SPINNER & BADER

[2020] FamCA 1089

FAMILY COURT OF AUSTRALIA

SPINNER & BADER [2020] FamCA 1089

FAMILY LAW – PRACTICE AND PROCEDURE – where the wife sought orders pursuant to s 79A(b) and s 79A(c) of the Family Law Act 1975 (Cth) for the variation of final property orders made by consent – where this was opposed by the husband – where this matter has a lengthy and complicated history including a successful appeal – where the wife has not established either of the grounds she relies upon pursuant to s 79A – where the wife’s application is dismissed.

FAMILY LAW – PRACTICE AND PROCEDURE – warrant for possession – where orders had previously been made for a warrant of possession to be issued requiring the wife to vacate the former matrimonial home – where this warrant was stayed pending the delivery of this judgment – where this stay is extended until the end of January to take into account the Christmas period – where the warrant will be executed in the event that the wife fails to provide the husband with vacant possession of the former matrimonial home.

Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 79A, 79

Barder and Barder (1987) 2 All E.R. 440
Cawthorne & Cawthorne (1998) FLC 92-805
La Rocca & La Rocca (1991) FLC 92-222
Re Badische Co. Ltd. (1921) 2 Ch. 331
Rohde and Rohde (1984) FLC 91-592
Taylor v Taylor (1979) FLC 90-674

APPLICANT: Ms Spinner

RESPONDENT: Mr Bader

FILE NUMBER: MLC 6810 of 2015

DATE DELIVERED: 24 December 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATE: 21 – 23 July 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Mellas

SOLICITOR FOR THE APPLICANT: Aitkens Partners Ltd

COUNSEL FOR THE RESPONDENT: Ms Tulloch

SOLICITOR FOR THE RESPONDENT: Davis Zucco Lawyers

Orders

1. The stay of Order 1 of the Orders made by the Court on 6 March 2020 be extended to 31 January 2021 and is thereafter discharged.

2. The wife’s further Amended Application for Final Orders filed 5 June 2020 be otherwise dismissed.

IT IS FURTHER ORDERED

1. All questions of costs be reserved for determination in Chambers.

2. By 4.00 pm on Monday 25 January 2021 the parties file and serve any bullet-point written submissions in support of any application for costs arising out of or incidental to the Amended Application filed 5 June 2020.

3. By 4.00 pm on Monday 15 February 2021 the parties file and serve any bullet-point written submissions in reply to any applications for costs. 

4. Any submissions as to costs should be limited to 10 pages.

5. All extant applications be dismissed and removed from the list of cases awaiting hearing save and except as to any application for costs.

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 Spinner & Bader 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 MELBOURNE

FILE NUMBER: MLC 6810 of 2015

Ms Spinner

Applicant

And

Mr Bader

Respondent

REASONS FOR JUDGMENT

Introduction

1. The parties in this case married in 1984 and separated in late 2014. Following separation the husband commenced proceedings in the Federal Circuit Court of Australia (“the Federal Circuit Court”) seeking orders for property settlement. On 26 August 2016 Judge Wilson (as he was then) made orders by consent (the “final orders”) pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) with the intention of ending the parties financial relationship. Notwithstanding that the court had made final property orders including an order for the sale of the former matrimonial home at Property A, Suburb H (“Property A”) and division of the proceeds, the wife continues to occupy the property with her new husband and the husband in this case is yet to receive his entitlements pursuant to the final orders.

2. Although it was intended by the making of final orders to bring the proceedings to a conclusion that has not happened and since those orders were made there has been a lengthy history of ongoing and complex litigation, including the husband’s successful appeal, focused for the husband’s part upon enforcing the final orders and culminating in the wife’s application to set aside those final orders.  

3. On 18 September 2018 the husband filed an Application in a case, the first of a number of applications for enforcement of the final orders. In that application he sought inter alia an order for vacant possession of Property A to the exclusion of the wife. On 15 November 2018 the wife filed a Response to the Application in a Case seeking inter alia orders providing for her continued occupation of Property A pending its sale and orders with respect to that sale. On 19 November 2018 Judge Wilson made orders that by 5 January 2019 the wife provide the husband with vacant possession of Property A and that the husband have sole possession of the property to the exclusion of the wife for the purposes of sale. This order is extant.

4. The wife did not vacate the property and on 22 February 2019 the husband filed the first of two applications in the Federal Circuit Court seeking the issue of a warrant of possession for Property A. On 1 March 2019 the wife filed an Amended Application in a Case seeking leave pursuant to s 79A of the Act to vary paragraphs 2-3, 5-6, 9 and 12-14 of the final orders and upon leave being granted that Property A be sold and the net proceeds of sale be divided as to 80/20 per centum in her favour instead of 50/50 as per the final property orders. The husband filed a further Application in a Case seeking the issue of a warrant for possession on 16 April 2019.

5. On 21 October 2019 orders were made by consent inter alia dismissing the wife Amended Application in a Case filed 1 March 2019 and she was ordered to file and serve a further Initiating Application in relation to any order she sought pursuant to s 79A of the Act together with an affidavit setting out with particularity the evidence based upon which she said the final property orders should be set aside.

6. On 6 November 2019 the wife filed an Initiating Application and an Affidavit in support of that application as she was ordered to do. In that application the wife sought orders inter alia for the variation of paragraphs 5 and 9 of the final orders pursuant to s 79A(1)(b) and/or (c) of the Act and her case being that Property A be sold that she be entitled to 80 per centum of the net proceeds of sale rather than 50 per centum as per the final property orders. It is that application I am required to determine.

