FEDERAL CIRCUIT COURT OF AUSTRALIA
| GABOR & GORE | [2018] FCCA 615 |
| Catchwords: FAMILY LAW – Undefended property proceedings – adjournment application refused – respondent failed to meaningfully engage in proceedings despite numerous opportunities – need to sell property to pay outstanding debts which are accruing interest. |
| Legislation: Family Law Act 1975, ss.106A, 75(2), 75(2)(o), 79(2), 79(4),79, 117(2A) |
| Cases cited: Damjanovic v Maley [2002] NSWCA 230 Mckenzie v Mckenzie [1970] 3 All ER 1034 |
| Applicant: | MR GABOR |
| Respondent: | MS GORE |
| File Number: | MLC 4543 of 2014 |
| Judgment of: | Judge Harland |
| Hearing date: | 22 January 2018 |
| Date of Last Submission: | 22 January 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 16 March 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hall |
| Solicitors for the Applicant: | Thompson Southern Law Practice |
| Solicitors for the Respondent: | No appearance |
ORDERS
Property A
That within 21 days each of the parties take all necessary steps and execute all necessary documents to cause Property A being the whole of the land in title reference (omitted) (“Property A”) Property A to be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement within 30 days of these Orders to be determined by the proper officer of the Real Estate Institute of Victoria or their nominee.
The proceeds of the sale of Property A be disbursed as follows:
(a)Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b)Payment of any money due and owing to the mortgagee;
(c)The net proceeds be applied to payment of debts of the marriage including but not limited to:
(i)Taxation liability in respect of Company A including any interest and penalties thereon;
(ii)Outstanding Superannuation Guarantee Payments in respect Company A with any interest and penalties thereon;
(iii)Outstanding Taxation liabilities in respect of the parties individually with any interest and penalties thereon;
(iv)Outstanding Taxation liabilities in respect of the parties’ Self-Managed Superfund with any interest and penalties thereon;
(v)All Accountancy fees and expenses to complete all outstanding tax returns and documents required by the Australian Taxation Office to finalise the taxation liability of the parties and their related entities including Company A and (omitted) Superannuation Fund;
(vi)The amount owing to (omitted insurance company) and any interest thereon in relation to the property at Property A,;
(vii)The amount owing to (school omitted) for [X] and [Y]’s school fees.
(viii)The amount owing to…
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- Gabor and Gore [2018] FCCA 615
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- [2018] FCCA 615
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CaseChat Overview and Summary
The court was required to determine the specific terms for the sale of Property A and Property B, including the method of sale, the timeframe for agreement on price, and the process for determining the price if agreement could not be reached. It also had to specify the order of priority for the disbursement of sale proceeds, distinguishing between sale expenses, mortgagee payments, various debts of the marriage, and the final distribution of the net proceeds between the parties. Further issues included the transfer of Property C, the discharge of a mortgage on that property, the closure of joint bank accounts, and the respective entitlements to superannuation.
The court ordered that Property A be sold by private treaty, with a mechanism for price determination by the Real Estate Institute of Victoria if the parties could not agree. The proceeds were to be applied first to sale costs and mortgagee payments, then to a comprehensive list of debts of the marriage, including tax liabilities, superannuation obligations, accountancy fees, school fees, and other specified debts. The remaining net proceeds were to be divided, with 60% to the applicant and 40% to the respondent, after certain deductions including legal fees, council rates, and reimbursements to the husband. Property B was to be transferred to the wife at her sole expense, with her paying the husband 58% of the equity. If this did not occur, Property B was to be sold, with proceeds distributed 58% to the applicant and 42% to the respondent. The court also made orders for the transfer of Property C to the applicant, the closure of joint bank accounts, and the retention of individual superannuation entitlements, with specific provisions for the husband's resignation as a trustee and withdrawal from a superannuation fund. The respondent was ordered to pay the applicant's costs fixed at $25,000, to be deducted from the applicant's share of the sale proceeds of Property A. Provisions were also made for the shortfall of the applicant's share of Property A to be deducted from her share of Property B.
