Baglio and Baglio

[2012] FamCA 287

FAMILY COURT OF AUSTRALIA

BAGLIO & BAGLIO [2012] FamCA 287

FAMILY LAW - PROPERTY – Where Husband objects to sale of property – Where Husband asserts he will be able to meet the current mortgage repayments due to co-operation by the ANZ Bank – Where there is no evidence that the ANZ Bank will accept the payment plan proposed by the Husband

APPLICANT: Mr Baglio

RESPONDENT: Ms Baglio

FILE NUMBER: BRC 7965 of 2009

DATE DELIVERED: 23 April 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 23 April 2012

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Buchanan Legal

SOLICITOR FOR THE RESPONDENT: Charles Cooper Lawyers

Orders

1. The parties cause the property at … H Street, Town A, to be sold.

Orders by Consent

1. The parties cause the property at … T Street, Town A, to be sold in the event that settlement of the current sale is not completed.

2. The property at … H Street, Town A, continue to be marketed for sale by the Real Estate Agent, Mr P, until such time as it is sold or a further Order of this Court.

3. If an offer to purchase … H Street, Town A is presented (and if settlement of the current sale of … T Street, Town A, is not completed), then an offer for that property which is within the range of 5% above or below the respective valuations prepared by the joint expert B Pty Ltd for either property then the Husband and the Wife must forthwith accept such an offer and sign the contract for sale and sign all other necessary documents when presented to each of them including Discharge of Mortgage and Transfer documents to enable settlement of sale to occur.

4. The Husband forthwith ensure that access is given to the agent for the purpose of inspecting and presenting the property for inspection by prospective purchasers on no less than 24 hours notice by the agent to the Husband.

5. The Husband, within 7 days of today, disclose to the Wife all bank statements evidencing the deposit of the rent from … T Street, Town A, in the period from May 2011 until the present time.

6. From the date of these Orders until the settlement of sale of the property at … T Street, Town A, on 25 May 2012, the Husband shall pay $1,500.00 per month to the ANZ Bank in servicing the mortgage debt on the property at … H Street, Town A. From the date of settlement of sale of the property at … T Street, Town A, the Husband pay the sum of $1,957.79 to the ANZ Bank in servicing the mortgage debt on the … H Street property up until the sale of the property.

7. From the date of these Orders, all future rental from the property at … T Street be deposited into ANZ account no. … for the purpose of meeting the mortgage payments.

8. To give effect to Order 8 above, the Husband forthwith provide all necessary notice to the tenants living in the property at … T Street, Town A, directing them to pay the weekly rent into ANZ account no. … .

9. Forthwith, the Husband authorise the Wife to communicate, sign documents and do all things necessary to enable C Pty Ltd to:

   (a)       Grant to the Wife access to the storage container wherein the Wife’s possessions, furniture and the child’s belongings are held; and

   (b)       To allow the Wife to remove her and the child’s belongings including furniture from the storage.

10. All other applications brought by the wife be dismissed.

11. Both parties’ costs of and incidental to this application are reserved to trial.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Baglio & Baglio has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 7965 of 2009

Mr Baglio

Applicant

And

Ms Baglio

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The parties in this matter met and commenced cohabitation in the United States of America in 2005. They relocated to Australia in 2006/2007, and married in March 2007. They separated on a final basis in March 2010. There is one child of the marriage, M, who is currently five years of age, having been born in April 2007.

2. The Father is 59 years of age and is in receipt of a disability pension from the United States of America. He currently is residing in the property in dispute on this application, namely the property at H Street, Town A. That property is jointly owned by the parties and is said to have a current value in the order of $340,000.00.

3. The application that came before the Court today was an application by the Wife in which she sought the sale of two jointly owned properties, being H Street, Town A, and T Street, Town A. In the event, the property at T Street, Town A, is under contract for sale for the purchase price of $320,000.00. That sale is due to settle on or about 25 May 2012. The mortgage arrears owing on the T Street property are currently in the order of $30,660.00, and the payout figure on the mortgage inclusive of those arrears is said to be, as at 25 May 2012, the date of settlement, $321,307.00.