7. On 6 March 2020 having heard his two Applications in a Case I issued a warrant for possession of Property A as sought by the husband. On 31 March 2020 the wife filed a Notice of Appeal against that order. On the basis of the wife withdrawing her appeal I made orders staying the execution of the warrant for possession pending delivery of judgment with respect to the wife’s s 79A application. Although the wife withdrew her appeal in her Amended Application for Final Orders filed 5 June 2020 she once again sought orders that she have sole use and occupation of Property A pending settlement of the sale.

Legal Principles

1. Section 79A of the Act provides as follows:

   FAMILY LAW ACT 1975 - SECT 79A

   Setting aside of orders altering property interests

   (1)Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

   …

   (b) In the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or

   (c)A person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or

   ….

   The court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

2. In Cawthorne & Cawthorne (1998) FLC 92-805 (“Cawthorne”) the Full Court (Ellis, Lindenmayer and Joske JJ) (at [85 053]) dealing with an appeal from the decision of the primary judge to dismiss an application to set aside property orders made by consent on the basis that it was impracticable for those orders to be carried out agreed, subject to one reservation, with the approach taken by Kay J in La Rocca & La Rocca (1991) FLC 92-222 (“La Rocco”) at 78,536 as follows:

   …In those circumstances where the husband is apparently insolvent can it be said that circumstances have arisen since the making of the order making it impracticable for the order to be carried out?  Can it further be said that if such circumstances do exist should the Court exercise its discretion to set aside any part of this order?

   There have been surprisingly few decisions on the meaning of s. 79A(1)(b) since its enactment in 1983. A section with identical import appears in s. 87(8) of the Act in dealing with the circumstances in which the Court ought to revoke the approval of a maintenance agreement. There are, as I understand it, only two reported decisions on either section.

   In Rohde and Rohde (1984) FLC 91-592 Justice Gee examined the meaning of the word ‘impracticable’ and concluded that it was something different from impossible and said at p.79,768:

   (a)  It is not enough that circumstances have arisen since the order was made which make it unjust for the order or part of the order to be carried out; the onus is upon the applicant to establish to the reasonable satisfaction of the Court, that in the circumstances that have arisen it is impracticable for the order or part of the order to be carried out.

   (b) The word ``impracticable'' means gleaning a definition from the Shorter Oxford Dictionary, ``not practicable'', ``that cannot be carried out or done''; ``practicably impossible''; ``unmanageable''; ``intractable''.'

   The section, in my view, is capable of a very narrow application or a very broad application depending upon as best as I can glean it, the intent of Parliament. The section has to be read in an enactment which includes s. 83, that spells out the circumstances in which Parliament thinks it is appropriate to vary orders made under the Family Law Act where a change of circumstances makes it appropriate to no longer require the earlier order to be complied with.

   The Court has a general power in respect of maintenance orders to vary or discharge an order but there should not be a variation unless since the order was made or last varied the circumstances of the person for whose benefit the order was made have so changed, or the circumstances of the person liable to make payments under the order have so changed to justify it in so doing.

   The distinction between the variability of maintenance orders and the variability of property orders was, in my view, one of the underlying bases upon which the Family Law Act was established. Reference is made to that distinction in the report of the Joint Select Committee of the Family Law Act at paragraph 5.90 when citing Mr Justice Murphy in Taylor v Taylor (1979) FLC 90-674 at 78,597 the Committee repeats his Honour's observation:

   `The difference in legislative treatment of property and maintenance orders is due to strong policy considerations in not reopening property orders after time for appeal has elapsed.'''

3. The Full Court in Cawthorne went on to say (at [85-059] as follows:

   …After referring, at some length, to the Joint Select Committee’s report, and to the opinions of text writers and commentators, Kay J at (p.78,538) continued:

   ``My own view is that each of the subsections of s. 79A have to be seen in context. They have to be seen against the comments of Mr Justice Murphy, of the dichotomy between property and maintenance, and of the narrow bases upon which it is said it is appropriate to step away from the permanency of a property order.

   There are four bases set out in s. 79A, three of which are clearly extremely narrow. The first one of miscarriage of justice relates to events at or before the trial. The second one as to default by one of the parties in carrying out their obligations enables an innocent party to come along and say, well, he was ordered to transfer to me the motor vehicle; he has burnt the motor vehicle, I now want something else, because it is unjust and unfair to require me to be left with nothing.

   The third one, the very narrow circumstances of hardship to a child as a result of changed circumstances, and the fourth one is this one which on the face of it is capable of a wide interpretation.

   My own view is that s. 79A(1)(b) should be narrowly interpreted, not to the narrow extremes spoken of by Professors Hardingham and Neave for, indeed, the Family Law Rules themselves now enable the machinery provisions and the times involved in dealing with matters to be altered and in particular, I make reference to Order 3 Rule 3.

   My own view is that the concept of impracticability, as referred to in this section, is akin to the application of the doctrine of frustration in contractual matters. What the Parliament is concerned with and what ought to be concerning the Court is the happening of events which cannot be reasonably foreseen, which will have the effect of causing an injustice to one of the parties if the happening of such events is not given effect to.

   In standard contractual doctrine, I think that is as comfortably as anywhere described by Russell J. in Re Badische Co. Ltd. (1921) 2 Ch. 331 at 379, where his Honour said:

   `The doctrine of dissolution of a contract by the frustration of its commercial object rests on an implication arising from the presumed common intention of the parties. If the supervening events or circumstances are such that it is impossible to hold that reasonable men could have contemplated that event or those circumstances and yet have entered into the bargain expressed in the document, a term should be implied dissolving the contract upon the happening of the event or circumstances.'

   Now, in my view, what the appropriate application of s 79A(1)(b) ought to be is that circumstances that have arisen in which it becomes impracticable to carry out the orders are circumstances that could not reasonably have been contemplated and that in such circumstances, whilst impossibility is not the test and impracticability is, it may then become just and equitable to change the orders.

