Moretti & Moretti (No 3)
[2025] FedCFamC1F 159
•4 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Moretti & Moretti (No 3) [2025] FedCFamC1F 159
File number: MLC 3989 of 2020 Judgment of: STRUM J Date of judgment: 4 March 2025 Catchwords: FAMILY LAW – Application in a Proceeding – Where several issues settled by consent – Remaining issues for determination were remediation and sale of property – Part-heard trial – Where there was a previous order for wife to undertake remediation of property – Where wife has not taken sufficient steps to ensure compliance – Where parties agree to the sale of the property – Orders made for husband to be authorised to take necessary steps for the remediation and sale of the land. Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 8.15 Cases cited: Moretti & Moretti (No 2) [2024] FedCFamC1F 570
Weatherall & Weatherall (2006) FLC 93-261; [2006] FamCA 269
Division: Division 1 First Instance Number of paragraphs: 32 Date of hearing: 4 March 2025 Place: Melbourne Counsel for the Applicant: Mr Goddard Solicitor for the Applicant: Roger O’Halloran & Co Counsel for the Respondent: Mr Gray Solicitor for the Respondent: Fair Family Law ORDERS
MLC 3989 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MORETTI
Applicant
AND: MR MORETTI
Respondent
ORDER MADE BY:
STRUM J
DATE OF ORDER:
4 MARCH 2025
THE COURT ORDERS BY CONSENT THAT:
1.There be Orders in accordance with the Minute of Proposed Consent Orders dated 4 March 2025 (as amended), marked Annexure “A” and attached hereto AND IT IS DIRECTED that such Minute remain upon the Court file.
THE COURT FURTHER ORDERS THAT:
2.Until further order, the Wife be restrained by injunction from taking any of the following steps without the prior written consent of the Husband:
(a)communicating with agents, officers and employees of O Pty Ltd or any related companies in relation to the clean-up of the property situated at K Street, Suburb S in the State of Victoria (K Street property);
(b)executing any documents in her capacity as an officer of G Pty Ltd (G Pty Ltd);
(c)representing to any person that she possesses authority to exercise the powers of an officer of G Pty Ltd;
(d)entering the K Street property; and
(e)dealing with, diminishing or disposing of the assets of G Pty Ltd.
3.Until further order, the Husband have sole use and occupation of the K Street property and be in such attendance thereat, by himself, his servants or agents, as may be lawfully required.
4.Until further order, the Husband be authorised to take all steps necessary to facilitate compliance with the enforcement order made by the Victorian Civil and Administrative Tribunal in proceeding … in late 2019 (VCAT Enforcement Order) and keep the Wife promptly advised at all times of all such steps undertaken.
5.Until further order, the Wife forthwith:
(a)do all such acts and things and sign all such documents as may be required to change the address of the registered office of G Pty Ltd from the K Street property to the address of the Husband’s solicitors, Fair Family Law; and
(b)provide the Husband’s solicitors with copies of all correspondence addressed to her in her capacity as an officer of G Pty Ltd or addressed to G Pty Ltd forthwith upon the Wife receiving said correspondence and the Husband hereafter do likewise for the Wife.
6.Until further order, the Husband be solely authorised, to the exclusion of the Wife, to take all steps necessary to cause the K Street property to be marketed for sale.
7.In the event that the Husband is able to locate a purchaser for the K Street property, he forthwith advise the Wife of the terms and conditions of the offer, including the provision to her of any offer in writing.
8.In the event of disagreement in relation to a proposed sale, liberty to apply upon short notice in writing is reserved to the parties.
9.Until further order, the Wife be restrained by injunction from doing any act or thing that impedes the marketing for sale of the K Street sale.
10.The Husband be authorised to provide a copy of these orders to any accountant, government body, O Pty Ltd, B Organisation, the Supreme Court of Victoria, any real estate agent, any conveyancer and any relevant financial institution.
11.In the event of default by the Wife, the Husband’s solicitor is appointed pursuant to s 106A Family Law Act 1975 (Cth) to execute all documents, deeds or instruments in the name of the Wife in her capacity as an officer of G Pty Ltd as may be required to give validity and operation to the documents, deeds and/or instruments required to be executed pursuant to the provisions of these Orders.
12.Save as otherwise provided in/by these Orders, the Husband’s Application in a Proceeding filed on 25 February 2025 and the Wife’s Response Application in a Proceeding filed on 3 March 2025 be otherwise dismissed.
13.The Case Management Hearing listed on 20 March 2025 be vacated.
