Huxley and Morris (No 2)

[2016] FamCA 712

FAMILY COURT OF AUSTRALIA

HUXLEY & MORRIS (NO. 2) [2016] FamCA 712

FAMILY LAW – PROPERTY SETTLEMENT – Where the parties were directed to file updated Minutes of Proposed Orders reflecting the Court’s determination – Where the de facto wife sought that the de facto husband pay a lump sum within one hundred and twenty days – Where the de facto husband sought that the de facto wife gradually receive the sum over three and a half years – Where the Court is not satisfied that the de facto husband could raise such funds within one hundred and twenty days – Where the Court is not satisfied that the de facto wife should wait three and a half years for payment – Where the Court accedes to the de facto husband’s proposal but shortens the period in which the lump sum is to be paid.

Family Law Act 1975 (Cth)

Family Law Rules 2004 (Cth)

APPLICANT: Ms Huxley

RESPONDENT: Mr Morris

FILE NUMBER: PAC 5019 of 2011

DATE DELIVERED: 26 August 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: Not applicable

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell SC

SOLICITOR FOR THE APPLICANT: Barkus Doolan Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Campton SC

SOLICITOR FOR THE RESPONDENT: Gordon & Barry Lawyers

Orders

THAT PURSUANT TO SECTION 90SM OF THE FAMILY LAW ACT 1975 (CTH):

1. The respondent de facto husband pay $1,392,130 (“the principal sum”) to the applicant de facto wife by way of instalments as follows:

   (a)       as to $700,000 on or before 16 December 2016; and

   (b)as to the balance of $692,130 on or before 16 December 2017 or such later date as the parties may agree in writing.

2. Pending payment by the respondent de facto husband of the principal sum pursuant to Order 1 the respondent de facto husband will not sell or further encumber his interest the following parcels of real estate:

   (a)“LL E2” and being the property described in title reference …;

   (b)“LL EA” and being the property described in title reference … and …;

   (c)“QQ” and being the property described in title reference …;

   (d)“SS” and being the property described in title reference …;

   save and except to facilitate and enable compliance with Orders or otherwise with the consent in writing of the applicant de facto wife.

3. Within seven (7) days of the date of these Orders, the applicant de facto wife will do all acts and things, including payment of any fees or expenses, necessary to withdraw the notification of the Order made by this Court on 15 August 2012 currently registered on the following Certificates of Title:

   (a)       …;

   (b)       …;

   (c)       …;

   (d)       …;

   (e)       ...

4. The respondent de facto husband shall do all acts and things necessary to cause Morris Nominees as trustee for the Morris Trust to indemnify the applicant de facto wife in respect of all liabilities of whatsoever nature the applicant de facto wife has to the Morris Trust.

5. The parties have liberty to apply in relation to the implementation of these orders upon fourteen (14) days’ notice.

THAT AS TO CHILD SUPPORT DEPARTURE:

1. The relief sought by the applicant de facto wife as to both periodic and

   
   

   non-periodic child support departure be dismissed without prejudice to the applicant de facto wife seeking a child support departure review by way of the administrative processes contained within Part 7 of the Child Support (Assessment) Act 1989 (Cth).

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Huxley & Morris (No.2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: PAC 5019 of 2011

Ms Huxley

Applicant

And

Mr Morris

Respondent

REASONS FOR JUDGMENT

The proceedings

1. On 28 July 2016 I provided reasons for judgment and requested that each of the parties submit a Minute of Orders to give effect to the outcome of the proceedings.  The solicitors for each of the de facto husband and wife provided such a Minute on 11 and 12 August 2016.

2. The applicant de facto wife’s Minute read as follows:

   IT IS ORDERED BY WAY OF FINAL ORDER:

   1.         Definitions

   That for the purpose of these orders, the following definitions apply:

   1.1       Applicant means the de facto wife, [Ms Huxley].

   1.2Applicant's liability to the Trust means all monies owed by her to the [Morris Trust], with a balance owing of $10,645.

   1.3Applicant's net assets means the value of the net assets and superannuation in her possession as at the date of these Order, with a value of $13,673.

