Joubert & Bottari

Case [2022] FedCFamC1F 761

Federal Circuit and Family Court of Australia

(DIVISION 1)

Joubert & Bottari [2022] FedCFamC1F 761   

File number(s): SYC 4450 of 2022
Judgment of: WILSON J
Date of judgment: 30 September 2022
Catchwords:  FAMILY LAW – PROPERTY – interim orders – application for part property orders – wife ordered to pay lesser amount than the sum sought – application otherwise dismissed.  
Cases cited:

Cao & Trong (No 2) [2019] FamCA 941

Eaby & Speelman [2015] FamCAFC 104

Gabel v Yardley (2008) 40 Fam LR 66

In the Marriage of Zschokke (2009) 42 Fam LR 203

Marvel v Marvel (2010) 43 Fam LR 348

Redmond & Redmond [2014] FamCAFC 155

SS & AH [2010] FamCAFC 13

Selena & Montez [2017] FamCA 583

Strahan v Strahan (2009) 42 Fam LR 203

Verdon v Verdon (2020) 62 Fam LR 573

Division: Division 1 First Instance
Number of paragraphs: 31
Date of last submissions: 16 September 2022
Date of hearing: 16 September 2022
Place: Melbourne
Counsel for the Applicant: Mr G. Gould
Solicitor for the Applicant: Bridges Lawyers
Counsel for the Respondent: Mr P. Cummings SC
Solicitor for the Respondent: Karras Partners Lawyers

ORDERS

SYC 4450 of 2022

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

MR JOUBERT

Applicant
AND:

MS BOTTARI

Respondent

order made by:

WILSON J

DATE OF ORDER:

30 SEPTEMBER 2022

THE COURT ORDERS THAT:

1.On the husband’s application for a part property order, I order the wife to pay the husband $61,000 by 14 October 2022.

2.Otherwise, paragraphs 1, 2 and 3 of the husband’s amended application sealed 15 September 2022 are dismissed.

3.The further hearing of this proceeding is adjourned to the Honourable Justice Harper.

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 Joubert & Bottari has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

WILSON J

INTRODUCTION

  1. The husband has applied for interim orders –

    (a)for a part property settlement in the sum of $3 million; 

    (b)alternatively, for the sale of real property in Suburb B, New South Wales; and

    (c)for spousal maintenance in the sum of $10,000 pending the sale of certain shares. 

  2. The wife opposed each of the husband’s applications contending that she was willing to pay the husband an amount in the vicinity of $50,000. 

  3. As these reasons record, in my view, the…

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Joubert & Bottari [2022] FedCFamC1F 761
Case
[2022] FedCFamC1F 761
Decision Date

CaseChat Overview and Summary

The case of Joubert & Bottari involves a dispute between the husband and wife, where the husband sought to compel the wife to sell shares she owned in C Pty Ltd to the value of $3 million. The husband argued that the sale would provide him with the necessary funds to cover his legal expenses and to maintain a level playing field in the ongoing litigation. The wife contested this application, and the case was heard by the court. The legal issues that the court had to decide included whether the husband's request for a part property order was justified, and if so, what the appropriate amount should be.

The court considered several factors in its reasoning, including the potential tax consequences of the sale of the shares, the lack of a satisfactory explanation for the husband's request for $3 million, and the potential impact of the sale on the wife's ability to participate in other litigation. The court found that the husband's request for $3 million was not justified and instead granted a part property order of $61,000. This amount was deemed sufficient to enable the husband to proceed with the next stage of the litigation, namely a mediation before Mr M KC and the return of the proceeding before Harper J in November 2022.

The court also noted that if the husband wished to apply for a further part property order in the future, he could do so on proper material. The court emphasised that the decision to grant a part property order should only be made with great circumspection, particularly in the context of a contested interlocutory application. In reaching its decision, the court relied on well-established authority, including Marvel v Marvel, Eaby & Speelman, SS & AH, and Redmond & Redmond.

In summary, the court granted a part property order of $61,000 to the husband, while refusing his application to sell shares in C Pty Ltd to the value of $3 million. The court found that the husband's request for $3 million was not justified and that the part property order of $61,000 would provide him with the necessary funds to proceed with the next stage of the litigation. The court also noted that the husband could apply for a further part property order in the future if proper material was provided.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