Orders
Orders of the court
Property A
1.
That within 21 days each of the parties take all necessary steps and execute all necessary documents to cause Property A being the whole of the land in title reference (omitted) (“Property A”) Property A to be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement within 30 days of these Orders to be determined by the proper officer of the Real Estate Institute of Victoria or their nominee.
2.
The proceeds of the sale of Property A be disbursed as follows:
(a) Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b) Payment of any money due and owing to the mortgagee;
(c) The net proceeds be applied to payment of debts of the marriage including but not limited to:
(i) Taxation liability in respect of Company A including any interest and penalties thereon;
(ii) Outstanding Superannuation Guarantee Payments in respect Company A with any interest and penalties thereon;
(iii) Outstanding Taxation liabilities in respect of the parties individually with any interest and penalties thereon;
(iv) Outstanding Taxation liabilities in respect of the parties’ Self-Managed Superfund with any interest and penalties thereon;
(v) All Accountancy fees and expenses to complete all outstanding tax returns and documents required by the Australian Taxation Office to finalise the taxation liability of the parties and their related entities including Company A and (omitted) Superannuation Fund;
(vi) The amount owing to (omitted insurance company) and any interest thereon in relation to the property at Property A,;
(vii) The amount owing to (school omitted) for [X] and [Y]’s school fees.
(viii) The amount owing to (omitted tax service) outstanding account for previous accounting work carried out for the parties;
(ix) The amount owing to Mr B (accountant) for repayment of loan;
(x) The amount owing to (company omitted) debt in relation to the (omitted) Store;
(xi) The amount owing to (business omitted) debt in relation to the (omitted) Store;
(xii) The amount owing to (business omitted) debt in relation to the (omitted) Store;
(xiii) Accountants’ fees to bring all tax returns up to date for the parties and their related entities including Company A, Company B, Company C and the (omitted) Superannuation Fund.
(d) Payment of the balance then remaining as follows:
(i) 60% to the applicant; and
(ii) 40% to the respondent –
(i) less the amount due to Croxford Partners to remove their caveat from the property in respect of moneys owed to them by the wife being the wife’s legal fees;
(ii) less the amount owing in respect of the (city council omitted) in respect of rates, and interest and legal costs for recovery and the Judgment Debt owing in respect of the rates for the property at Property A (approximately $14,000);
(iii) less $1,925 to paid to the husband for the wife’s share of the valuation;
(iv)less $3,787 being the reimbursement to the husband for the school fees that were owed to (school omitted) and were solely paid for by the husband;
(v) less the costs of and incidental to the trial herein of the applicant fixed in the sum of $25,000.
Property B
3.
That within 42 days the parties take all necessary steps and execute all necessary documents to remove the husband as guarantor and discharge the mortgage secured over Property B and being the whole of the land in title reference (omitted) (“Property B”) at the wife’s sole expense and simultaneously the wife shall pay to the husband 58% of the equity being $168,200 and thereafter the wife be declared the sole legal and beneficial owner.
4.
In the event that the wife is unwilling or unable to comply with order 3 herein, within 56 days each of the parties take all necessary steps and execute all necessary documents to cause Property B to be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement within 70 days of these Orders to be determined by the proper officer of the Real Estate Institute of Victoria or their nominee.
5.
If Property B is sold pursuant to Order 4 herein, the proceeds of sales be disbursed as follows:
(a) Payment of agent’s commission and advertising expenses and legal expenses of the sale;
(b) Payment of any money due and owing to the mortgagee;
(c) Payment of the balance then remaining as follows;
(i) 58% to the applicant; and
(ii) 42% to the respondent
6.
In the event that either or both of the properties fails to sell by private treaty pursuant to Order 1 and/or Order 4 herein, within a period of three months from the date of these Orders, then each party take all necessary steps and execute all necessary documents to cause the said properties (or property as the case may be) to be sold by public auction at the earliest possible date at a reserve to be agreed upon between the parties and failing such agreement within 14 days to be determined by the proper officer of the Real Estate Institute or their nominee and the proceeds of the said sale be disbursed in the same manner as, and in accordance with, Order 2 hereof.
