Erwin & Loupe
[2023] FedCFamC1F 137
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Erwin & Loupe [2023] FedCFamC1F 137
File number(s): MLC 14204 of 2022 Judgment of: MCNAB J Date of judgment: 8 March 2023 Catchwords: FAMILY LAW – PROPERTY – Interim Application – Balance of convenience favoured orders being made to preserve assets of the relationship Legislation: Family Law Act 1975 (Cth) s 90SS(1)(e) Division: Division 1 First Instance Number of paragraphs: 21 Date of hearing: 8 March 2023 Place: Melbourne Counsel for the Applicant: Mr D Mort Solicitor for the Applicant: Cahill and Rowe Family Law Counsel for the Respondent: Litigant in person ORDERS
MLC 14204 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ERWIN
Applicant
AND: MR LOUPE
Respondent
order made by:
MCNAB J
DATE OF ORDER:
8 MARCH 2023
THE COURT ORDERS THAT:
1.The Applicant, for and on behalf of herself and as Director of B Pty Ltd as Trustee for the C Trust, forthwith do all such things and sign all such documents in order to place the following properties on the market for sale:
(a)D Street, Suburb E, Victoria;
(b)Unit 1 G Street, Suburb F, Victoria;
(c)H Street, J Town, Victoria;
(d)K Street, Suburb L, Victoria;
(e)N Street, Suburb M, Victoria;
(f)Unit 1 P Street, Suburb M, Victoria;
(g)Unit 2 P Street, Suburb M, Victoria;
(h)Q Street, Suburb M, Victoria;
(i)R Street, Suburb F, Victoria;
(j)S Street, Suburb E, Victoria;
(k)Unit 2 G Street, Suburb F, Victoria; and
(l)T Street, Suburb U, Queensland.
(“THE REAL PROPERTIES”).
2.The properties be placed on the market for sale with such Estate Agent and upon such terms as determined by the Applicant in her sole discretion.
3.Upon completion of the sale of the properties, the proceeds of the sale be applied as follows:
(a)First, to pay the costs, commissions and expenses of the sale;
(b)Secondly, to discharge any mortgages and any other encumbrance effecting the said properties;
(c)Thirdly, to discharge the business loan with V Finance in the sum of approximately $150,000;
(d)Fourthly, the sum of $200,000 to the Applicant (noting that the Respondent has received $200,000, being the return of the deposit of property at W Street, City X, Western Australia); and
(e)Fifthly, balance remaining, if any, be placed in the Trust Account of Cahill & Rowe Family Law.
4.By 2.00pm this day, 8 March 2023, the solicitors for the Applicant forthwith forward to the Respondent by email an Authority to authorise Messrs Cahill & Rowe Family Law to execute the Withdrawals of Caveat (“the Authority”) in respect of the real properties referred to in paragraph 1 herein on behalf of the Respondent – MR LOUPE
5.By 3.00pm the Respondent execute the Authority forwarded pursuant to Order 4 herein and forthwith email same to Messrs Cahill & Rowe Family Law in order to register the Withdrawal of Caveats in respect of each of the real properties referred to in paragraph 1 herein.
6.In the event that the Respondent fails, neglects or refused to comply strictly with Order 5 herein, Mr Paul Cahill of Cahill and Messrs Cahill & Rowe Family Law solicitors be authorised to do all things necessary to complete a Withdrawal of Caveats in respect of the real properties and do all things necessary to give operation to the Withdrawals of the Caveats.
7.The costs of the Withdrawal of Caveats be reserved.
8.Until further order, the Respondent be restrained from attending or remaining at any of the properties.
9.Until further order, the Applicant have the sole right to occupy the property situated and known as T Street, Suburb U, in the State of Queensland and the Respondent be restrained from attending within 50 meters of the property.
10.The Applicant’s costs of and incidental to this application be reserved.
11.The Applicant be at liberty to provide a copy of these Orders to the Property Officer of Y Company.
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
EX-TEMPORE
(Revised from Transcript)McNab J:
This matter comes before the Court by way of an application in a proceeding, filed on 2 March 2023. The applicant seeks orders amongst other things, that the respondent remove caveats on a number of properties to enable their sale. The applicant is a partner in a de facto relationship with the respondent. There is some dispute about the length of the de facto relationship, but it is plain that there is substantial property which has been acquired in the course of the relationship, whether it be the period alleged by the applicant, which is a de facto relationship of well in excess of 10 years, or the respondent, who says the relationship commenced in about 2016.
The parties have acquired significant real estate assets, which is dealt with in the affidavit of the wife filed on 20 February 2023 in support of the application. That affidavit also sets out the significant history of the relationship and their financial dealings.
In summary, the applicant is the sole director and shareholder of B Pty Ltd as trustee for the C Trust and proprietor of 10 properties which are listed at [10] of her affidavit. She owns in her own name a residential property in Suburb U Queensland and a property in Suburb E, which are listed at [9] of her affidavit. Each of the properties are subject to either a first or second mortgage with Z Pty Ltd, which finance was obtained in about October 2022.
