Beltran & Preston (No 4) [2025] FedCFamC1F 939 (19 December 2025)

1. The respondent shall pay the applicant's party/party costs of this application, fixed in the sum of $2,500.
2. The Application in a Proceeding filed on 15 December 2025 is otherwise dismissed.
3. The Response to an Application in a Proceeding filed on 18 December 2025 is dismissed.

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 the pseudonym Beltran & Preston has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. The parties are in dispute over the implementation of property adjustment orders, which dispute is resolved by consequential orders explained by the following reasons.

1. Financial proceedings between the parties under Pt VIIIAB of the Family Law Act 1975 (Cth) ("the Act") were finalised by orders made on 25 August 2025, which were amended under the slip rule on 11 September 2025.
2. Relevantly, the applicant was declared the sole owner of the formerly jointly-owned real property situated at Suburb B (Order 1), the parties were ordered to sell another real property owned by the husband at Suburb M and then divide the net sale proceeds in certain proportions (Orders 3 and 4), and the parties were declared liable for and each required to indemnify the other against their individual debts (Order 10(b)).
3. The respondent is personally indebted to the NSW Legal Aid Commission ("Legal Aid") for $17,590.55 in legal fees, which entity lodged a caveat against the Suburb B property in January 2023 to secure the payment of the debt.
4. The respondent is also personally indebted to a litigation funder ("JustFund") for $89,462.25 for legal fees, which entity lodged a caveat against the Suburb M property in July 2025 to secure the payment of the debt. How it did so is a mystery because the respondent has never held any legal proprietary interest in that property. The respondent could only have possibly granted a charge over her own real and personal property to secure the funds advanced to or on her behalf by JustFund. Apparently, JustFund also registered a caveat over the Suburb B property, though it is unclear from the evidence when that occurred.
5. JustFund withdrew its caveat over the Suburb M property so its sale could be completed in November 2025, but the proceeds of sale are currently held in trust and, by arrangement between the interested parties, cannot be disbursed until the dispute over the distribution of the net sale proceeds between them is resolved.
6. Legal Aid maintains its caveat registered over the Suburb B property and will not remove it until paid, so it cannot be transferred into the applicant's sole name. JustFund presumably adopts the same position.
7. The applicant brought an Application in a Proceeding on 15 December 2025 seeking, first, an order compelling the respondent's payment of the JustFund and Legal Aid debts from her proportional share of the net proceeds realised on the sale of the Suburb M property, and second, an order compelling the removal of the caveats registered over the Suburb B property.
8. To avoid joining JustFund and Legal Aid to these interlocutory proceedings and thereby incurring further delay, the applicant abandoned the second aspect of his application and sought only these orders:
   1. That from the sum of $135,133.00 payable to [the respondent] under the orders made on 25 August 2025, the following payments be made forthwith from the proceeds held/received:

a. To JustFund the amount of $89,462.25 on account of Legal Fees

b. To [Legal Aid], the amount of $17,590.22 on account of legal fees.

...

1. That [the respondent] is ordered to pay the legal costs of [the applicant] for this application as follows:

a. On an indemnity basis

b. On a party-on-party basis

c. As determined by the Court

...

1. That any remaining sum (if any) is paid to [the respondent] by being transferred into account

1. In support of the application, the applicant relied upon his affidavit filed on 15 December 2025.
2. The respondent opposed the relief sought by the applicant but did not file and serve the rebuttal documents upon which she wished to rely by noon yesterday, as ordered. She filed a Response to an Application in a Proceeding late yesterday afternoon, seeking this alternate relief:
   1. A declaration that the loan secured by the caveat registered over the [Suburb M] property prior to settlement forms part of the costs of sale, specifically as part of "the encumbrance" within the meaning of Order 4.(a) of the Final Orders made on 25 August 2025 and amended on 11 September 2025.
   2. Pursuant to Order 4.(a) of the Final Orders, the encumbrance be discharged from the proceeds of sale prior to further distribution to either party.
   3. The respondent be paid $135,133.60, the amount equal to 28.63% of the sale price of the [Suburb M] property in accordance with Order 4.(c) of the Final Orders. Payment is to be made into the respondent's nominated bank account.
   4. That any payment already made to the applicant pursuant to Order 4.(b) be accounted for and adjusted so as to give effect to the proper sequencing required by the Final Orders.
   5. Such further or other orders as the Court considers appropriate to give effect to the Final Orders.

