Swayte & Swayte (No. 3)

[2021] FamCA 120

FAMILY COURT OF AUSTRALIA

Swayte & Swayte (No. 3) [2021] FamCA 120  

File number(s):	PAC 633 of 2020
Judgment of:	FOSTER J
Date of judgment:	16 March 2021
Catchwords:	FAMILY LAW – PROPERTY – where application for interim property orders – where consideration of applicable principles – where property involves a residential facility requiring completion and future Stage 2 development – where wife asserts there are insufficient funds for such works and development – where a development control order has been issued by the local council – where the wife seeks an order to be appointed as trustee for the sale of certain properties in an endeavour to comply with the development control order and meet ongoing accumulating liabilities– where the wife seeks an order for sale of the W Town property to finance payments in short term – where the state government department may make an application for the appointment of an administrator due to complaints as to administration of the facility – where the husband wishes to retain the facility –where the husband demonstrates no capacity to do so – where orders made as sought by the wife.
Legislation:	Family Law Act 1975 (Cth) s 114
Number of paragraphs:	51
Date of hearing:	18 November 2020 and 27 November 2020
Place:	Parramatta
Counsel for the Applicant:	Mr Coleman SC with him Ms Dart
Solicitor for the Applicant:	Diamond Conway Lawyers
Counsel for the Respondent:	Mr Hodgson
Solicitor for the Respondent:	Kalmath Lawyers

ORDERS

PAC 633 of 2020

BETWEEN:

MS SWAYTE

Applicant

AND:

MR SWAYTE

Respondent

ORDER MADE BY:	FOSTER J
DATE OF ORDER:	16 MARCH 2021

THE COURT ORDERS THAT:

1.The applicant, Ms Swayte (“the applicant”) be appointed Trustee for the sale of property known as D Street, Suburb F, being the whole of the land in Folio Identifier … (“the Suburb F Property”) together with the improvements including plant, equipment and goodwill of the business H Pty Ltd trading as H Company (collectively referred to as the “H Company”) and in that capacity the applicant is authorised to do all acts and things and sign all necessary documents for and on behalf of herself and the respondent, Mr Swayte (“the respondent”) to sell the Suburb F Property and the H Company in which respect the following shall apply:

1.1That Mr BB from EE Company and Mr CC from KK Company be appointed as co-selling agents.

1.2That the solicitors DD Lawyers be appointed to act upon the sale.

1.3That the H Company be offered for sale by expressions of public interest (“the public offering”).

1.4That subject to Orders 6, 7 and 8 below the applicant accept the highest offer received from the public offering.

1.5That the applicant for and on behalf of the respondent have sole authority to conduct the sale through the shared electronic workspace in accordance with the Electronic Conveyancing (Adoption of National Law) Act 2012 (NSW).

2.The net proceeds of sale of the H Company be applied in the following order, manner and priority:

2.1To pay any outstanding liabilities (including any penalties and interest) owed to the Australian Tax Office by the H Company.

2.2To pay any Capital Gains Tax liability arising from the sale of the H Company.

2.3To pay any land tax owing with respect to the Suburb F Property.

2.4To complete any rectification work required with respect to the H Company, including but not limited to rectification work required to be undertaken with respect to individual units and/or villas subject to a Contract of Sale of the H Company.

2.5To discharge any liability, if applicable, owing to the estate of the late Ms NN or to Mr & Ms QQ.

2.6To pay Ms MM $446,950.

2.7Any balance to be held in a controlled monies account operated by the applicant on behalf of the parties and to pay for all legal and accounting fees outstanding as at the date of settlement of the H Company.

3.Pending completion of the sale of the H Company as provided in Order 1, the applicant be appointed and authorised to solely manage the day-to-day operation of the H Company, to the exclusion of the respondent, including but not limited to:

3.1Dealing with, and addressing, all complaints relating to H Company.

3.2Being authorised to solely sign such documents as is necessary to issue new lease(s) and/or authorise the surrender of any existing leases in circumstances where new residents enter the residential facility and/or existing residents leave.

3.3Authorising any rectification work required to be undertaken.

3.4Being authorised to enter into a Deed with the PP Council to carry out the roadworks necessary to comply with the development approval issued.

3.5Providing sole authorisation to draw upon the $675,000 bond held by the PP Council.

3.6Being authorised to give such permissions and authorisations as is necessary to enable the PP Council to lodge a caveat over the Suburb F Property to give effect to the Council’s requirements to release the monies held by Council as part of the guarantee to complete the roadworks.

3.7To pay all liabilities and general expenses of the H Company as and when they fall due.

4.The applicant have sole authority to give instructions to solicitors for and on behalf of the applicant and respondent in proceedings in the Land and Environment Court bearing Case Number … with authority to sign for and on behalf of the applicant and respondent any settlement of the Land and Environment proceedings including giving effect to such settlement and/or orders made by the Land and Environment Court.

5.Pursuant to s 114 of the Family Law Act 1975 (Cth) (“the Act”), the respondent be and hereby is, restrained by injunction from:

5.1Attending or otherwise entering the H Company premises.

5.2Doing any act or thing so as to interfere with the ordinary operation of the H Company.

6.The applicant to provide the respondent with not less than 14 days’ notice of her intention to exchange contracts for the sale of the Suburb F Property and H Company, such notice to include the proposed sale price.

7.If at any time prior to the exchange of contract for sale with a third party pursuant to Order 1 herein, the respondent produces evidence of unconditional finance in the sum equivalent to the highest amount offered in accordance with Order 1.4, then the parties will forthwith enter into an unconditional contract for the sale of the Suburb F Property and H Company to the respondent in the form or forms approved by the Law Society of NSW as at the date of exchange.

8.In the event that prior to the completion of the public offer, the respondent tenders proof of capacity to acquire the Suburb F Property and H Company pursuant to these Orders and the acquisition prices offered by him represents an amount which in the opinion of the marketing agents represents the market value of the real property and H Company, the parties shall forthwith enter into unconditional contracts for sale for the sale of the Suburb F Property and H Company to the respondent in the form or forms approved by the Law Society of NSW as at the date of exchange.

Sale of the W Town property

9.The applicant be appointed as trustee for sale of the property at V Street, W Town being the land more properly described as Folio Identifier … (“the W Town property”) for the best price reasonably obtainable and for such purpose the property shall vest in the applicant as trustee for sale and that upon the sale the net proceeds of sale after agent’s commission, legal costs on sale, contract adjustments, reasonable costs of preparing the property for sale be paid into the controlled monies account established in the name of the applicant’s solicitor and that the applicant be authorised to utilise such funds in the ordinary course of the parties’ business to meet property outgoings including mortgage payments, accrued liabilities and other payments necessary for the orderly conduct of the residential accommodation business conducted at D Street, Suburb F trading as “H Company” pending sale and the parties’ affairs.

