Galip & Galip
[2023] FedCFamC1F 920
•27 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Galip & Galip [2023] FedCFamC1F 920
File number: SYC 1278 of 2023 Judgment of: CAMPTON J Date of judgment: 27 October 2023 Catchwords: FAMILY LAW – INTERIM APPLICATION – Interim application for the sale of real property, property settlement, injunctive orders and disclosure – Where the husband failed to appear at the hearing – Where the husband has failed to comply with his disclosure obligations and with court orders – Orders made broadly as sought by the wife on an undefended basis. Legislation: Family Law Act 1975 (Cth) ss 79 and 80
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6, rr 6.02, 12.06
Cases cited: Joseph & Joseph [2015] FamCAFC 168; (2015) FLC 93-665
Kioa v West (1985) 159 CLR at 582
Oriolo and Oriolo (1985) FLC 91-653l
Stanford & Stanford (2012) 247 CLR 108
Strahan & Strahan (2011) FLC 93-466
Tsiang & Wu and Ors (2019) FLC 93-911
Weir and Weir (1993) FLC 92-338
Division: Division 1 First Instance Number of paragraphs: 67 Date of hearing: 24 October 2023 Counsel for the Applicant: Mr Young Solicitor for the Applicant: Abbas Jacobs Lawyers Solicitor for the Respondent: Did not participate ORDERS
SYC 1278 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GALIP
Applicant
AND: MR GALIP
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
27 OCTOBER 2023
THE COURT ORDERS THAT PENDING FURTHER ORDER:
1.The wife be forthwith by way of these Orders appointed as trustee for the husband for sale of the real property at B Street, Suburb C (“the Suburb C property”) upon the terms as are appropriate and upon completion of such sale the wife shall apply the proceeds of the sale in the following priority:
(a)In payment of an amount sufficient to discharge mortgage … secured on the property in favour of the Commonwealth Bank of Australia;
(b)In payment of the costs incurred on sale, including real estate agents commission and conveyancing fees, legal costs and disbursements incurred in relation to the sale;
(c)In payment of other costs incurred by the wife, including legal and valuation fees, if any and/or as are necessary, in acting in her capacity as trustee; and
(d)In payment of the balance to the wife by of partial property settlement
2.The wife have, as against the husband, the exclusive use and occupation of the Suburb C property and the husband shall not approach or be upon the said property and shall not do any act or thing to interfere with, or attempt to frustrate or inhibit the wife in her role as trustee for sale of the property, including but not limited to engaging or communicating with the listing real estate agent or potential purchasers of the property.
3.On or before 31 January 2024 the husband is to pay to the wife by way of partial property settlement the sum of $800,000.
4.On or before 8 November 2023:
(a)The husband is to provide to the solicitors for the wife all relevant documents disclosing the settlement of and use and application of the funds received from the sales of 1 D Street, Suburb G in early 2023, E Street, Suburb H in mid-2023, 2 D Street, Suburb G in late 2023 and F Street, Suburb H in late 2023; and
(b)The husband shall file and serve an affidavit together with annexed verifying documents identifying the foundations for, and particulars of, including the source of funds, the acquisition from his solicitor Mr Ammar Steve Kassem (“Mr Kassem”), by J Pty Ltd, in late 2023 of the transfer of K Street, Suburb L to J Pty Ltd.
5.On or before 10 November 2023, the husband is to do all things to respond to and answer the requests for information in the letter from Mr M of N Accountants dated 12 July 2023, so far as they concern P Pty Ltd and/or Q Pty Ltd and shall simultaneously provide a copy of such documents and information to the wife.
6.Within 48 hours of these orders the wife file and serve an undertaking as to damages pursuant to r 10.18 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”).
7.Subject to the wife complying with Order 6, the husband, pending his compliance with Orders 3 and 4 hereof, is restrained by injunction from doing any act or thing, save as to facilitate compliance with Order 3 hereof or the wife’s prior written consent, so as to:
(a)Register any dealing in relation to any real property of which the husband, or a company of which the husband is a director, is the registered proprietor;
(b)Effect any change to the officeholders or members of any company of which the husband is a director; or
(c)Pay or cause to be paid from any entity or corporation in which he has an interest monies to Mr Kassem or FutureLegal Pty Ltd except to meet the costs incurred for legal services.
