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 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;
(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 C Street property to the purchaser;
(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
(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, 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
(c)       drawing down on any loan facility secured by mortgage on the title to any of the property.
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.
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.
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.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kahn & Kahn 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: SYC 1827 of 2020

Mr Kahn

Applicant

And

Ms Kahn

Respondent

REASONS FOR JUDGMENT

Introduction

This matter concerns an urgent Application for interim property orders by Mr Kahn (“the husband”) concerning the management of rent received in respect of three (3) investment properties owned jointly or individually by the husband and the respondent, Ms Kahn (“the wife”). The husband also seeks orders for the sale of those properties and, in the event of sale, orders dealing with the proceeds of sale and consequential matters.
The Application is made in circumstances where, as a result of the breakdown of the parties’ relationship, the husband is no longer living in the same household as the wife and the children and in circumstances where his income has been impacted by the current COVID-19 pandemic.
By way of summary, the dispute relates to the parties’ respective contentions as to what property and/or financial resources should be made available to the parties to assist them to sustain themselves and the children of the marriage pending the final hearing of the matter. In that respect, throughout the parties’ relationship, the parties bought, renovated and sold property. From time to time, those properties are also rented.
The wife has been responsible for managing the properties in terms of recording receipt of rental income, maintaining the properties and meeting expenses in respect of outgoings concerning those properties. Any rental income received over and above specific outgoings relating to the properties has been applied by the wife to meet day-to-day household expenses. At the time he lived in the same household as the wife and their children, the husband benefited from that surplus rental income when it existed. He contends that is no longer the case. The wife, on the other hand, contends that, in the absence of the household receiving the benefit of income from the husband, it is necessary for her to apply any surplus of rental income over and above expenses toward sustaining herself and the parties’ children.

Relevant background

In 1973, the husband was born. He is currently aged 47 years.
In 1977, the wife was born. She is currently aged 42 years.
In August 2007, the parties commenced cohabitation.
In December 2007, prior to their marriage, the parties entered into a financial agreement. That agreement set out the extent to which the parties desired to maintain their financial independence.
In 2009, the parties were married and, on 30 January 2019, the parties separated on a final basis.
There are three (3) children of the marriage:
a)In 2010, X was born. She is currently aged 10 years.
b)In 2012, Y was born. He is currently aged 8 years.
c)In 2017, Z was born. She is currently aged 3 years.
The parties, together, have a history of purchasing properties then residing in those properties, renovating them and selling them. For the purpose of this decision, however, I will not set out each property that the parties have “flipped”. The properties currently owned by the parties and the subject of the husband’s Application are as follows:
a)In or about 2005, prior to the commencement of the parties’ cohabitation, the wife purchased a property located at B Street, Suburb D (“the B Street property”) for $520,000. In September 2009, the wife transferred ownership of the B Street property to the husband for consideration in the amount of $750,000. Since March 2020, the B Street property has been untenanted;
b)In September 2010, the parties purchased the property located at G Street, Suburb H (“the G Street property”) for $1,700,000. In October 2010, the parties conducted renovations to the G Street property in the sum of approximately $220,000. It is split into two residences, hereforth referred to as “Upper G Street” and “Lower G Street”, respectively. Both residences are owned jointly by the husband and the wife and both are currently tenanted. The rent in respect of Lower G Street, however, has been paid upfront for the period February 2020 to August 2020;
c)On 30 January 2015, the parties purchased the property located at C Street, Suburb F (“the C Street property”) for $1,010,000. The C Street property was registered in the wife’s name and, as such, she is the sole proprietor of the property, which is currently tenanted; and
d)On 12 December 2015, the parties purchased the property located at J Street, Suburb H (“the J Street property”) and it is jointly owned by them. The J Street property is the parties’ former matrimonial home.

The wife and the children currently live in the J Street property and the husband resides in rental accommodation in Suburb H. The wife has, however, indicated that she consents to the husband living in one of the parties’ vacant rental properties and that is reflected in one of the orders which she is seeking.
The wife is unemployed and is the primary carer of the children. Her weekly income, as asserted in her Financial Statement filed 17 June 2020, is $6,254.42. That income is derived from rental income from the B Street property, the G Street property and the C Street property, as well as a government allowance of approximately $150. In her Affidavit, however, the wife attests to her weekly income being diminished to approximately $3,604.42, as a result of the B Street property being vacated in March 2020.
The wife contends that her weekly expenditure, including liabilities in relation to the properties, is $11,415.24. She contends that, of that amount, approximately $3,000 is expended per week towards meeting her expenses and the expenses of the parties’ children.
The husband works in the entertainment industry. Until mid-2019, the husband operated a business known as L Pty Ltd, however, in 2019, the company entered liquidation.
In the financial year commencing 1 July 2019, the husband has received approximately $20,000 through freelance work. In that respect, the husband attests to such freelance work being relatively unfruitful and states:
This has been as a consequence of the negative impact within my industry of the failure of L Pty Ltd, the time it has taken post trading as L Pty Ltd to create a pipe line of new work in my own name, the time I have had to devote to the liquidation of L Pty Ltd, the general reduction in work in the industry, the usual seasonal reduction in work over the holiday period at the end of the year and now the extremely limited work on offer because of the COVID-19 pandemic. Work in Australia and overseas has largely ceased as a result of COVD-19, including with respect to projects through advertising agencies, which was a portion of my work.
The husband is currently receiving a weekly income of $562 through the Federal Government’s JobSeeker Payment scheme. The husband states his weekly expenditure is $2,535 – of which $877 is for the personal expenses of himself and the children.

