Mosef and Mosef

[2015] FamCA 769

FAMILY COURT OF AUSTRALIA

MOSEF & MOSEF [2015] FamCA 769

FAMILY LAW – PROPERTY – Interim distribution of property – where application by wife for the sale of jointly owned property to fund an interim distribution of funds to the spouses and a Chapter 15 Expert report – consideration of applicable principles - where it is appropriate to make interim orders as sought by the wife.

Family Law Act 1975 (Cth) ss 75, 79, 80, 117

Harris & Harris (1993) FLC 92-378
Strahan & Strahan [2009] FamCAFC 166
In the Marriage of Poletti [1990] FamCA 79
In the Marriage of Wilson (1989) FLC 92-033
In the Marriage of Zschokke [1996] FamCA 79

APPLICANT: Mr Mosef

RESPONDENT: Ms Mosef

FILE NUMBER: PAC 4109 of 2014

DATE DELIVERED: 17 September 2015

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 8 September 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Conte-Mills

SOLICITOR FOR THE APPLICANT: Thurlows Family Lawyers

SOLICITOR FOR THE RESPONDENT: Browns The Family Lawyers

Orders

1. That the husband and wife do all things necessary and sign all necessary documents to forthwith effect a sale of the property at M Street, Suburb N being Lot … DP …, by public auction within three months from this date including:

   (a)       Appointing a selling agent by agreement and in default of agreement within 14 days such agent to be appointed by the wife,

   (b)       Appointing a solicitor to act on the sale within 14 days and in default of agreement such solicitor shall be appointed by the wife,

   (c)       Setting a reserve price for the auction by agreement and in default of agreement not less than 7 days before the auction such reserve shall be nominated by the selling agent and the husband and wife shall accept the recommendation of the selling agent as to the acceptance of an offer less than reserve at the auction,

   (d)       Distribution of the proceeds of sale as follows:

   (i)In payment of auction and selling expenses,

   (ii)In payment of legal fees on sale,

   (iii)In payment of $15,000 to the Independent Children’s Lawyer to meet costs of the Single Expert Report in parenting proceedings,

   (iv)In payment of $100,000 to each of the husband and wife,

   (v)In payment of the balance then remaining to the solicitors for each of the parties to be held in a controlled monies interest bearing account pending further order.

2. That in the event of any application for costs in respect of the present application, the applicant for such an order file and serve written submissions within 28 days from this date and the respondent file and serve any submissions in response within a further 14 days.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mosef & Mosef (No 2) 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 PARRAMATTA

FILE NUMBER: PAC 4109  of 2014

Mr Mosef

Applicant

And

Ms Mosef

Respondent

REASONS FOR JUDGMENT

1. The application for determination is an Application a Case filed by the applicant wife seeking interim property distribution and the husband’s Response thereto.

2. In her Application in a Case filed 10 July 2015 the wife sought orders for an interim property distribution of $100,000 to herself and to facilitate the payment of that sum the sale of a property of the parties at Suburb N be effected, with the balance of sale proceeds being held in a controlled monies account until further order.

3. At hearing, the wife sought orders in accordance with her Minute of Orders filed on 4 September 2015 and orally to the effect:

   a)That, by way of partial property settlement the applicant wife  and respondent husband each receive the amount of $100,000;

   b)That the wife be appointed trustee for sale of the property at Suburb N by public auction;

   c)That the proceeds of the sale be applied to pay all expenses of the sale, outstanding rates on the property, discharge the existing mortgage, $15,000 be placed in a trust account for payment of the Single Expert fees in relation to parenting issues, $100,000 for each of the wife and the husband and for the balance to remain in a trust account pending final determination.

4. In his Response to an Application in a Case filed 20 July 2015, the husband sought orders to the effect:

   a)That the Application in a Case of the wife be dismissed;

   b)That the parties do all acts and things and sign all documents necessary to approach the Westpac Bank to obtain a loan or extend the current loan in a sum sufficient to pay for the costs of the court-appointed expert in relation to the parenting proceedings;

   c)That each party equally bear the costs of such application and any repayments in relation to such a loan;

   d)That the wife pay the husband’s costs of this application.

5. The wife relied on the following documents:

   a)Application in a Case filed 10 July 2015;

   b)Affidavit of the wife filed 10 July 2015;

   c)Financial Statement of the wife filed 2 April 2015;

   d)Affidavit of the wife filed 4 September 2015;

   e)Financial Statement of the wife filed 4 September 2015;

   f)Minute of Order sought by the applicant wife filed 4 September 2015.

6. The husband relied on the following documents:

   a)Response to an Application in a case filed 20 July 2015;

   b)Affidavit of the husband filed 4 September 2015;

   c)Affidavit of the husband filed 29 August 2014;

   d)Financial Statement of the husband filed 4 September 2015.

Discussion

1. The principles as to applications for interim property provision are well settled, (Strahan & Strahan [2009] FamCAFC 166) and require a two-step process.

2. Firstly, there must be circumstances enlivening the power to make an interim order. The test is not limited to “compelling circumstances” but whether it would be “appropriate” to make an interim order, with the “overarching consideration” being the interests of justice.

3. In Strahan (supra), the Full Court said:

   132. In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1) (h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

4. Secondly, the Court is to have regard to relevant matters in s 79 of the Family Law Act 1975 (Cth).

5. It needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.

6. It is important to have regard to an overall caution. In Harris & Harris (1993) FLC 92-378, the Full Court said:

   As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings.

7. In Strahan (supra), the Full Court said at [132]:

   … regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

8. It is now well settled that in property cases the Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.  Such a consideration should not be guided by an assumption that the parties’ rights to, or interests in, property are, or should be, different from those that then exist. The question is whether those rights and interests should be altered.