AND THE COURT NOTES THAT:
A.Order 8 of the Orders made on 16 December 2024 remains in full force and effect.
Annexure “A”
Trial and mediation
1.The part heard trial be listed to resume before the Honourable Justice Strum on 10 June 2025 at 10.00am, with an estimated remaining hearing time of 4 days.
2.Each of the parties be at liberty to file an updating affidavit, confined only to matters occurring since the adjournment of the trial on 11 October 2024, on or before 4:00 PM 30 May 2025, limited to 15 pages and to comply with r 2.14(1) of the Federal Circuit Court of Australia (Family Law) Rule 2021.
3.The applicant Wife (Wife) pay at first instance the fee of the Mr Z in respect of the mediation ordered by paragraph 2 of the Orders made by the Honourable Justice Strum on 16 December 2024 and the percentage of said fee to be reimbursed to the Wife by the respondent Husband (Husband) is reserved.
Disclosure
4.The Wife forthwith provide the Husband full and frank disclosure of:
(a)copies of all written correspondence with agents, officers and employees of O Pty Ltd or any related companies;
(b)copies of any contracts entered into with O Pty Ltd regarding the K Street property;
(c)copies of any leases or documents recording other dealings with the K Street property dated atter 1 July 2024;
(d)copies of any documents that record the transfer of funds between the Wife and O Pty Ltd, or the receipt of funds by O Pty Ltd from the sale of materials stored on the K Street property;
(e)copies of any documents relating to the acquisition of the property located at AA Street, Town CC in the State of Victoria;
(f)copies of any bank statements, loan agreements or other documents recording payments by the Wife to Mr BB and/or DD Limited; and
(g)copies of bank statements and transaction listings for bank accounts held in the Wife’s name from 1 March 2023.
5.The Husband forthwith provide the Wife full and frank disclosure of:
(h)copies of bank statements and transaction listings for bank accounts held in the name of EE Pty Ltd since 1 March 2020;
(i)copies of bank statements and transaction listings for bank accounts held in the Husband’s name from 1 March 2023; and
(j)a copy of any lease for the property FF Street, Suburb GG NSW since 1 March 2020.
Further payments from trust
6.The Wife’s application for a further partial property settlement be adjourned for hearing as provided by order 9.
7.The Husband file any application for a further partial property settlement by 4:00pm on 7 March 2025.
8.The Husband serve copies of the parties’ respective applications for further partial property settlements (including affidavits relied on in respect of those applications) on the lawyers for the B Organisation by 4:00pm on 11 March 2025.
9.The parties’ respective applications for further partial property settlements be listed for hearing on 2 April 2025 at 10.00am by Senior Judicial Registrar Sudholz.
AND THE COURT FURTHER NOTES THAT:
A.The Wife remains under cross-examination following the adjournment of the part-heard trial on 11 October 2024.
B.Counsel for the Husband does not oppose counsel and solicitors for the Wife taking instructions from the Wife regarding the conduct and/or compromise of these proceedings on the proviso they do not discuss the Wife’s viva voce evidence given thus far in these proceedings.
C.The Husband and Wife are booked to attend a mediation with the Mr Z in March 2025.
D.The Wife consents to order 4 notwithstanding her assertion that some of the documents described therein may have already been disclosed by her, may not be in her possession and/or control or may not exist.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
STRUM J:
These proceedings have a long and sorry history, having been instituted in this Court in early 2020. However, even prior thereto, on 14 November 2019, orders were made in the Victorian Civil and Administrative Tribunal (“VCAT orders”) against the husband, the wife, and G Pty Ltd (“G Pty Ltd”). The husband and the wife are the only shareholders and directors of G Pty Ltd. It is the trustee of Superannuation Fund 1, and they are the only members thereof. The VCAT orders arose out of contraventions by G Pty Ltd, for which the husband and the wife are also liable, of a permit issued by B Organisation(“B Organisation”) regulating the use of the property at K Street, Suburb S, in the State of Victoria (“K Street property”), registered in the name of G Pty Ltd.
The VCAT orders required, inter alia, the husband, the wife and G Pty Ltd to provide guarantees in favour of B Organisation to secure the full cost of the rehabilitation of the K Street property by reason of their breach of the permit. That led to what I have previously found to be B Organisation’s misconceived involvement in these proceedings for nearly four years, between late 2020 and August 2024. See Moretti & Moretti (No 2) [2024] FedCFamC1F 570. The guarantees were not, and still have not, been given, and the land was not, and still has not, been remediated in the ensuing five years or more since the VCAT orders were made.
