Bale-Sutch and Bale-Sutch (No 5)

[2010] FamCA 825

FAMILY COURT OF AUSTRALIA

BALE-SUTCH & BALE-SUTCH (NO. 5) [2010] FamCA 825

FAMILY LAW – PROPERTY – Sale of property

Family Law Act 1975 (Cth)

McDonald and McDonald (1976) FLC 90-047
Ravasini and Ravasini (1983) FLC 93-312
Slapp and Slapp (1989) FLC 92-022

APPLICANT: Ms Bale-Sutch

RESPONDENT: Mr Bale-Sutch

FILE NUMBER: MLC 3800 of 2007

DATE DELIVERED: 17 SEPTEMBER 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 14 SEPTEMBER 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR HENWOOD

SOLICITOR FOR THE APPLICANT: WISEWOULD MAHONY

THE RESPONDENT: IN PERSON

Orders

1. That the husband forthwith sign any necessary document to terminate his agency agreement with Mr Z of Z Realty.

2. That upon the termination of the contractual arrangement between the husband and Mr Z, the husband and the wife forthwith sign any necessary authority to Z Realty and K Realty as agents in conjunction for the sale of the property at K.

3. That the property be placed on the market for private treaty for a period of two months from the date upon which the agents in conjunction commenced their retainers.

4. That the property be placed on the market at a price range of $300,000 to $335,000 and that upon either agent introducing a purchaser prepared to sign a contract for any sum in that range or any sum greater than $335,000, they each forthwith sign any necessary document to give effect to the sale.

5. That after the expiration of two months as referred to above, the property be placed by the husband and the wife with the agents in conjunction for auction on a date to be fixed by arrangement between the agents with a reserve price of $300,000.

6. That if either agent refuses or declines to act, the husband and the wife thereafter sign all necessary documents to appoint the other agent as the sole agent for the purposes of these orders.

7. That the husband and the wife request each of the agents to provide them with an agreed figure as to commission and a proposed advertising budget and in default of agreement between the husband and the wife as to the appropriate sum, the matter be relisted before me for determination based upon the evidence of the respective agents.

8. That the parties appoint a conveyancing company to undertake all legal work associated with the proposed sale at the joint expense of the parties and again in default of agreement, the matter be relisted for the purposes of that.

9. That the for the purposes of these orders, the husband do all things necessary and give any such instruction as may be required to both agents to have access to the property to implement the sale pursuant to these orders.

10. Should either agent referred to express to the parties concern about the legal aspects of their obligations under these orders, then the matter be relisted before me for urgent hearing to determine whether that agent should participate or some alternative arrangement be made for a sale.

11. That pursuant to s 106A of the Family Law Act 1975 (Cth), a registrar of the Family Court of Australia, Melbourne Registry is appointed pursuant to these orders to sign any necessary document to give effect to the orders in the name of the party who is required to sign such documents under these orders but refuses to do so.  For the purposes of this order, a registrar shall be satisfied of the non-compliance by such a party upon production by an affidavit setting out where the default has occurred and justifying such document being so signed.

12. That the applications of all parties be otherwise dismissed and removed from the list of cases awaiting a hearing.

IT IS CERTIFIED:

1. That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

2. That a copy of these reasons be made available to the husband by either email or fax transmission upon them being published.

IT IS NOTED that publication of this judgment under the pseudonym Bale-Sutch & Bale-Sutch is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 3800  of 2007

MS BALE-SUTCH

Applicant

And

MR BALE-SUTCH

Respondent

REASONS FOR JUDGMENT

1. On 17 June 2010, Ms Bale-Sutch (“the wife”) filed an application in a case seeking a variation of the orders I made on 18 February 2009 to give her control of the sale of a property at K. Further orders were sought under s 106A of the Family Law Act 1975 (Cth) (“the Act”) to enable the implementation of the order.

2. The respondent to the proceedings is Mr Bale-Sutch (“the husband”).  He is currently (and has for some time) remained in the Philippines. The proceedings were adjourned in July because of service problems on the husband.

3. On 2 September 2010, the husband filed a Notice of Address for Service and in the hearing before me on 14 September 2010, he indicated that that was the address to which all correspondence could be sent.  On the same day, the husband filed a request to attend by electronic communication and that order was made subject to him filing a document setting out what orders he proposed in response to the application of the wife.

4. On 14 September 2010, I conducted the hearing of the proceedings with counsel appearing on behalf of the wife and the husband attending by telephone from Manilla.