8.The wife serve a sealed a copy of these orders on the husband’s address for service in these proceedings and upon the husband personally within 72 hours of the date of these Orders.
9.The wife file and serve any affidavit evidence upon which she seeks to rely as to the costs of and incidental to this determination, together with written submissions of no more than three pages, on or before 10 November 2023. In the event the husband opposes the relief to costs as sought by the wife, he shall file and serve any affidavit upon which he seeks to rely and any written submissions of no more than three pages on or before 24 November 2023. Determination of the wife’s application for costs, subsequent to 24 November 2023, will be reserved to chambers.
10.Save and except as provided for by these Orders, all outstanding applications for interlocutory or interim orders and all outstanding applications in a proceeding or responses to an application in a proceeding are dismissed.
11.The proceedings are listed for case management in person at 9.30am on 6 February 2024.
12.The husband by way of these Orders is again placed on notice as to the obligations as to disclosure as codified by ch 6 of the Rules and his failure to comply with prior orders made as to the filing of an undertaking as to disclosure.
13.In the event an undertaking as to disclosure of the husband is not filed and served on or before 22 January 2024, consideration will be given on the adjourned date to striking out his Response to Initiating Application filed 22 May 2023 and for the wife to proceed to seek final relief as against the husband on an undefended basis.
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 the pseudonym Galip & Galip has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
INTRODUCTION
By way of an Application for Final Orders filed on 28 February 2023 in the Federal Circuit and Family Court of Australia (Division 2) Ms Galip (“the wife”) sought orders as to the adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) subsequent to the breakdown of her marriage with Mr Galip (“the husband”). The relief as sought by the wife is that the property of she and the husband be divided equally. The husband filed a Response to an Application for Final Orders on 22 May 2023 seeking that “the property pool” be divided 70 per cent to him and 30 per cent to the wife.
The wife also sought in her Application for Final Orders filed 28 February 2023 interim orders as to disclosure, for the sale of real property, interim property settlement and injunctions for the preservation of property. The husband in a Response to an Application in Proceeding filed 22 May 2023 sought that he receives 70 per cent and the wife 30 per cent of the “net asset pool”. He otherwise opposed the interim relief of the wife.
An interim hearing as to the contested interlocutory relief was conducted by a Senior Judicial Registrar of Division 2 on 23 May 2023. Judgment was reserved.
On 25 September 2023 the matter was transferred to Division 1 and was placed on the Major Complex Financial Proceedings List prior to the reserved Division 2 judgment being delivered. Upon transfer, the Division 2 Court was no longer seized with the proceeding such that orders could not be made on the disputed interim subject matters. If made, such orders would be in excess of the Division 2 Court jurisdiction (see Joseph & Joseph [2015] FamCAFC 168; (2015) FLC 93-665). In the circumstances it was necessary for this court to rehear the competing interlocutory relief as sought. These reasons determine that interlocutory relief.
For the reasons that follow, orders will be made for the sale of a property of the parties at B Street, Suburb C (“the Suburb C property”) to be conducted by the wife as trustee for the husband, and for the wife to receive the proceeds of sale of that property with an additional order that the husband pay to the wife the sum of $800,000. Further orders will be made as to further disclosure and by way of limited period injunctions for the preservation of property. The wife’s application for costs is the subject of further directions.
DOCUMENTS RELIED UPON
The wife relied upon:
·Her Case Outline document filed 20 October 2023 being Exhibit 4;
·Her affidavit filed 28 February 2023;
·An affidavit of the husband filed 23 May 2023;
·An affidavit of Mr Moustafa Elzmeter, solicitor for the wife, filed 15 September 2023;
·Her financial statement filed 12 October 2023;
·The wife’s joint balance sheet filed 20 October 2023 being Exhibit 3; and
·The husband’s financial statement filed 2 May 2023.