   1.4Applicant's paintings, jewellery and household effects means the paintings, jewellery and household effects in the possession or control of the applicant, with a value of $20,000.

   1.5Applicant's superannuation means her entitlements with Media Super Fund, with a balance of $4,318.

   1.6date of these orders means the date the orders were made by the Family Court of Australia, being the date that first appears on the front page of these orders.

   1.7default means a period 7 days after a payment is due and payable pursuant to these Orders.

   1.8[QQ] property means the real property situated [Town A] in the State of New South Wales, being the whole of the land in Certificate of Title folio identifiers …, registered in the name of the Respondent, valued at $3,650,000, and subject to mortgage in favour of National Australia Bank being registered mortgage dealing number ...

   1.9[LL E1] property means the real property in [Town A] in the State of New South Wales being the whole of the land in Certificates of Title folio identifiers …, …, registered in the name of the Respondent, valued at $2,250,000, and subject to mortgage in favour of National Australia Bank being registered mortgage dealing number ….

   1.10[LL E2] property means the real property in Town A in the State of New South Wales being the whole of the land in Certificate of Title folio identifier …, registered in the name of the Respondent, valued at $1,875,000, and being subject to a mortgage in favour of National Australia Bank being registered mortgage dealing number ….

   1.11[LL property] means [LL E1] property and [LL E2] property.

   1.12net pool of property and superannuation means the value of the Applicant's net assets and the Respondent's net assets.

   1.13parties means the Applicant and the Respondent;

   1.14proceeds of sale of the [QQ] property means the contract sale price less:

   1.14.1The balance of the National Australia Bank mortgage … secured over [QQ], which for the purposes of these Orders is $2,000,000, or any amount left owing after payment is received pursuant to Order 1.15.1;

   1.14.2The balance of the National Australia Bank mortgage … secured over [QQ], which for the purposes of these Orders is $1,000,000, or any amount left owing after payment is received pursuant to Order 1.15.2 and

   1.14.3All costs, commissions and agreed expenses of the sale.

   1.15proceeds of sale of the [LL] property means the contract sale price less:

   1.15.1The balance of the National Australia Bank mortgage … secured over [QQ], which for the purposes of these Orders is $2,000,000, or any amount left owing after payment is received pursuant to Order 1.14.1;

   1.15.2The balance of the National Australia Bank mortgage … secured over [QQ], which for the purposes of these Orders is $1,000,000, or any amount left owing after payment is received pursuant to Order 1.14.2 and

   1.15.3All costs, commissions and agreed expenses of the sale.

   1.16    Respondent means the de facto husband, [Mr Morris].

   1.17Respondent's bank account means the National Australia Bank account, with a balance of $1,187;

   1.18Respondent's creditors means the monies owed to the respondent from:

   1.18.1    [LL] P/L, with a value of $119; and

   1.18.2   [Morris Trust], with a value of $49,398.

   1.19Respondent's household contents means the household contents in the possession and/or control of the respondent, with a value of $7,000;

   1.20Respondent's liabilities means all monies owed by the Respondent pursuant to the following:

   1.20.1National Australia Bank mortgage … secured over QQ, with a balance owing of $2,000,000;

   1.20.2National Australia Bank mortgage … secured over QQ, with a balance owing of $1,000,000;

   1.20.3Mortgage to [Mrs M Morris] secured over [SS] property, with a balance owing of $450,000;

   1.20.4Debt to the [Morris Trust], with a balance owing of $1,231,829;

   1.20.5Debt to [AX] P/L, with a balance owing of $25,000; and

   1.20.6Debt to the St George Bank, with a balance owing of $49,398.

   1.21Respondent's net assets means the value of the net assets and superannuation in his possession as at the date of these Order, with a value of $4,672,338, unless Order 4 is activated and then the Respondent's net assets will be:

   1.21.1The proceeds of sale of the LL property;

   1.21.2The proceeds of sale of the QQ property; and

   1.21.3Respondent's shares;

   1.21.4Respondent's bank account;

   1.21.5Respondent's household contents;

   Less

   1.21.6Respondent's liabilities, save for the liabilities referred to in Orders 1.18.1 and 1.18.2.

