Onh & Jang (No 2)
[2023] FedCFamC1F 699
•21 August 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Onh & Jang (No 2) [2023] FedCFamC1F 699
File number(s): PAC 4448 of 2020 Judgment of: RIETHMULLER J Date of judgment: 21 August 2023 Catchwords: FAMILY LAW – PROPERTY – Determination of final property orders to give effect to prior reasons – Where parties unable to agree to terms – Where wife proposes orders which seek to depart from prior reasons for judgment – Orders made in accordance with husband’s proposal with adjustment to timeline and for wife to obtain security pending final payment – No matters of principle. Legislation: Family Law Act 1975 (Cth) s 79 Cases cited: Aitken & Aitken [2023] FedCFamC1A 69
Onh & Jang [2023] FedCFamC1F 269
Division: Division 1 First Instance Number of paragraphs: 20 Date of last submission/s: 8 June 2023 Place: Parramatta Solicitor for the Applicant: Landers & Rogers Solicitor for the Respondent: York Law Family Law Specialists ORDERS
PAC 4448 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR ONH
Applicant
AND: MS JANG
Respondent
ORDER MADE BY:
RIETHMULLER J
DATE OF ORDER:
21 AUGUST 2023
WHEREAS:
A.For the purpose of these Orders, the following definitions apply:
a.“Act” means the Family Law Act 1975 (Cth).
b.“Suburb E Property” means the property known as and situate at G Street Suburb E, Folio Identifier …, of which the husband is the sole registered proprietor, and which is subject to two caveats as follows:
i.Caveat lodged by the wife; and
ii.Caveat lodged by L Trust Limited, as security for the loan obtained by the husband from O Pty Ltd for legal finance.
c.“Suburb E Mortgage” means the mortgage to Commonwealth Bank of Australia secured over the Suburb E Property, dealing number ….
d.“Suburb J Property” means the property known as and situate at H Street, Suburb J of which the husband and his brother, Mr P Onh, are registered proprietors as tenants in common in uneven shares, with the husband holding a 60 per cent share and Mr P Onh holding a 40 per cent share.
THE COURT ORDERS THAT:
Joinder
1.Mr P Onh, the husband’s brother, be hereby joined as a party to these proceedings as the second respondent for the purpose of being bound by these Orders.
Refinance of Mortgage secured over the Suburb E Property
2.Within 7 days from the date of these Orders, the wife shall do all acts and things and sign all documents necessary to prepare a Withdrawal of Caveat to remove the Caveat secured against the title of the Suburb E Property, being registered dealing …, at the wife’s sole cost, to be lodged simultaneously with compliance with Order 3(a) and Order 4.
3.Conditional upon the wife’s compliance with Order 2 above:
(a)Within 6 weeks of the date of these Orders, the husband shall do all such acts and things and sign all such deeds, documents and instruments as may be necessary to refinance the Suburb E Mortgage into his sole name, provided that the wife shall sign the appropriate discharge authority within seven (7) days of it being submitted to the wife; and
(b)The property be charged in favour of the wife as security for the balance of the monies owing pursuant to these Orders, and the wife be at liberty to secure such a charge by way of a caveat lodged immediately after compliance with Order 3(a) and Order 4.
Partial property settlement payment
4.Simultaneous with full compliance of Order 3 above:
(a)The husband pay the sum of $300,000 to the wife by way of partial property settlement; and
(b)The parties shall forthwith do all such acts and things and sign all such authorities and directions as may be required to cause the fund held in the Commonwealth Bank of Australia Offset Account …74 to be disbursed to the wife, and, thereafter for that account to be closed.
