Khalid and Khalid & Ors

[2016] FamCA 918

FAMILY COURT OF AUSTRALIA

KHALID & KHALID AND ORS [2016] FamCA 918

FAMILY LAW – PRACTICE AND PROCEDURE – Application for third party to intervene in proceedings – Leave granted

FAMILY LAW – PRACTICE AND PROCEDURE – Orders and directions made for husband to provide disclosure to wife and third party to proceedings

FAMILY LAW – PRACTICE AND PROCEDURE – Directions made appointing wife as trustee with powers to sell parties property – Directions made in respect of the sale of the parties property

Family Law Act 1975 (Cth)

APPLICANT: Mr Khalid

RESPONDENT: Ms Khalid

INTERVENOR: Mr Yates and Mr Rollo As Liquidators Of I Pty Ltd (In Liquidation) Acn …

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: CAC 128 of 2014

DATE DELIVERED: 21 April 2016

PLACE DELIVERED: Canberra

PLACE HEARD:

JUDGMENT OF: Benjamin J

HEARING DATE:

REPRESENTATION

COUNSEL FOR THE APPLICANT: In person

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: Ms Haughton

SOLICITOR FOR THE RESPONDENT: Infinity Legal

COUNSEL FOR THE INTERVENORS: Ms Foster

SOLICITOR FOR THE INTERVENORS: Gadens Lawyers

Orders

1. The Court gives leave to Mr Yates and Mr Rollo as liquidators of I Pty Ltd (in liquidation) to be joined as parties to these proceedings.

2. These proceedings be adjourned for mention before me at 4.30pm on 25 May 2016 at Canberra for the purpose of directions for final hearing, the filing of further affidavits and for T L Street Limited to determine whether it wishes to be a party to these proceedings.

IT IS DIRECTED

1. Mr Khalid (‘the husband’) serve on the liquidator and Ms Khalid (‘the wife’) current statements in relation to:-

   a)debts owed by him being the mortgage on the property at M Street;

   b)the mortgage on L Street;

   c)the rates and rent arrears on those properties;

   d)the land value of those properties;

   e)the water and sewerage rates on those properties;

   f)the current statement (if any) from N Finance; and

   g)evidence of the payment of the debt to O Company allegedly paid by the husband.

1. The wife be appointed Trustee with power of sale of the following real properties (“the sales”):-

a)The real property situate at and known as M Street, Suburb Q in the Australian Capital Territory being more particularly described as Section …, Block … on Deposited Plan … Suburb Q (“the Suburb Q property”); and

b)The real property situate at and known as L Street, Suburb S, in the Australian Capital Territory being more particularly described as Section …, Block … on Deposited Plan … Suburb S (“the Suburb S property”).

1. The wife in her capacity as Trustee for the husband and the wife in respect of the sales referred to in Order 4 is entitled to do any act or thing that the husband would have been able to do in order to effect the sales including but not limited to all of the following for the purpose of affecting the sale of the property on her own behalf and as trustee for the husband pursuant to these orders:-

   a)Instruct any solicitor or conveyancer to undertake the conveyancing of the properties including signing any costs agreement and authorising any necessary disbursements for the preparation of a contract for sale;

   b)Instruct a real estate agent of her choosing to conduct sales and marketing campaigns for the properties and thereafter the auction of the properties including signing any agency agreement or authority for any reasonable disbursement for the sales and marketing campaign, to authorise the auction of the properties, to set the reserve price for the properties in consultation with the real estate agent, to negotiate with any prospective purchaser at any auction and authorise the acceptance of a sale price, and to authorise such other action as may be required to effect the sale of the properties;

   c)Sign any request to discharge the mortgages registered over the properties and give authority to discharge the same;

   d)Negotiate with the mortgagees any reasonable terms for the stay of any enforcement of the said bank’s rights as mortgagee pending the sale of the properties on behalf of herself and the husband;

   e)Sign any contracts for the sale of the properties;

   f)Sign any memorandum of transfer for the properties in favour of a purchaser;

   g)Sign any other document required of the parties in order to give effect to the sale of the properties;

   h)Authorise the payment of funds in satisfaction of the mortgage debt secured over the title to the property and any rates and charges with respect to the property upon the settlement of the sale;

   i)To give notice to any occupant or tenant to vacate the properties;

   j)Authorise the payment of fees and disbursements to the real estate agent and lawyers or conveyancers engaged with respect to the sale of the property;

   k)Negotiate with any party holding a caveatable interest over the property to effect the removal of the caveat in a timely manner prior to the settlement of the sale of the property;

   l)Authorise the drawing of cheques for the disbursement of the proceeds of the sale of the property pursuant to these orders; and

   m)Do any other act or thing necessary in order to effect the sale of the property.

