Pulham and Ridi and Ors

[2011] FamCA 1054

FAMILY COURT OF AUSTRALIA

PULHAM & RIDI AND ORS [2011] FamCA 1054

FAMILY LAW – PROCEDURE

Family Law Act 1975 (Cth)

APPLICANT: Pulham (As Liquidator Of B Pty Ltd Corporation Pty Ltd (In Liquidation)

HUSBAND: Mr Ridi

WIFE: Ms Ridi

INTERVENER: B Pty Ltd (In Liquidation)

INTERVENER: C Bank

FILE NUMBER: MLC 8719 of 2007

DATE DELIVERED: 29 July 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 29 July 2011

REPRESENTATION

THE HUSBAND: In person

SOLICITOR FOR THE WIFE: Mr Hone

Orders

1. That BY CONSENT there be orders in accordance with the minutes of proposed orders marked Exhibit “A” sealed and attached hereto AND IT IS DIRECTED that such minutes remain upon the Court file.

2. That the solicitor for the wife engross the minutes and deliver them by electronic transmission to my Associate within 7 days.

3. That all outstanding applications between the husband and the wife are dismissed.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8719 of 2007

Mr Ridi

Applicant

And

Ms Ridi

Respondent

REASONS FOR JUDGMENT

1. This is a continuation of a long and difficult financial case which, until Monday of this week, involved not only the husband and the wife but also the mortgagee bank, a receiver and a liquidator of a company known as B Pty Ltd.  The long and arduous process effectively came to an end on Monday whereby the parties other than the husband stepped away from the proceedings on a compromised position.  Under that compromised position the liquidator is to have his fees secured over a property at D Street, Suburb E. 

2. That being done it would appear on the face of all of the documents that there was about $400,000 in equity.  The matter was then adjourned to today to see what the husband and wife wanted to do about the remaining property dispute between them.  That remaining property dispute arose because in 2008 consent orders were made and in the orders I made on Monday of this week the parties all consented to those orders being set aside thereby enlivening the jurisdiction of s 79 of the Act.  In a candid discussion this morning there has been common ground reached that D Street, Suburb E is a house, the registered proprietor of which is B Pty Ltd. 

3. The issue, however, was whether B Pty Ltd held that property officially or as the trustee of a family trust.  It would appear that it has owned that property for about six or seven years.  The parties have agreed that B Pty Ltd now and at all times has owned the property in its capacity as the trustee of a family trust called F family trust, the beneficiaries of which are the children of the marriage of the husband and wife.  There are some complications about the resolution of that problem, one of which is that the parties had difficulty working out who would actually controls what happens in that trust because the husband was the appointor. 

4. It has been agreed today that as soon as practicable the husband will appoint one or more of the adult children of the marriage as a trustee or trustees of that family trust and that he will prepare the necessary documents to enable that to be given effect.  I was told that the trust was stamped and properly formed but that no documents had subsequently been prepared which would have given rise to a balance sheet.  There can therefore be no suggestion of money being owed by either of the parties to the trust, at least on the face of their understanding.

5. Today with the consensus that this property is not owned by the parties the only assets they have is a small amount of money and their personal chattels.  They have agreed that the assets in their respective possession will lie where they currently are and the party who does not have possession of those assets will relinquish any interest in those assets.  Because there is an impending bankruptcy for the wife the parties wanted to make clear their respective positions and have asked me to make a declaration under s 78 of the Act that neither of them has any interest in the Suburb E property.  It is their understanding as I have outlined it above that they don’t have that interest and therefore as an abundance of caution they seek that declaration.

6. There has been discussion about the fact that all of these orders may be the subject of scrutiny by the potential creditor of the wife.  I understand that the creditor of the wife is a litigation funder.  Mr Ridi also told me that he has some funding from the same organisation.  It would appear that if the property outside of that family trust is the only property the parties have then nothing that I am about to do by consent will affect the bankruptcy of the wife.  The declaration simply declares what the parties have said and agreed to and on my reasonably good knowledge of all of the matters that had gone on last Monday and in the time leading up to last Monday it would appear probable that the parties’ position is right. 

7. If I am wrong about that then no doubt the trustee of any bankruptcy of the wife will no doubt want that issue scrutinised and the parties are aware of my concern about making orders in the absence of a creditor under s 79.  The creditor will be at liberty obviously to investigate the trust issue and the parties would hope that their position is right.

8. The function of the court in making the declaration is only to trouble itself about what their position is.  Both parties have consensus about that so I have no difficulty in making the declaration under s 78.  Section 79 is a different position and requires the court not to make the order unless it is satisfied that it is just and equitable as between the parties and clearly any potential creditor.  Having regard to the very limited nature of the assets which are otherwise dealt with by these orders under s 79 it is hard to see how the creditor might be offended by that particular part of the order.

9. Effectively what the parties are walking away with is what they currently have.  So to that extent issues of contribution are not a problem and s 75(2) factors are basically irrelevant having regard to the size of that pool of assets.  In the circumstances I have little difficulty in making the order under s 79.  In those circumstances I am satisfied that the order in relation to the property that I am being asked to divide up is a just and equitable outcome for both parties. 

10. In the matter of Ridi I will make orders by consent of the parties in terms of the minutes.  I direct that minute remain as an exhibit and I will ask the solicitor for the wife to engross the minute and email it within seven days.  I will add to that order, but it does not need to be part of the minute, a dismissal of all outstanding applications between the husband and the wife. 

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 29 July 2011.

Associate: 

Date:  11 January 2012