Ashley & Isaacs
[2023] FedCFamC1F 828
•22 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Ashley & Isaacs [2023] FedCFamC1F 828
File number(s): SYC 5162 of 2022 Judgment of: CURRAN J Date of judgment: 22 September 2023 Catchwords: FAMILY LAW – PROPERTY – interim hearing – where orders previously made by consent for the property of the parties to be sold – application in a proceeding seeking a party be prevented from purchasing the property of the parties – whether an injunction should be made to prevent a party from bidding on the property at auction – whether consent orders for sale of the property should be varied or set aside – whether the wife should be compelled to sign a contract for sale – where a mechanism for resolving disagreement has been ordered by consent –application in a proceeding dismissed Legislation: Family Law Act 1975 (Cth) ss 80, 106A, 114 Cases cited: Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337
Chief Commissioner of State Revenue v Danny and Steven Keevil [2015] NSWCATAP 98
Re Ross Jones, Ex Parte Green (1984) 156 CLR 185
Division: Division 1 First Instance Number of paragraphs: 65 Date of last submission/s: 22 September 2023 Date of hearing: 18 September 2023 Place: Sydney Counsel for the Applicant: Mr Apelbaum Solicitor for the Applicant: KMJ Family Law Counsel for the Respondent: Mr Fermanis Solicitor for the Respondent: Sage Solicitors ORDERS
SYC 5162 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ASHLEY
Applicant
AND: MR ISAACS
Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
22 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed on 25 August 2023 is dismissed.
2.The Application contained in the Response to Application in a Proceeding filed on 11 September 2023 is dismissed.
BY CONSENT AND PENDING FURTHER ORDER, THE COURT ORDERS THAT:
3.On a without admissions basis, the Respondent Husband shall pay the interest payments on the B Pty Ltd mortgage as and when they fall due pending the discharge of that mortgage.
NOTATION:
A.Points of claim were to have been filed by 1 September 2023 and within 6 weeks thereafter points of defence are to be filed pursuant to the Orders made on 21 July 2023 by Deputy Chief Justice McClelland. Following the filing of same the parties will attend a private mediation.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Ashley & Isaacs has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTCURRAN J:
These reasons for judgment were delivered orally and have been corrected from the transcript.
INTRODUCTION
These proceedings concern the property interests of Ms Ashley (“the wife”) and Mr Isaacs (“the husband”) primarily in respect of the property at C Street, Town D NSW (“the property”) which they purchased in 2022 for just over $5,000,000. The parties separated in May 2022. The property has been exclusively occupied by the husband.
The parties were in a relationship from 1995 until 2008, and again from 2009 until May 2022 when they finally separated. They have two adult children. The matter is listed for final property determination commencing on 22 July 2024.
Interim Orders were made by consent on 26 April 2023, including for the sale of the property, which was valued in late 2022 for $4,300,000.
The present matters for determination relate to competing applications in respect of the sale of the property. The competing applications are, in short, that the wife seeks she be appointed trustee for sale; that the husband be restrained from bidding at the auction if it proceeds; and that pending the sale he pays rent of $1,200 per week. The husband seeks that the orders made on 26 April 2023 be discharged and that the parties sign a contract for sale of the property to him and his fiancé.
BACKGROUND
On 26 April 2023, interim orders were made by consent as to the sale of the property and the terms for that to occur, in the following terms:
1. The parties forthwith do all acts and things and sign all documents necessary to list the property situated at and known as [C Street], [Town D], NSW, being the land in Certificate of Title […] and […] (‘the Property’) for sale. For the purposes of the sale the following apply:
a. Within seven (7) days of the date of these orders, the parties shall appoint [Mr E] of [F Company] [Town G] as the agent with respect to the sale.