Sale of Suburb J Property
5.The husband and the second respondent shall forthwith do all acts and things and sign all documents necessary to list the Suburb J Property for the best price reasonably obtainable, in the following manner:
(a)Within 7 days from the date of these Orders, the husband and the second respondent shall instruct such lawyer as agreed by them to have the conduct of the sale of the Suburb J Property (“the conveyancing lawyer”);
(b)Within 7 days from the date of these Orders, the husband and the second respondent shall appoint such agent as they agree to have the conduct of the sale (“the agent”);
(c)Within 14 days from the appointment of the agent, the husband and the second respondent shall do all things necessary to list the Suburb J Property for sale by public auction;
(d)The reserve price for the purpose of such auction shall be as agreed between the husband and the second respondent, in consultation with the agent;
(e)The husband and second respondent shall cooperate in every way with the agent including (without limiting the generality of the foregoing):
(i)Making the key available to the agent;
(ii)Allowing inspection of the Suburb J Property at all reasonable times requested by the agent;
(iii)Doing or saying nothing to hinder or prevent a sale being effected;
(iv)Ensuring the Suburb J Property is in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(v)Signing all documents requested by the agent in relation to the listing for sale of the Suburb J Property except a contract or agreement for sale which has not been authorised by the conveyancing solicitor;
(f)In the event the bidding at the auction does not reach the reserve price, the husband may negotiate with the highest bidders or any other interested person and effect a sale of the Suburb J Property at a price which is not more than 5% below the reserve price;
(g)If the Suburb J Property is not sold at the public auction conducted in accordance with Order 5(c) above, the husband and the second respondent shall do all acts and things and sign all documents necessary to continue to relist the Suburb J Property for sale by public auction again at monthly intervals, and the provisions of Order 5(a) to Order 5(f) shall apply successively until the Suburb J Property has been sold so that at each successive auction the reserve price shall be 5% less than the reserve price at the immediately preceding auction;
(h)The sale price at which the Suburb J Property shall be listed shall be the price recommended by the agent and agreed between the husband and the second respondent;
(i)The provisions of Order 5(e) shall apply to the sale of the Suburb J Property by private treaty.
Settlement of sale of the Suburb J property
6.On settlement of the sale of the Suburb J Property, the proceeds of sale be paid in the following manner and priority:
(a)All costs and expenses of sale including:
(i)Legal costs and disbursements of the conveyance; and
(ii)Agent’s commission, marketing expenses and other costs of and incidental to the appointment of the agent;
(b)The repayment or reimbursement of any amount that has been paid by either the husband or the second respondent towards the costs and expenses described in Order 6(a);
(c)The amounts required to pay all municipal and water rates outstanding with respect to the Suburb J Property;
(d)40% of the balance remaining to the second respondent, as he may so direct;
(e)The sum of $682,746 to the wife by way of full and final property settlement (noting the amount paid pursuant to Order 3 herein), less the sum of $6,380;
(f)The balance to the husband; and
(g)In the event that the sale proceeds are insufficient to pay the amount set out in Order 6(e), the difference in the amount available from the sale proceeds and the amount required by Order 6(e) be payable by the husband to the wife.
Sale of Suburb E Property in event of default by Husband
7.In the event that the husband does not make payment to the wife of the sum of $300,000 in accordance with Order 4 above (and provided there has been no default by the wife pursuant to her obligations in Order 2 and Order 3 above) or the wife does not receive the sum referred to in Order 6(e) (regardless of whether there is insufficient proceeds from the sale of the Suburb J property), the parties shall do all acts and things and sign all necessary documents and list the Suburb E Property for sale for the best price reasonably obtainable in the following manner:
(a)Within 7 weeks of the date of these Orders, the husband shall nominate three real estate agents and three conveyancing solicitors to have conduct of the sale;
(b)Within 7 days of the husband nominating a real estate agent, the wife is to choose one of the agents and one of the conveyancing solicitors nominated by the husband to have conduct of the sale;
(c)Within 14 days from the appointment of the agent, the husband and wife shall do all things necessary to list the Suburb E Property for sale by public auction;
(d)The reserve price of such auction shall be as agreed between the husband and the wife, and in the absence of agreement, as recommended by the agent;
(e)The husband and wife shall cooperate in every way with the agent including (without limiting the generality of the foregoing):
(i)Making the key available to the agent;
(ii)Allowing inspection of the Suburb E Property at all reasonable times requested by the agent;
(iii)Doing or saying nothing to hinder or prevent a sale being effected;
(iv)Ensuring the Suburb E Property is in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(v)Signing all documents requested by the agent in relation to the listing for sale of the Suburb E Property except a contract or agreement for sale which has not been authorised by the conveyancing solicitor.