10.In addition to the above, the applicant shall do all acts and things necessary to pay to the respondent and to herself the sum of $150,000 each from the proceeds of sale of the W Town property with the classification of such sum to be reserved to the final trial.

11.Pending further Order, the Wife shall have sole use and occupation of the W Town property for the purposes of sale and the respondent is restrained from attending at or entering upon the said property without the express consent of the applicant and only for such purposes as she may permit.

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

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 17.02 Family Law Rules 2004 (Cth).

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).

REASONS FOR JUDGMENT

FOSTER J:

1. In ongoing property proceedings as between the primary applicant wife and the primary respondent husband the Court heard proceedings seeking interlocutory relief on 11 May 2020.

2. On 5 June 2020 judgment was delivered and orders were made in the following terms:

   Orders, Pending Further Order:

   (1)That the wife be appointed trustee for sale of the property situate at B Street, C Town (“The C Town property”) for the best price reasonably obtainable and for such purpose the property shall vest in the wife as trustee for sale and that upon sale the net proceeds of sale after agent’s commission, legal costs on sale, contract adjustments, reasonable costs of preparing the property for sale and discharge of mortgage be paid to a controlled monies account in the name of the wife’s solicitor and that the wife be authorised to utilise such funds in the ordinary course of the parties’ business to meet property outgoings including mortgage payments, accrued liabilities and other payments necessary for the orderly conduct of the residential accommodation facility (“the facility”) conducted at D Street, Suburb F trading as “H Company” and the parties affairs.

   (2)That pending further order the wife shall have sole use and occupation of the property at B Street, C Town for the purposes of sale and the husband is restrained from attending at or entering upon the said property without the express consent of the wife and only for such purposes as she may permit.

   (3)That the wife be appointed trustee for sale of the properties situate at 1 and 2 J Street, Suburb K for the best price reasonably obtainable and for such purpose the properties shall vest in the wife as trustee for sale and that upon sale the net proceeds of sale after agent’s commission, legal costs on sale, contract adjustments, reasonable costs of preparing the property for sale and discharge of mortgage be paid to a controlled monies account in the name of the wife’s solicitor and that the wife be authorised to utilise such funds in the ordinary course of the parties’ business to meet property outgoings including mortgage payments, accrued liabilities and other payments necessary for the orderly conduct of the facility conducted at D Street, Suburb F trading as “H Company” and the parties affairs.

   (4)That pending further order, the wife shall have sole use and occupation of the properties at 1 and 2 J Street, Suburb K for the purposes of sale and the husband is restrained from attending at or entering upon the said property without the express consent of the wife and only for such purposes as she may expressly permit.

   (5)That the wife do all things necessary to sell the property situate at L Street, Suburb M (“the Suburb M property”) for the best price reasonably obtainable and that upon sale the net proceeds of sale after agent’s commission, legal costs on sale, contract adjustments, reasonable costs of preparing the property for sale and discharge of mortgage be paid to a controlled monies account in the name of the wife’s solicitor and that the wife be authorised to utilise such funds in the ordinary course of the parties’ business to meet property outgoings including mortgage payments, accrued liabilities and other payments necessary for the orderly conduct of the facility conducted at D Street, Suburb F trading as “H Company” and the parties affairs.

   (6)That the wife shall provide to the husband by the last day of each month an accounting of funds used by her for the purposes permitted above.

   (7)That the husband shall vacate the said property at L Street, Suburb M within seven days from the date of these orders and that thereafter the wife shall have sole use and occupation of the property for the purposes of sale and the husband is restrained from attending at or entering upon the said property without the express consent of the wife and only for such purposes as she may expressly permit.

   (8)That the wife do all things necessary to remove and store furniture, furnishings, effects and antiques situate at the Suburb M property to storage facilities selected by her with the wife to pay storage fees as and when they become due and payable.

   (9)That pending further order the husband be restrained from doing any act or thing such as to remove any of the Suburb M property contents other than his personal effects without prior court order or written approval of the wife.

   (10)That notwithstanding the previous orders the wife shall do all things necessary to pay to the husband and to herself the sum of $100,000 each from the proceeds of sale of the first property sold with the classification of such sums to be reserved to final trial.

   (11)Liberty to apply as to implementation or enforcement.

   (12)The husband’s application for spouse maintenance be dismissed.

3. Subsequent to Orders made 5 June 2020 the husband appealed those Orders to the Full Court of the Family Court of Australia.  On 16 July 2020, pending determination of the husband’s application for stay of the Orders made 5 June 2020, pending determination of his appeal, Orders made 5 June 2020 were suspended pending further order.

4. On 14 August 2020 reasons for judgment and Orders were made in respect to the husband’s application for stay.  Orders were made in the following terms:

   1.That Orders 5, 7, 8 and 9 made 5 June 2020 be stayed subject to the following conditions:

   (a)

   (a)That the wife do all things necessary to sell the property at X Street, Suburb Y (“the Suburb Y property”) for the best price reasonably obtainable. Upon sale the net proceeds of sale after agent’s fees and commission, legal costs on sale, contract adjustments, reasonable costs of preparing the property for sale and discharge of mortgage be paid to a controlled monies account in the name of the wife’s solicitor and that the wife be authorised to utilise such funds in the ordinary course of the parties’ business to meet property outgoings including mortgage payments, accrued liabilities, other payments necessary for the orderly conduct of the residential accommodation facility business conducted at D Street, Suburb F trading as “H Company” and the parties’ affairs;

   (b)That the wife be appointed trustee for sale of the Suburb Y property for the best price reasonably obtainable and for such purpose the property be vested in the wife as trustee for sale;

   (c)That the husband shall vacate the Suburb Y property within seven days of the date of these orders and thereafter the wife have sole use and occupation of the property for the purposes of sale and the husband is restrained from attending at or entering onto the said property without the consent of the wife and only for such periods as she may expressly permit; and

   (d)That the wife do all things necessary to remove and store all furniture, furnishings, effects and antiques situate at the Suburb Y property to a storage facility nominated by her with the wife to pay the storage fees as and when they become due and payable from the controlled money account provided for above.

   (2)That costs of and incidental to the stay application be reserved to final hearing or agreement.

5. On 4 September 2020 the husband’s application for leave to appeal the interlocutory orders made 5 June 2020 was dismissed.

6. Meanwhile, on 10 July 2020, the wife filed a further Application in a Case seeking interlocutory financial orders. In summary, in that further Application in a Case the wife sought to be appointed trustee for sale of the real estate property known as D Street, Suburb F, New South Wales together with the improvements thereon and the business trading as H Company on certain terms and conditions. The wife sought orders that the net proceeds of sale be disbursed in the following order and priority:

   (a)In payment of outstanding liabilities owed to the Australian Taxation Office by the H Company including penalties and interest.

