where that action was properly and appropriately commenced. The husband concedes the claim of B Ltd. The wife’s defence to the claim of B Ltd is twofold. Firstly, it goes to whether the registered mortgages secured by the D Street property ought properly to have been registered. The wife asserts that B Ltd is not registered to do business in Australia, and that there is an issue to be determined by the Court as to whether B Ltd received approval from the Foreign Investment Review Board to take an interest in residential land in Australia. Secondly, although the wife does not deny executing the 2006 and 2012 registered mortgages, she makes complaint about the circumstances in which they were executed, described by counsel for B Ltd as “a number of procedural alleged irregularities” to assert that they are not valid and/or enforceable against her.[5] The wife does not make any allegation of fraud as against B Ltd. Consequently, B Ltd submits that the 2006 and 2012 mortgages would be expected to be found indefeasibly good and could not be overturned. Thirdly, the wife denies that she executed the 2015 registered mortgage. She does not allege however, fraud on the part of B Ltd for the purposes of s 42 of the Real Property Act 1900 (NSW) in respect of her claim. It is thus submitted by B Ltd that the 2015 registered mortgage would still be valid against her. As to the wife’s claim that she did not execute the mortgage, B Ltd’s further submission is that all the execution of the three mortgages was witnessed by a solicitor who will give evidence to that effect.
[5] Transcript 3 May 2024, p.13 lines 33-34.
The proceedings in the Supreme Court of New South Wales are usual proceedings in circumstances where mortgagees, with defaulting mortgagors, seek possession of land which is the subject of registered mortgage security. It cannot be said that such a usual proceeding in the Supreme Court is vexatious or oppressive and nor is it an abuse of this Court’s processes.[6] Further, it cannot be said that the mere existence of simultaneous proceedings in two different jurisdictions is of itself, vexatious or oppressive conduct.
[6] CSR Ltd v Cigna Insurance AustraliaLtd (1997) 189 CLR 345 at 400-401.
The Supreme Court of New South Wales proceedings could not have, jurisdictionally, commenced in this Court. The wife has made no application to have the Supreme Court of New South Wales proceedings cross-vested to this Court to give the Court jurisdiction to hear the matter the subject of those proceedings. Joinder alone will not overcome that issue.
In considering the question of joinder, and noting the relevant legal principles, in particular r 3.03(4) of the Rules, the issue for the Court to determine is whether the joinder of B Ltd is “necessary to determine all issues in dispute in the proceeding within the meaning of r.3.01 of the new rules”:[7] I conclude it is not so necessary.
[7] Daire and Gamer [2021] FedCFamC1F 261 at [40].
Whether the mortgages are valid and enforceable is a discrete issue. The Court could not make an order pursuant to s 90AE of the Act, as sought by the wife, such that the husband effect a transfer of the D Street property to her, without her having any encumbrances or otherwise responsibility for mortgage payments because there would not be satisfaction of s 90AE(3)(b) and s 90AE(3)(d) of the Act. That legislation is relevantly as follows:
(3) The court may only make an order under subsections (1) or (2) if:
…
(b)if the order concerns a debt of a party to the marriage--it is not foreseeable at the time that the order is made that to make the order would result in the debt not being paid in full; and
…
(d)the court is satisfied that, in all the circumstances, it is just and equitable to make the order; and
The husband cannot, without the consent of B Ltd, transfer title to the D Street property to the wife. B Ltd is entitled to the certainty of payment to them of that which they are owed whether by means of a sale of the F Street property or the D Street property, the latter being the only real security for the debt owed to it. The Court cannot be satisfied the husband will make payment of the debt. And nor will the wife. They are elderly and not in good health. Their income is inadequate for the purpose. The husband’s life insurance policies to B Ltd are in arrears in the payment of insurance premiums, and the policies do not secure repayment of the obligations secured by the mortgages on the evidence of B Ltd. B Ltd will only receive the sums assured in the event of the husband’s death, or in the case of one policy, the husband’s permanent disability. The sums in any event, are claimed by B Ltd to be insufficient to pay the debt secured by the mortgages. The Court could not place B Ltd in the position of an unsecured creditor. All of these matters point to there being no utility in the joinder of B Ltd to the proceeding.
In any event, the wife, in my view, fails to raise an arguable case sufficient to resist the entry of summary judgment by B Ltd.[8] Indeed, that has already occurred in the Supreme Court of New South Wales proceedings albeit the wife is seeking to challenge that finding.
[8] Riemann v Riemann (No 3) [2017] FamCA 911 at [37].
B Ltd submitted the specialist Possession List of the Common Law List of the Supreme Court of New South Wales is the more convenient forum for the determination of any real dispute the wife may wish to raise concerning the validity of the first, second and third registered mortgages. That discreet dispute is likely to be determined more quickly than in this Court. Further, resolution of this issue is likely to narrow the issues in dispute between the parties in this Court regarding the value of the marital pool of assets and shorten the length of hearing time required to determine the matters which are in issue in the proceedings between the husband and the wife.
I agree with each of the above submissions.
It is not necessary for B Ltd to be joined to the proceeding. There is already in place a summary judgment against the parties in the Supreme Court of New South Wales. The Supreme Court of New South Wales is the usual forum, and I find the appropriate forum for any proceeding between the parties and B Ltd in relation to the validity and enforceability of the three registered mortgages in favour of B Ltd as secured over the parties D Street property.
COSTS
In the exercise of my discretion and having had regard to s 117 of the Act, I determine that the wife should pay the costs of B Ltd in respect of her Application in a Proceeding. While I am mindful that her income receipt is low, the wife has been wholly unsuccessful in her pursuit of the application. B Ltd has had to prepare material to put before the Court in circumstances where any joinder of B Ltd is not necessary for the Court to finally determine all matters in dispute between the parties. Rather, the action of the mortgagee in pursuing litigation to protect its rights and endeavour to recoup that which is owed to it, will crystalise for the parties the ambit of their own dispute.
I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 17 May 2024
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