Applications

Orders sought by the husband

The husband seeks that orders be made in accordance with those set out in Annexure A to his case outline document, consistent with those sought in his Application in a Case filed 11 June 2020 save for minor amendments, as follows:
~~Procedural~~
~~1.        That the time for service of this Application on the Wife be abridged and the Husband be granted leave to serve this Application on the Respondent at short notice.~~
~~2.        That this application be listed for hearing on an urgent basis.~~
Interim Financial
3.        That within 7 days of the date of the making of this Order the Husband and the Wife will do all acts and things and sign all documents necessary to:
3.1      establish a joint bank account on terms which requires the signature and/or authority of both of them to operate (the Real Estate Rental Account);
3.2      establish a further joint bank account on terms which requires the signature and/or authority of both of them to operate (the Real Estate Proceeds Account); and
3.3      to 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.
4.        That pending further Order the Applicant and the Respondent within 7 days will do all acts and things and sign all documents necessary to pay all rental income from the lease of:
4.1      the property situate at and known as J Street, Suburb H in the State of New South Wales being the whole of the land contained in folio identifier … (the J Street property);
4.2      the property situate at and known as B Street, Suburb D in the State of New South Wales being the whole of the land contained in folio identifier … (the B Street property);
4.3      the property situate at and known as C Street, Suburb F being the whole of the land contained in folio identifier … (the C Street property);
4.4      the property situate at and known as G Street Suburb H being the whole of the land contained in folio identifiers … and … (the G Street property),
(the Properties) to the Real Estate Rental Account and thereafter apply those monies each calendar month in the following manner and priority:
4.5      the periodical payments (if any) in relation to loans with Commonwealth Bank of Australia number:
4.5.1   …17;
4.5.2   …58;
4.5.3   …66;
4.5.4   ..18;
4.5.5   …34;
4.5.6   …01;
4.5.7   …78;
4.5.8   …01; and
4.5.9   …05.
provided that no such payment is to be made if any mortgage payment deferral is available as a result of COVID-19 and/or financial hardship assistance packages offered by the Commonwealth Bank of Australia; and
4.6      the statutory and consumable outgoings in relation to any of the Properties including but not limited to council rates and utilities;
4.7      any other necessary expenses of the Properties as agreed to in writing in advance by the Husband and the Wife; and
4.8      one-half of the amount then remaining at the end of each calendar month, to each of the Husband and the Wife.
5.        That forthwith the Wife will do all acts and things and sign all documents necessary to withdraw the caveat on the title to the B Street property, with dealing number … and any caveat on the title to the J Street property.
6.        That forthwith the Husband and the Wife do all acts and things and sign all documents necessary to market for sale and sell the J Street property and in particular do all acts and things and sign all documents necessary to:
6.1      within seven days, agree upon a real estate agent failing which the Husband will forthwith nominate in writing three agents from which the Wife will within a further seven days select one and failing which the Husband shall select one (the J Street Agent);
6.2      execute the agency agreement and if within seven days of the selection of the J Street Agent the parties are unable to agree upon the terms of the agency agreement, the Agent’s standard terms and the J Street Agent’s standard fees will be adopted;
6.3      within seven days, agree upon a legal practitioner to act on their behalf in respect of the conveyance of the J Street property, failing which the Husband will nominate in writing three legal practitioners from which the Wife will within a further seven days select one and failing which the Husband will select one (the J Street Property Lawyer);
6.4      market the J Street property for sale by public auction on a date within 6 weeks of the date of the appointment of the J Street Agent (the First J Street Auction) at a reserve price agreed between the Husband and the Wife and failing agreement in the sum of $5,250,000;
6.5      in the event that the J Street property does not sell at the First J Street Auction, market the J Street property for sale with the J Street Agent by way of private treaty for a period of 6 weeks during which time the Husband and the Wife will accept any offer made to purchase the J Street property within 5% of the reserve price of the First J Street Auction unless the Husband and the Wife otherwise agree;
6.6      in the event that the J Street property is not sold at the First J Street Auction and is not sold in the period provided for sale by private treaty, market the J Street property for sale by public auction with the J Street Agent on a date within 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 5% below the reserve price at the First J Street Auction;
6.7      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 will negotiate with the highest bidder and the second highest bidder and shall accept the highest offer to purchase made within 5% of the reserve price set for that auction unless the Husband and Wife otherwise agree;
6.8      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 J Street Property Lawyer will be adopted;
6.9      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 J Street property to the purchaser;
6.10    co-operate in every way with the J Street Agent and the J Street Property Lawyer in relation to the sale of the J Street property at all times requested by the J Street Agent and ensure that the J Street property is in a neat and clean condition; and
6.11    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.
7.        That forthwith the Husband will do all acts and things and sign all documents necessary to market for sale and sell the B Street property and will in particular do all acts and things and sign all documents necessary to:
7.1      within seven days, appoint a real estate agent agreed upon by the Husband and the Wife, failing which the Husband will forthwith nominate in writing three agents from which the Wife will within a further seven days select one and failing which the Husband shall select one (the B Street Agent);
7.2      execute the agency agreement in a form agreed upon by the Husband and the Wife and if within seven 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;