1. The respondent relied upon her affidavit filed today.

1. The final financial orders require the respondent to be paid 28.63 per cent of the sale price of the Suburb M property (Order 4(c)). The property was sold for $472,000, so the 28.63 per cent share represents $135,133. The applicant must then be paid the balance of the net sale proceeds (Order 4(d)).
2. However, the respondent must bear her own debts (Order 10(b)), so the JustFund and Legal Aid debts must be paid from her own funds. Aside from the respondent's share of the proceeds realised on the sale of the Suburb M property, she has no other asset or financial resource from which to pay the JustFund and Legal Aid debts. Hence, the debts must be paid from the $135,133 she is due to receive from the Suburb M sale proceeds.
3. Consequential orders are made to that effect to aid the implementation of the substantive financial orders. Jurisdiction and power exists to make such orders (ss 105, 109A, 109AA and 114 of the Act; Pera v Pera (2008) FLC 93-372 at [58]-[62]; Marriage of Phillips [1985] FamCA 19; (1985) FLC 91-634 at 80,126 - 80,127; Marriage of Warwick [1983] FamCA 29; (1983) FLC 91-342 at 78,310; Marriage of Ravasini [1982] FamCA 62; (1983) FLC 91-312 at 78,125-78,128; Moliere & Van Wyk [1980] FamCA 85; (1980) FLC 90-911).
4. The respondent's refusal to meet her own debt to JustFund stems from her belief that the caveat formerly registered over the Suburb M property constitutes an encumbrance over the property and so the debt to which it relates must therefore be paid from the sale proceeds before the parties receive their respective shares of the net sale proceeds (Order 4(a)). Her belief is misconceived.
5. First, because the debt would then be paid from the equity in the applicant's own property, it perversely amounts to a belief that he should pay her debt for the legal fees she incurred in the litigation. No costs order was sought or granted, so the parties bear their own costs.
6. Secondly, the caveat was improperly registered over the Suburb M property in the first place because it was owned exclusively by the applicant and the respondent had no proprietary interest in it which she could use to secure her liability. The applicant was ignorant of the debt and did not volunteer to use his property to guarantee payment of the respondent's debt.
7. Thirdly, even if the caveat was properly registered over the Suburb M property, the caveat ceased to be an encumbrance by the time the sale of the property was completed. JustFund removed the caveat so the sale could be completed, even though the debt due to it by the respondent was not paid out on the settlement. At that point in time, the JustFund debt was not charged against the Suburb M property.
8. Fourthly, according to the evidence adduced at trial, the only encumbrance registered over the Suburb M property was the loan due to the bank, secured by registered mortgage (at [18]). The respondent did not reveal her debts to either JustFund or Legal Aid (at [19] and [21]). By its terms, Order 4(a) only contemplates the payment of the solitary encumbrance in the form of the disclosed registered mortgage - not the payment of multiple encumbrances.
9. As for the other debt due by the respondent to Legal Aid, her refusal to meet it from her own resources is entirely unexplained. Unless that debt is paid from the proceeds realised on the sale of the Suburb M property, Legal Aid will not remove the caveat registered over the Suburb B property, which property is retained exclusively by the applicant under the terms of the final orders. The respondent purported to dispute the quantum of the Legal Aid debt in her affidavit, but did not adduce any evidence to contradict the exact value of the debt to which the applicant deposed.

1. The applicant should have his party/party costs of this interlocutory dispute, which are assessed and fixed at $2,500 (s 114UB(5)(a)). The respondent opposed any costs order, but only on the basis that the hearing was unnecessary. Plainly it was necessary because the evidence shows the parties corresponded unsuccessfully over a possible resolution before the applicant filed his application for relief.
2. The respondent's financial circumstances may be precarious, but only her obduracy caused the need for this further litigation. The applicant ought not to have been put to the inconvenience and expense of needlessly bringing and prosecuting this application.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Austin.