   (b)In payment of any capital gains tax liability arising from the sale of the Village.

   (c)In payment of outstanding land tax owing in respect of the property D Street, Suburb F.

   (d)To complete any rectification work required with respect to the village including but not limited to rectification work required to be undertaken with respect to individual units and/or villas subject to contract for sale.

   (e)To discharge any liability owing to the estate of the late Ms NN or to Mr and Ms QQ in respect to their Villa.

   (f)To pay Ms MM $446,950.

   (g)In payment of the balance then remaining to a controlled monies account and to pay for all legal and accounting fees outstanding as at the date of settlement of the sale of the village.

7. Otherwise, the wife sought orders that facilitated her being appointed to solely manage the day-to-day operations of the village pending sale.

8. On 7 August 2020 the husband filed a Response to the wife’s Application in a Case in effect simply seeking its dismissal and an order that the wife pay his costs of and incidental to the application.

9. On 2 October 2020 the wife’s interim application was listed for judicial case management.  The following orders and directions were made:

   1.The applicant wife file and serve any further affidavit material to be relied upon by her by no later than Friday, 23 October 2020.

   2.The respondent husband file and serve any further affidavit material to be relied upon by him by no later than Friday, 13 November 2020.

   3.The applicant wife file and serve a short outline of case and outline of submissions relied upon in support of orders sought by her by no later than Tuesday, 17 November 2020.

   4.The respondent husband file and serve a short outline of case and outline of submissions relied upon in support of orders sought by him by no later than Tuesday, 17 November 2020.

   5.The interim application is adjourned for hearing to 10.30 am on Wednesday, 18 November 2020.

10. The applicant wife file an Amended Application in a Case on 30 October 2020 that sought the following orders:

    1.That the applicant, Ms Swayte (“the applicant”) be appointed Trustee for the sale of property known as D Street, Suburb F, being the whole of the land in Folio Identifier … (“the Suburb F Property”) together with the improvements including plan, equipment and goodwill of the business trading as H Company (collectively referred to as the “H Company”) and in that capacity the applicant is authorised to do all acts and things and sign all necessary documents for and on behalf of herself and the respondent Mr Swayte (“the respondent”) to sell the Suburb F Property and the H Company in which respect the following shall apply:

    1.1That Mr BB from EE Company and Mr CC from KK Company be appointed as co-selling agents;

    1.2      That the solicitors DD Lawyers be appointed to act upon the sale;

    1.3That the H Company be offered for sale by expressions of public interest (“the public offering”).

    1.4That subject to Orders 6, 7 and 8 below the applicant accept the highest offer received from the public offering.

    1.5That the applicant for and on behalf of the respondent have sole authority to conduct the sale through the shared electronic workspace in accordance with the Electronic Conveyancing (Adoption of National Law) Act 2012 (NSW).

    2.That the net proceeds from sale of the H Company be applied in the following order, manner and priority:

    2.1To pay any outstanding liabilities (including any penalties and interest) owed to the Australian Tax Office by the H Company;

    2.2To pay any Capital Gains Tax liability arising from the sale of the H Company;

    2.3      To pay any land tax owing with respect to the Suburb F Property;

    2.4To complete any rectification work required with respect to the H Company, including but not limited to rectification work required to be undertaken with respect to individual units and/or villas subject to Contract of Sale of the H Company;

    2.5To discharge any liability if applicable owing to the estate of the late Ms NN or to Mr and Ms QQ;

    2.6      To pay Ms MM $446,950;

    2.7Any balance to be held in a controlled monies account operated by the applicant on behalf of the parties and to pay for all legal and accounting fees outstanding as at the date of settlement of the H Company.

    3.That pending completion of the sale of the H Company as provided in Order 1, the applicant be appointed and authorised to solely manage the day-to-day operation of the H Company, to the exclusion of the respondent, including but not limited to:

    3.1Dealing with, and addressing, all complaints relating to H Company;

    3.2Being authorised to solely sign such documents as it necessary to issue new lease(s) and/or authorise the surrender of any existing leases in circumstances where new residents enter the residential facility and/or existing residents leave;

    3.3      Authorising any rectification work required to be undertaken;

    3.4Being authorises to enter into a Deed with the PP Council to carry out the roadworks necessary to comply with the development approval issued;

    3.5Providing sole authorisation to draw upon the $675,000 bond held by the PP Council;

    3.6Being authorised to give such permissions and authorisations as is necessary to enable the PP Council to lodge a caveat over the Suburb F property to give effect to the Council’s requirements to release the monies held by Council as part of the guarantee to complete the roadworks;

    3.7To pay all liabilities and general expenses of the H Company as and when they fall due.

    4.That the applicant have sole authority to give instructions to solicitors for and on behalf of the applicant and respondent in proceedings in the Land and Environment Court bearing Case Number … with authority to sign for and on behalf of the applicant and respondent any settlement of the Land and Environment proceedings including giving effect to such settlement and/or orders made by the Land and Environment Court.

    5.That pursuant to s 114, the respondent be and herby is, restrained by injunction from:

    5.1Attending or otherwise entering the H Company premises;

    5.2Doing any act or thing so as to interfere with the ordinary operation of the H Company.

    6.That the applicant to provide the respondent with not less than 14 days’ notice of her intention to exchange contracts for the sale of the Suburb F Property and H Company, such notice to include the proposed sale price.

    7.That if at any time prior to the exchange of contract for sale with a 3rd party pursuant to Order 1 herein, the respondent produced evidence of unconditional finance in the sum equivalent to the highest amount offered in accordance with Order 1.4, then the parties will forthwith enter into an unconditional contract for the sale of the Suburb F Property and H Company to the respondent in the form or forms approved by the Law Society of NSW as at the date of exchange.

    8.That in the event that prior to the completion of the public offer, the respondent tenders proof of capacity to acquire the Suburb F Property and H Company pursuant to these Orders and the acquisition prices offered by him represents an amount which in the opinion of the marketing agents represents the market value of the real property and H Company, the parties shall forthwith enter into unconditional contracts for sale the sale of the Suburb F Property and H Company to the respondent in the form or forms approved by the Law Society of NSW as at the date of exchange.

    Sale of the W Town property

    9.That the applicant be appointed as trustee for sale of the property at V Street, W Town being the land more properly described as Folio Identifier … (“the W Town property”) for the best price reasonably obtainable and for such purpose the property shall vest in the applicant as trustee for sale and that upon the sale the net proceeds of sale after agent’s commission, legal costs on sale, contract adjustments, reasonable costs of preparing the property for sale be paid into the controlled monies account established in the name of the applicant’s solicitor and that the applicant be authorised to utilise such funds in the ordinary course of the parties’ business to meet property outgoings including mortgage payments, accrued liabilities and other payments necessary for the orderly conduct of the residential facility business conducted at D Street, Suburb F trading as “H Company” and the parties affairs.

