Pinho & Pinho (No 2)

Case [2022] FedCFamC1F 603

Federal Circuit and Family Court of Australia

(DIVISION 1)

Pinho & Pinho (No 2) [2022] FedCFamC1F 603

File number(s): SYC 3353 of 2020
Judgment of: CHRISTIE J
Date of judgment: 22 August 2022
Catchwords: FAMILY LAW – INTERIM PROPERTY – SPOUSE MAINTENANCE – Where the wife seeks orders for the sale of two properties – Where the husband agrees to the sale of one of the properties – Where the wife will receive monies from the proceeds of sale – Where there is a question as to how those monies should be characterised – Where the wife is unable to support herself adequately by reference to income – Where the husband is unable to support himself adequately by reference to income – Interim or partial property orders
Legislation: Family Law Act 1975 (Cth) ss 72, 75(2) and 79
Cases cited:

Badir & Badir [2022] FedCFamC1A 109,

Kowaliw & Kowaliw (1981) FLC 91-092,

Rice & Rice [2020] FamCAFC 174,

Strahan & Strahan (2021) 64 Fam LR 89.

Division: Division 1 First Instance
Number of paragraphs: 36
Date of hearing: 11 August 2022
Place: Sydney
Solicitor for the Applicant: Mr Phair, Dettmann Phair Lawyers
Respondent: Litigant in Person

ORDERS

SYC 3353 of 2020

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

MS PINHO

Applicant
AND:

MR PINHO

Respondent

order made by:

CHRISTIE J

DATE OF ORDER:

22 AUGUST 2022

THE COURT ORDERS THAT:

1.Within 14 days of the date of these orders Mr Pinho (“the husband”) and Ms Pinho (“the wife”) do all acts and sign all necessary documents to place on the market for sale the property situated at and known as C Street, Suburb D, NSW (“the Suburb D property”). In that regard:

(a)The Suburb D property shall be listed for sale by private treaty with such agent as the parties may agree and in the absence of agreement within seven days thereafter, the wife will nominate three agents from which the husband shall within a further seven days select one and failing the husband making a selection, the wife will select one agent to act on the sale who will be the agent appointed (“the Suburb D agent”) at a list price agreed by the parties in writing and in the absence of agreement with seven days at a list price determined by the Suburb D agent and the parties are ordered to jointly instruct solicitors to act on their behalf of the sale and in the absence of agreement within seven days thereafter the wife will nominate three solicitors to act on the sale and within seven days thereafter, the husband will chose one and failing the husband making a selection, the wife will select one solicitor to act on the sale (“the Suburb D solicitor”).

(b)If the Suburb D property is not sold within four weeks of first listing then the Suburb D property is to be offered for sale by public auction through a licensed public auctioneer agreed by the parties or…

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AGLC
Pinho & Pinho (No 2) [2022] FedCFamC1F 603
Case
[2022] FedCFamC1F 603
Decision Date

CaseChat Overview and Summary

In Pinho & Pinho (No 2), the husband and wife were engaged in a dispute concerning the sale of their respective properties. The wife sought an order for the sale of the Suburb D property to obtain funds to meet her living expenses, and additionally, she sought the sale of the Suburb F property on the basis that the husband had not applied rent received from tenants to the mortgage after separation. The husband opposed the sale of the Suburb F property, asserting that he had obtained a "hold" on the mortgage payments and that he wished to retain the property as part of the final division of assets. The primary legal issues before the court were whether the wife’s application for the sale of the Suburb F property was justified and whether the proceeds from the sale of the Suburb D property should be characterised as spouse maintenance or as an interim property adjustment.

The court considered the principles governing interim property adjustments and spouse maintenance orders. It noted that while the wife did not need to demonstrate special circumstances to seek an interim property adjustment, she must show that such an order would be just and equitable, would not prejudice the relief of another party, and that there were assets available to satisfy the order. The court found that the husband's financial statement showed his expenses exceeded his income, raising concerns about his ability to meet mortgage payments. However, the court also considered that the husband wished to retain the Suburb F property as part of the final division of assets. The court concluded that ordering the sale of the Suburb F property would prejudice the husband’s relief at trial, and given that there was an alternate source of funds available from the Suburb D property, it was not necessary to order the sale of the Suburb F property. Consequently, the court dismissed the wife’s application for the sale of the Suburb F property.

The court ordered that the Suburb D property be sold in accordance with the wife’s proposed method of sale, and that the proceeds be used to meet the wife’s living expenses. This decision highlights the importance of characterising payments at the interim stage to avoid potential prejudice to a party’s final relief and the necessity of considering the broader context of the case when making interim orders.