   The potential insolvency of one of the parties in the future is not such a matter, in my view. In every case before the Court property values may change, go up or down, business may flourish or not flourish, the vicissitudes of life may affect one of the parties.

   In an appropriate case, such as the extreme circumstances described in Barder and Barder (1987) 2 All E.R. 440 in the House of Lords, where the mother killed herself and the children after the making of the order, then appeal out of time and fresh evidence is the appropriate answer. However the commercial failure of one of the parties post the making of the orders which will lead to the orders not being capable of being fully implemented does not, in my view, amount to a basis on which to set the order aside.

   That situation leads to a problem with enforcement. It may be that the bankruptcy laws would have to take over, but it is not an appropriate basis for having orders set aside and fresh orders made at the behest of the party who has suffered the financial embarrassment. There is no provision in the legislation to have matters looked at a second time if one of the parties suddenly becomes wealthy and, in my view, I do not see that the legislation can be appropriately read as applying when one of the parties becomes suddenly poor, in normal business circumstances.'

4. As noted by Kay J there had been “surprisingly few decisions on the meaning of s 79A(1)(b) of the Act since its enactment in 1983” and although that is still the case the principles enunciated in Cawthorne have been consistently applied by the Full Court in the years that followed.

5. I accept as submitted by Counsel for the husband that s 79A(1)(b) and (c) of the Act have different purposes and should not be conflated. Section 79A(1)(b) of the Act being in relation to circumstances which have arisen since the orders were made and s 79A(1)(c) of the Act addressing the conduct of a party in relation to the orders. On that basis the court would need to be satisfied that due to circumstances that have arisen since the final property orders were made that it is impracticable for the orders or part of them to be carried out. Or based upon s 79A(1)(c) of the Act that the husband has defaulted in carrying out his obligations pursuant to the final property orders and that due to circumstances that have arisen as a consequence of that default the court is satisfied that it is just and equitable to set aside or vary the final orders as the wife seeks in this case and if it thinks fit make an order in substitution for the orders set aside. In my view for the reasons which I will address in detail in the course of these reasons the wife has not established either of the grounds upon which she relies.

The Evidence

1. The standard of proof is the balance or probabilities. Section 140 of the Evidence Act1995 (Cth) requires the court in determining whether that standard has been met to take into account:

   a)The nature of the cause of action or defence;

   b)The nature of the subject-matter of the proceedings; and

   c)The gravity of the matters alleged.

2. The wife relied on the following documents in support of her case:

   a)Further Amended Initiating Application filed 5 June 2020;

   b)Affidavit of Ms Spinner filed 14 May 2020; and

   c)Financial Statement filed 13 May 2020.

3. The husband relied on the following documents in support of his case:

   a)Response to Initiating Application filed 5 February 2020;

   b)Affidavit of Mr Bader filed 28 May 2020; and (“Husband’s Affidavit”)

   c)Financial Statement filed 28 May 2020.

4. Both parties sought to rely upon the Affidavit of Mr F filed 23 April 2020 as to the value of “P Business. Mr F was the single expert witness engaged by the husband and wife at the time of the final property proceedings. Mr F was not required for cross-examination. 

5. This matter was heard over a period of three days through Microsoft Teams.

6. The parties in this case agree upon much of the factual background and with respect to those aspects of the evidence it is generally not a matter of which party is to be believed but how that evidence is to be interpreted and the way in which they put their respective cases. That being said in my view the husband was generally a more cogent and considered witness and when there is a dispute between the evidence of the husband and the wife I prefer his evidence. The wife was prone to making bald assertions without any evidence to back them up. The wife also had difficulty making concessions even when faced with documents or other evidence that clearly contradicted her assertions or her case generally.  Her case was to a significant extent founded upon her narrative about the husband and the business rather than evidence in support of her case.  I am also satisfied that the wife avoided answering questions when she recognised that the answer might not assist her case.

7. My observations of the husband’s evidence was that he was doing his best to answer the questions he was asked and although on occasions he had some difficulty doing so he did not appear to be avoiding answering questions. He was generally a much more convincing witness.   

Wife’s Application to rely upon the Flyer:

1. The wife annexed a flyer to her trial Affidavit (Annexure [A-9]) which she said supported her case that the husband’s new business in Suburb K is a continuation of  ‘P Business’ the business he ran in Suburb O during the relationship.

2. The original flyer was written in a foreign language save for the name of the business and the address and it referred to both Suburb O and Suburb K. The husband did not dispute the existence of the flyer and withdrew his objection to the wife relying upon the flyer annexed to her Affidavit. However the wife also deposed at paragraph 54 of her Affidavit to what she said that flyer said in English. The husband objected to that paragraph of the wife’s Affidavit and there being no evidence as to who had translated the flyer or that persons qualifications and Counsel for the wife having conceded that the document had not been properly translated I determined that it was not admissible. However I left open  the possibility of an application being made by the wife to adduce evidence of the translation of the flyer in the event that was able to have it translated by a suitably qualified translator.   

3. At the conclusion of the evidence and prior to the closing submissions Counsel for the wife sought leave to file and rely on an Affidavit by a qualified translator annexing an English translation of the flyer.  Counsel for the husband had been provided with a copy of the Affidavit and both Counsel made submissions as to why I should or should not grant leave to the wife to file and rely upon the Affidavit.

4. Counsel for the wife, whilst acknowledging that the flyer should have been properly translated at the commencement of the hearing, submitted that the evidence of the flyer related to a key issue in the case and that the Court needed to know what it said.  