   1.22    Respondent's shares means the following:

   1.22.110 Ordinary shares in [Morris Nominees] trading as [Morris Family Trust], with a value of $142,420;

   1.22.21 Ordinary share in [AX] Pty Ltd, with a value of $803,747;

   1.22.34 Ordinary shares in [LL] Pty Ltd, with a value of $27,659; and

   1.22.4220 shares in CBD, with a value of $198.

   1.23Respondent's superannuation means his entitlements with the [Morris] Superannuation Fund, with a balance of $71,837.

   1.24[SS] property means the real property in [Town A] in the State of New South Wales being the whole of the land in Certificate of Title folio identifier …, registered in the name of the Respondent, valued at $550,000, and being subject to a mortgage in favour of [Mrs M Morris].

   1.25settlement amount means either one of the following:

   1.25.1If Order 4 is not activated, then the sum of $1,392,130, plus interest (if any) capitalised under Order 3.1.2; or

   1.25.2If Order 4 is activated, then such other amount to ensure that the Applicant receives 30 per cent of the net pool of property and superannuation, and for the purposes of calculating same, the parties shall in every respect be bound by the determination in the Reasons for Judgement with variations only to substitute the sale price, less costs of sale, for the valuation figure found by Her Honour in respect of each of the [LL] property and the [QQ] property, as may be the case, as they are sold.

   1.26settlement date means 120 days from the date of these Orders or such other date as agreed by the parties in writing.

   2          Cash payments to the Applicant

   2.1On or before the settlement date, the Respondent shall pay or cause to be paid to the Applicant the settlement amount by way of bank cheque or in cleared funds.

   3          Security and enforcement provisions

   3.1That, in the event that the Respondent does not make any payment to the Applicant referred to in Order 2.1 by the settlement date, then the following provisions shall take effect:

   3.1.1Default interest calculated at the rate prescribed by the Family Law Rules 2004 shall be immediately due and payable to the Applicant with the interest to accrue on the settlement amount which interest shall continue to accrue until payment in full to the Applicant of the balance then owing and all interest payable under this Order 3.1.1; and

   3.1.2Interest which is payable under Order 3.1.1 will be calculated on daily balances, must be paid in arrears at the end of each period of 30 days and, if not paid, will be capitalised and will then form part of the settlement amount.

   3.2Within 7 days of the date of these Orders, by way of security for the cash payment referred to in Order 2.1, the parties shall sign all documents necessary and do all acts necessary to attend to the following:

   3.2.1The Applicant shall be granted, and shall be at liberty to register, a second-ranking mortgage in favour of the Applicant over the [LL] property and the [QQ] property with the second mortgage to be prepared by her solicitors provided that:

   3.2.1.1The principal amount secured by the second ranking mortgage does not exceed the settlement amount, plus interest and costs (including enforcement costs);

   3.2.1.2The parties shall procure or cause to be procured the consent of the first registered mortgagee for the [LL] property and the [QQ] property to the registration of a second registered mortgage in favour of the Applicant;

   3.2.1.3The second registered mortgage must be released upon the Respondent discharging in full his obligations under these Orders (including the payment in full of the settlement amount and any outstanding interest and costs);

   3.2.1.4The Respondent is responsible for all costs associated with the preparation, registration and removal of the third registered mortgages over the [LL] property and the [QQ] property; and

   3.2.1.5In the event that the parties are not able to procure the consent of the first registered mortgagee for the [LL] property and the [QQ] property to the registration of a second registered mortgage in favour of the Applicant, then the Applicant is entitled to lodge a caveat over the [LL] property and the [QQ] property, recording the interest of the unregistered second mortgage.

