Gillies & Crandall
[2021] FamCA 504
•13 July 2021
FAMILY COURT OF AUSTRALIA
Gillies & Crandall [2021] FamCA 504
File number(s): SYC 3159 of 2021 Judgment of: REES J Date of judgment: 13 July 2021 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Application to enforce a section 90UC financial agreement – Opposed by the respondent – Where the Court found the provisions of section 90UF do not change the terms of the agreement – Where the Court found the applicant gave valid notice of intention to purchase the property but that it could not be enforced until the agreement became effective on the making of the separation declaration. Legislation: Family Law Act 1975 (Cth) ss 90UC, 90UF, 90UN(c) Cases cited: Tranh & Long (No. 2) [2008] FamCAFC 194 Number of paragraphs: 37 Date of hearing: 12 July 2021 Place: Sydney Counsel for the Applicant: Mr Campton SC Solicitor for the Applicant: Dimocks Family Lawyers Counsel for the Respondent: Mr Dura Solicitor for the Respondent: Eleanor Murphy & Company ORDERS
SYC 3159 of 2021 BETWEEN: MR GILLIES
Applicant
AND: MR CRANDALL
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
13 JULY 2021
THE COURT ORDERS:
1.That orders be made pursuant to section 90UN(c) of the Family Law Act 1975 (Cth) (“the Act”) that the Financial Agreement dated 24 June 2019 between Mr Gillies (“the applicant”) and Mr Crandall (“the respondent”) be enforced as if it were an order of the Court.
2.That it be declared that, for the purpose of these orders, the value of the B Town property is $725,000.
3.That within seven days of the date of making this order:
(a)The applicant shall pay to the respondent, or as he may otherwise direct, the sum of $136,763.80; and
(b)Both parties shall do all acts and things and sign all such documents as may be necessary to procure the discharge in registerable form of the mortgage with Westpac Banking Corporation that is secured on the title of the property known as and situate at C Street, B Town in the State of New South Wales, being the whole of the land comprised in Folio Identifier ... (“the B Town property”).
4.That within seven days of the date of making this order, the respondent pay to the applicant one-half of the net rental income received by the respondent, during the period from 30 April 2021 to the date of making this order.
5.That simultaneously with the applicant complying with his obligations pursuant to order 3 above, the respondent shall do all such acts and things and sign all such documents as may be necessary to transfer into the sole name of the applicant the whole of his right, title and interest in and to the B Town property.
6.That pursuant to section 106A of the Act, in the event that the respondent refuses or neglects to execute any document in order to give effect to the above orders within 48 (forty-eight) hours of being provided with such document to sign, the Court appoint the applicant to sign such document in his place and authorise to give validity and operation to such document.
7.That until such time as the application of the respondent contained in his Amended Initiating Application filed 8 July 2021 has been heard and determined, or as otherwise agreed in writing, the applicant is restrained from encumbering, dealing with or disposing of the property at C Street, B Town being the land in Folio Identifier ..., other than in accordance with these orders or in accordance with Clause 12 of the Part VIIIAB Financial Agreement entered into by the parties on 24 June 2019.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Gillies & Crandall has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Rees J:
Mr Gillies (“the applicant”) and Mr Crandall (“the respondent”) entered into a Financial Agreement (“the agreement”) pursuant to the provisions of s 90UC of the Family Law Act 1975 (Cth), (“the Act”) on 24 June 2019.
The applicant seeks to enforce that agreement. The respondent seeks to set it aside. The only basis to set aside the agreement upon which the respondent relies is that he was placed under undue pressure to execute the agreement.
Clause 12 of the agreement sets out the agreement of the parties in the event of their separation, in relation to a property they purchased at C Street, B Town. It is common ground that, although the B Town property was registered in the sole name of the respondent, both parties contributed equally to the purchase money and to the outgoings on the property while they were together.
Clause 12.4 provides:
In the event [the applicant] or [the respondent] wishes to buy out the other’s interest in B Town then whoever wishes to retain B Town shall provide notice in writing to the other within two months of the date of the parties’ separation that he wishes to acquire the other’s interest in B Town…
The agreement then sets out the provisions for the transfer of the interest in terms which are not controversial and include refinancing the existing mortgage and paying a sum of money to the other party.
The parties separated on 3 December 2020. Thereafter, the respondent denied the applicant any access to B Town, instructed the managing agent not to communicate with him and retained all the income from the rental.
On the same day, the applicant notified the respondent that he wished to purchase the respondent’s interest in B Town.
From separation until about 3 March 2021, the respondent did not make the mortgage repayments.
On 19 May 2021, the applicant filed an application to enforce the agreement.
On 8 July 2021, the respondent filed an Amended Initiating Application seeking relevantly, that the agreement be set aside.
The matter was listed before me to determine the application to enforce.
The applicant is ready and willing to tender the agreement sum to purchase the respondent’s interest in B Town and to refinance the current mortgage as provided in the agreement. He can do so within seven days. The applicant proposes that he be restrained from otherwise encumbering or disposing of the property until such time as the respondent’s application to set aside the agreement has been determined.
The respondent’s position is that the application to enforce the agreement should not be determined until after the application to set it aside has been determined.
Further, the respondent submits that the applicant’s notice of his intention to purchase the respondent’s interest in B Town is invalid because that notice was given before the Separation Declaration was made.
SHOULD THE ENFORECEMENT APPLICATOIN BE STAYED?
Although the respondent has not formally sought a stay of the enforcement application, that is the effect of his position.
