Hertwig & Hertwig

Case [2022] FedCFamC1F 385

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Hertwig & Hertwig [2022] FedCFamC1F 385

File number(s): BRC 2437 of 2016
Judgment of: HOGAN J
Date of judgment: 27 May 2022
Catchwords:

FAMILY LAW – PROPERTY SETTLEMENT – INTERIM PROPERTY ORDERS – Where orders are sought on an interim basis for the sale of real property and distribution of the funds realised from the same – Where the property is the sole remaining asset of value.

FAMILY LAW – CORPORATIONS LAW – DEREGISTRATION OF COMPANIES – Where ASIC deregistered a number of companies – Where orders for the reinstatement of the registrations of companies are sought.
Legislation:

Corporations Act 2001 (Cth)

Family Law Act 1975 (Cth)
Cases cited:

Reid v Action Insulation Engineers Pty Ltd [2009] NSWSC 1182

Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 499

Zschokke & Zschokke (1996) FLC 92-693; [1996] FamCA 79

Division: Division 1 First Instance
Number of paragraphs: 31
Date of hearing: 3 November 2021
Place: Brisbane (via telephone)
The Applicant: Self-represented
The Respondent: Self-represented

ORDERS

BRC 2437 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR HERTWIG

Applicant
AND:

MS HERTWIG

Respondent

ORDER MADE BY:

HOGAN J

DATE OF ORDER:

27 MAY 2022

IT IS ORDERED THAT:

1.The Amended Application in a Case filed 26 October 2021 is dismissed.

2.The Response to Application in a Case filed 18 August 2021 is 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 the pseudonym Hertwig & Hertwig has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HOGAN J:

  1. By Amended Application in a Case filed 26 October 2021, Ms Hertwig sought an interim order for the sale of real property situated at M Street, N City (“the property”). She also sought orders be made so that:

    (a)she is solely responsible for the sale of the property; and

    (b)the reserve price for the sale of the property is set at no less than $270,000.00; and

    (c)the funds obtained from the sale of the property are applied to meet any taxes payable, legal and real estate costs, outstanding Council fees, outstanding ASIC fees and that she then be paid $5,000.00 to reimburse her for the costs of preparing the property for sale – before the balance of the sale proceeds then…

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AGLC
Hertwig & Hertwig [2022] FedCFamC1F 385
Case
[2022] FedCFamC1F 385
Decision Date

CaseChat Overview and Summary

In the matter of Hertwig & Hertwig, the court was tasked with addressing the application of Ms. Hertwig to sell the family property and apply the proceeds in a manner she contends is just. The dispute arose out of the property settlement proceedings between Ms. Hertwig and Mr. Hertwig, who have been married and divorced, and have three children. The crux of the matter involves conflicting assertions regarding compliance with disclosure duties and the financial responsibilities towards the children, particularly in light of the children’s residence in Country B and the parents' respective residences in Country B and Australia.

The legal issues central to the court's decision included whether the property should be sold and if so, how the proceeds should be applied. This necessitated a consideration of the financial needs of the parties, particularly Ms. Hertwig's claims regarding her sole responsibility for the children's expenses since their separation, and Mr. Hertwig's financial situation, including his reliance on Job Seeker payments and potential loss of these if he relocates to Country B. The court also had to weigh the impact of the COVID-19 pandemic on Ms. Hertwig's business and her financial hardship, against Mr. Hertwig's assertions about the impact of the property sale on his financial stability.

In its reasoning, the court considered the evidence provided by both parties, including the impact of the pandemic, the financial circumstances of Ms. Hertwig, and the necessity of the property sale to meet the children's immediate needs. The court found that the property was the only remaining asset of value and that Ms. Hertwig's need for the proceeds to cover the children's expenses outweighed Mr. Hertwig's concerns about his financial situation if he were to relocate to Country B. The court concluded that the sale of the property was in the best interests of the children and ordered the sale and the application of the proceeds as contended by Ms. Hertwig.