7.3      within seven days, appoint a legal practitioner agent agreed upon by the Husband and the Wife in respect of the conveyance of B Street property, failing which the Husband will nominate in writing three legal practitioners from which the Wife will within a further seven days select one and failing which the Husband will select one (the B Street Property Lawyer);
7.4      market the B Street property for sale by public auction on a date within 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;
7.5      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 6 weeks during which time the Husband will accept any offer made to purchase the B Street property within 5% of the reserve price of the First B Street Auction unless the Husband and the Wife otherwise agree;
7.6      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 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 5% below the reserve price at the First B Street Auction;
7.7      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 will negotiate with the highest bidder and the second highest bidder and shall accept the highest offer to purchase made within 5% of the reserve price set for that auction unless the Husband and Wife otherwise agree;
7.8      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 Property Lawyer will be adopted;
7.9      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 G Street property to the purchaser;
7.10    co-operate in every way with the B Street Agent and the B Street Property 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
7.11    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.
8.        That forthwith the Husband and the Wife do all acts and things and sign all documents necessary to market for sale and sell the C Street property and in particular do all acts and things and sign all documents necessary to:
8.1      within seven days, agree upon a real estate agent failing which the Husband will forthwith nominate in writing three agents from which the Wife will within a further seven days select one and failing which the Husband shall select one (the C Street Agent);
8.2      execute the agency agreement and if within seven days of the selection of the C Street Agent the parties are unable to agree upon the terms of the agency agreement, the Agent’s standard terms and the C Street Agent’s standard fees will be adopted;
8.3      within seven 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 legal practitioners from which the Wife will within a further seven days select one and failing which the Husband will select one (the C Street Property Lawyer);
8.4      market the C Street property for sale by public auction on a date within 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;
8.5      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 6 weeks during which time the Husband and the Wife will accept any offer made to purchase the C Street property within 5% of the reserve price of the First C Street Auction unless the Husband and the Wife otherwise agree;
8.6      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 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 5% below the reserve price at the First C Street Auction;
8.7      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 will negotiate with the highest bidder and the second highest bidder and shall accept the highest offer to purchase made within 5% of the reserve price set for that auction unless the Husband and Wife otherwise agree;
8.8      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 Property Lawyer will be adopted;
8.9      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 C Street property to the purchaser;
8.10    co-operate in every way with the C Street Agent and the C Street Property 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
8.11    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.
9.        That pending the settlement of the sale of the each of the B Street property, J 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:
9.1      extending any lease or providing any new lease or license to occupy any of the property;
9.2      further encumbering any of the property;
9.3      drawing down on any loan facility secured by mortgage on the title to any of the property.
10.      That on settlement of the sale of each of the B Street property, J Street property and the C Street property the Husband and Wife will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
10.1    payment of the agent’s commission, auctioneer’s commission and any other expense properly incurred in respect of the sale of the property;
10.2    payment of the legal costs of sale of the property;
~~10.3    payment of any amount expended in preparing the property for sale where the expenditure was agreed upon by the Husband and the Wife in writing in advance;~~
~~10.4    reimbursement to the Husband and/or the Wife of any amounts paid prior to settlement of the type specified in the preceding sub-clauses;~~
10.5    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 the property;
10.6    payment of any amount outstanding to any water authority or local council in respect of the property not otherwise taken up as a credit in favour of the vendor; and
10.7    payment of any amount expended in preparing the property for sale where the expenditure was agreed upon by the Husband and the Wife in writing in advance;
10.8    reimbursement to the Husband and/or the Wife of any amounts paid prior to settlement of the type specified in the preceding sub-clauses;
10.9    payment of the balance then remaining into the Real Estate Proceeds Account.
11.      That pending further Order the Husband and the Wife will do all acts and things and sign all documents necessary to pay from the Real Estate Proceeds Account as and when sufficient funds become available the following ~~expenses~~ amounts in the following priority:
11.1    to the Husband the sum of $150,000 to a bank account nominated by him in writing, by way of partial property settlement;
11.2    to the Trust Account operated by Broun Abrahams Burreket Family Lawyers, the sum of $145,000 by way of interim costs, such sum to be applied in payment of the costs and disbursements incurred by the Husband in the conduct of these proceedings;
11.3    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 on any Notice of Assessment for Income Tax.
Section 106A
12. In the event either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders then the Registrar of the Court be appointed pursuant to Section 106A of the Act to execute such deed or instrument in the name of the defaulting party and do all acts and things necessary to give validity and operation to the deed or instrument.
Costs
13. That pursuant to section 117(2) of the Act, the Wife pay the Husband’s costs of and incidental to this Application as agreed and failing agreement as assessed, such payment to made within 7 days of the date of the making of final property alteration.