9. There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact.

10. In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.

11. Both parties in this matter in any event seek that the Court make adjustive orders.

Context

1. The wife, aged 45, and the husband, aged 50, were married in 1997 and separated in 2014. There are four children of the marriage, E, aged 17, F, aged 15, B, aged 12, and C, aged 5, with the husband’s son Mr D also being part of the household from the age of 3. E and B live with the wife and F and C with the husband pending final parenting orders.

2. In August 2014, the husband initiated proceedings that now relate to parenting and property.

3. In his Amended Initiating Application filed 25 September 2014, the husband seeks final property orders that he pay the wife $150,000 and that upon payment of that sum the wife transfer to the husband all her right, title and interest in jointly owned properties at Suburb O and Suburb N.

4. In her Amended Response to Initiating Application filed 2 April 2015, the wife seeks final property orders that the Suburb O property and Suburb N property both be sold and the net proceeds be divided between them 60 per cent to the wife and 40 per cent to the husband.

5. The parties are in substantial agreement on the value of net asset pool. The present asset pool as best can be determined comprises:

   Assets:

   Joint               P Street, Suburb O   $525,000

   Joint               M Street, Suburb N   $700,000

   Wife               CBA account   $    1,003

   Wife               Toyota car  $    4,000

   Husband         CBA account  $      200

   Husband         NRMA shares   $    1,100

   Husband         Holden car   $  12,000       

   Husband         Contents   $    5,000

   Husband         Superannuation   $    5,630

   $1,253,933

   Liabilities:

   Joint               Mortgage P Street       $415,000

   Wife               Personal loans   $  21,500

   Husband         Personal loans  $  22,000

   Husband         Unpaid engineers fees   $    9,000

   Husband         Unpaid legal fees   $  22,317

   Wife               Unpaid legal fees  $  50,000

   $539,817

   Subject to issues as to whether unpaid legal fees are to be included and whether personal borrowings are of a matrimonial character the present pool is about $714,000.  It is likely that the pool for division will be larger if some of the debts are excluded.

The wife’s evidence

1. At cohabitation the wife had no assets or liabilities. The husband at that time in 1997 had a home at Ambarvale that was at that time sold with net proceeds of about $30,000-$40,000.

2. The parties purchased the matrimonial home at Suburb O for about $103,000 (the husband asserts the purchase price was $117,000) with a mortgage of $90,000 and the funds from the husband’s sale covering the balance, stamp duty and other purchase costs. The parties were able to pay out the mortgage by 2012.

3. The husband was the income earner and the wife the primary care giver for the five children and homemaker. The wife also undertook some employment.

4. In June 2013 after discharging the home mortgage the parties purchased vacant land at Suburb N for about $415,000 funded by mortgage. The loan, it appears, was also secured against the home as collateral security.

5. The husband is employed part time as a security officer earning about $690 per week after tax and the wife receives Centrelink benefits. The husband can only meet mortgage payments with the assistance of his son Mr D who is in employment.

6. The wife is renting her accommodation for $530 per week.

7. It is common ground that for the purposes of the parenting proceedings a report from a Chapter 15 Expert is required with neither party having sufficient available cash funds to obtain the report.

The husband’s evidence

1. The husband seeks to retain the vacant land at Suburb N and to build a home at a cost of about $400,000 thereon as was the intention of the parties before separation. Prior to separation he says the parties submitted plans to the local council.  

2. The husband asserts he has approval to increase the mortgage by $15,000 to cover the Chapter 15 report fees.

3. The husband adduces no evidence of any capacity to meet the order he seeks in relation to property being the payment to the wife of $150,000 that represents only 21 per cent of the above pool.

Discussion

1. In this matter the husband has a modest initial contribution over that of the wife. The parenting issue relates solely to the living circumstances of the youngest child

2. The wife’s contributions in general terms could not be less than 45 per cent with the range of s 75(2) adjustment in favour of the husband should the youngest child live with the husband being only modest.  So the wife’s claim modestly assessed comes in at about 40 per cent. Her claim for interim provision represents only 14 per cent of the contended pool.

3. The joint venture proposed by the parties in relation to the Suburb N property has ended by reason of the end of the relationship.

4. Notwithstanding the husband’s wishes, property is available to meet the wife’s interim claim. A sale of the Suburb N property will discharge the mortgage and leave some net funds available after a distribution of $100,000 to each and setting aside a fund for the Single Expert. The husband will then have the opportunity of raising a mortgage on the unencumbered matrimonial home to meet the balance of the wife’s claim.

5. The Court needs to be mindful of not compromising the ultimate property result. A payment to the wife in the order of what is sought is to be paid substantially to her lawyers and to meet living expenses and debt. It cannot on the present indications of the available pool be recovered, reversed or adjusted in total if the wife’s ultimate entitlement is less. A payment to the wife of a modest sum well within the likely range is indicated.

6. Otherwise the wife in submissions frames her application in the alternative as interlocutory costs.

7. It is well settled that such an order can be made under s 117(2) of the Act or under s 80(1)(h) of the Act. Such an order can facilitate the wife having a fair opportunity to present her case in circumstances where the “matrimonial property” is under the control of the husband. It is equally open to the Court to make the order proposed on this basis (In the Marriage of Wilson (1989) FLC 92-033, In the Marriage of Poletti [1990] FamCA 79, In the Marriage of Zschokke [1996] FamCA 79).

8. Orders as to sale of Suburb N will be made accordingly.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 17 September 2015.

Associate: 

Date:  17 September 2015