Gaudi and Knowles

[2007] FamCA 1300

FAMILY COURT OF AUSTRALIA

GAUDI & KNOWLES [2007] FamCA 1300

FAMILY LAW – PRACTICE AND PROCEDURE – Barro order

Family Law Act 1975 (Cth)

APPLICANT: Mr Gaudi

RESPONDENT: Ms Knowles

FILE NUMBER: MLF 3755 of 2005

DATE DELIVERED: 17 October 2007

PLACE DELIVERED: Melbourne

JUDGMENT OF: Brown J

HEARING DATE: 17 October 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms H. Dellidis

SOLICITOR FOR THE APPLICANT: Graeme Freeman

COUNSEL FOR THE RESPONDENT: Mr N.A. James

SOLICITOR FOR THE RESPONDENT: Pearsons

Orders

1. That from the funds standing in trust for the parties in the account of the solicitors for the wife, the sum of $10,000 be disbursed to each of the parties, those sums to be characterised as the trial judge determines, and the sum due to the husband be held in trust by his solicitor and, until further order, be disbursed by him only in payment of fees of counsel retained by the solicitor to represent the husband at the trial of the outstanding applications. 

2. That the form 2 filed by the husband on 11 October, 2007 and the form 2A filed by the wife on 15 October, 2007 be otherwise dismissed. 

3. That all costs of this day be reserved.

4. That the reasons for judgment this day be transcribed and that copies be made available to the parties.

5. That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel.

IT IS NOTED that publication of this judgment under the pseudonym Gaudi & Knowles is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLF 3755 of 2005

MR GAUDI

Husband

And

MS KNOWLES  

Wife

REASONS FOR JUDGMENT

1. Before the court is an application brought by the husband for the release to each party of $10,000 from a sum currently held in trust, being the proceeds of the sale of real property.  The parties have been involved in litigation about relation to children, property and spousal maintenance for some time and, more recently, child support.  Final parenting orders were made by consent, on 20 September, 2007; the balance of the claims remain to be determined.

2. It is clear from a swift reading of material filed for a trial (which is listed to commence next week) that there is a deal of animosity and much contested ground, and each alleges the other is in a significantly better financial position than admitted.  While they separated quite some time ago, there is still significant unhappiness and tension between them.  Facts in issue will be determined at trial.

3. By agreement in July 2007, $10,000 was provided to each of the parties, taken from funds held in trust, being proceeds of sale of real property in S.  The sum of $397,000 remains in the trust account.  As in most cases of this sort, it is almost impossible, in an interim list such as this, to make a realistic assessment of the parties’ assets, as there is significant dispute about them.  Here, the difficulty is exacerbated by apparent inconsistencies within a party's own case.  I refer to only two of those.

4. Counsel for the husband prepared a list of the assets, as can aide-memoire; it shows an equity of some $90,000 in a real property at M, on which are units.  In an affidavit sworn by the husband's solicitor, and relied on in these proceedings, he deposes to a belief that the equity in that property is around $70,000. 

5. In the wife's material filed in support of her response to the husband’s application, the wife deposes that the husband took some $60,000 in cash at or soon after separation.  In her trial affidavit, she deposes to that being a considerably higher amount, of $85,000 to $100,000.

6. Further, the court has to be cautious about including assessments of the value of assets such as cars and horses and motorbikes, which can be hard to value in a realistic sense, and which may not achieve a price commensurate with an estimate if sold.

7. The significant assets of the parties are the proceeds of sale of the S property, now standing at $397,000 and whatever equity is in the M property.  On 9 June 2006, Kay J. made an order for the sale of the M property.  The order provided for the immediate sale of all the units on such terms and conditions as the parties agreed and gave liberty to apply for further directions relating to the sale.  That the parties were not able to agree is apparent from a later order of Mushin J., of 18 September 2006, when he ordered, “in order to give greater certainty” to paragraph 3 of Kay J's orders, that the sale price of the property was to be agreed between the husband and wife within seven days, and failing agreement, to be arbitrated by the president at the time being of the Real Estate Institute of Victoria or his or her nominee.

8. Notwithstanding that assistance, the property was not sold.  The husband deposes in his trial material to valiant efforts to sell the property, frustrated by the behaviour of the wife.  The wife deposes to her conviction that the husband has frustrated the sale, illustrated by the fact that he took up occupation of one of the units himself after the parenting orders were made.

9. There is then a dispute as to whether a sum of $150,000 is due to the husband's mother, pursuant to a second mortgage registered in 1991.  The husband's evidence is that this related to the transfer to him of a business.  The husband’s mother has been joined as a respondent by the wife.  She has advised the court that she has nothing to say about the application before the court today and she is not a party to it.  However, she apparently supports her son on the mortgage issue.  The wife’s position is that the sum secured should not be considered a matrimonial debt.  The mortgage is to the ANZ Bank so, fortunately for whoever hears the trial, the balance outstanding should be able to be ascertained with some certainty.

10. There is an application brought by the wife for capitalised spousal maintenance.  There is an existing spousal maintenance order.  The parties have different views about that.  The wife has deposed that the husband has refused to pay the maintenance.  His counsel asserted that an agreement was reached between the parties that it would not be paid, having regard to an error in the evidence before the judicial officer who made the order, the error allegedly relating to the weekly payments to ANZ under the mortgage over the M property.

11. The wife opposes the making of the orders sought by the husband, perhaps on two grounds, although the second may be consequential on the first.  First, she is concerned that there will not be a sufficient sum left in the trust account to meet her entitlements for property, spousal maintenance and child support, if she is successful in her applications. 

12. On her behalf it is submitted that she will struggle to receive cash from the M property to make up her entitlement and, at best, receipt of funds from that source would be delayed, because the property still has not been sold, and there will be a significant delay before the net proceeds can be quantified.  Thus, she is concerned about her access to such funds as she was awarded, and the adequacy of the pool. 

13. Second, or perhaps as a subset of her major argument, it is submitted that she has had to arrange for her solicitors to carry her fees and there is no reason the husband should not be put in a similar position.

14. I note that Landers & Rogers went off the record for the husband on 18 June, and his current solicitors subsequently filed a notice of address for service.  He has been unrepresented at times.  I cannot say why Landers & Rogers went off the record but it is clear he engaged his current solicitors only very recently.

15. Balancing all matters, and taking into account the wife's claim for sums to be notionally added back into the pool, it is difficult to envisage a result which will not give the husband an entitlement in excess of $10,000.  It is in the interests of both parties to get this litigation heard and orders can ensure that the funds are not available for any purpose other than that for which they are allegedly sought.  I do propose to order that each of the parties receive $10,000 from the sums held in trust.  Those sums can be characterised as the trial judge sees fit.  One can imagine that the husband's $10,000 could be characterised as property and the wife's $10,000 characterised as spousal maintenance but it would be premature for me to make a finding now.

16. The form 2 and form 2A will be otherwise dismissed and the reasons for judgment transcribed.  I will reserve costs.

I certify that the preceding 16 paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Brown AM.

Associate

17 October 2007