1. Forthwith the wife do all acts and things and sign all documents necessary to cause the Suburb Q and Suburb S properties to be sold on such terms and conditions as she may determine at her sole discretion.

1. Within forty two (42) days of the date of these orders the husband do all acts and things as may be required to vacate the Suburb Q and Suburb S properties and thereafter the wife be entitled to sole possession of the properties (as against the husband) for the purposes of conducting the sale of the property pursuant to these orders.

1. Pending the sale of each property and whilst the husband is in occupation of Suburb Q the husband pay as and when they fall due all outgoings with respect of the Suburb Q and Suburb S properties including, insurance payments, mortgage repayments, water and land rates and land rent.

1. That upon the husband vacating each of the properties pursuant to order 7 hereof the husband be and is hereby restrained by injunction from returning to, entering upon or being within 500 metres of the relevant property and from causing any other person acting on his behalf or upon his instruction to enter the property for any purpose without the consent in writing of the wife.

1. Upon vacating each of the properties referred to in Order 4 the husband shall deliver to the wife’s solicitors all keys to each of the properties.

1. That the husband be and is hereby restrained by injunction from doing any act or thing which has the effect of devaluing the properties or causing damage or destruction to the properties or any part of them or their surrounds.

1. Upon completion of the sales, the proceeds of the sales be applied as follows:-

a)         firstly, to pay all costs, commissions and expenses of the sales;

b)         secondly to pay any council and rates and rent outstanding; and

c)thirdly to discharge the mortgages affecting the real properties.

1. Any of the net proceeds of sale be held in trust for both parties by the solicitor acting on the sale and retained by them or those firms of solicitors in trust pending the outcome of these property proceedings.

2. The solicitor for the applicant wife forward to my associate within one business day, an electronic form of the minute of order, in word format.

3. A copy of the reasons for these orders be taken out and placed on the court file, included in such reasons are to be the exchanges between the bench, counsel and the husband during the course of the argument.

IT IS NOTED

1. Neither the intervenor in terms of the liquidator or the putative intervenor in relation to T Insurance object to such course, only for such period of time as the husband is in occupation of the Suburb Q property.

IT IS FURTHER ORDERED

1. The operation of the appointment in relation to the sale of the property be stayed for twenty one (21) days from fourteen (14) days from the date of this order.

2. The husband hand his watch to the solicitor for the wife and that the solicitor hold that watch in a safe place on trust for the parties pending the outcome of the proceedings AND IT IS NOTED the watch was handed over today.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kahlid & Kahlid and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 128 of 2014

Mr Khalid

Applicant

And

Ms Khalid

Respondent

And

Mr Yates and Mr Rollo As Liquidators Of I Pty Ltd
(In Liquidation) Acn …

Intervenor

EX TEMPORE REASONS FOR JUDGMENT

1. This is an application which was listed for final hearing today and it was to commence on Monday.  On Monday it was discovered that there were debts outstanding to a liquidator of some five or six hundred thousand dollars, and debts outstanding to T Insurance of some fifty, sixty or seventy thousand dollars.

2. It became clear that the matter could not proceed as, in fairness, those creditors ought to have been given leave to appear.  The matter was stood over to today, and the liquidators sought to intervene.  That leave was granted.  The liquidators assert that they are owed some five or six hundred thousand dollars.  They are represented today.

3. T Insurance attended to inform the Court of its interest, and will reflect between now and the adjourned date as to whether they will intervene, having claimed the sum of about $68,000.  I note for the purpose of the transcript that Mr Jones appeared for T Insurance, and Ms Foster appeared for the liquidators.

4. One of the issues raised by the wife was the two properties owned by the husband which are the substantive properties in these proceedings.  Those properties are M Street, Suburb Q, which the husband says has a value of about $610,000 and the wife says has a value of about $650,000.  The other property is L Street, Suburb S, which the husband has a value of about $650,000 and the wife says it has a value of $850,000.  It seems to be common ground that that latter property has not been completed and needs a certificate to enable it to be sold.

