Taheri & Kamran
[2024] FedCFamC2F 797
•27 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Taheri & Kamran [2024] FedCFamC2F 797
File number: SYC 3377 of 2023 Judgment of: JUDGE KEARNEY Date of judgment: 27 June 2024 Catchwords: FAMILY LAW – Review of interlocutory property orders - 4 subject children – complex medical, behavioural and learning needs for both 17-year-old and 12-year-old subject children - Where the parties seek to vary interlocutory orders to sell the family home – Wife brings evidence to support the maintenance of the family home - Whether there has been a change of circumstances and/or the existence of a new fact that warrants the setting aside of the interlocutory orders – Whether the interlocutory orders should be enforced with a variation - Interlocutory orders set aside and fresh orders made. Legislation: Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021
Cases cited: Abraham & Abraham [2012] NSWSC 254
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44
Hedley & Hedley [2019] FamCA 946
I Limited & Chester and Ors [2010] FamCAFC 251; (2010) FLC ¶93-456; (2010) 44 FamLR 585
Jakubik & Jakubic [2023] FedCFamC1F 415
Kerr & Kerr [1983] FamCA 3; (1983) FLC ¶91-329; (1983) 8 FamLR 1023
Malloy & Stopford Malloy [2020] FamCA 506; (2020) 61 FamLR 449
Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108; (2012) 87 ALJR 74; (2012) 293 ALR 70; (2012) FLC ¶93–518; (2012) 47 FamLR 481
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2011) FLC ¶93-466; (2009) 42 FamLR 203
Suris & Suris (No 2) [2023] FedCFamC1F 89
Weir & Weir [1992] FamCA 69; (1993) FLC ¶92-338; (1992) 110 FLR 403; (1992) 16 FamLR 154
Wilkshire and Coffey v Commonwealth of Australia (1976) 9 ALR 325
Division: Division 2 Family Law Number of paragraphs: 100 Date of last submission/s: 21 June 2024 Date of hearing: 13 May 2024 Place: Newcastle Counsel for the Applicant: Ms Rusiti Solicitor for the Applicant: Yazbeck Law Counsel for the Respondent: Ms Hamilton Solicitor for the Respondent: Guardian Family Law ORDERS
SYC 3377 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR TAHERI
Applicant
AND: MS KAMRAN
Respondent
ORDER MADE BY:
JUDGE KEARNEY
DATE OF ORDER:
27 JUNE 2024
THE COURT ORDERS PENDING FURTHER ORDER THAT:
1.The Orders made 22 August 2023 are set aside.
2.Orders 1 to 5 made on 5 April 2024 are discharged.
Maintenance of the mortgage
3.The applicant, MR TAHERI (‘the husband’) and the respondent, MS KAMRAN (‘the wife’) are each permitted to electronically provide a copy of these Orders to O Law Firm via that firm’s last known email address as soon as practicable and by no later than 9.00am Friday 28 June 2024.
4.By 4.00pm Tuesday 2 July 2024, the respondent; MS KAMRAN (‘the wife’) is to cause $86,000 (‘the trust funds’) to be deposited into a trust account held for the benefit of the husband, and controlled by Yazbeck Law and contemporaneous with that deposit, the wife will notify the husband by email of the transaction.
5.Within 48 hours of the trust funds being cleared for withdrawal, the husband will authorise their current lawyers (from time to time) to:
(a)cause all the trust funds to be deposited into the loan account attached to the mortgage secured over the real property located at B Street, Suburb C, folio identifier … (‘the family home’);
(b)electronically notify details of the deposit to the wife and to O Law Firm via their respective email addresses.
6.Commencing 18 July 2024 and by the 18th day of each following month, the wife shall cause the current amount (from time to time) of the mortgage repayment calculated for the above specified mortgage (‘the monthly mortgage repayment’) to be deposited into a financial account nominated in writing by the husband and contemporaneous with that deposit, the wife will notify the husband by email of the transaction.
7.Within 48 hours of the monthly mortgage repayment being cleared for withdrawal, the husband shall cause the monthly mortgage repayment to be deposited into the loan account attached to the mortgage secured over the family home.
8.To facilitate the above Orders, the husband will do all acts and things to facilitate their lawyers (as applicable) to carry out the transactions and otherwise provide any necessary information as required including details about the financial accounts into which payments are to be made by the wife and what the sum of the monthly mortgage payment may be from time to time.
Interim property distribution to the husband
9.By 4.00pm 9 July 2024, the wife shall cause $20,000 to be paid to the husband via a financial account as nominated in writing by the husband.
Sale of the family home
10.PROVIDED the husband complies with their obligations above, IF the wife fails to make any payment on time as prescribed in Orders 4, 6 and 9 above, THEN Orders 11 to 14 shall come into immediate effect.
11.The husband shall be appointed sole trustee for the sale of the family home.
12.In exercising their role as sole trustee, the husband is to do all acts and things necessary for:
(a)The family home to be listed for sale by auction within 14 days of Order 10 coming into effect; with an auction date for (4) weeks after the property is listed or on a date advised by the selling agent at a reserve price advised by the selling agent but not less than $1,300,000;
(b)The family home to be listed for sale by private treaty for a period of 12 weeks (if the family home does not sell at auction); AND the husband may accept any offer within 10% of the reserve price;
(c)The family home to be re-listed for public auction at a reserve price of 10% less than the initial reserve price (if the property remains unsold after being listed for private treaty as above).