b. Within seven (7) days of the date of these orders, the parties shall agree upon and jointly appoint a conveyancer with respect to the sale, and in the event that the parties are unable to agree upon a conveyancer within seven (7) days then:
i.Within seven (7) days of the date of these orders the Respondent shall forward to the Applicant a list of three (3) conveyancers; and
ii.Within a further seven (7) days upon receipt of the list referred to in paragraph 1(b)(I) hereof, the Applicant shall select one (1) conveyancer from the list;
iii.Within a further seven (7) days the parties shall jointly appoint the conveyancer selected by the Applicant to be the conveyancer with respect to the sale;
iv.In the event that the Applicant does not comply with order 1(b)(ii) the respondent shall select one (1) conveyancer from the list and notify the Applicant and within a further seven (7) days the parties shall jointly appoint the conveyancer selected by the Respondent to be the conveyancer with respect to the sale;
c. Within 14 days of the appointment of the real estate agent, the parties shall list the Property for sale by private treaty;
d. Both parties are at liberty to liaise with the appointed real estate agent and all written communications, including but not limited to texts and emails, with the real estate agent are to be provided to both parties;
e. All verbal communications between the parties with the real estate agent and the conveyancer are to be relayed to the other party as soon as practicable;
f. The Applicant may elect to inspect the Property on two occasions prior to settlement of the sale on the following terms:
i.The Applicant shall provide seven days notice to the Respondent of her inspection of the Property.
ii.At the inspection of the Property the Respondent must not be present at the Property.
iii.The Respondent may nominate up to three people to be present at the Property when the Applicant inspects the Property and the Applicant may select one person from that list and the Court notes that the parties agree that [Mr H] and [Mr J] are nominated persons for the purposes of this Order.
iv.The Applicant must accompany the real estate agent or their nominee (if available) and the person nominated (subject to their availability) in accordance with subparagraph (iii) above to the inspection of the Property.
v.In the event that no nominated person is available, the wife can attend the Property with the real estate or their nominee.
g. If the Property remains unsold for a period of three (3) months, the parties are to do all acts and things and sign all documents necessary to list the Property for sale by public auction and for the purposes of the auction:
i.The public auction shall take place no later than 60 days from the date that the property is listed for sale by public auction (which is 90 days from the date that the property was listed for sale by private treaty and remained unsold); and
ii.the parties shall as soon as practicable agree upon a reserve and failing agreement the parties shall set a reserve as nominated by the agent;
iii.The parties shall as soon as practicable agree upon such other terms and conditions necessary for the purposes of the sale and failing agreement shall agree to such other terms and conditions as nominated by the agent; and
iv.In the event that the highest offer receive at auction is within 10% of the reserve price, then the parties shall accept the offer.
h. If the Property remains unsold after a period of one (1) month after the auction the property be listed at a price 5% less than the reserve price and thereafter 5% less than the reserve price on a monthly basis until sold;
i. The parties shall cooperate in every way with the agent including but not limited to the following:
i.Making the keys available to the agent;
ii.Ensuring the Property is in a neat and clean condition including the grounds, gardens and lawns at the time of inspection by the agent and prospective purchasers and shall allow inspection of the property at all reasonable times as requested by the agent.
j. The parties shall execute a Contract for Sale in the form prepared by the conveyancer. In the event the parties cannot agree on the terms of the Contract of the Sale then the terms recommended by the conveyancer will be adopted; and
k. The parties shall execute all documents necessary to complete the sale within the time required by the Contract for Sale to ensure that the purchasers do not have the right to terminate or rescind due to failure to do so.
2. Any funds spent on preparing the Property for sale are to be agreed upon between the parties in writing.
3. In the event that the real estate agent uses photographs prepared by [K Company] in respect of marketing the Property, the wife shall reimburse the husband as to 50% of the costs which the Court notes equates to $357.50.
4. Pending the sale of the Property the parties are restrained from:
a. Encumbering, mortgaging or otherwise dealing with the property; and
b. Spending any sum greater than $1,000 on the Property each week, without the written agreement of both parties.
5. Pending the sale of the Property the Respondent to pay as and when they fall due, the following outgoings referrable to the Property including the council rates, water rates, electricity, and the like.
6. The Respondent shall forthwith arrange insurance on the Property up until settlement of the sale of the Property and provide to the Applicant proof of same.
