BALSOM & HAGERMAN

[2020] FCCA 1820

FEDERAL CIRCUIT COURT OF AUSTRALIA

BALSOM & HAGERMAN [2020] FCCA 1820

Catchwords:
FAMILY LAW – Property – interim application by the wife seeking the sale of the former matrimonial home of the parties – the property is in the sole name of the wife – property to be listed for sale. 

Legislation:

Family Law Act 1975 (Cth)

Applicant: MR BALSOM

Respondent: MS HAGERMAN

File Number: DNC 14 of 2020

Judgment of: Judge Young

Hearing date: 19 June 2020

Date of Last Submission: 19 June 2020

Delivered at: Darwin

Delivered on: 19 June 2020

REPRESENTATION

Counsel for the Applicant: Ms Dowd

Solicitors for the Applicant: Ward Keller Lawyers

Counsel for the Respondent: Mr Barry

Solicitors for the Respondent: Darwin Family Law

ORDERS

1. That within 7 days of the date of these orders the parties shall do all acts and things to appoint B Real Estate to sell the Suburb C property (“the agent”).

2. That as soon as possible but within 14 days following the date of these orders the parties shall list the Suburb C property for sale.

3. That the property shall be sold at a price to be agreed between the parties and failing such agreement at a price to be nominated by the agent.

4. That advertising and like costs shall be met equally by the parties.

5. That upon the Suburb C property being listed for sale, both parties and their solicitor or solicitors may liaise with the agent and remain informed as to the sale process, including any offers received on the property, and any advice from the agent in relation to the sale.

6. That the applicant shall present the Suburb C property in a clean and tidy condition for sale, and shall permit the parties’ children and their children’s partners to access to the property on reasonable notice and obtain their possessions and vehicles.

7. That the applicant shall maintain the Suburb C property and should the property be sold the applicant shall promptly remove his personal effects and household contents and any other possessions from the Suburb C property, and provide vacant possession within 14 days from the date of signing a contract of sale.

8. That both parties shall cooperate fully with the agent and do all acts and things reasonable in that context.

9. That upon the Suburb C property being sold, thereafter the parties shall disburse the proceeds of the said sale in the following manner and priority:

   (a)Payment of agent's commission and advertising expenses and legal expenses of the sale; and

   (b)Payment of any other debts or outgoings on the property; and

   (c)Payout in full of Bank D loans ...56 and Bank D business equity line ...75, and any other loan secured against the property, including Bank D visa card ...77 if and only if the Bank D visa card ...77 debt is secured against the property, as may be necessary to obtain a discharge of any mortgage.

   (d)The balance to be held at the election of the respondent in either the Darwin Family Law trust account or the Ward Keller trust account, but those funds shall not be used for any purpose whatsoever or disbursed in part or full without a written agreement between the parties or further court order.

10. That unless otherwise agreed should the Suburb C property be listed for sale by private treaty and not sell within 3 months of being so listed, the property shall be sold forthwith by an auctioneer recommended by the agent and the property shall be auctioned on the following terms:

    (a)The parties shall jointly appoint the auctioneer to auction the property with a reserve price to be set by the agent, and further should the property not sell at the auction a further auction shall be held no less than 2 months later, with the property to be sold without a reserve price; and

    (b)That all costs of holding any auctions shall be met by equally by the parties; and

    (c)proceeds to be disbursed according to order 9.

11. That should this matter not settle at the conciliation conference the parties shall jointly appoint E Valuer to value the following vehicles, with the applicant to make best endeavours to make the vehicles available for inspection and with the respondent to meet the costs of valuation in the first instance, and with the applicant to reimburse the respondent 50% of those costs at settlement:

    (a)Motor Vehicle 1

    (b)Motorcycle 2 not to be included as sold since separation

    (c)Motor Vehicle 3

    (d)Motor Vehicle 4

    (e)Motorcycle 5 not to be included as sold since separation

    (f)Motorcycle 6

12. That the respondent has liberty to apply at short notice, with the court noting that the respondent is likely to seek an early distribution from any proceeds of sale from the Suburb C property.

13. That should the applicant have paid or pay any funds into the trust account of Ward Keller, those funds are only applied to loan arrears, or as agreed in writing between the parties.

14. That the respondent’s costs for preparation and attendance at court on 10, 18 and 19 June 2020 are reserved.

15. That within 14 days of the date of this order the respondent shall provide written evidence of any items he has sold for more than $200 since separation, including the 2 motorcycles he has deposed to having sold, who they were sold to, when they were sold, price achieved and documentary evidence of the sales and the disbursement of proceeds.

16. That the applicant shall not sell any further vehicles, fixtures or chattels without the written consent of the wife obtained via the parties solicitors.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DARWIN

DNC 14 of 2020

MR BALSOM

Applicant

And

MS HAGERMAN

Respondent

REASONS FOR JUDGMENT

Ex-Tempore

1. These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

2. This is an interim application seeking the sale of the former matrimonial home of the parties.  The former matrimonial home is in the sole name of the wife.  The parties separated last year, I believe.  The former matrimonial home is worth about $440,000. 

