Sresbodan and Sresbodan and Ors

[2011] FamCA 592

FAMILY COURT OF AUSTRALIA

SRESBODAN & SRESBODAN AND ORS [2011] FamCA 592

FAMILY LAW – PROPERTY – where an interim stay of the final property proceedings was granted pending the finalisation of the husband’s proceedings in the Full Court – interim property order in favour of the wife – release of funds to the wife and the husband’s trustee in bankruptcy to pay a GST liability – leave granted to two of the husband’s creditors to be joined as parties to the proceedings

Family Law Act 1975 (Cth)
Bankruptcy Act 1966 (Cth)

Kennon & Kennon (1997) FLC 92-757
Strahan & Strahan [2009] FamCAFC 166

APPLICANT: Ms Sresbodan

RESPONDENT: Mr Sresbodan

INTERVENOR: Trustee in Bankruptcy

INTERVENOR: Law Firm D

FILE NUMBER: SYF 4345 of 2006

DATE DELIVERED: 18 July 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 18 July 2011

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Adrian Twigg & Co

SOLICITOR FOR THE RESPONDENT: Litigant in person

SOLICITOR FOR THE TRUSTEE: Watson & Watson

SOLICITOR FOR THE INTERVENOR : D Attorneys 

Orders

1. The solicitors for the wife make a payment to the wife in the sum of $300,000 from the controlled monies account held by them for the parties, such payment to be made within a period of seven days.

2. The solicitors for the wife pay to the Trustee in Bankruptcy for Mr Sresbodan the sum of $670,000 and the Trustee use that money to pay the GST debt to the Australian Tax Office.

3. Mr D and Mr H trading as Law Firm D be joined as parties to these proceedings. 

4. Liberty granted to Mr D and Mr H to relist the matter on 28 days notice in the event they wish to make any further application.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYF 4345 of 2006

Ms Sresbodan

Applicant

And

Mr Sresbodan

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The wife makes an application that she be paid, by way of interim property adjustment, a sum of $300,000.  She also, as part of the order she seeks, would agree to an order being made that the husband also receive $300,000 by way of interim property adjustment.  The husband has indicated to me today that he does not want any such order made in his favour, and given that that is his position, I would not agree to that part of the wife’s application seeking an order in the husband’s favour that he be paid the sum of $300,000.

2. On 27 January 2011 the wife had already had an interim property order made in her favour, so that she received $150,000 from the controlled monies account.

3. In respect of the wife’s new application for an interim property order, it is not a case where any detailed analysis of a likely final result under s 79 Family Law Act 1975 (Cth) is required. The wife has already had a smaller interim property order made in her favour.

4. It is sufficient to say that the parties were married for approximately 40 years.  The husband received monies as a result of an injury payout well into the marriage.  The wife at the final property hearing wants to run an argument based on the principles discussed in the case of Kennon & Kennon (1997) FLC 92-757. Once a division is made based on contributions, any disparity in result may then well have to be the subject of further adjustment pursuant to s 79(4)(d) – (g) Family Law Act 1975 (Cth).

5. The current position in relation to the assets of the parties is that the husband’s Trustee in Bankruptcy currently holds about $1.8 million.  There is a residual fund which is approximately $4.9 million.  There is a claim which I will shortly deal with, relating to GST, which would take $670,000 out of the pool of assets if it was successful, bringing the overall amount down to about $4.3 million.  The wife wants $300,000 in addition to the amount she has already received.  I find that that is clearly within the range of results that she will ultimately receive by way of alteration of property. 

6. The husband has been granted leave to file out of time, an application for leave to appeal orders previously made by me. On the strength of the existence of the proceedings in the Full Court and without any examination of whether there is any realistic chance of the husband’s application and possible appeal succeeding, I granted a stay, pending further order, of the hearing to finalise alteration of property. Mindful of the hardship that might visit on the wife, I indicated on that occasion I would probably be sympathetic to any application the wife made to get some money whilst the husband pursues his belated quest to annul his bankruptcy.

7. I have in mind the principles discussed by the Full Court in the case of Strahan & Strahan [2009] FamCAFC 166. I do not need to find compelling reasons, although I might say in passing that the reasons the wife gives for needing the money are reasonably compelling (see paragraphs 12 to 15 of her affidavit in support of this application as to why she wants some financial independence now).

8. The reason the husband advances for the wife not to receive the money, is his oft repeated claim that he should never have been sent bankrupt and the Suburb K property should not have been sold. This is not a reason why the wife should not be given some money now.

9. In her Reasons of 11 March 2011, Ainslie-Wallace J said at paragraph 16:

   In the course of the procedural hearing on his applications, it appeared to me that the husband accepted that there was no point in either staying or eventually seeking that the order for sale of the property be set aside given that the sale had completed. Certainly the discussions about the matter generally proceeded from that point.