5. The order that I made in February 2009 provided that the K property be placed on the market for sale at a price not less than $400,000.  The husband placed the property for sale with a Mr Z who is a real estate agent at an asking price of $360,000. The wife attached to her affidavit a copy of the advertising brochure.

6. It seems common ground that the property has not sold.  The husband told me without demur from counsel for the wife that the only offer that has been made in the last 18 months is that of $240,000 which was rejected.

7. The wife said that she had spoken to a real estate agent who had told her that the appropriate price was within the range of $310,000-$335,000 and she obtained a letter from that agent accordingly.  She said she had lost confidence in Mr Z because he had been unable to find a buyer.  Notwithstanding the hearsay nature of all of this evidence, the husband told me that he thought that the price range was between $300,000-$320,000 although he later altered that to $300,000-$350,000. 

8. The husband filed an affidavit by facsimile transmission in which he said that he had complained about the lack of resolution of the problem.  He said that he telephoned the wife’s solicitor in December 2009 and that there was agreement that the price should be lowered.  Nothing happened.

9. A number of other matters were set out in the affidavit of the husband but those are irrelevant.  The one thing he did say in the affidavit which was of some assistance was that Mr Z wanted to lower the price to “say $350,000 to $320,000”.

10. The husband made his position clear.  He wants a resolution of the matter and a sale of the property but not by auction.  His view was that an auction would be costly if it failed and there had been no sign of any person being interested in intending to buy so why would an auction work.

11. The husband’s position was that he did not want the agent of the wife and it appears that there is a stalemate because the wife has adopted the same position in respect of the husband’s agent.  What is clear, neither party has had an agent who has been successful in obtaining a buyer.  Notwithstanding that the wife was not authorised to sell the property, there is no evidence from her that she has been able to produce a buyer to the husband’s agent.

12. I suggested that to the parties that the solution was that each nominate an agent to give some competition and wider pursuit of buyers. The husband was unhappy with that arrangement because he said he had a contractual arrangement with Mr Z.  I propose to overcome that problem by ordering that the husband terminate the contractual arrangement with Mr Z and that each party jointly appoints both agents in conjunction to sell the property by private treaty initially.  I propose to make orders that the property be placed on the private treaty market for a period of no more than two months and if it has not been sold by that period of time, it is then to be placed on the market by both agents for auction.  If either agent declines to be involved for economic or other reasons, then the other agent can continue to act for both parties.

13. The husband expressed concern about the costs.  Their agents can only charge commission and incur expenses by agreement between the parties and as such, each agent should have a very limited period to put a proposal.  It makes sense for the agents to get together and work out an agreed position.  If there is an agreed position, then the parties must sign any necessary authority to give effect to that agreement.  If the agents do not agree to commission and advertising expenses, including the question of whether a commission is paid in the event of a failed auction, the matter can be relisted before me and I will determine the terms and conditions of the sale in full.

14. Notwithstanding the finality of the orders under s 79 made in 2009, there is ample power to modify the machinery positions of the property order providing it does not affect the substantive property rights or cause undue hardship to either party.  (See McDonald and McDonald (1976) FLC 90-047). There are clearly limitations on the power of the Court to vary a s 79 order. (See Slapp and Slapp (1989) FLC 92-022). The distinction between a machinery and substantive order is effectively determined by whether or not the proposed order is consequential. A consequential order must not have the effect of varying the substantive property entitlements already decreed by the Court. (See Ravasini and Ravasini (1983) FLC 93-312).

15. This is a case in which the parties can make no progress until the property is sold. There are clearly limitations created by market forces and geographic location that are contributing to the dilemma. However it is clear that the wife is frustrated by the fact that the husband has simply left the property in the hands of one agent who she feels has no interest in selling the property quickly and the husband is frustrated because of the fact that he perceives the wife as not being prepared to negotiate a lower price. As with all of the proceedings in this case to date, there is no trust between the parties. In those circumstances, it is important that the orders made in February 2009 be given effect to as quickly as possible. In those circumstances, I propose to make orders which will enable both parties to participate and to the extent that either refuses to do so, I shall give the Registrar power under s 106A to sign any necessary document in the name of that party to give effect to these orders.

16. The husband and the wife both have a vested interest in the property and as such, they should also have some say in what their agents are doing and how much their agents receive.  For those reasons, I propose to give the parties the opportunity to sort out the question of the agents’ commission failing which, I shall determine it.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 17 September 2010.

Associate: 

Date:  17 September 2010