Mullis & Quimby

[2023] FedCFamC1A 16

Federal Circuit and Family Court of Australia

(DIVISION 1) APPELLATE JURISDICTION

Mullis & Quimby [2023] FedCFamC1A 16

Appeal from:

Mullis & Quimby [2022] FedCFamC2F 1046

Appeal number(s):

NAA 196 of 2022

File number(s):

SYC 5033 of 2013

Judgment of:

MCCLELLAND DCJ

Date of judgment:

14 February 2023

Catchwords:

FAMILY LAW – APPEAL – PROPERTY – De facto husband appeals from orders requiring a lump sum payment upon sale of property – De facto wife cross-appeals on differing grounds – Changes in property value during delay between hearing and delivery of judgment – Where parties concede appeal should be upheld – Percentage apportionment of net proceeds of sale of property is just and equitable – Error of law – Appeal allowed – Costs certificates granted.

Legislation:

Family Law Act 1975 (Cth) s 90SM

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 36(1)

Federal Proceedings (Costs) Act 1981 (Cth)

Cases cited:

Bhatnagar & Riju [2018] FamCAFC 144

House v the King (1936) 55 CLR 499; [1936] HCA 40

Noetel and Quealey (2005) FLC 93-230; [2005] FamCA 677

Tiley and Tiley (1980) FLC 90-898; [1980] FamCA 73

Waters and Waters (1981) FLC 91-019; [1981] FamCA 19

Number of paragraphs:

10

Date of hearing:

14 February 2023

Place:

Sydney

Counsel for the Appellant:

Mr Jackson

Solicitor for the Appellant:

Urban Family Lawyers

Counsel for the Respondent:

Mr Othen

Solicitor for the Respondent:

Willis & Bowring

ORDERS

NAA 196 of 2022
SYC 5033 of 2013

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTION

BETWEEN:

MR MULLIS

Appellant

AND:

MS QUIMBY

Respondent

order made by:	MCCLELLAND DCJ
DATE OF ORDER:	14 February 2023

BY CONSENT, THE COURT ORDERS THAT:

1.The appeal filed 8 September 2022 be allowed.

2.The cross-appeal filed 23 September 2022 be dismissed.

3.The orders made on 12 August 2022 by the Federal Circuit and Family Court of Australia (Division 2) are set aside, and s 90SM of the Family Law Act 1975 (Cth) orders are made in their place by consent in terms of Annexure “A”.

4.The Full Court grants the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) in respect of the costs incurred by him in relation to the appeal.

5.The Full Court grants the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) in respect of the costs incurred by her in relation to the appeal.

6.There be no order as to costs with respect to the appeal and cross-appeal.

ANNEXURE A

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA ACT 2021

IN THE FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1) APPELLATE JURISDICTION

AT SYDNEY  

Appeal No. NAA 196 of 2022

File No. SYC 5033 of 2013

BETWEEN:

MR MULLIS

Appellant/Cross Respondent

-and-

MS QUIMBY

Respondent/Cross Appellant

THE COURT ORDERS THAT:

1.Pursuant to s 90SM of the Family Law Act 1975 (Cth):

a.   “the property” means the real property at Street A1, Suburb B in the State of New South Wales being the whole of the land in Certificate of Title Folio Identifier ...

b.   That the Husband shall be solely responsible as between the Wife and the Husband for all outgoings payable in relation to the property and the Husband shall indemnity and keep indemnified the Wife in relation to all and any such payments, including with respect to the mortgage currently registered over the property by Bank J, being registered dealing number ... (“the mortgage”), so as to release the Wife from all and any liability in relation to the mortgage.

c.   That the Husband shall forthwith engage qualified tradesmen to do all things necessary to demolish and remove the shed encroaching upon the boundary between the property and Street A2, Suburb B in the State of New South Wales and any asbestos not attached to any structure on the property, and immediately upon completion of that work, the Husband shall sign all documents and instruments and do all things necessary to list for sale the property at a listing price agreed upon between the parties with a real estate agent agreed upon between them and shall proceed to a sale of the property at a sale price agreed upon between them and following such sale the proceeds of sale shall be applied as follows:

i.In adjustment of rates on settlement;

ii.In payment of agent’s commission (if any) on sale;

iii.In payment of legal and all other proper costs of sale;

iv.In payment to the Bank J of a sum sufficient to discharge the mortgage;

v.In payment to the Husband of 78.5% of the balance then remaining;

vi.In payment of the balance to the Wife.

