Henschel & Sartre (No 2)
[2023] FedCFamC1F 544
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Henschel & Sartre (No 2) [2023] FedCFamC1F 544
File number(s): SYC 6123 of 2020 Judgment of: BERMAN J Date of judgment: 5 July 2023 Catchwords: FAMILY LAW – PROPERTY – Orders for interim distribution – Variation – Where previous orders were made for the husband to pay the wife $250,000 by way of sale of livestock – Where the orders considered the extent to which each of the parties should be involved in the sale of livestock – Where the husband contends that his inability to access the property has not enabled him to make payment – Where the husband seeks to attend at the property on a regular basis and to be at liberty to use the homestead – Where the homestead is the wife’s primary residence – Where the wife opposes the orders – Where the wife seeks that she be given liberty to sell the livestock – Consideration of the extent to which the husband should attend at the property – Where the Court does not find it would be appropriate for the husband to attend at the property more frequently or for longer periods – Orders. Cases cited: Henschel & Sartre [2023] FedCFamC1F 86 Division: Division 1 First Instance Number of paragraphs: 61 Date of hearing: 14 June 2023 Place: Adelaide via MS Teams Counsel for the Applicant: Mr Bateman Solicitor for the Applicant: ATW Family Law Counsel for the Respondent: Litigant in person ORDERS
SYC 6123 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR SARTRE
Applicant
AND: MS HENSCHEL
Respondent
order made by:
BERMAN J
DATE OF ORDER:
5 july 2023
UPON NOTING THAT the husband has paid the sum of $40,000 to the wife in part settlement of the Order for partial settlement of property made 23 February 2023.
THE COURT ORDERS THAT:
1.The time for the husband’s compliance with order 9 of Orders made 23 February 2023 be extended by ninety (90) days.
2.The parties do all acts and things and sign all documents necessary, in their capacity as directors of B6 Pty Ltd as trustee for the Mr Sartre and Ms Henschel Family Trust (“the Family Trust”), to sell the livestock, silage, machinery and as a matter of last resort, other stock animals, owned by B6 Pty Ltd.
3.To facilitate order 2 of these Orders:
(a)that the wife shall have the sole ability and authority for and on behalf of B6 Pty Ltd to sell livestock, silage and the following plant and equipment:
(i)Motor Vehicle 1, vehicle attachments and various machinery for and on behalf of the Mr Sartre and Ms Henschel Family Trust (“the Family Trust”);
(b)the husband and wife shall forthwith instruct Mr DD of EE Company to act as agent in relation to the sale of the livestock, silage and nominated plant and equipment.
(c)the method of sale of livestock, silage and nominated plant and equipment shall be informed by the recommendations of the agent.
4.The parties, in their capacity as directors of B6 Pty Ltd, shall disburse the proceeds of sale of livestock, silage and plant and equipment in the following order and priority:
(a)to the bank account held by B6 Pty Ltd with ANZ bank account number …36; and then
(b)to the wife, up to an amount of $210,000, with such amount to be credited against the payments that the husband is required to pay to the wife pursuant to order 9 of Orders of 23 February 2023.
5.The time for the wife to file her material in accordance with order 3 of the Orders of 21 March 2023, be extended to 28 July 2023.
6.The time for the husband to file his material in accordance with order 5 of the Orders of 21 March 2023, be extended to 6 October 2023.
7.The time for the wife to file her material in accordance with order 6 of the Orders of 21 March 2023, be extended to 30 October 2023.
8.The interim proceedings and the Amended Enforcement Application are dismissed.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
By Application in a Proceeding filed 19 May 2023, Mr Sartre (“the husband”) seeks orders summarised as follows:
(1)That the time for the husband’s compliance with order 9 of the Orders made 23 February 2023 be extended by 60 days.
(2)That the parties do all things necessary, in their capacity as directors of B6 Pty Ltd as trustee for the Mr Sartre and Ms Henschel Family Trust, to sell livestock, other animals, machinery and silage owned by B6 Pty Ltd.
(3)That to facilitate order 2, the parties shall instruct Mr DD of EE Company to act as agent in relation to the sale of the livestock and other animals in such manner, and upon such terms and conditions, as may be recommended by the said agent.
