Pattison and Gilbertson

[2013] FCCA 750

FEDERAL CIRCUIT COURT OF AUSTRALIA

PATTISON & GILBERTSON [2013] FCCA 750

Catchwords:
FAMILY LAW – De facto property – injunction – whether a caveat appropriate to protect the Applicant’s interest – where Respondent failed to disclose that a property was on the market – injunction granted.

Legislation:
Family Law Act 1975(Cth), ss.90SF, 90SM, 106A, 114

Real Property Act 1900 (NSW), s.74F
Federal Circuit Court Rules 2011 r. 24.03

Cases cited:
M & DB [2006] FamCA 1380; (2006) 36 Fam LR 454; FLC 93-293
Sim & Soh [2011] NSWSC 1207

Applicant: MS PATTISON

Respondent: MR GILBERTSON

File Number: SYC 2234 of 2013

Judgment of: Judge Scarlett

Hearing date: 1 July 2013

Date of Last Submission: 1 July 2013

Delivered at: Sydney

Delivered on: 8 July 2013

REPRESENTATION

Counsel for the Applicant: Mr Jackson

Solicitors for the Applicant: Shead Lawyers

Counsel for the Respondent: Mr Campton

Solicitors for the Respondent: Greg Alfonzetti

ORDERS

UNTIL FURTHER ORDER:

1. The Respondent must do all acts and things necessary to procure that upon the completion of the Contract of Sale of Property B in the State of New South Wales being the whole of the land in Certificate of Title Folio Identifier (omitted) the proceeds of sale are to be paid in the following manner and priority:

   (a)In payment of the amount required to discharge the mortgage registered (omitted) to the (omitted) Bank or its successor in title over the said property or any other mortgage registered from time to time;

   (b)In payment of real estate agent’s commission and expenses if any due on the sale;

   (c)In payment of all municipal and water rates outstanding;

   (d)In payment of solicitors’ legal costs of the sale;

   (e)In a sum of $600,000.00 by bank cheque in favour of “Julie Ann Shead and Greg Alfonzetti in trust for Ms Pattison and Mr Gilbertson” for deposit in a controlled moneys account at the (omitted) Branch of the (omitted) Bank on behalf of the Applicant and the Respondent; and

   (f)The balance to the Respondent.

2. The Applicant’s solicitor is authorised to advise the solicitor or conveyancer acting for the Respondent as Vendor and the solicitor or conveyancer acting for the Purchaser on the sale of the said property at Property B aforesaid, that the Applicant’s solicitor and the Respondent’s solicitor are authorised to attend on settlement and to receive the cheque for $600,000.00 referred to in Order (1)(e) above.

3. The Applicant is to do all such things to prepare and execute a Withdrawal of Caveat in respect of the caveat on the title of the property at Property B and provide that Withdrawal of Caveat on or before the date of settlement of the Contract of Sale.

4. In the event that a party refuses or neglects to execute a deed or instrument in compliance with this Order then a Registrar or Deputy Registrar of the Federal Circuit Court of Australia is appointed under section 106A of the Family Law Act 1975 to execute any such deed or instrument and do all acts and things necessary to give validity and operation to the deed or instrument.

5. The Applicant’s solicitor is to serve a copy of these Orders on the solicitor or conveyancer acting for the Respondent as Vendor and the solicitor or conveyancer acting for the Purchaser of the property at Property B and on the mortgagee being the (omitted) Bank or its successors and on the solicitor for the mortgagee within two (2) days of the date of this Order.

6. The Applicant and the Respondent are to attend a Conciliation Conference before a Registrar of this Court on a date to be fixed.

