Lenova and Lenova

[2010] FamCA 834

FAMILY COURT OF AUSTRALIA

LENOVA & LENOVA [2010] FamCA 834

FAMILY LAW – ORDERS – Interpretation of s 79 orders – Lease and water entitlements

APPLICANT: Mr Lenova

RESPONDENT: Ms Lenova

FILE NUMBER: MLC 5218 of 2009

DATE DELIVERED: 14 September 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 14 September 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr T.J. Puckey

SOLICITOR FOR THE APPLICANT: Taussig Cherri & Associates

COUNSEL FOR THE RESPONDENT: Mr D.J. Brown SC

SOLICITOR FOR THE RESPONDENT: Nicholes Family Lawyers

Orders

IT IS ORDERED

The Proposed Lease

1. THAT the terms of the Lease in respect of the husband’s land as defined in paragraph 2 of the final consent orders pronounced 22 July 2010 (“the Orders”) be amended from the draft form as presented to the Court to read as follows:

   1.(a)      to insert the words “subject to special condition 1.2 thereof” after the words “50 years” in defining the term of the Lease;

   2.(b)      to acquire the landlord’s name to be endorsed upon the public liability insurance policy required by clause 8.1.1 of the Lease and on each subsequent yearly policy thereof with such documents and proof of endorsement to be provided to the wife as landlord within seven (7) days of the date of renewal, and at the expense of the tenant;

   3.(c)      to allow the wife as landlord access to the shed on the leased land between 10.00 a.m. and 10.45 a.m. on the first Saturday of February and August in each calendar year for the purposes of conducting a landlord’s inspection of the premises, to be undertaken in the absence of the husband and in the presence of a person nominated by the husband and agreed to by the wife;

   4.(d)      to insert the husband as guarantor on page 3 of the Lease document with liability limited to the rental due and any necessary and proper outgoings pursuant to the Lease itself for which the tenant would ordinarily be responsible;

   5.(e)      without necessarily including these provisions within the Lease document the wife as landlord has limited scope to inspect her electricity meter box and water tanks on the leased property at times when the husband is not present.

IT IS NOTED

A.THAT the extempore reasons for judgment delivered upon the proposed Lease are to be transcribed, be placed upon the Court file and be made available to the parties.

B.THAT the Court proceeded to hear and determine any issues of and related to the Lease in the absence of the second and third respondents to the orders upon the express invitation of the parties and their assurances to the Court that no issue or matters will arise therefrom and on the basis that there has been correspondence between solicitors and those other respondents on matters of and related to the issues now before the Court.

IT IS FURTHER ORDERED BY CONSENT:

Water Entitlements

1. THAT all applications of and incidental to the water entitlements or syndicate or other documents of and related thereto be dismissed and the parties are to abide by the provisions of paragraph 2 of the orders whereby the wife is to receive 2 megalitres of stock and domestic water entitlement subject to the matters further identified in that paragraph.

Superannuation

1. THAT each of the husband and wife forthwith comply, and instruct their legal practitioners to comply on their behalf with paragraph 9 of the orders and further and in consequence thereof the wife forthwith sign the documents and cheques identified in paragraphs 15 and 31 of annexure “A” to the husband’s application in a case filed 2 September 2010 and each of the four cheques, more specifically identified in paragraph 15 thereof are to be signed by the wife and delivered by her solicitor to the husband’s solicitor prior to 4.30 p.m. this day.

2. THAT if the wife refuses to comply with the preceding order a Registrar of this Court pursuant to s106A of the Family Law Act 1975 be appointed to execute, on Wednesday 15 September 2010 such cheques or documents (in the name of the wife) as are required pursuant to that order.

Maintenance and Other Payments

1. THAT further to paragraph 16 of the orders and in discharge of calendar monthly maintenance as was required pursuant to paragraph 16.2 thereof the husband immediately pay to the wife a sum of $3,250 in discharge of his obligations under that paragraph.

2. THAT otherwise the wife receive her entitlement of the rent of the R property for the month of September.

Further Orders

1. THAT the husband’s application in a case filed 2 September 2010 and the response of the wife thereto filed 9 September 2010 be otherwise dismissed.

2. THAT all applications for costs of and incidental to these interim applications be otherwise dismissed.

IT IS CERTIFIED

1. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Senior Counsel for the wife and Counsel for the husband.

IT IS NOTED that publication of this judgment under the pseudonym Lenova & Lenova is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 5218 of 2009

MR LENOVA

Applicant

And

MS LENOVA

Respondent

REASONS FOR JUDGMENT

1. The matter of Lenova returns before me for enforcement purposes and other Orders.  Mr Puckey of counsel appears for the husband.  Mr Brown of Senior Counsel appears for the wife.  The instructing solicitors for both parties are in court, as are the clients.

