Teasdale and Teasdale
[2017] FCCA 986
•19 May 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TEASDALE & TEASDALE | [2017] FCCA 986 |
| Catchwords: FAMILY LAW – Wife’s application for order releasing trust monies representing proceeds of sale of property transferred to wife under binding financial agreement – husband opposes order having extant applications to set aside Binding Financial Agreement, and if successful then property adjustment application – orders made having effect of preserving trust monies pending hearing of husband’s extant applications, but releasing certain trust monies by consent of husband. |
| Legislation: Family Law Act 1975, ss.34, 71A, 90, 90C, 90KA, 114 |
| Cases cited: Black & Black (2008) 38 FamLR 503 |
| Applicant: | MS TEASDALE |
| Respondent: | MR TEASDALE |
| File Number: | PAC 3041 of 2013 |
| Judgment of: | Judge Newbrun |
| Hearing date: | 20 October 2016 |
| Date of Last Submission: | 6 February 2017 |
| Delivered at: | Parramatta |
| Delivered on: | 19 May 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr Battley |
| Solicitors for the Applicant: | Team Legal Group |
| Solicitors for the Respondent: | Michael Vassili Barristers & Solicitors |
ORDERS
The wife be forthwith permitted to withdraw $45,000, from the Controlled Monies Account ((omitted)), held in trust for the parties by the wife’s solicitor, but otherwise the wife’s application in a case filed 17 October 2016 is dismissed.
Costs of the parties are reserved, in relation to the wife’s Application in a Case filed 17 October 2016 and husband’s Response filed 7 November 2016.
IT IS NOTED that publication of this judgment under the pseudonym Teasdale & Teasdale is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 3041 of 2013
| MS TEASDALE |
Applicant
And
| MR TEASDALE |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons for decision relate to the determination of the wife’s Further Amended Application in a Case filed 17 October 2016 seeking an order that she be permitted to withdraw $100,000 from a controlled monies account held in trust for the parties by the wife’s solicitor. (If necessary, the Court grants leave for that application to be filed).
The husband’s Response to the above application filed 7 November 2016 seeks orders that the application be dismissed. (If necessary, the Court grants leave for that application to be filed, having noted the wife’s objections to leave being granted).
However, in the husband’s written submissions, he indicates that he would consent to an interim property award to the wife of $45,000 although he does not concede the wife’s application is founded on a sound legal or evidentiary basis.
The parties entered into a Binding Financial Agreement on 5 November 2012, pursuant to Section 90C of the Family Law Act1975 (the Act). Under that agreement, inter alia, the former matrimonial home (the property) of the parties was to be transferred to the wife, which later occurred.
The wife sold the property and settlement occurred in April 2015. Prior to settlement, the husband had placed a caveat on the property. Just before settlement, the wife agreed with the husband to hold an amount of about $200,000 from the proceeds of sale of the property, in trust for the parties in the controlled monies account with the wife’s solicitors, pending an agreement between the parties or order of the court, and there is presently about $203,000 sitting in the trust account. $20,000 was released to the wife from the proceeds of sale of the property at settlement, and a further $5,000 was released to the wife from the controlled monies account in late December 2016; a total of $25,000.
There is also an amount of some $46,020, representing the balance of the deposit from the agent, presently sitting in a Disputed Controlled Monies account.
The husband, in his Further Amended Initiating Application filed 18 October 2016, under the heading “Property Settlement”, seeks orders, inter alia, that the “Financial Agreement entered into by the parties on 5 November 2012 pursuant to section 90C of the Family Law Act 1975 be set aside”. He also seeks property settlement orders that the total monies held in the controlled monies account “in the sum of approximately $202,000” be released to the husband, and that the sum of $46,020 held in trust also be released to him.
The wife’s Response to Amended Initiating Application filed 31 March 2015 seeks a property order that the husband’s application be dismissed, or in the alternative, that the Binding Financial Agreement be affirmed.
The parties’ parenting and property proceedings are listed for a three-day final hearing on 31 July 2017.
Material relied upon by the parties
The wife’s Further Amended Application in a Case filed 17 October 2016 came before the Court in a busy duty list and each party was directed to file written submissions. Final material was filed in early February 2017.