7. On the sale of the Property the sale proceeds be applied in the following way:
a. To pay the real estate agent’s commission, auction and advertising expenses and any other expenses payable on the sale;
b. To pay the legal costs and outlays relating to the sale;
c. In discharge of the registered mortgage (dealing number […]) to B Pty Ltd;
d. To repay the lender the sum of up to $65,494.65 for funds that may be lent to the husband between the date of these orders and 31 May 2023 strictly on the following conditions:
i.That the totality of the funds lent to the husband are applied to pay [B Pty Ltd] in respect of the unpaid interest owing on the loan from [B Pty Ltd] up to 30 April 2023.
ii.That the husband provides to the wife, prior to settlement of the Property, written confirmation from [B Pty Ltd] of receipt of the funds in payment of interest.
iii.That the husband provides to the wife a duly executed Loan Agreement between him and the lender.
e. To provide the sum of $250,000 to the Applicant;
f. To provide the sum of $250,000 to the Respondent; and
g. The remaining funds to be held in a controlled monies account with Sage Solicitors.
8. Upon receipt of funds pursuant to order 7, the Applicant shall reimburse to the Respondent half the costs paid by the Respondent to insure the Property and half the costs paid by the Respondent in relation to the property valuation of the Property dated [late] 2022.
9. If after a written request from the other party, either party refuses or neglects to sign or execute and return a document when obliged to do so under this order, within seven (7) days of the request a registrar of the Federal Circuit and Family Court of Australia is hereby appointed under section 106A of the Family Law Act 1975 to execute such document on behalf of that party.
10. All extant interim applications be dismissed.
11. There be no order as to costs with the intention that each party bear their own costs.
MATERIAL RELIED UPON
Applicant wife
The wife relied upon the following documents for the purposes of her application:
(a)Application in a Proceeding filed on 25 August 2023;
(b)Financial Statement of the wife filed on 2 March 2023;
(c)Affidavit of Ms Ashley filed on 25 August 2023;
(d)Documents tendered from the Tender Bundle filed by the wife on 15 September 2023;
(e)Outline of Case Document dated 15 September 2023; and
(f)Written submissions filed today at 11.18am.
Respondent husband
The husband relied upon the following documents for the purposes of this application:
(a)Response to Application in a Proceeding filed on 11 September 2023;
(b)Affidavit of Mr Isaacs filed on 11 September 2023;
(c)Documents tendered from the annexures to his affidavit;
(d)Outline of Case Document dated 14 September 2023; and
(e)Written Submissions filed today at 9.41am.
ORDERS SOUGHT
Applicant wife
The wife sought the following orders, as set out in her Outline of Case Document:
1. The Applicant, [Ms Ashley], be appointed Trustee for the sale of the property situated at [C Street], [Town D], NSW, being the land in Certificate of Title […] and […] (‘’the Property’’).
2. The Orders for the sale of the Property made on 26 April 2023 be varied such that:
a. The Applicant is solely entitled to instruct the Agent conducting the sale, [Mr E] of [F Company] [Town G], to accept any offer to purchase the Property notwithstanding the Respondent may not agree to accept the offer.
b. The Applicant is solely responsible for doing all things necessary and signing all documents as are necessary to cause the Property to be sold.
c. The time by which the Property must be listed for auction if not sold by private treaty be extended at the Applicant’s discretion.
3. In the event the Property is to be sold by auction, the Respondent be restrained from bidding at auction or causing any other person to bid on the Respondent’s behalf.
4. The solicitors for the Applicant shall forthwith provide a copy of this Order to the Agent, [Mr E] of [F Company] [Town G], and the Conveyancer, [Mr L] of [M Company].
5. Pending the settlement of the sale of the property, or the Respondent vacating the property, the Respondent to pay rent to the Applicant at the sum of $1,200 per week.
6. The Respondent pay the Applicant’s costs of this Application in a Proceeding on an indemnity basis.
Respondent husband
The husband sought the following orders as set out in his Outline of Case Document:
1. The Application in a Proceeding filed by the Applicant on 25 August 2023 be dismissed.
2. Order 1 of the Court Orders dated 26 April 2023 (the Orders) be discharged, save and except for Orders 1(a) and (b).
3. To give effect to Order 2 above:
(a)The parties instruct the Real Estate Agent appointed in accordance with Order 1(a) of the Orders to cease marketing the sale of the property known as and located at [C Street], [Town D] in the State of New South Wales, being the whole of the land contained in Folio Identifiers […] and […] (the [Town D] Property); and
(b) The parties instruct the Real Estate Agent appointed in accordance with Order 1(a) of the Orders to cancel the auction scheduled to take place on 5 October 2023.