The trial of these proceedings commenced on Monday, 7 October 2024. On the morning of the fourth day, being Thursday, 10 October 2024, whilst the wife, who is the applicant in the substantive proceedings, was under cross-examination, the matter was stood down at the request of the parties, through their counsel, for settlement discussions. I was told over the course of the day that the matter had resolved in principle and that a minute of consent orders would be provided by the end of that day. That did not occur, and the matter was rolled over to Friday, 11 October 2024, for the minute to be finalised. It was stood down again that morning until the early afternoon when, ultimately, I was told the matter had not settled.
Orders made on 11 October 2024 adjourned the trial part-heard to 16 December 2024 and, in the circumstances, required the parties to attend a mediation in the intervening period. There was no opposition to that order. In that intervening period, notwithstanding that the wife was under cross-examination, her solicitor and therefore her counsel at trial withdrew and a new solicitor and counsel appeared on 16 December 2024. That was the wife's seventh solicitor in these proceedings. The involvement of that solicitor and counsel was short-lived and she is today represented by an eighth firm of solicitors, which has briefed yet another member of counsel. I make no criticism of those solicitors or counsel; whether they continue to act for the wife remains to be seen.
The trial did not resume on 16 December 2024 because B Organisation foreshadowed an application to the Supreme Court of Victoria for a sequestration order in relation to the assets of the husband and the wife which, if granted, would likely have rendered the continuation of the trial in this Court otiose. The matter was therefore adjourned to 20 March 2025 for mention, to ascertain the status of the foreshadowed Supreme Court proceedings. The orders made on 16 December 2024 also provided for the husband and the wife to do all acts and things in relation to the preparation of contracts of sale and a Vendors’ Statement in relation to the K Street property. That order remains extant, and no party has sought a discharge thereof. It is common ground today that the sequestration order was not granted by the Supreme Court.
CURRENT ISSUES FOR DETERMINATION BY THE COURT
On 25 February 2025, the husband filed an Application in a Proceeding in which he seeks orders, inter alia, for the remediation and sale by him of the K Street property and that, in the interim, he have the sole use and occupation thereof.
On 3 March 2025, the wife filed a Response to an Application in a Proceeding in which she seeks, in addition to the dismissal of the husband's Application in a Proceeding, that she have sole use and occupation of the K Street property and that the husband execute an agreement, unilaterally entered into by her, with O Pty Ltd (“O Pty Ltd”), to undertake remediation work at the K Street property.
Issues raised in the parties' respective Application in a Proceeding and Response to an Application in a Proceeding relating to the mediation and to disclosure have been resolved by a minute of orders by consent, which I will make, with some modest amendments.
Insofar as the wife seeks litigation funding in her Response to an Application in a Proceeding and the husband has foreshadowed another litigation funding application, in each case by way of further partial property settlement, those issues will be adjourned to a Senior Judicial Registrar because I am told by counsel for the husband and the wife that the provision of further funds may be in breach of some unspecified undertaking given by the husband and the wife. It is unclear, however, whether that undertaking was given merely to B Organisation or, rather, to the Supreme Court of Victoria. In the event that it be the latter, I would not wish for this Court, in any way, even indirectly to enable a breach of an undertaking to another Court.
The issues for determination by the Court today, which the parties have not been able to resolve, are those relating to the remediation and the sale of the K Street property. The wife has been in occupation of that property since at or about the time of separation; on any view, for a very long time. Since then, neither the husband nor she have complied with the VCAT orders and incomprehensibly so; however, it is equally incomprehensible why B Organisation has allowed this to occur and only taken steps to enforce those orders in the Supreme Court of Victoria late last year.
Remediation of the K Street Property
In the part-heard trial, the wife has been cross-examined about her engagement of HH Pty Ltd (“HH Pty Ltd”), a company owned or controlled by a relative of hers, to undertake the remediation of the K Street Property and for which it is claimed that company is owed $759,000, even though it would appear that the land has not been remediated. Indeed, notwithstanding that claim, the wife has now engaged O Pty Ltd to undertake or complete those works. The issue of any liability to HH Pty Ltd and, if so, whether it should be borne by the wife, rather than by G Pty Ltd, are matters to be determined at trial. In any event, those transactions unilaterally entered into by the wife, are and/or presumably will be the subject of her incomplete evidence, in respect of which cross-examination will resume at the part-heard trial, which I shall re-list to resume.