(4)That the wife will facilitate the husband’s attendance at N Property including the homestead, for the purpose of carrying out maintenance or repairs in order to facilitate proposed order 3.
(5)That the wife will do all acts and things necessary to facilitate the husband’s attendance at N Property for the purpose of selling the silage owned by B6 Pty Ltd, providing that the husband shall not attend at the homestead.
(6)That the proceeds of sale of livestock, silage and other animals shall be applied first, to the wife to be credited against the obligation of the husband to pay the wife’s sum as ordered in order 9 of the Orders dated 23 February 2023 with the balance to the bank account held by B6 Pty Ltd with ANZ Bank Account number …36.
(7)That the wife will do all acts and things necessary to facilitate the attendance of the husband or any agent of B Pty Ltd at N Property for the purpose of accessing the material stored by B Pty Ltd at N Property, providing that neither the husband nor any agent of B Pty Ltd attend the homestead.
(8)That the wife will facilitate the husband’s attendance at N Property, including the homestead, for the purpose of carrying out maintenance or repairs to N Property for the purpose of agisting livestock at the property, providing that it shall occur on such dates and times as the wife will be residing in Sydney, with the husband to provide 24 hours’ notice of his intention to attend.
By Response filed on 7 June 2023, Ms Henschel (“the wife”) opposes the orders sought by the husband and by an Amended Enforcement Application filed 7 June 2023, she seeks to enforce the sum required to be paid by the husband, pursuant to order 9 of the Orders of 23 February 2023, and seeks the following relevant order:-
(1)That the wife be granted sole authorisation and signing authority to sell any inventory owned by the Mr Sartre and Ms Henschel Family Trust (“the Family Trust”) and operate bank accounts in the name of the Family Trust to satisfy order 9 of the Orders of 23 February 2023 and any future financial orders or financial obligations of the Family Trust, provided that the wife maintains proper accounting for all amounts received in the accounts of the Family Trust, with the husband to do all things necessary to facilitate the sale.
Whilst the wife also seeks other orders, they go beyond the core issues being the payment required to be made to satisfy Orders made on 23 February 2023 and to consider the extent to which each of the parties should be involved in the sale of livestock, plant and equipment. An ancillary consideration is the extent to which the husband should be able to attend N Property for the purposes of effecting the sale of livestock, silage and plant and equipment.
On 21 March 2023, trial direction orders were made listing all applications for final orders for a final hearing to commence on 4 December 2023 with the wife to file and serve her trial material by 4.00 pm on 16 June 2023 and the husband by 4.00 pm on 6 November 2023.
Both parties agree that the trial date should be maintained in circumstances where the proceedings have been on foot since 2020 and it is broadly conceded that the parties are litigation weary.
TRIAL DIRECTIONS
A focus of the Orders made on 23 February 2023 was to facilitate the discovery and production of documents likely to be relevant to an issue in the proceedings and to ensure that there is evidence presented as to the value of the property of the parties.
Orders were made on 7 October 2020 as follows:
37.The parties do all such acts and things including sign all necessary documents, to appoint a single expert valuer to value the parties’ interests in the following entities:-
37.1 B2 Pty Ltd
37.2 B Pty Ltd
37.3 B3 Pty Ltd
37.4 B4 Pty Ltd
37.5 S Pty Ltd
37.6 D Pty Ltd
37.7 B5 Pty Ltd
37.8 F Pty Ltd
37.9 B7 Pty Ltd
37.10 B6 Pty Ltd
Further orders were made to progress the valuation of real estate as may be necessary to facilitate the valuation of the parties’ interest in the entities set out in order 37.
The Response seeks orders for the wife to have an extension of time for her to file her trial material on the basis that she is not able to do so until she receives the real estate valuations and in particular, the valuation of the parties’ interests in their commercial and business entities.
The parties instructed Ms T, a forensic accountant, to value the interests of the parties as set out in the Orders made 7 October 2020 and 27 May 2021.
On 16 May 2023, Ms T advised that the only outstanding issue was the value of N Property.
Prior to the hearing, there has been significant effort made to resolve the outstanding valuation issue and I am told by the husband’s counsel that the valuation of N Property would soon be made available to Ms T which should result in her valuation report being finalised.