4. Within seven (7) days, the Applicant and Respondent shall sign the Contract for Sale in relation to the [Town D] Property to enable the sale of the said property to the Respondent, [Mr Issacs] and [Ms N].
5. To give effect to Order 4 above, the parties shall instruct [M Company] to include the following terms and conditions:
(a) The current Contract for Sale prepared by [M Company] be amended to reflect [Mr Isaacs] and [Ms N] as the purchasers, in equal shares as tenants in common.
(b) The purchase price on the Contract for Sale be $4,225,000.
(c) The settlement period documented on the Contract for Sale be amended to five (5) months, with a special condition to be included in the said Contract allowing for an earlier settlement date, subject to the provision of fourteen (14) days’ notice to the parties, with any agreement as to an earlier settlement date confirmed in writing.
6. Unless otherwise stipulated in these Orders, the parties shall comply with the Court Orders dated 26 April 2023, with respect to the sale of the [Town D] Property and the application of the proceeds of sale.
7. That the parties shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
8. If after a written request from the other party, either party refuses or neglects to sign or execute and return a document when obliged to do so under this order, within seven (7) days of the request a registrar of the Federal Circuit and Family Court of Australia is hereby appointed under section 106A of the Family Law Act 1975 to execute such document on behalf of the other party.
9. The Applicant pay the Respondent’s costs of the interim application on an indemnity basis.
10. In the alternative to Order 9 hereof, the Applicant pay the Respondent’s costs in accordance with the scale.
11. Such further or other orders as the Court deems necessary.
THE WIFE’S APPLICATIONS
Each of the orders sought by the wife is refused.
Should the wife be appointed Trustee for the sale of the property?
For the reasons that follow, I refuse to make the proposed orders sought by the wife for her to be appointed Trustee for sale of the property pursuant to s 80(1)(e) of the Family Law Act 1975 (Cth) (“the Act”).
The wife’s affidavit deposes to the history of attempts to sell the property since the consent orders were made and that several offers had been made by a Mr O to purchase the property, which were not accepted by either party.
In mid-2023, Mr O offered to purchase the property for $4,200,000, with a six-month settlement and 10% deposit. The wife accepted the offer. The husband rejected that offer on the basis that he now wished to purchase the property. Prior to then he had made a previous offer to purchase.
The next day, the husband instructed the real estate agent to put a counteroffer to the wife to purchase the property for $4,225,000 with a 5% deposit and settlement period of 3 months, with the option of an earlier settlement on 14 days' notice and a special condition that, in the event that it does not settle within the stipulated 3 months, the wife can retain the deposit.
The wife’s evidence is she had, and still has, significant doubt as to the bona fides of the husband’s offer. She contended that the offer was inconsistent with his previously deposed impecuniosity and that it was in fact an attempt to thwart the sale to a bona fide third-party purchaser, in an attempt to remain living at the property with his fiancé, rent free.
The wife contended that the evidence overwhelmingly supported that finding on a number of grounds, including that:
(a)Both financial statements filed by the husband disclosed a significant deficit in expenses over income;
(b)He had recently borrowed substantial sums of money of around $300,000 to meet existing expenses;
(c)The “purported loan documents” do not demonstrate a genuine capacity to purchase the property;
(d)He is currently in default on payment of the current mortgage to B Pty Ltd, with a current debt of $726,015 with a default interest rate being applied and significant arrears currently existing of an amount close to $40,000 that has accrued since May 2023.
(e)He has a CGT liability that has or will shortly crystalise.
(f)He has “lost his contract with [P Company]” and the wife disputes his new income source; and
(g)He is currently paying interest only on the loan to Mr Q, with a loan balance of $709,375.
The wife contends that the husband has failed to provide satisfactory evidence of finance approval that would facilitate him purchasing the property, such as finance with a major banking institution. The wife does not accept the husband is bona fide in his desire to purchase the property with his fiancé. As referred to below, I do accept that the husband and his fiancé are bona fide in their desire to purchase and thereby retain the property, and in the husband’s case a 50% interest in the property.