The husband relies upon:
a)Further Amended Initiating Application filed 18 October 2016;
b)Notice of Discontinuance filed 1 August 2016;
c)Amended Response to a Case Application filed 12 July 2016;
d)Affidavit of husband filed 24 November 2015; paragraphs 23, 24, 31, 33, annexures G, L and N;
e)Affidavit of husband filed 21 June 2016, paragraph 15, and annexure G;
f)Affidavit of husband filed 7 November 2016;
g)Affidavit of husband filed 27 March 2015 (this affidavit is referred to in the husband’s affidavit filed 7 November 2016, paragraph 68);
h)Documents produced under the subpoenas by Team Legal Group;
i)Documents produced under the subpoena by (employer omitted);
j)Affidavits of Ms E filed 18 and 19 October 2016.
The wife relies upon:
a)Further Amended Application in a Case filed 18 October 2016;
b)Affidavit of the wife filed 18 (sic 17) October 2016;
c)Affidavit of wife sworn 6 February 2017;
d)Wife’s financial statement filed 22 June 2016;
e)Affidavit of Dr T filed 26 July 2016.
Both parties referred to a Balance Sheet filed 9 November 2016 in their submissions.
Evidence
The Court has considered the wife’s objections to the Affidavit of the husband filed 7 November 2016. The Court overrules the objections, save for the objection to paragraphs 53-65 of the Affidavit, noting the $46,020 was placed in the Disputed Controlled Monies account. The Affidavit of the husband filed 27 March 2015 is in support of the husband’s proposed order seeking to set aside the Binding Financial Agreement.
The husband is aged 43 years and the wife is aged 41 years.
The wife came to Australia from (country omitted) in 1982.
The parties married in (country omitted) in 2003. The husband came to Australia after the marriage in 2003.
The parties separated on a final basis in November 2010.
There are two children from the relationship; a boy aged 11 years, and a girl aged 8 years.
The children have been in the father’s primary care since about March 2015. On 28 April 2016, the Court ordered that the children live with the father, and that the mother spend time with the children, eventually, each fortnight from after school Friday until the beginning of school Monday. Further, the parties were to share school holiday time with the children.
In this context, it is noted that the father’s Further Amended Initiating Application filed 18 October 2016 seeks parenting orders that the children live with the father, and that the children continue to spend time with the mother every second weekend, in addition to each alternate Tuesday after school to 6:30 PM, together with sharing of school holiday times and other special occasions.
The husband’s Affidavits relied upon in these interim proceedings relating to the parties’ past financial relationship, including his asserted contributions to their financial relationship and to the children of the relationship are not significantly challenged by the wife in her two Affidavits. In the wife’s Affidavits she essentially refers to the matters relating to the Binding Financial Agreement and her current financial circumstances. The Court now sets out, but not fully, certain aspects of the husband’s Affidavits. The Court has had regard to the entirety of the husband’s Affidavits, as referred to immediately above in this paragraph.
The husband states that during the marriage he worked in paid employment in (occupations omitted) and supported the family with his earnings.
The husband states that neither party had significant assets at the time of cohabitation. He states that he did work around the home including other domestic chores. He helped care for the children.
The parties purchased the former matrimonial home at Property Q in 2005 for $330,000. A deposit was paid with the parties’ joint savings together with a first home owner’s grant from the government. A mortgage loan was taken out by the parties. The husband states that he met the monthly mortgage repayments and rates after the house purchase and up to separation.
The husband states that post separation he paid child support and other children’s expenses.
The husband states that he now pays for all expenses relating to the children living with him, and receives about $16 a fortnight in child support from the wife.
The husband states that in about late 2010 or early 2011, he and a family friend purchased a (business omitted) for $140,000, with each of the husband and his friend contributing $70,000. The husband states that about $40,000 of the $70,000 that he contributed towards the purchase of the (business omitted) was drawn from the mortgage over the former matrimonial home. The (business omitted) was sold for $150,000 in about December 2012; the husband received $60,000 and his friend $90,000.
In about January 2013, the husband purchased a (omitted) business, converted by him to a (business omitted), and which he currently owns. He purchased the business for $45,000. He used all the monies from the proceeds of sale of the former (business omitted) to purchase the new (business omitted). He states that the wife has not assisted him in the running of the old or new (business omitted). His brother assists him in the running of the business. (On 13 December 2016 the husband’s solicitors informed the wife’s solicitors that the husband had found a purchaser for the (business omitted) and the sale price is $46,000 gross. By letter dated 20 December 2016 from the wife’s solicitors to the husband’s solicitors, full details of the sale of the business was sought by the wife).