To that extent, I indicated to the parties that I would accept that the valuation issue was now likely to be resolved. A further assistance is the consent of the parties to an extension of time for each of them to file their trial material.
At this stage, there is no suggestion that there is insufficient time for trial preparation, although an aspect of the interim proceedings to be determined is the position of the wife that she currently remains a self-represented litigant and until she has received payment of the ordered settlement sum, she is not able to instruct solicitors.
PARTIAL PROPERTY SETTLEMENT
I rely upon the matters as set out in Henschel & Sartre [2023] FedCFamC1F 86 delivered on 23 February 2023.
Order 9 of the Orders made 23 February 2023, is in the following terms:
9. Within ninety (90) days of the date of this Order, the [husband] do pay to an account nominated by the [wife], the sum of TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000) by way of partial settlement of property.
On 26 May 2023, the husband posted a cheque to the wife in the sum of $40,000 to her address at FF Street, Suburb GG. There was an enquiry by the husband’s solicitors as to why the cheque had not been cashed.
The husband relies upon a curious photograph of him physically posting the cheque in an envelope addressed to the wife. The wife acknowledges receipt of the cheque but was concerned as to the method and manner by which it was forwarded to her rather than by electronic funds transfer (“EFT”).
Whilst there is considerable mistrust between the parties, it may well be a reasonable finding that the husband considered posting the first payment to the wife as necessary for compliance and to ensure that there was evidence of payment. The wife indicated that she will deposit the cheque into her account and the husband acknowledges that hereafter payment by EFT is the preferred method.
As such, the amount now outstanding is reduced to $210,000. The issue remains as to whether there should be an extension of time granted for the husband to pay the outstanding sum and if so, the mechanics by which the outstanding sum can be satisfied.
The husband highlights the following paragraph from my judgment of 23 February 2023 which sets out a mechanism by which the husband could pay the settlement sum:-
101.There appears to be broad agreement that whilst there may be an adverse financial impact in terms of various tax allowances should the [livestock] on the property be sold, in circumstances where the wife does not wish to retain the farming enterprise and the husband proposes that the […] livestock be disposed of, it does not seem unreasonable to pursue that outcome.
That paragraph must be placed into context by the following provision:-
104.I propose to make the order as sought by the wife but to give the husband three months to make payment either by sale of the livestock, other property or from the husband’s own resources.
What was clearly contemplated was that at the expiration of three calendar months, the husband would pay the wife the settlement sum either from the sale of the livestock and other property or from his own resources.
The wife’s contention is that it was a matter for the husband but if insufficient funds were raised from the sale of the livestock or other property then the obligation remained with the husband to satisfy the settlement sum, personally. It is not in dispute that the husband has not done so.
The husband contends that his financial position is such that he would struggle to raise sufficient funds to pay the outstanding amount of the settlement sum. In his affidavit filed 19 May 2023, he refers to his current income and expenses as being accurately represented by his Financial Statement filed 16 September 2022.
The husband states that he has no other assets or financial resources to satisfy the payment of the remainder of the settlement sum other than through the sale of livestock and silage held by B6 Pty Ltd.
He provides further information concerning significant sums borrowed from his parents company, the bank and other resources necessary to keep the group of entities that comprise the B Group financially viable.
What is not controversial is that any suggested impecuniosity of the parties must be tempered against the likely approximate value of the property at V Street, Suburb W (“the Suburb W property”), in which the husband resides, having a value as at 12 April 2021 of $12 million dollars with a mortgage of $3,614,590, N Property having a value of $15 million dollars and the potential for the interest of the husband in the B Group whilst the subject of an outstanding valuation from Ms T, to be considerable.
It also is likely that at a minimum, the husband would wish to retain the Suburb W property and his interest in the B Group whereas the wife has now foreshadowed that as part of settlement of property, she would wish to retain N Property.
Whilst I acknowledge that the husband’s concern in respect of his financial position and his purported inability to pay the outstanding sum of $210,000 from his own personal resources, the issue of his financial position was dealt with in reasons given in support of the order of the payment of the settlement sum to the wife.
The husband does not set out any new or material change in his circumstances nor is it suggested that he is prepared to sell the Suburb W property.