    10.That in addition to the above, the applicant shall do all acts and things necessary to pay to the respondent and to herself the sum of $150,000 each from the proceeds of sale of the W Town property with the classification of such sum to be reserved to the final trial.

    11.That pending further Order, the Wife shall have sole use and occupation of the W Town property for the purposes of sale and the respondent is restrained from attend at or entering upon the said property without the express consent of the applicant and only for such purposes as she may permit.

1. On 18 November 2020 the Application in a Case came on for hearing. The matter was not ready to proceed and relevantly the following Orders and directions were made:

   2.The applicant wife’s Application in a Case filed 10 July 2020 as amended by the Amended Application in a Case filed 30 October 2020 and the husband’s Response thereto be adjourned for further hearing on a part-heard basis to 10.00 am on Friday, 27 November 2020.

   3.Due to the ongoing situation with the coronavirus (COVID-19), attendance in person is not required, but you are required to attend by telephone via AAPT telelink at the part heard hearing listing before Justice Foster on Friday, 27 November 2020 at 10.00 am.

2. On 26 November 2020 the husband filed a Response to the wife’s Amended Application in a Case, in summary, seeking the following orders:

   (a)That the wife’s application for the sale of the property 20 D Street, Suburb F with the improvements and business conducted thereon known as the H Company be dismissed.

   (b)That the wife’s application for sale of the real estate property known as to V Street, W Town be dismissed.

   (c)That Orders made 14 August 2020 as to the sale of the property at X Street, Suburb Y be discharged.

   (d)That the husband and wife in their capacity as directors of Q Pty Ltd do all things necessary to cause the property known as Z Street, Suburb AA to be sold and that the proceeds of sale be applied in the following manner and priority:

   (i)To discharge any existing liability, if applicable, owed to Ms RR in respect of units six of the H Company facility.

   (ii)To pay any outstanding liabilities including penalties and interest owed to the Australian taxation office by the H Company and/or the parties.

   (iii)To pay any land tax owing in respect to the Suburb F Property and any other property owned or controlled by the parties or their corporate entities, to complete any rectification work required with respect to the H Company including but not limited to rectification required to be undertaken with respect to any individual units and/or villas contained within the village.

   (iv)To discharge any existing liability, if applicable, owed to the estate of the late Ms NN in respect of unit 5 in the H Facility and Mr QQ and Ms QQ in respect of villa 7 in the H Facility.

   (v)To pay each of the husband and wife the sum of $150,000 by way of partial property settlement/interim costs the nature of such payment to be characterised by the trial Judge at final hearing.

   (vi)That the balance of net proceeds of sale be utilised in the ordinary course of the parties’ business to meet outgoings including mortgage payments, accrued liabilities and other payments necessary for the orderly conduct of the H Company and the parties’ financial affairs.

   (vii)That in order to facilitate the previous order the parties do all acts and things necessary to cause SS Company to provide each of the parties’ solicitors each month in advance a budget setting out the anticipated total monthly expenditure necessary to meet the business expenses of the H Company and outgoings relating to the parties’ financial affairs, and authorise their respective solicitors to pay the amount of such anticipated total monthly expenditure within seven days to SS Company from those monies held in a controlled monies account in the names of the solicitors for each of the husband and wife.

   (e)That the orders sought in the wife’s Amended Application in a Case pertaining to Land and Environment Court proceedings be dismissed.

   (f)That the husband have sole authority to provide instructions to solicitors acting on behalf of the parties in the proceedings in the Land and Environment Court as well as authority to sign for and on behalf of the parties any consent orders to effect any settlement reached with the PP Council in relation to the Land and Environment Court Proceedings, and to implement any consent orders or orders which may otherwise be made by the Land and Environment Court.

   (g)That within seven days the husband and wife do all things necessary and sign all necessary documents to enable the requisite work required by the PP Council to be commenced and carried out of the H Company facility and instruct TT Services to carry out and complete such rectification work upon the basis of the quotation provided and not exceeding $105,050 including GST.

   (h)That the husband and wife forthwith do all acts and things and sign and execute all documents necessary to authorise an amount not exceeding $105,050 to be released to the husband from the $675,000 bond presently held by the PP Council to enable him to provide for payment of the rectification work to be carried out at the H Company facility as referred to above.

   (i)That order 3 as sought in the wife’s Amended Application in a Case pertaining to the wife having sole control to manage the day-to-day operations of the H Company facility to the exclusion of the husband be dismissed.

   (j)That order 5 as sought in the wife’s Amended Application in a Case seeking to restrain the husband from attending or otherwise entering the H Company facility and doing any act or thing so as to interfere with the operation of the H Company facility be dismissed.

   (k)That within seven days the husband and wife do all acts and things and sign all documents necessary to appoint a single expert valuer to conduct the valuation of the improvements including plant, equipment and goodwill of the H Company facility.

   (l)That within seven days the husband and wife do all acts and things necessary to appoint a single expert accountant to conduct a forensic investigation in respect of the operation and management of the H Company facility from the completion of stage I of the building project in 2016 to date.

   (m)That the wife, her servants or agents be restrained from doing any act or thing to further encumber the following properties:

   (i)the property situated at R Street, Suburb S;

   (ii)the property situate at L Street, Suburb M;

   (iii)the property situate at X Street, Suburb Y;

   (iv)the property situate at Z Street, Suburb AA;

   (v)the property situate at  D Street, Suburb F;

   (vi)the property situate at V Street, W Town;

   without first providing the husband 28 days’ notice of any intention to do so prior to effecting such intention.

3. On 27 November 2020 the Application in a Case was heard and judgment was reserved.

4. The background to the parties’ relationship was considered in reasons for judgment delivered 5 June 2020 as follows:

   Context

   7.        The wife is presently aged 68 and the husband aged 78.

   8.The husband is a self-employed healthcare professional operating his business from the wife’s real estate property at R Street, Suburb S.

   9.The parties married in 1973. At the time of marriage the wife was aged 21 and the husband aged 31. Following a marriage of some 44 years the parties separated in late June 2017.

   10.At the time of separation the wife left the former matrimonial home being the Suburb M property. She asserts that throughout the marriage the husband had been physically and verbally abusive to her and at the time of separation she was fearful of her personal safety by reason of the husband’s conduct.

   11.      There are six children of the parties’ relationship, all are now adults.

   12.Over the period of the parties’ marriage the parties have accrued a significant property portfolio that is referred to above in the context of orders sought by each of them.