   3.3Pending the Respondent discharging in full his obligations to the Applicant pursuant to these Orders, the Respondent shall be restrained and an injunction shall issue restraining him from:

   3.3.1Borrowing any funds secured by the first registered mortgages against the [LL] property and/or the [QQ] property, without first obtaining the Applicant’s written consent unless the proceeds are to be and are in fact paid to the Applicant or towards the discharge of the Respondent’s obligations under Order 2.1;

   3.3.2Taking steps to arrange with any bank and/or other financial institution any mortgage and/or further mortgage and/or debt and/or loan facility and/or encumbrances over [LL] property and/or the [QQ] property, as security without first obtaining the Applicant's written consent unless the proceeds are to be and are in fact paid to the Applicant in or towards the discharge of the Respondent’s obligations under Order 2.1;

   3.3.3Otherwise dealing with the [LL] property and/or the [QQ] property without the Applicant's written consent or in accordance with the terms of the second ranking mortgage to be granted to the Applicant in accordance with these Orders, unless the proceeds are to be and are in fact paid to the Applicant or towards the discharge of the Respondent’s obligations under Order 2.1, and that such sum is not less than the settlement amount outstanding at the time of the dealing; and

   3.3.4Doing anything or taking any steps which will allow or result in a caveat or notification or dealing to be placed on the title of the [LL] property and/or the [QQ] property, without the Applicant’s written consent unless the proceeds are to be and are in fact paid to the Applicant or towards the discharge of the Respondent’s obligations under Order 2.1 and that such sum is not less than the settlement amount outstanding at the time of the dealing.

   Default sale provisions

   4In the event that the Respondent fails to pay to the Applicant the settlement amount owing pursuant to Order 2.1, the parties shall take immediate steps to sell the [LL] property and/or the [QQ] property as follows:

   4.1.1The real estate agent appointed to list the [LL] property for sale and/or the [QQ] property shall be as the parties agree upon in writing or, in the absence of agreement reached within 7 days, as nominated by the Applicant.

   [LL] property

   4.1.2The sale price at which the [LL] property shall be sold shall be such price as the parties agree upon in writing or, in the absence of agreement, the sale price shall be amount of $4,125,000.

   4.1.3In the event that the [LL] property does not sell by private sale within 6 months from the date is was listed for sale, the Respondent must sign all documents and instruments and do all things necessary to list the [LL] property for sale by public auction with an auction agent agreed upon by the parties and in the event there is no agreement, the auction agent to be nominated by the Applicant and a reserve price shall be agreed upon between the parties and, in the event of no agreement as to the reserve price, then the reserve price shall be $4,125,000.

   4.1.4The Respondent shall be responsible for all costs and expenses of the auction payable prior to the auction sale of the [LL] property.

   4.1.5In the event that the [LL] property does not sell by public auction in accordance with Order 4.1.3, that Respondent do all acts to cause the [LL] property to be resubmitted for sale by private treaty in accordance with the provisions of Orders 4.1.3 and 4.1.4 and the [LL] property shall be resubmitted for sale by public auction at 6 monthly intervals from the last public auction and be resubmitted for sale by private treaty between such auctions, until the LL property is sold.

   [QQ] property

   4.1.6The sale price at which the [QQ] property shall be sold shall be such price as the parties agree upon in writing or, in the absence of agreement, the sale price shall be amount of $3,650,000.

   4.1.7In the event that the [QQ] property does not sell by private sale within 6 months from the date is was listed for sale, the Respondent must sign all documents and instruments and do all things necessary to list the [QQ] property for sale by public auction with an auction agent agreed upon by the parties and in the event there is no agreement, the auction agent to be nominated by the Applicant and a reserve price shall be agreed upon between the parties and, in the event of no agreement as to the reserve price, then the reserve price shall be $3,650,000.

   4.1.8The Respondent shall be responsible for all costs and expenses of the auction payable prior to the auction sale of the [QQ] property.

   4.1.9In the event that the [QQ] property does not sell by public auction in accordance with Order 4.1.7, that Respondent do all acts to cause the [QQ] property to be resubmitted for sale by private treaty in accordance with the provisions of Orders 4.1.7 and 4.1.8 and the [QQ] property shall be resubmitted for sale by public auction at 6 monthly intervals from the last public auction and be resubmitted for sale by private treaty between such auctions, until the [QQ] property is sold.

