Harvey & Harvey & Anor

[2016] FamCA 1054

FAMILY COURT OF AUSTRALIA

HARVEY & HARVEY AND ANOR [2016] FamCA 1054

FAMILY LAW – PRACTICE AND PROCEDURE – Application for adjournment of the final hearing by the wife – where the husband opposes the adjournment – where the husband has incurred a significant debt to the Australian Tax Office as a result of his failure to lodge tax returns – where previous orders for the sale of a property and the application of the proceeds of sale to discharge a debt to a bank have not yet been complied with – where the purpose of the adjournment is to allow the parties to quantify the asset pool after the payment of the debt to the bank and the ATO – where there may be no assets for division following the sale of the property – interim orders made vacating the final hearing date

Family Law Act 1975 (Cth)

APPLICANT: Ms Harvey

RESPONDENT: Mr Harvey

INTERVENER: Commissioner of Taxation

FILE NUMBER: MLC 2362 of 2014

DATE DELIVERED: 8 November 2016

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Johns J

HEARING DATE: 8 November 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr L. Berger

SOLICITOR FOR THE APPLICANT: Berger Kordos

THE RESPONDENT: In person

COUNSEL FOR THE INTERVENOR: Ms Jacobson

SOLICITOR FOR THE INTERVENER: ATO Dispute Resolution

Orders

BY CONSENT IT IS ORDERED

1. That paragraphs 4 and 5 of the orders dated 25 July 2016 be varied as follows.

2. That the parties forthwith do all acts and things and sign all necessary documents to engage G Real Estate to place the property situate at B Street, Suburb A (“the former matrimonial home”) on the market for sale by public auction on 17 December 2016 (“the sale”), with the reserve price to be agreed between the husband and wife in writing not less than 48 hours prior to the auction, and in default of agreement as nominated by the selling agent but not less than $2,175,000.

3. That at the settlement of the sale, the proceeds including any deposit received in relation to the sale be applied as follows:

   (a)First, to meet al costs, commissions and expenses associated with the sale;

   (b)Secondly, to discharge the liabilities to the Bank of Queensland, particularly loans …779 and …481 (the BoQ loans”);

   (c)      Thirdly:

   (i)the entire balance of the sale proceeds (up to $1,628,311.36) be paid to the Commissioner of Taxation for the Commonwealth of Australia (“the Commissioner”); and

   (ii)the remainder be held in an interest bearing trust account in the joint names of the wife and the husband until further order.

4. That if either party refuses or neglects to sign any document necessary to implement these orders the Registrar of the Family Court of Australia at Melbourne be appointed to sign the document on behalf of that party pursuant to s 106A if the Family Law Act 1975 (Cth).

5. That all extant applications be adjourned for further mention before me at 9.30am on 3 February 2017.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Harvey & Harvey 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 2362 of 2014

Ms Harvey

Applicant

And

Mr Harvey

Respondent

And

Commissioner of Taxation
Intervenor

REASONS FOR JUDGMENT

1. The matter of Harvey is listed for final hearing before me today in relation to the parties’ competing property applications.  The matter has a long history in my docket.  The background to the matter is as follows. 

2. The applicant wife is Ms Harvey.  She is aged 43 years.  She is employed as a health professional. 

3. The respondent husband, who is self-represented, is Mr Harvey.  He is 43 years of age.  He is also engaged in employment as a health professional. 

4. The parties commenced cohabitation in December of 2001.  They married in 2002 and final separation occurred in July of 2013. 

5. There are three children of the marriage, D, who is 13 years, E who is aged 11 years and F who is aged eight years.

6. The proceedings were commenced by the wife in this Court in March of 2014.  At that time the parties held a number of property interests.  Many of those interests have been sold through the course of the proceedings. 

7. It became evident during the course of the proceedings that, in addition to the various property interests held by the parties, there was also significant debt.  In particular, an issue emerged as to the failure of the husband to file taxation returns for the period 2008 to 2015 inclusive. 

