Massalski and Riley
[2016] FamCA 144
•11 March 2016
FAMILY COURT OF AUSTRALIA
| MASSALSKI & RILEY | [2016] FamCA 144 |
| FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where there is a dispute between parties as to the date of cessation of the de facto relationship – Where, if necessary, consent was given for leave to be granted to the applicant to proceed pursuant to section 44(6) –Where there is agreement between the parties for orders to be made facilitating the subdivision of two properties – Where the applicant seeks injunctive relief in respect to properties jointly owned with third parties or solely owned by the respondent – Orders made for the respondent to provide the applicant with written notice of his intention to deal with those properties – Where the respondent seeks the title of a property owned with the applicant be altered following completion of its subdivision, to allocate one lot to each party – Application dismissed – Orders made for the property to remain in the joint names of the parties – Orders made restraining either party from dealing with the property other than in compliance with Orders. |
| Family Law Act 1975 (Cth) ss 44(6), 79, 80(1), 90SB, 90SK, 114(3) Family Law Rules 2004 (Cth) r 13.07, 13.22 |
Beacham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Blue Seas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380
Davidson & Davidson (No. 2) (1994) FLC 92-469
Felice & Felice [2011] FamCA 162
G and T (2004) FLC 93-176
Giumelli v Giumelli (1999) 196 CLR 101
Harris & Harris (1993) FLC 92-378
K & K [2008] FamCA 957
Kelleher & Anderson [2007] FamCA 137
Lawson & Crawford and Ors [2014] FamCA 1012
Medlow & Medlow [2016] FamCAFC 34
Mullen & De Bry (2006) FLC 93-293
Norton & Locke (2013) 284 FLR 51
Sresbodan & Sresbodan and Ors [2013] FamCA 480
Stanford & Stanford (2012) FLC 93-518
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836
Zschokke & Zschokke (1996) FLC 92-693
| APPLICANT: | Ms Massalski |
| RESPONDENT: | Mr Riley |
| FILE NUMBER: | SYC | 496 | of | 2015 |
| DATE DELIVERED: | 11 March 2016 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | 16 December 2015 |
REPRESENTATION
| FOR THE APPLICANT: | Ms Massalski in person |
| COUNSEL FOR THE RESPONDENT: | Mr Fowler |
| SOLICITOR FOR THE RESPONDENT: | Russell Byrnes Solicitor |
Orders
THE COURT ORDERS BY CONSENT THAT:
Pursuant to section 44(6) of the Family Law Act 1975 (Cth), leave is granted to the applicant to apply out of time.
THE COURT ORDERS THAT:
The question of costs incurred by the parties in respect to the hearing dates of 20 July 2015 and 22 July 2015 is reserved to be dealt with at the final hearing.
Orders 2 and 3 of the applicant’s Minute of Proposed Orders dated 15 December 2015 are dismissed.
Order 9 of the applicant’s Application in a Case filed 22 September 2015 is dismissed.
THE COURT FURTHER ORDERS PENDING FURTHER ORDER THAT:
The respondent is restrained from selling, transferring, further charging or otherwise encumbering the properties known as and situated at:
a.B Street, Suburb A, VIC …;
b.C Street, Suburb A, VIC …;
c.D Street, Suburb E, NSW …;
or creating or increasing any liability secured against those properties, either individually or collectively, without providing the applicant with fourteen (14) days written notice.
The parties are to expeditiously do all acts and things and sign all documents required to complete the registration of the plan of subdivision and associated dealings of the property known as and situated at F Street, Suburb G, being the land in folio identifier (“the F Street property”).
For the purposes of Order 6 above, the applicant is to execute the following documents and return those documents properly executed and witnessed as is required by each document, to the solicitors for the respondent, within fourteen (14) days of the date of delivery of those documents to the applicant at F Street, Suburb G, NSW:
a.any application form(s) required by Suburb H City Council to effect the subdivision of the F Street property;
b.the Positive Covenant for the benefit of Suburb H City Council;
c.the Restriction on the Use of the Land by a Prescribed Authority, for the benefit of Suburb H City Council;
d.the Strata Plan Administration Sheet and Strata Plan;
e.any authority required by the Commonwealth Bank of Australia to produce the Folio Identifier at the LPI NSW; and,
f.such other document or documents as may be provided by the respondent to the applicant which is, or are, reasonably required to enable the registration of the subdivision.
For the purpose of Order 7 above, the respondent is to deliver the documents to the applicant at F Street, Suburb G, NSW, by registered post.
Within twenty-eight (28) days of registration of the subdivision of the F Street property, the parties are to do all acts and things and sign all documents required to effect the following:
a.cause the Title Deeds for the two lots created by the subdivision to be delivered to the solicitors for the respondent and the solicitors for the respondent are to hold the Title Deeds on the behalf of the parties pending the parties agreeing on an alternative means of retaining the Title Deeds or further order of the Court.
b.authorise the Commonwealth Bank of Australia to discharge the mortgage, registration number …, secured over Lot 1 as shown on the Strata Plan, being the Lot at the front of the property (“Lot 1”), and to secure the debt then owing to the Commonwealth Bank of Australia by a mortgage secured over Lot 2 as shown on the Strata Plan, being the lot at the rear of the property (“Lot 2”);
c.sign all documents necessary to register Lot 1 and Lot 2 of the F Street property in the joint names of the parties as tenants in common in equal shares.
d.After the preceding subparagraphs have been carried out, authorise any relevant person to deliver the original Title Deeds for Lot 1 and Lot 2 of the F Street property, to the solicitors for the respondent, and the solicitors for the respondent are to hold the Title Deeds pending further order of the Court.
The parties are to each pay one half of the costs and fees payable in respect to the preparation of the registration of the Strata Plan and associated documents, except for, any fees payable to the Commonwealth Bank of Australia which shall be the sole responsibility of the respondent.
Other than in compliance with these Orders, the parties are each restrained from disposing, further encumbering and otherwise dealing with Lot 1 and/or Lot 2 of the F Street property until further order of the Court.
Within fourteen (14) days of these Orders, the parties are to do all acts and things and sign all documents as are necessary to find a tenant and to execute a lease for a period of six (6) months, with a month to month periodic lease thereafter, for Lot 2 of the F Street property at an agreed weekly rental price, and failing agreement, at a price as determined by the President of the Real Estate Institute of Australia (NSW Division).
The parties are restrained from interfering with the tenant’s quiet enjoyment of Lot 2 of the F Street property.
Upon Lot 2 being tenanted in accordance with Order 12 above, the parties are to do all acts and things and sign all documents necessary to establish a bank account in joint names for the rental income received from Lot 2 of the F Street property to be collected into accordance with Order 12 above. Such rental income is to be deposited on a weekly basis, or such other time period as the parties may agree.
The parties are restrained from utilising, disposing or otherwise transferring the rental income received from Lot 2 of the F Street property other than to make mortgage payments on the Commonwealth Bank mortgage in the name of both parties which is secured over the F Street property.
The applicant is to have exclusive occupation of Lot 1 of the F Street property.
The applicant is responsible for the following payments in respect to Lot 1 of the F Street property:
a.all rates, outgoings and strata levies payable in respect to Lot 1 of the F Street property;
b.maintenance in respect to Lot 1 of the F Street property as agreed and upon the production of tax invoices and receipts; and
c.all building insurance and public liability insurance premiums for Lot 1 of the F Street property.
