Gallato and Cellini and Anor (No 2)

[2016] FamCA 311

FAMILY COURT OF AUSTRALIA

GALLATO & CELLINI AND ANOR (NO 2) [2016] FamCA 311

FAMILY LAW – Injunctions and variations of extant orders to enable father to get his property.

Family Law Act 1975 (Cth)

APPLICANT: Ms Gallato

RESPONDENT: Mr Cellini

INTERVENOR: B Pty Ltd

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 11073 of 2015

DATE DELIVERED: 6 April 2016

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 6 April 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Parker

SOLICITOR FOR THE APPLICANT: Lander & Rogers

COUNSEL FOR THE RESPONDENT: Mr Cummings

SOLICITOR FOR THE RESPONDENT: Lennon Mazzeo

COUNSEL FOR THE 2^ND RESPONDENT

SOLICITORS FOR THE 2^ND RESPONDENT

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER

SOLICITORS FOR THE INDEPENDENT CHILDREN’S LAWYER

Dr Ingleby

Gadens Lawyers

Ms Boymal

Victoria Legal Aid

Orders

1. That paragraph 12(a) of the applicant’s amended application is dismissed.

2. That paragraph 13 of the applicant’s amended application is dismissed.

3. That the applicant do all things necessary to remove caveat … over the title to the property at G Street, Suburb H at her expense.

4. That the 2^nd respondent B Pty Ltd be at liberty to place G Street on the market for sale to be sold by public auction at the earliest possible date and the proceeds of sale be applied to discharge the mortgage to the National Australia Bank secured against G Street after the payment of all agents’ commission, advertising expenses and legal costs and disbursements associated with the sale.

5. That the applicant mother vacate the property at G Street, Suburb H and provide the 2^nd named respondent B Pty Ltd with vacant possession thereafter.

6. That in the event that the applicant mother refuses or neglects to execute the necessary documents to give effect to the sale of the property under these orders, a registrar is appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such document in the name of the applicant and to do all things necessary to give validity and operation to those documents upon the registrar being provided with verification of such refusal or failure by the mother by way of affidavit.

7. That the costs of all parties this day are reserved.

8. That the outstanding applications for final orders are otherwise adjourned to a date to be fixed for allocation to a judge for final hearing.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Gallato & Cellini and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11073 of 2015

Ms Gallato

Applicant

And

Mr Cellini

Respondent

REASONS FOR JUDGMENT

1. By a response filed 30 March 2016, B Pty Ltd (“the company”) seeks orders that a house property at G Street, Suburb H be sold.  The company is the registered proprietor of G Street and proposed consequential orders that included the sale proceeds being used to discharge the company’s obligations to the mortgagee, which in this case is the National Australia Bank.  The company has two directors who are the parents of the respondent father in the substantive proceedings.  The supports the proposed orders.  The applicant in the substantive parenting and property proceedings is Ms Gallato, to whom I shall refer as (“the mother”).  The respondent father is Mr Cellini.

2. This case has been before the Court since late 2015 when it seems that parenting proceedings were heard by the senior registrar, who changed the residence of the children to the respondent father.  The mother suffers from a mental illness.  In the judicial duty list on 5 April 2016 Mr Cummings, the solicitor for the mother, indicated that he could not obtain instructions and that his client needed a case guardian.  That was the purpose of his attendance and he brought with him an application in a case seeking the appointment of Mr Timothy Mulvany as that case guardian.  All other parties to the proceedings consented to the order for the appointment and consented to the order specifically naming Mr Mulvany.

3. An independent children’s lawyer had been previously appointed in this case and counsel appeared to indicate that no orders were sought at this time.  Mr Cummings acknowledged that although the mother had been in a psychiatric facility since the last hearing, she had now been discharged and has returned to the home at G Street.  Although he had no other instructions and could not realistically obtain them from the mother because of her disability, Mr Cummings opposed the company’s application on grounds that included that there was no urgency, the mortgagee was not pressing and that if the sale of the home went ahead the mother would have nowhere to live.  His application was to adjourn the proceedings.