5. Counsel for the husband opposed the wife being granted leave to file and rely on the Affidavit and submitted as follows:

   ·    That the matter had been listed for final hearing to commence on 1 June 2020 and although it did not proceed on that date the wife was on notice that the husband was objecting to this paragraph of her Affidavit and the basis of that objection;

   ·    That the wife had had ample opportunity to have the flyer properly translated prior to the commencement of the hearing on 21 July 2020; 

   ·    That although the husband had been cross-examined about the untranslated flyer and he had denied having any knowledge or input into the precise wording of the flyer it had not, as no translation had been available,  been put to him in its translated form;

   ·    That if the wife were permitted to rely upon the translation of the flyer there being the possibility of subtle variations in the way language is expressed and translated the husband would for the sake of procedural fairness be entitled to obtain advice as to the accuracy of the translation and to cross-examine the translator or if considered necessary adduce evidence of his own translator; and   

   ·    That any application for an adjournment of the matter due to the late admission of the evidence of its translation would be disproportionate given the relevance of this evidence to the matters the court is required to determine.

6. I accepted Counsel for the husband’s submissions and did not accede to the wife’s application that she be permitted to file and rely upon the translator’s Affidavit. The matter had been listed for hearing before me on 1 June 2020 at which time it was known to the wife that the husband objected to her evidence as to the translation of the flyer. In my view the wife had ample time between 1 June 2020 and the commencement of the final hearing before me to rectify any shortcomings in her evidence had she needed or wanted to do so. There was in effect no explanation given as to why she had not done so. It was as submitted by Counsel for the husband too late. And in my view, and I will address this issue in more detail later in these reasons, the flyer whether translated or not is not as relevant to the matters I must determine as the wife submits.

Relevant Background Facts

1. As previously referred to there was little factual dispute with respect to the history of this matter albeit that the husband and wife interpreted the evidence differently and emphasised different aspects of that evidence. On that basis unless otherwise indicated that evidence as set out in these reasons is to be treated as findings of fact.  

2. The husband was born in 1964 and is 56. The wife was born in 1963 and is 57. The parties were married on … 1984 and separated in 2014. There were no children of their relationship. The wife has remarried and as previously referred to, notwithstanding the various orders, remains in possession of Property A with her new husband. By the time the parties separated the property was unencumbered and it remains so.

3. At the time of the final property proceedings the husband was the sole director of Company C Pty Ltd (“Company C”) and he and the wife each held one of the company’s two issued shares. Company C was the trustee of the M Trust. Company C traded as P Business selling stock from rented premises in Suburb O.

4. The relevant paragraphs of the final orders made by Judge Wilson on 26 August 2016 for the purposes of these proceedings are as follows:

   …

   2.That the real property situate at [Property A, Suburb H] and more particularly described in Certificate of Title Volume:  … Folio:  … (“the real property”) be placed on the market through the agency of a licensed estate agent to be agreed upon by the parties but in default of agreement within seven (7) days of default then through the agency of a licensed estate agent appointed by the President for the time being of the Real Estate Institute of Victoria.

   3.        That –

   (a)the reserve price be agreed upon by the parties but in default of agreement within seven (7) days of appointment of the selling agent then by a valuer appointed by the President for the time being of the Australian Property Institute (Victoria Division) and the parties shall be equally liable in the cost of the appointment and the valuation.

   (b)neither party encumber the real property without the written consent of the other party.

   4.That the parties co-operate in every way with the selling agent, including but not limited to the following:

   (a)                 Making the key available to the agent;

   (b)Making the property available to tradesmen engaged by the agent and or the parties for repairs at reasonable times;

   (c)Not interfering with or hindering in any way the carrying out of repairs;

   (d)Allowing inspection at the property at all reasonable times requested by the agent;

   (e)Not doing or saying anything to hinder or prevent the sale being effected;

   (f)Ensuring that the property, including the grounds, are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and

   (g)Signing all documents requested by the agent in relation to the listing for the sale of the property except a Contract or Agreement of Sale which has not been authorised by the parties’ solicitors.

   5.That any recommendations for works or improvements by the agent be carried out, such works not exceed $5,000.00 and such expense is to be equally paid by the parties.  The parties have liberty to apply with respect to same. 

   6.That the conveyancing of the property be conducted by such conveyancer or solicitor as agreed between the parties and failing agreement by such conveyancer or solicitor appointed by the selling agent.

   7.That until such time as settlement of the sale of the real property has been effected, the Wife have sole use and occupation of the real property.

   8.That the Husband cease to pay the Wife spousal maintenance and all spousal maintenance applications be and are dismissed.

   9.That on settlement of the sale of the real property, funds be paid in priority as follows:

   (a)First to pay all agent’s fees, advertising, commissions, marketing expenses, auction expenses and other conveyance costs and charges incidental to that sale;

   (b)Secondly to discharge all liabilities associated with the property;

   (c)                 Thirdly in payment of:

   (i)50% of the net proceeds to the Husband plus an additional sum as set out in paragraph 11 hereunder;

   (ii)50% of the net proceeds less the additional sum as set out in paragraph 11 hereunder to the Wife.

   10.That the Husband pay to the Wife via bank cheque made payable to her solicitors the sum of $25,000.00 (twenty five thousand dollars only) within seven (7) days of this Order.

   11.      That –

   (a)from this day and up until the settlement of the sale of the real property, the Husband shall pay the outgoings of the real property limited to rates, taxes, gas and electricity, upon receipt of such accounts from the Wife and the Wife shall send such accounts direct to the Husband’s solicitors.

   (b)the payments made by the Husband in subparagraph (a) in respect of gas, electricity and other utilities shall be adjusted against the Wife and be payable to the Husband at settlement of the sale of the real property out of the Wife’s share of the real property.