The respondent be responsible for the following payments in respect to Lot 2 of the F Street property:
a.all rates, outgoings and strata levies payable in respect to Lot 2 of the F Street property;
b.maintenance in respect to Lot 2 of the F Street property as agreed and upon the production of tax invoices and receipts; and
c.all building insurance and public liability insurance premiums for Lot 2 of the F Street property.
Within twenty-eight (28) days of the date of these Orders, the parties are to do all acts and things and sign all documents necessary to complete the registration of the plan of subdivision for the property known and situated at B Street, Suburb A, VIC and the property known and situated at C Street, Suburb A, VIC.
In so far as it has not already occurred, pursuant to Part 13 of the Family Law Rules 2004 (Cth), the respondent is to, by way of disclosure, provide to the applicant:
a.details of monies received by the respondent from the respondent’s late father, or from the estate of the respondent’s late father, as a result of the sale of the property located at I Street, Suburb J; and
b.copies of documents relating to the source of funds used to pay for the property located at D Street, Suburb E.
All outstanding orders contained in the applicant’s Application in a Case filed 22 September 2015 and Minute of Proposed Orders dated 15 December 2015, and the respondent’s Minute of Order dated 15 December 2015, are otherwise dismissed.
In default of either party doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of the Family Court of Australia at Sydney be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to said Orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Massalski & Riley 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 SYDNEY |
FILE NUMBER: SYC 496 of 2015
| Ms Massalski |
Applicant
And
| Mr Riley |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns competing applications for interim property orders sought by the parties who were in a de facto relationship for a relatively short period of time. During the relationship the parties participated in the construction of a duplex building at F Street, Suburb G, in New South Wales (“the F Street property”). It is common ground that the F Street property forms part of the property pool potentially available for distribution in a final property settlement between the parties. It is also agreed by the parties that that property should be subdivided.
The major issues in dispute between the parties concern, firstly whether Ms Massalski (“the applicant”) has an interest in a duplex property that Mr Riley (“the respondent”) constructed jointly with the applicant’s former husband, Mr K (“Mr K”). That duplex incorporates the addresses of B Street, Suburb A and C Street, Suburb A in Victoria (“the Suburb A property”). The second issue is whether the applicant has an interest in the property in which the respondent currently resides with his new partner which is situated at D Street, Suburb E in New South Wales (“the Suburb E property”).
There is agreement between the parties that, irrespective of the applicant’s existing interest in the F Street property and/or potential interest in the Suburb A property, it is appropriate for those properties to be subdivided.
During the course of the proceedings the applicant withdrew her application for several proposed orders. However, she pressed for an order that the respondent provide additional financial disclosure to her. That proposed order was not opposed by the respondent.
Preliminary issues
There is no dispute between the parties that the geographical requirements necessary to establish the Court’s jurisdiction pursuant to section 90SK of the Family Law Act 1975 (Cth) (“the Act”) are satisfied. It is also agreed that the parties’ relationship was in excess of two years and accordingly the provisions of section 90SB are satisfied.[1]
[1] Section 90SB(a).
The matter was initially listed on 20 July 2015 for hearing in respect to the applicant’s application for interim orders but was adjourned to 22 July 2015. On that day an issue arose as to whether the Initiating Application had been commenced within a two year period following the cessation of the de facto relationship, as required by section 44(5) of the Act. That matter was adjourned for hearing on 16 and 17 December 2015.
Shortly prior to the hearing on 16 December 2015, the respondent advised the applicant that, whilst the date of separation remained in dispute, the respondent did not object to the Court granting leave pursuant to section 44(6) of the Act for the applicant to apply for the orders she seeks. This was confirmed at the hearing on 16 December 2015 by counsel for the respondent. Accordingly, it was agreed between the parties that the Court would consider the respective applications by the parties for interim orders.
Background
In order to understand the issues that have motivated the respective applications, it is necessary to set out a brief summary of the relevant factual contentions of the parties. These are as follows:
·The applicant was born in 1958 and is currently aged 57. The respondent was born in 1951 and is currently aged 65.
·In 1982, the applicant married Mr K. The marriage is said to have ended in 2002. The respondent, however, disputes this separation date and alleges that, up until March 2009, the applicant and Mr K were still living together. The respondent alleges that the applicant and Mr K continue to maintain a “close relationship”.[2]
[2] The respondent’s affidavit filed 7 July 2015 at paragraph 92.
·In 2005, the applicant and Mr K bought two apartments at resort in Suburb G, entering into a joint mortgage to finance the purchases.
·In 2006, the respondent and Mr K purchased the Suburb A property for $300 000 as tenants in common in equal shares, with a view of building two townhouses on the property. The respondent borrowed $135 000 to put towards the purchase of his share of that property.
·After the purchase of the Suburb A property, the respondent and Mr K constructed two townhouses on the land. The townhouses are to be known respectively as B Street and C Street, Suburb A. As at the date of the hearing, the plan of subdivision had not yet been registered.
·The respondent alleges that in 2007 the parties began an intimate relationship.
·In December 2008, the parties purchased land at F Street, Suburb G, with a view to constructing two home units. The F Street property was purchased by the parties as tenants in common in equal shares and the purchase price was $330 000. The parties agreed to contribute equally to the cost of constructing the units and that, after the subdivision was completed, they would each retain one of the units. The applicant retained possession of, and continues to reside in Unit A, which is at the front of the property, whilst the respondent retained possession of Unit B, which is located at the back of the property.
·The applicant borrowed $165 000 from Mr K for her share of the purchase price of the F Street property. The respondent borrowed $182 000 from his father to contribute to his share of the purchase price. The respondent contends that he has contributed $30 000 more than the applicant to the cost of the development – however, that difference was allegedly remedied by the applicant allowing the respondent’s father to move into Unit B rent-free for two years commencing in January 2011. The respondent also contends that he still owes the estate of his late father the sum of $182 000 which he borrowed.
·In early 2009, the respondent moved out of the home where he was living with his then wife, Ms L Riley, to M Street, Suburb G (being a property owned by the applicant) to oversee the construction of the F Street property.
·Between January and March 2009, the parties commenced cohabitation.
·Between May 2009 and May 2010, the parties constructed the two F Street units at the F Street property (hereafter “the F Street units”). The respondent took seven months off work during the construction of the two units. The applicant contributed approximately $50 000 cash to the initial cost of construction of the units and borrowed a further $190 000 from Mr K for her share of the construction costs. The respondent contributed $50 000 to the initial cost of construction of the units and borrowed a further $260 000 from the Commonwealth Bank which he contributed to the construction costs.
·The respondent alleges that the Commonwealth Bank insisted on the applicant’s name being placed on the loan due to the F Street units being registered in both parties’ names. The respondent alleges that the Commonwealth Bank loan is wholly his responsibility and he has met all repayments for it. The applicant, however, alleges that it is a joint loan, which the parties intended to pay off utilising rental income generated by the respondent’s father’s home in Suburb J.[3]
[3] The applicant’s affidavit filed 8 September 2015 at paragraphs 53-54.
·In January 2010, the applicant bought a laptop computer for the respondent. According to the respondent, the computer was bought to re-pay the respondent for money he had loaned to the applicant.
·Between December 2010 and September 2012, the respondent resided with his father in Unit B of the F Street units whilst the applicant continued to reside in Unit A.
·The respondent alleges that in October 2012 the parties separated. The applicant, however, alleges that the parties separated “in or around October 2013”.[4]
[4] The applicant’s affidavit filed 8 September 2015 at paragraph 7.