THE HUSBAND’S FAILURE TO APPEAR AND TO COMPLY WITH DISCLOSURE OBLIGATIONS AND ORDERS
The wife’s solicitor’s affidavit evidence records, and I accept for the purposes of these reasons, that the husband has instructed FutureLegal Pty Ltd and Mr Kassem solicitor of that firm since June 2022.
The husband’s solicitors filed a Notice of Address for Service in this proceeding on 24 April 2023 and prepared the husband’s Response to the wife’s Application for Final Orders filed 22 May 2023, the husband’s affidavit filed 23 May 2023 and his Financial Statement filed 22 May 2023.
The husband solicitors, or counsel appearing on behalf of the husband, briefed by his solicitors, appeared at the interim hearing before a Senior Judicial Registrar on 23 May 2023 and at listings before a Judicial Registrar on 1 August 2023 and 19 September 2023. The Orders record the husband attending with his solicitor on the listing on 19 September 2023. The Orders made on that day include notations as follows:
C.The Respondent Husband has not complied with orders 1, 2, 4 and 5 made 1 August 2023 in relation to, among other things, the filing of a complete Financial Statement and an Undertaking as to Disclosure.
D.The Respondent Husband has not complied with order 3 made 23 May 2023 in relation to the filing of an Undertaking as to Disclosure.
…
F.The Court is informed that the valuation of the parties’ assets has been completed.
G.The Court is informed that [N Accountants] has been appointed as Single Expert to complete the valuation of the husband’s business interests and [R Accountants] has been appointed to complete the valuation of the wife’s business interests.
…
I.The Applicant’s interim application filed 28 February 2023 was originally listed for interim hearing before [a] Senior Judicial Registrar […] on 23 May 2023 on which occasion judgement was reserved. By way of correspondence received from the Applicant by the Court on 7 July 2023 and a balance sheet filed on the same date, the Applicant sought to be further heard on the interim issues due to what they alleged to be substantial change in circumstances following the receipt of various valuations. In the circumstances, the matter was listed for further hearing before [the] Senior Judicial Registrar […] on 16 August 2023. Due to non-compliance with the filing directions for interim hearing, orders were made on 15 August 2023 vacating the interim hearing.
Subsequent to the transfer to Division 1, Orders were made on 26 September 2023, including:
1.The Application in a Proceeding of the wife seeking orders as to disclosure, the sale of real property, interim property settlement and spouse maintenance filed 28 February 2023 and the husband’s Response to an Application in a Proceeding seeking that the net asset pool be divided “70% to the husband and 30% to wife” filed 25 May 2023 be listed for hearing in person at 10am on 23 October 2023.
2.That each party file and serve an updated financial statement by 6 October 2023.
3.For the purpose of the interlocutory hearing on 23 October 2023, neither party shall file any further affidavit evidence, save and accept as provided for by these orders or with leave of the Court.
4.The wife shall serve upon the husband by 12 October 2023 a joint draft balance sheet to include all assets, liabilities, superannuation interest and financial resources suggested to be relevant and to include values as she understands are alleged by each party.
5.The husband shall by 17 October 2023 make any additions to the balance sheet as required to reflect his contra allegations and any values that are agreed (if applicable).
6.Wheresoever controversy exists as to the inclusion of an item or the value of an item a footnote shall be appended to explain the controversy.
7.A final, settled version of the draft joint balance sheet shall be filed and served by the wife by no later than 19 October 2023.
8.On or before 19 October 2023, each party is to file and serve a Case Outline document in the approved form in respect of financial issues and shall include:
(a) a list of the material relied upon;
(b) a brief chronology listing significant events that are relevant to the issues to be determined by the Court;
(c) short submissions in support of the relief sought.
9.The Court puts the husband on notice as to the obligations as to disclosure as codified by Chapter 6 of the rules and to his failure to file pursuant to Order 3 made 23 May 2023 and as further ordered on 1 August 2023 an undertaking as to disclosure such that in the event his undertaking as to disclosure is not filed and served on or before 19 October 2023, consideration will be given to striking out his Response to Initiating Application filed 22 May 2023 and for the wife to proceed as against the husband on an undefended basis.