In paragraph 1 of his amended application in a proceeding sealed the day before I heard this application on 16 September, the husband sought orders compelling the wife to sell shares she owned in C Pty Ltd to the value of $3 million and to pay that sum forthwith to the husband. THE HUSBAND’S EVIDENCE ON THIS ISSUE In support of that application, the husband relied on two affidavits made by him, the first sworn 28 June 2022 and the second sworn 28 July 2022. Certain information in those affidavits was contested on this application. As well-entrenched authority provides,[1] findings of fact on a contested interlocutory application should only be made with great circumspection. So far as the uncontroversial material is concerned on this application, drawn from the husband’s two earlier mentioned affidavits or from the wife’s affidavit sworn 8 August 2022 and her affidavit sworn 16 September 2022, the following relevant matters emerged – [1] Marvel v Marvel (2010) 43 Fam LR 348, Eaby & Speelman [2015] FamCAFC 104, SS & AH [2010] FamCAFC 13 and Redmond & Redmond [2014] FamCAFC 155. (a)the husband is 45, the wife is 51, they met in late 2005, married in 2007 and separated in November 2021;(b)they have a daughter born 2012 making her nine years of age, who lives with the wife and spends time with the husband;(c)the husband estimated the gross value of assets for division in this litigation to be approximately $70 million;(d)tax is owed of about $15 million;(e)the Suburb B property the subject of paragraph 2 of the husband’s amended application was estimated to be valued at $25 million; (f)that property is owned by the husband and wife as tenants in common as to 99 shares by the husband and as to one share by the wife;(g)at the commencement of the relationship, the husband was employed earning $80,000 per annum, living in rented accommodation with superannuation between $10,000 to $20,000, cash-at-bank of about $30,000 and an interest in real estate in Country D;(h)at the commencement of the relationship the wife then had recently sold her one third interest in a company called E Pty Ltd which, after discharging loan finance, derived for her after tax the sum of $7,500,000 or thereabouts;(i)she had also a motor vehicle the husband said was worth $100,000, cash-at-bank of between $100,000 and $200,000, superannuation and an interest in a company called F Pty Ltd (“F Pty Ltd”);(j)C Pty Ltd was incorporated in early 2007 of which the wife was the sole director and in which F Pty Ltd is its shareholder;(k)G Pty Ltd (“G Pty Ltd”) was incorporated in mid-2007 in respect of which the wife is the sole director and shareholder; (l)G Pty Ltd is the trustee of the H Trust;(m)J Pty Ltd (“J Pty Ltd”) was incorporated in mid-2008 in respect of which the wife is the sole director and shareholder; and(n)J Pty Ltd is involved in litigation in the High Court of Australia on appeal from Federal Court decisions.[2][2] On appeal from the decisions in [2021] FCAFC 163 and [2021] FCAFC 180.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Mr Cummings also submitted that a reasonable sum for costs (up to $61,000) is appropriate as a part property order because this litigation returns before Harper J in November this year and Mr M KC will conduct a mediation before that. Such an approach was consistent with the approach taken by McClellan DCJ in Selena & Montez.[12] [12] [2017] FamCA 583. CONSIDERATION OF the application for a PART PROPERTY ORDER Even though the application to sell shares in C Pty Ltd to realise $3 million took up the majority of the debate before me on 16 September 2022, it was expressed to be alternative to the application to sell the house at Suburb B. Logically, the application to sell the Suburb B property came first in time, so I address that first. In my view the application to generate funds from the sale of the Suburb B property fails. If granted, the home would be sold and converted to cash. The wife tells me she seeks orders at trial that she have the home. If sold before then, she will be denied the possibility of that order being made. If sold, the order cannot be reversed. Such an approach is an affront to the statements of principle in In the Marriage of Zschokke[13] and Gabel v Yardley.[14] I refuse the application in paragraph 2 of the husband’s amended application in a proceeding.[13] (1996) 20 Fam LR 766.[14] (2008) 40 Fam LR 66. So far as the sale of shares was concerned, I am willing to grant that application but only as to $61,000. I refuse the application for the shares in C Pty Ltd to be sold so as to generate $3 million. I say that for several reasons. First, the mere fact that a party contends that at trial he or she will obtain a division of property in the sum sought is not sufficient to warrant a part property order being made ahead of trial. Second, the C Pty Ltd shares are secured by a margin lending facility so any sale of those shares or part thereof is likely to trigger a call on the margin loan. Third, beyond his statement that he needs funds to meet certain expenses in the nature of legal fees, the husband proffers no satisfactory explanation for his application for $3 million. Fourth, if funds from the sale of the shares in C Pty Ltd are realised, substantial tax consequences will follow on which the wife would need sophisticated taxation advice, none of which is presently available to her. Fifth, the husband’s counsel’s justification for his client’s application on the basis of “level playing field” or “scorched-earth policy” was meaningless and nonsensical. Sixth, the part property order of $61,000 will provide to the husband funds to enable him to get to the next stage of this litigation, namely a mediation before Mr M KC then the return of the proceeding before Harper J in November 2022. Seventh, if the husband on proper material subsequently wishes to apply for a further part property order, he can. Eighth, very substantial expenses may very well befall the wife in costly litigation in Country L, in the Federal Court of Australia and in the High Court of Australia that is likely to account for a large proportion of the liquid component of the shares, namely $10 million. PARAGRAPH 3 OF THE AMENDED APPLICATION