·In 2013, the respondent and Mr K obtained a joint construction loan of $660 000 for the construction of the two townhouses at the Suburb A property.
·Between January 2013 and April 2014, the townhouses were constructed. Mr K chose to retain the townhouse at B Street, leaving the townhouse at C Street for the respondent.
·In January 2014, the respondent’s father was relocated into permanent care at an aged care facility in Sydney and the respondent vacated Unit B of the F Street units. The respondent alleges that he tried to tenant Unit B through a real estate agent, but was prevented from doing so by the applicant who, the respondent asserts, told the agent she was a joint owner and would not give permission for it to be tenanted.
·Throughout 2014, the respondent alleges that he carried out lengthy negotiations with the surveyor and with Suburb H City Council, paid for an engineer’s certificate, arranged council inspections and paid fees to the Council and to the Commonwealth Bank to procure the issue of an Occupation Certificate for the F Street units. This was in order to proceed with the subdivision of the property.
·In February 2014, an interim Apprehended Domestic Violence Order was made by N Town Local Court against the applicant for the protection of the respondent and Ms O, the respondent’s new partner (“Ms O”).
·The respondent alleges that in March 2014 the applicant took $25 000 from the Commonwealth Bank loan account without the consent of the respondent.
·In April 2014, an Occupation Certificate was issued for the Suburb A property.
·In June 2014, the respondent and his former wife, Ms L Riley (“Ms Riley”), divorced. Around this time, the respondent and Ms Riley also finalised a property settlement – which included a term that the respondent pay her the sum of $100 000 by 31 December 2015. Ms Riley subsequently placed a caveat over the F Street property.
·On 12 June 2014, a final Apprehended Domestic Violence Order was made by Suburb H Local Court against the applicant for the protection of the respondent and Ms O, including an order that the applicant not enter the respondent’s Unit B at F Street.
·In September 2014, the respondent obtained an Occupancy Certificate for the F Street units. The F Street units were also valued, with Unit A being valued at approximately $700 000 and Unit B being valued at $675 000.
·In September 2014, the respondent’s father gifted his property at I Street, Suburb J in New South Wales (“the Suburb J property”) to the respondent.
·In October 2014, the respondent sold his father’s property at Suburb J for $1.436 million and applied the proceeds of that sale towards the purchase of the Suburb E property with Ms O.
·The respondent alleges that, in October 2014, he sent the documentation required to subdivide the F Street units to the applicant but the applicant refused to sign the documents. The respondent further alleges that the applicant would not return the documentation to him.
·The respondent also alleges that, in November 2014, he sent another set of documents to the applicant for her to sign in order to proceed with the subdivision of the F Street units. He says that the applicant has not responded to requests for her to sign the documents, thereby preventing the registration of the plan of subdivision with NSW Land and Property Information.
·Between December 2014 and February 2015, the construction of the townhouses at the Suburb A property was finalised and those townhouses were in a position to be tenanted.
·On 12 December 2014, the parties were separately served with a Statement of Claim filed by Suburb H City Council for outstanding rates relating to the F Street units. The respondent alleges that he has since paid 50 per cent of the outstanding rates.
·In January 2015, the applicant entered the respondent’s F Street unit and removed the laptop computer which the respondent alleges was his.
·On 30 January 2015, the applicant commenced proceedings in the Family Court of Australia.
·On 17 June 2015, the applicant lodged a caveat over the Suburb A property.
·On 18 June 2015, the Apprehended Domestic Violence Order against the applicant for the protection of the respondent and Ms O was extended by Suburb H Local Court.
·On 25 November 2015, the respondent’s former wife, Ms Riley, filed an Application in a Case seeking leave to be joined to the proceedings.
·On 1 December 2015, Ms Riley discontinued her application to be joined to the proceedings.
The competing applications
The Applicant
The applicant was self-represented at the hearing. In her Application in a Case filed 22 September 2015, the applicant sought the following orders:
1. That the court allows abridgment of the usual service time and agrees to deal with this application in an ex perte [sic] hearing.
2. That [Mr Riley] shall not withdraw any money from funds transferred to any of his accounts from the accounts held in the name of [Mr P Riley].
3. That Mr Riley shall not encumber or dispose of any assets or incur further debts on any properties owned by him, by taking loans or giving guarantees secured with his assets for any loans for the benefit of [Ms O] or other people.
4. That [Mr Riley] will not be allowed to access funds from the loan approved for the amount of $300,000 according to the Application No 9040410734, and credited on the loan under redraw: …, or authorise drawings to be made against this loan by Ms O.
5. That [Mr Riley] shall be restrained from making any changes, alterations or additions as approved in the Development Application … or any other alterations whatsoever to the property known as and situated at [D Street], [Suburb E].
6. That [Ms Massalski] shall have exclusive possession of the property known and situated at [F Street], [Suburb G] and be allowed to rent out unit B, by a licenced real estate agent for a period of 6 months.
7. That the income derived from renting the unit B in accordance with Order 6 be used for payment of outgoings in relation to the [F Street] units including but not limited to:
7.1.Council rates
7.2.Water rates
7.3.Maintenance and repairs
7.4.Insurances
7.5.Paying off the home loan Account No 380106308 issued in the name of [Ms Massalski] and [Mr Riley], by the Commonwealth Bank, currently secured over the F Street units by a mortgage to the Commonwealth Bank ….
8. That the Registrar issues a Power of Attorney for [Ms Massalski] giving her exclusive rights to rent out the unit according to Order 6 and 7 and to deal with the Insurance Policy for the property known as and situated at [F Street, Suburb G] Folio Identifier ...
9. That any Garnishee Orders obtained by [Mr Riley] against [Ms Massalski] be stayed until the property settlement proceedings in the Family Court are finished.
10. That by the return date [Mr Riley] provides a full disclosure of the source of funds of the money that was used to pay for the property in [D Street], Suburb E.
11. That by the return date [Mr Riley] provides details of monye [sic] received from his father [Mr P Riley] upon sale of the property in [I Street, Suburb J], including all bank accounts to which the money was deposited to and the current balances of these accounts.
12. That by the return date [Mr Riley] provides a disclosure whether [Ms O] or any other third party holds or is using or has exercised or is exercising a power of disposition over, or is otherwise in possession of assets that belong to [Mr Riley].
On 15 December 2015 the applicant provided the following Minute of Proposed Orders to the Court:
1. That [Mr Riley] pays legal costs incurred by [Ms Massalski] in relation to the preparation and attending proceedings on 20 and 22 July 2015 on Indemnity basis.
2. That leave be granted for [Mr K] to join the proceedings.
3. That Consent Orders between [Ms Massalski] and [Mr K] be granted.
4. That [Mr Riley] be ordered to provide a financial statement providing disclosure of all assets and income received from renting his father’s house in [Suburb J].
5. That [Mr Riley] be ordered to provide full disclosure of how the income received from renting the [Suburb J] property was spent, itemising the expenditures in the following categories:
a.for the benefit of his former wife, [Ms L Riley];
b.for the benefit of his sons [Q and R Riley];
c.for the benefit of [Ms O], including jewellery, mortgage repayments travelling, car repayments;
d.for his own needs, travelling, entertainment, loan repayments;
e.for development of the property in [Suburb A];
f.for mortgage repayments for the property in [Suburb A];
g.for mortgage repayments for the property in [Suburb G];
h.for purchase of the property in [D Street], [Suburb E];
i.for legal expenses incurred to deal with property settlement with [Ms L Riley];
j.for legal expenses incurred to deal with ADVO proceedings;
k.for legal expenses incurred to deal with these Family Court proceedings.