Orders were made on 19 October 2023 vacating the listing for hearing of the interlocutory dispute from 23 October 2023 and listing it for hearing at 2.15pm on 24 October 2023.
The wife’s solicitor’s affidavit records, and I accept and find for the purposes of this determination, that:
(a)The husband failed to comply with orders made by a Judicial Registrar on 4 April 2023 as to filing his response to an Application in Proceeding and specific orders for disclosure; and
(b)The husband’s disclosure from mid-2022 until the commencement of proceedings of both documents and information was haphazard, piecemeal, and tardy. The wife recorded these contentions seeking specified documents a letter from her solicitor dated 8 December 2022, to which the husband’s solicitors replied to the effect that the requested disclosure would be provided during early January 2023. It was not.
(c)Orders were made on 4 April 2023, 23 May 2023, and 1 August 2023 for the husband to file an undertaking as to disclosure pursuant to r 6.02 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”). He has not filed any such undertaking.
(d)The husband, post separation and during the proceedings, has caused corporations of which he is the sole shareholder and director to dispose of real properties. He has not disclosed documents as to those disposals or as to the use or application of the sale funds. These properties include:
(i)E Street, Suburb H sold in mid-2023 for over $3,000,000;
(ii)2 D Street, Suburb G sold in late 2023 for over $2,000,000; and
(iii)F Street, Suburb H in late 2023 for over $3,000,000.
(e)An unorthodox transaction was entered into between the husband and his current solicitor in this proceeding. In late 2022, while acting for the husband in this property dispute, the solicitor transferred his interest in K Street, Suburb L to J Pty Ltd (an entity of which the husband is the sole shareholder and director) for a consideration of either $1,960,000 or $1,800,000. The husband has not disclosed if any funds were paid to his solicitor, and if so, the source of those funds. The wife has a reasonable suspicion as to the financial relationship between the husband and his solicitor being of greater compass than one for the arm’s length provision of legal services alone.
A party to property proceedings is required to make full and frank disclosure of their financial position (see Oriolo and Oriolo (1985) FLC 91-653l; Weir and Weir (1993) FLC 92-338 (“Weir and Weir”)). That case law is reinforced in ch 6 of the Rules. The duty of disclosure is absolute and fundamental to achieving justice and equity. The fact that the obligation of disclosure exists as a duty to the court, as well as the other party, is significant.
In Weir and Weir, the Full Court stated at 79,593 that:
It seems to us that once it has been established that there has been a deliberate non‑disclosure, which follows from his Honour’s findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
I find that the husband has failed to comply with his positive obligation to disclose material facts, information, and documents to provide a comprehensive understanding of his relevant financial conduct. I need not be unduly cautious in making findings on topics related to those disclosure failures in favour of the wife.
I find that the husband failed or neglect to comply with the orders made on 26 September 2023 as to filing and serve an updated financial statement and a case outline document. Implicitly, he elected to ignore the notice contained in those orders as to his obligations as to disclosure and as to the possibility of the striking out his Response to an Initiating Application filed 22 May 2023 and for the wife to proceed on an undefended basis. The husband additionally failed to engage with the wife as ordered in the preparation of a joint balance sheet. That document prepared by the wife alone, noted as to the source of the value of each item, was filed on 20 October 2023 (Exhibit 3).
Cast against the husband’s failure to comply with his obligations as codified in ch 6 of the Rules and his failure to comply with orders of the Court, there was no appearance by or on his behalf when the matter was called three times outside the courtroom at 2.15pm on 24 October 2023. Two minutes prior to the hearing commencing, at 2.13pm, an email was received from the husband’s solicitor to chambers (Exhibit 1) recording:
Afternoon Associate,
I am deeply sorry about such a late email noting the proceedings being listed at 2:15pm. My wife and I had a rough night as it seems we have contracted a virus to which I have only been able to get up and write this quick email after making sure my client would be in attendance. I advised him of my illness early in the morning and that he would be there to advise the court.