   THE WIFE’S EVIDENCE

   13.The wife asserts that she has been required to seek interim orders as a consequence of the husband’s refusal to cooperate in the proper administration of the facility and the sale and/or borrowings against the parties’ various real estate properties to meet unpaid statutory liabilities, fund the ongoing expenses of the administration of the facility and other real property outgoings.

   14.She deposes as to a monthly deficit of about $71,000 with the ongoing deficit being met from a capital sum of about $377,000 presently held in the parties’ accountant’s trust account.

   The Facility

   15.The parties’ significant asset comprises the real estate property at Suburb F upon which the facility operates. The real property was purchased by the parties in 1986 for about $185,000. Consequently, the parties engaged in the construction of the facility in stages. The real property at Suburb F and the facility operated thereon is owned by the parties in their own names.

   16.In 2007 the parties incorporated H Pty Ltd for the purposes of managing the facility. The company is also the trustee of the H Company Trust (“the Trust”) in which the husband and wife each hold 100 units.

   17.Development approval for the facility was obtained in April 2010 and is subject to certain conditions as to public road access drainage and services. The development approval provided for a development of the facility in three stages: 

   (1)       Stage I to construct 12 units and six three-bedroom villas

   (2)       Stage II was to provide 13 villas, 27 units and five suites 

   (3)Stage III was to provide 11 three-bedroom units, 29 two-bedroom units and 15 suites

   18.The wife asserts that the present value of the Suburb F property and the facility is between $15 million and $16 million.

   19.In August 2013 the company entered into a finance facility with Westpac Banking Corporation to fund the development and construction of Stage I. The finance was secured by way of mortgage over the Suburb F property and properties owned by Q Pty Ltd and T Pty Ltd. Interest of about $35,000 to $40,000 per month on the loan facility was payable.

   20.Difficulties arose with the builder during construction and the parties had difficulties in meeting interest payments. The parties borrowed $230,000 from a daughter together with other funds from a son.

   21.The wife complains that the husband refused to sell any of their other real estate properties or secure funds against those properties to meet ongoing interest and building costs. Subsequently, and in July 2019, the parties’ daughter sold her residential apartment and from the proceeds of sale advanced to the parties a further sum of about $202,000. These funds have been expended on meeting ongoing holding costs in relation to the facility and the parties’ other business interests

   22.Stage I of the development was completed in about August 2016 with the last of the units being “sold” by way of long-term lease in April 2019. The sale of each leasehold unit was registered as against the title to the property at Suburb F. Part of the proceeds of sale of each unit are paid by way of loan from each purchaser to the Trust.

   23.The last unit in Stage I was “sold” in April 2019 for $700,000. Those funds were deposited to the trust account of the parties’ accountants. Previously, sale of the remaining units realised about $14 million with those funds being held in the trust account of DD Lawyers. These funds were expended on servicing loan repayments and part discharging mortgages and paying building costs. The sum remaining in the trust account of the parties’ accountants from the last sale referred to above is about $377,000.

   The husband’s conduct

   24.The wife asserts that since 1973 she has managed the parties’ business affairs including the husband’s business. She is presently supported in property management by her sons Mr FF and Mr GG who have not been paid a salary since April 2010.

   25.Since June 2018 the wife has not managed the husband’s business.

   26.The wife complains that the husband since separation has refused to co-operate in an orderly and timely manner in the management of the facility in that he has refused to sign leases, refused to pay administrative and outgoings in relation to the business, refused to carry out roadworks as required by the council development approval and refused to attend board meetings of the parties’ various corporate entities. As a consequence, the husband and wife agreed in 2017 to establish the Swayte Council (“SC”) to assist in making decisions for the proper management of the facility and the parties’ other business interests. The board comprised the husband and wife, their son Mr FF, their advisor Mr HH and the parties’ accountant Mr JJ.

   27.SC met regularly until December 2018. Minutes of the meetings were prepared and the board considered payment schedules prepared by the wife for payments that were required to be made with those payments relating to known outgoings and expenses or supported by invoices.

   28.As at July 2017 it appears there were funds totalling about $715,000 (from the sale of the second last unit) in an ANZ bank account available to meet ongoing expenses. However, at that time the husband unilaterally effectively froze that account. In September 2018 the parties met in endeavour to reach agreement as to accessing the ANZ funds but no agreement was reached.

   29.In November 2018 the wife informed the husband of invoices totalling $137,000 that were required to be paid but could not be paid as there were insufficient funds remaining in the trust account of the parties’ accountant. These invoices included invoices for telephone, electricity, water and power, due Australian Taxation Office payments, insurances and defect works necessary at the facility for the health and safety of the residents, together with various mortgage repayments, interest due and other property outgoings.

   30.In December 2018 SC met; the husband was absent. It was resolved that there be a transfer of $715,000 from the ANZ trust account to the parties’ accountants trust account. Subsequently, invoice payments have been made against those funds and the last sale funds thus leaving the current balance available of about $377,000 H Company.

   The other real estate properties

   31.The adjoining properties being the 1 J Street property (N Pty Ltd: Wife 99.8 per cent, Husband 0.2 per cent shareholding) and the 2 J Street property (P Pty Ltd: Wife 50 per cent Husband 50 per cent shareholding) had been used by the husband for storage for the last 12 years with a rental payment by him of about one half of the commercial rent obtainable. The husband had previously represented that he wished to obtain development approval to build a medical centre but has never to the wife’s knowledge made any such application for approval or development. The wife has obtained a market appraisal for the sale of the two Suburb K properties and if sold together she asserts they will realise something in the order of $1.9 million.

   32.The husband pays $1,100 per month to lease the Suburb S property owned by the wife. He operates his business from those premises. He has paid no rent since October 2019. The wife asserts that the husband has failed to lodge invoices to secure payment for services rendered since June 2018. The property, she says, has a value of between $800,000 and $880,000.

   33.The husband pays storage fees of $150 a month for the Suburb Y property (T Pty Ltd), a property the wife asserts has a commercial rental value of about $1,200 per week as it comprises a significant home on five acres. The husband, she says, now occupies this property and has stored in the property significant furniture, household effects and building material. The wife asserts that the property in its present condition cannot be commercially rented with the husband refusing her access to the property to collect certain items of furniture and household effects that she wishes to retain. The property, asserts the wife, has a value of between $2.9 and $3.3 million and is subject to a mortgage of about $1.2 million.

   34.The husband also pays $330 a month to lease the W Town property (T Pty Ltd) owned by the wife.

   35.The Suburb M property is in the sole name of the wife. She asserts it has a value of about $1.28 million and is subject to a mortgage of $420,000. A sale would realise approximately $800,000 that would be available to meet holding costs, property liabilities and necessary expenses for the facility. The husband, she says, has padlocked the front gate to prevent access to the property by her. The property, she asserts, is presently uninhabitable and the husband has stored significant effects in the property. The husband had previously occupied the property subsequent to separation but the wife asserts that he has vacated that property and he is presently residing at the Suburb Y property.

