Philkin & Philkin (No 3)

Case [2021] FedCFamC1F 224

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Philkin & Philkin (No 3) [2021] FedCFamC1F 224

File number(s): DGC 2894 of 2018
Judgment of: HARTNETT J
Date of judgment: 3 December 2021
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Interim Property Orders – Application for a Stay of Orders made by the court on 16 September 2021 – Where the husband seeks an injunction restraining the parties from dealing with properties as  provided for in earlier orders of the court – Where the husband’s application is without merit – Where the husband has filed an Application for Leave to appeal orders made 16 September 2021 – Application of husband dismissed – Where orders sought by wife – Where orders for a sale of property ordered prior to orders of 16 September 2021 – Where terms of sale sought to be varied – Where orders made providing for variation as sought in application of the wife.
Legislation:

Family Law Act 1975 (Cth)

Family Law Regulations 1984 (Cth)

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)

Cases cited:

Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106

Philkin & Philkin (No.2) [2020] FamCAFC 264

Trahn & Long (No. 2) [2008] FamCAFC 194

Zhai & Niu [2015] FamCA 639

Division: Division 1 First Instance
Number of paragraphs: 58
Date of hearing: 17 November 2021
3 December 2021
Place: Melbourne
Advocate for the Applicant: Mr Thompson on 17 November 2021
Professor Karunadasar on 3 December 2021
Solicitor for the Applicant: TAI Lawyers Darwin
Counsel for the Respondent: Ms Damon
Solicitor for the Respondent: Ryan Carlisle Thomas

ORDERS

DGC 2894 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR PHILKIN
Applicant 

AND:

MS PHILKIN
Respondent

ORDER MADE BY:

HARTNETT J

DATE OF ORDER:

3 DECEMBER 2021

THE COURT ORDERS THAT:

1.There is leave to the Applicant husband ( the husband) to adduce further evidence in the proceeding being email correspondence from VV Solicitors to the husband’s solicitor, Mr Jeff Thompson, dated 23 November 2021, as contained in the affidavit of the husband filed the 26 November 2021.

2.The Application in a Case filed by the husband on 19 October 2021 is dismissed.

3.Within fourteen (14) days from the date of these Orders, the husband file and serve a financial statement.

4.The husband make full and frank disclosure pursuant to rule 6.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), at his expense, and provide the wife with copies of documents relevant to his financial affairs such as are requested by the wife’s solicitors within twenty-one (21) days of any such request.

5.Within fourteen (14) days of the making of these Orders, the parties do all such acts and things and sign all such documents as may be necessary to forthwith sell the property situate at FF Street Suburb F in the State of Victoria (“the FF Street property”) in compliance with Order (2) of the consent orders made by the…

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Philkin & Philkin (No 3) [2021] FedCFamC1F 224
Case
[2021] FedCFamC1F 224
Decision Date

CaseChat Overview and Summary

The case of Philkin & Philkin (No 3) involves the husband and wife in a family law dispute concerning property and financial matters. The husband filed an application seeking interim property orders, while the wife responded with her own application for differing interim property orders and further orders. The court had previously made orders on 16 September 2021, which the husband now sought to stay. Additionally, the husband filed an application for leave to appeal the September orders. The wife sought orders for the sale of certain properties and for varying the terms of a previous sale order.

The legal issues in this case revolve around the interpretation and enforcement of the previous court orders, the husband's application for a stay of those orders, and the wife's application for machinery orders for the sale of a specific property. The court had to consider whether the husband's application for a stay was justified, whether the husband had complied with the previous orders, and whether the wife's application for machinery orders was warranted.

The court dismissed the husband's application for a stay of the orders made on 16 September 2021, finding that it was without merit. The court found that the husband had acted contrary to the orders by unilaterally marketing one of the properties for sale. The court also dismissed the husband's application for leave to appeal the September orders, stating that he had little prospect of success. The court granted the wife's application for machinery orders for the sale of the FF Street property, as the previous sale had not proceeded as ordered. The court ordered that the wife be solely responsible for the conduct of the sale, with the husband nominating three real estate agents from which the wife could choose. The court also restrained the husband from dealing with the sale of another property and ordered him to pay the wife's costs.

In conclusion, the court dismissed the husband's applications for a stay and for leave to appeal and granted the wife's application for machinery orders for the sale of the FF Street property. The court emphasized the need for the husband to comply with the previous orders and to provide full financial disclosure to the wife. The court appointed a registrar to execute deeds and instruments on behalf of the husband if necessary, and ordered the husband to pay the wife's costs.