7. The parties’ costs are reserved.

8. Liberty to apply on three (3) days’ notice.       

IT IS NOTED that publication of this judgment under the pseudonym Pattison & Gilbertson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT SYDNEY

SYC 2234 of 2013

MS PATTISON

Applicant

And

MR GILBERTSON

Respondent

REASONS FOR JUDGMENT

Application

1. This is an Application for injunctive orders brought by the former de facto wife of the Respondent. The Application relates to the sale of the home at Property B, New South Wales, in which the parties used to live. Contracts have been exchanged and it appears that completion of the sale is scheduled to take place on 26^th July.

2. The Applicant seeks an Order providing that the sum of $750,000.00 from the net proceeds should be placed in a controlled moneys account on behalf of the parties until the Applicant’s her claim for a property settlement against the Respondent can be finalised.

3. Not surprisingly, the Respondent opposes this Application. He seeks orders that the Applicant should withdraw a caveat she has placed on the title of the property and proposes that he will give her fourteen days’ notice of any intention that he might have to sell, encumber or otherwise deal with two other properties in his name, at Property A and at Property O. 

Background

1. These proceedings arise from a de facto relationship in which the parties were involved for some years, although their estimates of the length of the relationship differ greatly.  

2. The Applicant commenced proceedings by filing an Application on 26^th April 2013, seeking final orders that the Respondent should pay to her by way of settlement of property the sum of $700,000.00. In that Application she also seeks interim orders for:

   a)Periodic maintenance at the rate of $845.00 per week and a lump sum of $16,900.0;

   b)Injunctive orders restraining the Respondent from selling, encumbering or disposing of his interest in:

   i)The property at Property B;

   ii)Two other properties Property A and Property O; and

   c)An Order that the Respondent pay to her the sum of $25,000.00 to be used for her legal costs.

3. This Application was returnable on 1^st July. It was accompanied by a Financial Statement, an affidavit from her psychiatrist, and an affidavit in which she set out her claim for settlement of property against the Respondent.

4. In her affidavit the Applicant states that she commenced living with the Respondent in June 2002. She deposes in 2008 she paid an amount towards the deposit on the house at Property B, although it was purchased only in the Respondent’s name. She left the Respondent on the weekend of 1^st and 2^nd December 2012.

5. The Respondent filed a Response, an affidavit sworn 11^th June 2013 and a Financial Statement on 13^th June 2013. In his affidavit the Respondent deposes that he and the Applicant started living together as a couple in a de facto relationship in August 2007. He denied that the Applicant made any contribution towards the purchase of the property in Property B.

6. In a further affidavit sworn on 17^th June 2013 the Respondent deposes that:

   a)On 14^th June 2013 he exchanged contracts for the sale of Property B;

   b)The sale price in the contract is $1,515,000.00;

   c)Completion of the sale is due on 26^th July 2013; and

   d)The Applicant has lodged a caveat against the title claiming an equitable interest in the land under the Family Law Act 1975.

7. The Applicant filed her Application in a Case seeking injunctive orders on 24^th June 2013, accompanied by an affidavit sworn 21^st June 2013. In her affidavit the Applicant expresses concern that if the net proceeds of the sale are paid to the Respondent her Application will be prolonged and frustrated.

8. On that same day the Respondent’s solicitors wrote to the Applicant’s solicitors, disputing the applicant’s claim but offering an undertaking that the Respondent would not sell, transfer or further encumber his interest in the other property, at Property O and Property I without providing 14 days’ notice of his intention to do so.          

Orders Sought

1. The Applicant seeks the following Orders:

   1.  That the Respondent do all acts and things necessary:

   1.1to procure that upon completion of the Contract of Sale of Property B comprised in Certificate of Title Folio[1] (omitted) (“Property B”) the proceeds of sale be paid in the following manner and priority:

   (i)in payment of the amount required to discharge the mortgage registered (omitted) to the (omitted) Bank or its successor in title, over Property B, or any other mortgagee registered from time to time;

   (ii)in payment of agent’s commission and expenses if any due on the sales;

   (iii)in payment of all municipal and water rates outstanding;