In my call to my client, he advised me via phone that he had a medical emergency at his worksite with an employee taken by ambulance earlier and he is at the hospital. This is in addition to our Counsel being unavailable due to the change in date and this has left us in a very bad position.
I am very sorry about the current circumstances and I will provide to the Court an Affidavit confirming my illness once I am able to get to a doctor tonight. I understand my client will also provide evidence about the accident onsite.
I note this is very late and the best I can do is seek a short adjournment via email of a few days so that we can deal with this.
Kind regards,
Steve Kassem
(Emphasis added)
The solicitor for the wife who was present at court advised through counsel, and I accept, that there has been no contact between his firm and the husband’s solicitors since an email on 25 September 2023.
There is no explanation as to the husband’s failure to afford any courtesy to the wife, to her legal representatives, or to the Court. It is inappropriate to contact chambers unilaterally. Applications are not made by email.
The husband had an opportunity to instruct an agent or to have his solicitor brief alternate counsel to appear on 24 October 2023 to make an application for an adjournment or engage in the interim hearing. He had the opportunity to apply to appear electronically at the hearing as listed. This is not a case where the husband has not had the adequate opportunity to be heard and present his case (see Kioa v West (1985) 159 CLR at 582).
The wife prosecuted her interlocutory relief as contained in her Outline of Case document filed and served on the husband’s solicitors on 20 October 2023 on an undefended basis.
THE RELIEF AS SOUGHT BY THE WIFE
The terms of the relief as sought by the wife (Exhibit 2) was as follows:
1. The husband’s interest in [B Street, Suburb C] vest in the wife. To avoid doubt, the wife is authorised to sell the property and, after deduction of amounts secured by mortgage […] to the Commonwealth Bank of Australia, retain the proceeds by way of interim property settlement.
2.By 31 December 2023, the husband pay the wife $100,000, and by the last day of each month thereafter pay the wife a further $100,000, until the wife has received the difference between $4,000,000 and the net proceeds of sale of [B Street, Suburb C], by way of interim property settlement.
3. The husband pay the wife’s costs of the proceedings to 24 October 2023 on the indemnity basis.
4. By 27 October 2023, the husband file:
(a) an undertaking pursuant to rule 6.02 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), and (b) a costs notice pursuant to rule 12.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
5. By 3 November 2023:
(a) the husband disclose settlement and trust account statements for the sales of [1 D Street, Suburb G in early] 2023, [E Street, Suburb H in mid] 2023, [2 D Street, Suburb G in late] 2023 and [F Street, Suburb H in late] 2023, and (b) the husband’s solicitor provide an affidavit explaining his reasons for transferring [K Street, Suburb L] to [J Pty Ltd in late] 2022.
6.By 10 November 2023, the husband answer the requests for information in the letter from [Mr M] of [N Accountants] dated 12 July 2023, so far as they concern [P Pty Ltd] or [Q Pty Ltd].
7.Until the husband has complied with orders 2, 3, 4, 5 and 6, the husband must not without the wife’s prior written consent:
(a) register any dealing in relation to any real property of which the husband, or a company of which the husband is a director, is the registered proprietor,
(b)effect any change to the officeholders or members of any company of which the husband is a director, or
(c) pay any amount to Ammar Steve (Steve) Kassem or FutureLegal Pty Ltd.
(Emphasis added)
The relief reflected in not dissimilar terms as that sought by the wife in her Outline of Case Document filed 17 May 2023 (Exhibit 4). I am satisfied that the husband has notice of the relief of the wife as sought.
The gravamen of her relief for orders as to the Suburb C property (currently vacant save for a granny flat which is tenanted) jointly held by the parties was for she to be able to affect a sale of the property absent interference or hinderance by the husband and for her to receive the proceeds of sale. This relief, at least as to the fact of the sale of the property, was, on the wife’s case:
(a)Not opposed by the husband as at 16 December 2022 when an email was sent from his solicitors to the wife’s solicitors, stating: “We do not have final instructions, we do not see any issue with the sale of the [B Street] property early next year”; and
(b)Canvassed during the course of the hearing before the Senior Judicial Registrar on 23 May 2023.