7.
That pending the sale and settlement of Property A, the respondent cause to be paid as they fall due all instalments in respect of the mortgages, council rates and outgoings, and water rates or levies in respect of the properties and pay forthwith any arrears in respect of the said outgoings, rates and levies.
8.
That pending compliance with order 3 or order 4 as applicable, the respondent cause to be paid as they fall due all instalments in respect of the mortgages, council rates and outgoings, and water rates or levies in respect of the properties and pay forthwith any arrears in respect of the said outgoings, rates and levies of Property B.
9.
That Thompson & Southern Law Practice have the care and conduct of the sale of the at Property A, and Property B, if the property is to sold pursuant to Order 4 herein.
10.
For the purpose of putting these orders into effect, the net proceeds of sale of the properties at Property A, and Property B, if the property is sold pursuant to Order 4 herein, be paid into the Thompson & Southern Law Practice Trust Account on trust for disbursement in accordance with these Orders and for them to attend to the payments of the debts of the marriage listed in paragraph 2(c) and disbursement of the balance in accordance with paragraph 2(d) above.
Property C Property
11.
That the respondent do all such acts and things and sign all necessary documents forthwith so as to transfer to the applicant all her right title and interest in the property situated at Property C, (“Property C”) being the whole of the land comprised in title reference (omitted).
12.
That contemporaneously with the transfer in paragraph 11 hereof the parties do all such acts and things and sign all necessary documents and remove the caveats so as to discharge the mortgage on the subject property.
Bank Accounts
13.
That within 14 days of these orders the parties do all such acts and things and sign all necessary documents so as to close down any bank accounts held in joint names, including but not limited to the (bank omitted) Account number (omitted) and cause the balance of same to be paid into the Thompson & Southern Law Practice Trust Account to be distributed with the proceeds of sale of the properties in paragraph 2(c).
Superannuation
14.
Each of the parties otherwise retain all their right title and interest in and to Superannuation Entitlements in their name or standing to their credit and neither shall have any further claim on such entitlements of the other.
15.
That the husband resign as a Trustee of the (omitted) Superannuation Fund and contemporaneously with his resignation withdraw the amount standing to his credit in the said fund to be rolled into a complying superannuation fund of his choice as soon as possible after the said fund’s taxation and accounting obligations have been completed and brought up to date.
16.
For the purpose of paragraph 14 hereof, the Court Orders that the amounts standing to the credit of the parties in their individual accounts in the said fund are to be retained solely by them.
General
17.
That other than as set out in these Orders, the parties have the sole right title and interest in any other property which is at this date hereof in their possession, title, or name and they shall be solely liable for and indemnify the other against any personal liabilities.
18.
That the respondent and applicant do all acts and things, give all consent, and execute all documents and writings necessary to give effect to the orders made herein.
19.
That in the event that either party refuses or neglects to execute any deed or instrument or other document or any transfer or other thing directed or required of a party to put these orders into effect, the Registrar of the Federal Circuit Court of Australia be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
20.
That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money under these or any subsequent orders:
(a) Each party be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party as at the date of these orders;
(b) Any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;
(c) Each party hereby foregoes any claim they may have to any superannuation benefit that is belonging to or owned by the other save as provided for in these orders;
(d) All insurance policies are to become the sole property of the owner named hereon;
(e) Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(f) Any joint tenancy of the husband and wife in any real or personal estate is hereby expressly severed.
21.
The respondent pay the applicant’s costs fixed in the sum of $25,000, with such costs to be deducted from the amount payable to the wife pursuant to paragraph 2(d)(ii) and paid to the applicant.
22.
In the event the wife’s share of the sale of the Property A property does not cover the costs owed to the husband, the amount be deducted from the wife’s share to the Property B property pursuant to 5(c)(ii) herein.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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