2. The first matter is relevant to all of the various issues listed before me this day and that is that the second and third respondents from the trial have not been served with the continuing applications and responses and are not present at court.  Those respondents are the sons of the husband and wife and they were a party to the final property orders pronounced, by consent, on 22 July of this year.

3. I have raised this issue of the non-appearance of the second and third respondents. I understand they have not been formally served with the applications. I understand it was never intended that they be at court.  I am advised that there have been some level of continuing correspondence between solicitors, with each of the sons and/or their legal advisors.  They may or may not know of the proceedings today.

4. I am requested by the legal practitioners for both the husband and wife to proceed in their absence, on the basis that they each have general knowledge of matters before the court.  I am of the view that they should have been served and that was a basic matter for attention by solicitors.  Nevertheless, the matter is re‑listed, it having earlier been mentioned on a prior date and the parties have incurred costs and want the proceedings to proceed this day.

5. It is not suggested that there is any inconvenience or detriment to either of the second or third respondents, or matters that they would wish to be heard upon.  Whether the husband is or is not representing their interests, or has common interest, is perhaps another matter, but Mr Puckey, on instructions does not seek any adjournment on this matter and does not seek to have either of the sons represented or heard.  On that basis I will proceed, albeit reluctantly, with the issues before the court this day.

6. The application in a case was filed 2 September 2010 and the husband therein seeks the appointment of the Registrar, pursuant to section 106A of the Family Law Act 1975 to execute documents arising from and required as a result of the consent orders and in the name of the wife. Additionally, a costs order, including on an indemnity basis, is sought against the wife and/or her legal practitioners.

7. The response of the wife is filed 9 September 2010 and it seeks various orders of and related to the proposed lease document, to spousal maintenance, to water rights and the provision thereof, and to the production of documents and otherwise costs, and those matters will variously be before me today or on other days hereafter.

8. The husband relies upon an affidavit of his solicitor, Ms Cherrie, filed 2 September 2010 with voluminous exhibits thereto.  This day and now by leave and with the agreement of the wife’s solicitors, a further affidavit from his commercial solicitor, Mr Roccisano, has been filed and I have read, albeit briefly, that document.  In support of the orders sought, Mr Puckey, as counsel for the husband, has prepared a written submission identifying the arguments relied upon. 

9. The wife, for the purposes of orders sought in her response, relies upon an affidavit of her solicitor filed 9 September 2010, a further affidavit of hers filed 9 September 2010 and, additionally, an affidavit of Mr K filed 13 September 2010, that gentleman being a licensing officer with the New South Wales government Office of Water and that affidavit being relevant to other and ongoing issues and disputes in this matter.

10. As I have identified in the overall, the issues arising out of the consent orders, and now before the court, involve spousal maintenance, water rights and the delivery and basis of water being provided to the property in which the wife has retained pursuant to the orders, and also the provision of a lease and the terms and conditions of the lease of a shed on adjoining land, but which is to be offered up to the husband and/or others.  In addition, there are likely to be other and continuing issues.

11. What I propose to do for the purposes of all extempore judgments delivered in this continuing matter is to proceed on a item by item basis.  That is, I will deal with each of the particular disputed issues and provide reasons for judgment, if appropriate, on those matters.

12. The first of the matters that I have had submissions upon relates to the proposed lease and I will now deal with that matter in these continuing extempore reasons.

13. The consent-defended orders of 22 July 2010 provide, in paragraph 2, that:

    The husband will do all things and sign all documents required, at the expense of the wife, to transfer to her his right, title and interest in a property described as [Lot 4B, E property] and to provide to the wife two megalitres of stock and domestic water entitlement subject to various conditions that are contained within subclauses 2.1-2.3 (inclusive) thereof.

14. It is necessary to have general regard on all of the matters before the court today to paragraph 2 of those orders of which I have read.  Mr Puckey emphasises that 2.1 thereof provides that each of the husband and the second and third respondents are to have sole use and occupation of the land identified as part 3, as is drawn in a plan, schedule B, to the orders.

15. Dealing with the issue of the lease, paragraph 2.3 provides that the wife:

    Execution of a lease of the husband’s land in favour of the husband or his nominee, in such terms as the husband, in his sole discretion, shall require.  Save that total payment in respect of rental, outgoings and any other expense in relation to the husband’s land shall be fixed in the sum of $100 per calendar month, and the cost of electricity supplied to the husband’s land provided, same is separately metered.

16. The parties had intended, in paragraph 2, to deal with all issues of and related to the transfer of that land and the consequential water and leasehold issues that now arise.  The particular issues of and related to the lease are identified by the wife in paragraph 30 of her recently filed affidavit.  That lease was provided to her on 25 August and it is yet to be executed.  A number of issues are raised by the wife on the basis that she will not execute the lease, subject to court order, unless these matters are identified and resolved.  Subparagraphs (a)-(f) thereof identify each of those provisions and counsel have separately addressed me on the majority of those items.