(f)In the event the bidding at the auction does not reach the reserve price, the husband and wife may negotiate with the highest bidders or any other interested person and effect a sale of the Suburb E Property at a price which is not more than 5% below the reserve price.
(g)In the event the Suburb E Property is not sold at the public auction, the husband and the wife shall do all acts and things and sign all documents necessary so as to list the Suburb E Property for sale by private treaty with the agent;
(h)The sale price at which the Suburb E Property shall be listed shall be the price recommended by the agent and agreed between the husband and the wife, or failing agreement, as nominated by the agent.
8.On settlement of the sale of the Suburb E Property, the proceeds of sale be paid in the following manner and priority:
(a)All costs and expenses of sale including:
(i)Legal costs and disbursements of the conveyance; and
(ii)Agent’s commission, marketing expenses and other costs of and incidental to the appointment of the agent;
(b)The amounts required to pay all municipal and water rates outstanding with respect to the Suburb E Property;
(c)The sum of $300,000 to the wife as required by Order 4 herein and the sum of money as required by Order 6(e) herein, less any amounts already paid in partial satisfaction of these obligations; and
(d)The balance to the husband.
Superannuation Split
9.The base amount of $154,009 is allocated, as required by s 90XT(4) of the Family Law Act 1975 (Cth), to the wife out of the interest held by the husband in Superannuation Fund 1, Member No. … (“Superannuation Fund 1”).
10.Whenever a splittable payment within the meaning of s 90XE of the Act becomes payable to or on behalf of the husband from his interest in Superannuation Fund 1, the trustee shall pay the wife the entitlement calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001, and make a corresponding reduction in the entitlement the wife would have had but for these Orders.
11.Order 9 has effect from the operative time.
12.The operative time is four business days from the date of service of these Orders.
13.Order 9 to Order 12 above bind the Trustee of Superannuation Fund 1.
Declarations and Indemnities
14.Other than as is specifically provided for in these Orders:
(a)The husband is solely, legally and beneficially entitled to the exclusion of the wife to all other property, financial resources and superannuation of whatsoever nature and kind as are in his ownership, possession and/or control as at the date of the making of these Orders, or to which he may become entitled after the making of these Orders, including but not limited to:
(i)The Suburb E Property;
(ii)Motor Vehicle 1, in his possession;
(iii)All cash at bank and moneys invested by him and in his sole name;
(iv)Furnishings and effects that remain in the Suburb E Property; and
(v)Subject to these Orders, his remaining interest in Superannuation Fund 1, Member No. …; and
(vi)Any other asset currently in his possession or his control.
(b)The wife is solely, legally and beneficially entitled to the exclusion of the husband to all other property, financial resources and superannuation of whatsoever nature and kind as are in her ownership, possession and/or control as at the date of the making of these Orders, or to which she may become entitled after the making of these Orders, including but not limited to:
(i)All cash at bank and moneys invested by her and in her sole name;
(ii)Motor Vehicle 3, in her possession;
(iii)Her interest in Superannuation Fund 2;
(iv)The contents removed by the wife from the Suburb E Property upon separation; and
(v)Any other asset currently in her possession or her control.
(c)From the date of these Orders, the husband do all acts and things necessary to indemnify, and keep indemnified, the wife from and against all liabilities of the husband, including but not limited to:
(i)All liabilities including claims, actions, suits or demands of whatsoever nature arising out of, or in connection with, the husband’s interest in any business or real property;
(ii)Taxation liabilities; and
(iii)Credit card liabilities.
