KAHN & KAHN - [2020] FamCA 563

FAMILY COURT OF AUSTRALIA

KAHN & KAHN

[2020] FamCA 563

FAMILY LAW – PROPERTY – Interim property orders – Where the husband seeks orders in respect of the parties’ investment properties – Where the husband’s proposed orders are pressed as both interim spousal maintenance orders and mandatory injunctions – Where the wife opposes the husband’s application in part – Where the wife seeks orders for interim partial property distribution – Whether the husband has satisfied the s 72(1) gateway requirement for spousal maintenance – Whether the parties have satisfied the Court that it is reasonable and just in the circumstances for injunctions to be made in respect of the parties’ properties – Orders made by consent for properties to be sold and distribution of proceeds of sale – Orders made injuncting parties’ use and management of properties.

Family Law Act 1975 (Cth) ss 43, 72(1), 74, 79, 80, 114

Aitken & Murphy(No 2) [2012] FamCA 239
Edgar & Strofield (2016) FLC 93-711
Hall v Hall (2016) 257 CLR 490
In the marriage of F and F (1989) FLC 92-031
In the marriage of Farr (1976) FLC 90-133
In the marriage of Sieling and Sieling (1979) FLC 90-627
Jeeves v Jeeves (No 2) [2008] FamCA 1148
Kelleher & Anderson [2007] FamCA 137
Lampros & Lampros [2012] FamCA 415
Martin v Martin (2013) 49 Fam LR 606
Mertens & Mertens [2016] FamCAFC 136
Philips & Samuels [2017] FamCA 125
Tripp & Tripp [2013] FamCA 1107

APPLICANT:

Mr Kahn

RESPONDENT:

Ms Kahn

FILE NUMBER:

SYC

1827

2020

DATE DELIVERED:

16 July 2020

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

McClelland DCJ

HEARING DATE:

18 June 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Gray

SOLICITOR FOR THE APPLICANT:

Broun Abrahams Burreket

COUNSEL FOR THE RESPONDENT:

Mr Cummings

SOLICITOR FOR THE RESPONDENT:

Horton Rhobes Legal

Orders

That, within seven (7) days of the date of these Orders, Mr Kahn (“the husband”) and Ms Kahn (“the wife”) do all acts and things and sign all documents necessary to:
(a) Establish a joint bank account on terms which requires the signature and/or authority of both of them to operate (“the Real Estate Proceeds Account”); and
(b) Apply and, if successful, obtain, from the Commonwealth Bank of Australia, any and all financial hardship assistance and/or a deferral of their loan repayments in relation to any loans owing by either and/or both the husband and the wife to the maximum extent and for the maximum duration possible.
That forthwith the husband will do all acts and things and sign all documents necessary to market for sale and sell the property located at B Street, Suburb D in the State of New South Wales (“the B Street property”) and will, in particular, do all acts and things and sign all documents necessary to:
(a) within seven (7) days, appoint a real estate agent agreed upon by the husband and the wife, failing which the husband will forthwith nominate, in writing, three (3) agents from which the wife…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading KAHN & KAHN

Details

AGLC: KAHN & KAHN [2020] FamCA 563
Case: [2020] FamCA 563
Decision Date: 16 July 2020

CaseChat Overview and Summary

This matter came before McClelland DCJ concerning orders sought by Mr Kahn and Ms Kahn. The dispute involved the sale of two properties, one located at B Street and another at C Street, both in New South Wales. The court was required to make orders regarding the marketing, sale, and distribution of proceeds from these properties, as well as the management of other assets and liabilities.

The court was tasked with determining the specific steps and timelines for the sale of the B Street and C Street properties, including the appointment of agents and legal practitioners, the method of sale (auction or private treaty), reserve prices, and the negotiation of offers. Furthermore, the court needed to establish a clear priority for the distribution of sale proceeds, encompassing sale expenses, legal costs, reimbursements, mortgage discharges, council rates, estimated capital gains tax, income tax, a specific sum for each party, and the remaining balance. The court also had to address interim occupation rights, restrictions on further encumbrances, and the management of rental income and outgoings for other properties.

In its reasoning, the court established a detailed framework for the sale and distribution of assets. It mandated the creation of a joint bank account for real estate proceeds and required parties to seek financial hardship assistance for loans. Specific timelines were set for appointing agents and lawyers, marketing properties, and accepting offers within a percentage of the reserve price. The distribution of proceeds followed a hierarchical order, ensuring expenses and taxes were addressed before distributing capital sums to the parties. The court also granted exclusive occupation of the B Street property to the husband pending its sale and imposed restraints on further encumbering properties. The wife was given exclusive occupation of the J Street property and was ordered to manage the G Street property, with rental income directed to an offset account for various outgoings.