BACKGROUND AND FINDINGS
The wife was born in 1977 in Australia and is currently 46 years old. The husband was born in 1976 in Country S and is currently 47 years old.
The parties met in 2009 and married commencing cohabitation in 1999. At the time of marriage, the husband was on a student visa and was not yet an Australian citizen. The wife and her mother sponsored the husband’s application to migrate to Australia from Country S by way of a spouse visa. The wife paid the solicitor and Department of Immigration fees for the application.
The parties have three daughters and one son:
·Ms W, born 2002 and is now 21 years old;
·Ms X, born 2005 and is now 18 years old;
·Y, born 2007 and is now 16 years old; and
·Z, born 2009 and is now 14 years old.
At the time of marriage, the wife was working as a public servant. Shortly after getting married, the husband achieved casual employment.
The husband contributed a smashed uninsured car. The wife contributed $50,000 in savings and a car. The wife applied her savings to purchase a car for the husband for approximately $4,000 – $5,000 and pay out his $10,000 credit card debt.
In 2000 the parties purchased their first home at T Street, Suburb U (“the Suburb U property”), funded by way of a mortgage and modest savings. They rented the house out and lived in the granny flat at the rear until about 2001.
In 2001, the husband obtained a trade licence. The parties decided to open their own business, incorporating P Pty Ltd. The wife supported the husband in opening the business and carried out all the paperwork, forms, invoices and sending of emails. The financial statements for P Pty Ltd for the year ended 30 June 2021 records a profit of $1,180,997.
In 2001 the parties sold the Suburb U property for a profit and purchased a property at V Street, Suburb AA (“the Suburb AA property”).
In 2006 they sold the Suburb AA property and purchased the property at the Suburb C property using the proceeds of sale of the Suburb AA property and obtaining a mortgage.
The parties thereafter used their income from P Pty Ltd and equity in the B Street property to commence to buy other real properties and develop them.
The wife left employment in the public service in 2009 due to institutional changes, and at the request of the husband.
The parties moved to Country S in 2013 for approximately two years and acquired real property in Country S.
The husband caused Galip Investments Pty Ltd to acquire BB Street, Suburb CC (“the BB Street property”), borrowing the funds to acquire the property secured against the Suburb C property. The parties caused the BB Street property to be reconstructed and lived there.
The wife, as between the parties, was the primary homemaker and parent during the marriage. The wife gives evidence as to the husband occasioning significant family violence for much of the period of the marriage making her contributions more onerous than they ought to have been. I make no finding on this subject matter.
The parties separated in 2019. The wife moved out of the BB Street home on 11 May 2022. Since that time, the children Z and Ms W have lived with the wife in a rental property. The children Ms X and Y have lived with the husband in the BB Street property. The husband has controlled and had the benefit of the lion’s share of the property of the parties, including retaining the proceeds of sale of the real properties sold post separation as recorded earlier in these reasons.
An order for divorce was made in 2023.
THE LAW
The balance sheet – identifying the property of the parties
Notwithstanding the husband’s disclosure failures and failures to comply with orders, the wife caused a balance sheet (Exhibit 3) to be constructed sourced from single expert valuations of real property, the husband’s financial statement and affidavit, and some limited documents disclosed by the husband. Broadly, the evidence promotes a finding as to the property of the parties from that document to be:
(a)The jointly held Suburb C property valued at $3,000,000 less the mortgage of $831,149 totalling $2,168,851 net;
(b)The husband’s property portfolio by way of one real property in his own name and 18 by way of corporations valued at $38,630,000, less the mortgages secured against those properties totalling $28,254,851, equating to a net $10,375,149;
(c)The husband’s liabilities consisting of six unsecured loans totalling $3,706,721;
(d)The husband’s other assets including a motor vehicle, P Pty Ltd, Q Pty Ltd, assets in Country S, household contents, parcels of land in Perth and superannuation, equating to $3,160,935; and
(e)Wife’s other assets made up of property in Country S, a 50 per cent share in DD Pty Ltd, liquid funds and superannuation, equating to $411,194
The wife conservatively contended that the net value of the property of the parties available for adjustment is $12,409,407. That value is not dissimilar to what the husband says is the value of the property of the parties without taking into account “his personal liabilities”. The husband’s financial statement indicated that it would attach a document specifying or particularising those liabilities. No such attachments formed part of the document. The wife contends that many of the contented personal loan liabilities of the husband are shams.