   (iv)in payment of solicitors legal costs of the sale; and

   (v)in a sum of $750,000.00 by bank cheque in favour of “Shead Lawyers Pty Ltd on behalf of Ms Pattison and Mr Gilbertson” for deposit in Shead Lawyers Pty Ltd solicitors controlled moneys account at (omitted) Bank, (omitted) Branch for the Applicant and the Respondent;

   [1] sic

   2. That the Applicant’s solicitor is authorised to advise the solicitor/conveyancer acting for the Respondent as Vendor and the solicitor/conveyancer acting for the Purchaser on the Contract of Sale of Property B that the Applicant’s solicitor is authorised to attend on settlement and to receive the cheque in accordance with Order 1(v) above;

   3. That on the making of the orders, the Applicant’s solicitor serve the orders by facsimile (on) the solicitor/conveyancer acting for the Respondent as Vendor and the solicitor/conveyancer for the Purchaser on contract of Sale of Property B, the Property B mortgagee the (omitted) Bank or their respective successors, and its solicitor;

   4. That the Respondent pay the Applicant’s costs of the Application in the Case and interim Consent Orders and matters ancillary thereto;

   5. That in the event that either party refuses or neglects to execute a deed and/or instrument in compliance with the provisions of this order, the Registrar or a Deputy Registrar of the Family Court of Australia[2] at Sydney is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute all deeds and/or instruments and do all acts and things to give validity and operation to the deeds and/or instruments.

   [2] sic

   6.  Liberty to list on 3 days notice.

2. Counsel for the Respondent submitted a Minute of Orders Sought seeking the following:

   1.That within 48 hours the applicant Ms Pattison do all such things as are necessary at her expense to cause the caveat she has lodged on the title of the property at Property B to be withdrawn.

   2. That the applicant Ms Pattison be restrained, pending further order, from doing any act or thing to cause caveats to be lodged upon the title of the properties at Property B, Property A and Property O.

   3.That the respondent Mr Gilbertson, pending further order, with[3] admissions, shall give the applicant Ms Pattison 14 days notice in writing of any intention to transfer, further encumber or deal with his interest in the properties at Property A and Property O.

   [3] sic

Submissions

1. The Applicant relies on the submissions in a Case outline Document prepared by her counsel. The Applicant’s counsel refers the Court to the decision of the Full Court of the Family Court in M & DB[4] at [46]-[50] held that:

   46A court…may grant an injunction…in any case in which it is just or convenient to do so…

   47Ultimately, each case will involve an overall assessment of a number of factors to determine the just or convenient result…

   [4] [20076] FamCA 1380; (2006) 36 Fam LR 454 (reported as M v DB); FLC 93-293

   …

   49In some cases, the possibility (based on some evidence) of an intention or scheme may, with other factors, be sufficient to establish the probability of an objective risk of disposal with intent to defeat an order.

   50…(I)n an enquiry into the risk of disposal, the question of intention or scheme is but one of a number of factors relevant to the objective risk of disposition to defeat an order.[5]

   [5] Per Kay, Warnick and Boland JJ at [46]-[50]

2. Mr Jackson of counsel, who appeared for the Applicant, submitted that:

   a)The net asset pool amounts to $2,714,564.00;

   b)There is no issue that the parties were engaged in a de facto relationship for at least five years, although the Applicant urges that it was for over a decade;

   c)On the basis of a ten year de facto relationship a stage two contribution assessment of 35% in favour of the Applicant is not controversial;

   d)The s.90SF(3) factors being the Applicant’s poor health and her income of about half that of the Respondent would allow an adjustment in the Applicant’s favour of “at least 10%, and probably more”;

   e)It is important to the Applicant’s case that $700,000.00 plus an additional $50,000.00 should be preserved, as the only real opportunity for the Applicant to receive an appropriate $700,000.00 payout by way of a property division is out of the proceeds of sale of the house at Property B;

   f)The Respondent failed to even mention the sale of the property in his first affidavit;  

   g)The Applicant claims that he has also failed to disclose a Long Service leave account with a balance of about $100,000.00; and

   h)The net proceeds of sale of the property at Property B will yield about $1.1 million, so there would be no prejudice to the Respondent if the sum of $750,000.00 being injuncted were to be held in an interest bearing controlled moneys account.