6. That [Mr Riley] be ordered to create a ‘notional asset’ pool based on assets already distributed by [Mr Riley] for his own benefit and benefit of third parties.
7. That [Mr Riley] shall not encumber or dispose of any assets or incur further debts on any properties owned by him, by taking loans or giving guarantees secured with his assets for any loans for the benefit of [Ms O] or other people.
8. That [Mr Riley] will not be allowed to access funds from the loan approved for the amount of $300,000 according to the Application No …, and credited on the loan under redraw: …, or authorise drawings to be made against this loan by Ms O.
9. That [Mr Riley] shall be restrained from making any changes, alterations or additions as approved in the Development Application … or any other alterations whatsoever to the property known as and situated at [D Street, Suburb E].
10. That [Ms Massalski] shall have exclusive possession of the property known and situated at [F Street, Suburb G] and be allowed to rent out unit B, by a licenced real estate agent for a period of 6 months.
11. That the income derived from renting the unit “B”; [F Street, Suburb G] in accordance with Order 10) be used for payment of outgoings in relation to the [F Street] units including but not limited to:
7.1 Council rates
7.2 Water rates
7.3 Maintenance and repairs
7.4 Insurances
7.5 Paying off the home loan Account No … issued in the names of [Ms Massalski] and [Mr Riley], by the Commonweatlh [sic] Bank, currently secured over the F Street units by a mortgage to the Commonwealth Bank ...
12. That by the return date Mr Riley provides a full disclosure of the source of the money that was used to pay for the property in [D Street, Suburb E].
13. That leave for [Ms O] to join the proceedings be granted, to enable the title of the property in [D Street, Suburb E] be adjusted according to contributions paid by [Ms O] and by [Mr Riley].
14. That by return date [Mr Riley] provides a disclosure whether [Ms O] or any other third party holds or is using or has exercised or is excercising a power of disposition over, or is otherwise in possession of assets that belong to [Mr Riley].
15. That by the return date [Mr Riley] provides details of money received from his father [Mr P Riley] upon sale of the property in [I Street, Suburb J], including all bank accounts to which the money was deposited to and the current balances of these accounts.
16. That separate proceedings be granted to deal with alteration to the asset pool, pursuant to Sec 79 of the Family Act.
17. That the Registrar issues a Power of Attorney for [Ms Massalski] giving her exclusive rights to rent out the unit according to Order 10 and 11 and to deal with the Insurance Policy for the property known as and situated at [F Street, Suburb G] Folio Identifier ....
Any other orders as they may arise during the proceedings and upon inspection of the documents provided under a Subpoena by the banks.
At the hearing, the applicant elected to proceed on the basis that she would seek the orders as set out in her Application in a Case as well as Orders 2, 3 and 6 set out in her Minute of Proposed Orders dated 15 December 2015.
The Respondent
By way of an annexure to a Case Outline document provided to the Court on 15 December 2015, the respondent sought the following orders:
1. That the parties expeditiously do all acts and things and sign all documents required to complete the registration of the plan of Strata subdivision and associated dealings of the property at [F Street, Suburb G] being the land in Folio identifier 190/10057 ("subdivision").
2. That for the purposes of Order 1 the Applicant execute the following documents, and return those documents properly executed and witnessed as is required by each document, to the Respondent's solicitor, Russell C Byrnes, within 14 days of either the date of delivery of those documents to the Applicant personally or the date of the leaving of those documents at, or the posting the documents to, the Applicant at Unit A, [F Street, Suburb G], NSW:
a. The Positive Covenant for the benefit of [Suburb H] City Council.
b.The Restriction on the Use of the Land by a Prescribed Authority, for the benefit of [Suburb H] City Council.
c.The Strata Plan Administration Sheet and Strata Plan.
d.Any authority required by the Commonwealth Bank of Australia to produce the Folio Identifier at the ...
e.Such other document or documents as may be provided by the Respondent to the Applicant which is, or are, reasonably required to enable the registration of the subdivision;
noting that the documents referred to in subparagraphs a, b, c and d are in the form of the documents annexed to these orders, subject to any alterations or additions as may be required to any of those documents by the [Suburb H] City Council, …, or any other competent authority in order to effect the registration of the subdivision.
3. That within 28 days of registration of the subdivision the parties do all acts and things and sign all documents required to effect the following:
a.Cause the title documents for the 2 lots created by the subdivision to be delivered to the solicitors for the Respondent to hold for the parties to be dealt with to give effect to these orders.
b.Authorise the Commonwealth Bank of Australia to discharge its mortgage registered number AF … over Lot 1 as shown on the Strata Plan, being the Lot at the front of the property ("Lot 1") and, if so requested by the Respondent, to secure the debt then owing to the Commonwealth Bank of Australia by a mortgage over Lot 2 as shown on the Strata Plan, being the Lot at the rear of the property ("Lot 2"), as elected by the Respondent.
c.Transfer the title to Lot 1 to the Applicant, unencumbered, and transfer the title to Lot 2 to the Respondent.
d.After the preceding subparagraphs have been carried out, authorise any relevant person to deliver the original title document for Lot 1 to the Applicant, or to such person as the Applicant may in writing direct, and authorise any relevant person to deliver the original title document for Lot 2 to the Respondent, or to such person as the Respondent may direct.
4. That the parties each pay one half of all costs and fees for the preparation of the Strata Plan and associated documents, to obtain registration of the subdivision, and to effect the transfer of title of Lot 1 to the Applicant and Lot 2 to the Respondent, including, but not limited to, costs payable to the surveyor, fees payable to Suburb H City Council and fees payable to LPI NSW, but not any fees payable to the Commonwealth Bank of Australia which shall be the sole responsibility of the Respondent.
5. That the Applicant have exclusive use and occupation of Lot 1, both before and after the registration of the subdivision, including the right to lease Lot 1 and to receive the rent from it, and the Respondent be and is hereby restrained from interfering with the Applicant's quiet use and occupation Lot 1.
6. That the Respondent have exclusive use and occupation of Lot 2, both before and after the registration of the subdivision, including the right to lease Lot 2 and to receive the rent from it, and the Applicant be and is hereby restrained from interfering with the Respondent's quiet use and occupation Lot 2.
7. If either party wishes to enter into a lease as lessor of the Lot to which that party is entitled to exclusive use and enjoyment pursuant to these orders, while that Lot remains in the joint names of the parties, then the other party shall, at the request of the party wishing to enter into the lease, cooperate with the leasing of the Lot and shall promptly sign a Residential Tenancy Agreement for the Lot at the request of the party wishing to enter into the lease provided that the party wishing to enter into the Residential Tenancy Agreement shall indemnify and keep indemnified the other party from any claim made against that other party as a lessor of the Lot.
8. That the Applicant, within 7 days of receipt by her, send to the Respondent's solicitor a copy of all rate notices, all other accounts and or invoices and every other notice received by the Applicant relating to the property at F Street, Suburb G.