Is it just and equitable to adjust property?
The High Court in Stanford & Stanford (2012) 247 CLR 108 observed that it is necessary for the Court to be satisfied that justice and equity will be achieved as part of the adjustment process to be undertaken pursuant to s 79 of the Act. The requirements identified by the High Court are readily satisfied in this matter having regard to the long marriage of the parties, their relationship having broken down and them now living apart, the contributions identified in these reasons and by way of the fact that both parties have invoked s 79 seeking final and interim orders for property settlement which they agree are necessary.
The Full Court in Strahan & Strahan (2011) FLC 93-466 (“Strahan”) identified the principles effectible to interim or partial property orders and set out the steps in determining whether to make an interim property distribution.
Subject to the interests of justice, the usual approach in respect of s 79 adjustment is a final order. The overarching consideration as to the appropriateness of the exercise of an interim property power must be answered in the affirmative in the interests of justice. As was explained by the Full Court, s 80(1)(h) is a wide enabling provision for interim property decisions. All that is required before the power to make an interim property order is exercised is a reason or reasons as to why it is appropriate that the order be made.
In all the circumstances of the evidence before the court, the substantive claim by the wife to 50 per cent of the property of the parties could not be said to be unreasonable or ambit, and on one view is conservative having regard to the husband’s disclosure failures. The husband concedes the wife ought to receive an adjustment of 30 per cent of the property of the parties.
The wife concedes in her outline of case filed 17 May 2023 that an interim property settlement is not immediately necessary to enable her to continue the litigation, but that a likelihood exists that she will be unable to fund the litigation in the future, especially if the husband’s disclosure failures continue. Implicitly, she has been required to expend more of her resources than ought to be necessary to ascertain the husband’s financial circumstances where he has the province of relevant documents and information on that subject matter. In the wife’s outline of case filed 17 May 2023, she submits that her available cash funds since separation have been reduced to approximately $50,000 from $250,000 being available before the commencement of these proceedings.
She additionally illustrated the current financial imbalance between the parties. The husband is in control of the lion’s share of the property of the parties. The wife submits that the husband is responsible for at least 10 real property development projects, with gross assets of some $35 million, according to his own estimate. As of 30 June 2021, his taxable income was $135,057, and the total amount available for appropriation from P Pty Ltd, of which he is the sole shareholder, was $2,246,270. She states that he also enjoys the use of a vehicle which valued at $100,000. By comparison, as of 30 June 2021, her taxable income was $78,635 and her business enterprise made a loss.
The wife is currently residing in rental accommodation which she describes as having “limited space”, whilst the husband resides in the former matrimonial home. On inquiry by way of oral submissions as to why a $4,000,000 lump sum payment was sought by the wife, her counsel submitted that the matrimonial home in which the husband resides is valued in the range of $2,650,000 by the single expert, and that she should be able to purchase a real property of a similar value to provide accommodation for their children so as to achieve some notion of a “level playing field” by way of residential accommodation to that as enjoyed by the husband.
I accept the wife’s evidence that she will utilise any funds she receives by way of interim property adjustment to purchase a real property and so find.
I find that all of these factors militate principled reasons establishing that it is in the interests of justice to exercise an interim property power and hence that the wife has established that it is in the interests of justice to exercise that power at this time. This finding is supported by the husband’s interim relief that the wife ought to receive 30 per cent of “net asset pool” and is further support by the fact and magnitude of the husband’s disclosure failures.
Upon broad considerations of the matters identified earlier in these reasons of integer s 79 factors, I find that the wife has established the matters set out in the second limb identified by the Full Court in Strahan.