Orders

Orders of the court

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Background

Background to the litigation

The material relied upon by each of the parties was voluminous; however, the relief sought was as noted. Whilst each party asserted that the other had failed to comply with the duty of disclosure and had depleted the property available to be considered in the extant property settlement proceedings, such issues are, clearly, a matter for trial.Brief background The parties commenced cohabitation in late 1999, married in 2003, separated in either late 2014 or early 2015 and divorced in 2017. They have three children now aged 16, 14 and 11. Ms Hertwig commenced proceedings on 18 March 2016, seeking only parenting orders. In August 2018, Mr Hertwig was granted leave to commence property settlement proceedings out of time. On 28 May 2019, the parties entered into final parenting orders by consent. These orders provided, by way of broad summary, that they have equal shared parental responsibility; for the children to live in Country B; that, in the event Mr Hertwig lived in Country B, the children live with their parents on a week-about basis; or, if Mr Hertwig did not live in Country B, the children spend substantial school holiday time with him. It seems the parties subsequently entered into further parenting orders in November 2020 –these were made by the Family Court in Country B (“the Country B orders”).[1] Ms Hertwig asserted that an effect of the Country B orders is that, whilst she has sole parental responsibility for the children,[2] Mr Hertwig is not relieved of his financial obligations in relation to them.[3] However, Mr Hertwig asserted that the effect of the Country B orders is that Ms Hertwig is “solely responsible for the costs of maintaining the children” as she “sought to have [his] parenting rights withdrawn”.[4] This is but one of many disputes between these parties.[1] Affidavit of Ms Hertwig filed 5 October 2021, Annexure “2”.[2] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 6.[3] Affidavit of Ms Hertwig filed 5 October 2021, paragraphs 9–10.[4] Affidavit of Mr Hertwig filed 24 October 2021, paragraph 216. Ms Hertwig and children live in Country B, as they have done since prior to the parental separation.[5] Mr Hertwig lives in Australia and has done so from, it would seem, at least May 2020. His evidence includes that, as at October 2021, he was in receipt of Job Seeker payments whilst awaiting processing for a Disability Support Pension. He said that, if he left Australia for “any significant period” (which he estimates at between two and six weeks), he will not receive these payments or other financial support to which he has access in Australia.[6]Matters relevant to the consideration of the application for orders that the property is sold and the proceeds applied as contended for by Ms Hertwig[5] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 5.[6] Affidavit of Mr Hertwig filed 24 October 2021, paragraphs 144–148. According to a title search,[7] the property is owned by P Pty Ltd as trustee for the Q Trust.[8] Mr Hertwig and Ms Hertwig are both directors of P Pty Ltd – each holds one ordinary share in the company.[9] [7] Affidavit of Mr Hertwig filed 20 September 2021, Annexure “4”.[8] Affidavit of Mr Hertwig filed 20 September 2021, paragraph 6; Ms Hertwig’s Case Outline filed 5 October 2021, paragraph 28.[9] Affidavit of Mr Hertwig filed 20 September 2021, paragraph 10.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Ms Hertwig and children live in Country B, as they have done since prior to the parental separation.[5] Mr Hertwig lives in Australia and has done so from, it would seem, at least May 2020. His evidence includes that, as at October 2021, he was in receipt of Job Seeker payments whilst awaiting processing for a Disability Support Pension. He said that, if he left Australia for “any significant period” (which he estimates at between two and six weeks), he will not receive these payments or other financial support to which he has access in Australia.[6]Matters relevant to the consideration of the application for orders that the property is sold and the proceeds applied as contended for by Ms Hertwig[5] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 5.[6] Affidavit of Mr Hertwig filed 24 October 2021, paragraphs 144–148. According to a title search,[7] the property is owned by P Pty Ltd as trustee for the Q Trust.[8] Mr Hertwig and Ms Hertwig are both directors of P Pty Ltd – each holds one ordinary share in the company.[9] [7] Affidavit of Mr Hertwig filed 20 September 2021, Annexure “4”.[8] Affidavit of Mr Hertwig filed 20 September 2021, paragraph 6; Ms Hertwig’s Case Outline filed 5 October 2021, paragraph 28.[9] Affidavit of Mr Hertwig filed 20 September 2021, paragraph 10. The parties agree that the property, which, on Ms Hertwig’s evidence, is unencumbered,[10] is the only remaining asset of value to be considered in the property settlement proceedings between them.[11] Each asserts that a final hearing of these proceedings is unable to occur in the near future because, according to Ms Hertwig “the final trial is going to be way off” as Mr Hertwig is alleged to have failed to update “his income disclosure for years”[12] and, according to Mr Hertwig, “the issue of disclosure still needs to be dealt with” and he will apparently seek to join Ms Hertwig’s parents as parties to the property settlement proceedings.[13] [10] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 28.[11] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 2; Affidavit of Mr Hertwig filed [12] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 3.[13] Affidavit of Mr Hertwig filed 24 October 2021, paragraph 140. As noted earlier, Ms Hertwig’s primary reason for seeking the sale of the property is to enable her to access funds to assist her to meet the children’s expenses, for which she says she has been solely responsible since the parental separation.[14] Her evidence included that: the business she operates in Country B has been affected (presumably negatively) by the onset of the COVID-19 pandemic;[15] her straitened financial circumstances resulted her moving with the children in March 2021 from D Town to R City (which is more affordable);[16] she has been unable to afford to enrol the children in school in R City (which, because they are “expats”, involves fees);[17] and that she has been unable to afford to pay for many of the children’s needs or provide them with various required educational supports, meet insurance premiums or have necessary dental and orthodontic work completed.[18] [14] Affidavit of Ms Hertwig filed 5 October 2021, paragraphs 7–8; Ms Hertwig’s Case Outline filed 5 October 2021, paragraph 4.[15] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 20.[16] Affidavit of Ms Hertwig filed 5 October 2021, paragraphs 14 and 18. [17] Affidavit of Ms Hertwig filed 5 October 2021, paragraph 15.[18] Affidavit of Ms Hertwig filed 5 October 2021, paragraphs 46–54.