   12.That the parties do all acts and things and sign all documents (including any guarantees as setout below) in order that the business known as [P Business] conducted by [Company C Pty Ltd] as trustee of the [M Trust], of which all units in the said trust are held by [Q Pty Ltd] as trustee of the [Bader] Family Trust (“the business”) be sold altogether out of Court as soon as practicable, on the following terms:

   (a)At a price to be agreed upon by the parties and if no agreement by the “Broker” as set out below, with the sale conducted by a business broker (“the Broker”) appointed by agreement and if no agreement then appointed by the President for the time being of the Australian Institute of Business Brokers.

   (b)The parties shall do all acts and things and sign all documents including if required personal guarantees in order, with all due diligence, to obtain a renewal of lease on the premises where the business is currently conducted from [R Shopping Centre Suburb O] (“the premises”); such lease to be on reasonable terms with liberty to either party to apply with respect to the renewal of the current lease or otherwise and as to any guarantee that the lessor may seek from one or other party or both and noting that the lessor [S Company] is not required to provide notice of offer of a new lease on or before 3 September 2016.

   (c)Until the sale of the business the Husband and the Wife shall do all acts and things and use their best endeavours to ensure that the business remains profitable, and neither party shall do any act or thing by themselves and or their servants or agents that will diminish the prospects for sale and or the value of the business and or its profitability.   The Husband will make the books, ledgers and other documents available to the Wife for inspection upon reasonable notice through the parties’ lawyers.

   (d)Reserve general liberty to either party to apply to this Court if the terms of any new lease offered require a refurbishment of the premises; the costs of which are to be met by the business and not the lessor or like provision or if no lease is offered.

   (e)That until the sale of the business, the Husband shall continue to conduct the business with all due diligence.

   (f)Reserve general liberty to either party to apply in relation to the sale of the business or the implementation of the sale.

   13.That the proceeds of the sale of the business shall upon settlement of the sale be disbursed as follows:

   (a)To pay all brokerage and selling costs including advertising and commission;

   (b)      To pay any outstanding creditors of the business;

   (c)      To pay Capital Gains Tax (if any) arising upon the sale.

   (d)To pay any Goods and Services Tax payable on behalf of the [M Trust].

   (e)The balance to be paid into the cash account of the M Trust to be distributed to the [Bader] Family Trust or otherwise as advised by the parties’ accountant Messrs. [T Pty Ltd]; [Mr U] (“the accountant”) in the most tax effective a manner and thereafter each party receive one half of the net profit (if any) upon sale of the business and or one half of the net loss if any upon the sale of the business. 

   14.Until the sale and settlement of the sale of the business the parties shall do all acts and things and sign all documents as required in order to ensure that:

   (a)The Wife receives $1,400.00 per week by way of taxable distribution from the business;

   (b)The Husband continues to receive $1,250.00 per week by way of taxable distribution from the business;

   (c)The amounts the Wife receives in 14 (a) and the amounts the Wife has received pursuant to paragraphs two (2) and nine (9) of the Interim Order made 24 November 2015 and any tax paid for the Wife by the business shall be treated as taxable distributions to the Wife. 

   (d)The amounts the Husband receives in 14 (b) and any tax paid for the Husband by the business and has received from the business shall be treated as taxable distributions to the Husband.

   (e)For the end of the financial year 2016, the parties shall, in conjunction with and subject to the advice of the accountant, do all such things and sign all such documents so that the profit of the business (after tax) be distributed to the parties on an equal share basis after taking into account any monies received by either of them in accordance with order 14 (a) to (e).  In the event that either party is required to reimburse the other to equalise the share of the profit then such adjustment be paid firstly from the 2016/2017 financial year distribution of profit or secondly from their respective share of the proceeds of sale of the business or thirdly from the parties’ respective share of the sale proceeds of the real property.

   15.That otherwise the parties shall do all acts and things and sign all documents in order that:

   (a)The Wife file her 2015 taxation return as prepared by the accountant.

   (b)The tax payable on same be met by the business and adjusted as a distribution as set out in these orders.

   (c)The parties file their 2016 taxation return as prepared by the accountant and the tax payable if any on same be adjusted as a distribution as set out in these orders.

   (d)If advised to do so by the accountant, the parties do all acts and things upon the finalisation of the sale of the business and the completion of the final accounts and the payment to the parties of their respective entitlements pursuant to these orders and if so requested by the Husband the Wife will:

   (i) Resign any office held in [Company C Pty Ltd], the [M Trust], [Q Pty Ltd] and the [Bader] Family Trust (“the entities”);

   (ii)Transfer to the Husband any shares she holds; and 

   (iii)Relinquish any claim or claims she may have against any of the entities.

   (e)The Husband shall indemnify the Wife and keep her indemnified in respect of all claims of whatsoever nature arsing in respect of his conduct of any of the entities as and from the date of transfer pursuant to this order. 

5. Despite the sale of Property A and the business being central to the agreement the parties had reached and embodied in the final orders those orders, albeit for different reasons, have not been implemented. The history of the enforcement of the orders in relation to Property A is referred to in detail in my reasons for judgment delivered on 6 March 2020. On that date I made orders for the issue of a warrant for possession of the Property A in favour of the husband. Although the wife withdrew her appeal against that order it was stayed by agreement pending the outcome of the wife’s application to set aside the final orders pursuant to s 79A of the Act.

6. What occurred in relation to the sale of the business is more complex. I am satisfied that at the time the parties consented to the final orders they were both aware, as evidenced by the valuation prepared by Mr F upon which both parties relied for the purposes of the hearing before me and the terms of the final orders themselves that they needed to either renew or obtain a new lease for the business premises and that the lease was the key to the sale of the business.  In particular the orders reserved general liberty to apply if a lease was offered which required the premises to be refurbished at the cost of the business or there was no offer of a lease. In my view whether the lease could be renewed or the parties needed to obtain a new lease is not material to the matters the Court is required to determine.