5. The properties are subject to significant liabilities.  In respect of M Street there is a mortgage of some $240,000, land rent of about $285,000, and water and sewerage rates, including arrears, of some $3,655.  There are arrears of land rates and rents of some $75,430.  .

6. In terms of L Street, Suburb S, it has a mortgage of approximately $247,000.  It has a land value debt of $390,000.  It has arrears of land rent and rates of almost $89,000 and water and sewerage arrears of $2,837.

7. The husband acknowledges those in general terms, but says that he is just managing.  He says he has made arrangements with the water and sewer entities to pay those charges, including arrears, as they fall due. 

8. There is also a caveat secured against those properties by O Company which in the receiver’s list shows a debt of approximately $25,000.  The husband’s case is that that debt has been repaid, or is not outstanding. 

9. There is also a debt due to N Finance.  There is evidence before me that N Finance is owed some $43,000 approximately as at January 2015.  The documents before me show that there was an advance of some $26,800 in 2010, and that by January 2015 that amount was $42,848, and that between December 2013 and January 2015 there were no credits against that account.  I do not know the status of that account prior to December 2013, nor do I know the status of that account subsequent to that.  The husband says that he thinks that this is a private person.  He believes that he can persuade them or have them agree to that debt being reduced to some $30,000.  But it is clear that the debt has not been met on a regular basis for some time.

10. If the wife is correct in terms of her estimates of the value of the property, then there is about $100,000 worth of assets available to the parties, less the cost of sale, less the cost of completing the L Street property.  So it is likely to be a very modest pool.  The husband has been unable to keep these expenses down over that time and is facing further difficulties in terms of the claims by the liquidator against him for some five or six hundred thousand dollars as contained in the statement of claim to which I have alluded to earlier, and a claim by T Insurance of some $68,000.

11. The husband says that this is the home which he has worked hard to create over the period of time that he has been in Australia, since about 2000, and where he has achieved a good income, but his property portfolio has been an unhappy investment, given all of the circumstances.  He says he wants to remain in that home and asserts that he can meet the expenses as they fall due.  There is some 1.3 to 1.4 million dollars of liabilities.  It is clear on the evidence that he has been unable to meet these commitments as they fall due.

12. If I leave the circumstances as they are, in other words to wait for a hearing, it is likely that, in the pursuit of accommodation for the husband, that any residue value or credit value on the property is likely to diminish.  In many ways the husband supports that when he says, on his view, that if everything was sold, he would be liable for about $100,000 anyway.

13. I do not think it is fair for the wife, nor do I think it is just and equitable that this should continue, and the value of any equity in that property ought to be frittered away by the husband.  In those circumstances, I have made the orders to which I have alluded to earlier and I will direct that the reasons be taken out and placed on the Court file. 

14. I also direct that included in these reasons are to be the exchanges between myself, counsel and the husband during the course of the argument.  I note that neither the intervenor in terms of the liquidator, nor the putative intervenor in terms of T Insurance object to that course.

15. I have considered further the submission about the husband making the mortgage and rate payments pending the sale.  It is clear to me that once the properties are to be sold, it will be necessary at some stage for the husband to vacate the property and find his own rental accommodation.  Accordingly, I will accede to the draft orders 11 and 12 but only for such period of time as the husband is in occupation of the Suburb Q property.

16. There was an oral application that a watch, which was purchased by the company some years ago and which the husband said was a payment to him, be placed in the trust of the wife’s solicitors pending the outcome of these proceedings.  This was particularly in the light of the serious allegations by the wife of the husband’s non-disclosure and hiding of assets which are the subject of some significant issues. 

17. I asked the husband what, if any, prejudice there would be to him if this course were adopted.  He explained to me that he needed the watch so that he could look at the watch rather than his mobile telephone when he went to and from meetings.  There is always a risk in cases like this that property can go missing and there are serious allegations made by the wife. 

18. I make a further order directing that the husband hand his watch to the solicitor for the wife, and that the solicitor hold that watch in a safe place pending the outcome of the proceedings.  And I note that the watch was handed over.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 21 April 2016.

Associate:     

Date:              2 November 2016