An order will be made appointing the wife as the husband’s trustee for sale of the Suburb C property. Any taxation impost incurred that will crystalize on the disposal will be a liability of the parties. The evidence as to the husband disclosure failures and failures to comply with orders much like they are suggestions only require other ancillary orders to be made to facilitate that sale process absent possible interference of the husband. If the property is sold for the value opined by the single expert at $2,650,000 (value less mortgage), after payment of the mortgage of $831,149, the wife will achieve in the range of $1,818,851.
A further order will be made for the husband to pay to the wife within three months the sum of $800,000.
By way of aggregate, the wife will achieve an interim property adjustment in the range of $2,720,000, being not dissimilar in value to the value of the real property occupied and enjoyed by the husband.
The making of the order in these terms, in the context and circumstances of this case, cannot be said to be incapable of being reversed or adjusted if it is subsequently considered necessary to do so. The interim payment will be capable of being recovered from a sale of the wife’s home when acquired if considered necessary at some point in the future.
Having regard to the husband’s disclosure failures, I find that it is not necessary for the wife to identify with precision how the husband is to fund the additional payment to her of $800,000. In all the circumstances, it is a matter for the husband as to how that funding is to be arranged. If he fails to comply with such order, the wife has a range of enforcement process available to her by way of the rules and other Commonwealth legislation.
The injunctive orders sought
The principles applicable to determine an application for orders for injunctions of the nature as sought by the wife are well known. The wife must establish both an arguable case with sufficient likelihood of success to justify the preservation of the status quo, and that the balance of convenience favours the grant of the injunction, in that there is a danger or risk of dissipation of, or dealings with assets which will frustrate any judgement in her favour (see Tsiang & Wu and Ors (2019) FLC 93-911).
The merits of the wife substantive case is established earlier in these reasons. I find that the wife has established, arising from the husband’s disclosure failures, a reasonable objective apprehension that the husband is causing property in his possession or control to be disposed of to defeat the judgment she seeks as to the adjustment of property in these proceedings. I find that injunctive relief is necessary to preserve the status quo and the subject matter of the litigation as there is a risk of dissipation of property interests. The wife seeks injunctive orders for a limited period, being until the husband complies with any interim property order and other relief sought.
Some modification is required to the orders sought by the wife. As a starting point, she is required to file her undertaking as to damages within the prescribed form within 48 hours of these orders, consistent with her counsel’s concession and any injunctive orders will be grounded from compliance with such direction.
The first injunctive order sought by the wife, if made, would prevent the husband from potentially engaging in the enterprise of the development of real property or obtaining funds to complete those developmental processes. The evidence records that the husband is the sole shareholder and director of the corporations holding real property identified earlier in these reasons, forming the pool of property of the parties. Further, it may prevent the husband from raising funds meet payment of the interim property order. To avoid any potential prejudice, the injunctive order sought by the wife will be varied to facilitate the husband complying with the order for him to pay her $800,000.
It is open to the husband to apply by filing an application pursuant to the Rules to vary or discharge any injunctive order. He is on notice that should he seek such discharge or variation he ought to have complied with his disclosure obligations.
The second injunctive order as sought by the wife will be made, again to promote the preservation of the property of the parties for a limited period. No apparent prejudice exists should such an order be made.
The third injunctive order as sought by the wife will be modified so as to permit the husband to pay his lawyer any professional costs for the provision of legal services.
More orders as to disclosure
The wife sought orders that the husband file an undertaking as to disclosure pursuant to r 6.02 of the Rules, and a costs notice pursuant to r 12.06 of the Rules.
In circumstances where the husband has repeatedly failed to comply with orders of the court to file such documents, the making of the same order again is an exercise in futility. This relief will be refused.
The wife sought further orders as to specified disclosure. It is appropriate in the circumstances as recorded earlier in those reasons to make those orders by modified by me. There is no current warrant for the husband’s solicitor himself to provide an affidavit. It may be inevitable as to him receiving a subpoena to produce documents or being a witness in the proceeding.
Costs
Directions will be made as to the filing of evidence and submissions as to costs with a capacity to the husband to engage in that determination that will be reserved to chambers.
I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 27 October 2023
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