SWAYTE & SWAYTE
[2020] FamCAFC 219
•4 September 2020
FAMILY COURT OF AUSTRALIA
| SWAYTE & SWAYTE | [2020] FamCAFC 219 |
| FAMILY LAW – APPEAL – LEAVE TO APPEAL – Interim property orders – Where the primary judge’s orders provided for the sale of property – Where the applicant husband wished to retain the property – Where the aim of the orders is to preserve the parties’ assets – Where insufficient doubt attends the judgment sought to be challenged – Where no substantial injustice would result if leave is not granted – Application for leave to appeal dismissed. |
| Family Law Act 1975 (Cth) s 94AA |
| Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63 Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34 |
| APPLICANT: | Mr Swayte |
| RESPONDENT: | Ms Swayte |
| FILE NUMBER: | PAC | 633 | of | 2020 |
| APPEAL NUMBER: | EAA | 77 | of | 2020 |
| DATE DELIVERED: | 4 September 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | In Chambers |
| JUDGMENT OF: | Ainslie-Wallace, Ryan & Aldridge JJ |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 5 June 2020 |
| LOWER COURT MNC: | [2020] FamCA 450 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Hodgson |
| SOLICITOR FOR THE APPLICANT: | Kalmath Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Coleman SC with Ms Dart |
| SOLICITOR FOR THE RESPONDENT: | Diamond Conway Lawyers |
Orders
The application for leave to appeal the orders made by a judge of the Family Court of Australia on 5 June 2020 be dismissed.
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 Swayte & Swayte 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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EAA 77 of 2020
File Number: PAC 633 of 2020
| Mr Swayte |
Applicant
And
| Ms Swayte |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for leave to appeal against interim property orders made by a judge of the Family Court of Australia in proceedings between Mr Swayte (“the husband”) and Ms Swayte (“the wife”) (s 94AA of the Family Law Act 1975 (Cth)).
With the consent of the parties, this application is being heard by way of written submissions only. Written submissions were received by the husband on 7 August 2020 and the wife on 17 August 2020. The husband filed written submissions in reply on 24 August 2020.
On 5 June 2020, the primary judge ordered that the wife be appointed trustee for sale of four properties (“the C Town property”, “the Suburb M property” and “two properties at Suburb K”). Ancillary orders were also made to prevent the husband from causing any delays with the sales, including an order that the husband vacate the Suburb M property. The husband now seeks leave to appeal against those orders.
The essence of the husband’s challenges to the orders is that he wishes to retain these properties as part of the final property settlement between the parties and, because he has lived in the Suburb M property for 47 years, it would be onerous for him to have to move out to facilitate its sale. The husband also contends that there is no need to sell the properties as sufficient funds to continue the development of a residential accommodation facility undertaken by the parties could be obtained by further borrowing and that any need for such funds arose from the mismanagement of the project by the wife.
On 14 August 2020, the primary judge stayed the operation of the orders made on 5 June 2020 for the sale of the Suburb M property (Orders 5, 7, 8 and 9) and in lieu thereof, appointed the wife as trustee for sale of a property at Suburb Y (“the Suburb Y property”). Thus, the husband does not now have to move out of the Suburb M property and that aspect of the challenge to his Honour’s orders falls away.
We are informed by counsel for the husband that the two properties at Suburb K were sold on 22 August 2020 and therefore the appeal in relation to those orders is nugatory (husband’s written submissions in reply filed on 24 August 2020, paragraphs 6–7).
Thus, the husband’s application for leave to appeal now concerns only the sale of the C Town property and the Suburb Y property.
Brief background
The following matters emerge from the primary judge’s reasons for judgment and are not challenged in the proposed appeal.
The husband is aged 78 and is working part-time as a healthcare professional. He said that he was presently not in receipt of an income because he has been unable to submit invoices to Medicare since the parties separated in June 2017, as the wife is no longer his bookkeeper. The husband expects to receive a lump sum of approximately $200,000 at some stage, which will be subject to an obligation to pay income tax (at [51]).
The financial affairs of the parties have been substantially controlled by the wife who is presently aged 68, with the assistance of the parties’ son.
The parties’ most significant asset consists of real estate at Suburb F upon which the parties and a company owned by them (“H Pty Ltd”) are constructing a residential accommodation facility.
Development approval for the residential accommodation facility was obtained in April 2010 and provided for the work to be done in three stages. In August 2013, H Pty Ltd entered into a finance facility with Westpac Banking Corporation to fund the development and construction of Stage 1. Difficulties arose with the builder during construction and the parties found it difficult to meet the interest payments and other costs. As such, $230,000 was borrowed from the parties’ daughter and other funds from one of their sons to meet these costs.