It appears that on Tuesday, 15 October 2024, within two business days after the trial was adjourned part-heard, the wife engaged O Pty Ltd to undertake work at the K Street property. In her affidavit, filed on 3 March 2025, the wife annexes two documents which are of particular relevance and to which I was referred by counsel in their submissions.
Annexure MSM-6 to the wife's affidavit is what is described as a Land Access Agreement (“the Land Access Agreement”). It is, on any view, a pithy agreement. I express no view as to the enforceability of that agreement. The “overview” to the Land Access Agreement states as follows:
[O Pty Ltd] has been granted a licence to access the property located at [K Street, Suburb S], VIC […] [by the wife] (A [sic]director of [G Pty Ltd]) for the purpose of disposing all rock and concrete currently located on-site. The particulars of this access license are detailed below.
The “purpose” of the Land Access Agreement is said to be as follows:
[O Pty Ltd] is granted the right to dispose of all rock and concrete on-site, including materials marked as [Stockpile 4] in Figure 1 of the cleanup report. This includes crushing, screening, and marketing the materials as per [O Pty Ltd’s] processing and recycling plans.
Albeit that the Land Access Agreement is said to have been executed on or about 15 October 2024, the only “cleanup report” in evidence is the report on the clean-up activities at the K Street property dated 9 December 2024 (“the Clean-Up Report”), which is Annexure MSM‑7 to the wife’s affidavit. Although the Land Access Agreement purports to grant a period of access from 16 October 2024 until 16 October 2026, the reference therein to the apparently extant “cleanup report” specified in the “Purpose of Access” is therefore entirely unclear.
The compensation stipulated in, and other aspects of, the Land Access Agreement appear to favour O Pty Ltd. There is a provision that:
[O Pty Ltd] will be granted access at all times and will undertake the disposal of the concrete and rock in the stockpiles identified above free of charge. In return, [O Pty Ltd] shall have full ownership and control over the processed material and may dispose or repurpose it at its discretion.
There is a further provision that:
[G Pty Ltd] (with [the wife] as Director) agrees to indemnify [O Pty Ltd] against any liabilities resulting from wrongful, negligent, or unlawful acts related to the property, except where such liability is caused by [O Pty Ltd’s] negligence.
Interestingly, the Land Access Agreement provides that, in respect of termination:
This agreement can be terminated by the landowner [G Pty Ltd] or an authorised representative by giving one (1) month’s notice in writing and the payment to [O Pty Ltd] of all costs incurred in connection with this site since gaining access. This sum shall not be less than $200,000.
Conversely, the Land Access Agreement provides that it “can be terminated by [O Pty Ltd] by providing notice in writing”, with no financial or other ramifications for that company.
Whether or not the sum of $200,000 is a penalty, and/or is otherwise enforceable, is a matter about which I do not presently need to express any opinion.
Rule 8.15(3)(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) provides that annexures are not in evidence unless they have been tendered. Although there was no formal tender of Annexure MSM-6 and MSM-7, the hearing proceeded on the basis that they are in evidence and I accept they are so.
The Clean-Up Report, although said in the wife’s affidavit to be a report to B Organisation, is not, on its face, necessarily so, although it does contain a request for B Organisation support. It is entirely unclear whether this report was prepared for G Pty Ltd, for the wife and/or for B Organisation. The introduction to the Clean-Up Report refers to O Pty Ltd as having been “engaged by [the wife] to manage and execute the cleanup of the site at [K Street]”. Relevantly, for present purposes, it then addresses four stockpile categories.
The first stockpile category, which appears at page 49 of the wife's affidavit, refers to “[Stockpile 4] (Priority 1 - Processing Underway)” and the status thereof is said to be “[c]urrently being processed”. In fact, that is the only stockpile category actually referred to in the Land Access Agreement. The other stockpile categories specified in the Clean-Up Report, which do not appear to be the subject of the Land Access Agreement, are:
·Stockpile 5, which are described as priority 2;
·Stockpile 6, which are described as priority 3, in respect of which the “Processing Plan” is to test the stockpile to identify any potential contaminants and segregate it into usable products; and
·Stockpile 7, which are described as priority 4, and identified as a “Long-Term Cleanup Project”, in respect of which material, wood and plastic will be separated for recycling or disposal. It is described as a “labour-intensive, capital-heavy process that requires more time and resources”, with an estimated completion time in July 2026.