Orders

Orders of the court

DGC 2894 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR PHILKIN

Applicant

AND:

MS PHILKIN

Respondent

ORDER MADE BY:

HARTNETT J

DATE OF ORDER:

3 DECEMBER 2021

THE COURT ORDERS THAT:

1. There is leave to the Applicant husband ( the husband) to adduce further evidence in the proceeding being email correspondence from VV Solicitors to the husband’s solicitor, Mr Jeff Thompson, dated 23 November 2021, as contained in the affidavit of the husband filed the 26 November 2021.

2. The Application in a Case filed by the husband on 19 October 2021 is dismissed.

3. Within fourteen (14) days from the date of these Orders, the husband file and serve a financial statement.

4. The husband make full and frank disclosure pursuant to rule 6.09 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), at his expense, and provide the wife with copies of documents relevant to his financial affairs such as are requested by the wife’s solicitors within twenty-one (21) days of any such request.

5. Within fourteen (14) days of the making of these Orders, the parties do all such acts and things and sign all such documents as may be necessary to forthwith sell the property situate at FF Street Suburb F in the State of Victoria (“the FF Street property”) in compliance with Order (2) of the consent orders made by the Court on 13 July 2020.

6. For the purposes of effecting the sale of the FF Street property:

(a) the wife shall be solely responsible for the conduct of the sale of the property up to and including settlement of its sale;

(b) the sale shall be conducted by a real estate agent to be selected by the husband nominating three (3) agents within seven (7) days and the wife to elect an agent out of the three (3) but if the husband fails to make his nomination within seven (7) days, the wife be at liberty to appoint an agent of her choice;

(c) SS Solicitors shall have care of the conveyancing of the sale of the FF Street property;

(d) the mode of sale, asking/reserve price and/or marketing plan shall be as determined by the wife in consultation with the selling agent;

(e) the parties are to do all things and sign all documents required by the selling agent to progress the sale including signing any exclusive sale authority;

(f) the parties are to co-operate with the selling agent in relation to the marketing of the FF Street property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective purchaser;

(g) the wife shall be at liberty to accept any offer that is at least 90 per cent of the asking price or reserve price as the sale price for the FF Street property; and

(h) the parties shall execute the Contract of Sale of the property and all other documents necessary to complete the sale including all transfer documentation forthwith upon such documents being made available to them by the selling agent and/or SS Solicitors and/or their own solicitors.

7. The husband be restrained from further dealing in any way with the sale of the property situate at 2 HH Street Suburb F in the State of Victoria.

8. In the event that the husband refuses or neglects to execute a deed and/or instrument in compliance with the provisions of these Orders, a registrar of the Melbourne Registry is hereby appointed pursuant to section 106A of the Family Law Act 1975 (Cth) (“the Act”) to execute all deeds and/or instruments in the name of the husband and do all acts and things to give validity and operation to the deeds and/or instruments.

9. The husband pay the costs of the wife on a party-party basis fixed in the sum of $8,000

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.

Background

Background to the litigation

The correspondence from VV Solicitors (23 November correspondence) noted orders made on 26 October 2021, in the County Court proceeding, that proceeding being as referred to hereafter in these reasons. Such orders were not placed by the husband before the Court in this proceeding. The wife’s solicitors, in correspondence of 25 November 2021, sought production of such orders from the husband. The solicitor for the husband responded by email of the 29 November 2021, that such orders were not in that firm’s possession, although the husband’s solicitor could seek, on behalf of the wife’s solicitors, a copy of the orders from the County Court in the event the wife’s solicitors were unable to obtain such orders. The wife is not a party to that litigation. The husband is. It would appear that the solicitor for the husband in this proceeding is not the solicitor acting for the husband in the County Court and that the husband may be a litigant in person. No information was forthcoming from the husband or the solicitor acting for him on 3 December2021 as to what, precisely, was the situation. The solicitors for the wife have now put the husband on notice that an application will be filed by them for joinder of the Westpac Banking Corporation as Second Respondent to this proceeding. The husband has been placed on notice that the costs of same will be sought by the wife to be paid by the husband. Otherwise, the 23 November correspondence provides information, relevantly, as to the following:a) total loan amounts, including arrears components, but not including ongoing interests, fees and enforcement expenses as owed by the husband to Westpac Banking Corporation (the Bank) are now in the sum of $1,555,021.64; andb) the preparedness of the Bank to consider a proposal by the husband to enter into a longer term arrangement, and discontinue the County Court Proceeding, if the husband –(i)achieves a voluntary sale of the 2 HH Street Property and the net sale proceeds after all usual settlement adjustments are applied to clear all arrears of all the accounts ---(bearing in mind that, while payments are not being made, the arrears will continue to increase while interest and enforcement costs continue to accrue);(ii)provides evidence satisfactory to Westpac of his ability to service the future repayment obligations under the loan accounts, by completing and returning an updated statement of financial position together with supporting evidence; and(iii)demonstrates serviceability by maintaining his minimum monthly repayment obligations of all loan accounts for at least 6 months.BACKGROUND APPLICATIONS Prior to 3 December 2021, the proceeding was last before me on 7 November 2021. Prior to that hearing, an earlier hearing had been had, on 19 August 2021. The 19 August hearing was occasioned by the husband, who is the Respondent in the substantial proceeding, filing an Application in a Case on 19 July 2021 seeking interim property orders. The wife responded to that Application in a Case seeking differing interim property orders and further and other orders. Following that hearing, and on 16 September 2021, I made orders upon the parties competing applications and delivered reasons for judgment. I do not propose to set out here the matters canvassed in those recently delivered reasons for judgment. I note, however, that those reasons should be read, where relevant, in conjunction with the reasons for judgment delivered herein.

