SALEMI & SALEMI

[2020] FamCA 493

FAMILY COURT OF AUSTRALIA

SALEMI & SALEMI [2020] FamCA 493

FAMILY LAW – PROPERTY – Interim distribution – Where the wife seeks payments from joint funds held in a controlled monies account for legal costs and for interim property settlement – Where the parties are yet to fully comply with their obligations as to disclosure – Where the husband concedes that the wife is likely to receive at least $100,000 in the final settlement – Orders for the wife to receive $100,000 by way of interim property settlement – Where the parties agree that the matter has no chance of settling at a conciliation conference – Order made to waive the requirement of the parties attending a conciliation conference prior to final orders being made.  

Family Law Act 1975 (Cth) s 79

APPLICANT: Ms Salemi

RESPONDENT: Mr Salemi

FILE NUMBER: SYC 7491 of 2018

DATE DELIVERED: 12 June 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 12 June 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Todd

SOLICITOR FOR THE APPLICANT: Pigdon Norgate Family Lawyers

RESPONDENT IN PERSON: Mr Salemi

Orders

THE COURT FOUND THAT:

1. Pursuant to s 79(9), having regard to the special circumstances of these proceedings that it is appropriate to make final orders under s 79 notwithstanding that the parties to the proceedings have not attended a conciliation conference with a registrar of the Court.

IT IS ORDERED THAT:

1. The wife’s solicitors, Pigdon Norgate be authorised and directed to make a payment to the wife from the funds held in a controlled monies account operated by that firm in the sum $100,000 as soon as practicable by way interim property settlement.

2. By consent, that within seven days or such further time as the parties might agree on in writing N Legal be directed and authorised by the parties to deposit into a controlled monies account the funds held by them on behalf of the parties pursuant to Order 5 of the Orders of 12 July 2019.

3. If it is not practicable for N Legal to give effect to the authority of the parties pursuant to Order 3. they are requested to pay the funds held by them pursuant to that order to Pigdon Norgate Solicitors as soon as practicable, to be held by the latter firm on behalf of the parties in a controlled monies account to abide further order of the Court.

4. The Court notes that it is asserted on behalf of the wife and conceded to some extent on behalf of the husband that he has yet to provide all of the documents required of him for the purposes of these proceedings including for example, relevant bank statements.

5. The Court notes that in the event that the proceedings come to hearing without the husband having complied with his obligation to provide documents within his possession or control it may be that the Court will make orders sought by the wife on issues related to those records.  The parties are reminded of their obligation to provide disclosure, to provide for example, relevant income tax returns, relevant and requested statements of relevant bank accounts and that those obligations are ongoing.  The parties are advised to quickly comply with their obligations in relation to those documents.  The Court also notes references made in particular to some missing bank statements from those produced by the wife.

6. The question of the costs of and incidental to the proceedings today is reserved and leave is granted to the parties to restore the proceedings to the list before the Honourable Justice Loughnan or if not available before an available judge in relation to that issue on giving seven days’ notice to the Court and each other.

Note:  The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Salemi & Salemi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC7491 of 2018

Ms Salemi

Applicant

And

Mr Salemi

Respondent

REASONS FOR JUDGMENT

1. These are proceedings between the parties for settlement of property.  The proceedings started in November 2018 in the Federal Circuit Court and were transferred to this Court in October 2019.  The parties are Ms Salemi, who I will refer to as “the wife” and Mr Salemi, who I will refer to as “the husband”.  And in the context of those main proceedings, the wife seeks orders in relation to interim costs and certain interim property settlement. 

2. The orders she seeks are at annexure 2 of the case outline document that has been provided to me and to the husband.  Her counsel, Mr Todd advised that the wife does not press orders 2.3 and 2.4 of those orders. 

3. As to the nature of the relief sought by the wife, she seeks a payment of $150,000 by way of interim costs, in respect of her costs and disbursements in these proceedings.  She seeks a further $100,000 but does not identify the basis for that payment. 

4. The wife also seeks that a firm of solicitors, N Legal, who holds $100,000-odd on behalf of the parties, pay those moneys into a controlled monies account and if that is not practicable, that they pay those funds into the controlled monies account held by the wife’s solicitors. 

5. She seeks an order that within 48 hours, the husband provide certain records for his cleaning business to the wife and to the single expert and that he also provide with that time documents that have already been sought. 

6. The wife also seeks that the requirement for a conciliation conference be dispensed with.  Finally and depending on the outcome of the proceedings today, she seeks her costs of these proceedings. 

7. I heard a similar application by the parties in December last year.  In reasons for judgment given then I set out the background facts and the rules and the principles to be applied in such applications.  I note that in that earlier judgment it was accepted that there may be some related issues that needed to be dealt with at a later date.

8. Each of the parties is 47 years of age.  They commenced living together upon their marriage in 1998 and they separated on 28 April 2018.  They have adult children:  Mr L who is 20 years of age and Mr M, 19. 

9. The parties had a property, I think, it might been at Suburb B and it was sold, resulting in net proceeds of about five or six hundred thousand dollars.  On 2 December 2019 I ordered that the net proceeds be held mainly in a controlled moneys account of the wife’s solicitors and the balance in such an account held by solicitors nominated by the husband.  I understand that the latter solicitors are not the husband’s solicitors in these proceedings.