The husband considers that his inability to access N Property by reason of the Orders made 23 February 2023, has not enabled him to sell livestock held by B6 Pty Ltd in order to fund the payment of the settlement sum to the wife.
There is a further contention that EE Company have attended N Property and identified that before the livestock could be collected for sale, significant work needs to be undertaken both as to tagging and vaccinating the livestock, repairing equipment and loading ramp infrastructure, moving dirt to enable truck access, repairs to yards, gates and fences and the removal of certain trees.
The issue of the extent to which the husband should be able to attend N Property is highly contentious. The wife is prepared to facilitate the attendance by the husband pursuant to the Order of 23 February 2023 and with appropriate notice, will facilitate the attendance of an agent for and on behalf of B Pty Ltd in order to access stored plant and equipment.
The wife considers that the property is her home and but for the need for the husband and the child of the parties to rent premises in Sydney in order to facilitate the child to attend the school nominated possibly by the parties but certainly by the husband, she would reside permanently at N Property.
The Orders made on 23 February 2023 took into account the high level of mistrust as between the parties and the likelihood that the conflict would only be heightened by the parties coming into close proximity.
Orders were made that provided for the husband to have limited access to N Property sufficient for him to maintain a connection with the property but not to interfere with the wife’s continued occupation.
The new circumstance relied upon by the husband is the need to attend N Property to undertake the significant works necessary to facilitate the sale of livestock as may be required to enable the balance of the settlement sum to be paid.
SALE OF LIVESTOCK, SILAGE, PLANT AND EQUIPMENT AND OTHER STOCK ANIMALS
The comprehensive submissions of the husband’s counsel would result in an uncontroversial finding that the sale of livestock, supplemented by the sale of silage and if necessary the further sale of nominated plant and equipment, would result in more funds being available than is required to pay out the balance of the settlement sum to the wife.
The parties are in agreement as to the sale of livestock, silage and plant and equipment as nominated by the husband.
The parties are not able to agree the sale of the other stock animals, although the husband concedes that three of the animals should be excluded from sale.
The wife is keen to retain the animals and argues that their sale is not necessary, that their son has a strong emotional attachment to the animals and in any event, they should be considered as part of the wife’s business plans.
The status of the other stock animals was also considered in my judgment delivered on 23 February 2023. Whilst I considered that the other stock animals should not be considered as necessarily different to the livestock, what has now occurred is that the husband would seek to sell not just the livestock but silage and plant and equipment. Given that sufficient funds will be raised from their sale, it is reasonable that the sale of the other animals should only be required as a last resort.
The parties remain in dispute as to the method and manner by which livestock, silage and plant and equipment should be sold.
The husband seeks that he be in charge of the sale process and as such, he will need to attend N Property on a regular and extended basis. The husband’s attendance will also require access to the homestead for the purposes of toilet facilities, refreshment and first aid, if required.
The ability of the husband to attend N Property has resulted in allegation and counter allegation and has descended to threatening communication.
The animosity as between the parties is highlighted by the following text message sent by the husband to the wife on 5 June 2023:[1]
You have no right to touch my personal property or move it from the [property] to which I own without my permission.
I will be down on the [property] on the weekend of the 24th (as previously planned) please make sure my painting […] is there or I will assume it’s stolen and will call the police.
I will be returning my personal property back to the [property] on the 24th of June.
I am furious that you have touched and relocated my personal property. I would never touch anything that belonged to you. I’m sure you’d be furious if I did.
Why do you think you can touch my things?
(Emphasis in original)
[1] Affidavit of Ms Henschel sealed 7 June 2023, page 101.
The affidavit material relied upon by each of the parties reinforces my earlier finding that it is not tenable for the parties to remain in close proximity to each other or to come in contact at N Property.
The wife contends that the significant work that the husband considers is necessary before EE Company could load livestock for sale arises from hundreds of tons of waste that B Pty Ltd dumped on the property which obstructed the livestock yards and in any event is unnecessary.
The contention between the parties now brings to account the wife’s assertion that the dumping of the waste may constitute an unlawful act, is under consideration by the EPA and the remediation of the site is not as easily undertaken by the proposal of the husband that he would be able to do so without assistance.