The husband’s evidence is that his circumstances have substantially changed since the sale orders were made in April 2023, being that: he is now engaged to his fiancé Ms N; he has new employment with R Pty Ltd which generated income of $3,000 per week to his company; he has secured finance for the purchase; and the value of the property is declining.
I am satisfied on the evidence that the husband is bona fide in his desire to purchase the property with his fiancé and I do not accept that it is a ruse to endeavour to remain in the property “rent free” or to extend his period of exclusive occupation. This is for several reasons. Firstly, the husband has consented to an order that, pending sale, he meet the interest due and payable on the loan from B Pty Ltd of almost $8,000 per month. Until this was agreed, there was no order or agreement is respect of the payment of the interest which was accruing. Secondly, as was acknowledged by his counsel, if the contract is executed by negotiation or he is successful at the auction if it proceeds, and the husband fails to complete the contract, he and his fiancé would be open to loss of the 10% deposit of over $400,000, and would be liable to pay damages arising from a breach of contract. Thirdly, the husband has provided evidence of an “indicative” offer of finance from T Pty Ltd to provide $2,500,000 to the husband, secured over the Town D property, dated 1 September 2023. Fourthly, the husband has paid a 5% deposit of $211,250 into the trust account of his solicitor for the contract he proposed, being the sum identified in Exhibit 13 (the letter from the lender) and in Exhibit 5 (email correspondence from the husband’s solicitors containing a trust statement confirming that they hold $211,250 in trust). Fifthly, the husband has produced evidence of the listing of Ms N’s otherwise unencumbered property which it is contended is to be sold to meet the balance of the purchase price and has provided evidence that the indicative offer of finance involves both the husband and Ms N.
It was raised that the husband failed to call Ms N to give evidence of her intention to sell her own property to purchase a 50% share of the property using her sale proceeds and that this was a very significant omission. I agree that the best evidence would have been from Ms N directly. However, there was evidence to which I give weight supporting the husband’s evidence of their joint intention to purchase the property, including that: the indicative offer of finance referred also to Ms N as borrower and guarantor; there was a title search of Ms N’s unencumbered property (Exhibit 14); and the Agency Agreement for sale dated mid-2023 with a price range of $2,200,000 – $2,400,000 (Exhibit 15). I am satisfied that this evidence supports a finding that the husband’s intention to purchase is bona fide and the capacity of the parties to fund the purchase, if successful at the auction or otherwise, through the sale of assets and borrowings, together with the finance of his fiancé Ms N has been satisfied. I am not satisfied that the two earlier financial statements should be given the weight contended as to the capacity of the husband to borrow because the proposed joint borrowing with his fiancé noting her assets, is a new circumstance.
Otherwise, there is no evidence that the husband has defaulted in any obligation pursuant to the consent orders made, or otherwise conducted himself in a manner that would justify an order for the wife to become Trustee for the sale. I am not satisfied on the evidence it is proper in these circumstances or it is in the interests of justice to make such an order.
As referred to later in these reasons, there is ongoing conflict between the parties as to the proposed terms of sale and whether the husband should be restrained from bidding at the auction if it proceeds. It is not appropriate that one party have the right to determine the terms of sale unless there is evidence that establishes, on the balance of probabilities, that the conduct of the other party warrants such an order. I am not so satisfied on the evidence that it does.
By reason of the ongoing conflict between the parties in respect of the terms of sale, it is appropriate that neither have the sole capacity to determine the terms and conditions of sale. The terms of the consent orders made on 26 April 2023 will apply to the auction if it proceeds. The evidence is that the auction is listed in late 2023. The consent orders made on 26 April 2023 will continue to apply to the agreed interim distribution of funds following sale. In my view there is no basis upon which I am satisfied it is appropriate to vary the orders.
Should the husband be restrained from purchasing the property at auction?
The wife seeks an injunction, as she contends, as referred to in these reasons earlier, that the husband is attempting to extend his exclusive occupation and thwart the sale to a bona fide purchaser. For the reasons that follow, I refuse to make the orders sought by the wife for the husband to be restrained from bidding on the property at auction or causing another person to bid on his behalf.