   36.The C Town property (Q Pty Ltd) has a market value of between $920,000 and one million dollars and is subject to an outstanding mortgage of approximately $750,000. The mortgage also secured, it appears, collaterally over The Suburb S property. Net proceeds says the wife could be contributed to meeting holding costs in relation to the facility and other real property outgoings.

   Other issues

   37.Road works: At present roadworks to the frontage of the Suburb F property, being a condition of the development approval remain incomplete. The wife has obtained estimates for completion of the works at a cost of about $1.15 million and asserts there is sufficient security in the Suburb F property to support an application for a finance facility to complete those works to facilitate a sale of the overall development once complete.

   38.At present the local council holds a bank guarantee by way of security bond for completion of the roadworks in the sum of $675,000. Upon completion of the roadworks to the council’s satisfaction, those funds would be released and be able to be paid to reduce any sum borrowed to complete the works. The local council requires a Deed of Agreement be entered into for the purposes of carrying out the works to the council’s satisfaction. The wife asserts that the Deed of Agreement is necessary as part of the application for the required finance to complete the works.

   39.The ATO: the Australian Taxation Office has assessed the parties as liable in the sum of $523,244 with such sum including interest and penalties. That liability remains unpaid.

   40.The Facility: the wife asserts that three of the residents have made complaints to the Department of Fair Trading and the local council about delays in undertaking the necessary roadworks to the frontage of the property. Otherwise, one of the unit owners passed away in January 2019 and is due a refund payable to her estate of $643,808. Those funds are not available absent the realisation of assets. Otherwise, another unit owner has terminated the lease requiring a repayment of $1.2 million. Demand has been made for that payment with the threat of proceedings being commenced for recovery.

   41.Land Tax: Land tax remains outstanding for the 2019 year in the sum of $40,000. The wife estimates that the parties’ land tax liability for the 2020 year will be in the order of approximately $200,000. There are no funds available to meet this expected liability.

   42.The wife complains that the husband has frustrated the release of funds from the parties’ accountant’s trust account to meet ongoing liabilities, refused to join in an application to borrow funds to meet the liabilities referred to above, refused to join in the sale of real estate properties to realise necessary capital and refused to join in the sale of the Suburb F property and the facility.

   43.The wife proposes that net funds from the sale of the Suburb K properties of about $600,000 would be available to meet part of the costs of roadworks and other outgoings.

   44.The wife’s application is supported by the parties’ adult son Mr FF who has been intimately involved with the development of and the ongoing conduct of the Suburb F property and the facility. He has received no financial remuneration or salary for his efforts since May 2012 including the marketing and sales of the various units when completed. His evidence corroborates the wife’s evidence as to the urgency of the realisation of capital to meet and reduce ongoing liabilities.

   THE HUSBAND’S EVIDENCE

   45.Notwithstanding being a self-employed healthcare professional, the husband in his Financial Statement asserts no income from his profession.

   46.The husband asserts that as at the date of marriage he owned two properties at Suburb LL, subject to mortgage and tenanted. The properties were purchased by him the year before marriage. The equity in these properties as at the date of marriage is not known. He also had some savings accrued from his professional employment prior to marriage.

   47.The husband asserts that subsequent to marriage he subdivided and developed the Suburb LL properties into townhouse accommodation. The various townhouses were sold for about $500,000 each and the proceeds of sale were used to purchase the Suburb F property.

   48.Thereafter he gives detailed evidence as to the parties’ respective contributions during their long marriage including various property acquisitions and as a consequence there is little to suggest that contributions over the period of the marriage in all the various hues would not be regarded as substantially equal.

   49.The husband complains that funds available from the development of Stage I of the facility have been expended without proper management or adequate explanation and without his authorisation or consent to the payment of liabilities relating to the facility. He further complains about the expenditure of funds on unnecessary repairs and works to the facility without his consent or authorisation. He denies that he has refused to cooperate with the due administration of the facility.

   50.He asserts that he was not involved in the meetings of the SC (although he agreed to it being set up) nor did he approve any of the resolutions of the board. He, otherwise, asserts that he is unaware as to the ATO liability accrued by himself and his wife from their partnership activities.

   51.He asserts he is currently working part-time as a healthcare professional, three days per week in his business at the wife’s Suburb S property. All of his income he asserts is derived through Medicare payments. He asserts that he has been unable to submit invoices to Medicare since separation as previously such had been done by the wife or his bookkeeper. Once Medicare payments are received he asserts that he will receive a lump sum payment in the vicinity of about $200,000 from which he will be required to pay income tax in due course.

   52.He says that he is presently working on preparing and lodging outstanding Medicare claims. There appears to be no reason why, if such is completed in a timely manner, he would not receive prompt payment. He estimates that he will be able to earn an ongoing income of between $2,000 and $3,000 per week.

   53.He asserts that he has not paid his receptionist for 18 months and that she is owed about $35,000 for unpaid wages and superannuation.

   54.He acknowledges that the wife has been the financial controller throughout cohabitation, asserting now that he has no access to his bank accounts and he is unable to afford his living expenses. He says he has borrowed $25,000 from his daughter.

   55.He asserts that he has resided alone at the Suburb M property since separation but travels to the Suburb Y property to spend weekends there. He does not assert that he is unable to reside at the Suburb Y property if indeed he remains at the Suburb M property mid-week. Otherwise, if indeed he remains residing at the Suburb M property, there is no reason why the Suburb Y property cannot be sold.

   56.As to the properties at Suburb K the husband asserts that the wife has changed the locks on those properties and he has been unable to access them. Building material and scaffolding previously stored at those premises, he says, has now been removed. He opposes the sale of the Suburb K properties asserting without any objective evidence his belief that they have significant development potential. Perhaps if that is the case such development potential will be reflected in any sale price.

   57.As to the various issues raised by the wife, he says that the roadworks are due to be finished upon completion of Stage II of the facility development. Yet he proffers no solution as to how such further development could be funded having regard to the present difficulties in relation to finances.

   58.As to the taxation liability, he asserts that is presently the subject of negotiation by his accountant with the Australian Taxation Office. Clearly he is aware of the debt.

   59.Otherwise, he disputes that other issues raised by the wife are pressing and need to be addressed at present. This assertion is contrary to his contentions that he has been isolated from ongoing decisions relating to management of the facility and has no intimate knowledge of the parties’ financial affairs.

   The wife’s evidence

1. In support of her Application in a Case the wife relied upon:

   (a)her consolidated affidavit sworn 30 October 2020;

   (b)the affidavit of Ms VV, solicitor;

   (c)the affidavit of Roslyn McCulloch, solicitor;

   (d)the affidavit of Tom Doumanis, solicitor.

