Prentice and Maheris

[2008] FamCA 980

FAMILY COURT OF AUSTRALIA

PRENTICE & MAHERIS [2008] FamCA 980

FAMILY LAW – PRACTICE AND PROCEDURE – Interim property and case management orders

Family Law Act 1975 (Cth)

APPLICANT: Mr Prentice

RESPONDENT: Ms Maheris

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 11939 of 2007

DATE DELIVERED: 27 OCTOBER 2008

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 27 OCTOBER 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: IN PERSON

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: MR STRUM

SOLICITOR FOR THE RESPONDENT: TAUSSIG CHERRIE & ASSOCIATES

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: MS SMITH

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: VICTORIA LEGAL AID

ORDERS

IT IS ORDERED:

1. THAT:

   (a)the husband’s application in a case filed 1 October 2008 (save for paragraphs 1 and 2 thereof which are otherwise adjourned to the Judicial Duty List on 5 December 2008) and his response to an application in a case filed 16 October 2008;  and

   (b)the wife’s application in a case filed 25 September 2008 and her response filed by leave this day:

   insofar as they seek only interim/interlocutory financial relief be otherwise adjourned to 28 November 2008 at 10.00 a.m. before Young J.

2. THAT save for the leave first obtained by either of the parties from Registrar Kaur or otherwise from a Judge of this Court no further affidavit material is to be filed by either party pending the adjourned date for hearing of financial issues.

3. THAT on the adjourned hearing date both parties are to present to the Court a concise typed statement of the orders then sought by each of them together with an updated estimate of value and marketing strategy for the sale of the properties owned by one or both of the parties in K and P.

4. THAT until the adjourned date or further order, all rental payable to the husband and the wife by the agent, R Agent (net only of commission) in respect of the real property situate at and known as B Street in P in the State of Victoria (“B Street”) be hereafter paid by the said managing agent directly to the Commonwealth Bank of Australia in repayment of principal and interest (including arrears thereof) for account numbers:

   (a)         …6 (loan);

   (b)         …1 (loan);

   (c)         … (line of credit),

   and no funds be otherwise drawn down from any of the said accounts by either the husband or the wife without the prior written consent of both parties.

5. THAT until the adjourned date or further order neither party grant any lease or licence in respect of the real property situate at and known as … K Road (also known as …A and …B K Road) in K (“K Road”) nor otherwise do anything which would preclude obtaining vacant possession and/or the sale of K Road forthwith if so ordered on the adjourned date.

6. THAT on or before 4.00 p.m. on 5 November 2008, the husband make available for inspection and copying by the wife’s solicitors at their offices at a time agreed between them, all source documents within the categories referred to in such paragraphs (a) to (e) inclusive of paragraph 3 of the orders sought by the wife in her Application in a Case filed 25 September 2008. 

7. THAT liberty to apply upon short notice in writing be reserved to each of the husband and the wife. 

8. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

9. THAT the costs of each party of and incidental to the hearing this day be reserved for determination, if appropriate, on 28 November 2008.

IT IS CERTIFIED

1. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Counsel for the wife.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11939 of 2007

MR PRENTICE

Applicant

And

MS MAHERIS

Respondent

And

INDEPENDENT CHILDREN’S LAWYER

REASONS FOR JUDGMENT

1. The matter of Prentice and Maheris is before me in the judicial duty list.  Mr Strum of counsel appears for the wife, who is in court.  The husband acts for himself, he formally having terminated the services of Ms Leanne Cain, solicitor.  I have earlier dealt with in May orders in relation to the child and parenting matters, and that application is separately being returned in the judicial duty list on 5 December 2008.  I have earlier excused the Independent Children's Lawyer, Ms Smith, and she is therefore not in court when I have been considering in this busy duty list this ongoing property and financial matter.

2. The husband and wife are the registered owners of a property at B Street in P.  This is a retail shop let to a retailer.  The value of that shop is approximately $1.22 million.  The rents received on a calendar‑monthly basis are slightly less than $6,000.  The husband is otherwise the registered proprietor of a property at K Road in K.  Its valuation is said to be approximately $1.25 million, though clearly the real estate market is in some turmoil as a result of the financial crisis now worldwide.  That K Road property is unencumbered; the property is divided into two units.

3. I have been given the very firm impression that it is in a poor standard of repair and needs much renovation and attention.  Currently one of the property divisions is rented at a sum of $150 a week to a Mr S.  The other property is occupied by a friend of the husband's on the basis that he perform some repair and restoration work, and he pays no rent.  The husband has emphasised that this property was acquired many years prior to marriage and the long‑term intention of the husband is said to be to preserve and protect this property so that it might be available for the child, born in November 1999.  That of course may be a situation that is many, many years in the future indeed if it were to occur.