13.Yazbeck Law is to conduct the conveyance on behalf of the vendor. The following conditions shall apply:
(a)Settlement is to be no more than a 42-day period;
(b)The husband and the wife are to do and sign all things necessary to allow for the marketing, sale and settlement of the family home, including withdrawing any caveats; and
(c)Conveyancing fees will not exceed the amount of $2,700 and the parties are to bear the costs equally. Each party is to transfer their share of the conveyancing fees to the trust account of Yazbeck Law no less than 7 days prior to the settlement date of the family home.
14.Upon settlement of any sale of the family home, the proceeds will be applied in the following priority:
(a)Agent’s fees and commission;
(b)Rates, taxes and any other adjustable outgoings payable on settlement;
(c)Discharge of Mortgages and other encumbrances;
(d)An interim property adjustment distribution to the wife of $50,000; and
(e)The balance to be held for the benefit of both parties in a trust account controlled by Yazbeck Law until further order of the Court or written agreement between the parties.
15.In the event that either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
IT IS FURTHER ORDERED THAT:
16.All outstanding interlocutory applications are dismissed including the Application for Review filed by the wife on 18 April 2024.
17.Should an application for costs be filed, the filing party is permitted to notify Judge Kearney of that circumstance by email to […]@[…].gov.au provided that a circular copy of that notification is also sent to the other party.
THE COURT NOTES THAT:
A.Cognisant of the obligations imposed by ss 95 and 96 of the Family Law Act 1975 (Cth), the future case management of this proceeding should consider the promotion of alternate dispute resolution and reduction in future court events, given the high conflict and limited property available for distribution.
B.Any costs application related to the review hearing is to be listed for hearing before Judge Kearney on a date to be fixed.
C.The substantive proceedings are listed for mention before a Judicial Registrar at 2:30pm on 23 July 2024. At that time, the parties should be prepared to address the Court on their compliance with the above Orders (as may be applicable).
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE KEARNEY
INTRODUCTION
Almost a year ago the husband and wife agreed to sell the family home on the basis that apparently neither could afford to keep up the mortgage. In the face of the wife’s subsequent refusal to engage in the sale process, the husband seeks to enforce those orders and a delegate of the Court agreed. The wife disputes the delegate’s decision and brings evidence to support their maintenance of the family home until the proceeding is finalised. What should I do?
Unless a person’s preference is known to the Court, gender-neutral language will be adopted.
It was common ground that for different reasons, both parties sought relief that was different (to varying degrees) to orders made by the delegate on 5 April 2024. Instead, the discussion focussed primarily on either the effective setting aside or enforcement (through variation) of the Orders made 22 August 2023 (‘the subject orders’). As such the issues are:
(a)Whether, because of a change in circumstances and/or the existence of a new fact, the subject orders should be set aside to afford MS KAMRAN (‘the wife’) the opportunity to maintain B Street, Suburb C (‘the family home’) until the parties’ financial proceedings are finalised or the wife can no longer pay the mortgage (whichever occurs first)?
(b)Whether, by way of enforcement, the subject orders should be confirmed subject to one variation empowering MR TAHERI (‘the husband’) to act as sole trustee for the sale of the family home?
In addition, a further issue is whether a valuation of D Pty Ltd is required for the purposes of the substantive property adjustment proceeding?
It was agreed that any costs application that may arise because of this hearing should be deferred because it was expected that the Court may be asked to consider offers of settlement as defined within s 117C of the Family Law Act 1975 (Cth) (‘the Act’).
Based on the parties’ contentions, these review proceedings invoke consideration of:
(a)Sections 75(2), 79, 80, 95, 96 and 105 of the Act;
(b)Sections 254(2)(l) & 256 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the Court Act’); and
(c)The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) including rr 1.04, 7.04 and 10.13(1)(c).
Unless otherwise specified –
(a)A reference to a rule will be a reference to the Rules; and
(b)A legislative reference will be a reference to the Act; and
(c)A reference to an Order will be a reference to the subject orders.
In addition to the husband and the wife, relevant to the proceedings there are four subject children of the marriage:
(a)W (aged 17 years);
(b)X (aged 12 years);
(c)Y (aged 10 years); and
(d)Z (aged 8 years);
collectively described as ‘the children’.
There are two adult children of the marriage who also live in the family home.
It was undisputed that this Court has the power to review a delegate’s decision to make an interlocutory parenting order: ss 254(2)(l) & 256 of the Court Act.
During reservation of this matter, it occurred to me that r 10.13(1)(c) may apply and that neither party had addressed the Court about it. Consequently, I re-opened the review hearing and allowed the parties an opportunity to make further submissions on that subordinate legislation.
Regrettably both parties decided to entertain a frolic and attach documents to their submissions before seeking permission from the Court to tender that material. Before accepting the three sets of submissions as exhibits[1], I have removed all the proposed documents and ignored any submissions reliant upon them for the following reasons.
[1] Exhibit ‘W11’ Primary submissions of the wife filed 12.06.2024, Exhibit ‘H9’ Primary submissions of the husband filed 19.06.2024 and exhibit ‘W12’ Submissions in reply of the wife filed 21.06.2024.
Even though the husband was the first to embark on this course of conduct, the wife decided to enter the fray and respond to it, not only in submissions but also by seeking to adduce further documents (to which the husband had no right of reply). The only way to cure the inherent procedural unfairness in the wife’s approach was to once again re-open, but the parties’ circumstances, the issues in dispute and my obligation to the overarching purpose[2] informed my decision that this dispute needs to end now and not be further delayed. In further support of my decision, no actual application to re-open for the purpose of tendering documents was ever made by either party. This situation suggests that either the parties did not heed their lawyers’ advice (and the lawyers acted on instructions); or the lawyers’ have failed in their obligations to advise their clients. This aberrant conduct is to be condemned and exacerbates the need for the quick resolution of the substantive proceedings so as to minimise the risk of any further conduct that flies in the face of an efficient use of court resources and clients’ time and money.