The court made detailed orders concerning the sale of the B Street and C Street properties, including the establishment of a joint bank account for proceeds and the process for seeking financial hardship assistance. The orders specified the marketing and sale procedures for both properties, including the appointment of agents and lawyers, reserve prices, and the acceptance of offers. A comprehensive priority for the distribution of sale proceeds was established, followed by provisions for capital gains tax, interim occupation rights, and the management of other properties and their associated income and expenses.

Orders

Orders of the court

That, within seven (7) days of the date of these Orders, Mr Kahn (“the husband”) and Ms Kahn (“the wife”) do all acts and things and sign all documents necessary to:

(a) Establish a joint bank account on terms which requires the signature and/or authority of both of them to operate (“the Real Estate Proceeds Account”); and

(b) Apply and, if successful, obtain, from the Commonwealth Bank of Australia, any and all financial hardship assistance and/or a deferral of their loan repayments in relation to any loans owing by either and/or both the husband and the wife to the maximum extent and for the maximum duration possible.

That forthwith the husband will do all acts and things and sign all documents necessary to market for sale and sell the property located at B Street, Suburb D in the State of New South Wales (“the B Street property”) and will, in particular, do all acts and things and sign all documents necessary to:

(a) within seven (7) days, appoint a real estate agent agreed upon by the husband and the wife, failing which the husband will forthwith nominate, in writing, three (3) agents from which the wife will, within a further seven (7) days, select one (1) and failing which the husband shall select one (1) (“the B Street Agent”);

(b) execute the agency agreement in a form agreed upon by the husband and the wife and, if, within seven (7) days of the selection of the B Street Agent, the parties are unable to agree upon the terms of the agency agreement, the B Street Agent’s standard terms and the B Street Agent’s standard fees will be adopted;

(c) within seven (7) days, appoint a legal practitioner agent agreed upon by the husband and the wife in respect of the conveyance of the B Street property, failing which the husband will nominate, in writing, three (3) legal practitioners from which the wife will, within a further seven (7) days, select one (1) and failing which the husband will select one (1) (“the B Street Lawyer”);

(d) market the B Street property for sale by public auction on a date within six (6) weeks of the date of the appointment of the B Street Agent (“the First B Street Auction”) at a reserve price agreed between the husband and the wife and failing agreement in the sum of $1,450,000;

(e) in the event that the B Street property does not sell at the First B Street Auction, market the B Street property for sale with the B Street Agent by way of private treaty for a period of six (6) weeks, during which time the husband will accept any offer made to purchase the B Street property within five per cent (5%) of the reserve price of the First B Street Auction unless the husband and the wife otherwise agree;

(f) in the event that the B Street property is not sold at the First B Street Auction and is not sold in the period provided for sale by private treaty, market the B Street property for sale by public auction with the B Street Agent on a date within six (6) weeks of the date of the conclusion of the period of sale by private treaty at a reserve price agreed between the husband and the wife and failing agreement five per cent (5%) below the reserve price at the First B Street Auction;

(g) attend (in person or by telephone) any auction pursuant to this Order and, in the event that the reserve price set for that auction is not reached, negotiate with the highest bidder and the second highest bidder and shall accept the highest offer to purchase made within five per cent (5%) of the reserve price set for that auction unless the husband and the wife otherwise agree;

(h) execute the contract for sale in a form agreed upon by the husband and the wife, and, in the event that the husband and the wife fail to agree on the terms of the contract for sale, the terms recommended by the B Street Lawyer will be adopted;

(i) within 24 hours of entering into any contract for sale, provide a termination notice of the tenancy agreement(s) to any tenant(s) stating that the landlord has entered into a contract for sale that requires vacant possession of the B Street property to the purchaser;

(j) co-operate in every way with the B Street Agent and the B Street Lawyer in relation to the sale of the B Street property at all times requested by the B Street Agent and ensure that the B Street property is in a neat and clean condition; and

(k) execute all other documents necessary to complete the sale within the time required by the contract for sale to ensure that the purchasers do not have a right to terminate or rescind due to failure to do so.

That forthwith the husband and the wife do all acts and things and sign all documents necessary to market for sale and sell the property located at C Street, Suburb F in the State of New South Wales (“the C Street property”) and, in particular, do all acts and things and sign all documents necessary to:

(a) within seven (7) days, agree upon a real estate agent, failing which the husband will forthwith nominate, in writing, three (3) agents from which the wife will, within a further seven (7) days, select one (1) and failing which the husband shall select one (1) (“the C Street Agent”);

(b) execute the agency agreement and, if, within seven (7) days of the selection of the C Street Agent, the parties are unable to agree upon the terms of the agency agreement, the C Street Agent’s standard terms and the C Street Agent’s standard fees will be adopted;

(c) within seven (7) days, agree upon a legal practitioner to act on their behalf in respect of the conveyance of the C Street property, failing which the husband will nominate, in writing, three (3) legal practitioners from which the wife will, within a further seven (7) days, select one (1) and failing which the husband will select one (1) (“the C Street Lawyer”);