   4.2Upon the completion of the sale of the [LL] property and/or the [QQ] property, the Applicant is to be paid the amount owing to her pursuant to Orders 2.1 and 3.1.

   4.3The Respondent shall pay or cause to be paid as and when due, all of the instalments of principal and interest (if any) including arrears, fees, costs, expenses, indemnities, charges, duties and damages, pursuant to the terms of the National Australia Bank mortgage … secured over [QQ] property and National Australia Bank mortgage … secured over [QQ] property as well as all other costs and expenses associated with the said properties, including land tax and statutory charges, and the Respondent shall indemnify and keep the Applicant indemnified in respect of any actions, claims, demands, debts and liabilities of whatsoever nature and whensoever arising which may be taken or made against the Applicant arising out of or in any way relating to the said properties including land tax and statutory charges.

   Retention of personal property

   5The Applicant, as against the Respondent, shall forthwith retain as her absolute property all of her right, title and interest to and in, and the respondent shall relinquish and/or transfer to the Applicant all of his right, title and interest, if any, to and in the following:

   5.1       Applicant's paintings, jewellery and household effects; and

   5.2       Applicant's superannuation.

   AND the Court NOTES that the combined value of the assets and superannuation referred to in Order 5 is $24,318.

   6The Respondent, as against the Applicant, shall forthwith retain as his absolute property and/or financial resource all of his right, title and interest to and in, and the Applicant shall relinquish and/or transfer to the respondent all of her right, title and interest, if any, to and in the following:

   6.1       Subject to Order 4, the [LL] property;

   6.2       Subject to Order 4, [QQ] property;

   6.3       [SS] property;

   6.4       Respondent's shares;

   6.5       Respondent's creditors;

   6.6       Respondent's bank account;

   6.7       Respondent's household contents; and

   6.8       Respondent's superannuation.

   And the Court NOTES that the combined value of the assets and superannuation referred to in Order 6 is $9,428,656.

   7The Respondent is responsible for and must meet all payments when due for the Respondent's liabilities and indemnify and keep indemnified the wife from all liability howsoever arising in relation to the Respondent's liabilities.

   And the Court NOTES that the combined value of the Respondent's liabilities referred to in Order 7 is $4,672,338

   8The Respondent shall do all acts and things necessary to cause the [Morris Trust] to releases the Applicant from the payment of the Applicant's liability to the Trust and the Respondent shall indemnify and keep indemnified the Applicant from all liability howsoever arising in relation to same.

   9Except as any of these orders provide to the contrary, each of the Applicant and Respondent indemnifies the other from all loans owing by one to the other.

   10Except as any of these Orders provide to the contrary, the Applicant and Respondent shall each respectively be solely responsible for all and any debts and/or liabilities incurred in that party’s sole name or jointly with any other party and/or in relation to any of the assets to which each party is entitled pursuant to these Orders.

   11In the event that there is any dispute between the parties
   as to the implementation and giving effect to Order 1.25
   and the consequence determination of the value of the
   entitlement of the Applicant, then the parties shall have
   liberty to apply, by arrangement with the Associate to
   The Honourable Justice Stevenson, for further Orders.

   Child Support Departure

   12That the Applicant's application that this Court should exercise a discretion pursuant to section 116 of the Child Support (Assessment) Act 1989 so as to determine her application for departure from a child support assessment be dismissed.

1. The respondent de facto husband’s Minute read as follows:

   THAT PURSUANT TO S90SM OF THE FAMILY LAW ACT

   1.The Respondent de facto Husband pay $1,392,130 (“the principal sum”) to the Applicant de facto Wife by way of instalments as follows:

   1.1.        as to $700,000 on or before 16 December 2016; and

   1.2.        thereafter by way of instalments as follows:

   1.2.1.    $250,000 on or before 16 December 2017; and

   1.2.2.    $250,000 on or before 16 December 2018; and

   1.2.3.    $192,130 on or before 16 December 2019.

   2.The Respondent de facto Husband pay to the Applicant de facto Wife interest on any of the principal sum that remains outstanding as at 16 December 2017 calculated at the rate prescribed from time to time by the Family Law Rules, such interest to be paid annually in arrears, so that the first payment of interest would be due on 16 December 2017.