[2] Section 95 of the Act and s 190 of the Court Act.
Because of the misconception embedded in at least the running of the wife’s case, the finalisation of this proceeding has been delayed, and I regret the anxiety and inconvenience this undoubtedly has caused to the parties and other persons whose interests may have been affected. I say this knowing full well that there is a frustrated mortgagee who is not bound by my decision, and I sincerely regret the inconvenience caused to them by the delay.
Self-evidently from the judgment so far and reliant on the parties’ more recent submissions, any order I make that varies the subject orders is not grounded in s 79A.
Subject to the above, I have considered all the evidence put before me, as well as each party’s submissions made in writing and orally at the hearing.
Turning then to the issues.
Whether, because of a change in circumstances and/or the existence of a new fact, the subject orders should be varied to afford the wife the opportunity to maintain the family home until the parties’ financial proceedings are finalised or the wife can no longer pay the mortgage (whichever occurs first)?
Following the proceeding being re-opened; I have considered the parties’ respective written submissions.
I am satisfied that r 10.13(1)(c) applies to the circumstances before me because the wife seeks a variation of interlocutory orders being the subject orders.
Rule 10.13(1)(c) does not prescribe a framework. In their respective submissions, the parties were united in submitting that there is little in the way of judicial guidance as to how to interpret r 10.13(1)(c) where interlocutory property adjustment consent orders are concerned. This is of some import because of the case law that has developed around the exercise of discretion in making a just and equitable and otherwise proper interlocutory property adjustment decision.[3]
[3] See for example, the Full Court (Boland, Thackray and O’Ryan JJ) decision in Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2011) FLC ¶93-466; (2009) 42 FamLR 203 (‘Strahan’).
I have read and considered the parties’ submissions and the case law embedded therein. I have also had regard to a much more recent decision by Carew J in Jakubik & Jakubic [2023] FedCFamC1F 415 (‘Jakubic’).
Some influence over my decision is exerted by Jakubic because it is binding on me, applies to the existing r 10.13(1)( c) and the order under scrutiny was an interlocutory consent order about the distribution of sale proceeds from a subject property (albeit made as part of a procedural order related to securing a single expert family report writer). In summary Carew J found that to disturb the existing order; a finding had to be made that there had been a change of circumstance or a new fact.[4]
[4] Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178, approved by Carew J in Jakubik at [56].
I will consider these factors now.
Has there been a change in circumstance?
There are three main contentions put forward by the wife – the children’s circumstances have changed, the wife’s ability to secure rental accommodation has changed, and the wife’s occupation has changed.
A change in the children’s circumstances?
While there are six children (adult and minors) of the marriage, only two of the children are relevant under this consideration, namely W and X.
It is uncontroversial that W has had a medical procedure which has left her with serious medical conditions.[5]
[5] Exhibit ‘W8’.
It is uncontroversial that X has been diagnosed with Autism Spectrum Disorder (for impaired social communication and for restrictive and repetitive behaviours).[6]
[6] Exhibit ‘W9’ and CIR-9.
In summary, the wife says that post 22 August 2023 (when the subject orders were made in chambers), the following circumstances have arisen:
(a)On 15 November 2023, a child impact report (‘the CIR’) was produced by a court child expert.[7] The CIR reports alleged conversations and disclosures made by all participants including the parties, the children and two adult children (Ms E and Ms F);
[7] Exhibit ‘A’.
(b)Since the beginning of this year,[8] X has commenced his secondary education at G School;
[8] Exhibit ‘W9’ at page 2 and Affidavit of Ms Kamran filed 18.04.2024 at paragraph [19]. For convenience, this document shall be referenced as ‘MSK’ and paragraphs identified in square parenthesis.
(c)Since the beginning of this year, W has commenced year 12 at H School and there are physical limitations to W regularly attending school, despite the family home being near to her high school and W’s desire to successfully complete her Higher School Certificate (‘HSC’) this year.
(d)On 10 May 2024, as part of a broader document, a six-month General Practitioners (‘GP’) Management Plan for W was prepared by Dr J.[9] The GP Management Plan identified a diagnosis of epilepsy and various steps required to be taken by W (under supervision from either a general physician or specialist as required) to reduce seizures and maintain functionality. Various actions were prescribed to achieve those two goals including medication compliance and the minimisation of triggers. To carry out these actions various steps were specified such as –
[9] Exhibit ‘W8’.
(i)ensuring W was educated by third parties about her condition;
(ii)ensuring W was educated by third parties about how to maintain a healthy diet and optimal weight range; and
(iii)ensuring that W maintained an exercise routine that was suitable to her needs, and which was to be prepared by various third parties.
(e)On 10 May 2024, paediatrician Dr K produced a report[10] following their consultation with X and the wife that same day. Within the report it is recorded that:
(i)since the last appointment (date not recorded), there have been ongoing stressors relating to the parties including that the husband is trying to sell the family home. Two of X’s older sisters continue to experience significant mental health issues with one attempting suicide;
(ii)X has commenced high school and has had some difficulties adjusting and has experienced bullying;
(iii)X has been accepted for NDIS funding and is awaiting the allocation of supports such as therapy;
(iv)X has a healthy range of food and sleeps well;
(v)X’s diagnosis of Autism (for impaired social communication and restrictive and repetitive behaviours) is confirmed;
(vi)X and the other members of his household have experienced sustained significant family violence which has had a detrimental effect on all of them and for which they are continuing to work through the psychological effects of;
(vii)X has found the transition to high school challenging due to bullying but has engaged in strategies to avoid his exposure and has also formed a friend group.