(d)From the date of these Orders, the wife do all acts and things necessary to indemnify, and keep indemnified, the husband from and against all liabilities of the wife, including but not limited to:
(i)All liabilities including claims, actions, suits or demands of whatsoever nature arising out of, or in connection with, the wife’s interest in any business or real property;
(ii)Taxation liabilities; and
(iii)Credit card liabilities.
15.That, in the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders, then a registrar of the Court shall be appointed, pursuant to s 106A of the Family Law Act 1975 (Cth), to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
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 Onh & Jang has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
RIETHMULLER J:
INTRODUCTION
On 24 April 2023, reasons for judgment were delivered in this matter determining the outcome of the parties’ property dispute pursuant to s 79 of the Family Law Act 1975 (Cth): see Onh & Jang [2023] FedCFamC1F 269. These reasons identified the parties’ property pool (at [71]) and determined that the parties’ interests should be split 55 percent to the husband and 45 per cent to the wife: at [87] and [91].
BACKGROUND
During the course of the trial in October 2022, an agreement was reached between the husband and his brother for the sale of a commercial property located at H Street, Suburb J NSW (“the Suburb J property”) that had been transferred to them by their father, and figures agreed between the parties as to the appropriate allowance for capital gains tax that would be incurred upon that sale (during submissions the wife confirmed the current estimate for the CGT applicable to the husband’s 60 per cent share of the Suburb J property was approximately $113,359).
The direction that the parties prepare draft orders to reflect the outcome was made prior to recent Full Court authority on that question: see Aitken & Aitken [2023] FedCFamC1A 69.
Whilst the facts and circumstances are set out in some detail in the previous judgment (Onh & Jang) it is appropriate to note some of the salient features of the proceedings.
The parties’ two children live with them in an equal shared care arrangement (for half of each week during the school term and half of school holidays). The husband resides in a property located at G Street, Suburb E NSW (“the Suburb E property”) which is included in the assets of the parties for the purpose of the proceedings. Considerable funds were provided by the husband’s family to assist in the purchase of property.
The husband wishes to retain the Suburb E property in which he and the children live: at [80]. The wife is living in rental accommodation after having taken a large sum from the parties’ accounts. The mortgages are also greater than they may have been as a result of the husband not paying the mortgages for a period. These matters were taken into account in determining the appropriate split of the parties’ assets.
PROPOSED ORDERS
The husband’s solicitors prepared draft orders which provide for the husband to retain the Suburb E property (which continues to be his family home with the children living with him half time), the joinder of his brother who is a joint title holder of the Suburb J property (the sale of which his brother consents to), the sale of the Suburb J property, and the splitting of superannuation.
In order to effect the 45 per cent to 55 per cent division of the parties’ assets as determined in Onh & Jang, the husband’s orders provide for him to pay $300,000 to the wife by way of partial property settlement upon refinancing the Suburb E property so as to remove the wife from the mortgage, and to pay the wife the balance of the sums owing upon the sale of the Suburb J property. Superannuation splitting orders reflecting the terms of the judgment are included, as are orders ensuring that in other respects, the parties no longer have interests in their respective property.
The wife objects to orders in the terms proposed by the husband, seeking instead that the husband obtain bridging finance in order to pay her the totality of the judgment amount within 60 days and failing which for the Suburb E property to be sold, effectively putting the husband and the children out of the home that they have been occupying. There is little doubt that the husband will be able to retain the Suburb E property once the Suburb J property is sold. The wife also argues that the findings in the judgment should be departed from on the basis that the Suburb J property:
…need not be sold and therefore CGT of $113,359 will not be incurred.