(d) market the C Street property for sale by public auction on a date within six (6) weeks of the date of the appointment of the C Street Agent (“the First C Street Auction”) at a reserve price agreed between the husband and the wife and failing agreement in the sum of $1,500,000;

(e) in the event that the C Street property does not sell at the First C Street Auction, market the C Street property for sale with the C Street Agent by way of private treaty for a period of six (6) weeks during which time the husband and the wife will accept any offer made to purchase the C Street property within five per cent (5%) of the reserve price of the First C Street Auction unless the husband and the wife otherwise agree;

(f) in the event that the C Street property is not sold at the First C Street Auction and is not sold in the period provided for sale by private treaty, market the C Street property for sale by public auction with the C Street Agent on a date within six (6) weeks of the date of the conclusion of the period of sale by private treaty at a reserve price agreed between the husband and the wife and failing agreement five per cent (5%) below the reserve price at the First C Street Auction;

(g) each attend (in person or by telephone) any auction pursuant to this Order and, in the event that the reserve price set for that auction is not reached, negotiate with the highest bidder and the second highest bidder and shall accept the highest offer to purchase made within five per cent (5%) of the reserve price set for that auction unless the husband and the wife otherwise agree;

(h) execute the contract for sale and, in the event that the husband and the wife fail to agree on the terms of the contract for sale, the terms recommended by the C Street Lawyer will be adopted;

(j) co-operate in every way with the C Street Agent and the C Street Lawyer in relation to the sale of the C Street property at all times requested by the C Street Agent and ensure that the C Street property is in a neat and clean condition; and

That, on settlement of the sale of each of the B Street property and the C Street property, the husband and the wife will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:

(a) payment of the agents’ commissions, auctioneers’ commissions and any other expense properly incurred in respect of the sale of each property;

(b) payment of the legal costs of sale of each property;

(c) payment of any amount expended in preparing each property for sale where the expenditure was agreed upon by the husband and the wife in writing in advance;

(d) reimbursement to the husband and/or the wife of any amounts paid prior to settlement of the type specified in the preceding sub-clauses;

(e) such amount as is necessary to obtain a discharge of any registered mortgage in favour of the Commonwealth Bank of Australia secured on the title to either property;

(f) payment of any amount outstanding to any water authority or local council in respect of each property not otherwise taken up as a credit in favour of the vendor;

(g) payment of an amount being the estimated capital gains tax payable by the parties on the sale of each property to be held by the wife’s solicitors on trust. In the event of a dispute between the parties about the estimate, the higher estimated amount will prevail;

(h) as and when the same falls due for payment, any tax owing by the husband and the wife to the Australian Taxation Office following the receipt of any Notice of Assessment for Income Tax;

(i) payment of an amount to each party such that they each receive a total sum of $295,000; and

(j) payment of the balance then remaining into the Real Estate Proceeds Account.

That capital gains tax payable on the sale of the B Street property and the C Street property are to be paid, as and when it falls due, from the funds held in the wife’s solicitors’ trust account. In the event of a shortfall of funds from which to pay the capital gains tax, the parties are to pay the shortfall equally.

That, pending sale of the B Street property, the husband be entitled to occupy the B Street property to the exclusion of the wife and be obligated to pay all outgoings in respect of that property, except mortgage repayments.

That, pending the settlement of the sale of the B Street property and the C Street property, the husband and the wife are hereby restrained, without the written consent of the other or an Order of Court, from:

(a) extending any lease or providing any new lease or license to occupy any of the property;

(b) further encumbering any of the property; and

That the wife pay all outgoings, including mortgage repayments but excluding land tax, in respect of the property located at G Street, Suburb H in the State of New South Wales (“the G Street property”), including the upper and lower levels of the G Street property, as and when they fall due and the wife shall pay the balance of the rental income over and above those outgoings into the Commonwealth Bank of Australia offset account number ending …90 (“the Offset Account”).

That, within seven (7) days, the wife is to provide the husband with “view” access to the bank account into which the G Street property rental proceeds and expenses are paid to and from, or otherwise provide disclosure upon payment of such expenses if those expenses are not paid from the relevant bank account.

10.

That the funds in the Offset Account be applied as follows:

(a) in payment of all outgoings, including mortgage repayments, if payable, in respect of the B Street property, the C Street property and the property located at J Street, Suburb H in the State of New South Wales (“the J Street property”);

(b) in payment of any land tax payable in respect of the B Street property, the C Street property and the G Street property;

(c) in payment of rental deposit bonds to be returned to the tenants of the B Street property, the C Street property and the G Street property; and

(d) if applicable, in payment of capital gains tax payable on the sale of the B Street property and the C Street property.

11.

That the wife have exclusive occupation and use of the J Street property.

THE COURT NOTES THAT:

A. These Orders have been amended pursuant to rule 17.02 of the Family Law Rules 2004 (Cth).

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

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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