3. Mr Campton of counsel, who appeared for the Respondent, submitted that:

   a)The caveat lodged on the title of the property should be removed, as the Applicant does not have a caveatable interest under the Real Property Act 1900 (NSW);

   b)Both the applications for interim relief in the initiating application by way of spousal maintenance and interim costs are misconceived and without merit;

   c)The Applicant’s claim for a final order that she receive an amount of  $700,000.00 in cash after a five year de facto relationship that produced no children is unrealistic;

   d)The Respondent has other properties worth $900,000.009 in which he has more than $300,000.00 worth of equity;

   e)He would provide notice of his intention to sell either property;

   f)The Respondent would cause only $500,000.00 out of the proceeds of sale of Property B to applied towards the purchase of another property;

   g)Thus, there would be at least $850,000.00 of comfort to the Applicant;

   h)Further, it would be outrageous to order that an amount from the proceeds of sale of the property should be placed in the Applicant’s solicitor’s Trust Account;

   i)The Applicant works for four days a week and has a bank account with a balance of about $273,346.00, and in consequence would neither be entitled to an order for interim maintenance or interim costs.

4. The Court was referred to the decision of Brereton J in Sim v Soh[6], where his Honour declined to make an order extending the operation of a caveat when there were proceedings already on foot in the Family Court for property adjustment.

   [6] [2011] NSWSC 1207

Conclusions

1. It was not put to the Court by counsel for the Applicant that his client was moving on the Application for interim orders for maintenance, injunctive orders relating to the properties at Property A or Property O, or a payment of $25,000.00 towards the Applicant’s legal costs, contained in the Initiating Application. Mr Jackson did not direct any submissions towards any of those proposed orders.

2. Consequently, I will make no ruling on any of those orders and the Application can be left for argument on another day.

3. The matters for concern in the Application in a Case concern:

   a)the application for an order that an amount of $750,000.00 should be retained out of the proceeds of sale of the property at Property B, in a controlled moneys account to protect the Applicant’s chances of obtaining funds out of her property claim; and

   b)the Respondent’s proposed order that the Applicant should remove the caveat placed on the title.

4. In my view, the decision of the Full Court of the Family Court in M & DB[7] is relevant, in that the facts are similar and their Honours’ decision offers, with respect, a guide to the manner in which a court at first instance should approach an application for an injunction in the circumstances.

   [7] supra

5. It is a matter of concern that the Respondent failed to mention in his sworn on 11^th June and filed on 13^th June 2013 that he had any intention to sell the property at Property B when it was clear that the property was on the market and contracts were exchanged on 14^th June, the very day after the affidavit was filed. It is only in his later affidavit sworn on 17^th June 2013 that the Respondent deposes:

   7. I have been attempting to sell the Property B property for the last eight weeks and the purchaser under the Contract is the only serious buyer which emanated.

   8. At the time of our separation on 1 December 2012 I had informed the Applicant that I would sell the Property B property as soon as I had the opportunity to complete some repairs to it.[8]

   [8] Affidavit of Mr Gilbertson 17.6.2013 at paragraphs [7]-[8]

6. Parties have a clear duty to make a full and frank disclosure of their financial circumstances (Rule 24.03), and it will not avail the Respondent at all if he were to seek to argue that he did not exchange contracts until three days after he swore his affidavit.

7. Such a failure to disclose a relevant factor raises a serious concern about the Respondent’s intentions, noting that the title to the property is solely in his name. The Response filed on 13^th June seeks no other orders than that the Application be dismissed with costs.