[10] Exhibit ‘W9’.
Accepting that the weight I can give to the untested evidence found within the CIR is somewhat constrained, nonetheless it is a forensic tool prepared by an independent expert witness. The consistency of the children’s reporting lends weight to the veracity of the reported statements of W.[11]
[11] CIR, see generally paras 15 – 19.
The GP Management Plan identifies up to nine different treators being engaged to support the achievement of W’s goals. It has been prepared by an independent treator, albeit I acknowledge that it is unlikely the husband has had much input in the process given his lack of contact with W since separation.
The paediatric report suggests that X has seen significant change to his social environs given his transition to high school; and that this transition has not gone smoothly with more work to be done via the wife speaking to her son’s school about the bullying. Again, I acknowledge that the husband has likely had limited involvement in the process given the lack of contact he has had with X.
Whilst I acknowledge the weight that I can place on these two medical reports is constrained because they are untested pieces of evidence (informed in part at least by disclosures made by only one party to the proceedings); nonetheless they have been prepared by treators of the two children and do not appear to have been produced at the direction of a party to support the relief sought within these proceedings, but rather produced to support the future management of their patients.
To an extent, I accept the submissions from the husband about the weight I can give to some of the wife’s untested evidence within their affidavit, however that does not mean that I can simply disregard it, given the very nature of interlocutory hearings is to determine issues in the absence of a proper testing of contentious evidence which requires (at times) the making of findings after weighing competing controversial evidence.
I also accept the husband’s submissions about some of the circumstances disclosed within the evidence as being in existence before August 2023, and therefore being capable of informing the wife’s decision to agree to the subject orders.
With the above in mind, I am satisfied that I can make the following findings.
Notwithstanding the husband’s contentions, W’s circumstances have changed because:
(a)Firstly, W has ongoing physiological and neurological conditions with symptoms that are impeding her capacity to physically attend school during her HSC year (which commenced after the subject orders were made). As W’s HSC year did not commence until after the subject orders were made, it is not reasonable to expect that the wife would have had regard to any prospective difficulties that W may have encountered months later;
(b)Secondly, as of May 2024, to manage W’s conditions (amongst others), W needs to consult with a multitude of treators, albeit I cannot say with certainty that all nine of the potential treators listed within the GP Management Plan will be required to manage the specified conditions referred to above. How those consultations will be arranged is unclear but inferentially, with the husband having no contact, it would appear to fall on the wife to make these appointments happen. Again, on the available evidence before me it is not reasonable to find that the wife must have taken these issues into consideration at the time the subject orders were consented to;
(c)Thirdly, the wife says that because of the difficulties they are having in finding rental accommodation, there is no certainty about where W will be living which may mean either a longer commute or W changing school mid-way through her HSC year. The wife is concerned that given the difficulties that W is already experiencing in her HSC year (including her capacity to attend school), a move away from the family home may significantly affect W’s capacity to complete the HSC.[12] While I can safely infer that it was known at the time of the subject orders that W would commence the HSC later that year, the subsequent difficulties experienced by W in tandem with the wife’s difficulties in securing rental accommodation that would not unnecessarily affect the commute to school, could not have been reasonably apprehended at the time the subject orders were made; and
(d)Finally, the CIR has, for the first, time enabled the parties to comprehend W’s views and experiences through the forensic gathering and recording of her expressions. As part of that process (which occurred after the subject orders were made), the CIR records that W has experienced a much calmer environment since the husband left the family home.[13] The parties’ ability to comprehend W’s experiences through a forensic lens occurred after the subject orders were made and which had the consequential effect of requiring W to move out of the family home because it was to be sold. Self-evidently it is unreasonable to expect that the wife would have been aware of these expressions at the time of the subject orders and so the wife could not have considered the emotional benefits to W from remaining in the calmer environment she is reportedly now experiencing, as opposed to the potential impacts arising from a change to that environment.
[12] MSK-[22].
[13] CIR-15.
Notwithstanding the husband’s contentions, X’s circumstances have changed because X has had difficulties transitioning from his primary school environment (2023) to his secondary school environment (2024) in circumstances where his capacity for social communication must be impaired given his diagnosis.[14] There is no evidence about where X would live if he was forced to leave the family home and the wife has concerns about the burden that will be imposed upon the children (including X) if the commute time increases.[15] Whilst the wife may have been aware of some of these issues in August 2023, it is not reasonable to infer that she would have been able to take into account the potential for her son to have so many difficulties with the transition to high school, particularly about him being the victim of bullying.
[14] Exhibit ‘W9’.
[15] MSK-[22].
A change in the wife’s ability to secure rental accommodation?
The wife has been unable to secure suitable rental accommodation for them and the children to move into and this has been the source of significant anxiety for the wife.[16]
[16] MSK-[30], [32]-[35] and exhibit ‘W6’.
I take judicial notice of the widely published difficulties surrounding renters trying to secure accommodation. On the evidence before me I am satisfied that the wife would have been aware of the difficulties facing them. However, it is not reasonable to infer that at the time of the subject orders, the wife would have been aware of the potential consequences of those difficulties for W and X as they respectively transitioned into the HSC year and their secondary education.
A change in the wife’s occupation?
The wife has secured a change in occupation to become a carer although the quantum of their income and hours of employment is not entirely clear.[17]
[17] Exhibit ‘W10’.
I infer that a change to a person’s occupation is something that is within the vicissitudes of modern life and is not a change that I should have regard to.
Has there been a new fact?
About a month after the subject orders were made, the maternal uncle, Mr L agreed to loan the wife sufficient funds to enable the outstanding mortgage arrears to be paid and to ensure the payment of mortgage payments until the finalisation of the financial proceedings between the parties.[18]
[18] MSK-[52].