Evidence

Evidence Before The Court

In light of the above, I sought some further information from the solicitor acting on behalf of the husband as to precisely what orders were sought by the husband on the hearing of the matter. The husband confirmed that he wished to sell the property at 2 HH Street and that he wished to have control of that sale. He sought orders to that effect. THE EVIDENCE In support of his case, the husband sought to rely on the following documents: (a)Application in a Case filed 19 October 2021;(b)affidavits of the husband sworn 17 October 2021 and 16 November 2021; and (c)document entitled “Submissions of the Plaintiff dated 29 September 2021 prepared by VV Solicitors, solicitors for the plaintiff, in proceedings in the County Court of Victoria in Melbourne between Westpac Banking Corporation and the husband.” In support of her case, the wife sought to rely on the following documents:(a)Response to an Application in Case filed 29 October 2021; and(b)affidavits of the wife affirmed 29 October 2021 and 12 November 2021. Also tendered in evidence by the wife was email correspondence from the husband’s solicitor, Mr Thompson, to SS Solicitors dated 29 October 2021 together with email correspondence from Z.R.E. to SS Solicitors dated 15 November 2021, marked as exhibit “A1”. I consider those two pieces of correspondence to be relevant to the orders sought by the husband. That correspondence demonstrates that the husband has acted to unilaterally market the 2 HH Street property, for the purpose of its sale, indeed a matter conceded by the husband. Such actions of the husband are not in accordance with the Orders made 16 September 2021. They appear to be supported by the husband’s solicitor. BACKGROUND An important backdrop to this litigation is the litigation in the County Court of Victoria at Melbourne as commenced by Westpac Banking Corporation, the plaintiff, on 7 June 2019, against the husband as the named defendant. The first listing of that proceeding was 20 September 2019. As set out in the “submissions of the plaintiff” document, tendered by the husband in the hearing before me, it is noted that the first mention date of the County Court proceeding was adjourned several times to allow for a complaint as made by the defendant to the Australian Financial Complaints Authority (“AFCA”) to be resolved by AFCA. The outcome of this complaint is canvassed in my reasons for judgment of 16 September 2021, paragraphs 39, 83, 92, and 96-97. It is further set out in those “submissions of the plaintiff” that on 25 August 2021, the defendant informed the County Court that his complaint had been determined and closed by AFCA. The plaintiff proposed timetabling orders for the progression of the matter in the County Court, to which the defendant objected. Consequently, the plaintiff requested an interlocutory determination. The “submissions of the plaintiff” continued:4.The defendant has provided to the court and the plaintiff a copy of orders made in proceeding PDGC2894/2018 (Family Court proceeding) dated 13 July 2020 (Family Court orders), and expressed concern that order 5 of the Family Court orders prevents him from taking active steps in this proceeding.