2. The wife asserts that she and the husband and their entities have, notwithstanding recent sales of properties as previously ordered, the following financial obligations:

   (a)Australian taxation office in the sum of $517,667 comprising unpaid GST of $324,000 plus penalties and interest with interest continuing to accrue at the rate of 7.98 per cent per annum;

   (b)a monthly deficit between income and expenditure for the H Company and their other business interests of just over $71,000;

   (c)Revenue NSW land tax totalling $218,864;

   (d)debt to the estate of Ms NN in respect of unit 5 H Company of $643,308;

   (e)estimated refund in respect to villa 7 H Company of $1,012,739;

   (f)a refund demanded in respect of unit 2 H Company $735,000;

   (g)cost of carrying out roadworks being a condition of the development approval for the H Company facility of about $1.171m, which after release of a PP Council security bond in the sum of $675,000 will require a net payment of about $496,979;

   (h)necessary repairs and maintenance to the H Company premises of about $300,000;

   (i)estimated cost of completing landscaping and fencing works required to be undertaken by the PP Council in the sum of approximately $486,915;

   (j)estimated cost of the provision of awnings over the front and rear balconies of first floor residences at the H Company facility $218,085;

   (k)outstanding legal and accounting fees owing in respect of the personal affairs of the husband and wife $80,000.

3. The wife says that following orders made by this Court she has sold the C Town property for $1.15 million, with net proceeds of sale of about $92,750.  The Suburb K properties at 1 and 2 J Street, Suburb K have been sold in one line for $2.072 million, with estimated net proceeds of sale of $710,175.  The Suburb Y property is listed for sale of $2.4 million and after discharge of mortgage and sale expenses estimated proceeds are in the sum of $1,250,000.  Those capital funds can be applied to the outstanding liabilities set out above leaving a surplus of about $96,000.  However, the wife says this does not address the issue of the monthly operating expenses deficit of H Company of about $60,000 per month.

4. The wife gives evidence of pending legislative changes that would require the operators of residential accommodation facility to acquire from a resident the unit or Villa in the event that the resident is unable to sell his or her premises within six months after it has been listed for sale.  There is no evidence as to any legislated progress in relation to this expected change.  This obligation relates, in particular, to the estate of Ms NN as referred to above.  The wife says that she has informed the husband of this impending obligation but has received no response.

5. The wife anticipates that in the event that the H Company sold, a sale would take some five to six months.  

6. The wife asserts that she and the husband do not have the financial capacity to complete stage II of the H Company development having an estimated cost in October 2016 of about $16.6 million or on today’s costs about $19.122 million.  The wife has sought information from the husband through his solicitors as to his capacity to fund the development and completion of stage II.  There has been no response.

7. Otherwise, the wife has sought from the husband, through his solicitors, information as to his financial capacity to acquire from her the H Company enterprise and the land upon which it stands.  She has received no response.  The wife asserts that the husband has no capacity to complete the development or acquire the H Company property from her.

8. She asserts that the husband has had no involvement in the development of stage I of the H Company, its administration or the administration of their other business interests owned either in their personal names or through related corporate entities.  She asserts that the relationship between her and the husband is so acrimonious as to avoid any future cooperation between them.

9. Otherwise, the wife deposes as to the personal toll on her in endeavouring to maintain the parties’ business interests, including the H Company, with the ongoing necessity to deal with lawyers, Counsel, Department of Fair Trading and prospective Parliamentary changes.  She says that she is overwhelmed of the anxiety of entering upon the premises of H Company for fear of being accosted by one of the residents or their family members.  She says that she is not willing to continue to operate H Company enterprise for longer than is absolutely necessary (to procure a sale).

10. As to more recent developments, the wife exhibits a development control order served by the local council dated 21 August 2020, requiring the completion of certain works that were a condition of the original development consent for the H Company facility.  Those works are referred to above with a total cost of $1.17 million.  The wife by way of Notice of Motion in the Land and Environment Court unsuccessfully sought the revocation of the development control order.  The solicitor acting on behalf of the wife and H Company Ms Roslyn McCulloch confirms that a Notice of Motion seeking to set aside the development control order and stay the local council’s implementation of the development control order was filed on 22 September 2020.  As a consequence, the implementation of the development control order was stayed pending delivery of the decision in relation to the primary issue which was listed for hearing on 14 and 15 December 2020.  In the event that the wife had not sought to appeal the development control order the solicitor expresses the view that the husband and wife would have been subject to daily fines of $3,000 for failure to comply with the development control order, injunction proceedings at the suit of the Council seeking compliance with the development control order, plus costs and criminal proceedings for failure to comply with the development control order with a maximum penalty of $1 million plus $10,000 per day for a continuing offence or the Council could enter upon the lands of the residential facility and complete the work and recover the costs of so doing from the owners.  The solicitor says it is her understanding that the wife is presently seeking an extension of time to comply with the development control order subject to the sale of certain properties to provide funds for the cost thereof and subject to an order by this Court appointing the wife as trustee for sale of those certain properties

11. Otherwise, the wife seeks an order for sale of the W Town property to realise adequate funds to meet ongoing liabilities. 

12. Ms VV, solicitor, gives evidence of his specialist experience in the industry and in advising upon the operation regulatory framework and management of residential accommodation facilities.  He has been engaged with the husband and wife in relation to the H Company for some years.  He expresses some concerns that H Company has been the subject of complaints.

13. It is the opinion of the solicitor that in circumstances where H Company operator is moving to effect a sale of H Company and attending to remedy and rectify building defects that such a course would counter any opinion being formed by the Secretary that may result in the appointment of an administrator.  He expresses the opinion that in the event that the sale of H Company is unable to progress or there are more concerns raised by residents which cannot be addressed by reason of H Company having lack of funds, then the Secretary’s position as to the appointment of administrator may well change and an application to the Supreme Court for the appointment of an administrator may well be successful.

14. The solicitor asserts that from his experience, the impact on both the residents’ personal circumstances and the value of H Company contract to them, is something that the Department is aware of and is why he believes the Department’s preference is to allow the operator to address the issues as best they can, and in the case of the H Company progress the sale.

15. The solicitor, otherwise, expresses some concern in relation to a claim being made on behalf of the owner of Unit 2 in H Company which rests upon allegations of a failure by H Company to fulfil the representations and promises made in relation to the overall development and a range of services promised.  The owner of Unit 2 has the capacity to make an application to the tribunal for an order requiring H Company to perform the obligations in its contract or an order for compensation.  Such an order may well trigger actions by the Secretary for the appointment of an administrator as referred to above.

    The husband’s evidence

16. The husband in support of orders sought by him relied upon his consolidated affidavit affirmed 26 November 2020.

17. The husband, for his part, denies that he has failed to cooperate with the wife in relation to the administration of the H Company in meeting liabilities and ongoing expenses and paying outgoings in respect of their properties.  In reality, his failure to do so is the subject of reasons for judgment previously delivered.