In the absence of the wife’s former lawyer being on notice and able to respond to the allegations made against them, I am unable to make any findings about why there was such a delay between when Mr L made this circumstance and when the husband was informed of it.
At the date of the hearing, I heard that the arrears amounted to about $62,390 and the monthly repayments were about $5,232.[19] It also appeared to be common ground that the mortgagee has declined to act on the default and is considering its position[20] and that to-date the husband’s credit rating has not been adversely affected.
[19] Exhibit ‘H1’ at [14] & [27.f.].
[20] Exhibit H1-[29].
Because the loan account is solely in the husband’s name and without the husband’s co-operation, the mortgagee says that they are unable to accept funds from the wife to ameliorate the current default position as it relates to the outstanding arrears.[21]
[21] MSK-[54] and the Affidavit of Mr L filed 11.05.2024 where at paragraphs [3] and [4] they depose to some of the terms of the loan including to make the mortgage payments as and when they become due. For convenience, this document shall be referenced as ‘MRL’ and paragraphs identified in square parenthesis.
Mr L says that in addition to the above terms of the loan, they are able (if required) to make a partial property adjustment payment of $20,000 to the husband as would have been disbursed, had the subject orders been complied with and the family home sold.[22]
[22] MRL-[3]. As to the partial property adjustment payment of $20,000, see Order 3.d.i. of the subject orders.
From the evidence I am satisfied that Mr L has access to about $120,000 via an off-set account associated with their home at Suburb M, and that they also have the capacity to meet the ongoing loan repayments because of the significant equity available to them.[23]
[23] MRL-[12]-[15].
Other facts that appear to have arisen after the making of the subject orders include a submission about who should pay for the ongoing utilities associated with retention of the family home.[24] There was no evidence about what the husband’s exposure looked like. There was evidence about the ongoing impact upon the husband (both financial and emotional) arising from them remaining subject to the existing mortgage. There was limited evidence that the husband wanted to obtain another mortgage or any other credit.[25] Instead, the husband merely speculated the potential for them to experience difficulties should they wish to do so. It seems to me that given the overall financial position of the husband, the prospect of the husband having the capacity to take on more credit is very limited.[26]
[24] Exhibit ‘H1’ at [30].
[25] Exhibit ‘H1’ at [28].
[26] See the summary of the husband’s financial circumstances at Part B of the Financial Statement of Mr Taheri filed 08.03.2024. For convenience, this document shall be referenced as ‘FSOA’, and items numerically identified.
I accept however that some weight should be given to the proposition that the husband’s credit rating is exposed whilst ever they do not have the capacity to meet the repayments due on a $760,000 mortgage.[27] The reason I say ‘some’ is because the submission is inconsistent with the husband’s failure to mitigate their exposure to adverse outcomes and the mortgagee’s equivocal response (both of which are explored within this decision).
[27] Exhibit ‘H1’ at [28].
Having regard to the decision of Cleary J in Hedley & Hedley [2019] FamCA 946 at [7], for the reasons set out above, I find that it was not reasonably available to the wife to put the following events before the Court at the time the subject orders were made:
(a)Firstly, that there was a change in circumstances with respect to two of the children and the wife’s ability to secure appropriate rental accommodation given the potential impacts for those two children; and
(b)Secondly, the willingness for Mr L to financially support the wife in the maintenance of the family home until a final hearing.
As to the second point, to be clear, I confirm this to be a new fact.
I am further satisfied that the above events were not reasonably available for the wife to put before the Court at the time that the subject orders were made.
Having made those findings, I am satisfied that I have a broad discretion to vary or set aside the subject orders (should I choose to do so) as permitted within r 10.13(1)(c) and because of the Court’s inherent power to regulate and govern its own practices and procedures, subject to jurisdiction.[28]
[28] See the decision of Judge Harper (as he then was) in Malloy & Stopford Malloy [2020] FamCA 506 [15]-[16]; (2020) 61 FamLR 449 where at [15]-[16] he discussed the previous iteration of r 10.13(1)(c) [namely r 17.02(1)(c) of the Family Law Rules 2004 (Cth)] and followed the decision of Wilkshire and Coffey v Commonwealth of Australia (1976) 9 ALR 325, at 330; I Limited & Chester and Ors [2010] FamCAFC 251; (2010) FLC ¶93-456; (2010) 44 FamLR 585 at [170].
Later, I will return to what orders I should make about the subject orders.
Whether, by way of enforcement, the subject orders should be confirmed subject to one variation empowering the husband to act as sole trustee for the sale of the family home?
The husband says that s 105 grounds my jurisdiction to make an enforcement order in the terms sought by him. It seems to me that there is also some relevance to be had from r 10.13(1)(c).
Regardless, and taking a broad-brush approach, the two issues I need to resolve are whether the wife is in default (being a new fact) and if so, should I exercise my discretion to vary the subject orders by way of enforcement, and if so, how?
Is the wife in default of the subject orders?
Notwithstanding the protestations of the wife about an apparent lack of knowledge, I am satisfied that the wife is in default of the subject orders. The reasons why will now be explored.
The only action taken by the wife which notionally could be seen as compliant is that in September 2023 the wife nominated a real estate agent to conduct the sale of the family home.[29]
[29] Affidavit of Mr Taheri filed 24.04.2024 at paragraph [5]. For convenience, this document shall be referenced as ‘MRT’ and paragraphs identified in square parenthesis.