The husband states that when he left the former matrimonial home the parties owned a Toyota (omitted) car valued at about $5,000. He states that the wife retained this vehicle following the separation.
The husband states that the wife retained all household contents and jewellery when he left the former matrimonial home, which is stated to be valued at $15,000 in the Financial Agreement under section 90C of the Act between the parties and dated 5 November 2012.
The husband states that the wife retained cash at bank in the sum of $5,000, as stated in the Financial Agreement.
Pursuant to the Financial Agreement, the former matrimonial home was transferred to the wife. Thereafter, the wife dealt exclusively with that property, subject to the mortgage. The wife solely dealt with the finances after separation relating to that property. She withdrew funds from the mortgage redraw facility from time to time and she ensured that the mortgage instalments were paid.
As at 23 November 2012, being the date that the wife refinanced the mortgage over the former matrimonial home, the mortgage loan was about $261,000. Following refinancing, the mortgage loan was $310,000.
Between about 3 January 2013 and 21 January 2015, the husband asserts that the wife drew down amounts under the mortgage loan in the sum of $80,100. At the above settlement, the mortgage loan was discharged in the amount of about $309,000. Accordingly, it would appear that the difference between the mortgage loan as at 23 November 2012 and settlement of sale of the former matrimonial home in April 2015, about $261,000 and $309,000 respectively, was about $48,000 (see item 13 in the Balance Sheet).
On settlement of sale of the former matrimonial home (the selling price was $590,000), in April 2015, the husband consented to the release of $20,000 to the wife from the proceeds of sale, and on 22 December 2016 a further $5,000 was released to the wife.
After the separation, the children lived with the wife until December 2014. During this period the husband spent time with the children every Sunday for a few hours.
The wife states that she desperately needs money.
The wife states that she has been a part-time (occupation omitted), though unemployed since 29 November 2016.
The wife states that of the $20,000 paid to her following settlement of the sale of the former matrimonial home, she paid $9,000 for a rental bond of $1800 and rent in advance of $7,200. She does not state what she did with the balance of $11,000, though her Financial Statement filed 22 June 2016 does not reveal any significant cash funds held.
She has urinary incontinence disorder and a lactating disorder and she has insufficient funds to arrange consultation with specialists. She refers to prescription medicine for depression and mood stabilisation. (The court notes the medical report of the wife’s psychiatrist dated 21 July 2016).
In addition she seeks to purchase furniture, estimates living expenses of about $400 each week, and refers to outstanding legal fees of $40,000 (this legal fee debt is not referred to in the wife’s Financial Statement).
The wife’s Affidavit of 6 February 2017 states, inter alia, that since 17 October 2016, she is no longer living in emergency housing; she has obtained a two-bedroom unit in (omitted), being a property that she leases from the Human Community Housing Association, and pays about $77 per week after her Centrelink rent assistance subsidy. She states that she is still unemployed having lost her job on 29 November 2016. She states that on 22 December 2016 the husband agreed to her withdrawing $5,000 from the controlled monies account.
The wife’s Financial Statement refers to weekly income of $283 per week. Personal expenditure is stated to be some $364, including rental of $100. The wife’s recent affidavit indicates her new rental is now some $77 per week after rental assistance.
Her liabilities are stated to be MasterCard of about $10,000, and she states she owes about $14,900 in loans from her mother and friends (although not stating what the payment arrangements exist).
Assuming weekly expenditure of some $400, and deducting her weekly benefits income of some $283, the wife has a deficit of some $117 per week.
The wife states that the husband’s solicitor advised her solicitors in mid-December 2016 that the husband had found a purchaser for the (omitted) business with the sale price being $46,000 gross.
By reference to the husband’s Affidavit filed 27 March 2015, the husband seeks to contend, in relation to the Binding Financial Agreement and his proposed order that it be set aside, that, inter-alia, he did not receive proper independent legal advice before signing the Binding Financial Agreement. He states that although he did attend upon an independent solicitor, he did not receive such legal advice, and the Binding Financial Agreement was never interpreted or explained to him in the (language omitted) language. He states that he was not provided with “a copy of the signed independent legal advice certificate” from the independent solicitor.