During the course of the hearing, counsel for the husband indicated that the husband was not pressing proposed orders 5 and 6 of his Application.

Orders sought by the wife

The wife seeks that orders be made in accordance with those set out in Annexure A to her case outline document, consistent with those sought in her Response to Application in a Case filed 17 June 2020 save for proposed order 13, as follows:
Sale of the property at B Street, Suburb D
1.        Unless otherwise agreed in writing, the parties do all acts and things necessary in order to cause the property at B Street, Suburb D (B Street property) in the State New South Wales to be listed for sale by public auction, forthwith as follows:
1.1      That the Real Estate Agent be Mr M of N Realtors (unless otherwise agreed);
1.2      That the conveyancer be agreed by the parties and failing agreement, with a conveyancer/solicitor nominated by the President of the NSW Law Society;
1.3      The reserve price will be set as agreed between the parties and failing agreement set by a nominee of the President of the NSW Real Estate Institute;
1.4      If at auction the reserve price is not reached, the B Street property is to be sold, if an amount within 5% of the reserve price is offered;
1.5      That the proceeds of sale in respect of the sale of the B Street property be distributed as follows and in the following priority:
1.5.1   In payment of Agent’s commission and advertising expenses and legal expenses of the sale of the respective property;
1.5.2   In discharge of the mortgage secured on the title of the respective property and required to be repaid;
1.5.3   In reimbursement to the Respondent of any upfront marketing expenses and or any costs incurred in preparing/presenting the B Street property for the sale, agreed by the parties in writing and the costs to prepare the property for sale to be reasonably agreed between the parties up to a maximum amount of $7,500. The nature of costs incurred are to be agreed between the parties and, failing agreement, such costs are to be incurred as recommended by the sales agent. Those costs are to be reimbursed to the paying party from the net sale proceeds of sale in priority to the final payment of funds to the parties;
1.5.4   An amount be held by the Respondent’s solicitors on trust, being the estimated Capital Gains Tax payable by the parties on sale of the B Street property. In the event of a dispute between the parties about the estimate, the higher estimated amount will prevail;
1.5.5   The balance be paid to each party equally, by way of partial property.
2.        Pending sale of the B Street property, the Applicant be entitled to occupy that property to the exclusion of the Respondent and be obligated to pay all outgoings in respect of that property, except mortgage repayments.
Sale of C Street, Suburb F
3.        Unless otherwise agreed in writing, the parties do all acts and things necessary in orders to cause the property at C Street, Suburb F (C Street property) in the State New South Wales and, to be listed for sale by public auction, with such auction to be held by 19 December 2020, noting the current lease expires in November 2020 as follows:
3.1.     That the Real Estate Agent be Mr M of N Realtors (unless otherwise agreed);
3.2.     That the conveyancer be agreed by the parties and failing agreement, with a conveyancer/solicitor nominated by the President of the NSW Law Society;
3.3.     The reserve price will be set as agreed between the parties and failing agreement set by a nominee of the President of the NSW Real Estate Institute;
3.4.     If at auction the reserve price is not reached, the C Street property is to be sold, if an amount within 5% of the reserve price is offered;
3.5.     That the proceeds of sale in respect of the sale of the C Street property be distributed as follows and in the following priority:
3.5.1. In payment of Agent's commission and advertising expenses and legal expenses of the sale of the respective property;
3.5.2. In discharge of the mortgage secured on the title of the respective property and required to be repaid;
3.5.3. In reimbursement to the Respondent of any upfront marketing expenses and or any costs incurred in preparing/presenting the C Street property for the sale, agreed by the parties in writing and the costs to prepare the property for sale to be reasonably agreed between the parties up to a maximum amount of $7,500. The nature of costs incurred are to be agreed between the parties and, failing agreement, such costs are to be incurred as recommended by the sales agent. Those costs are to be reimbursed to the paying party from the net sale proceeds of sale in priority to the final payment of funds to the parties;
3.5.4. The balance be paid:
3.5.4.1.          An amount be held by the Respondent’s solicitors on trust, being the estimated Capital Gains Tax payable by the parties on sale of the C Street property. In the event of a dispute between the parties about the estimate, the higher estimated amount will prevail;
3.5.4.2.         An amount be paid to each Party such that they each receive a total sum of $295,000 less the amount paid pursuant to Order 1.5.4, by way of partial property;
3.5.4.3.         The balance to the Commonwealth Bank of Australia offset account number ending #…90 (the Offset) in respect of the property at J Street, Suburb H (J Street property).
4. Unless otherwise agreed in writing, the parties be restrained from executing any lease or making any agreement with any tenant of the C Street property to extend the term of any lease beyond 30 November 2020.
G Street, Suburb H
5.        The Respondent pay all outgoings, including mortgage repayments but excluding land tax, in respect of the property at G Street, Suburb H (G Street property), including the Upper and Lower levels of the G Street property, as and when they fall due and the Respondent be entitled to all rental proceeds.
6.        Within 7 days, the Respondent is to provide the Applicant 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.
7.        If the Wife defaults in respect of any mortgage repayments following the expiration of any mortgage deferrals granted in respect of the G Street property, that property be sold if such default is not remedied within 72 days of the default, as set out at Order 6 below.
8.        Unless otherwise agreed in writing, the parties do all acts and things necessary in order to cause the property at G Street, Suburb H (G Street property) in the State New South Wales and, to be listed for sale by public auction to be held within 100 days of the day of default by the Respondent, referred to at Order 7 above, as follows:
8.1.     That the Applicant nominate three Real Estate Agents and the Respondent select one;
8.2.     That the conveyancer be agreed by the parties and failing agreement, with a conveyancer/solicitor nominated by the President of the NSW Law Society;
8.3.     The reserve price will be set at $3,600,000;
8.4.     If at auction the reserve price is not reached, the G Street property is to be sold, if an amount within 5% of the reserve price is offered;
8.5.     That the proceeds of sale in respect of the sale of the G Street property be distributed as follows and in the following priority:
8.5.1. In payment of Agent’s commission and advertising expenses and legal expenses of the sale of the respective property;
8.5.2. In discharge of the mortgage secured on the title of the respective property and required to be repaid;
8.5.3. In reimbursement to the Respondent of any upfront marketing expenses and or any costs incurred in preparing/presenting the G Street property for the sale, agreed by the parties in writing and the costs to prepare the property for sale to be reasonably agreed between the parties up to a maximum amount of $7,500. The nature of costs incurred are to be agreed between the parties and, failing agreement, such costs are to be incurred as recommended by the sales agent. Those costs are to be reimbursed to the paying party from the net sale proceeds of sale in priority to the final payment of funds to the parties;
8.5.4. The balance being paid, as follows:
8.5.4.1.         An amount be held by the Respondent’s solicitors on trust, being the estimated Capital Gains Tax payable by the parties on sale of the G Street property. In the event of a dispute between the parties about the estimate, the higher estimated amount will prevail;
8.5.4.2.         If applicable, an amount be paid to each Party such that they each receive a total sum of $295,000 less the amounts paid pursuant to Orders 1.5.4 and 3.5.4.2, by way of partial property;
8.5.4.3.         The balance to the Offset.
9.        The Applicant be restrained from occupying the G Street property at any time.
Other
10.      The funds in the Offset to be applied as follows:
10.1.   In payment of all outgoings, including mortgage repayments, if payable, in respect of the B Street property, C Street property and J Street property;
10.2.   In payment of any land tax payable in respect of the B Street property, C Street property and G Street property;
10.3.   In payment of rental deposit bonds to be returned to the tenants of the B Street property, C Street property and G Street property;
10.4.   If applicable, payment of Capital Gains Tax payable on the sale of the B Street property, the G Street property (if applicable), and the C Street property.
11.      The Respondent have exclusive occupation and use of the J Street property.
12.      Capital Gains Tax payable on the sale of the B Street property, G Street property (if applicable), and the C Street property, are to be paid as and when it falls due, from the funds held in the Respondent’s solicitor’s trust account. In the event of a shortfall of funds from which the pay the Capital Gains Tax, the parties are to pay the shortfall equally.
13. The Applicant pay the Respondent’s Costs of the Application.