The application enlivens the consideration of the Court’s powers, under s 114 of the Act, to make such orders or grant such injunctions as it considers proper. The power to grant injunctions under s 114 is wide, the jurisdiction of this court to do so has been summarised by the High Court in Re Ross Jones, Ex Parte Green:
Section 114 of the Act gives to the court a wide power to grant injunctions, both in proceedings referred to in para (e) of the definition of "matrimonial cause" and in other proceedings. The power given in other proceedings is exercisable in "any case in which it appears to the court to be just or convenient to do so", but it is clear that it is only to be exercised in aid of the jurisdiction otherwise conferred on the court and that it does not enlarge the ambit of that jurisdiction. That is to say, the power to grant injunctions may only be exercised in cases otherwise within the jurisdiction of the court.[1]
[1] Re Ross Jones, Ex Parte Green (1984) 156 CLR 185, page 625 (Wilson & Dawson JJ).
I am satisfied that I have jurisdiction to grant such an order, as sought by the wife, pursuant to s 114(1)(e), being an injunction in relation to the property of a party to the marriage, as the order sought is an order in relation to the disposal of the property of the parties. However, I do not, as required by subsection (1), consider it proper to make the injunction as sought by the wife to restrain the husband from bidding on the property at auction. It should also be noted that the husband proposes to purchase the property with his fiancé, and the authorities are clear that the Court does not have jurisdiction to defeat the rights of a person who is not a party to the marriage, such as by making an injunction under s 114.[2]
[2] Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337 at 354.
The parties were in agreement, at the time of the consent orders being made in April, for the property to be sold. This would also enable an interim distribution of the proceeds of the major asset of the parties. The evidence is clear that the wife is living in very difficult circumstances in that: she is receiving only $650 per week of spousal maintenance; has no car; has no computer; is residing in a studio provided by a friend that is short-term; and is living with the parties’ 21 year old son, Mr S, who presumably she is providing at least some support to by way of accommodation if not other support. The agreed distribution to each party of $250,000 will alleviate some of the current dire circumstances of the wife and provide her with capacity to meet some basic needs that she currently undoubtedly struggling to meet.
The husband deposes that his circumstances have changed such that the husband still seeks the sale to proceed, the liability attached to be paid out and the interim distribution to occur, but he seeks to purchase the asset with his new partner. The husband’s evidence is that he seeks to retain the property now because: he has been living there since May 2022 and wishes to stay there; his fiancé has moved in with him; he has undertaken work on the property; the value has reduced; and, that with the financial assistance of his new partner, he is now able to secure the finance to purchase and retain a 50% interest in the property.
There is no basis on the evidence for a finding that the husband has behaved in a way other than as a bona fide purchaser. The wife contends that the husband wishes to remain living rent free in the home with his fiancé. There was no evidence before me from either party of any discussion or agreement regarding payment of rent, or a request to pay rent, or an expectation that rent would be paid.
The wife believes Mr O may still be a prospective purchaser. He has previously made offers to purchase the property that were not accepted. He may indeed still be an interested potential purchaser. The fact that Mr O may be an interested purchaser is not a reason to prevent the husband (and his fiancé), from bidding on the property at auction, provided he is a bona fide purchaser and has the capacity to meet the legal obligations arising from such contract that is entered into.
The other consideration that I must give some weight to is that the husband may now be the only purchaser interested in purchasing the property.
The wife’s case is that Mr O was an interested purchaser in mid-2023, the wife was informed about an offer from Mr O of $3,800,000 with a 5% deposit and a six-month settlement period, this offer was rejected by the wife. Two days later, the wife was informed of another offer by Mr O of $4,000,000 with a 5% deposit and a six-month settlement period. The wife was prepared to accept this offer. The husband then, a short time later, made an offer to purchase the property for $4,150,000 with a 5% deposit and a six-month settlement period. The last offer that is in evidence before me that Mr O made was in mid-2023, when he made an offer for $4,200,000 with a 10% deposit and six-month settlement period which was not accepted by the husband. The husband then made an offer that included a purchase price $25,000 higher than Mr O’s last offer. The evidence previously was that the wife said she would think about the offer of the husband, but then ultimately communicated to the agent her rejection of his offer. The real estate agent sent an email by way of update in late 2023, marked as Exhibit 13, that said:
[Mr O] is currently selling his home in [Town U] and after 3 open homes has no interest in it. The price guide is now dropping today from $3,450,000 to $2,950,000. How this impacts his interest in [C Street] remains to be seen but this is as I forecasted and unfortunately it won’t be a positive one.