d.   That in the event that paragraph (c) of this order operates and the property does not sell by private sale within five months from the date of this order, then the Husband shall sign all documents and instruments and do all things necessary to list the property for sale by public auction with an auction agent agreed upon between the parties at a reserve price agreed upon between them and shall proceed to a sale at a sale price agreed upon between them and, following such sale, the proceedings of sale shall be applied as provided in paragraph (c) of this order.

e.   That in the event that paragraph (d) of this order operates and the property does not sell by public auction in accordance with paragraph (d), then the property shall be resubmitted for sale by private treaty in accordance with the provisions of paragraph (c) of this order and the property shall be resubmitted for sale by public auction at six (6) monthly intervals from the last public auction and be resubmitted for sale by private treaty between such auctions, until the property shall be sold and, upon such sale either by public auction or private treaty, the proceeds of sale shall be applied as provided in paragraph (c).

f.    That in the event that the parties are unable to reach agreement in relation to an auction agent, a real estate agent, a listing price, a reserve price or a sale price whether for a sale by public auction or by private treaty then the parties shall and do hereby appoint the President for the time being of the Real Estate Institute of New South Wales or his or her nominee to determine such disputed matter or matters and the parties shall thereafter act in accordance with that determination and the parties shall be equally responsible for the costs and expenses of the President or his or her nominee in making such determination.

g.   That the Husband is the sole owner in law and in equity as between himself and the Wife of all items of real property, personal property, financial assets and financial resources, including superannuation entitlements, currently in his power, possession or control other than as specifically dealt with elsewhere in this order.

h.   That the Wife is the sole owner in law and in equity as between herself and the Husband of all items of real property, personal property, financial assets and financial resources, including superannuation entitlements, currently in her power, possession or control other than as specifically dealt with elsewhere in this order.

i.    That the Husband do all acts and things and sign all documents necessary to authorise the Wife to deal with City AN Council with respect to the non-compliant toilet at the property connected to the septic system for Street A2, Suburb B and, to the extent necessary, to access the property.

2.That in the event that either party refuses or neglects to comply with any part of Order 1 in relation to the execution of any deed, instrument or document, the court appoints and authorises the Registrars of the Federal Circuit and Family Court of Australia to execute such deed, instrument or document in the name of the party who so refuses or neglects and further appoints those Registrars to do all acts and things necessary to give validity and operation to the deed, instrument or document.

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).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 the pseudonym Mullis & Quimby has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE
REASONS FOR JUDGMENT

MCCLELLAND DCJ:

1. By way of Notice of Appeal filed 8 September 2022, as amended on 17 November 2022, the appellant/cross-respondent (“the husband”) appeals the decision of the learned primary judge dated 12 August 2022. The respondent/cross-appellant (“the wife”) opposed the appeal and sought to appeal the decision on grounds different to that of the husband. However, in circumstances where the parties agree that the appeal should be upheld by consent, it is unnecessary to deal with the cross-appeal.

   Background

2. The parties commenced cohabitation in 1991 or 1992, although they were never married. There are two children of the relationship, one who is now an adult and the other who is 17 years of age. The parties separated when the husband vacated the parties’ home in September 2012. The husband commenced the substantive proceedings by way of an Initiating Application filed 29 August 2013 seeking parenting orders. This was subsequently amended to seek property orders and, ultimately, leave was granted to the husband to proceed on that application.

3. The reasons for judgment of the primary judge set out the parties’ respective applications and contentions. Relevantly for the purposes of this appeal, the hearing before the trial judge occurred over four days, being 1–2 October 2020 and 6–7 April 2021. Reasons for judgment and orders were delivered on 12 August 2022.