10. In the earlier proceedings I was asked to order that certain debts be paid out of the available funds and I made an order that some moneys be paid out of the funds held by the wife’s solicitors to the Australian Taxation Office.  In that regard, however, I noted that there was an argument to be made at trial about ultimate responsibility for that debt.  I also made an order in relation to some expenses associated with the proceedings.  I made an order about some of the things to do with the single expert.  And I noted that the balance of the application before me would be put over and that has resulted in the proceedings before me today. 

11. The matter was listed for hearing today pursuant to a direction made on 27 May 2020.  I excused the second respondent from attending.  I ordered that the parties provide updated Financial Statements and I noted that neither party intended to file any further affidavit material for this hearing. 

12. On the last occasion, I identified the principles that are applied in interim property proceedings.  The Court has power to make an order for interim property settlement; that is, a distribution of property in advance of a final hearing.  It is the usual expectation that a property settlement will be done once and for all after a final hearing, but the Court has power to make an interim or partial order.  The orders for interim property settlement are made by an exercise of power under s 79.  Because this would be an exercise of power well in advance of a final hearing and because there are, particularly, in this case, many issues that the parties have identified which cannot be resolved, the Court would seek to avoid making an order that cannot be remedied on final hearing.  The Court is to make a conservative exercise of power on a preliminary basis. 

13. The submissions today reveal that there continue to be issues about the draft balance sheet - about the value of G Pty Ltd; about the value of H Pty Ltd that was, at some point, in the wife’s name; and about a property at Suburb E which has the wife on title.  It is the wife’s case that H Pty Ltd and the Suburb E properties were never beneficially owned by her.  The wife says that she and the parties owe money to her brother.  The husband says there is no basis for any borrowings that he was involved in from the wife’s brother.

14. Therefore, much of the balance sheet is in dispute.  The draft balance sheet, itself, shows net assets of nearly $425,000 with a number of “not knowns”.

15. I asked Mr Todd, what would be a conservative estimate of the wife’s claims and he said he thought that she could point to a case whereby she might have 60 per cent of the balance sheet, based on her making an equal contribution over a long marriage and would receive an adjustment in her favour of 10 per cent largely based on the fact that the husband has a good income whereas the wife does not.  The wife is seeking nearly 60 per cent of the draft balance sheet.  The problem is obvious.  The wife’s argument relies on the wife being successful in relation to her arguments about the Suburb E property, about debts that are owed to her brother and about the Suburb E property.  The wife’s application cannot be said to be an conservative exercise of power under s 79. 

16. I asked the husband today whether there was a chance that the wife could receive less than $100,000 out of the available funds, and he said, “No.”  He was rather dismissive in that response, inferring that of course, I should have known that that she would receive, at least, $100,000.  And I suppose, that is, really, what the authorities come to.  The husband is confident about that and I can see the logic of his response. 

17. As to there being a need for legal costs, much of the costs have been incurred already.  The parties agree that they have no chance of settling the matter at a conciliation conference.  Unfortunately the parties’ dispute involves complicated issues but there is likely to be only a modest pool of assets.  The husband reminded me that I suggested to the parties on an earlier occasion that their dispute would never go to trial.  That was said on the basis that with the likely pool of assets, the parties cannot afford a trial.  If the parties were to give full vent to all of the issues they have identified, all of the money that they have could be consumed in the process of deciding how to divide it up.

18. On the positive side, if the husband is able to argue that substantial assets come onto the balance sheet massive amount of additional money comes into the balance sheet, like some part of the Suburb E property, then no harm is done.  There will be plenty of money to go around and the process of a trial may be a justifiable expense.  However, if the parties are right about their main contentions, if the husband is right in relation to his views about the value of the cleaning company he runs, if the wife is right about her beneficial ownership of the Suburb E property or any interest she might have had in a smash repair business and she is right about the monies that are owed by the parties and by her to her brother, then the Court is unable to offer a trial process for getting to a resolution of their property involving a cost that bears any sensible relationship to the value of the property.  The parties would consume most of what they have got left in paying Mr F and lawyers and so on.  I hope it is not the outcome.

19. Base on the concessions made, I will make an order for interim property settlement in favour of the wife in the sum of $100,000.  The finds in question are held by her own solicitors.

20. The parties have won me over as to the utility of a conciliation conference.  And I will formally order that the requirement for a conciliation conference to be conducted prior to a hearing of property settlement proceedings be dispensed with. 

21. As to the funds held by N Legal, the former solicitors for the husband, the husband agrees that the money should be in a controlled monies account.  I will make the order that is proposed on behalf of the wife in relation to that. 

22. The problem with the orders sought in relation to disclosure is that the Court has made those orders on a number of occasions and they are also obligations that are imposed by the Rules of the Court in any event.  The Court cannot just keep making the same order over and over.  I note that it is asserted on behalf of the wife and conceded, to some extent, on behalf of the husband, that he has yet to provide all of the documents required of him for the purposes of these proceedings, including, for example, relevant bank statements. 

23. I will note that in the event that the proceedings come to hearing, without the husband having complied with his obligation to provide documents within his possession or control, it may be that the Court will make orders sought by the wife on issues related to those records.  The parties are reminded of their obligation to provide disclosure, to provide relevant income tax returns, to provide relevant and requested statements of relevant bank accounts and that those obligations are ongoing.  They are encouraged to quickly bring themselves within compliance of their obligations in relation to those documents.  And will I note that reference is made, in particular, to some missing bank statements from those provided by the wife.

I certify that the preceding twenty three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 12 June 2020.

Associate: 

Date:  18 June 2020