May and Jonas and Anor

[2011] FamCA 825

FAMILY COURT OF AUSTRALIA

MAY & JONAS & ANOR [2011] FamCA 825

FAMILY LAW – PROPERTY – respondent do all acts and things necessary to, in his own name and by the third named respondent provide a discharge or withdrawal or release of any security interest held by him or the third named respondent to permit completion and settlement of the sale of the real property.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

APPLICANT: Ms May

1^st RESPONDENT: Mr Jonas

2^nd RESPONDENT: Mr D

3^rd RESPONDENT: D Pty Ltd

4^th  RESPONDENT: E Lawyers

FILE NUMBER: MLC 2485 of 2010

DATE DELIVERED: 18 October 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Bennett J

HEARING DATE: 18 October 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: Taussig Cherrie Fildes

COUNSEL FOR THE 1^ST RESPONDENT: In person

SOLICITOR FOR THE 1^ST RESPONDENT:

COUNSEL FOR THE 2^ND RESPONDENT In person

SOLICITOR FOR THE 2ND RESPONDENT
COUNSEL FOR THE 3RD  RESPONDENT	In person

SOLICITOR FOR THE 3^RD RESPONDENT

COUNSEL FOR THE 4^TH RESPONDENT

SOLICITOR FOR THE 4^TH
 RESPONDENT Excused from further attendance in the proceedings

Orders

IT IS ORDERED THAT:

1. The second named respondent Mr D, do all acts and things necessary to, in his own name and by the third named respondent D Pty Ltd, provide a discharge or withdrawal or release of any security interest held by Mr D or the third named respondent to permit completion and settlement of the sale of the real property at Suburb B and upon completion and settlement of any sale of the property for the proceeds of sale to be applied:-

   (a)       first in payment of the costs, commissions and expenses of the mortgagee sale;

   (b)       second, to discharge the first mortgage affecting the property and registered in favour of C Pty Ltd and/or Mr and Ms C; and

   (c)       for the balance to be paid into an interest bearing account on trust for the parties to these proceedings, pending a determination of these proceedings,

   AND IT IS NOTED THAT the interest bearing account is an ANZ account in the name of the wife’s solicitors as stakeholders and trustees for all of the parties to these proceedings.

2. That the Ds for decision this day be transcribed and when settled copies be made available to the parties.

3. By not later than 4.00 pm on Friday 11 November 2011 the wife deliver to each other party to the proceedings any requests for either of them to answer specific questions and in that respect I dispense with the operation of paragraph 13.26(3b) of the Family Law Rules so that the number of specific questions that can be asked is unlimited, subject of course to the recipients’ right to object and the provisions of Rule 13.26(3)(c) of the Family Law Rules.

4. IT IS DIRECTED THAT, for ease of reference my Associate set out at the foot of the order the provisions of Part 13.3 of the Family Law Rules.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 2485 of 2010

Ms May

Applicant

And

Mr Jonas

1^st Respondent

And

Mr D

2^nd Respondent

And

D Pty Ltd

3^rd Respondent

And

E Lawyers

4^th Respondent

DS FOR JUDGMENT

ex tempore

1. In this matter, the applicant wife made oral application on the last occasion, the terms of which are set out at paragraph 10 of my Orders of 13 September 2011, to facilitate or support the sale by the first mortgagee of the property at Suburb B.  In particular, that costs, commissions, and expenses of the mortgagee sale be paid upon settlement and upon completion of the sale the first mortgage affecting the property which is registered in favour of C Pty Ltd or entities associated with it be paid.  She opposes the payment at this stage of any moneys on account of or in part payment of a security interest which is registered against the property by way of the second registered mortgage in favour of the second respondent or the third respondent and seeks that any net proceeds of sale after payment of expenses and the first registered mortgage be put into an interest bearing account and held on trust for the parties pending a determination of these proceedings. It is this final aspect which is contentious because Mr D seeks to rely on the registered security interest and take what proceeds are available upon settlement of the sale.

2. These Ds will be brief. The matter is heard electronically, by telephone link up. I have heard submissions from the parties and there has been discussion from which my Ding would have already become evident.

3. The principal proceedings are set down for final hearing before me to commence on 27 February 2012 at 10.00 am.  At the moment it is the only case listed on that day and so the parties and their practitioners should expect that it will, if not be the only case, be the case that is listed first.  Orders were made on 13 September to ready the matter for trial and to require each party to file documents in anticipation of the trial. 

4. On the last mention, 13 September 2011, the husband appeared on his own behalf as he now does.  He does not support or oppose the wife’s oral application. 