I propose to consider the application, in effect to stay, in accordance with the well understood principles set out in Tranh & Long (No 2) [2008] FamCAFC 194 in the following terms:
•the onus to establish a proper basis for the stay is on the applicant for the stay however it is not necessary for the applicant to demonstrate “special” or “exceptional” circumstances;
•a person who has obtained a judgment is entitled to the benefit of that judgment;
•the person who has obtained a judgment is entitled to presume the judgment is correct;
•the mere filing of an appeal is insufficient to ground a stay;
•the bona fides of the applicant;
•a stay may be granted on terms that are fair to all parties – this may involve a court weighing the balance of convenience and the competing rights of the parties;
•a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor in determining whether it will be appropriate to grant the stay;
•some preliminary assessment of the strength of the proposed appeal - whether the appellant has an arguable case;
•the desirability of limiting the frequency of any change in a child’s living arrangements;
•the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of a stay for a short period of time; and
•the best interests of the child the subject of the proceedings.
The stay is not ordered as a matter of right and the onus is upon the respondent to establish the proper basis.
The agreement is, prima facie, binding and the applicant is entitled to rely on its provisions. There is no challenge to the agreement’s compliance with the requirements of the legislation as to its preparation and its execution.
The applicant’s proposal that he be restrained from dealing with or encumbering the property has the effect that the respondent’s substantive application, to set aside the agreement, is not rendered nugatory. The subject property will be preserved.
The respondent has not established that he will be unduly inconvenienced if the applicant acquires the property. Indeed, the respondent’s initial reaction to the applicant’s proposal was that the applicant should “buy me out at a time that suits my needs”.
On behalf of the respondent it was submitted that he would be inconvenienced by having to relocate his conveyancing business from B Town but the respondent gave no evidence of what would be required to relocate the business. Since the respondent deposed in his Financial Statement that his income from the business is $411 per week, I infer that he does not deal with a large number of clients at any one time.
Consideration of the respondent’s Financial Statement reveals that he would, in fact, be financially advantaged if the applicant acquires B Town. The respondent currently receives $350 per week in rent for B Town and pays $450 per week in mortgage payments and $67 per week in rates. Thus he would be $167 per week better off if he were no longer responsible for the outgoings on B Town.
The respondent currently makes no proposal to buy out the applicant’s interest in B Town although he has done so in the past, notably on 5 May 2021. However, in his affidavit sworn 2 July 2021, the respondent concedes that he would be unlikely to be able to raise the money required to buy out the applicant’s interest or to refinance the mortgage.
Thus the respondent’s position is no more than that the applicant should be kept out of his interest in the property without compensation.
I am unable to say when the substantive application to set aside the agreement would be dealt with but, since it was filed very recently, it could confidently be expected that it will not be allocated to a judge’s docket for at least a year.
On a preliminary view, the respondent’s case to set aside the agreement has its difficulties. There is no dispute that the parties, who were living together in a de facto relationship since late 2015, conducted the negotiations which ultimately led to the execution of the agreement between July 2018 and June 2019 and that, throughout the whole of the negotiations, the respondent was independently represented.
Taking all of those matters into account, the balance favours the course of action proposed by the applicant.
In so far as the applicant seeks an accounting of the rent received by the respondent, that accounting could, because of the provisions of s 90UF of the Act, date only from the date of the separation declaration.
IS THE APPLICANT’S NOTICE INVALID?
The respondent relies on the provisions of s 90UF of the Act which state:
90UFNeed for separation declaration for certain provisions of financial agreement to take effect
(1)A Part VIIIAB financial agreement that is binding on the parties to the agreement, to the extent to which it deals with how, in the event of the breakdown of the de facto relationship, all or any of the property or financial resources of either or both of the spouse parties:
(a) at the time when the agreement is made; or
(b) at a later time and during the de facto relationship;
are to be dealt with, is of no force or effect until a separation declaration is made.
The applicant signed a document entitled “Separation Declaration” on 30 April 2021.
The requirements for a separation declaration are found at subsections 90UF(3) to (5) in the following terms:
Requirements for a valid separation declaration
(3)A separation declaration is a written declaration that complies with subsections (4) and (5), and may be included in the Part VIIIAB financial agreement to which it relates.
(4)The declaration must be signed by at least one of the spouse parties to the Part VIIIAB financial agreement.
(5)The declaration must state that:
(a) the spouse parties lived in a de facto relationship; and
(b)the spouse parties have separated and are living separately and apart at the declaration time; and
(c)in the opinion of the spouse parties making the declaration, there is no reasonable likelihood of cohabitation being resumed.
On 3 December 2020, the applicant sent an email to the respondent in the following terms:
With great sadness, I look at the words of our Binding Financial Agreement dated 24 June 2019 (“BFA”), and formally say that in my opinion, our relationship has irretrievably broken down, as defined in Clause 12 of the BFA. I think in your heart and in your head, you would agree with this.
It was not submitted, on behalf of the applicant, that the email of 3 December 2020 constituted a separation declaration but, for the sake of completeness, I find that it does not comply with all of the requirements of subsection 90UF(5) in that it does not state that the parties lived in a de facto relationship; that the parties are living separately and apart and it is not signed.
Thus the applicant gave notice of his intention to acquire B Town within two months of the date of separation, as required by the agreement, but before he made the separation declaration.
Is the notice, nevertheless validly given?
The provisions of s 90UF of the Act do not change the terms of the agreement. For the notice to be effective, the agreement required that it must be given within two months of the date of separation. However, the effect of s 90UF is that the applicant could not seek to enforce the notice until the agreement became effective upon the making of the separation declaration.
Thus the notice was validly given.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 13 July 2021
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