4. There must be a shortfall in respect of the T Street property not only in respect of the mortgage debt, but also in respect of relevant costs of sale including agent’s commission. I accept that the shortfall overall might be in the order of $15,000.00 to $20,000.00.

5. The parties agree that if T Street does not proceed to settlement under the current contract, there ought be Orders for its sale and I have left it to the parties to formulate consent Orders to that effect. In relation to H Street, Town A, the difficulty lies in the feature that the value of the property is said to be about $340,000.00, but the mortgage debt is $360,957.00. The arrears on the mortgage are in the order of $31,654.00. There is evidence before me that the parties received an offer of $368,000.00 for the H Street property in or about November 2011, and on the Wife’s evidence the Husband was not prepared to sell at that price at that time. Whilst offers are not evidence of value, the reality seems to be that if I accept that its current value is as both parties tell me as per a real estate valuation is in the order of $340,000.00, it does not seem to me that a market for the H Street property has improved and may indeed be going the other way.

6. It is asserted on behalf of the Husband that things will change with the settlement of the sale of the T Street property. Of course, there is a significant shortfall, even on the Husband’s evidence, when the T Street property settles. It is not really apparent to me how it is proposed that that shortfall will be met.

7. ANZ Bank is the relevant mortgagee with respect to that property, as with the H Street property. I was directed to paragraphs 4 to 14 of the Husband’s most recent affidavit, containing in paragraph 8 what he says about his recent discussions with the mortgagee, the ANZ Bank. The Husband is currently paying $1,500.00 per month and has, on his affidavit, suggested to the ANZ Bank that he will increase the payment to $1,900.00 per month once the T Street property has been sold.

8. The Husband suggests that the ANZ Bank has indicated a willingness to, “…work with him,” as he puts it, in relation to the arrears of the mortgage debt and as to the payments of the mortgage, but simple mathematics suggests to me that even at $1,900.00 per month, on an increased payment which the ANZ Bank has not indicated that it will in fact accept, there is no relevant improvement in the position so far as the mortgage debt and the interest accruing on a loan as significant as $360,957.00. Absent any evidence of an expert kind that the market is likely to change for the positive in the foreseeable future, it must follow that there is a potential for the parties’ joint position to worsen. Of course, the Wife, as is the Husband, is liable for the mortgage debt as a joint borrower.

9. It is also suggested that a relevant consideration is that the Husband resides in the H Street property, and that the sale of that property will mean that he has to accommodate himself elsewhere. However, having regard to the matters I have just referred to, it would seem to me that there is a likelihood that the ANZ Bank will take the matter out of the parties’ hands before too long and enforce a sale. There is evidence that G Law Firm have already been instructed by the ANZ Bank in respect of the mortgage debt.

10. The Husband has had sufficient notice of this hearing today to put before the Court firm evidence from the ANZ Bank, if it exists, that the bank is likely to stay its hand, as it were, in terms of forcing the sale of the property.

11. It is plainly in the interests of both of the parties if they can control the sale of the property to maximise the price that is received, rather than finding themselves in the hands of a bank whose costs in respect of exercising power of sale, together with the sale costs of the property, will be added to the debt burden that the parties have.

12. In the circumstances, I conclude that the just and equitable approach to both parties is that Orders for sale of the property be made so as to preserve, as far as possible, the asset pool available or at least minimise the debts in the asset pool prior to the determination of final property Orders in this case.

13. In summary, absent evidence from the Husband or either party as to the likely improvement in the market for the property; absent evidence from the Husband that the relevant shortfalls are capable of being met at any time in the foreseeable future; and absent clear evidence from the Husband as to how the ongoing debt and interest on the mortgage debt is likely to ever be met such as I could be satisfied that the ANZ Bank will not proceed on the notices it has already given, I therefore propose to make Orders in terms of the Orders sought by the Wife in terms of the sale of the H Street property.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 23 April 2012.

Associate: 

Date:  4 May 2012