8. The Respondent gives no evidence in either of his affidavits that he intends to buy another property, noting that he owns another property Property A. However, his counsel told the Court that the Respondent only intended to apply $500,000.00 out of the proceeds of sale towards the purchase of another property. That being so, if Mr Jackson is correct in his submission that the net proceeds of sale of Property B will yield about $1,100,000.00, the deduction of the $750,000.00 that the Applicant seeks to be injuncted would leave the Respondent a sum of $350,000.00, a shortfall of $150,000.00.

9. The sum of $750,000.00 sought by the Applicant to be held in a controlled moneys account represents a lump sum that would be available to lead to speedy resolution of the Applicant’s property claim. The Respondent’s offer to undertake to give the Applicant 14 days notice of any intention to sell either of the other two properties, in which he has an equity of about $300,000.00, does not offer much comfort, in my view. This is particularly so in view of the Respondent’s failure to disclose in his affidavit of 11^th June 2013 that he had listed Property B for sale some seven weeks earlier.

10. It has been put to the Court that the Applicant does not have a caveatable interest in the property and that she should be ordered to withdraw the caveat. The only authority that the Court received from counsel for the Respondent was an exhortation to look at the Real Property Act 1900.

11. Section 74F of the Real Property Act provides:

    (1)Any person who, by virtue of any unregistered dealing or by devolution of law or otherwise, claims to be entitled to a legal or equitable estate or interest in land under the provisions of this Act may lodge with the Registrar-General a caveat prohibiting the recording of any dealing affecting the estate or interest to which the person claims to be entitled.

12. The Applicant claims an equitable interest in the land pursuant to the Family Law Act. I note that in her affidavit of 20^th April 2013 at paragraph [66] the Applicant claims that the Respondent was initially going to purchase the property in both of their names and at paragraph [68] she deposed that she paid an amount of $5,000.00 towards the deposit.

1. It will be for the Applicant to prove what interest she has in the property.

2. The decision of Brereton J in Sim v Soh[9] has been referred to the Court.. Whilst his Honour referred to the caveat in that case having been found by another Judge to be defective, this does not take the matter any further. Brereton J declined to order that the caveat should be extended or that the proceedings should be transferred to the Family Court. His Honour held at [9]:

   In the present case, there were already on foot proceedings for property adjustment pursuant to the Family Law Act, s.78 and s.79, in the Family court, and those proceedings have been set down for hearing in October. In those proceedings, the Family court has granted injunctive relief restraining the defendant – the wife in those proceedings – from dealing with the subject property to a certain extent. In my view, it is quite inappropriate in that context for there to be parallel proceedings in this Court in which, by way of a statutory injunction in the form of a caveat, a more extensive restraint is sought. If the plaintiff wishes to have the defendant restrained from dealing with the property, and in the outcome of the hearing in the Family Court, the appropriate place in which to make that application is the Family Court.

   [9] supra

3. It appears clear that it is inappropriate for the Applicant to continue to seek relief by way of a caveat and it should be withdrawn.

4. I am of a view that an injunction should be granted. Whilst it appears that the Applicant has an arguable claim for a property order, it is unlikely that any award would reach $750,000.00. In the circumstances, the claim for an overall division of 45% would appear to be highly optimistic in my view.

5. Accordingly, I consider that the injunction should be granted, but only to the extent of the sum of $600,000.00. The parties’ solicitors between them should place that amount in a controlled moneys account on behalf of their respective clients to be held until further order.

6. The Applicant seeks that an Order be made authorising a Registrar or Deputy Registrar of the Family Court under the provisions of s.106A of the Family Law Act to execute any deed or instrument in place of a party who fails or neglects to do so. A Registrar or Deputy Registrar of the Federal Circuit Court of Australia is the appropriate person to be appointed.   

7. The parties’ costs will be reserved.

8. The parties will be directed to attend a Conciliation Conference before a Registrar of the Court on a date to be fixed. They will be required to make a full and frank disclosure of their respective financial situations.    

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Date:  8 July 2013