Otherwise, it is uncontroversial that as regards to the sale of the family home, the mother has failed to comply with Order 2.b. of the subject orders, resulting in the family home not being listed, marketed, or sold meaning that the family home remains registered in the husband’s name and the wife continues to have sole occupation with the children having the benefit of living there too.
On 5 April 2024, the delegate (for all intents and purposes) confirmed the subject orders (‘the delegate’s orders’).[30] On 26 April 2024, the delegate’s orders were stayed.
[30] Exhibit ‘H1’ at [16].
Following receipt of a Default Notice in March 2024, the husband caused their lawyer to engage with the lawyers for the mortgagee. In March 2024, the mortgagee’s lawyers had not received instructions to commence enforcement proceedings for the default and by May 2024, their advice was that they were still considering their position.[31]
[31] MRT-[17] and Exhibit ‘H8’.
The family home remains unsold.
Should I exercise my discretion and vary the subject orders by way of enforcement, and if so, how?
Given the conduct of the wife, the husband now contends that the subject orders should be varied to appoint the husband as sole trustee for the sale of the family home.
I am grateful for the thorough submissions made by the husband’s lawyer on this topic and have reflected on the summary of Carew J in the case of Suris & Suris (No 2) [2023] FedCFamC1F 89 at [22].[32]
[32] Exhibit ‘H1’ generally.
To some degree, those factors informing the exercise of my discretion are like those inherent within the exercise of my jurisdiction (pursuant to r 10.13(1)(c)). I accept that the basis for my discretion is different depending on which legislative provision I adopt.
Consequently, and to avoid repetition, I have had regard to the circumstances referred to above as may be relevant to my decision.
In addition, I note that the husband says that due to the wife’s default, they are living from week-to-week and that they are experiencing symptoms related to them being extremely stressed financially.[33] As noted earlier, I accept that the mortgagee is not bound by these Orders and (subject to further judicial intervention), is capable of exercising its rights to foreclose although I trust that serious consideration will be given to this decision before doing so.
[33] MRT-[32]-[34].
Reflective of Nygh J’s comments about the parties’ conduct in the case of Kerr & Kerr [1983] FamCA 3; (1983) FLC ¶91-329; (1983) 8 FamLR 1023, a few additional matters are worth commenting on:
(a)Why is it that the husband is the applicant to an enforcement application and not the wife to a variation application? In the absence of (at least) documentary records from the wife’s former lawyer (which the wife could have obtained but has chosen/failed not to), there is no way to test the validity of their complaints against the lawyer, and so there is limited weight I can give to the wife’s contentions that seem to try and justify the wife’s delay.
(b)For the same reason as asserted above, given the dearth of evidence from the wife’s former lawyer, I am unable to make favourable findings that would justify why the wife did not at the outset apply to vary or set aside the subject orders instead of/or contemporaneously with them approaching the mortgagee;
(c)Despite the husband’s initial actions in applying for hardship (which clearly were aimed at mitigating risk), I don’t understand why later, the husband didn’t jump at the chance to mitigate the potential risk of foreclosure by accepting Mr L’s payment of at least the mortgage arrears. It seems to me that the husband’s decision was irreconcilable and driven by the conflict between the parties causing me to find that the husband has also engaged in poor conduct against both parties’ interests.
Finally, I accept that there is an expectation that parties are entitled to the ‘fruits’ of the orders of the Court.
However, having weighed up the competing evidence and balancing the parties’ interests, I am not satisfied that it would be equitable for me to enforce the subject orders as sought.
This is because, stepping back and looking holistically at the parties’ ongoing financial dispute–
(a)I accept the evidence that I have a party who (despite their poor conduct in not immediately seeking to vary or set aside the subject orders and/or immediately approaching the husband with an alternative to more court proceedings) has the capacity to maintain an asset of the parties’ relationship and thus avoid the irreversible loss of that asset (if the property was to be sold prematurely in accordance with the enforcement of the subject orders);
(b)I accept that the other party will continue to have the legal rights and responsibilities that come with their sole ownership of the family home but by their own conduct, this must not necessarily trouble them because even when given the opportunity to mitigate the adverse consequences of remaining in arrears, they have chosen not to accept the funds proffered by Mr L (as represented through an exchange of legal correspondence);
(c)Any prejudice that the husband argues they will suffer by retaining sole ownership in the family home until the proceeding is finalised is something I find that the husband can sustain because –
(i)even though in more recent times, they were aware that the mortgagee was pressing them for action, they could not see a way forward to reduce or remove the arrears by accepting the payment from Mr L;
(ii)there was no evidence of the husband being restricted in their current or future financial activities as a result of the burden (if the mortgage balance remained up to date);
(iii)if I vary or set aside the orders pursuant to r 10.13(1)(c), I can ensure that the husband will be forewarned that the wife’s financial support has expired and allow the husband the opportunity to sell the family home in circumstances where during the hearing the wife consented to that being the consequential effect of a failure by them to comply with any orders I made regarding the upkeep of the mortgage.
Put simply;
(a)Where the wife wishes the opportunity to argue for their retention of property in which the parties hold an interest and there is a finding that they can; and
(b)Where any risks inherent in that approach can be ameliorated to protect the husband’s interests;
it would be inequitable for me to enforce the subject orders.
The inequitability of doing so, is compounded by the relevant orders being interlocutory in nature and where enforcement of the interlocutory orders could have long-term repercussions for the overall property adjustment between the parties.
Should I vary or set aside the subject orders?
The wife has asked me to set aside and/or vary the subject orders by making further interlocutory or interim property orders. If I accept the wife’s primary relief (which is very different to the effect of the subject orders), I am satisfied that it would be more efficient and easier for the parties to interpret and understand any changes I may make by setting aside the subject orders and starting again.