7. On 9 September 2016 the wife deposes that her then solicitor wrote to the husband’s solicitor enquiring inter alia as to whether “the Lease has been renewed” noting that the Lessor had been due to provide a notice of intention to renew or otherwise state their intention not to renew by 3 September 2016 and requesting copies of any correspondence from or to the Lessor. The wife further deposes that the husband’s solicitor advised by letter dated 12 September 2016 that the landlord had verbally offered to enter into a new lease for 2017.

8. On 7 November 2016 the wife’s solicitor received an email from W Company, the manager of the business premises, in which they advised that they do not automatically renew leases when they expire and that they had that day provided the husband with a proposal based upon which the Lessor would consider a new lease. The husband deposes and I am satisfied having heard his evidence that this proposal was based upon rental of $116,000 per annum plus GST, centre outgoings and a full refurbishment of the business premises to comply with W Company’s guidelines at the expense of the business. By 2017 the rent payable on the existing lease was $72,000 per annum plus GST, a promotion fund contribution of $2,400 plus GST and there was a bank guarantee of $13,898. The proposed lease being significantly more than the business had been paying under the previous lease the husband’s solicitor advised W Company that the rent together with the proposed refurbishment would not be viable for the business. The husband also deposed to his concern about having to increase the bank guarantee to approximately $30,000.

9. On 20 February 2017 W Company wrote to the husband’s solicitor proposing a lease on the following terms (at [40] of the husband’s Affidavit):

   (a)      The commencement date would be 4 March 2017;

   (b)      The term was 5 years;

   (c)      The base rent - $82,000 pa plus GST;

   (d)      The rent to be increased by 5% pa;

   (e)The tenant to pay a promotion contribution of $4,100 pa plus GST (to be increased by 5%pa);

   (f) The tenant to give a bank guarantee equivalent to 3 months base rent, plus promotion contribution plus centre outgoings plus GST, being for an amount including GST of approximately $30,000;

   (g) The tenant to pay a proportion of the centre outgoings estimated to be $22,901 pa plus GST;

   (h)      The tenant to pay the landlord a $2,550 design fee;

   (i)       The tenant to pay a hoardings fee;

   (j) The tenant to undertake substantial renovations and works to improve the property which would have cost well over $50,000 or $60,000 (referred to as "Tenant Works" and also referred to in the Special Conditions).

10. Whilst the rental was lower than the first proposal the husband deposes that on the basis of this proposal the lease would have cost the business  $160,000 in the first year and would have required him to provide a bank guarantee of approximately $30,000. On that basis the husband did not accept W Company’s proposal.

1. The husband further deposes, which is consistent with the letter received from the Lessor, that even if he had signed the Letter of Offer, that letter would be treated as an offer made by the business which the Lessor could either accept or reject and did not guarantee that there would be a new lease. On this basis it was not simply a matter of the husband accepting an offer made by the Lessor.

2. On 9 March 2017 the wife’s solicitor wrote to the husband’s solicitor enquiring as to whether the husband proposed to accept the offer. On 10 March 2017 the husband’s solicitor wrote to the wife’s solicitor advising that prior to renewing the lease he wanted the wife to attend a round table mediation with regard to the “debt owing to business [sic].” The husband deposes that the primary purpose of the proposed mediation was to find a way to fund the bank guarantee which would be required in order for the business to enter into a new lease. Whilst not referred to in the letter from the husband’s solicitor to the wife’s solicitor it is consistent with the reply from the wife’s solicitor on 14 March 2017 in which the solicitor makes it clear that it has always been the husband who has acted as guarantor with respect to past leases and that the wife did not in these circumstances consider any round table discussion necessary.

3. Whilst not referred to by the wife in her trial Affidavit this was not the last of the husband’s efforts to obtain a new lease.  There being no progress on 4 May 2017 W Company sent the business a notice that it would not be renewing the lease. However on 15 May 2017 W Company sent the husband a further Lease Offer which had a base rate of $105,000 per annum and otherwise the same conditions as the previous Letter of Offer. On 29 May 2017 the husband amended the Letter of Offer reducing the base rate to $82,000 per annum, reducing the design review to $1,000 and including a $50,000 limit on the cost of the refurbishments, signed the amended Letter of Offer and returned it to W Company.

4. There were further emails passing between the husband’s solicitor and W Company and on 5 July 2017 the husband’s solicitor sent an email confirming that an agreement had been reached in relation to the key terms, there being an outstanding issue with respect to the timing of the refurbishment. On 11 July 2017 W Company responded agreeing that the refurbishment works would be capped at $50,000, that the husband would have 6 months to complete them but indicating that the base rate of rental had been amended to $88,000 plus GST.

5. On 20 July 2017 the husband’s solicitor wrote to W Company querying why the base rental had been increased to $88,000 plus GST when W Company had already agreed to the husband’s figure of $82,000. Consistent with the husband’s submission that an offer from W Company did not guarantee a new lease they replied as follows (at [50] of the husband’s Affidavit):

   …The offer at $82K was never accepted by the landlord. P Business made an offer to the landlord of $82,000K which is not approved. We have been flexible thus far in the refurbished works to their shop, however we require $88,000 + GST if we are to proceed any further.

6. On 27 July the husband’s solicitor wrote to W Company advising that the business would agree to a base commencement rental of $88,000 on the basis of there being no rental increases for the 2^nd and 3^rd years. On 31 July 2017 W Company advised that the Lessor did not accept the husband’s proposal and that these conditions would not be incorporated in the new lease.