It is manifest from the Clean-Up Report that the Land Access Agreement deals with only the first of the four categories of materials to be removed from the property, seemingly the easiest of the four categories. There is no provision in place for the other three of the four categories. Therefore, I do not consider that, by the wife's entry into the Land Access Agreement with O Pty Ltd, she has fully, or even substantially, undertaken steps to remediate the K Street property, sufficient to ensure the requisite compliance.
I am also concerned, prima facie, by the commerciality of the Land Access Agreement. O Pty Ltd can remove and sell material from the K Street property and retain, for its own benefit, the proceeds of sale. However, it is purportedly entitled to a payment of $200,000 if the contract is terminated by G Pty Ltd.
Although O Pty Ltd was purportedly retained by the wife on 15 October 2024, she did not directly or contemporaneously inform the husband thereof; he only became aware of the company’s involvement in the course of the Supreme Court proceedings in late 2024. If for no other reason, the wife was obliged to make disclosure of the agreement by reason of her disclosure obligations in these proceedings. She alleges that she only received a copy of the Land Access Agreement in recent days, but that is not to the point. The fact of the existence of the agreement itself should have been, but was not, disclosed as required by her disclosure obligations in this Court.
In circumstances where the wife, who has been in occupation of the K Street property for many years, has failed to comply with, or to cause G Pty Ltd to comply with, or to enable the husband to comply with, the VCAT orders, and has not kept the husband informed or involved with the few steps she purports to have taken, I consider it appropriate, and the balance of convenience favours, that the husband be given the opportunity of regularising the situation. If he too is unable to affect the remediation of the K Street property promptly and fully, consideration may need to be given by the Court to the appointment of a controller or administrator of G Pty Ltd and to take the company out of the hands of both the husband and the wife.
Whilst the wife deposes that she regards the K Street property as her permanent place of residence, she admits that she has a lease of a property at AA Street , Town CC, in the State of Victoria for a term of three months, it would appear from in or about late 2024. It might be expected that the lease will expire later this month. However, the wife is entirely silent in relation thereto, including whether she has, or has been offered, any option to extend the lease. If, indeed, she could not remain there beyond the three-month term, it would be expected that she would have deposed to that difficulty, but she has not done so.
Further, it does not appear to be an arm’s length transaction between the wife and the lessor, in circumstances where she concedes that she lent him $50,000 to apply for the purchase of the property which she now leases. No explanation has been proffered by the wife of her connection to, or relationship with, the lessor or how and why she came to lend him $50,000 from what she deposes to have been a partial property settlement (noting that she has a pending application for yet another partial property settlement, by way of litigation funding). Insofar as she deposes that someone is required to be on-site to safeguard the material, equipment and works, and for fire safety reasons, her evidence is that she has alternated nightly at the K Street property with O Pty Ltd and, if that be the case, the husband will need to do likewise. I therefore propose to make orders substantially in terms of those sought by the husband and to give effect to these reasons.
Sale of K Street Property
Both parties agree that the K Street property should be sold and seek orders at trial to that effect. The orders made on 16 December 2024 provided for the preparation of a contract of sale and a Vendors’ Statement, at the equal shared expense of the parties. That has not occurred, but neither party seeks the variation, discharge or enforcement of those orders. The K Street property was valued at $2.75 million in January 2024 subject, I am told, to the remediation thereof. The husband deposes to a possible purchaser, for a sum in the order of $10 million in or about October 2024. However, evidence of an offer is not evidence of value. See Weatherall & Weatherall (2006) FLC 93-261 at [55].
The wife opposes the husband having the conduct of the sale but deposes to a wish to maximise the sale price of the K Street property. Presumably, if an offer of, or in the order of, $10 million or, indeed, anything over the valuation at $2.75 million were forthcoming, she would wish to maximise the return to her interest in the superannuation fund. However, because of the uncertainty at this juncture in relation to the remediation cost and the liability of any purchaser therefor, I am not presently prepared to make orders authorising the husband to conclude a sale, especially in circumstances where the part-heard trial will resume in under four months time. However, in circumstances where I propose to make orders giving him sole use and occupation of the property, I consider it appropriate to authorise him to market the property for sale. If any offer is received and one party or the other unreasonably refuses it, application will unfortunately need to be made, albeit that cost orders may follow. That is not said in terrorem; it is said as a matter of law.
Therefore, I shall make orders to give effect to these reasons for judgment, as well as in terms of the minute of consent orders, as amended, disposing of the pending interlocutory applications, save for the wife’s partial property settlement application and noting that the husband proposes to apply likewise therefor.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Strum. Associate:
Dated: 13 March 2025
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