In exercising my discretion, I am mindful of the assertion that the overriding principle is do whatever the interests of justice require in the particular circumstances of the case.[34] Relevant to my application of r 10.13(1)(c), in addition and in the exercise of discretion, the Act requires the Court to observe its obligations to the overarching purpose which, for ease of reference, is set out below:
[34] Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 at 46 (McLelland J) as adopted by Abraham & Abraham [2012] NSWSC 254 at 11, which in turn was considered in Hedley & Hedley [2019] FamCA 946.
Section 95 Overarching purpose of the family law practice and procedure provisions
(1)The overarching purpose of the family law practice and procedure provisions is to facilitate the just resolution of disputes:
(a)in a way that ensures the safety of families and children; and
(b)in relation to proceedings under this Act in which the best interests of a child are the paramount consideration--in a way that promotes the best interests of the child; and
(c)according to law; and
(d)as quickly, inexpensively and efficiently as possible.
Note: For family law practice and procedure provisions, see subsection (4).
(2)Without limiting subsection (1), the overarching purpose includes the following objectives in relation to proceedings under this Act:
(a)the just determination of all such proceedings;
(b)the efficient use of the judicial and administrative resources available for the purposes of courts exercising jurisdiction in such proceedings;
(c)the efficient disposal of the overall caseload of courts exercising jurisdiction in such proceedings;
(d)the disposal of all such proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
(3)The family law practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make applicable Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.
(4)The family law practice and procedure provisions are the following, so far as they apply in relation to proceedings under this Act:
(a)the applicable Rules of Court;
(b)any other provision made by or under this Act, or any other Act, with respect to the practice and procedure of the Federal Circuit and Family Court of Australia or any other court.
Given the relief sought, I have also reflected on the two-step approach espoused within Strahan at [118]. Firstly, I am satisfied that it is appropriate that I make an interim property adjustment order because the interests of the parties in the family home are at risk of adverse action by a third party that requires an immediate remedy, as opposed to waiting for a final decision to be reached.
Secondly, having reflected on ss 79 and 75(2) through the prism of the parties’ circumstances (with those of most significance having been explored earlier), I am satisfied that the proposed orders will preserve the parties’ interests about the family home whilst protecting the husband’s interests should the wife fail to meet their obligations to maintain that asset. In addition, the proposed orders reflect a conservative approach aimed at ensuring that both parties retain the right to agitate for their respective final relief and otherwise meet their respective legitimate expectations at trial as well as ensuring the parties’ interim need for financial provision is provided in a way that is tailored to their needs at this time and into the future.
Noting the above, I am satisfied that it is in the interests of justice, proper and is otherwise just and equitable to set aside the subject orders and make orders to:
·Allow the wife the opportunity to maintain the family home;
·Require the wife to pay $20,000 to the husband by way of partial property adjustment; and
·To allow the husband to be the sole trustee for the sale of the family home should the wife fail to maintain it as prescribed by the orders I intend to make.
In summary this is because the practical outcome will be to:
(a)Ensure the safety of the children – particularly the emotional safety of W and X by allowing them the opportunity to remain in their known environment while ever the wife can meet their obligations;
(b)Preserve an asset of the relationship in circumstances where to do nothing will mean the irreversible loss of an express desire by the wife to agitate relief that permits them a proprietary interest in the family home at the time the property adjustment dispute is finalised[35];
(c)Protect the husband’s entitlement to the partial property adjustment sum of $20,000 that no doubt informed the compromise inherent in the consent position reflected in the subject orders and which the husband would otherwise have been precluded from receiving because the family home was not sold; and
(d)Balance the above considerations while protecting the husband’s exposure to risk (should the wife failure to adhere to these Orders) by allowing self-executing orders for the sale of the family home.
[35] Strahan at [136].
On that last point, by way of explanation, the husband says that they have been locked out of the mortgage account and so cannot easily obtain a balance; but are still receiving advice about changes to the mortgage repayments.[36] As of 8 May 2024, the outstanding arrears was $62,390 with the monthly repayments of $5,232.64 due on the 25th of each month.[37] That means that if no payment has been made in the meantime, then by 25 June 2024, the arrears would have accrued to about $73,000 ($62,390 + $10,465.28 (or $5,232.64 x 2). The re-hearing (and my decision) post-date 25 June 2024.
[36] MRT-[20] & [23].
[37] Exhibit ‘H8’.
To ensure that the husband’s interests are protected, the orders will mandate that:
(a)Forthwith the parties are permitted to provide a copy of the Orders to the mortgagee’s lawyers, O Law Firm;
(b)Within three business days, the wife is to deposit into the trust account of Yazbeck Law (the lawyers for the husband) $86,000 (‘the trust funds’);
(c)Within 48 hours of the trust funds being cleared for withdrawal, the husband will authorise Yazbeck Law to:
(i)cause all the trust funds to be deposited into the loan account attached to the mortgage secured over the family home so that there are no more arrears, and the loan account is in advance; and
(ii)give written electronic notice of the details of the deposit to the wife and to the mortgagee’s lawyers via their respective email addresses.
(d)For the purposes of maintaining the mortgage on the family home, by the 18th day of each month, commencing 18 July 2024, the current amount of the mortgage repayment, shall be deposited by the wife into a financial account nominated in writing by the husband and contemporaneous with that deposit, the wife will notify the husband by email of the transaction; and
(e)If the wife does not comply with any of the orders relating to the payment of money, then the husband will become the sole trustee for the sale of the family home in terms consistent with the subject orders save that, the only premature distribution will be the sum of $50,000 to the wife (because the husband has already received a $20,000 payment).