4. In his judgment, the primary judge made a finding that the parties’ pool of available property, as determined by the trial judge, be divided 70 per cent to the wife and 30 per cent to the husband. The primary judge also made default orders in the event of the wife failing to pay a lump sum to the husband in order for a property at Street A1, Suburb B (“the property”) to be transferred to the wife. This was in circumstances where the wife lives in the neighbouring property at Street A2, Suburb B, which is currently in her name. The default provisions provided for the sale of the property, with the wife being ordered to arrange for and meet the costs of rectifications to enable the sale to proceed. Those rectifications involved removing a shed that overlaps both properties and also effecting separation of the septic tank system that is joined to both properties.

   The appeal

5. These reasons focus on those aspects of the appeal that were conceded, which relate to Grounds 1, 2 and 2A of the appellant’s grounds of appeal:

   1.That the primary judge erred in making a default property sale Order, being Order (1)(c)(v), including a provision that the Appellant receive a lump sum of money from the net proceeds of sale of the relevant property, rather than a percentage of the net proceeds of sale, thereby failing to give any or sufficient consideration to a change of value of the property located at [Street A2, Suburb B] in the state of new South wales from the date of the final date of hearing on 7 April 2021 and the date of the Judgment on 12 August 2022.

   2.That the primary judge erred in making the Order pursuant to section 90SM of the Family Law Act (Cth) (1975) (“the Act”), specifically Order (1)(c)(v), in that such an Order may have the effect of not represent [sic] the just and equitable division determined by the Court.

   2A.That the primary judge erred in failing to give reasons why in relation to Order (1)(c)(v), the Appellant would receive a lump sum of money from the net proceeds of sale of the relevant property, rather than a percentage of the net proceeds of sale.

   (As per the original)

6. Essentially, those grounds contend that, consistent with relevant authorities, in circumstances where it could reasonably be anticipated that there would be a delay between the concluding date of evidence and the delivery of judgment, a trial judge would have directed that the net proceeds of sale of the property would be divided in accordance with the apportionment of the parties’ property as determined by the primary judge to be appropriate. That is, it was contended that such a percentage based apportionment should have been applied, rather than the requirement to pay a lump sum, which the primary judge ordered to be an amount of $288,608 together with interest (Order 1(a)).

   CONSIDERATIOn

7. Notwithstanding that the appeal was conceded by the respondent, an appellate court is nonetheless required to be satisfied of appealable error on the part of the primary judge (Bhatnagar & Riju [2018] FamCAFC 144 at [7]). It therefore follows that I am required to be satisfied of appealable error before consent orders allowing the appeal can be made.

8. The respondent wife, at paragraph 48 of her Summary of Argument filed 23 November 2022, acknowledged that the preferred course to be adopted to achieve a just and equitable division of the parties’ property was orders for a percentage division from the net proceeds of sale of the subject property, rather than the lump sum payment as determined by the primary judge. This was particularly in circumstances where it could reasonably be anticipated that there would likely be a substantial delay between the conclusion of evidence, including as to valuation, and delivery of judgment. Relevant authorities referred to by the husband in that respect included Noetel and Quealey (2005) FLC 93-230 at [143]; Tiley and Tiley (1980) FLC 90-898 at 75,660; and Waters and Waters (1981) FLC 91-019.

   Applying the principles adumbrated in those authorities to the facts of this appeal, I find that there has been an error of law within the principles adumbrated in the well-known authority of House v the King (1936) 55 CLR 499. In those circumstances, it is appropriate for relevant costs certificates to be issued pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) in respect to the costs incurred by each of the parties in respect to the appeal.

9. Having found error on the part of the primary judge, as conceded by the parties, the Court is empowered by s 36(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) to re-exercise jurisdiction, which I so do. Having regard to each party’s submissions and the evidence as filed by the parties, to which I have had access in the form of the appeal book, I am satisfied that the orders proposed by the parties upon the appeal being upheld are appropriate and represent a just and equitable adjustment of the parties’ property pursuant to s 90SM of the Family Law Act 1975 (Cth), and I make orders in those terms.

   DISPOSITION

10. I make orders in the terms proposed by the parties as set out at the commencement of these reasons, together with Annexure A, and I grant the relevant costs certificates to each party.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Deputy Chief Justice McClelland.

Associate:

Dated:       20 February 2023