9. That the Applicant pay, and indemnify and keep indemnified the Respondent from all claims in relation to, the following outgoings and expenses as and when they fall due:
a.One half of all rates for the property at F Street, Suburb G, until Lot 1 and Lot 2 are subject to separate assessment of rates.
b.One half of building insurance and public liability insurance premiums for the property at F Street, Suburb G.
c.All rates and strata levies payable for Lot 1 after registration of the subdivision.
d.All other outgoings, maintenance and repairs which relate exclusively to Lot 1, unless payable by the owner's corporation after the registration of the subdivision.
10. That the Respondent pay, and indemnify and keep indemnified the Applicant from all claims in relation to, the following outgoings and expenses as and when they fall due:
a.One half of all rates for the property at F Street, Suburb G, until Lot 1 and Lot 2 are subject to separate assessment of rates.
b.One half of building insurance and public liability insurance premiums for the property at F Street, Suburb G.
c.All rates and strata levies payable for Lot 2 after registration of the subdivision.
d.All other outgoings, maintenance and repairs which relate exclusively to Lot 2, unless payable by the owner's corporation after the registration of the subdivision.
e.All amounts payable for the Commonwealth Bank of Australia mortgage registered number … secured over the property at [F Street, Suburb G].
11. That within 28 days the Applicant cause the Caveat registered by her against the property at [B Street, South Suburb A], Victoria to be removed.
12. That within 7 days of the date of this Order the Applicant return to the Respondent the .. laptop computer (with all data that was on the computer when removed by the Applicant) which was removed by the Applicant from unit B (Lot 2) [F Street, Suburb G].
13. That in the event that either party refuses or neglects to execute a Deed and/or Instrument in compliance with the provision of these Orders, the Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute all Deeds and/or Instruments in the name of the defaulting party and do all acts and/or things necessary to give validity and operation to the Deed and/or Instruments.
During the course of the proceedings, following difficulties being identified to the applicant with her proposed order, the applicant elected to abandon the following proposed order, as contained in her Minute of Proposed Orders:
6. That [Mr Riley] be ordered to create a ‘notional asset’ pool based on assets already distributed by Mr Riley for his own benefit and benefit of third parties.
Further, during the course of the proceedings, the applicant’s claim in respect to the following proposed Order 9, as contained in the applicant’s Application in a Case, was dismissed:
9. That any Garnishee Orders obtained by [Mr Riley] against [Ms Massalski] be stayed until the property settlement proceedings in the Family Court are finished.
In addition, the applicant’s claim in respect to the following proposed Orders 2 and 3, as contained in her Minute of Proposed Orders, were dismissed:
2. That leave be granted for [Mr K] to join the proceedings.
3. That Consent Orders between [Ms Massalski] and [Mr K] be granted.
The applicant had sought to join Mr K on the basis that she allegedly owes money to Mr K, but she does not allege that Mr K owes her money nor is she seeking any orders against Mr K that would require him to pay money or transfer property to her. Essentially, the Court determined that the applicant had not established a basis for the joinder of Mr K and the proposal for Mr K to be permitted to join to the proceedings was accordingly dismissed. If Mr K seeks to be joined as a party to the proceedings, that application can be dealt with at the appropriate time.
I considered that the applicant’s application to stay a garnishee order obtained by the respondent against her in unrelated proceedings in the State jurisdiction to be without reasonable prospects of success. Dealing with that issue would have unjustifiably have taken up additional time and resources of both the parties and the Court.
During the course of the proceedings the parties agreed that the applicant’s application for costs in respect to the adjournment of the proceedings on 20 July 2015 and 22 July 2015 should be deferred until the final hearing of the matter.
Issues
The following issues therefore remained to be considered by the Court:
·Should the respondent be restrained from dealing with property that is currently registered in his name solely or with a third party?
·Should interim orders be made altering the title of the F Street property?
·Should Unit B of the F Street property be tenanted and, if so, how should the rental income generated be allocated?
·Should the respondent be required to provide additional financial disclosure to the applicant?
·Should the applicant be required to remove a caveat registered against the Suburb A property?
·Should the applicant be required to return the laptop computer to the respondent?
Consideration
Injunctions
The law concerning injunctions
When proceedings are before the Court, the Court has broad powers to grant injunctive relief including for the purpose of preserving the status quo, and/or otherwise regulating the conduct of the parties, pending final hearing.[5] In those circumstances, pursuant to section 114(3) of the Act, the Court must be satisfied that it is just or convenient to grant such an injunction or make an interlocutory order. By way of summary, the following principles are relevant to the Court’s consideration of the parties’ respective applications in this matter:
[5] See G and T (2004) FLC 93-176 at [53] – [54] and where it is “just or convenient to do so”: see Mullen & De Bry (2006) FLC 93-293 applying section 114(3).
a)In so far as the purpose of the proposed injunction is to restrain dealing with property pending the final hearing, the Court must address the question as to whether there is evidence of a risk of the disposal of any assets that would defeat any anticipated order in the substantive proceedings. However, that is but one of a number of factors to be considered.[6]
[6] Lawson & Crawford and Ors [2014] FamCA 1012 at [52] referring to Mullen and De Bry (2006) FLC 93-293.
b)The applicant seeking such orders must establish “a real risk of assets being disposed of” prior to final hearing.[7]
[7] Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 428[122].
c)In assessing that risk, it is not necessary for the applicant to satisfy the Court as to the probability of success of the applicant’s case.[8]
d)In that context, as was noted in Kelleher & Anderson:[9]
[The applicant] for injunctive relief… bears the onus of establishing, on the evidence, a real risk of assets being disposed of and also that such disposal may cause [his or her] claim to be defeated or prejudiced. It would not be sufficient merely to show that there is a risk of disposal of assets, or the asset pool being diminished, without also establishing that there is a risk that the [party’s] claim may be defeated or prejudiced if the injunction is not granted.
e)A precondition to the Court granting injunctive relief is that the Court finds that “there is a serious issue to be tried and that the balance of convenience supports the making of an order”.[10]
f)In considering the nature of the injunctive relief sought by the applicant, it is important to be aware of the general principle that “equity intervenes to the minimum extent necessary to do justice”.[11]
g)In the context of family law proceedings, in Sieling and Sieling (1979) FLC 90-627 at 78,265, the Full Court said:
The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly. The Court must balance the hardship to each party of granting or refusing an order and frame its order in such a way to impose no further restriction than is necessary to achieve the protection of the applicant’s interest. It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim.
[8] Beacham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-623.
[9] [2007] FamCA 137 at [195].
[10] Blue Seas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856 at 86,128 and Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836 at 85,723.
[11] Giumelli v Giumelli (1999) 196 CLR 101 at [10] referred to in Norton & Locke (2013) 284 FLR 51 at [72].
Application of the law concerning injunctions to the facts of this matter
As discussed above, in order for the Court to grant injunctive relief pursuant to section 114(3) of the Act with a view to preserving the parties’ interests pending final hearing, it is necessary for the party seeking such orders to establish that there is “a real risk” that the potential property of the relationship will be dissipated and/or disbursed such that it will prevent or impede the Court from making a just and equitable property distribution, if that is warranted, at final hearing.
The evidence relied upon by the applicant to establish such a risk was information provided by the respondent and his new partner, Ms O, in a loan application submitted to the Commonwealth Bank to borrow the amount of $300 000.
A document summarising the information provided by the respondent and Ms O as part of that loan application[12] included a list of the following properties together with their estimated values, under the subheading “Details of what you own”:
a.F Street, Suburb G NSW … - $350 000;
b.S Street, Suburb T, NSW … - $400 000;
c.F Street, Suburb G, NSW … - $600 000;
d.B Street, Suburb A, VIC … - $970 000;
e.D Street, Suburb E NSW …- $1 199 120;
f.U Street, Suburb V, NSW … - $750 000; and
g.C Street, Suburb A VIC … - $900 000.
