MITCHELL & MITCHELL

[2013] FamCA 152

FAMILY COURT OF AUSTRALIA

MITCHELL & MITCHELL [2013] FamCA 152

FAMILY LAW – PROPERTY – Urgent interim hearing – Orders sought for sale of property and farming equipment – Significant urgent financial liabilities – Conflict and family violence – Adjourned for a defended hearing if and when prepared

Family Law Act 1975 (Cth)

APPLICANT: Ms Mitchell

RESPONDENT: Mr Mitchell

FILE NUMBER: MLC 4068 OF 2011

DATE DELIVERED: 7 March 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 7 March 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dickson

SOLICITOR FOR THE APPLICANT: Kenna Teasdale Lawyers

COUNSEL FOR THE RESPONDENT: Mr Weil

SOLICITOR FOR THE RESPONDENT: Jane M Curtis & Associates

Orders

IT IS ORDERED:

1. THAT each of the husband and wife forthwith do all acts and things, sign all required documents and give all necessary and proper instructions to facilitate the immediate offering for sale of the properties known as “M”, “T” and “O”, by public auction and with G Real Estate the appointed selling agent and the parties having the joint conduct of the sale.

2. THAT otherwise any further terms and conditions of the sale(s) are to be agreed between the parties upon the recommendation of the selling agents, including the reserve selling price of each property.

3. THAT an independent solicitor is to be agreed upon and appointed to conduct the conveyancing for the sales.

4. THAT after the payment of the costs and expenditures of and incidental to the sales all net monies are to be paid to the National Australia Bank in reduction of the mortgage debt of the parties or their business, A Pty Ltd (“the business”) .

5. THAT the orders pronounced by her Honour Justice Macmillan on 21 December 2012, as to paragraphs 1A, 2, 3 and 4 thereof continue until further order (but subject to the specific orders as to certain items of plant and equipment of the business hereunder contained).

6. THAT if the wife determines, on behalf of the business, to plant a lucerne or other crop on the residential … acre property then the husband, to facilitate that outcome, forthwith deliver plant and equipment including the … tractor with frontend loader, the suited hay forks and bucket attachments and other reasonably requested items for that farming purpose.

7. THAT the husband be permitted to enter upon the … acre property, but not to enter the home, for that purpose and also to collect and remove all such items which the wife is to deliver up after harvesting is completed.

8. THAT if a lucerne or other crop is planted and harvested any net proceeds of sale, after deduction of all proper costs and expenses, be paid to in the joint NAB account of the business established pursuant to the orders of Justice Macmillan.

9. THAT if the business requires, and if the wife has no immediate and proper use of the … mower, conditioner and small baler they are to be provided by her for collection by the husband, subject to them being returned to her when they are reasonable required for use on the residential … acre property.

10. THAT within seven (7) working days the cost of repair of the irrigation pump is to be paid for by the business (a sum of $3,520) and returned to and installed at, and made workable on the … acre property.

11. THAT otherwise all extant interim applications be dismissed, subject to the specific outstanding issues identified in the extempore Reasons for Judgment and which have not been the subject of any hearing this day.

12. THAT the extempore Reasons for Judgment be transcribed, placed upon the Court file and made available to all parties.

13. THAT these proceedings be referred to the defended list of cases to await an allocated defended hearing date.

14. THAT liberty be reserved to both parties to apply for priority of that hearing upon proper documents filed and served and in that regard the matter is then to be listed before his Honour Justice Cronin.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mitchell & Mitchell 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 MELBOURNE

FILE NUMBER: MLC 4068 of 2011

Ms Mitchell

Applicant

And

Mr Mitchell

Respondent

EXTEMPORE REASONS FOR JUDGMENT

1. These proceedings return to court by virtue of the provisions which her Honour Justice Macmillan made in the orders of 21 December 2012, and thereafter, her further directions and orders made on 8 February 2013.  Mr Dickson, of Counsel today appeared for the wife.  Mr Weil, of Counsel for the husband.  Both parties are in court.  Instructing solicitors have been present for all of the proceedings this day. 

2. The matter came before me in a Judicial Duty List.  The general understanding is that no duty matter can have more than two hours.  I have been flexible in that scenario because of the orders of 21 December 2012 and what was intended by her Honour.  Though I am somewhat hampered by the fact that there are no Reasons for Judgment, and indeed, the Orders were, as I understand the submissions, agreed to by the parties out of Court on that day and therefore Reasons for Judgment were not sought. 

3. What her Honour did was to otherwise adjourn the interim applications to herself, though she was not available today to hear the continuing issues in this matter.  Her Honour structured the right to file further affidavits, updated applications, a bullet point summary of argument, lists of affidavits to be relied upon and a precise minute of the various orders sought.  Both solicitors have complied with those directions. 

4. This matter has a particular background, and there have been a number of earlier Orders made in the Federal Magistrates Court (as it was) and in this Court.  In particular, I was referred to orders made by Phipps FM on 17 April 2012 in the Dandenong Court.  Those Orders provided that, subject to the husband's compliance with particular paragraphs thereof, he was to conduct the agricultural business known as A Pty Ltd, as trustee for its family trust. 