5. The second respondent, Mr D, represents himself and also the third respondent, D Pty Ltd. On the last occasion Mr D indicted that he opposed the oral application of the wife insofar as nothing would be paid to him immediately upon the completion of the sale of Suburb B property.  He said that he had previously consented to Orders of this Court which postponed his security interest over alternative properties on the expectation that he would be paid sooner than now or at least not later than from any sale of the Suburb B property but the Orders had not operated as he originally anticipated and he had not received any moneys.  He also stated that he was unhappy about the solicitors for the wife being responsible for any investment of any net proceeds of sale. 

6. On 13 September 2011, I adjourned the proceedings to today to allow the husband and Mr D adequate time to consider the wife’s oral application. Mr D indicated that he may well be reinstructing a firm of solicitors to act on his behalf. I thought it appropriate that he be given an opportunity to get advice on the prospects of successfully opposing the wife’s oral application. It transpires that Mr D has not reengaged the solicitors and he continues to act for himself, although he may take advice from time to time from the solicitors to which he referred.

7. Mr D’s opposition to the wife’s oral application today is that he sees his security interest as being “improperly eroded.”    He will be required to furnish a discharge of the mortgage to allow clear title but that he won’t be receiving moneys that he says are due to him.

8. The principal proceedings are very much to do with the wife’s specific attack against Mr D’s security interests including the mortgage affecting the Suburb B property.  She has sought that the actual mortgage instruments be set aside pursuant to section 106B.  She seeks more general orders which appear to me to have some basis in Part VIIIAA of the Act.  That is, orders against third parties. If the wife succeeds in setting aside the mortgage then Mr D and his company would not be entitled to the net proceeds of sale of the Suburb B property and any indebtedness of the parties or either of them to Mr D and/or his company would merely rank with other liabilities.  However, as I understand it, the wife also seeks to avoid repaying Mr D anything in that she says that any monies which he has advanced ought to be the sole responsibility of the husband. If the wife fails, there is not going to be any property to divide between herself and the husband and, no doubt, one or other of the other parties will seek that the wife pay his costs. Colloquially, it is a crash through or crash situation.

9. The auction of the Suburb B property is scheduled for Friday 4 November and is being conducted by Mr F, estate agents.   I anticipate that if the property is successfully sold, settlement would ensue 60 or 90 days thereafter.  If it was the later it would be early in the month of the final hearing so it does not seem to me that there is an undue delay in receipt of the moneys. 

10. In the event that the settlement moneys were paid to the second or third respondent on the basis that they could be subsequently repaid to the parties for division in these proceedings, if the wife’s application against Mr D succeeds, that there could well be difficulty in the enforcement of those orders.  The court has significant powers, pursuant to Part VIIIAA to make orders against third parties to such as is necessary to effect a division of property between the parties to the marriage but there is a recognised distinction between what is necessary to effect a property division and what may be necessary to enforce an order. Specifically, there is an argument that enforcement orders may well fall outside Section 90AE. By his own submission, Mr D has little ready cash or income. He says that he has considerable capital and is wealthy but apparently not in the sense of an income stream. The matter is listed for hearing in February next year, the period during which the moneys would not be available to Mr D are from the date of settlement of any sale of the property until a final decision if he is the entitled to it.

11. I find that the balance of convenience is not in favour of Mr D being paid monies on the basis that the court and the parties can be confident that those funds would be recoverable in the event that the outcome of the proceedings is against him and in favour of the wife.

12. In all of the circumstances, I consider that the granting of an injunction is appropriate.   

RECORDED :   NOT TRANSCRIBED

1. There was also an application by the solicitor for the wife for Mr D to file and serve a financial statement. I do not consider that to be appropriate. For a start, some of the information required in a financial statement is in the context of the court’s adjustive powers under Section 75(2) which is wholly inapplicable to Mr D and his company. Second, more focussed enquiries can be made by way of requiring answers to specific questions.

2. For the benefit of Mr Jonas and Mr D who will be acquiring a copy of the Act and the Family Law Rules, it is Part 13.3 and it starts off at r 13.25 and provides that after the matter has been allocated to a judge a party can serve on another party a request to answer specific questions. You can only serve one set of questions – I don’t think there has been a set previously:

   The specific questions must (a) be in writing; (b) be limited to 20 questions (with each question taken to be one specific question); and (c) not be vexatious or oppressive.

3. I am satisfied that 20 questions is too few. It is a case with factual complexity. I will remove any limitation as to the number of questions. The questions cannot be prolix or irrelevant. I will deal with submissions in that regard as and if they arise.

4. Then there are provisions which require the answers to be served within 21 days on affidavit, and the answer must be full and frank to each specific question, or objections to an answering a specific question on a specific basis. So when you gentlemen do acquire the Act and the Rules, please go to Part 13.3.

RECORDED   :   NOT TRANSCRIBED

I certify that the preceding (16) paragraphs are a true copy of the Ds for judgment of the Honourable Justice Bennett delivered on 18 October 2011.

Associate:   

Date:   26 October 2011