This email indicates that, in the opinion of the real estate agent, due to lack of interest and declining value in the home of Mr O, he may no longer be interested in purchasing the property, or if he is, that his capacity to make a higher offer may be limited. It is at best speculation on the part of the agent. However, I am without any current evidence as to whether or not Mr O remains an interested purchaser.
In the circumstances where he might be, the property should be sold for the highest price and the means of ascertaining whether Mr O, the husband or any other interested purchaser may purchase the property is to proceed to sale as intended by the April 2023 consent orders that were made, which now is leading to the auction that is anticipated shortly.
On balance, the best way to put into effect the parties’ intention for the sale of the property is to proceed with the terms of the consent order. That is to proceed to allow the auction to occur as was initially intended by the consent orders. If Mr O is a willing purchaser, he will have the opportunity to bid and if not, the husband and his fiancé can equally bid at the auction on the terms previously ordered.
Should the husband pay rent of $1,200 per week for the property as sought by the wife?
For the reasons that follow, I refuse to make the orders sought by the wife in relation to the husband to pay rent to the wife of $1,200 per week.
There was no evidence before me to support the application for the sum of $1,200 per week to be paid by the husband and his partner.
The submission on behalf of the wife was that since the husband’s fiancé is now residing at the property there should be rent paid. There was no evidence as to market rent that would be applicable, and no submission made as to why $1,200 per week, or any sum, was an appropriate amount to be paid. The order that was previously made by consent was for the husband to meet the outgoings. The order that is now made by consent is for the husband to also meet the interest payments on the mortgage on an ongoing basis.
There is no basis upon which I can find that it is appropriate to make an order for the payment of rent as sought.
THE HUSBAND’S APPLICATIONS
Should the parties be directed to sign the contract for sale prepared by the husband and his fiancé Ms N?
For the reasons that follow, I refuse to make the orders sought by the husband for the wife to sign the contract prepared by the husband and his fiancé to purchase the property on the terms as set out in the Contract for Sale proposed by the husband (Exhibit 16).
The parties entered into consent orders on 26 April 2023, including for the sale of the Town D property. These orders are set out in their entirety earlier in these reasons.
The husband’s evidence is that his circumstances have changed since then, as detailed above.
In mid-2023, Mr O offered to purchase the property for $4,200,000, with a six-month settlement and 10% deposit.
The next day, the husband then offered to purchase the property for $4,225,000 with a three-month settlement and a 5% deposit which would be forfeited to the wife in the event the husband failed to settle within 3 months.
The husband now seeks the wife be ordered to sign a contract for $4,225,000 with a five-month settlement and a 10% deposit, but with no retention of deposit by the wife in the case of default. The husband’s counsel submitted the husband’s earlier offer, which included retention of the deposit, had been refused by the wife in circumstances where Mr O was still a potential buyer.
The husband’s offer is currently the highest offer that has been made, and he contends that he is the “only” bona fide purchaser interested in the property.
There is no evidence as to whether or not Mr O has withdrawn his offer and no positive evidence that he remains interested in the property.
Order 1(j) made by consent on 26 April 2023 was that:
the parties shall execute a Contract for Sale in the form prepared by the conveyancer. In the event the parties cannot agree on the terms of the Contract of the Sale then the terms recommended by the conveyancer will be adopted.
There was no evidence that the conveyancer agreed by the parties, M Company, recommended the terms of the contract presented to the wife to sell the property to the husband and his fiancé. They are the terms are those sought by the husband and his fiancé. The wife opposes the property being sold to the husband at all due to her contention that he is not a bona fide purchaser and due to what she says is the risk of him failing to complete the contract.
