Kendall & Kendall
[2023] FedCFamC1F 321
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kendall & Kendall [2023] FedCFamC1F 321
File number: SYC 5218 of 2020 Judgment of: REES J Date of judgment: 27 April 2023 Catchwords: FAMILY LAW – INTERIM PROPERTY – Application by the wife for adjournment – Alternatively, the wife seeks the stay of interim orders for the sale of the property in which she lives and interim property distribution of $260,000 to her and no payment to the husband – Where the husband seeks the stay of interim orders for the sale of both of the properties in which the respective parties live and that each party receive an interim distribution of $70,000 – Where the wife alleges the husband has undisclosed interests – Where the wife alleges that she has a greater need than the husband because the husband has greater earning capacity – Where the husband pays the wife child support – Stay of interim order for the sale of the properties – Parties each receive $70,000 by way of partial property settlement. Division: Division 1 First Instance Number of paragraphs: 36 Date of hearing: 26 April 2023 Place: Sydney Counsel for the Applicant: Mr Watkins Solicitor for the Applicant: Solari & Stock Lawyers Counsel for the Respondent: Ms Giacomo Solicitor for the Respondent: Archbold Legal Solutions ORDERS
SYC 5218 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KENDALL
Applicant
AND: MR KENDALL
Respondent
order made by:
REES J
DATE OF ORDER:
27 April 2023
THE COURT ORDERS:
1.That the operation of Order 3 made on 23 August 2022 be stayed, pending further order.
2.That each of the husband and the wife instruct their respective solicitors to cause the sum of $70,000 to be paid to each of them from the sum of $356,000 held on their behalf in trust, such sum to be paid to each by way of partial or interim property settlement.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under Kendall & Kendall has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
The proceedings before me concern interim financial matters arising out of the separation of the parties, Ms Kendall (“the wife”) and Mr Kendall (“the husband”). Those proceedings are listed for final hearing in 2024. They were originally listed in May 2023 but that hearing was vacated because criminal charges against the husband, relating out of offences of which the wife is the alleged victim, have not been completed.
Before me the wife seeks an adjournment or, if the proceedings are not adjourned, that interim orders requiring the sale of the property in which she lives be stayed and that she receive an interim property settlement of $260,000.
The husband’s position is that interim orders for the sale of the properties in which the wife lives and in which he lives should be stayed; that the outgoings on those properties should be paid from money held in trust arising from the sale of other properties and that they should each receive an interim property settlement of $70,000.
The parties tendered a draft balance sheet wherein the wife asserted that the net assets of the parties are $6,417,356 and the husband asserted a value of $4,309,954.
It is agreed that there is $356,000 held in trust from the sale of properties.
The house in which the wife lives (“B Street”) has an agreed value of $4,200,000 and a net value of $3,184,118. The mortgage payments are $5,438 per month.
The unit in which the husband lives (“1 H Street”) has been valued at $1,500,000 and a net value of about $250,000. The mortgage payments on that property are $6,412 per month.
At the present time, the mortgage payments and other outgoings on both properties are paid from the funds held in trust.
On 20 December 2021, orders were made by consent giving the wife the sole occupation of the former matrimonial home and the husband sole occupation of 1 H Street.
On 23 August 2022, orders were made by consent for the sale of both B Street and 1 H Street and for the net proceeds of the sales to be held in trust.
Before me, both parties seek orders that will stay the sale of the property in which she or he lives until the determination of the substantive proceedings.
WIFE’S APPLICATION TO ADJOURN
The wife asserts, but has not proved, that the husband either owns a business “EE Pty Ltd”; or that he did in the past own that business; or that he now controls that business; or that has some interest in the business.
The husband disputes those assertions.
Further to that assertion, the wife has issued subpoenas to a number of entities including the husband’s solicitors, an accounting firm, the National Australia Bank, the “new owner” of the business and a company FF Pty Ltd which was, at one time, the owner of the shares in the business.
Those subpoenas are not yet returnable.
She asks the court to adjourn these proceedings until the subpoenas have been complied with.
After hearing submissions on behalf of the wife, I declined to adjourn the proceedings and indicated that I would give reasons.
The wife’s position at the substantive hearing is that she seeks to retain both B Street and an investment property at G Town. On her behalf, counsel conceded that this may not be feasible and the properties may have to be sold. However, B Street is where she lives with the parties’ three children, one of whom is ten years old and the older children are at university. She has no other accommodation available to her.
The husband seeks an equal division of their assets.
I infer that the wife would be able to retain B Street if she can prove that the husband has or had an undisclosed interest in the business which has or had a significant value.
The wife was unable to demonstrate that the result of this application would be different if the documents had been produced.
If the net assets (excluding the interest in the business) are, as the wife asserts, in excess of $6.4 million, any order permitting the husband to remain in 1 H Street and making an interim property settlement in his favour can be easily adjusted out of his share of those assets as determined at final hearing.
There is no utility in adjourning the proceedings and great costs. Both parties have filed costs notices. The wife’s costs to date total $718,962. The husband’s costs are $297,000.
INTERIM ORDERS
The wife seeks to stay the orders for the sale of B Street but that 1 H Street be sold.
She seeks an interim property settlement to herself of $260,000 and no payment to the husband.
The husband seeks that the orders for the sale of both properties be stayed and that they each receive $70,000 with the balance of the trust monies being available to pay the outgoings on the two properties.
On behalf of the wife, it is submitted that she has a greater need than the husband because he has a greater earning capacity than she does.
I am unable to determine, on the untested evidence before me, that this is so.
The wife, in her financial statement sworn 5 April 2023, discloses an income from employment of $454 per week and that she receives $250 per week from the husband by way of child support.
The husband in his affidavit sworn 19 April 2023, deposes that he receives an income of $500 per week, and, according to the wife, pays her $250 for child support from that sum.
I accept that, before separation, when they jointly operated a business, their combined income was much greater. It is conceded that the business returned a net income of between $800,000 and $1,000,000. However, that business has not operated since 2019 and there is no evidence that the husband is capable of earning a greater amount than he says he presently does.
Nextly, on behalf of the wife, it is submitted that 1 H Street should be sold because the mortgage payments are greater than the mortgage payments on B Street. I accept that the mortgage payments on 1 H Street are about $1,000 more than those relating to B Street but there is no logic in the position espoused on behalf of the wife when the decision to purchase 1 H Street was a joint decision and where, I accept, the husband has no other place to live.
There are sufficient funds available that if, at trial, it is determined that there should be an adjustment against the husband because of the difference in the mortgage payments, that can be accommodated.
Lastly, it was submitted on behalf of the wife, that if I were minded to allow $70,000 to the husband, then she should receive $140,000 on the basis that her needs are greater.
That proposition has not been demonstrated by evidence.
I propose to make orders staying the operation of the orders for the sale of B Street and 1 H Street and making an interim property settlement order in favour of each party in the sum of $70,000.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 27 April 2023
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