Evidence

The husband relied upon the following documents:
a)Application in a Case filed 11 June 2020;
b)Affidavit of the husband filed 10 June 2020, together with annexures;
c)Financial Statement of the husband filed 15 June 2020; and
d)Response to Initiating Application filed 4 May 2020.
The wife relied upon the following documents:
a)Response to Application in a Case filed 17 June 2020;
b)Amended Response to Initiating Application filed 17 June 2020;
c)Affidavit of the wife filed 17 June 2020, together with annexures; and
d)Financial Statement of the wife filed 17 June 2020.

Issues

The primary issues to be determined in these proceedings are:
a)Should orders be made for the establishment of a joint bank account for the purpose of administering receipt of the rent received in respect of the properties and the payment of outgoings in respect of the properties?
b)As a related issue, how should the rental income of the properties be applied?
c)Should orders be made for the sale of any of the investment properties and, if so, which properties?
d)How should the proceeds of the sale of any properties be applied and, in particular, should there be a partial property distribution to either or both of the parties?
e)Should there be injunctions restraining the parties’ use of the properties, including the management of the properties?

Consideration

At the request of the Court, counsel for the husband clarified that his Application for proposed orders 3 and 4 were pressed in the nature of, firstly, an Application for interim spousal maintenance and, secondly, or in the alternative, an Application for injunctive orders pursuant to s 114 of the Family Law Act 1975 (Cth) (“the Act”).
In Hall v Hall (2016) 257 CLR 490 at 496 (“Hall v Hall”), the High Court described the “gateway” requirement for the consideration of a spousal maintenance application pursuant to s 74 of the Act. The gateway requirement is set out in s 72(1) of the Act, as follows:
(1)      A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)      by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)      by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)      for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The difficulties associated with making findings of fact in interim proceedings have been acknowledged. As the Full Court said in Edgar & Strofield (2016) FLC 93-711 at [15], “…the limits to an interim hearing are well known. Disputed issues of fact cannot be resolved at an interim hearing”.
Despite those limitations, in Hall v Hall (supra) at [497], the High Court confirmed that:
No doubt, on an application for an interim order “[t]he evidence need not be so extensive and the findings not so precise” as on an application for a final order. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth).
(Citations omitted)
In these proceedings, it was not contested that the income received by the husband through his business has declined as a result of the impact of the COVID-19 pandemic. In that respect, the existence of the pandemic and the repercussions felt by businesses, including the entertainment industry, as a consequence of the requirement of social distancing imposed by each State and Territory Government around Australia are matters to which I can have regard pursuant to s 144 of the Evidence Act 1995 (Cth), which provides:
144     Matters of common knowledge
(1)      Proof is not required about knowledge that is not reasonably open to question and is:
(a)      common knowledge in the locality in which the proceeding is being held or generally; or
(b)      capable of verification by reference to a document the authority of which cannot reasonably be questioned.
(2)      The judge may acquire knowledge of that kind in any way the judge thinks fit.
(3)      The court (including, if there is a jury, the jury) is to take knowledge of that kind into account.
(4)      The judge is to give a party such opportunity to make submissions, and to refer to relevant information, relating to the acquiring or taking into account of knowledge of that kind as is necessary to ensure that the party is not unfairly prejudiced.
The husband is not the primary carer of the parties’ children and it was not contended that the amount of time the children spend with him impacts upon his earning capacity such that his circumstances satisfy the requirements of s 72(1)(a) of the Act. Nor was it contended that the husband suffers a relevant physical or mental incapacity as envisaged by s 72(1)(b). In those circumstances, in order to satisfy the gateway requirement referred to in Hall v Hall (supra), the husband is required to produce admissible evidence that satisfies the Court that there are other circumstances, as referred to in s 72(1)(c) of the Act, that result in the situation where he is unable to adequately support himself.
At paragraph 14 of his Affidavit, the husband explains the reason why he asserts that he is currently in “a dire financial situation”. In that respect, the husband attests that he is able to pursue freelance directing work, however, earning income in that capacity has been difficult as a result of, inter alia, the impacts of the COVID-19 pandemic. The husband also attests to difficulty in retaining that freelance work in the current circumstances.
In terms of further relevant evidence, the husband provides an account as to the extent to which his industry has been impacted by the COVID-19 pandemic and the consequent loss of income he has suffered.
At paragraph 78 of his Affidavit, the husband states:
I am an established professional. I am unlikely to return to the heights of income earned at L Pty Ltd where I was [working in the entertainment industry]. I will be limited to income I can earn [in the industry]. This is uncertain now and will remain so for some time. I have not earned any income since December 2019. I have significant concerns about the viability of my work as a Freelancer moving forward. I do not know when the [entertainment] industry will recover, particularly given the significant economic downturn that has accompanied COVID-19. I am presently reliant on loans from friends and family to meet my living expenses.
The husband was not challenged on his evidence that the COVID-19 pandemic has significantly impinged upon the Australian entertainment industry. The husband’s evidence as to the impact those circumstances have had on his income is plausible and I accept it to be truthful. However, the husband has not, with respect, provided evidence of any qualifications, skills, experience and/or contacts, or lack thereof, that would equip him for alternative employment. Nor has the husband provided evidence of attempting to obtain alternative employment that would enable him to adequately support himself. In those circumstances, the husband has not satisfied me of the gateway requirement set out in s 72(1) that is a precondition to the Court considering his Application for spousal maintenance.
In considering the alternative basis upon which the husband seeks proposed orders 3 and 4 of his Minute of Order, it is noted that s 114 of the Act empowers the Court “to make such order or grant such injunction as it considers proper in relation to the property of the parties”: Philips & Samuels [2017] FamCA 125 at [65].
In Martin v Martin (2013) 49 Fam LR 606 at [15], Cronin J said:
Section 114 of the Family Law Act 1975 (Cth) (the Act) enables the Court to provide a discretionary remedy. The fundamental principle is that an order should only be made if it is proper.
It is clear that s 114 of the Act empowers the Court to make orders in positive as well as negative terms, as in the case of mandatory injunctions: Mertens & Mertens [2016] FamCAFC 136 at [56]. Such an order is discretionary and must be considered proper: Jeeves v Jeeves (No 2) [2008] FamCA 1148 at [29] citing In the marriage of F and F (1989) FLC 92-031; Tripp & Tripp [2013] FamCA 1107 at [53]. The term “proper” means “reasonable and just in [the] circumstances”: In the marriage of Farr (1976) FLC 90-133 at 75,636.
The party moving for injunctive relief carries the onus of establishing that there is a proper basis for granting the relief as sought in their respective applications: Kelleher & Anderson [2007] FamCA 137 at 195 (“Kelleher & Anderson”).
The Court’s consideration of the parties’ respective contentions is in the context of those relevant principles.

