Magnus & Sandri (No 2)
[2024] FedCFamC1F 236
•4 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Magnus & Sandri (No 2) [2024] FedCFamC1F 236
File number: SYC 3830 of 2019 Judgment of: HARPER J Date of judgment: 4 April 2024 Catchwords: FAMILY LAW – PROPERTY – INTERIM – Where property is due to be sold prior to delivery of final judgment – Where wife seeks a mandatory order directing the surplus of the sale to be paid into an offset account on the mortgage of the former matrimonial home – Where husband consents to surplus sale proceeds being held in a controlled monies account in the parties’ names – Where interest on the mortgage is likely higher than that received on a controlled monies account – Court satisfied surplus sale proceeds should be protected pending delivery of final judgment – Whether injunctive or mandatory order more appropriate – Orders made for the surplus sale proceeds to be directed to a loan account secured against the former matrimonial home. Division: Division 1 First Instance Number of paragraphs: 10 Date of hearing: 4 April 2024 Place: Sydney Counsel for the Applicant: Mr Muddle SC with Mr Bennett Solicitor for the Applicant: Coleman Greig Lawyers Counsel for the Respondent: Mr Sirtes SC with Mr Auld Solicitor for the Respondent: Abbott Delaney Lawyers ORDERS
SYC 3830 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MAGNUS
Applicant
AND: MR SANDRI
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
4 APRIL 2024
THE COURT NOTES THAT:
A.The Respondent Husband (“the husband”) is the sole registered proprietor of the property situated at and known as B Street Sydney NSW (“the B Street Residence”) being the whole of the land contained in folio identifier ….
B.Contracts for the sale of the B Street Residence were exchanged in early 2024 for a purchase price of $16,000,000.
C.Settlement on the sale of the B Street Residence is scheduled to occur in early 2024. As at the time of the making of these orders, the husband has not been informed of any request made by the purchaser to extend the completion date and is not aware of any other circumstances which may prevent settlement from occurring on the scheduled settlement date.
D.The husband discloses that the agent’s commission payable on the sale of the B Street Residence is 1.5 per cent of the sale price, meaning that the total commission payable on the sale will be $240,000.
E.These orders do not discharge or vary the obligations of the husband pursuant to Order 2 of the orders made 8 October 2019 and 4 September 2020 relating to the E Bank loans.
THE COURT ORDERS THAT:
1.Simultaneously with settlement occurring on the sale of the B Street Residence, the husband shall do all acts and things necessary to cause the proceeds of sale to be disbursed in the following manner and order of priority:
1.1payment of agent’s commission up to a maximum amount of $240,000, with any amount owing above this amount to be payable by the husband;
1.2payment of the solicitors’ costs for acting on the sale up to a maximum amount of $5,000, with any amount owing above this amount to be payable by the husband;
1.3payment of the loan to the National Australia Bank account ending …28, for an amount not exceeding $7 million, with any amount owing above this amount to discharge the indebtedness under this loan to be payable by the husband;
1.4payment of the loan to the National Australia Bank account ending …27, for an amount not exceeding $4 million, with any amount owing above this amount to discharge the indebtedness under this loan to be payable by the husband; and
1.5the remaining balance of the proceeds of sale after the payments contemplated by the above Orders 1.1 to 1.4 to be paid to reduce the following E Bank home loan account secured against the Suburb C property:
1.5.1Loan account ending …00.
2.The husband shall be restrained by injunction from allowing the proceeds of sale from the B Street Residence to be paid except as provided for in Order 1 above and these orders shall constitute sufficient authority to the purchaser and its solicitor, the agent, the solicitor acting on the husband’s behalf and the National Australia Bank in dealing with the proceeds of sale.
3.The husband shall notify the Applicant Wife’s (“the wife’s”) solicitor should completion of the B Street Residence be delayed within four hours of being notified and the husband shall authorise his solicitor acting on the sale of the B Street Residence to forward to the wife’s solicitor a copy of the finalised Settlement Sheet not less than 12 hours prior to the settlement and these orders shall constitute sufficient authority on the solicitor acting to communicate with the wife’s solicitor for the purpose of this order.