4. That was opposed by the company and by the respondent father.  The power to make such an order was not disputed and it is contained in section 114(2A) of the Act.  An overview of this matter indicates the problem.  The mother and father lived together in a de facto relationship.  There would appear to be no jurisdictional issues to exclude the Court’s exercise of power to alter property interests.  The de facto relationship has come to an end and the application was filed within time.  The mother did not plead, in her application, property alteration orders with any particularity, nor did she set out the nature of the power to be exercised or what specific orders she was seeking in relation to G Street.

5. In her affidavit, which sought various relief, she said she believed that G Street was hers and the respondent father’s.  She said the father had always talked about “our house”.  An examination of her assertions in the affidavit did not engender much confidence that there was a legal basis to say that the house belonged to the mother and the father.  At a registrar’s hearing earlier in 2016, the mother was ordered to file a statement of claim to show what orders and why she was seeking relief against the company.  She did not do that, notwithstanding she had and has lawyers acting for her on the Court record.  The directors of the company say the house was purchased for $2.3 million and they explained where that money came from.

6. All of it is asserted to have been borrowed.  The principal mortgagee is National Australia Bank and they have written a polite letter asking for their money and suggesting an ordered sale would be appropriate.  The directors of the company are both in their 70s and are committed to paying over $9000 per calendar month by way of mortgage payments.  They say they cannot continue that obligation.  Mr Cummings pointed to the fact that the father lodged a caveat on title as an indication that he had an interest in the property.  The inference he would have the Court draw is that all of this was a façade.  Having said that, the father attended the purchase, which was by auction, and using the nominee provisions allowed the contract, signed as purchaser and lodged a caveat based upon the contract.

7. The timing of that signature, the caveat and the sale all suggest that the submission by the solicitor for the father is correct, that this was simply a holding position.  The mother did not dispute that the title is registered to the company.  The evidence of some equitable claim by the mother is not strong.  The indication that a claim was forthcoming has not eventuated.  The company wishes to sell and there is no evidence from the mother that would support a constructive trust giving the mother and the father any equitable interest.  Indeed, the father, by affidavit, denied that he had any interest.  The mother’s relief was to seek that G Street be transferred to she and to the father, but he explicitly denies any interest.

8. The interest claimed by the mother is therefore unclear and if the affidavit previously filed, and it would seem that it would be difficult for her to depart from those sworn concepts, is relied upon, there is no claim against the company.  There is no indication of how the father is said to be the beneficiary of any trust.  It is also said that absent discovery, the mother does not know how the money flowed to the acquisition of G Street, but even so there would appear to be no equity there anyway.  Worse still, it is asserted by the company, and not denied by the mother, that the bank is owed over $5 million.  A sale therefore will not net anything for division.

9. It is not suggested how the mother could retain the property even if it were part of the divisible assets of the mother and the father.  In respect of the mother’s concern about where she will live, the father’s affidavit said that he would provide her with alternative accommodation.  That statement was reiterated by Mr Parker, the solicitor on behalf of the father, in the court room.  That statement came about because the company seeks vacant possession in seven days, but to order that in circumstances where the father had not put in place the necessary alternative would not be fair to the mother.  In the circumstances, it is proper to exercise the power and order a sale.

10. The mother has not shown to my satisfaction that the company is not the beneficial owner of G Street.  She has not shown to my satisfaction that she has interest, such that it would be unjust and inequitable to remove her immediately in anticipation that she will receive that property on an alternation of interest in property by an order.  Accordingly, the order for sale should follow.  In respect of the case guardian issue, the parties have agreed on the appointment being necessary and Mr Mulvany should be the appointee.  That is still a matter for the Court, but also to confirm that he has the right to charge professional fees for his task because he is a lawyer.

11. That is so because the mother will have no say in the decision making about how the litigation is conducted.  Having regard to the conditions imposed by Mr Mulvany, which the solicitors for the mother have accepted, I consider that it is an appropriate exercise of chapter 6 of the rules of the Court.  There are no other extant issues, save the one that I will now address so the matter can be adjourned to await the allocation of a judge for determination at trial.  That other issue is that the Court previously ordered that the father have access to the property to retrieve his personal property.  That order should be replicated because it did not occur, apparently as a result of the mother’s hospitalisation.

12. I indicated to the practitioners that I would not be prepared to make any costs orders because of the unusual circumstances that the solicitor for the mother was in, so they should simply be reserved.  I certify otherwise that it was appropriate for counsel to attend.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 6 April 2016.

Associate: 

Date:  5 May 2016