Joint bank account for receipt of rental income

In his proposed orders 3 and 4, the husband seeks, in effect, the setting up of an account into which the rental proceeds of all properties that are either individually or jointly owned by the parties will be paid.
As noted, the wife opposes those orders on the basis that she contends the husband does not require access to those funds to sustain himself because he has a capacity to work. Comparatively, the wife contends that she requires that rental income to properly manage the properties and to apply any surplus to support herself and the parties’ three (3) children.
I have earlier addressed the husband’s Application characterised as an application for spousal maintenance pursuant to s 74 of the Act. As noted, a precondition to the award of interim spousal maintenance is that the applicant is required, as a threshold issue, to present evidence to address those matters set out in s 72 of the Act as giving rise to the situation where that person is unable to support themselves adequately: Hall v Hall (supra).

Consideration of the husband’s Application for orders in the nature of a mandatory injunction do not require him to present evidence to cross a similar threshold. He, nonetheless, bears the onus of satisfying the Court that there is a proper basis for granting the relief as sought: Kelleher & Anderson (supra).
Further, in In the marriage of Sieling and Sieling (1979) FLC 90-627 at 78,264, the Full Court of the Family Court noted that the discretionary power to grant injunctions is “not to be exercised lightly”, and that, in exercising that power, “[t]he Court must balance the hardship to each party of granting or refusing an order”.
The evidence before the Court in these interim proceedings is such that the Court is unable to determine the merits of each parties’ respective contentions, including the reasonableness of their needs and the extent to which funds are available to properly manage the rental properties as well as adequately provide for the parties’ respective needs after expenses associated with the properties are paid.
Further, I note that, in exercising jurisdiction under the Act, s 43(c) of the Act also requires me to have regard to the welfare of children – in this case, being the parties’ three (3) children, all of whom are currently aged 10 years or less.
In considering that evidence and, specifically, assessing the financial circumstances of the wife and the requirement she has to sustain both herself and the children for whom she has primary care, I note that she has been dependent upon both the husband’s income supplemented by receipt of income from the rental properties. In circumstances where the husband’s income has now been significantly reduced as a result of the impact of the COVID-19 pandemic, aside from a small Government benefit, her sole source of income to sustain herself and the parties’ children is the rental income which she receives from the investment properties.
Comparatively, the husband is in receipt of a government benefit in the sum of approximately $562 per week. In addition, the wife has proposed, in paragraph 2 of her Minute of Order, entitling the husband to reside in the B Street property until it is sold. It is proposed that the wife would be responsible for continuing to pay mortgage payments in respect to that property. In other words, should that opportunity be taken by the husband, he will have accommodation with minimal cost, being the cost of utilities associated with his use of that property.
In those circumstances, including having regard to the provisions of s 43 of the Act to which I have referred, upon consideration of the potential hardship for both parties, including the parties’ children, I decline to make the proposed orders 3 and 4 in respect of the receipt of rental income as sought by the husband.

Joint bank account for the proceeds of sale

In circumstances where, as I will set out, the parties are in agreement that two (2) of their investment properties should be sold, the husband’s proposal for the establishment of a joint bank account, to be operated on the basis of joint signature and authority, has merit. The establishment of such an account will facilitate the payment of the proceeds of sale of the properties into that account which will provide some flexibility to the parties to meet future expenses that they mutually agree should be paid.
Further, in circumstances where, at least until the investment properties are sold, the parties will be pressed for access to liquid funds, the husband’s proposal for the parties to apply to the Commonwealth Bank of Australia for further hardship assistance and/or deferral of their loan repayments has merit and I will include the husband’s proposed order 3.3 in the orders that I make.

Sale of investment properties

During the course of the proceedings, senior counsel for the wife indicated that the wife consented to orders for the sale of the following properties:
a)The C Street property – the husband’s proposed order 8 and the wife’s proposed order 3; and
b)The B Street property – the husband’s proposed order 7 and the wife’s proposed order 1.[1]
[1] Transcript 18 June 2020, p.4 line 40 to p.5 line 7.
The wife has, however, proposed that the sale of those properties be deferred until the late spring/summer months, being a time that she believes is most likely to attract additional buyer interest. The wife further contends that the real estate agent engaged to sell those properties should be the real estate agent of her choice.
In circumstances where the late spring and summer months are rapidly approaching, I am not satisfied that there is any utility in deferring the time for the sale of the properties, particularly where the parties’ limited access to liquid funds has given rise to the disputation which is the subject of these proceedings. Further, in circumstances where the parties are unable to agree on the selection of the real estate agent, I prefer the husband’s proposal whereby one party will nominate three (3) potential agents and the other party chooses from that list the agent who will be engaged to sell the properties. I will, therefore, make orders in accordance with proposed orders 7 and 8 in the husband’s Minute of Order.
The wife opposes the husband’s proposed orders set out in order 6 of the husband’s proposed Minute of Order in respect to the sale of the J Street property. In Aitken & Murphy(No 2) [2012] FamCA 239 at [158], in the context of an application for orders for the interim distribution of property pursuant to ss 79 and 80 of the Act, Young J said that, in considering whether to make such an order that applied pending final hearing, “care must be taken not to potentially defeat any parties claim or legitimate expectations in a final hearing” and, accordingly, a party should not be “required to liquidate an asset reasonably sought to be retained in the final hearing”. That reasoning is apposite to the Court considering an application pursuant to s 114 of the Act insofar as the injunctive relief sought would result in the liquidation of an asset that a party reasonably seeks to retain in the final hearing. In the context of these interim proceedings, I, therefore, do not make any order for the sale of the J Street property which, as noted, is the property that the wife and the children are currently living in. That is, I will not make orders in accordance with order 6 as proposed by the husband.