4.Pending completion of the sale of the B Street Residence as contemplated above the husband shall be liable for meeting all minimum repayments due and owing on the National Australia Bank home loan accounts ending …28 and …27 (“the NAB loans”), as and when the obligation to make those payments arises, and shall indemnify the wife in respect of all such obligations.
5.Order 11 of the orders made on 24 September 2020 be discharged and replaced with Order 6 below.
6.Pending further order, each party is restrained from drawing down or against the E Bank loan accounts ending …00, …00 and …01 secured against the Suburb C property and the NAB loans, or from in any way increasing the indebtedness of either of the parties arising in respect of those loans and these orders shall constitute sufficient authority to each of E Bank and National Australia Bank to restrict each parties’ access to the said accounts in the manner as contemplated by this order.
7.In the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
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 the pseudonym Magnus & Sandri has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
HARPER J:
These are property proceedings between the applicant wife, Ms Magnus (“the wife”) and the respondent husband, Mr Sandri (“the husband”). The trial of the financial issues has taken place between 2 and 4 April 2024. On 3 April 2024, the wife made an oral application for orders to be made pending delivery of final judgment. Those orders are in the nature of interlocutory mandatory injunctions compelling the husband to direct the surplus to be derived from the sale of the property known as B Street, Sydney (“the B Street Residence”).
The B Street Residence has been sold with settlement of the sale to take place in early 2024. The orders proposed by the wife would result in an amount of approximately $4.7 million dollars being applied towards the outstanding debt balances of one of three accounts secured against the property which was the former matrimonial home and located at F Street, Suburb C, NSW (“the Suburb C property”).
The husband resists the proposed orders but would be content for the surplus to be retained in a controlled monies account. Accordingly, the difference between the parties is really which account the surplus funds should be held in pending delivery of final judgment. The Court is unable to specify a likely date for the delivery of judgment but will ensure that that happens as soon as practicable.
If the funds were to be held in a controlled monies account in the name of the spouse parties steps would have to be taken between now and the settlement of the sale tomorrow establishing that account with a relevant financial institution. There is no evidence before me of what sort of interest rate would be applied to the monies so held.
The debit balances of the loan accounts secured against the Suburb C property are held in three accounts held at E Bank and ending with the numbers #...00, #...00 and #...01. While there are well recognised differences between an injunctive order which restrains certain actions and a mandatory order compelling certain steps to be taken. The question of a prima facie case and balance of convenience tests are applicable to both.
It is in my view beyond argument that there is a prima facie case for the surplus to be ultimately applied, at least partially, in favour of the one or other of the spouse parties which, in turn, supports a balance of convenience position that the surplus proceeds should remain in a position where they cannot be accessed by either party pending the delivery of final judgment.
It is apposite to note at this point that pursuant to interlocutory orders earlier made in these proceedings, although the E Bank loan accounts are held in the name of the husband who is able, pursuant to his arrangements with that bank, to operate upon those accounts, without the consent of the wife at present he would not be able to do so. If the surplus funds are directed into one of the E Bank loan accounts that would have quite obviously the effect of reducing the interest payable which might accrue on those accounts or that account into which the money is paid pending the delivery of final judgment.
I take judicial notice of the fact that the interest rate applicable to the loan debit balances is likely to be higher than the interest that would accrue upon a deposit in a controlled monies account.
In those circumstances it seems to me to be preferable for the money to be paid as the wife proposes. In the event the husband wishes to access some or all of those funds prior to delivery of final judgment it is open to him to apply to vary interlocutory orders on a proper basis pursuant to a properly formulated application at any point. Whilst I am not inviting any further litigation between these parties by that last comment, it simply indicates that the position of the husband is as protected by the monies being placed into an E Bank account upon which he might redraw funds subject to Court order as he would be if they were placed into a controlled monies account in the name of both parties.
Accordingly, I propose to accede to the wife’s application and make orders in accordance with the proposed Minute of Orders marked Exhibit V.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Harper delivered on 4 April 2024. Associate:
Dated: 12 April 2024
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