There is no evidence as to the attitude of the EPA, but I am satisfied that there is an unresolved issue and as such, the proposal of the husband may not be tenable either because the task of remediation is beyond his ability or any attempt at remediation may require input, involvement or supervision by the EPA.
The husband has undertaken enquiry with neighbours as to whether their livestock yards could be used to process livestock and load onto transport for market.
The wife, in her affidavit filed 25 May 2023, states the following:-
38.I refer an email chain sent to [the husband], me and the [property] manager, [Mr HH], commencing on 9 March 2023 and exhibited as [MH9] in which:
a.[Mr DD] provided an appraisal of the [livestock] on 9 March 2023 estimating their total value to be in the range of $170,440 to $241,400, albeit this was over two months ago and it’s now winter and a poorer market in the [area] due to the slow pasture growth; and
b.[Mr DD] then outlined the various works that would need to be completed before the [livestock] could be processed for sale onsite at the [O Town] property, due to the [livestock] yards at the [O Town] property being in a state of disrepair; and
c.[Mr DD] then advised that “Looking at the [livestock] I think you can work on the following appraisal but they would need to be tagged and loaded somewhere up the road I think?”.
39.Upon receiving this email from [Mr DD], I contacted our two closest neighbours on 17 March 2023, [Mr JJ] and [Mr KK], and obtained their consent to use their [livestock] yards to process the [livestock] and load them onto transport. It is common in the country for [neighbours] to help each other out, and we have on many occasions shared facilities and equipment with each other. I informed [the husband], [Mr DD] and our [property] manager [Mr HH], on the same day 17 March 2023, that we could use [Mr JJ] and [Mr KK’s] yards (as documented further in [MH9]).
40.[The husband] has deposed in his affidavit on 19 May 2023 [p. 42] that “[EE Company] ultimately advised that the neighbours’ yards were not sufficiently large enough to separate and assess the [livestock]”. I am concerned that these comments may mislead the Court as [Mr DD] in fact replied on this email chain on 17 March 2023 still in [MH9] and said:
“We can Yard and truck [some livestock] at [Mr KK’s] yards as it’s just across from where they are.
The [other livestock] will have to go to [Mr JJ’s] yards as there isn’t enough room at [Mr KK’s] yards.
At this stage we would take the [livestock] to the saleyards and mother them up and preg test the [livestock].”
41.[The husband] then indicated his agreement with this approach in the same email chain on 17 March 2023: “[Mr HH], Do you need a hand marking the [livestock]? , if we can load out through [Mr KK’s], we can also load out the [other animals] as well through his yards and ramp.” However, some time later [the husband] must have decided that he would not agree to the [livestock] being loaded from the neighbour’s property and instead insisted on undertaking repairs to the [livestock] yards at the [O Town] property instead with the aim of selling them via [auction] on site.
(As in original)
The wife also impressed as being able to manage and negotiate the sale of livestock and the preparation of National Vendor Declarations (“NVD”).
In circumstances where I do not consider that there should be a change to previous orders made allowing the husband to attend more frequently and for longer periods at N Property, I propose to make orders that would enable the wife to have control of the sale of livestock, silage and the plant and equipment as nominated by the husband.
To the extent that there is any shortfall, then the wife will need to dispose of the other animal stock either in whole or in part to the extent as may be necessary to satisfy the settlement sum.
The pool of property available to the parties is likely to be substantial. There may well be disagreement and argument as to whether the price that may be obtained for the sale of livestock, silage and plant and equipment if disposed of by the wife is at the highest and best price.
The parties are able to produce evidence at trial should there be an assertion that the wife did not properly sell the livestock and plant and equipment for best value.
The focus of the parties should be upon the preparation of the matter for trial to ensure that the matter remains listed and that the Court will have evidence to enable a resolution as to any area of dispute as between the parties.
CONCLUSION
I propose to extend time for the husband to pay the balance of the settlement sum as requested. I note that he seeks sixty days. Given that the control of the sale of livestock, silage and plant and equipment will now rest with the wife, I propose to extend the time as sought to ninety days.
I make orders as appear at the commencement of these reasons.
I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 5 July 2023
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