3. The property secures two mortgages or two sets of borrowings;  one for $133,000, which seems to be a conventional home mortgage, and further borrowings of about $51,000, which were business borrowings related to the wife’s business, which has ceased trading in recent months.

4. The wife vacated the property on separation, leaving the husband as the occupier.  The mortgages have not been paid since about October 2019, and there are presently arrears in excess of $9,000 in the mortgage or mortgages. 

5. The husband would not appear to have any capacity to bring the arrears up to date, though I was told in recent days that he would bring the arrears up to date.  Apparently that was in the context of him believing – at least telling the Court – that his son would buy out the wife’s interest in the property.  As of this morning, on the filing of an affidavit from the son he makes it clear he is not interested in acquiring any interest in the property.

6. The husband is a disability pensioner paid $425 a week.  I am satisfied he has no capacity to bring the arrears up to date, nor does he have an incapacity to borrow to pay out the wife.  It must have been apparent to him, as I said yesterday or earlier, that once the mortgages stop being paid then the increase in indebtedness works solely to the disadvantage of the wife, who was not in occupation but was responsible for the payment of the mortgages.  In other words, her indebtedness was steadily increasing.

7. In the circumstances where the husband has been in occupation essentially rent free, or at least not servicing the mortgage debt for the past few months, it is inequitable that he should remain in occupation.  The wife’s financial position appears to be difficult. It is not in question that she has a breast cancer diagnosis.  She is apparently living in City F.  She says she has no money and she is living with friends.  So for her it appears to be urgent that she obtain some money.

8. Notwithstanding what I think has been deliberate delay on the part of the husband in attempting to resolve this issue, particularly as there has been no real pressure on him to resolve it, nevertheless, he is a disability pensioner and he will find it difficult to find housing as well. 

9. So those two concerns need to be balanced in my view.  The parties have brought in a proposed minute.  They disagree about certain aspects of the minute, and they have asked me to rule on them.  The first is when the property should be listed for sale, they’ve agreed to appoint an agent immediately, and the applicant husband seeks that the property be not listed for two calendar months, and according to his counsel this morning he will need that long to clean up the mess on the block or on the land.

10. The respondent wife says that the property should be listed for sale as soon as possible, but within 14 days.  She is not concerned about the land being in the mess.  She says that the property, in all probability, is simply going to have to be sold on an as-is basis, and she doesn’t appear to have much confidence in the husband’s promises to clean up the block.  I must say I have similar doubts about those promises.

11. The second issue that I need to rule on is when the applicant husband shall be required to vacate the property after a contract of sale is signed.  He seeks a two month period to remove his personal effects.  So he is effectively seeking a delay of four months before he is required to vacate the property and provide vacant possession.  That would mean, given that the usual time for settlement of residential homes is 30 days – that can be varied by negotiation of course, he would be seeking a very significant extension.

12. Those two matters are related in my view, and I consider that, all in all, the minimum period ought to be about a month for the husband to vacate the property. If there is an immediate contract or if a contract is signed immediately, then it appears to me that the earliest vacant possession would be required would be within one month or 30 days.

13. So that is completely breakneck speed.  I think it is highly unlikely that a property in the rural area in Darwin at the moment, with the depressed property market, would be sold within the minimum time, in other words, immediately on listing.  I think there is likely to be a built-in delay before a contract is signed.

14. The orders I propose to make take account of that.  I propose to make the orders in 1 as the respondent seeks – that is, the property is to be listed for sale within 14 days, but in relation to 7, where the respondent seeks the immediate departure of the respondent from the property on the signing of that contract, I propose to give him 14 days.  So he will have 14 days from the signing of the contract to remove his personal effects, household contents, etc.

15. In relation to the second area of dispute, the applicant is apparently – remarkably, in all the circumstances – seeking, as I understand the proposed order, that the mortgages not be discharged.  I doubted that was what drafter had in mind but hearing submissions it appears that that was what was contemplated.  That’s entirely unrealistic in the circumstances.

16. I propose to make the orders as set out in 9(b) of the respondent’s proposal, with the exception that the wording should be that all loans secured by mortgage over the property will be paid out in order to obtain discharge of mortgages, including payment in full of the Bank D loan, ...56, and the Bank D Business Equity Loan, ...75. 

17. The visa card is not to be included; I doubt that that’s secured by mortgage, but if it is secured, if the discharge is required for settlement it will have to be paid, but otherwise not. 

18. Proposed order (g) is not to be included. That relates to the tax debt of the business operated by the wife. Without hearing some further evidence about the matter, I do not propose to make that order.  This matter was brought on as an interim application on the basis of urgency, and it appears to me that I should restrict myself to dealing with the urgent matters on which I can properly make some assessment of the fairness of the positions of the parties, and I am not satisfied that I should order a payment of a tax debt for the wife’s business without hearing any further evidence of the matter.  I also, in relation to the other orders sought, I propose to make order 1 and order 2, but not order 3.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Judge Young.

Associate: 

Date:             3 July 2020