17. The actual lease document is exhibit “DC7” to the affidavit of Ms Cherrie and I first observe, on page 48 of that affidavit, a lessee has been nominated as Lenova Pty Ltd.  Thus, on that basis, the husband has already exercised a level of discretion in nominating that company as the legal entity to receive the benefit of and take the responsibility for the lease as tenant.  That is clearly provided for on the front page of the lease document, that company having its registered office in Melbourne.  The term of the lease is said to be for 50 years.

18. There are special conditions and subparagraph 1.2 thereof provides:

    This lease shall continue for the benefit of the tenant for the duration of time for which the wife, as landlord, is the registered proprietor or is entitled to be the registered proprietor of the property lease.  The lease shall end upon the landlord ceasing to be the registered proprietor or being so entitled (in summary).

19. The wife objects to a term of 50 years and said that was never discussed.  She says the agreement, in respect of the property and the shed thereon, was reached on the basis that it would cease upon her selling of that property.  She alleges otherwise it is inconsistent.

20. In dealing with all issues in this matter, I have before me consent orders and they are binding on the parties and on the court, save as where otherwise interpreted to be inconsistent or wholly inappropriate.  The commencement point is thus;  the husband, together with the second and third respondents, were to have sole use and occupation of the land to be leased, as identified on the schedule to the orders and the lease was to be as the husband, in his sole discretion, determined.

21. What I intend to require is for the lease document to be redrawn, so that the term, on the front page of the agreement, is said to be expressly subject to special condition 1.2 thereof.  That particularly, therefore, incorporates that it is for the duration of time that the wife is the registered proprietor.  The expression “or is entitled to be the registered proprietor” is presumably to operate only up until the execution of the lease and the transfer required by order 2 and not for any other period thereafter - and that is the common sense reading that must be given to that subclause as presently drafted.  Otherwise, I have generally applied the consent orders and that with which the husband was then empowered, in terms of drafting that part of the lease document.

22. In paragraphs (b) and (c) of paragraph 30 of her affidavit, issues as to the commencement date and the provision of a guarantor are raised, but both counsel have indicated to me these matters are not the subject of continuing dispute and are appropriate.  Whilst the sum of money is extremely modest and I make no particular order, it is fundamental that there is security for those monies to be on-paid to the wife for the term of the agreement, particularly if the husband is not thereafter involved or in a position of control in relation to the lease.  That should be easily drafted and incorporated, and any prudent solicitor advising the landlord would have some level of certainty included therein.

23. The principal argument before me, seemingly related to insurances, and before I deal with that topic I have reconsidered attachment B in the plan.  It is important to understand that the shed, as drawn on that plan, adjoins the wife’s house.  It is said that there is a dividing brick wall.  The entrance to the shed is by gates fronting the Road.  The husband’s mother’s home is nearby, but not abutting the shed.

24. Clause 10 of the lease, as drawn, provides for the transfer or sublease of the property.  In subclause (1) it is required that the tenant must not transfer the lease without the consent of the landlord, which consent must not be unreasonably held.  Clearly, that is a very proper clause, commercially in use and should be retained.

25. The more particular objection relates to clause 10.1.2 thereof, which permits the tenant to transfer the lease from time to time to any company of which the husband or either of the two sons are directors or shareholders, alone or with others, without the landlord’s consent.  In considering this clause, which is the subject of specific objection by the wife, it is fundamental that in the orders of the court, made in the section 79 proceedings, clause 2.1 provided for the husband and the second and third respondents to each have sole use and occupation of the land upon which the shed is erected.

26. On a careful reading of that subparagraph, 10.1.2, any transfer may only be to a corporate entity and not to any other individual, and can only be to a corporate entity where one of the family members is a director or shareholder.  In the fullness of time, that person may have other family members or others, but it must always be within the umbrella of an operating entity where the husband or one of those children are involved.  It cannot be to an outsider, beyond the family, without a member of the family so involved.

27. The argument on behalf of the wife is that a nomination has been made and that the entity, Lenova Pty Ltd, has been nominated and that pursuant to clause 2.3 thereof, the husband has only one nomination and that has been made and should not or cannot be changed.  On the balance of the drafting of paragraph 2 of the section 79 consent orders, and understanding that these orders are intended to operate for the foreseeable future, and given that the sons were respondents in the proceedings, and given that they each have sole use of part of lot 3 pursuant to clause 2.1 thereof, it is reasonable that this clause be drafted in the lease in the form required in subparagraph 10.1.2.  I do not require the subclause to be otherwise amended or deleted therefrom.  I emphasise that the submissions on behalf of the husband highlighted that it is intended to remain within the family and always the husband, or one of the two sons, are and will be involved or will be directors of the corporate entity so involved.