[12] That document was part of Annexure “D” to the applicant’s affidavit filed 22 September 2015.
The applicant argued that her interest in the F Street property is undisputed and the respondent should not have represented that property as his own. The applicant further submitted that she has a viable argument that the Suburb A property and the Suburb E property form part of the property pool and, therefore, the respondent should not have represented those two properties to be his own for the purpose of raising capital.
The Suburb A property
The applicant’s argument in respect to the Suburb A property was that, during the de facto relationship with the respondent, she assisted with the development of those properties by attending to certain administrative tasks. This included dealings with the local council as well as paying fees in respect to the development of the property in the sum of approximately $6 250.
By affidavit filed 15 December 2015, Mr K supported the applicant’s claim that she played a role in respect to the development of the Suburb A property. Specifically, at paragraph 21, Mr K states:
[Ms Massalski] was fully involved with the process of drawing architectural plans based on her concept and dealing with easements and other obstacles. Without her involvement the houses in Victoria would not have been approved.
Mr K also alleged that there was a verbal agreement between himself, the respondent and the applicant to pay a management fee of 10 per cent of the total value of the project to the applicant.[13] Further, Mr K stated that the applicant arranged for a loan from the Commonwealth Bank in respect to the Suburb A property on the behalf of the respondent and Mr K.[14]
[13] at paragraph 23.
[14] at paragraph 32.
On the other hand, counsel for the respondent argued, during oral submissions, that the Suburb A property was acquired prior to the relationship between the applicant and himself and that, further, the construction of the buildings on the land occurred subsequent to the cessation of the relationship between the applicant and the respondent.
The Suburb E property
The applicant claims that she has an interest in the Suburb E property as a result of the source of funds used for the purchase of that property, including funds provided to the respondent by his late father.
The applicant also claims that, as a result of contributions made by her during the relationship, including, she says, assisting in the care of the respondent’s late father when he lived in Unit B of the F Street units, the respondent’s inheritance received from his late father’s estate, or a portion thereof, should be included in the property pool. In so far as the applicant asserts that inheritance has been utilised to purchase the Suburb E property, the applicant argues that the Suburb E property therefore forms part of the property pool.
Further, the applicant alleges that, as a result of the respondent’s father living rent free in Unit B of the F Street units, the respondent was in a position to utilise the rental income obtained from tenanting his father’s Suburb J property. That rental income, the applicant alleges, was subsequently applied towards the purchase of the Suburb E property.
The respondent, on the other hand, argued that in the circumstances of the short relationship, it is inappropriate for his inheritance to be included as part of the property pool. The respondent also argued that there is no evidence that any rental income received by him in respect to the Suburb J property was applied towards the purchase of the Suburb E property.
Therefore, the respondent submitted that the applicant’s argument that the Suburb A and Suburb E properties should form part of the property pool is without merit.
Should injunctive relief be granted in respect to the Suburb A and Suburb E properties?
It is not possible in these interim proceedings to make findings of fact where there are competing assertions and allegations. On the basis of evidence currently before the Court, it appears that the applicant will have difficulty in establishing that the Suburb A and Suburb E properties form part of the property pool. However, at this stage of the proceedings, I am unable to make a finding as to whether the applicant’s argument is entirely without merit.
Nevertheless, even if it is assumed that the applicant has a viable argument, the applicant has not presented evidence that establishes that there is a real risk that the respondent will sell those properties or otherwise deal with those properties such that the value of the pool will be diminished or depleted to such an extent that the Court will be unable to accommodate the parties legitimate interests at final hearing.
As indicated, the highest the applicant’s case can be taken is referring to the information provided to the Commonwealth Bank as part of a loan application, wherein the respondent and Ms O claimed ownership of the disputed properties without disclosing the applicant’s alleged interests in the Suburb E and Suburb A properties, or her acknowledged interest in the F Street property.
The applicant acknowledged that the purpose of the loan application was to enable the respondent and Ms O to acquire funds to renovate the Suburb E property. This, presumably, will add to the capital value of the property rather than diminish its value.
Further, the applicant acknowledged that she has lodged a caveat against the Suburb A properties. There was no evidence provided to the Court as to why that caveat is inadequate to protect the interest that the applicant claims she has in those properties.
Accordingly, I do not propose to grant the injunctive relief sought by the applicant in respect to the Suburb E and Suburb A properties.
Nevertheless, in circumstances where there is an issue between the parties as to whether the Suburb E and Suburb A properties form part of the property pool, the applicant is entitled to receive notice of the respondent’s intention to sell or otherwise deal with those properties such that the potential pool might be depleted. Upon receiving that information, the applicant would then be in a position to obtain advice and make such application as she sees deems necessary to protect her alleged interests in those properties.
Interim property distribution
The law concerning interim property distribution
The relevant case law in respect to interim property settlements was summarised by Fowler J in Sresbodan & Sresbodan and Ors [2013] FamCA 480 at [35]-[43]. Drawing upon his Honour’s analysis, and additional authorities as noted below, the following principles are relevant to the Court’s consideration of the application in this matter:
a)Together, sections 79 and s 80(1)(h) confer a power on the Court to make orders for interim property settlement.
b)Section 79 confers a discreet power to make orders for property settlement and the Court may exercise the power conferred by section 79 through “a succession of orders until the power ... is exhausted” or until a final order dealing with all the known property of the parties is made.[15]
[15] Gabel v Yardley (2008) FLC 93-386, as cited in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [113] at 85, 640.
c)Section 80 is not in itself a source of jurisdiction for such an order to be made. Rather, the section is an “enabling provision” that provides various ways in which the general power in section 79 may be exercised in individual cases.[16] This includes, by section 80(1)(h), making “a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order”.
[16] Davidson & Davidson (No. 2) (1994) FLC 92-469 at 80, 875; Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836 at [118] at 85,725.
d)There are two stages to the hearing of an application for interim property orders. [17]
[17] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [118] at 85,641.
i)The first stage is a “procedural step” which requires an analysis of whether the circumstances of the case trigger the Court’s power to invoke s 80(1)(h) to make an order for interim property settlement before a final hearing. At this stage, the “overarching consideration” is the interests of justice.
ii)The second stage is the “substantive step” where the provisions of section 79 must be considered and applied but with limitations, given that it is not the final hearing.
e)There is no barrier or threshold requiring an applicant to establish “compelling circumstances” at either the first or second stages of the Court’s consideration.[18]
[18] Ibid at [135] at 85,645.
f)Given that the party is effectively seeking access to their own funds, it is unnecessary for there to be “any detailed inquiry as to the purpose for which the funds are to used.”[19]
[19] Felice & Felice [2011] FamCA 162 at [12].
g)Sufficient particulars must nonetheless be provided to enable the Court to determine:
i)that the application is “genuine”; [20]
[20] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [227] at 85,657.
ii)to “identify the circumstances that make it appropriate to give consideration to exercising its power”;[21] and
[21] Ibid at [226] at 85,657.
iii)to sufficiently weigh the identified need “against the benefit of having only one exercise of a s.79 power”.[22]
[22] Ibid at [222] at 85-656 citing with approval of Reithmuller FM in Wenz v Archer (2008) 40 FamLR 212.