5. I have read those orders and in particular I observe that her Honour Justice Macmillan saw fit to discharge paragraphs 2, 3 and 8 thereof, and thus they are no longer applicable.  What her Honour, however, did in December was to endorse paragraph 4 of those Orders, that is that the husband continue to conduct the business, and she did not interfere with that Order.  Notwithstanding that there are substantial orders made by her Honour to structure, manage, or deal with business issues and the payment, or structure of accounts, or monies arising there from, and in that regard at paragraph 4, subparagraphs (a) - (j), inclusive, thereof, remain operative.  The matter has proceeded today on the basis that both parties have finetuned necessary Orders, as they were invited so to do.  The wife's orders sought are contained in Court document 34.  That is the Outline of Argument document and the orders sought are numbered 1-10, inclusive, thereof. 

6. In essence, and as a very general overview, the wife has presented to the Court the option that she manage and control the business;  she be responsible for the structure and organisation of staff and equipment issues;  that she ensure the income is paid in discharge of the National Australia Bank debt, or other debts, and properly recorded.  Effectively, she would remove the husband from the day-to-day management and operation of the business.  She said that she had an equal skill in the business management issues, and also in the operation of equipment, and in general farm knowledge. 

7. Aside from the business, these parties are the joint registered proprietors of four properties, one of which is of …acres, and the matrimonial residence is constructed thereon.  The wife lives there with the three daughters aged 12, 10 and 7.  There are no children's issues before me, but in the context of the hearing I did inquire of Counsel and I was told that, for whatever reasons, the husband presently does not spend any meaningful time with those children. 

8. There is an agreement between the parties that the three properties known as "M”, “T” and “O", are to be sold as soon as practicable, by auction, and with G Real Estate to be the appointed property agent.  I will so order.  I will not fix a reserve price.  That needs to be agreed to by the parties, or failing agreement as determined by the appointed real estate agent.  Clearly, there is a necessity for an urgent sale and all monies are to be paid to the National Australia Bank in discharge of existing liabilities. 

9. Returning to the business, the husband has likewise prepared a minute of order, and has likewise filed substantial affidavits, both of himself and witnesses, including the financial accountant, Mr I.  I have read all of his affidavits, as I have read the affidavits filed on behalf of the wife.  The husband is prepared to accept the continuation of the existing orders in relation to the business.  Certainly there were matters that Mr Weil was instructed to make submissions upon, which would have ventured from those orders, but I am not inclined to make such orders by way of a variation from the current order.  The wife's Counsel strongly addressed the court on the alleged business and financial failures of the husband, what was said to be his irresponsible financial management and conduct, and that he had no real understanding of either the financial obligations imposed upon him by the orders, or the necessity to account for all monies.  There may be, but it is not necessary for me to now find, any truth in those matters. 

10. My approach to the various business financial accounting and injunctive issues are that Macmillan J heard and determined those matters on an interim basis in December of last year.  We are within three months of the making of those orders and I do not intend to discharge, vary, or deal with them other than in respect of certain items to which I will turn my attention in these extempore reasons in a moment. 

11. I have little confidence, and the affidavit material inspires no confidence in the common sense of these parties as to their understanding of the financial crisis, they and therefore their family, will confront.  I particularly have in mind the Australian Taxation Office or if there is any default in the schedule of payments that has been agreed upon, the National Bank, which has real property mortgages and chattel mortgages over the assets of the parties and their business.  It is asserted that the National Bank is owed approximately $4.1 million.  It may be that it is a slightly lesser sum, but it is substantial and interest is continuing to accrue. 

12. As an overview, I have an understanding of the assets of the parties.  Certainly, the real property assets of the parties are approximately $3.6 million, or thereabouts, and that is always subject to any sale price actually achieved.  Thereafter, the parties have substantial plant and equipment, in which there is likely an equity, and if there is any value of the established business which had been previously commenced and developed by the husband's father.  Mr Dickson highlighted the balance sheet and alerted the court to the fact that there may well be a surplus of up to $3.5 million, but that will be, ultimately, determined by the true value of plant and equipment, what it can be realised for, and the increasing liabilities that the business and, indirectly, the husband and wife have brought upon themselves. 

13. In the context of the business, Mr Weil said that there is a travelling irrigator and low-line irrigator owned by the business which presently remains on the home residence property of … acres.  He would have those items immediately returned to the business, or to the possession of the husband. 

14. On the same property, Mr Dickson said that the irrigation pump is under repair, but has not been paid for or returned.  The cost was $3,520, and that was a matter specifically dealt with by Macmillan J in her previous orders.  Insofar, therefore, as the business is concerned I do require that account for the repair of the irrigation pump to be paid immediately by the husband.  He simply must find the funds, either through his employment or through monies in one of the National Bank accounts.  The pump must be refitted and must be operative to the home residence. 

15. I am not going to detail orders by which the wife is then at liberty to plant an Autumn lucerne crop on those … acres, and/or manage same.  Any cropping of that land is ultimately for the benefit of the business or the parties, but likewise, the cost of any such crop and the ability to both plant or harvest is subject to proper equipment.  What Mr Dickson highlighted in paragraph 5 of his orders was that the court should order the following:

    "That the husband forthwith deliver to the wife, at his expense, the … tractor with front end loader, the suited hay forks and bucket attachments, and the diesel irrigation pump specifically commissioned for use on that property."