In July 2019, the parties’ daughter sold her residential apartment and advanced $202,000 to the parties, which was spent on holding costs and other business interests.
The last unit in Stage 1 was sold in April 2019. The proceeds of sale of all the units (approximately $14 million) have largely been expended and at the time of the hearing before the primary judge, only $377,000 remained in the trust account of the parties’ accountant firm. The wife’s evidence was that there was a monthly deficit of $71,000 which could only be met from that capital sum.
The primary judge noted that the sum of $523,224 was owed to the Australian Taxation Office, the sum of $643,808 was due to be refunded to one of the residential accommodation facility unit owners who had died in January 2019 and land tax was owing in the sum of $40,000, with an estimate that the land tax liability for 2020 would be in the sum of approximately $200,000 (at [39]–[41]).
In addition, it was a condition of the development approval for the residential accommodation facility that road works to the front of the property were improved at a cost of about $1.15 million. This work remains to be done. The local council holds a bank guarantee for completion of those works in the sum of $675,000 which will be released once they are completed.
It was the wife’s case, which was accepted by the primary judge, that the sale of the properties was necessary to maintain the value of Stage 1 of the development and to permit the parties to move to Stage 2.
The wife asserted that the present value of the development was between $15 million and $16 million.
The primary judge found that “[t]he husband for his part proffers no pathway to resolve the ever-growing difficulty of accumulating liabilities except the suggestion the parties borrow even more funds” (at [64]).
His Honour continued:
68.It is clear by reason of the discussion above that the wife has significant likelihood of obtaining orders for substantial property adjustment. She, in the context of this matter, seeks orders that would address the prospect of the diminution of the overall property pool by reason of accumulating liabilities or indeed the prospect of litigation in respect to the various claims and outstanding liabilities asserted by her.
69.In this matter the Court is readily satisfied that the foundational basis for the grant of orders or injunctions as sought by her has been made out.
The application for leave to appeal
It is agreed that the question to be answered is whether or not the decision of the primary judge is attended by sufficient doubt so as to warrant its reconsideration by the Full Court and whether a substantial injustice would occur if leave were not granted, supposing the decision to be wrong (Medlow & Medlow (2016) FLC 93-692 at [57]).
The husband raises the following submissions in support of his challenges to his Honour’s orders:
·The husband has resided continuously in the Suburb M property for 47 years and it would be onerous having regard to his age and possessions to have to leave;
·The wife has controlled all of the family finances and any debts that are owing are due to her mismanagement;
·The husband has “no confidence that [the wife] would ensure that the best price reasonably obtainable” will be obtained (husband’s written submissions filed on 7 August 2020, paragraph 11);
·The “quantum of the net asset pool is such that [the husband] would be able to raise sufficient funds to meet the [wife’s] entitlement to [a] property settlement”, particularly if Stage 2 is completed (husband’s written submissions filed on 7 August 2020, paragraph 24); and
·There are ample assets available so that any issues of distribution can be addressed at the final hearing.
As we have said, the first of these points can be immediately put to one side because of the effect of the orders made by the primary judge on 14 August 2020.
As to the remaining points, the husband did not suggest that the primary judge ignored these matters or that any of the findings outlined above were erroneous. In particular, no error was identified in the primary judge’s findings as to the failure of the husband to suggest a way forward without selling the properties or his ability to raise funds, either now, or in the future.
The challenge therefore can only be as to issues of weight which face a very high bar (Gronow v Gronow (1979) 144 CLR 513 at 519).
In our opinion, the matters relied upon by the primary judge which have been set out above, amply justify the orders that were made. The aim of the orders is to preserve the parties’ assets as best as can be done. Mismanagement of the parties’ affairs by the wife in the past, if it be that, is not a reason for not taking that course. It is also something which can be taken into account at the final hearing.
We are not satisfied that the decision is attended by sufficient doubt so as to warrant its reconsideration by the Full Court.
In the husband’s written submissions in reply to those of the wife, the husband referred to many facts that were not before the primary judge which he says, when taken into account, would weigh strongly against the making of the orders, and foreshadows an Application in an Appeal to adduce further evidence in the appeal, if leave is granted. Some of those facts are said to derive from disclosure given by the wife after the orders were made but this seems to go to the criticisms of the wife’s management of the project. The balance appear to be matters that could have been raised before the primary judge had the appropriate subpoenas or notices to produce been issued. We have accordingly given these new facts little weight.
Further, as two of the properties have now been sold and as the husband is now not required to move out of his home, the Suburb M property, we are not satisfied that any substantial injustice would result if leave is refused.
The husband’s application for leave to appeal will be dismissed.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Ryan & Aldridge JJ) delivered on 4 September 2020.
Associate:
Date: 4 September 2020
1
1