   3.Pending payment by the Respondent de facto Husband of the principal sum pursuant to Order 1, and any interest payable pursuant to Order 2, the Respondent de facto Husband shall not sell or further encumber his interest the following parcels of real estate:

   3.1.“[LL E2]” and being the property described in title reference ..;

   3.2.“LL [E1]” and being the property described in title reference … and …;

   3.3.“[QQ]” and being the property described in title reference 32/734992;

   3.4.“[SS]” and being the property described in title reference …;

   save and except to facilitate and enable compliance with Orders 1 and 2 hereof, or otherwise with the consent in writing of the Applicant de facto Wife.

   4.Within 7 days of the date of these Orders, the Applicant de facto Wife shall do all acts and things and sign all documents necessary, including paying any fees or expenses, to withdraw the notification of the Order made by this Court on 15 August 2012 currently registered on the following Certificates of Title:

   4.1.       …;

   4.2.       …;

   4.3.       …;

   4.4.       …;

   4.5.       ...

   5.The Applicant de facto wife shall be restrained by injunction from doing any act or thing to prevent, or to hinder, the Respondent
   de facto Husband from further encumbering or otherwise borrowing funds to be secured on the properties identified in Order 3, or from selling or disposing of any property identified in Order 3, in an effort to facilitate compliance with Orders 1 and 2. 

   6.The Respondent de facto Husband shall do all acts and things necessary to cause [Morris Nominees] as trustee the [Morris Trust] to indemnify the Applicant de facto Wife in respect of all liabilities of whatsoever nature the de facto Wife has to the [Morris Trust].

   THAT AS TO CHILD SUPPORT DEPARTURE

   7.That the relief sought by the Applicant de facto Wife as to both periodic and non periodic child support departure be dismissed without prejudice to the Applicant de facto Wife seeking a child support departure review by way of the administrative processes contained within Part 7 of the Child Support (Assessment) Act.

2. On 17 August 2016 enquiries were made of the solicitors for the parties as to whether they wished to put any further submissions in relation to the form of orders.  The solicitors advised that neither party wished to put any additional submissions.

3. On the basis of the evidence which was before me at trial, I am not persuaded that the de facto husband could raise a sum of $1,392,130 within 120 days of the date of Orders.  On the other hand, I am not persuaded that the de facto wife should be required to wait for three and half years to receive the whole of her entitlement.  I appreciate that the de facto husband’s proposal involves payment of interest on any amounts outstanding beyond 16 December 2017.  It seems to me, however, that the parties’ financial entanglement should reach a complete finalisation before 16 December 2019.

4. I am not persuaded that it is appropriate, at this stage, that there be orders for sale of real property in the event of default in payment by the de facto husband.  All of the enforcement provisions provided by the Family Law Act 1975 (Cth) and Family Law Rules 2004 (Cth) would be available to the de facto wife if there were to be such a default. It seems to me that it would be appropriate that consideration be given to the de facto husband’s financial circumstances and the ongoing viability of his dairy farming operation, if and when any such default may call for enforcement proceedings.

5. In the exercise of my discretion, I will accede to the de facto husband’s proposal that he pay a sum of $700,000 on or before 16 December 2016.  I am not prepared to spread payment of the balance of $692,130 over the ensuing three years.  I will order that the de facto husband pay that sum of $692,130 on or before 16 December 2017 or such later date as the parties may agree in writing.  The de facto husband will thus be afforded an opportunity to structure his financial affairs as he sees fit, so as to accommodate payment, from time to time and having regard to his circumstances.

6. Otherwise, I will make orders in accordance with the Minute submitted on behalf of the de facto husband, with the exception of proposed order 5.  I do not consider that such an order is necessary in light of the provisions of paragraph 3 of the Minute submitted on behalf of the de facto husband.  I will dismiss by consent the de facto wife’s application in relation to child support departure.  I will order further that the parties have a liberty to apply in relation to the implementation of these orders.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 26 August 2016.

Associate: 

Date:  26 August 2016