16. As I have said, that irrigation pump is to be repaired, paid for, installed and made operative.  Otherwise, common sense would dictate that for the purposes of planting any lucerne, the required equipment, whatever it may be, and if it be identified in paragraph 5, is to be delivered to the property by the husband, only for use for the time that is necessary, and then returned to and removed by the husband for his own use in the extended business operations.  That would be a reasonable and financially viable use of the land, hopefully would produce some income. 

17. The downside is that both counsel have addressed me that these clients should not be near each other, effectively, that they cannot be trusted with each other, and that it would likely lead to incidents of alleged violence or poor behaviour.  Sometimes people learn from past mistakes, although counsel do not inspire any confidence of the conduct and behaviour of this couple.  Nethertheless, trying to manage, somehow, their financial issues and use of the home block, it would be appropriate if that equipment was available and, clearly, if there was a crop there then the travelling irrigator would remain.  I understand it is primarily used for that property.  Mr Weil initially said all properties, but he was immediately corrected, so I see no need to remove the travelling irrigator from the … acres at this time.  If there is, then commonsense should apply, albeit how unlikely that is. 

18. To be perfectly clear, I am not going to order the sale of the … acres, that is the home block and residence, where the wife and three children now live.  I do record, as it may become an issue at another date and time, that the complaint voiced by Mr Weil was that it will financially prejudice the sale of the other three properties or may reduce the net monies received on sale.  In that regard he made reference to an affidavit that had been filed by Ms P, a real estate agent who has now relocated to Western Australia, but who, nevertheless, maintained that she could have had a potential buyer, but only on the basis of purchasing the four properties owned by the parties.  Notwithstanding that affidavit, I do not order the sale of that fourth property. 

19. The file has a number of interim applications.  Recently, they have been filed on 10 October 2012, 27 November 2012 and 20 December 2012.  There was also an amended response filed 6 December 2012.  There are a multitude of orders sought in each of those documents.  My decision is that I will make the various interim orders, which I have identified above, but otherwise, each of those interim applications are to be dismissed.  All that I intend remain alive is the competing section 79 applications for a division of property. 

20. In dismissing all interim applications there are certain matters that I have not dealt with, and I do not want to prejudice any final hearing by having it argued that I have wholly dismissed certain interim applications.  I have in mind the husband's allegation that the wife has taken and diverted $45,000 from bank accounts of the children.  I have made no finding on that issue, and that is a matter that can be properly raised, if then relevant, in the final proceedings.  Likewise, Mr Weil had identified various interim restraining orders.  I intend to make no such orders today for the protection of either the husband or wife, but I understand that in proper circumstances those matters could be re-agitated in this court if genuinely applicable.  The majority of the interim applications which Mr Dickson had sought related to business matters, the involvement of his client in the business, or the proper financial affairs of the family.  All of those matters will fall to one side as I maintain the current orders of Macmillan J. 

21. I take this brief opportunity to record that the parties must show some real concern and business acumen.  Their obligation is to try and preserve and protect financial assets, maintain the business, pay off the National Bank and other creditors as required, and have a pool of assets so each of them would likely get some money on the determination of these proceedings.  Part of that is to limit their expenditure on legal practitioners.  The temptation is to fight every issue and spend any and all monies available, but that is likely imprudent.  Again, parties can spend what they want, when they want, if it is their money, but common sense must apply sometime.  I say no more on that issue, but I have incorporated that topic within these extempore reasons for judgment, so that at least one day it can be read and understood that the Court tried to highlight commercial and financial issues, not only to the parties, but to their legal advisors. 

22. This matter has now occupied the better part of three and a half or four hours and ultimately enough is enough.  This matter needs to be out of Court, the parties sort out their affairs and come to court for a final hearing when they are ready, and when the court has time to hear the matter. 

23. What I will order in that regard is that the final applications be adjourned to a defended list of cases awaiting hearing.  That will be managed by Cronin J.  I will reserve liberty to both parties upon proper material filed and served to seek an urgent hearing.  I could not envisage any such application could be made until the three vacant properties are sold, and until the parties have re-established the business, or otherwise the bank has intervened and the business and its assets are subject to sale orders. 

24. These Reasons are extremely brief, and are primarily related to the facts of the matter and the issues raised in the affidavits.  I have provided the reasons to try and give some brief understanding that I have approached this matter as a further interim hearing.  I have not varied the existing orders, save as I have specified, and the obligation of the parties is somehow to move forward themselves. 

25. I will have these brief Extempore Reasons transcribed, placed upon the Court file, and they can read by any other judge hereafter having this matter in their list.  It will record the view of the court this day that some urgent commercial financial common sense need be brought to this matter, and, indeed, some independent financial advisor, having no association with the parties or the lawyers, might be of some commercial assistance in managing the declining business and trying to preserve the few assets of this once wealthy family that might remain after the current dispute.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young.

Associate: 

Date:  14 March 2013.