The wife also contended that if the husband purchased the property, it would reduce the ultimate pool of property for distribution of the parties due to the cost of the upfront interest disclosed in the finance offer and due to the husband’s half share of the stamp duty. Counsel for the wife took me to the authority of Chief Commissioner of State Revenue v Danny and Steven Knezevic [2015] NSWCATAP 98, where the Tribunal Appeal panel upheld the decision that the full duty on an auction purchase price was paid in similar circumstances. The husband contends that the stamp duty exemption will apply at least to the husband’s share. Whether or not the stamp duty exemption applies is a matter for the husband to take up with the Commissioner of State Revenue if he succeeds in the purchase of the property at auction.
I accept the submission that there may be costs incurred by the husband in the purchase he proposes, however, the parties are not required to live in a state of suspended economic animation between separation and finalisation of property proceedings. Further, the court’s assessment of the pool at the date of final hearing and the treatment of funds expended by the parties’ post separation, is something that the parties can address at the final hearing of this matter.
I am not satisfied that there is a basis upon which an order should be made compelling the wife to sign the contract for sale with the terms as proposed by the husband and his fiancé. The terms in the contract proposed are a purchase price of $4,225,000, with a five-month settlement, and a 10% deposit, 5% payable on exchange and the balance payable 30 days after exchange, with 50% of the deposit being paid to each husband and wife. The offer made by husband to the agent in mid-2023 after Mr O’s offer of a day earlier was on slightly better terms, including a three-month rather than five-month settlement, and for the wife to retain the 5% deposit in the event of default.
Terms of sale, whether to the husband or to a third party, should be as agreed between the parties. In this case there is already a mechanism if no agreement is reached between the parties to default to the recommendation of the conveyancer as to the terms. The order for sale did not provide for an unconditional contract or provide for the terms and conditions of sale. It is appropriate in the context of this executive style property, for a contract to be subject to terms and conditions that are reasonable in all the circumstances. The fact that the parties have not agreed to the terms is not a reason for one party to enforce their will, particularly where the previous consent orders for sale which identify the mechanism for resolving such a dispute.
No party made any submission as to why that term of the consent orders should be varied or discharged, as it provides a previously agreed mechanism for resolving a dispute as to the terms of sale if the parties cannot agree. It does not prevent the husband from bidding at the auction or making an offer to purchase, but he does so on terms agreed, and failing agreement, as envisaged by Order 1(j).
To accede to the husband’s application would be to compel the wife to adopt the husband’s preferred proposed conditions of sale rather than utilising the intended mechanism to resolve the disagreement, as consented to by both parties in April 2023, pursuant to Order 1(j).
I also agree with counsel for the wife’s submission that to order the wife to sign the contract as proposed and prepared on the husband’s instructions would be to deprive her of the opportunity to take advice as to the appropriate terms of the contract. I note that there was no evidence of the wife having had independent legal advice about the proposed terms of the contract.
SHOULD THE AUCTION DATE BE ALTERED?
The wife sought the auction be moved to a later date.
Neither party made any submission in relation to the applications to move the auction date. There was no evidence before me in support of the application, nor was there evidence of any benefit to the parties in delaying the auction.
There is some evidence that the agent formed the view that further delay might negatively impact the willingness of Mr O to purchase the property as referred to above in Exhibit 13.
The husband sought the auction be cancelled if the orders sought by him for the parties to sign the contract was made. His alternate position was he should not be injuncted from bidding at the auction if it proceeded, and I accept that position for the reasons I have already explained.
CONSENT ORDER FOR HUSBAND TO PAY INTEREST ON B PTY LTD MORTGAGE.
The husband has had the benefit of sole occupation of the property since May 2022. By consent orders were made on 26 April 2023 that he was to pay the outgoings including specifically the water and council rates.
There was no order made at that time for either party to pay the interest on the B Pty Ltd mortgage. The loan has been in arrears, and a default interest rate of 15% has been applied as a consequence. There is no dispute that the current interest arrears are just under $40,000.
The question of the payment of this interest, which will continue to accrue until the mortgage is discharged, was raised by me in submissions. It was noted that there was no application by either party in relation to this issue, but that it seemed likely that this matter would be subject of a further application and require determination if the arrears continued to accrue given the hearing date is listed until July next year. The parties, to their credit, were able to agree to an order being made by consent for the husband to meet the interest payments, without admission, until the sale of the property, with characterisation of the payments to be determined at the final trial. This order I make by consent.
I make no order as to costs.
I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 16 October 2023
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