h)While the usual section 79 considerations apply to the second stage of the process, a detailed analysis of those considerations is not required in an interim hearing.
i)Nevertheless, because the very nature of an interim hearing is such the Court is not in a position to properly evaluate the evidence, the Court should take a conservative approach including in respect to determining whether there are likely to be sufficient resources of the parties available at final hearing to accommodate any “adjustment issue”.[23]
[23] Harris & Harris (1993) FLC 92-378 at 79,930 as referred to in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at 85,646.
j)The onus is upon the party seeking the interim property distribution to establish that there are “sufficient assets available for the interim distribution and that the effect of any interim order [is] capable of being reversed as part of the final hearing or at least would not defeat [the other party’s] property claims”.[24]
[24] Medlow & Medlow [2016] FamCAFC 34 at [86].
k)After completion of the first two stages, it is then necessary to focus on that “adjustment issue”. In terms of quantum, it is necessary to consider whether an interim property order would give a party “so much that it could not be adjusted on a final hearing.” [25]
[25] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [136] at 85,646 and its importance was also stressed by the Full Court in Zschokke & Zschokke (1996) FLC 92-693 at 83,220-83,221.
l)The exercise of the jurisdiction should be conducted in the context of and with an appreciation that “as a generality, the interests of the parties and the Court are better served by there being one final hearing of section 79 proceedings”[26]
[26] Ibid at [223] at 85,656 citing Harris & Harris (1993) FLC 92-378 at 79,929-79,930.
m)The overriding consideration at all stages of the process is that the Court is satisfied that it is “just and equitable” to make the order in circumstances before the Court.[27]
[27] Stanford & Stanford (2012) FLC 93-518 at 86,640 – 86,642.
n)Whilst often cases in which interim property orders have been made relate to applications to obtain funds to conduct litigation,[28] that is by no means the only instance where such orders of been made. Other instances include:
i)situations where a party may need access to resources “to meet debts which may result in the party being pursued by creditors”,[29]
ii)the “need for the party to make payments to the benefit of the children”;[30] or
iii)to “take advantage of other financial opportunities (for example the superannuation contribution cases)”;[31] or
iv)where the parties consent;[32] or
v)where there are “urgent situations” such as:
(i)“where it is necessary to exercise this power if injustice to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and
(ii)cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.”[33]
[28] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at 85,631 and cases referred to therein.
[29] Ibid at 85,643 quoting Wenz v Archer (2008) 40 FamLR 212.
[30] Ibid.
[31] Ibid.
[32] Harris & Harris (1993) FLC 92-378 at 79-930.
[33] Ibid.
Application of the law concerning interim property distributions to the facts of this matter
Both parties agreed that the F Street property and the Suburb A property should be subdivided and accordingly, the Court proposes making orders which facilitate that occurring.
As noted, however, the respondent seeks additional orders such that, following the subdivision of the F Street property, the title of the property identified as Unit B or Lot 2 be transferred to the respondent and the property identified as Unit A or Lot 1 be transferred to the applicant.
Counsel for the respondent indicated in oral submissions that his client required those orders in order to proceed to sell Unit B with a view to:
a)Discharging the Commonwealth Bank mortgage in the sum of $180 000 secured over the F Street property;
b)Refunding to the estate of his late father the sum of $182 000; and
c)Finalising a property settlement with his former wife, Ms Riley, in the sum of $100 000.
Counsel for the respondent estimated that there would be the sum of approximately $190 000 left over from the proceeds of the sale of Unit B/Lot 2 of the F Street property. Counsel for the respondent indicated that the respondent would consent to that amount being held in a controlled monies account pending finalisation of the proceedings.
The difficulties with the respondent’s argument are as follows:
a)There is a dispute between the parties as to the properties that should be included in the property pool.
b)Other than the September 2014 valuation of the F Street property, there are no current valuations of the other properties that would potentially form the property pool.
c)The Court cannot at this stage find, with any degree of comfort, that the applicant’s legitimate property interests could be accommodated at final hearing by an amount of $190 000, which is the amount the respondent estimates would be paid into a controlled monies account.
d)Further, the respondent has not provided information to satisfy the Court in respect to the first threshold issue identified in Strahan (supra). That is, the respondent has not presented sufficient evidence to persuade the Court that the interests of justice require an interim property distribution order being made, at this stage of the proceedings, to make the three payments that he proposes to:
·the Commonwealth Bank;
·his late father’s estate; and
·his former wife.
In that context, I note that the respondent has the ability to borrow money and he has done so for the purpose of renovating his Suburb E property. He has not presented evidence to the Court as to any difficulty he has experienced in raising funds to meet the debts that he alleges are due to the Commonwealth Bank, his late father’s estate and to his former wife.
In all the circumstances, therefore, the respondent’s application for the title of the property identified as Unit B or Lot 2 of the F Street property to be transferred to him, and the title of the property identified as Unit A or Lot 1 of the F Street property to be transferred to the applicant, is dismissed.
In those circumstances, where pending final hearing the parties will jointly own the F Street property following its subdivision, with a view to avoiding future disputation between the parties, the Court will restrain either party from dealing with the F Street property other than in accordance with these Orders.
Disclosure
The law concerning disclosure
Rule 13.07 of the Family Law Rules 2004 (Cth) (“the Rules”) relevantly provides:
Duty of disclosure--documents
The duty of disclosure applies to each document that:
(a) is or has been in the possession, or under the control, of the party disclosing the document; and
(b) is relevant to an issue in the case.
(Emphasis added)
Rule 13.22 of the Rules empower a party to apply for an order for disclosure. It relevantly provides:
Application for order for disclosure
(1) A party may seek an order that:
(a) another party comply with a request for a list of documents in accordance with rule 13.20;
(b) another party disclose a specified document, or class of documents, by providing to the other party a copy of the document, or each document in the class, for inspection by the other party;
(c) another party produce a document for inspection;
(d) a party file an affidavit stating:
(i) that a specified document, or class of documents, does not exist or has never existed; or
(ii) the circumstances in which a specified document or class of documents ceased to exist or passed out of the possession or control of that party; or
(e) the party be partly or fully relieved of the duty of disclosure.
(2) A party making an application under subrule (1) must satisfy the court that the order is necessary for disposing of the case or an issue or reducing costs.
(3) In making an order under subrule (1), the court may consider:
(a) whether the disclosure sought is relevant to an issue in dispute;
(b) the relative importance of the issue to which the document or class of documents relates;
(c) the likely time, cost and inconvenience involved in disclosing a document or class of documents taking into account the amount of the property, or complexity of the corporate, trust or partnership interests (if any), involved in the case; and
(d) the likely effect on the outcome of the case of disclosing, or not disclosing, the document or class of documents.
(4) If the disclosure of a document is necessary for the purpose of resolving a case at the conciliation conference, a party (the requesting party ) may, at the first court event, seek an order that another party:
(a) provide a copy of the document to the requesting party; or
(b) produce the document to the requesting party for inspection and copying.
(5) The court may only make an order under subrule (4) in exceptional circumstances.
(6) If a party objects to the production of a document for inspection or copying, the court may inspect the document to decide the objection.
Sub-rule 13.22(2) is clear that the onus of satisfying the Court that the order “…is necessary for disposing of the case or an issue or reducing costs” rests on the party making the application. In this matter, that onus rests on the applicant.