Decision

Reasons for decision

HARTNETT J
Further, the Court is of the view that the husband would appear to have little prospect of success on his leave to appeal application in respect of the September orders. Even were he to be successful, the appeal would not be rendered nugatory. The sale of 3 of the properties remains in contemplation as ordered by the July orders. The Westpac Bank litigation is moving to trial in July 2022, as submitted by Mr Thompson, and a sale of all properties as secured by the bank is sought to the extent of satisfaction of all monies owed to them.CONCLUSION The Court will accede to the orders as sought by the wife in respect of the sale of the FF Street property. The orders as sought by the wife are machinery orders for the sale of that property, necessitated by the failure of the earlier sale which did not proceed after the 16 September 2021 hearing. The settlement of the sale of the FF Street property was due to occur on 28September 2021. On 16 September 2021, the contract for sale of the FF Street property was mutually terminated by the purchasers and the wife and the wife instructed the selling agent to arrange for the full deposit of $81,000 paid by the purchasers to be refunded to the purchaser’s solicitors. The husband was informed of this on 17 September 2021. It thus becomes necessary to further and forthwith, place the FF Street property on the market for sale. Order 2(a) of the July orders remains operative to provide for the sale of the FF Street property. However, orders 3(a) to 3(i) of the July orders were discharged by virtue of Order 8 of the orders made on 16 September 2021. The September orders do not specify how the sale of the FF Street property is to be conducted and that is necessary given the parties inability to agree matters. The husband has had ample opportunity to make offers to the wife to purchase the FF Street property, particularly, as Order 3(g) of the July orders allowed both the husband and the wife an opportunity to purchase the property. The husband has now no obvious means, on the evidence, to make any payment to the wife, or to the bank. He has no updated and relevant financial statement before the Court. The husband’s now position, and one that he has acted upon in the manner described above, is that he is prepared to sell the 2 HH Street property immediately. But only on his terms. Further, he wishes to take possession of the FF Street property. The existence of the earlier and operative orders of the Court are immaterial to him. The husband has indicated to the wife that subject to the sale of the 2 HH Street property, he could apply for a loan for $100,000 or redraw that amount to make a payment to the wife. The husband does not however produce any evidence to the Court or to the wife to show that he has a capacity to borrow $100,000. He has not made repayments of the mortgages outstanding for a substantive period of time, and provides no evidence, at all, of any capacity to service his future mortgage repayment obligations. He has not made payment of outstanding costs orders against him. The wife claims that the husband has not been meeting his child support, nor spousal maintenance obligation payments. The husband is proposing that the parties sell only the property which has the least value, being a value of $400,000 to $440,000 as alleged by the husband in his affidavit of 19 August 2021.I observe that during the course of this hearing, some two months later, the husband described that value as being $600,000. There is no valuation evidence before the Court.

Ratio Decidendi

Legal Principle Established

Established by: HARTNETT J

The evidence before the Court on 17 November 2021, as to the outstanding debt owed by the husband to the Westpac Bank, was evidence before me on 19 August 2021. As set out in my earlier reasons for judgment of 16 September 2021, the quantum owing to the Westpac Banking Corporation was in the sum of approximately $1,309,996 as at 31 July 2021.[1] The further evidence adduced by the husband on 3 December 2021, indicates that sum has increased by a further $246,025.64 by virtue of the husband making no mortgage payments, nor any other type of payment to the Bank.[1] See paragraph 74 and 75 of the reasons for judgment of 16 September 2021. CONSIDERATION This application, in part, traverses old ground and matters already agitated and/or judicially determined which are sought to be re- agitated and judicially determined. The husband seeks a stay of the operation of the orders of 16 September 2021. When asked by me which particular order/s were sought to be stayed in their operation, or whether it was in fact an application going to the totality of the orders, the husband indicated that he sought a stay in respect of the totality of the orders. The husband also seeks an injunction restraining the parties from dealing with properties registered in the sole name of the husband until the finalisation of both extant parenting and property order applications. In respect of the duration of the injunctions as sought by the husband, I note the husband’s agreement, on an earlier interim hearing in the proceeding (19 July 2021) to a bifurcation of the proceeding, as referred to in paragraph 6 of the reasons for judgment of 16 September 2021.That bifurcation gave priority to the outstanding property orders proceeding. The injunctions as sought by the husband are injunctions in respect of properties which are the subject of Court order, including operative orders for the sale of the properties referred to in the husband’s Application in a Case. The relevant history is explained in the paragraphs which follow. On 13 July 2020, the Court made interim property orders by consent (“the July orders”) in circumstances where both parties were legally represented. Those consent orders dealt with the sale of the FF Street property; the HH Street property; and a further property, the 3 HH Street property, being a property in respect of which no injunction was sought by the husband in this proceeding. Not only did those orders provide for the sale of the three properties as referred to, but the orders by consent provided for the mechanisms of sale, including the manner of appointing a selling agent; the determination of the selling list price; the sale price; the appointment of a solicitor or a conveyancer; and the application of the proceeds of sale. The July orders also provided for the continued sole occupation and use of the FF Street property by the wife pending settlement or sale of that property; of the HH Street property by the husband pending settlement or sale of that property; and of the 2 HH Street property by the husband pending settlement or sale of that property. The orders also provided, in respect of a further property owned by the husband, that he would have interim continued sole occupation and use of that property, situate at PP Street, Suburb QQ in the State of Victoria (“the PP Street property”). The July orders also included Order 5 which provides as follows:(5)Within 7 days the Respondent Husband and/or his solicitor provide the Westpac Banking Corporation and their solicitors VV Solicitors, with a copy of these Orders and the Respondent Husband do all things necessary to seek a discharge (or stay) of proceedings with respect to the Writ issued in the County Court of Victoria (case number …) pending sale of the above named properties, and provide the Applicant Wife proof of any communication had and received from Westpac and/or their solicitors with respect to the said County Court proceedings.