The husband was in paid employment during the relationship and he contends that he contributed his earnings towards the financial running of the parties’ household, including the payment of the mortgage loan. Both parties appear to have contributed their joint savings towards the purchase of the former matrimonial home in 2005. The husband also contends that, when he was not at work, he assisted the wife in domestic chores and raising the children.
Post separation, for a period of some four years, the wife appears to have been the primary carer of the children up until December 2014, and thereafter and to date, the husband appears to have been the primary carer, with the wife spending regular time with the children since then.
Jurisdiction/Determination
The wife submits that she simply seeks an order for the release of $100,000 from funds held in a controlled monies account being funds held in trust for the parties pending a court order.
The wife expressly rejects the notion that her application is an application for interim property provision; she submits that the Binding Financial Agreement prevents the Court from making such an interim property order by reason of Part VIII of the Act having been effectively ousted by the terms of the Binding Financial Agreement. In this context the wife refers to section 71A of the Act, which states, inter-alia, that Part VIII does not apply to financial matters to which a financial agreement that is binding on the parties to the agreement applies, and refers to the decision of Black & Black (2008) 38 FamLR 503. That decision states, inter alia, that a Binding Financial Agreement, which is valid under the relevant provisions of Part VIIIA, has the effect of ousting the jurisdiction of the Court in respect to certain matters covered by the agreement.
The Court would accept those submissions of the wife. In this context, the Court infers that the wife seeks to enforce the Binding Financial Agreement pursuant to section 90KA of the Family Law Act 1975 (the Court further notes in this context that the wife’s Response to Amended Initiating Application filed 31 March 2015 seeks an order, inter alia, that the Binding Financial Agreement be affirmed).
The Court notes the husband’s extant application to set aside the Binding Financial Agreement which is to be determined at trial. The Court notes the husband opposes the wife’s sought orders, and in this context he also refers to his extant property adjustment application (relevant should he be successful in setting aside the binding financial agreement) seeking orders that all monies sitting in the controlled monies account on trust for the parties be paid to him, together with a further order that the balance of deposit monies sitting in the other controlled monies account be also paid to him.
The Court infers that the husband seeks to preserve the asset (namely the disputed funds of some $203,000 held in the controlled monies account), having the effect of preserving the status quo pending final hearing, whether pursuant to section 114 of the Act, or section 34 of the Act (and also noting this Court’s arguable power to preserve the subject matter of the dispute and to make orders ancillary thereto, as an aspect of its implied powers): see Teh & Muir [2015] FamCAFC 224.
In relation to the husband’s prospective property adjustment application (again which is subject to successfully setting aside the Binding Financial Agreement), the Court notes that the wife has already received $25,000 from the disputed monies and the husband will consent to a further $45,000 being released to the wife, which will bring the wife’s receipts to $70,000.
On the evidence before the Court, the husband has established a persuasive case that it is proper to make an order having the effect of preserving the asset (the disputed funds of some $203,000), whilst noting the husband’s consent to release $45,000.
Even taking into account the wife’s present apparent difficult financial circumstances, acting conservatively, there is a real risk of the husband’s arguable substantive applications being rendered nugatory were the wife’s proposed order seeking release of $100,000 to be made by the Court.
The trial of these proceedings is about 10 weeks away (31 July 2017). The wife asserts a weekly deficit of about $117 in terms of her usual weekly living needs. Accordingly, the release of $45,000 to the wife should provide her with some appropriate financial assistance at least to trial date, in respect to her weekly financial and other needs, together with assistance with legal fees.
Accordingly, the court will make an order that the wife be forthwith permitted to withdraw $45,000, from the Controlled Monies Account ((omitted)), held in trust for the parties by the wife’s solicitor, but otherwise the wife’s Application in a Case filed 17 October 2016 shall be dismissed. Such order is proper and the Court finds accordingly.
The effect of the above proposed order will be that the balance of the trust monies, after release of the $45,000 to the wife, will remain in the controlled monies account, pending further order of the Court, noting the parties’ former agreement in this context.
At this interim stage, the Court proposes to reserve each party’s costs of these interlocutory proceedings.
I certify that the preceding sixty two (62) paragraphs are a true copy of the reasons for judgment of Judge Newbrun
Date: 19 May 2017
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