8. As a result, in September 2016 an Application in a Case was filed on behalf of the Commissioner of Taxation who sought to intervene in these proceedings on the basis that there was a substantial debt owing by the husband to the Commissioner.  The sum of that debt at that time was $1,613,237.81 and, in addition, there were general interest charges for late payment.  That debt remains outstanding.

9. As I have noted, the parties’ respective property applications were listed for final hearing to commence before me today.  The material filed on behalf of both the husband and the wife indicates that their principal assets as at the commencement of the hearing are a property at B Street, Suburb A and a property at H Street, Suburb C. 

10. On 25 July this year I made orders at the conclusion of an interim hearing for the sale of the property at B Street, Suburb A.  That property, I am told, has a valuation of $2.175 million.  The parties have listed that property for an auction.  The auction is scheduled to occur on 17 December 2016.

11. Today, Counsel for the applicant makes an oral application that the proceedings be adjourned to a date after the auction.  The purpose of the adjournment is to enable the parties to quantify the amount to be received by them from the sale of the Suburb A property.  It may well be that in the aftermath of that sale there are no assets available for division and that debt still remains to the Australian Taxation Office (“the ATO”).  Accordingly, it is submitted that it would be premature to embark upon a final hearing at this time where there may be no assets to divide as between the husband and the wife.

12. The wife’s application for an adjournment was opposed by the husband.  He indicated concern that the proposed adjourned date may coincide with the date upon which he is required to vacate the former matrimonial home.  In those circumstances, he expressed concern as to the potential consequences of an adjournment. 

13. The husband also raised concerns as to payment of debts to the Bank of Queensland.  It has been his case throughout the proceedings that he should not be held responsible for a debt to the Bank of Queensland which he alleges was obtained fraudulently by the wife whom he alleges forged his signature in respect of the loan documentation.  Those allegations are denied by the wife and at this interim stage I am not in a position to make any findings with respect to those allegations in circumstances where the evidence has not been tested.

14. In any event, it is clear from the orders made by me on 25 July 2015 that that loan, together with the other debt to the Bank of Queensland, is to be discharged from the sale proceeds.  It is evident both at paragraphs 1 and 5 of those orders that that is to occur.  There is no appeal against those orders.  Accordingly, they continue to operate.

15. The position of the Commissioner of Taxation is that the application for adjournment is not opposed provided that the proceeds of sale from the Suburb A property are applied to the discharge of the debt to the ATO after the debts to the Bank of Queensland have been discharged.  An order in those terms is not opposed by either the husband or the wife.

16. Having regard to the balance of convenience, I am satisfied that it is appropriate that these proceedings be adjourned at this time.  As I have already indicated, it may well be that after the sale of the Suburb A property there are no assets available for division.  It may well be that substantial debts remain.  That being the case, in my view it would be premature and in neither the interests of the husband nor the wife to proceed to a final hearing at this point in time. 

17. It is unfortunate that the orders made by me in July 2016 were not complied with in a timely fashion.  Had the sale orders been implemented appropriately, it is likely that the sale of the Suburb A property would have been completed by this time so that the parties could move to finalise their competing applications.  That is not the case and, therefore, I am left with little alternative but to adjourn the proceedings. 

18. I will not allocate a further trial date to this matter until I am satisfied that it is, indeed, ready to proceed.  Therefore, what I propose to do is list this matter for a mention hearing in the new year at which time the parties will have likely entered into a contract for sale of the Suburb A property and there will be certainty as to what, if any, assets remain to be the subject of the parties’ competing property applications.  The date to which this matter will be adjourned will be a mention hearing before me at 9.30 am on 3 February 2017. 

19. Give the consent between the parties that it is appropriate that the ATO be paid the balance of the sale proceeds from Suburb A, what I am going to do is stand the matter down to enable a minute of order to be drawn to that effect.  I am asking the practitioners to prepare a minute which provides for the payment to the ATO, so a variation of the orders of 25 July to accommodate that variation and, further, and otherwise the matter will be adjourned to the mention date which I have indicated.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 8 November 2016.

Associate: 

Date:  8 November 2016