7. On 8 August 2017 the husband offered to pay a base rental of $85,000 plus GST. This was also rejected by the Lessor and on 1 September 2017 W Company advised (at [54] of the husband’s Affidavit) that they “were currently out to market on the site and have interest from other retailers which we are discussing”. They also referred to the possibility of the business relocating to another site in the same centre and that if neither site was suitable the lease would expire on 8 November 2017 and the business would be required to vacate the premises. The husband’s solicitors thereafter wrote to the wife’s solicitors on 4 October 2017 advising that the landlord had not agreed to a new lease and that the business had been given notice to vacate.

8. Notwithstanding that the orders reserved liberty to apply to the parties with respect to the terms of the lease or in the event that a lease could not be obtained the wife did not avail herself of the opportunity and there being no lease the business ceased trading in mid-November 2017. 

Discussion

The Lease

1. It is the wife’s case that the lease could and should have been renewed on reasonable terms and that the husband had chosen not to enter into a new lease thereafter reopening the business in new premises in Suburb K and in doing so avoiding having to pay the wife her share of the proceeds of sale of the business. Both the husband and wife deposed and were cross-examined at length in relation to the steps they had taken or as the wife would say failed to take to comply with the orders for a sale. The husband was also cross examined at length in relation to the business he now conducts in Suburb K.

2. It was the clear intention of the final property orders that the business would be sold. However it was also clear, as demonstrated by Mr F having valued the business on the basis of its net tangible assets in the event that the lease was not renewed or the business could not obtain a new lease, that it might not be possible to sell the business. As previously referred to the final orders provided liberty to apply in the event of there being no offer to renew or enter into a new lease. I am satisfied that, in circumstances where there was no new lease and the business had to vacate the premises and cease trading, there was in effect no business to sell.

3. I am satisfied that the prospect that it might not be possible to renew or obtain a new lease was clearly contemplated by the parties and their legal representatives and the final orders made provision for that very possibility. In these circumstances I do not accept as submitted by the wife that it is impracticable to implement the orders because of circumstances which have arisen since the final orders were made which could not have reasonably been contemplated. I am satisfied that the wife has not established that there is a ground for setting aside the orders on this basis. 

Default

1. The other ground upon which the wife relies is that, the husband having defaulted in carrying out his obligations pursuant to the orders, in that he did not obtain a new lease and thereafter sell the business, circumstances have arisen as a result of his default which should lead the Court to conclude that it is just and equitable to vary or set aside the relevant paragraphs of the final orders. Counsel for the wife submitted that the husband could and should have accepted the Lessor’s last offer, if not an earlier offer.

2. I am satisfied on the balance of probabilities that the husband engaged in bona fide negotiations reaching agreement on various key terms of a new lease and the wife has not adduced any evidence which would suggest otherwise. And that although the negotiations were ongoing, for reasons beyond the husband’s knowledge or control, the Lessor decided to market the premises to other possible tenants and on 1 September 2017 advised that it would not be entering into a new lease. Then on 8 November 2017, giving the business notice to vacate the premises. I am satisfied, the husband having used his best endeavours to obtain a new lease and these matters being beyond his control, there was no default on his part.  

3. I also do not accept as submitted by the wife that the husband notwithstanding the fact that he had to vacate the business premises should have kept the business running in new premises. Even if he could have done so the final orders did not require him to do so.

4. A key element of the wife’s case that the husband had not complied with the order for the sale of the business was her assertion that the husband’s business in Suburb K is the same as the business in Suburb O, operating under a new name and in a new location but using the same distributors and suppliers.  However the husband deposed (at [67] of the husband’s affidavit) in reply to the wife’s assertions  in relation to these issues, that evidence not being the subject of any challenge, as follows:

   …When I was operating [P Business] my main supplier was [Mr V] who trades as "[X Company]". Occasionally I would purchase stock from "[Y Company]", but this would have been less than 25% of the business. On 18 April 2018 I registered a new company "[Z Pty Ltd]", but I took no further steps at that time to commence a new business. In mid-December 2018 I commenced a new business trading as "[C Business]" in [Suburb K]. The new business does not have any funds or stock from [P Business] and is operated at premises in [Suburb K] which are a significant distance from the old premises in [Suburb O]. All funds necessary for me to commence the new new business were provided by a manufacturer, [Mr AA]. He paid my rent on the new business premises for the first 6 months in the sum of $33,000 and I am required to repay that money back to him. The stock that he provides to me is sold by me on consignment. I have a very small amount of stock in the shop from [X Company], this is stock that I have to purchase. At [C Business] I am also selling stock from [BB Company] on consignment only. [P Business] only sold certain stock, [C Business] sells other items. I only have a short term lease for [C Business] which ends a the end of this year. The premises are located on a development site so there is very little prospect that the lease will be renewed.

5. As previously referred to the wife sought to rely upon the contents of a flyer she said the husband had provided to her friend Mr E when he visited the husband’s business in Suburb K. Although for the reasons discussed I did not allow the wife to rely upon her translation of that flyer the untranslated version was in evidence before me and the husband was cross examined at length about its preparation and his part in that preparation. In summary it was his evidence that a friend of 7 or 8 years of Asian origin who worked for him part time when he started the business in Suburb K suggested preparing a brochure and that he left it in her hands. I accept that the husband could not read those parts of the flyer that were not in English, did not understand and had not questioned what it said. Even if the husband was responsible or had a part in the preparation of the flyer it would not in my view have been all that surprising if he had referred to his previous business in an attempt to attract customers to his new business. Nor would he having done so lead me to conclude, having regard to all of the evidence, that the Suburb K business was a continuation of the Suburb O business.    

6. I accept the husband’s evidence and am satisfied on the balance of probabilities that the business the husband now operates is a new business and not a continuation of P Business.

