NGHIEM & ASTEY

[2016] FamCA 458

FAMILY COURT OF AUSTRALIA

NGHIEM & ASTEY [2016] FamCA 458

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Competing applications – Where the husband seeks that the proceeds of sale of a business be deposited in a controlled monies account – Where the wife opposes the application and seeks access to the funds as the business was previously her source of income – Orders made for the proceeds of sale to be deposited in a controlled monies account, with the wife to have access to all interest accrued – Where the wife seeks the sale of four investment properties owned by the parties – Where the evidence presented to the Court does not establish the necessity of such a sale – Application dismissed.

Family Law Act 1975 (Cth)

APPLICANT: Mr Nghiem

RESPONDENT: Ms Astey

FILE NUMBER: SYC 7271 of 2014

DATE DELIVERED: 9 June 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 18 May 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Watkins

SOLICITOR FOR THE APPLICANT: Paton Hooke Lawyers

COUNSEL FOR THE RESPONDENT: Mr Miller

SOLICITOR FOR THE RESPONDENT: Pigdon Norgate

Orders pending further order:

1. Each of the parties will do all things and execute all documents necessary to cause the funds held in ANZ Bank account number …, in the name of Ms Astey, to be deposited into a controlled monies account in their joint names.

2. Each of the parties will do all things and execute all documents required to effect payment to the wife of all interest which accrues on the funds lodged into the controlled monies account pursuant to Order (1).

3. Otherwise, the Application in a Case filed on 29 February 2016 and the Response to an Application in a Case filed on 13 May 2016 are dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Nghiem & Astey 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 SYDNEY

FILE NUMBER: SYC 7271 of 2014

Mr Nghiem

Applicant

And

Ms Astey

Respondent

REASONS FOR JUDGMENT

The proceedings

1. The husband, Mr Nghiem, and the wife, Ms Astey, are parties to litigation concerning property settlement.  The proceedings were commenced by way of the wife’s Initiating Application filed on 20 November 2014.

2. On 29 February 2016 the husband filed an Application in a Case, by which he sought the following orders:

   1.That the wife sign all documents and do all things to transfer the balance in ANZ account number …, in the name of [Ms Astey], which had a balance as at 11 August 2015 of $2,298,981.54 to a controlled monies account to the held in the names of the parties.

   2.That the signal [sic] expert, [Ms B], be directed to answer questions in the letter from Paton Hooke Lawyers to [B Forensic Accounting] dated 10 December 2015.

   At the interim hearing on 18 May 2016, counsel for the husband informed the Court that he pressed only for proposed Order 1.

3. On 13 May 2016 the wife filed a Response to Application in a Case, by which she sought the following orders:

   THAT PURSUANT TO SECTION 79 PROPERTY ORDERS BE MADE AS FOLLOWS:

   1.That the Application in a Case filed by the Husband on 29 February 2016 be dismissed.

   2.That the Single Expert, [Ms B], be directed to ignore the questions put to her by the Husband by way of the letter dated 10 December 2015 from Paton Hooke Lawyers to [B Forensic Accounting].

   3.That the Parties list for sale and sell [1 C Street, 2 C Street, D Street and E Street] in accordance with Schedule A.

   4.Simultaneously with the settlement of the sales of [1 C Street, 2 C Street, D Street and E Street], the Husband and Wife do all acts and sign all documents necessary to cause the payment of the proceeds of sale to be paid in the following order and priority:

   4.1Pay all costs and expenses relating to the sale of each property including legal costs, disbursements, agent’s commissions, advertising and sales expenses;

   4.2Pay all amounts necessary to discharge the mortgage secured against [E Street];

   4.3Pay the remaining proceeds of sale into the Controlled Monies Account pending written agreement or further order of this Court.

   5.That pending the sale of [1 C Street, 2 C Street, D Street and E Street] the Parties each be restrained from further charging or encumbering the properties or creating, or increasing any liability secured against the properties without the prior written consent of the other party, which consent must not be unreasonably withheld.

   6.That the Wife be at liberty [to] retain the entirety of the balances of the ANZ account and the Term Deposit to the exclusion of the Husband and be released from any undertaking made by her with respect to the preservation of any portion of the funds in these accounts.

   7.That leave be granted to the Wife to file an Amended Initiating Application by 30 June 2016.

   8.That leave be granted to the Husband to file an Amended Response by 30 June 2016.

   9.That the Husband pay the Wife’s costs of and incidental to these proceedings.

   Given that the husband did not seek orders in relation to questions to Ms B, I assume that the wife did not press for proposed Order 2.

4. The issues for determination at the interim hearing were thus as follows:

   1.Should the wife be required to lodge a sum of approximately $2.2 million into a controlled monies account pending further order?

   2.Should the parties forthwith sell four investment properties and discharge the associated liabilities from the sale proceeds?

   3.Should leave be granted to the parties to file an Amended Initiating Application and Response?

Background

1. The husband and the wife, who are aged 49 and 40 respectively, married in 1999 and separated on 27 August 2012.  The wife married her current husband, Mr Astey, in 2014.

2. The parties have three children:

   ·B born in 2004 (12);

   ·C born in 2005 (10); and

   ·D born in 2009 (6).