There is a question as to whether a document or documents being “relevant” for the purpose of Rule 13.07 is a reference to the document being “directly relevant” to an issue in the case.[34]
[34] See Strahan & Strahan (Interim Financial Orders) [2010] FamCA 423.
The Explanatory Statement, which accompanied the introduction of the Rules,[35] states:
[Rule 13.07] imposes a duty on a party to disclosure documents in the party’s possession or control that are ‘directly’ relevant to an issue…
The requirement for disclosure ‘directly relevant’ will introduce a higher standard of assessment in the shifting and examination of a client’s documents. This will oblige parties and lawyers to focus attention at an early stage upon the real issues in dispute and the documentary evidence that goes directly to those issues.
Notwithstanding the apparent strictness of the rule, the focus must really be on relevance at a particular time of the documents or the information being pursued. The same principle of relevance applies in respect of the disclosure and discovery of documents as it does in relation to the pursuit of documents by a party of non-parties under subpoena.
[35] Family Law Rules 2004, Explanatory Statement Statutory Rules 2003 No. 375.
Despite the reference in the Explanatory Statement to the need for a document or class of documents being “directly” relevant, I am reluctant to adopt a construction that imports an additional qualification to the concept of relevance when the word “directly” does not appear in the wording of rule 13.07.
I agree with the suggestion of Cronin J in K & K [2008] FamCA 957, where his Honour suggested that a less strict approach than the “direct relevance” test should be applied in the preliminary stages of disclosure as between the parties when the issues in the proceedings are yet to fully crystallise.[36]
[36] at [19].
Nonetheless, his Honour said that, in order to determine what is relevant, it “may be useful to measure it against what is not relevant.”[37] As his Honour stated:[38]
…and that is held to be when a party is seen to be going on a ‘fishing expedition’. In Commissioner for Railways v Small (1938) 38 SR NSW 564 at [575] ‘fishing expedition’ is defined as an exercise ‘endeavouring not to obtain evidence to support a case, but to discover whether the person has a case at all’ and in Roundtree v ASC (Federal Court of Australia, Lockard J, 27 November 1992, unreported) Lockard J described fishing as ‘allowing a party who can produce no material to support an allegation access to the documents of his opponent in the hope that he may discover something that supports his case’.
[37] at [18].
[38] Ibid.
Application of the law concerning disclosure to the facts of this matter
The respondent acknowledges that, in so far as it has not already been done, it is appropriate for him to provide further disclosure to the applicant in respect to the following:
a)details of monies received by him from his late father’s estate from the sale of the Suburb J property; and,
b)disclosure of the source of monies used to pay for the Suburb E property.
The respondent otherwise opposes the applicant’s application for disclosure in respect to whether Ms O or any other third party “holds or is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of assets that belong to [the respondent]”.
In support of her application for additional disclosure, the applicant referred to Annexure “H” of her affidavit filed 22 September 2015 which contains a bank statement in respect of the respondent’s “Pensioner Security Account” with the Commonwealth Bank. The transfers specifically identified by the applicant were:
a)Overseas trip – three amounts totalling $9 500;
b)Ring – $10 000;
c)Georg Jensen (jewellery) – $1 000; and
d)Ring – refund – $4 000.
The applicant submitted that the likely recipient of those transferred funds was the respondent’s new partner, Ms O. Even if that is the case, the applicant has not demonstrated how that expenditure is relevant to an issue in these proceedings. The amounts involved are not so substantial that it can reasonably be argued that the respondent is attempting to surreptitiously or improperly deplete the property pool. Moreover, the applicant’s request for disclosure of such expenditure, absent an appropriate explanation as to how that expenditure is relevant to an issue in the proceedings, is in the nature of “fishing” and, for that reason, her application for disclosure in respect of those matters is dismissed.
It is inappropriate to order the respondent to produce documents relevant to the private lives of him and his new partner “in the hope that [the applicant] may discover something that supports [the applicant’s case].”[39]
[39] Ibid.
This is particularly the case where requiring the respondent to disclose matters relating to his relationship with Ms O directly impacts upon her privacy in circumstances where Ms O is not a party to these proceedings.
The caveat against the Suburb A property
As noted, the respondent has sought orders requiring the applicant to remove the caveat she has placed over the Suburb A property. The question as to whether or not the applicant has a caveatable interest substantially depends upon whether that property should properly be regarded as forming part of the property pool attributable to the parties’ relationship. As noted, while the applicant may have some difficulty in establishing that to be the case, I am not prepared to make those orders at this stage in the proceedings.
I will, however, direct the applicant to take such action as is necessary to achieve the consent position of the parties that the Suburb A property be subdivided.
Return of the laptop computer
During the course of the proceedings I expressed to the applicant that she was disingenuous in seeking to tender a receipt for the purchase of the laptop computer which the respondent alleges she gave to him. It was common ground between the parties that the applicant had purchased the computer. It is of note that, at paragraph 30 of her affidavit filed 22 September 2015, the applicant acknowledges the laptop computer as being the respondent’s. Specifically, the applicant states:
I paid for [Mr Riley’s] laptop computer, which he accused me of stealing from him, when he obtained an ADVO against me. He created the same argument in the ADVO proceedings as he did in the Family Court.
(Emphasis added)
The respondent has provided evidence that he has “personal photos and videos… as well as work data” on the computer.[40] In circumstances where the applicant has acknowledged that the laptop computer is the respondent’s, she should forthwith return that computer to the respondent.
[40] The respondent’s affidavit filed 16 December 2015 at paragraph 13.
Tenanting the currently vacant F Street Unit B
Both parties are in agreement that, if the Court declines to make an order transferring the title of Unit B to the respondent, that that the property should nonetheless be tenanted.
The applicant submitted that the rental income from Unit B should be applied for her benefit or, should the Court reject the request, the income should be applied towards the mortgage which is secured over the F Street property in the joint names of the parties. The applicant submitted that, while the respondent acknowledges responsibility for that loan, she would prefer it to be paid so that she would not be left with a liability should the respondent be unable to continue to service that mortgage.
As any rental income derived from renting Unit B would potentially form part of the property available for distribution in the section 90SM proceedings, in the normal course, I would have directed that rental income be held in a controlled monies account pending finalisation of the matter. However, in light of the request made by the applicant, I will make an order to facilitate rental income received from renting out Unit B to be applied towards the Commonwealth Bank mortgage secured over the F Street property.
Expenses associated with the F Street property
The parties acknowledge that they are jointly responsible for meeting the outgoings in respect to the F Street property. A dispute has arisen between the parties which relates to whether or not appropriate notice has been provided to each party when those payments fall due. This ambiguity has created problems between them and specifically has resulted in the Suburb H City Council commencing legal proceedings against the parties in respect to outstanding rates.
Accordingly, it is appropriate for orders to be made to confirm that the parties are jointly responsible for paying the outgoings in respect to the F Street property. As these orders will achieve the consent position that the F Street property be subdivided, it is convenient for the Court to make orders which set out the parties’ respective obligations to meet the expenses associated with each respective unit.
As the applicant has been occupying Unit A which upon subdivision will become Lot 1, it is appropriate for the applicant to meet the expenses associated with that unit. In those circumstances it is appropriate for the respondent to meet the expenses associated with Unit B or what will become Lot 2.
Orders
For all of these reasons I make the orders as set out at the commencement of these reasons for judgment.
I certify that the preceding seventy-four (74) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 11 March 2016.
Associate:
Date: 11 March 2016
2
13
2