Orders

Orders of the court

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Background

Background to the litigation

The husband relies on a financial statement filed 1 July 2022. The husband who acts for himself filed a Response and an updated affidavit on 11 August 2022, the morning the matter was listed for hearing. The husband tendered into evidence various documents dealing with the outgoings in respect of the Suburb F property. I note the wife did not object to the husband’s late filed affidavit.BAckground The background facts relevant to this application include the fact that the parties commenced cohabitation in mid-2008 at which time the wife owned an apartment in Suburb K (subject to a mortgage). After the parties commenced co-habitation the husband purchased the Suburb F property in his sole name with the assistance of a mortgage. In mid-2013 the parties sold the property at Suburb K and applied the proceeds of sale to purchase the Suburb D property in early 2014. As at the time of this hearing that is the residence of the wife and children. The wife has a shortfall between her income and her expenses such that she has difficulty meeting the mortgage payments in respect of the Suburb D property. The husband is residing in the Suburb F property and documents tendered in the proceedings suggest that he has not met all of the mortgage payments as and when they have fallen due but is currently up to date with all of the outgoings. He resists an order for sale of the Suburb F property.the law The parties are at liberty to approach the Court for interim property orders with the awareness that it is ordinarily best that there be one exercise of the s 79 power under the Family Law Act 1975 (Cth) (“the Act”). The wife seeks orders requiring the sale of the properties in order to free up capital to be paid to her to meet her expenses. The question which arises for the Court is how the payment to the wife should be characterised. The wife in her application seeks such payment by way of spouse maintenance. It is therefore necessary to consider the provisions of ss 72 and 75(2) of the Act. If, in considering the provisions of ss 72 and 75(2) of the Act, I find that the statutory requirements for characterisation of payments to the wife as spouse maintenance are not met, then it is necessary to consider the law as it relates to interim property adjustment pursuant to s 79 of the Act. The wife does not have to demonstrate special circumstances in order to seek an interim order for partial property adjustment. However, it is necessary to demonstrate that:(a)Such on order would be just and equitable;(b)Such an order would not prejudice the relief of another party; and(c)There are assets available to satisfy the order. The principles which apply to an application for interim or partial property adjustment are well settled: Strahan & Strahan (2021) 64 Fam LR 89. consideration The parties each sought an order for sale of the Suburb D property. The wife’s minute of order set out the method of sale. The husband’s minute of order was silent on these details but in his oral submissions he accepted that the machinery provisions for sale in the wife’s application were appropriate.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The principles which apply to an application for interim or partial property adjustment are well settled: Strahan & Strahan (2021) 64 Fam LR 89. consideration The parties each sought an order for sale of the Suburb D property. The wife’s minute of order set out the method of sale. The husband’s minute of order was silent on these details but in his oral submissions he accepted that the machinery provisions for sale in the wife’s application were appropriate. The wife seeks an order that she receive $100,000 from the proceeds of sale of the Suburb D property. The wife seeks the proceeds be characterised as spouse maintenance in circumstances where they will be applied to living expenses. The wife’s solicitor conceded in oral submissions that, in the alternative, the wife would be content for the payment to be characterised by the judge at final hearing. This approach – characterisation of the payment at final hearing is not without difficulty. Some matters resolve before final hearing. In other cases a judge of the Court at final hearing is required to consider facts and circumstances which are now historical in nature and have regard to the evidence filed at the time of the interim hearing. Where possible, it is preferable that the judicial officer hearing the interim application, characterise the payment at the time of hearing – that is particularly important because different considerations apply to the making of a spouse maintenance order as opposed to a property adjustment order: Badir & Badir [2022] FedCFamC1A 109. The wife seeks sale of the Suburb F property on the basis that the husband did not apply the rent he received from tenants to the mortgage after separation at a time when he was seeking orders from the Court that obliged him to meet the payment of the mortgage. He says he had applied for and obtained a “hold” on the mortgage payments between December 2020 and September 2021. The wife’s solicitor pointed to the mortgage statements which suggested the bank had charged an enforcement payment fee in respect of the husband’s non-payment. Certainly, the husband had fallen into arrears in respect of the strata levies and water rates since separation and I accept the bank had levied the enforcement fee. The wife also pointed to documents which she said, through her lawyer, evidenced a concern that the husband may be at risk of losing his employment. The husband submitted that that concern was historical (March 2022). I am concerned about the husband’s capacity to meet mortgage payments. The husband’s financial statement demonstrates that his expenses exceed his income. The wife argued that this fact should be persuasive when considering her application that the Suburb F property be sold. The husband wishes to retain the Suburb F property as part of the final division of assets as between the parties. That is a significant consideration on this interim application. If I were to make an order requiring its sale that would have the effect of determining that he not be permitted to retain that property as part of the final adjustment. The order sought by the wife at this interim stage of proceedings prejudices the relief sought by the husband at trial. I accept that this is not necessarily determinative of the outcome of her interim application but it is an important consideration. Given the husband has not opposed the sale of the Suburb D property there is an alternate source of funds to meet the wife’s application for payment of a lump sum. In those circumstances I would need to be convinced that it was necessary to order the sale of the Suburb F property by way of asset preservation. I do not have enough evidence to reach that conclusion.