28. I turn to the question of insurances on the land and, in particular, on the shed.  In subparagraph (d) of paragraph 30 of her affidavit, the wife highlights that the husband should be responsible for all costs.  The lease is curiously drawn, insofar as clause 8 thereof provides for insurance and damage.  It concerns itself with only the insurances that the tenant must take out and not the landlord.  The obligation of the tenant is to keep a current insurance policy covering public liability.  What should occur is that the landlord be accepted for and endorsed on that policy, as the public liability should offer a level of protection to both landlord and tenant.  It would be a travesty if a situation arose and an injured person was, for example, able to sue the tenant who could rely on the policy of insurance, but likewise sue the landlord who could not rely on a policy of insurance.  Such costing of public liability is generally not expensive, but I have no particular evidence before me in that regard.  What should occur is that the public liability policy should be extended to cover both landlord and tenant and that would be prudent and, likely, at no or little additional cost.

29. The more particular issue is the shed and the insurance on the structure, which is separate to any public liability policy.  I have no evidence as to the independent value of the shed, or any cost of insurance thereon.  Generally, the landlord must insure property, particularly when rental, even if a peppercorn rental, is paid therefore.  There is no basis upon which I can require the husband to pay or any commercial entity of the husband to pay, insurance on that building.

30. What the court, however, has been told - and this is fundamental to any insurance issue - is that there is only machinery in the shed.  There is no storage of any type of chemical or hazardous material or inflammable material, save for petrol that might be in the tanks of machinery (or diesel).  I would have a wholly different attitude if any chemical or other product was to be stored within the shed, because that would change the basis of and the need for the cost of insurance to the wife.

1. Again, this case wholly depends upon some level of discussions between parties, but I am repeatedly told that is not possible and will not occur, and there will be no common sense shown.  If so, unfortunately, the reality is there are and should be restrictions on what is within the shed, but the wife must pay the basic insurance on the structure, as presently drafted and on the basis of the consent orders.  I have little doubt, if that was known to the wife, the rent would be greater than $100 a month, which is not even indexed with CPI.  But, at this stage, unless there are more substantial reasons to set aside all of the property orders, I am not prepared to vary the orders on that insurance issue.

2. I turn now to access to the shed.  The wife, as landlord, wants access each six months.  The husband, for reasons still largely unknown to me, but seemingly because of the poor relationship between he and his wife and/or past intervention and court orders, or previous unseemly disputes between them, does not want that scenario to arise.  As landlord, my view is the wife is entitled to a right of inspection.  She requests only each six months and I will require that to be drafted within the lease agreement.  What I require, to give certainty, is that at 10 am on the first Saturday of February and August in each year, the wife is to have a right of inspection with the husband not present, but a person nominated by the husband and agreeable to the wife to be present.  Hopefully, such a person exists within the area of the farm or the local townships.

3. The wife has finally raised the fact that her electricity meter and her water towers supplying domestic water for garden, but not drinking purposes, are located on the land.  It is said by her that on a not regular and, perhaps, emergency basis she must have a right of inspecting the structures.  The husband opposes that and would not have the wife anywhere on the land for any genuine reason or any other reason.  This is a matter that simply should not be before the court and it says little of the parties that they cannot resolve matters.  I intend to make no order on this regard.

4. If it ultimately were to be that the wife, on two occasions a year, inspected her electricity box/meter or the condition of the water towers, then that would be both reasonable and proper, and any alleged breach of the lease on that basis would be puerile.  However, I do not intend to make any order on such a matter.  I well understand the husband has an obligation to supply water to the boundary fence of the wife’s property, as delineated in schedule B to the orders, and that must occur.  The only caveat, clearly, is that the wife should not be wandering on the land, or inspecting the water tank when the husband is nearby.  That would simply be inflammatory and, no doubt, lead to conflict and further actions in the local Magistrates Court or police, or whatever, given what I seem to be told of or have previously read of past issues.

5. I, before moving on to the myriad of other issues that these parties cannot talk about or their solicitors are unable to discuss, will adjourn for lunch, given it is now 10 past 1 on a matter that was to be a brief mention.  The counsel, between them, over lunch, or solicitors, can draw the order on the lease to incorporate what I just said and I will pronounce that on my return, by the court and not by consent.  These reasons will, of course, be transcribed and placed on the court file for me on another occasion, or others on other occasions, hereafter to continue to read and adjudicate upon.

I certify that the preceding thirty-five
(35) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Young delivered on
14 September 2010.

Associate: ……………………………………………………………

Date:  …………………………………………………………………