Disbursement of the proceeds of sale

The parties are in broad agreement regarding the disbursement of funds from the proceeds of the sale of the C Street property and the B Street property. Specifically, both parties agree that the proceeds of sale should be applied towards any charges associated with the sale of those properties and any outstanding mortgages and statutory rates. The parties are, however, in dispute as to further distribution beyond that. In that respect, the wife contends that there should be funds reserved for the payment of any capital gains tax associated with the sale of the properties and the balance, she contends, should be distributed to the parties equally by way of partial property distribution.
I note that the husband’s proposed order 10 achieves an outcome whereby the costs associated with the sale of the B Street property and the C Street property would be paid and the remaining balance would be deposited into a joint account operated by the parties in accordance with his proposed order 3.2.
Order 11 proposed by the husband overlaps with orders 1.5.5 and 3.5.4.2 of the orders sought by the wife. The amounts proposed to be withdrawn by the husband from the sale proceeds in accordance with proposed orders 11.1 and 11.2 total $295,000. The wife’s proposed order 1.5.5, together with order 3.5.4.2, similarly, result in the sum of $295,000 being allocated to both the husband and the wife by way of partial property distribution. In that respect, in order 1.5.5 of her Minute of Order, the wife proposes that the balance of the proceeds of sale of the B Street property, after an amount is set aside to facilitate payment of anticipated capital gains tax, “be paid to each party equally, by way of partial property”. Orders in similar terms is proposed in paragraph 3.5.4 of the wife’s Minute of Order in respect to the C Street property, however, following amounts dispersed to the parties, the order stipulates that the balance be held in the Commonwealth Bank of Australia offset account ending …90.
The wife’s proposed orders for funds to be set aside for payment of anticipated capital gains tax are prudent and, similarly, the husband’s proposal for an amount to be set aside to enable the parties to pay anticipated income tax is also prudent. Accordingly, I will make orders pursuant to the wife’s proposed orders 1.5.4 and 3.5.4 and the husband’s proposed order 11.3.
As a related issue, proposed order 12 as sought by the wife achieves the obligation of the parties to pay capital gains tax, including making good any shortfall that is over and above those funds which have been set aside. As that completes the prudent step that I have referred to in the immediately above paragraph, I will make an additional order in those terms.
For those reasons, I will make an order that effectively combines the husband’s proposed orders 10 and 11 and the wife’s proposed orders 1.5.4, 1.5.5 and 3.5.4. Those orders will stipulate, as I have noted, that the agreement of both parties will be required before funds are withdrawn from the proposed real estate proceeds account.

Injunctions restraining the parties’ use of the properties

In proposed order 9, the husband seeks an order that would restrain the wife from engaging in conduct that would result in the B Street property, the J Street property and the C Street property being leased or further encumbered. The wife seeks a similar order in respect to the C Street property. The fact that each party seeks such orders is an indication of an unfortunate mistrust that they appear to have for one another. Nevertheless, in circumstances where both parties agree that both the B Street property and the C Street property should be sold, in order to facilitate the orderly sale, I propose making orders in terms of proposed order 9 sought by the husband, save for in respect to the J Street property, which, effectively, includes the substance of order 4 as proposed by the wife.

The wife’s exclusive occupation of the J Street property

In her proposed order 11, the wife seeks an order for exclusive occupation and use of the J Street property. In circumstances where it did not appear that, during the course of the proceedings, the order as sought by the wife was challenged and in circumstances where it reciprocates order 2 proposed by the wife for the husband’s benefit, I intend to make an order to that effect.