By framing the orders in this way, if the wife defaults on making a monthly payment, then the husband will have about two months to settle the sale of the family home and avoid the mortgage falling back into arrears. This will then secure the husband’s credit rating, something that the husband was concerned about.
Other orders and notations will be made to facilitate the substantive effect of my decision.
No orders have been made about the payment of utilities and rates that are otherwise attached to the family home. This is because there has been no procedural fairness about what those debts look like and neither party sought for the making of such orders. Accordingly, it is not just and equitable nor in the interests of justice for me to make orders about the issue because in essence I would be making orders in a vacuum.
Both parties continue to have an obligation to maintain the family home and it seems that the husband pays less than $40.00 per month by way of child support to support four children in circumstances where at the same time they live in a home leased by their partner who receives the benefit of the husband’s contribution to the lease @ $320.00 but whom cannot or has not been asked to make any payment for the benefit of the husband in return.[38]
[38] FSOA- 18, 21 & 31 and MRT – [31].
Having made those observations, it seems to me that if the wife’s case is for them to retain the family home, they should be demonstrating their capacity to do so in the long-term by now volunteering to make those payments for which they are receiving the benefit of (through occupation).
Apprehending that this may not come easily (given the animosity between the parties as demonstrated by their conduct for which I have already made adverse findings), and given the issues in this case and informed by my earlier comments about the parties’ respective conduct, I will make a notation to the effect that the matter be given some priority in its future case management as I fear that the parties’ costs will otherwise not be proportionate to the dispute and that both the Court, the parties and their lawyers will do a disservice to our respective obligations to the overarching purpose (s 95).
I turn then to the final issue.
Is a valuation of D Pty Ltd required for the purposes of the substantive property adjustment proceeding?
The short answer is “no”. Here is why.
It appears to be common ground that D Pty Ltd is owned and controlled by the husband.[39] Reviewing the husband’s financial statement, the husband discloses that the balance sheet of D Pty Ltd encompasses:
(a)One Commonwealth Bank of Australia account #...25[40] E$800
(b)Motor Vehicle 1[41] E$4,000
(c)Their 100% interest in D Pty Ltd[42] $0
(d)Loan owed to Mr N[43] -E$73,000
TOTAL -$68,200
[39] FSOA-41.
[40] FSOA-37.
[41] FSOA-40.
[42] FSOA-41.
[43] FSOA-50.
The husband’s evidence is potentially inconsistent insofar as their source of income is concerned, with the financial statement filed in March 2024 disclosing them to be self-employed (via D Pty Ltd) and earning a gross weekly income of $850[44] but in their affidavit filed in April the husband says that they work as a transport worker.[45]
[44] FSOA – 8 & 9.
[45] MRT-[32].
There was no denial that the only employee of D Pty Ltd was/is the husband and on that basis, it is open for me to infer that the company is the alter ego of the husband.
The wife appears to contend that a forensic valuation is required to determine the value of D Pty Ltd because to make a decision that is just and equitable, the Court needs to ascertain the value of each party’s proprietary interests.[46] Although their relief is not explicit, it seems that impliedly this is to be a single expert valuation paid for by the husband.[47] The relief is broad and relies on the parties co-operating which (for reasons already set out) I have serious doubts is actually possible.
[46] See for example Stanford & Stanford [2012] HCA 52; (2012) 247 CLR 108; (2012) 87 ALJR 74; (2012) 293 ALR 70; (2012) FLC ¶93–518; (2012) 47 FamLR 481.
[47] See Response to Application in a Proceeding filed 08.03.2024 at Part B, paragraph 2.
Other than what has occurred with regards to their inexplicable conduct in trying to preserve their interests in the family home, and despite having months to prepare for the review hearing, the wife brought no evidence about who the three proposed experts were, whether they consented to being nominated and how much their fees would be. Instead, the wife asked for another 14 days (post-order) to collate that information and send it to the husband who then is supposed to pick one within seven days.
Given the alleged value of D Pty Ltd and the lack of evidence about how much it will cost for an accountant to forensically value the entity, I am left wondering about whether there will be a disproportionate cost to resolve the alleged issue in dispute. The Court is often left grappling with what property is worth in the absence of consensus or expert evidence and still manages to find a way to make orders that are just and equitable. At other times, through the process of disclosure and/or cross-examination, recalcitrant parties are caught short in their failure to disclose and again the Court has a remedy available to it so as to ensure a fair outcome.[48]
[48] See for example Weir & Weir [1992] FamCA 69; (1993) FLC ¶92-338; (1992) 110 FLR 403; (1992) 16 FamLR 154.
On its face, the biggest asset of D Pty Ltd was the husband’s labour, something which (to be frank) is unlikely to be capable of ascribing a market value to D Pty Ltd (particularly if the husband is now working as a transport worker). It seems to me that any evidence about the income earned previously by D Pty Ltd is now more likely to be relevant to the husband’s current and future financial contributions and their capacity to earn.
Considering their obligations towards the overarching purpose, the wife could have brought evidence to address the proportionality of the husband’s potential exposure to costs. The wife chose not to.
The primary issues appeared to be about either the husband’s income earning capacity and/or the husband’s conduct in the treatment of either current or former assets of D Pty Ltd. I am satisfied that those issues can be appropriately and more cost-effectively addressed through either disclosure (including via subpoena) and/or cross-examination.
For the above reasons, the wife’s application for the appointment of a single expert forensic accountant witness is dismissed.
CONCLUSION
For the reasons set out above, I am satisfied that the orders I shall make are just and equitable and otherwise are in the interests of justice and proper, with the notations being appropriate.
I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kearney. Associate:
Dated: 27 June 2024
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