18. He asserts there is no necessity for roadworks adjacent to the boundary of the residential facility to be carried out, this notwithstanding the development control order from the PP Council.

19. He continues to assert in general terms that his endeavours to commence and complete stage II of the development have continually been thwarted by the wife.  He believes, he says, that he continues to have a good relationship with the residents of the residential facility and that they would be supportive of embarking upon the stage II development.  This notwithstanding that he has not produced one jot of evidence during the course of these proceedings as to his financial capacity to secure significant additional funds, running into multimillions of dollars to commence and complete stage II development.

20. As to the Australian taxation office he concedes that he has seen an integrated client account statement as at 6 July 2020 and showing an outstanding liability of $543,618.

21. He can proffer no evidence as to the ongoing monthly shortfall between income and expenditure on the ongoing operations of the H Company and the parties’ other business interests.  This notwithstanding that he provides not one jot of evidence as to his contribution to ongoing liabilities either for the H Company or the various business interests of the parties.

22. He complains of withdrawals and all payments from trust monies held by SS Company on behalf of the wife over a period from July 2019 until 2 April 2020.  An accounting on this type of issue will need to await final hearing.

23. He, otherwise, asserts that there was a land tax payment as a consequence of a sale of the C Town property that has reduced outstanding land tax to $150,145.  Once again, a resolution of that issue in the overall question of land tax can await final hearing and necessary cross examination.

24. He makes no concession as to any liability to the estate of the late Ms NN other than he is aware of the letter of demand from the estate administrators, the New South Wales Trustee and Guardian, dated 11 June 2019 and that on 17 November 2020 the trustee was awaiting further information in relation to the sale of the unit by H Company.  It is the wife’s evidence that this unit has been on the market for some time with no interested purchaser.

25. As to the claim by Mr and Ms QQ referred to above, the husband asserts that he has received correspondence from Mr and Ms QQ in the form of an unsigned and undated typed letter.  In that correspondence Mr and Ms QQ allegedly complain about the outstanding deadline for the completion of roadworks and the fact that the site still looks like a demolition yard.  They further complain that the sale of Villa 7 is slow progress, having had many difficulties with the wife.

26. The husband, otherwise, asserts that he has no knowledge of the claim by the owner of unit 2, Ms RR, in relation to a refund entitlement of $735,000.  He asserts that if H Company is required to refund that entitlement, H Company would be able to refund itself from ultimately the proceeds of sale.  He proffers no evidence as to how H Company would fund the preliminary refund of $735,000.

27. Otherwise, he complains that the wife had not previously disclosed to him the poor condition of the residential facility and he asserts she has done little, if anything, to improve the appearance or deal with the apparent defects of the facility.  He proffers no view as to how funding for addressing those issues would be provided save that he does not believe that significant monies would be required to be expended to carry out any repairs to defects and rectification work to the units and villas at H Company. 

28. He, otherwise, expresses concern that the wife has sought to exclude him from the ongoing Land and Environment Court proceedings.  This notwithstanding that on 29 October 2020 he was joined as a party to the proceedings.

29. He takes issue with circumstances relating to the continuing shortfall in the monthly administration of H Company on the basis of hypothesis and opinion.  He asserts that it is his intention to seek to retain the H Company as part of his final entitlement to property settlement.  He asserts he would be able to afford to develop stage II by borrowing secured upon assets which he seeks to retain by way of his entitlement to property settlement.  This notwithstanding that significant real estate assets of the parties have or are in the process of being sold and there are other assets likely to be sold in the interim.

    Discussion

30. Once again in these proceedings the parties seek to engage the Court in an endeavour to resolve the financial consequences of their inability to cooperate and to deal with the complex issues arising from their financial affairs.

31. Once again, as it was in June 2020, the Court is faced with a circumstance that appropriate orders need to be made to protect the assets of these parties in some form or another.  In the event of orders for sale, assets will be converted after payment of liabilities to significant cash sums for distribution between the parties.  The ultimate distribution of those funds will await, it appears, the resolution of significant discrete issues between them at final hearing in the course of cross examination.  As a consequence of that process, the entitlement of the parties to assets that remain in specie and to a division of any cash funds available will be determined.

32. Misgivings as to the husband’s position were clearly expressed in reasons for judgment of 5 June 2020.  The evidence in the proceedings in respect of this application does nothing to allay the Court’s concerns expressed in those reasons for judgment as to the risk that is presented to the parties’ asset pool by reason of accumulating liabilities and their inability to address those liabilities in any way by agreement or compromise.  The husband’s solution appears to be simply borrowing more money secured over the assets that remain with no ability on his part to service debt, such as it is now, or indeed any accumulation of debt that would be as a consequence of his proposals.

33. The question of interim property division was addressed in the previous reasons for judgment and as a consequence there was provision made for a modest capital distribution to each of the parties of $100,000 from sale of property.  The significance of the matrimonial pool is set out in reasons for judgment of 5 June 2020 and is clearly indicative of there being upon the realisation of assets, the capacity for each of the parties to receive a further capital distribution.

34. However, importantly and significantly in this matter, the Court’s jurisdiction is enlivened again by reference to Section 114 of the Act. There is significant concern as to Departmental intervention in the business of the H Company by reason of the appointment of an administrator. There is clear evidence from an experienced solicitor that in the event that there is a Tribunal order on the complaint of a resident that such an order may well trigger an application to the Supreme Court of New South Wales for the appointment of administrator. In that circumstance the parties will lose all control in relation to the ongoing business and one would assume that the administrator would take steps to sell the business to a new appropriately qualified operator. Present indications are that by reason of the ongoing dispute as to the conduct of the business as between the husband and wife, the provisions of the Corporations Act could be enlivened by a creditor seeking the appointment of a receiver and/or liquidator to the business.

35. It is readily apparent that facilitating a sale of the business and the underlying real estate by the wife would address the prospective financial damage that would flow from the appointment of an administrator or a receiver and/or liquidator by a creditor.  Allowing the current operator to sell the business in a timely manner, one would expect would alleviate the pressures and uncertainty evidenced by the wife in this present application.  Otherwise, the husband faces the reality that in the event that the wife is unwilling to continue to endeavour to operate and conduct the business in the circumstances as they are, she may make application for the appointment of a receiver and/or liquidator in any event.

36. In all of the circumstances, it is appropriate that there be orders by way of injunction substantially as sought by the wife to protect this significant asset pool of the parties in one form or another.  For reasons previously given there is no reason why each of the parties should not receive a further capital distribution from proceeds.

37. Orders will be made accordingly.

I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster.

Associate:       

Dated:       16 March 2021