   On 19 July 2013 the parties consented to orders which provide that they have equal shared parental responsibility for the children.  These orders provided further that the children spend equal time with each parent.

3. The husband and wife are health professionals.  The husband conducts a business at E Town.  There was a dispute as to the value of the husband’s business, with the single expert Ms B offering opinions of $1,886,700 and $2,026,700 on two alternative scenarios.  The husband does not accept either of these valuations and contends for a figure of $515,000.

4. Until 1 July 2015 the wife was the proprietor of business, which operated from jointly owned premises at F Street, E Town.  The F Street property is security for an ANZ bank loan in relation to the husband’s business, which is known as the “G Loan”.

5. Sale of the business and the F Street property settled on 1 July 2015.  The net proceeds of sale of the F Street property amounted to $578,250, after discharge of the G Loan and these funds are held in a controlled monies account by the wife’s solicitors.  The net proceeds of sale of the business amounted to $2,291,890 and these funds are held in an ANZ bank account in the sole name of the wife.  It is these funds which the husband now seeks be lodged in a controlled monies account.

Consideration

Proceeds of sale of the business

1. The affidavits of each of the parties annexed solicitors’ correspondence in which the husband sought, and the wife refused to provide, consent to an arrangement whereby these funds would be deposited into a controlled monies account.  The wife contended she requires access to the sale proceeds because she has sold her business, which was her source of income.  In a letter dated 20 August 2015 the wife’s solicitor offered an undertaking, whereby she would retain a sum of $1 million from the sale proceeds pending agreement or order of the Court.  The wife now seeks a release from this undertaking.

2. During the course of the interim hearing I asked counsel for the husband why the wife should be deprived of access to interest generated by the funds of $2.2 million.  Counsel informed me that the husband had no objection to that course.

3. It is true that there is “no evidence of any threat by the wife” in relation to dissipation of the sale proceeds, as was submitted by her counsel.  I disagree, however, with the submission that “there was no evidence of any risk of dissipation of assets by the wife”, as her application was that she have unfettered access to these funds.

4. A matter of concern to me is the substantial dispute as to the value of the husband’s business, which could have a substantial impact on the balance sheet.  The parties engaged a remuneration expert, Mr H, as well as Ms B on this issue.  Ultimately the report of Ms B was released on 20 November 2015.

5. It may be that, ultimately, the husband will be unsuccessful in his apparent challenge to the single expert opinion of Ms B but that issue must be determined at some future time.  For present purposes, I am of the view that steps should be taken to preserve the parties’ property until there is clarity as to their assets and liabilities.

6. I propose to order that the wife cause the sale proceeds of the business, as currently held in her ANZ account, to be lodged into a controlled monies account pending further order.  I will order that she receive all interest generated by that capital sum pending further order.

7. This outcome, of course, does not prevent the wife from seeking access to part of that capital sum by way of interim or partial property settlement at some future time.  Further, this outcome appears to be somewhat consistent with the wife’s own intentions for these monies.  In her affidavit of 11 May 2016 the wife deposed as follows:

   44.I have no other income other than the income from my ANZ account, and the income from the investment properties, to meet my outgoings.  The ANZ account, being a fixed term investment account, will mature on 15 June 2016.  At that time, the interest which has accrued on this account will be released to me and I plan to apply this toward my living expenses.  I plan to invest the balance in accordance with the recommendations of my financial adviser at that time.

Sale of the investment properties

1. The wife sought orders for the sale of four investment properties and the discharge of the associated liabilities.  In her affidavit the wife deposed that one of the bases of this application is that the parties now disagree as to the value of these properties.  It appears that the properties were valued in 2014 and that the husband adheres to these figures but the wife requires updated opinions.  The wife does not wish to incur the expense of updated valuation reports.  A further basis for the sale of the Suburb I property which was offered by the wife is that both parties wish to retain this asset.

2. I accept the submission on behalf of the husband that the evidence of the wife established no necessity for an immediate sale of these properties.  There was no evidence, for example, that the parties are unable to service the relevant mortgages and that there is a consequent risk of erosion of their asset base.  There was no evidence as to any tax implications for the parties upon the sale of these investment properties.

3. I am not persuaded that the fact that both parties wish to retain the Suburb I property is any basis for its immediate sale.  It may well be that the only way to resolve this dispute ultimately will be an order for sale of that property but there is no necessity to take such a step at the present stage of the proceedings.

Leave to file an Amended Initiating Application and Response

1. It appears that, on 24 November 2015, a Registrar ordered that no Amended Application or Response is to be filed without the leave of the Court.

2. In her affidavit of 11 May 2016 the wife deposed:

   67.I cannot finalise the Orders that I seek until the dispute regarding the value of [Mr Nghiem] interest in [the business] and the value/sale of the investment properties have been resolved.  I am also unable to quantify my entitlements pursuant to the orders sought by [Mr Nghiem], or his proposals for settlement, until these issues are resolved.

3. It seems to me that, in these circumstances, there is little utility in my now granting leave to the parties to file an Amended Application and Response.  That matter can be pursued with the Docket Registrar at a more appropriate time.

I certify that the preceding 22 paragraphs (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 9 June 2016.

Associate: 

Date:  9 June 2016