Injunctions in respect to the G Street property

The wife seeks various orders in respect to the G Street property in paragraphs 5, 6, 7, 8, and 9 of her proposed Minute of Order. The wife contends that the effects of those orders would be to, effectively, confirm the status quo whereby the wife would be responsible for collection of rent and payment of all outgoings pending final hearing with the proviso that the husband would be provided with visual access to accounts in respect of the management of the G Street property. The orders would also provide for the property to be sold in the event that the wife defaults in payment of the home loan repayments.
The argument advanced by senior counsel for the wife in respect to those proposed orders is set out in the transcript of proceedings of 18 June 2020 at page 16 and, by way of summary, is as follows:
·The wife is on the record in these proceedings as wishing to retain the G Street property and will press for that outcome at final hearing;
·The wife receives rent for the G Street property and, in those circumstances, it is appropriate that orders are made confirming that she is responsible for the management of the G Street property and paying the outgoings associated with that property;
·The additional orders sought would provide cover for circumstances where there may be a default on the mortgage, in which case the orders would require the property to be sold;
·It is contended that, in the interest of transparency, in circumstances where the wife receives the rental income, manages the property and pays outgoings, it is appropriate for the orders to provide for the husband to have visual access to the bank account to which the rent from the G Street property is paid; and
·The orders would, it is contended, avoid potential unpleasant disputes about who should occupy the premises in the future.
In terms of the wife’s need to obtain the rental income, she refers to the fact that, since February 2020, the children live with her for 10 nights per fortnight.
At paragraph 4.4 of her Affidavit, the wife describes the current configuration of the G Street property which I have set out above. The wife attests to rent for Lower G Street being prepaid from February 2020 until August 2020 at which time the rent will again be payable. The wife attests that she has used the lump sum amount equivalent to six (6) months’ rent to attend to payment of the mortgage in respect of the G Street property, as well as to meet family expenses.[2] The wife also indicates that, as monies received from the tenants in respect to rental bonds have not been deposited with the New South Wales Fair Trading, funds need to be set aside to return those bonds, equivalent to four (4) weeks’ rent, to the tenants once they leave the property.
[2] Affidavit of the wife filed 17 June 2020 at paragraph 33.3.
At paragraph 8.5 of her Affidavit, the wife explains that, while she sought orders for her to retain the G Street property in the Response she filed on 4 May 2020, in circumstances where she is required to climb 80 stairs to access the property, it may not be the most practical option for her in light of the fact that she is the primary carer for the parties’ youngest child who is just three (3) years old.
The wife also attests to receiving approximately $3,604.42, including total rental income from all of the matrimonial properties. Those properties include the properties that are in the parties’ joint names as well as the properties that are separately owned by the parties. According to the wife, the current approximate weekly expenses to care for the children and herself total approximately $3,861.72. That figure excludes the amount required to satisfy the home loan repayments in relation to the parties’ properties. In that respect, the wife states that the mortgages total approximately $301,256 per annum, which is also expressed as approximately $5,793.39 per week. Those mortgage repayments have, however, been deferred until approximately December 2020 as a result of the impact of the current COVID-19 pandemic
The wife deposes that the combined rental income being received for both Upper and Lower G Street is $3,850 less expenses of $1,116.44 in respect to outgoings, excluding mortgage, leaving a net rental income of $2,733.56. In her Financial Statement, the wife included additional notes expanding on the amounts detailed in respect of her outstanding home and other mortgages at items 46 and 47. Specifically, the wife attests, at page 13, that the interest-only mortgage repayments in respect to the G Street property are, respectively, $4,874.96 and $1,056.52 which, combined, total $5,931.48 per month or $1,482.87 per week. In combination, therefore, the weekly outgoings including interest-only mortgage payments total $2,599.31. In those circumstances, the total rental income of $3,850 for both the Upper and Lower G Street properties results in a net income of $1,250.69.
The wife contends, however, that, when responsibilities in respect to all of the parties’ investment properties are attended to, including outgoings and mortgage payments, there are no rental proceeds to pay to the husband.
For the reasons which I have previously set out by reference to Kelleher & Anderson (supra), the wife carries the onus of satisfying the Court that those proposed orders are proper in the sense of being “reasonable and just in the circumstances”.
Proposed order 5 sought by the wife would impose an obligation upon her to continue to effectively manage the G Street property, including both the upper and lower residences, by attending to all required outgoings, including mortgages, with the exception of land tax. I am satisfied that an order giving effect to what is the current arrangement between the parties is proper and would facilitate the preservation of the matrimonial property pending the final hearing of this matter.
The wife’s proposed order 5, however, goes further than that which is necessary to ensure payment of those outgoings insofar as the proposed order provides that “the Respondent be entitled to all rental proceeds”. As noted, this would result in the wife receiving net rental income of $1,250.69 from those properties.
In this matter, the husband has asserted that the wife has unreasonably incurred expenditure in the period subsequent to the parties’ separation. In these interim proceedings, it has not been possible to determine that issue. The question therefore becomes whether it is proper, in the sense of being reasonable and just in the circumstances, for the wife to receive “all rental proceeds” from the G Street property. In the context of the concerns expressed by the husband, I am of the view that, for the proposal of the wife to be reasonable and just in the circumstances, inclusion of a provision requiring the balance of any rental income to be paid into the “offset” account referred to in the wife’s proposed order 3.5.4.3 is necessary. In arriving at that decision, I have had regard to the comments of Forrest J in Lampros & Lampros [2012] FamCA 415 at [50], that:
In this Court particularly, interim junctive relief is primarily utilised to maintain things as they are, or to restore things to as they were until they were abruptly changed to the prejudice of an interested party, to protect claims that parties have or may have to substantive relief after a final hearing.
In light of the qualification that the Court will impose in respect to the application of the rental income, the Court will make, as a related order, order 10 as sought by the wife. In combination, those orders will ensure that the funds are applied to preserve the matrimonial property of the parties pending final hearing and will avoid a situation where the funds might otherwise be applied for the personal benefit of the wife.
In terms of order 6 proposed by the wife, I accept that it is entirely appropriate that there is transparency allowing the husband to view all relevant bank accounts confirming that the rental income received is applied in accordance with the orders that I make. This is particularly so in circumstances where the orders the Court makes will impose an obligation on the wife to apply the rental income from the G Street properties to meet outgoings in respect to those properties, as well as other properties in the parties’ combined investment portfolio. I will, therefore, make an order in accordance with proposed order 6 in the wife’s Minute of Order.
Proposed orders 7 and 8 of the wife’s Minute of Order include default arrangements for the sale of the G Street properties in the event of the mortgages payable in respect to those properties not being met by the wife. This, effectively, enables the wife to determine whether those properties are or are not sold depending upon whether she makes those relevant payments. Without in any way suggesting that the wife would act capriciously or other than in good faith in making those payments, there is an absence of evidence before the Court as to why those orders are necessary at this point in time. For that reason, the wife has failed to discharge the onus that she carries of satisfying the Court that those orders are necessary. The Court will, therefore, not make orders in terms of proposed orders 7 and 8 of the wife’s Minute of Order.

Order 9 proposed by the wife would impact upon the rights of the husband, who is a joint owner of the property, to occupy “the G Street property at any time”. This would include, for instance, circumstances in which tenants currently occupying one of the properties are known to the husband and such an order would preclude the husband from residing with those persons. It is understandable that the wife might be concerned with any conduct on the part of the husband which prejudiced the potential to receive full rental value for the property. However, the evidence presented in these interim proceedings is not such that it satisfies the Court that the husband is likely to engage in conduct of that nature. Accordingly, once again, the wife has failed to discharge the onus that she carries of satisfying the Court that such an order, which would impact upon the rights of the husband as a joint owner of the property, is justified.

Conclusion

For all of the above reasons, I make the orders as set out at the commencement of my reasons for judgment.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 16 July 2020.

Associate:

Date: 16 July 2020