The applicant’s affidavit details at length dealings conducted by the respondent through various entities including the purchase and development of properties, mostly in the City AA area and in BB Region and in Perth. In 2016 a real estate company, Loupe Real Estate Pty Ltd, was incorporated. There have been significant real estate dealings and borrowings.
The applicant alleges that the husband has since about 2019 been taking illicit drugs which has affected his behaviour and causing him to behave both erratically financially and violently towards the applicant. These allegations are set out in detail in the applicant’s affidavit at [37] - [81].
The evidence of the applicant is that the respondent had purchased 6 properties in Victoria and one in City X, and needed to arrange finance to complete the purchases. He engaged a finance broker, Mr CC of DD Finance, in order to complete the finance application. The communications with Mr CC are set out in annexure ME3 of the applicant’s affidavit.
The wife describes significant incidents of family violence occurring on 2 October 2022 with the husband as the instigator. The applicant describes at [82] demands from the husband that she sign an offer of finance to take out a short term private loan of about $4.5 mil through Z Pty Ltd with the loan offer being emailed to her by Mr CC. Finance was subsequently obtained from Z Pty Ltd on 12 October 2022, in the sum of $4,603,000.
It is apparent from reading the wife’s affidavit, in particular at paragraph [82], and annexure ME3, that the respondent regarded the need for finance to be something of the utmost urgency as third party vendors were involved, and were serving rescission notices.
Finance was obtained, and the respondent was directly involved in obtaining the finance, and it was done with his knowledge. In Court today, he accepted that, in fact, he was a “cheerleader” for the loans to proceed, and in his words, he “absolutely wanted the loan to be put in place”.
The loan from Z Pty Ltd is a short-term finance for an initial 2 month period. I have not been given evidence of the precise details of the loan.
The applicant has given evidence that the respondent has acted to prevent the wife from servicing the loan from Z Pty Ltd and had access to the bank accounts for B Pty Ltd and Loupe Real Estate. She also gave evidence that he was acting irrationally.
On 18 November 2022, the Applicant executed a Deed of Forbearance with Z Pty Ltd on behalf of B Pty Ltd, and she provided a personal guarantee. At [103] she states that the amount owing to Z Pty Ltd at 6 November 2022 was $4,994,170.63 (excluding legal fees). That amount remained constant until 12 February 2023, after which time she states that she will be charged additional monthly interest of $115,000 plus a roll-over fee if the loan is extended between $100,000 and $150,000 together with legal fees.
The applicant states that she is now in breach of the deed of forbearance with Z Pty Ltd.
I am also informed by Mr EE, who appeared, effectively, as a friend of the Court to act on behalf of Z Pty Ltd, that a receiver had been appointed pursuant to the terms of the loan documents.
The wife has taken steps to sell the properties which are subject to the loan agreements with Z Pty Ltd. Whilst the evidence is as at 20 February 2022 that eight of the properties have been sold unconditionally, the respondent has lodged caveats over the properties referred to it [108] of the affidavit which are the subject of the application.
Arrangements have been made to sell those properties to third parties, and in my view, it is most important that the sale of the properties be allowed to proceed so as to prevent further loss to the parties as a result of the escalating costs associated with the properties not being sold, the loan to Z Pty Ltd increasing and the losses caused to third parties. There is no evidence before the Court to suggest that the purchasers of the properties are anything but arm’s length purchasers.
The respondent has been approached to remove caveats which he has lodged in respect of those properties. He has refused to remove the caveats and is preventing the sale of the properties. The husband, who until recently, was represented by solicitors, is now self-represented. The arrangements by which he was represented by Ms GG are the subject to numerous questions which I am not in a position to deal with now, but may, in fact, become the subject of further inquiry if needs be. He relied upon an affidavit that he filed this day.
The husband alleges that a fraud has been committed. He says the fraud started somewhere in about 2012, but there is further evidence of fraud in 2016, whereby he says he was unlawfully removed, without his knowledge, from an involvement in a trust which owned certain properties. I am not in a position to determine those matters today. What is apparent is that he now asserts that the applicant’s approach to Z Pty Ltd was part of some fraudulent scheme. The evidence of the applicant and the admissions made by the respondent this day are sufficient to make a prima face finding that the respondent was actively seeking finance from Z Pty Ltd.
In my view, the balance of convenience strongly favours the granting of an injunction, and making orders of the kind sought today and the applicant has established that there is a strong prima facie case for making of the orders pursuant to s 90SS(1)(e). There is no evidence before the Court which would persuade me that the respondent is in a position to pay the monies owed to Z Pty Ltd without the subject properties being sold.
Any claim of fraud to be made by the respondent can be dealt with at trial. The orders that I make effectively seek to preserve the assets of the relationship and to prevent further loss to the parties and third parties.
It is appropriate for the orders in paragraph 3.4 and of the orders that have been provided to be made. That is a reasonable order and appropriate having regard to the distribution of funds that have been made from joint assets which have apparently been made to the respondent which has been the subject of affidavit evidence of the exchanges between Mr Cahill, the applicant’s solicitor, and the applicant’s former solicitor in relation to monies that were deposited and then dispersed to the respondent.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice McNab. Associate:
Dated: 8 March 2023
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