Taxable Distributions

1. It was also part of the wife’s case that the husband had failed to pay her the sum of $1,400.00 per week by way of a taxable distributions from the business pursuant to the final orders and calculated what she says is owed to her on the basis of the husband’s new business in Suburb K being a continuation of the business in Suburb O. I have found with respect to this issue that the business in Suburb O ceased trading in November 2017 and the business in Suburb K being a new business there is no basis for the wife’s claim that the husband should have been making distributions to her pursuant to the final orders.  On this basis the amount owing to the wife would have been at most $1,400 per week from the 7 May 2017, or as she says for the period November 2016 to February 2017 and thereafter from 7 May 2017 when the last payment was made and November 2017 when the business ceased trading.

2. I also note that the orders provided for distributions to the husband of $1250 per week however the husband said in cross-examination, and I accept his evidence, that he stopped paying both the $1,400 and the $1250 because he needed the funds to meet the bank guarantee which was required for a new lease. It was always open to the wife to have issued proceedings to enforce payment of the distributions if as she said the husband was not complying with the orders and she did not do so. As Counsel for the wife acknowledged, in these circumstances, even if the business had had the capacity to distribute $1,400 per week to the wife the husband’s failure to do so would not be a basis for setting aside the orders with respect to the sale of the property and the division of the proceeds as proposed by the wife.  

Conclusion

1. The wife’s case changed many times during the course of the proceedings. This  included that she should retain the former matrimonial home, her being entitled to 80% of the net proceeds of sale and at the commencement of this hearing the orders being varied to give her an entitlement to 75% of the net proceeds of sale.  

2. Even if there were grounds for setting aside the orders, and I am satisfied that is not the case, it is extremely difficult to see how the wife could have sustained such a position even if as Counsel for the wife submitted her case was based upon the $600,000 she asserted the business was worth following the final orders being made. Ultimately Counsel for the wife conceded that there was no evidence supporting the wife’s assertion as to the value of the business and put her case on the basis that she should receive an additional $124,000 plus the $1400 per week for the period 7 May 2017 until 7 May 2020 an amount of approximately $218,400. This is notwithstanding counsel for the wife’s concession that the distributions were an enforcement issue rather than a ground for varying or setting aside the orders. The $124,000 was half of the $321,750 which was the mid-point of the value attributed to the business by Mr F less the $73,000 in the business account that was included in that valuation and was distributed to the parties pursuant to the consent orders made on 19 April 2018 in the Federal Circuit Court. However that valuation was based upon the lease being renewed or the business signing a new lease and in the absence of a lease he valued the net tangible assets of the business at $48,000. Having found that the husband did what he could to renew the lease and that the Lessor’s decision not to renew the lease was beyond his control there could be no basis in my view to treat the business as having a value based upon it having a new lease.

3. Even if the husband could or should have obtained a new lease and sold the business and/or the business had been generating sufficient income to make distributions and he did not do so, the court must be satisfied that it is just and equitable to set aside or vary the final property orders.  Even if the husband had not done what he was required to do the orders required both he and the wife to do all acts and things and sign all documents, including if required providing a personal guarantee, in order, with all due diligence, to renew the lease for the business premises, albeit what was in fact required was a new lease. Apart from instructing her solicitor to make enquiries of the husband’s solicitor as to whether the lease had been renewed there is no evidence that the wife did anything to assist the husband in obtaining a new lease. In fact when the husband proposed a round table meeting to discuss the guarantee required by the Lessor to enter into a new lease the wife’s position, notwithstanding the terms of the final orders, was that the husband had always acted as guarantor and on that basis there was essentially nothing to discuss. I am satisfied on the balance of probabilities based upon the evidence before me that the wife thereafter made no further enquiries as to the progress of the lease negotiations and took no active part in the negotiations. Nor did the wife, as previously referred to, seek to have the matter relisted pursuant to the liberty to apply or file an application for enforcement of the final orders. In these circumstances arguably even if the wife had established that there are grounds for setting aside or varying the orders there would be a strong argument that it would not be just and equitable for the Court to set aside the orders.

4. The court in exercising its discretion to vary or set aside orders must also be mindful of the justice and equity of the outcome for both parties and in this case notwithstanding the final orders the wife has continued to have the benefit of living in the former matrimonial home to the exclusion of the husband who has been deprived of his entitlements since 2016.  Unlike the wife the husband has actively sought to enforce the orders.

5. In all of the circumstances I propose to dismiss the wife’s application pursuant to s 79A of the Act.

The Warrant for possession of Property A:

1. In her Further Amended Application for Final Orders the wife also sought orders that pending settlement of the sale she have the sole use and occupation of Property A and that she have the conduct of the sale. However the wife’s case ignores the fact that there is an order in force made by Judge Wilson on 19 November 2018 that the husband have possession of the property for the purposes of its sale and an order made on 6 March 2020 for the issue of a Warrant of Possession based upon Judge Wilson’s order.

2. Counsel for the wife referred the Court to the wife’s difficult financial circumstances and said that the Court could have confidence that the wife will co-operate with a sale. These were matters that were addressed in the reasons delivered on 6 March 2020 and the wife did not point to any new or further evidence that would give the Court confidence that she will co-operate with the sale and/or vacate the property upon settlement.

3. Although the wife’s financial circumstances may be limited she has had many months in which to prepare for the possibility that she will be required to vacate the property and at the conclusion of the hearing she was urged to start planning for that possibility.

4. The orders made by Judge Wilson on 19 November 2018 and my order for the issue of a warrant for possession remain in force, however as the property is unlikely to be sold over the Christmas holiday period I propose to stay the execution of the warrant of possession until 31 January 2021. If the wife has not already made arrangements for alternative accommodation this should give her the opportunity to do so.

5. Finally I propose to make directions for the filing of bullet point written submissions with respect to costs. 

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered on 24 December 2020.

Associate: 

Date:  24 December 2020