(Wife’s written submissions filed 8 June 2023, paragraph 9)
At trial, the matter proceeded on the basis that the Suburb J property would be sold and CGT would be incurred. The registered titleholders of the Suburb J property (the husband and his brother) are both agreeable to the sale, and prefer to take such a course rather than retaining the property. It would not be appropriate for this Court to force the husband and his brother to retain a property so as to avoid crystallising CGT so as to effectively increase the respective property pool. This was not put at trial by the wife, nor would it have been an appropriate order.
The wife argues that orders cannot be made (as proposed by the husband) as the husband’s brother has not been joined. The husband’s brother was present at the final hearing, and consented to the orders, and has consented to being joined for the purpose of the orders. This argument is without foundation.
Issues that may arise as to the process of sale of the Suburb J property do not appear to me to present any real difficulty. Courts order properties be sold on a regular basis, and if machinery provisions are required, they can be provided. Given that the husband and his brother are agreed and both have a financial interest in obtaining the best sale price, it seems to me to be unlikely that there will be any difficulties with effecting the sale of the Suburb J property.
The wife also seeks to take on a proposed case for the husband’s father and uncle, suggesting that they may have some interest that may need to be respected or accounted for. Neither are registered titleholders, and there is no indication that either would make any claim. This does not appear to me to be a genuine basis for opposition by the wife to the orders proposed by the husband.
Whilst the wife argues that she should not have to wait to receive her share of the property, if the husband does not choose to obtain bridging finance, she would have to wait for the sale of the Suburb E property in any event. Indeed, a significant delay has now occurred as a result of the wife being unprepared to agree to orders, which reasonably implement the terms of the judgment. That delay was caused by the need for an opportunity for the parties to make submissions (and in part, due to my having commenced leave prior to those submissions having been made, and then awaiting a judgment).
I note that the wife, despite seeking the sale of the Suburb E property, if the husband does not obtain bridging finance (and there is no evidence that he can, in fact, obtain bridging finance), makes no provisions in the orders to share in any deficit that might arise as between the net proceeds of sale of the Suburb E property and the figure utilised in the statement of assets and liabilities. Similarly, she seeks no such order with respect to the Suburb J property. The husband’s draft orders do not expose the wife to any potential variation in the settlement sum as a result of the differences in sale prices compared to valuations, just as the wife seeks in her proposed orders.
I am persuaded that the machinery provisions for the sale of the Suburb J property provide too long a timeline in the event the property is not sold when first auctioned. In the event the Suburb J property does not sell at first auction, it should be re-auctioned thereafter each month with a lesser reserve price, rather than waiting six weeks to attempt to sell by private treaty and the three months between auctions.
I also note that the draft orders proposed by the husband require the early removal of the wife’s caveat over the Suburb E property (to allow for the refinance and partial payment) but do not provide for the wife to again secure her interest pending final payment. Thus, I have altered the draft orders to provide for this existing caveat security to remain until settlement of the Suburb E property mortgage release, and liberty to the wife to renew her caveat pending final settlement payment, if she wishes to retain security.
CONCLUSION
The orders proposed by the husband substantially reflect the terms of the judgment. The husband’s draft order provide for the wife to be paid the precise sum contemplated in the judgment and insulated her against any losses that may occur as a result of property sales. There is no argument that she should receive a precise sum as her orders also insulate her from any movements in the property market. I am not persuaded to expose the husband to the risk of having to sell his home within 60 days, but to allow the sale of the commercial Suburb J property first. The proposed orders for the sale of the Suburb J property provide for that sale to take place immediately with considerable machinery provisions which, as I have adjusted them, ensure that such a sale occurs in a short time. I have also added to the orders to ensure that the wife is able to take security over the Suburb E property following the refinance, pending final payment to her.
As the delay has been largely caused by the wife, and the nature of the assets is such that they cannot be quickly liquidated, I do not make any provision for that delay in the orders.
I make final orders accordingly.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Riethmuller. Associate:
Dated: 21 August 2023
0
2
1