10. Some of his submissions made before me by the husband might indicate he still has a desire to set aside the conveyancing transaction and take back the Suburb K property from the third party purchaser. Her Honour, however, has proceeded on the basis that that is not a matter to be agitated before the Full Court.

11. The husband asserted before Her Honour and subsequently before me, that s 116 of the Bankruptcy Act 1966 (Cth) (“BA”) applied to protect the Suburb K property in his bankruptcy because :

    …in about 1983 he received a lump sum payment of about $250,000.00 in relation to an injury sustained at work.  That money was used to purchase a property in [J Town] for $330,000.  The proceeds of [J Town] were used to purchase the [Suburb K] property.

12. The factual underpinning of that assertion by the husband is very much in dispute and in particular, whether the protected monies from his work injury represented “the whole, or substantially the whole” of the purchase price of Suburb K, so as to attract the provisions of s 116(2) and (3) BA. As I understand it, it is that assertion which will be ventilated in the proceedings before the Full Court. It was on that basis I granted an interim stay of the final property proceedings.

13. There is nothing in anything the husband said that would provide a basis for refusing the wife’s application. I find an order for interim property alteration in the sum of $300,000 should be made in her favour. 

14. I next turn to the application that is made jointly by the trustee and the wife to authorise them to make a payment from the controlled monies account in the sum of $670,000 to the Australian Tax Office.  I have been provided today with a copy of the contract for sale by which the property at Suburb K was sold.  The sale price of the property was $6.7 million.  Special condition 47 in the contract for sale is in the following terms:-

    GST

    Clause 13.2 shall be deleted from this contract notwithstanding any other provision of this contract to the contrary.  The purchasers shall pay at completion (in which time is of the essence) GST of 10 per cent of the purchase price in addition to the purchase price.  The vendor must upon receipt of the payment of GST from the purchaser hand to the purchaser a complying tax invoice.  The provisions of this clause shall not merge on completion.

15. Mr Richardson’s affidavit filed on 14 July 2011 attaches a copy of a payment slip from the Australian Tax Office requiring the payment of the $670,000.  In summary, the husband has opposed the order on the basis that the sale never should have taken place and he was unaware as to how GST might have been written into the contract as payable on top of the purchase price.

16. The requested payment of $670,000 cannot be seen as any reduction in the net pool of assets to which the parties are entitled. The purchaser paid over and above the purchase price specifically for the purposes of satisfying the Australian Tax Office in relation to the payment of GST.  The contract was structured in that way, and that additional amount was provided by the purchasers so that this liability could in fact be attended to.

17. I infer additional fines and penalties will be incurred, if the payment is not made. The husband has not given me any good reason why that amount should not be paid. I will make an order so the payment can be made.

18. Further, I have an application before me today from Mr D and Mr H to be joined as parties to the proceedings pursuant to s 79(10)(a) of the Family Law Act 1975 (Cth). I am informed that Mr D and Mr H are to be parties to the proceedings in the Full Court.

19. The circumstances in which they are seeking to be joined are that I had, in effect, made an order that the debt which they are owed by the husband be paid from the proceeds of the sale of the Suburb K property.  That order has now been stayed pending the Full Court dealing with the husband’s application for leave to appeal certain orders that I have made.  That stay may not be a stay which remains in place permanently.  It will depend very much upon the course and progress of the husband’s proceedings in the Full Court. 

20. The affidavit by Mr D sets out the basis upon which he says Mr H and he are creditors of the husband.  The claim is for the substantial amount of $248,000. The trustee has assessed their claim at $189,000 and Mr D and Mr H are challenging that amount. The husband says no amount is yet payable for the services that Mr D and Mr H provided him because they had agreed to wait to be paid until Suburb K was sold and he seeks to reverse the sale of Suburb K. It is appropriate, given circumstances that Mr D and Mr H are not getting their money because of the interim stay order which I have made, that they be allowed to be parties to the property proceedings so that:

    20.1.They then would have standing to bring their own application, should they believe that the husband is not properly prosecuting his appeal that he has been given leave to prosecute out of time;

    20.2.They would know if the stay was lifted and the matter was proceeding to a hearing; and

    20.3.They might bring any application, at least, for injunctive orders, to secure funds and for payment to themselves once quantum is certain. I have expressed a preliminary view that I would not be involved in assessing the quantum of their claim.

I certify that the preceding twenty (20) paragraphs are a true copy of the ex tempore reasons for judgment of the Honourable Justice Watts delivered on 18 July 2011.

Associate: 

Date:  28.7.2011