4. The husband and wife have a substantial mortgage debt with the Commonwealth Bank.  There are two mortgages, totalling approximately $865,000.  There is an additional line of credit of approximately $100,000.  As to the mortgages, they are in arrears, seemingly in the sum of approximately $10,000.  The mortgage is met by the payment of the shop rent.  Currently that rental is paid to a personal account of the husband.  I will order that the moneys being paid by the managing agent, R Agent, exclusively in reduction of the Commonwealth mortgage debt after retention only of their commission or other specific property charges that are known and agreed to by both parties.

5. Separately the parties have a modest investment in T Company.  That is in cash and apparently protected from any financial concern.  I intend leaving that sum of money in T Company, pending the adjourned hearing date of the financial aspects of this case, which I will list before me on Friday 28 November at 10.00 a.m.  I emphasise to all parties the matter is not listed for any lengthy defended hearing.  Specifically I intend to have the matter listed that day to ascertain if the mortgage debt has been reduced, if the shop rental moneys are being paid direct to the Commonwealth Bank and otherwise to ascertain the value of K Road and issues of and related to a sale of that property.

6. Currently the husband seeks to sell the shop in B Street.  That is clearly an admission that debt reduction should be a priority for this family.  Mr Strum on behalf of the wife has strongly argued that the B Street shop should be retained, as it returns a positive income to the family and the lack of any income from K Road identifies that property as the ideal property to sell.  Interestingly, and I carefully observe that, both the husband and wife are seeking the sale of a property; the issue is which property.  Neither of them are presenting an argument to the court that no property should be sold.  That would appear a very sensible position, given the extent of the Commonwealth Bank mortgage debt and the cost of repayment thereof.

7. I had initially, but without any concluded view, considered the sale of K Road and Mr Strum, on behalf of his client and without the agreement of the husband, has drawn minutes to effect the orderly sale of that property.  I am more comfortable to require the parties to now obtain an accurate current market appraisal of the property at K Road in K.  It was proposed that a local firm of real estate agents, C Realty, market and sell the property.  They therefore can no doubt prepare a pre-sale report on the property and their recommendations as to the sale thereof.  I require both parties to cooperate in obtaining that document, which must be before the court on the adjourned hearing date.

8. I have directed both parties that the property is not otherwise to be occupied and no lease is to be entered into in respect of that residential property.  It is to remain free and able to be dealt with by the court on the adjourned hearing date.  The court should properly balance any sale application with appropriate caution, understanding that of course once a property is sold, it cannot be recovered.  A debt reduction may be the appropriate outcome, but I have therefore paused in my initial overview of this case to allow the husband appropriate time to further consider the options of sale of K Road, the basis of sale and indeed his opposition to any sale.

9. I have no firm view and it may be, as the husband has highlighted, that much will depend upon further potential interest rate reductions by the Reserve Bank of Australia or other worldwide government action in the next month, given current financial tensions in property. 

10. I must observe that the volume of material filed in this case is oppressive.  The affidavits are voluminous and cumbersome; the annexures are simply extraordinary.  This case presents a relatively straightforward financial adjustment.  I have endeavoured to persuade the husband of the fact that ownership of a property is not absolutely the criteria upon which property is considered or dealt with by the court; all financial aspects of the case, including acquisition, conservation and improvement, are matters of importance.  In any section 79 determination, all section 79(4) and 75(2) factors are and can be relevant and persuasive.

11. To the extent that the husband opposes the sale of K Road because it was acquired by him pre-marriage is perhaps more emotional or tactical rather than dealing within the real world of this court, where all property can be carefully and properly considered as to its history, acquisition and all circumstances.  On balance, and I record in these extempore reasons the fact that on the adjourned date I will balance the competing arguments of the husband and wife and determine what is best for this family if they cannot agree on any interim procedural property steps to be taken to secure and maximise the pool of assets available.  I have no preconceived view, though I am very much of the understanding that each of them want to sell property; they simply cannot agree on what parcel of land is to be sold.

12. That therefore may become the choice of the court.  What I intend to do is therefore to adjourn the wife's application in a case filed 25 September 2008 and the husband's response thereto, which is somewhat unhelpful in that it seeks only the dismissal of that application, to the adjourned date.  I do not intend to receive any further affidavits and the parties are not to file any other document, save with the leave of Registrar Kaur or order of a judge of this court.  I am prepared to receive from the parties on the day a hand-up statement of appraisal of value of the property and/or recommendations for sale, and/or a current description of the properties; and of rental payment on the shop and, of course, an updated statement of the Commonwealth Bank debt.

13. I have therefore indicated the orders that are appropriate and I will have these extempore reasons transcribed, placed upon the court file and made available to both parties.

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate: