Belding and Belding (No 2)
[2020] FamCA 1098
•22 December 2020
FAMILY COURT OF AUSTRALIA
| BELDING & BELDING (NO 2) | [2020] FamCA 1098 |
| FAMILY LAW – NATIONAL ARBITRATION LIST – dispute regarding timing for the sale of property – property to be sold forthwith by private treaty. |
| Belding & Belding [2020] FamCA 1027 |
| APPLICANT: | Ms Belding |
| RESPONDENT: | Mr Belding |
| FILE NUMBER: | BRC | 2195 | of | 2020 |
| DATE DELIVERED: | 22 December 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | On the papers |
| DATE OF LAST SUBMISSIONS: | 18 December 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not applicable |
| SOLICITOR FOR THE APPLICANT: | Natalie Mcdonald Law |
| COUNSEL FOR THE RESPONDENT: | Mr Taylor |
| SOLICITOR FOR THE RESPONDENT: | TLG Law |
Orders
The D Town property must be sold by private treaty by 26 February 2021.
If no contract for sale is entered into by 26 February 2021 then the D Town property must be sold by public auction, the auction to be conducted by 31 March 2021.
The reserve price for the sale of the D Town property by public auction is to be fixed by the auctioneer.
I decline to make an order in relation to meeting the mortgage debt.
I decline to make orders for the removal of any particular caveat.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Belding & Belding has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: BRC 2195 of 2020
| Ms Belding |
Applicant
And
| Mr Belding |
Respondent
REASONS FOR JUDGMENT
Three issues arose from my earlier decision[1] handed down on 4 December 2020. After the parties provided submissions on those issues, a determination on them may now be made.
[1]Belding & Belding [2020] FamCA 1027.
Public or private sale
The husband sought orders for the sale of the D Town property by private treaty. So did the wife. I make that order based on their joint position.
The real issue then became one of timing. The wife wanted the home listed for sale prior to 30 March 2021. Having regard to the fact that the arbitral award was published in late September this year, in my view the home must be listed forthwith for private sale. If the parties choose to sell by public auction, naturally they are at liberty to do so.
If the home is not sold by private treaty by 26 February 2021 or by such other date as may be agreed, then I order the property to be placed for sale by auction to be conducted by not later than 31 March 2021.
Readying the home for sale
The wife identified nine activities she said she needed to undertake so as to ready the home for sale. She said she needs time to undertake those tasks and she argued that the achievable sale price will be enhanced if those works are done before sale. That makes sense. However, the wife is not working and she previously sought orders permitting her to pay the costs ordered by the arbitrator from the proceeds of sale.
That raised the issue about who was to meet the costs of undertaking the repair works so as to ready the house for sale. In my view those expenses should be met jointly and equally. If it transpires that the two parties are unable to jointly meet those expenses, then the home will have to be sold in its current condition with the consequence that its most favourable price may not be generated. Whether the parties are able to reach an agreement that the husband meets the repair costs so as to put the property in its most favourable state for sale is a matter on which there is no evidence. I will not make an order to that effect, however.
Setting a reserve
The husband requested me to make an order fixing the reserve price if a sale at public auction became necessary. He asked for an order fixing the reserve at $785,000. The wife did not make a submission concerning the reserve price if the property must be sold at public auction.
It is commonplace in this court for the judge to stipulate a reserve price. In doing so the ambit for dispute reduces and the parties gain a degree of certainty in their sale process. That said, reserve prices are ordinarily fixed by reference to sound valuation evidence, none of which has been adduced in this case, at least not in this application before me. It was not possible for me to assess whether $785,000 was a realistic figure.
In those circumstances no legitimate forensically maintainable basis existed for me to order a reserve price in the amount urged by the husband. If one party behaves unreasonably by refusing to accept an offer that is within the range of realistic sale sums as recommended by the auctioneer, then I will not hesitate to impose a costs order upon the party behaving unreasonably.
Paying the mortgagee until sale
It seems readily apparent that hostilities between the parties are now such that a dispute has emerged about who must be responsible for meeting mortgage instalments between the date of the arbitral award and settlement of the sale of the D Town property. The husband has said the wife should pay those amounts. The wife says she is unable to work and therefore financially unable to meet mortgage sums.
This presents a very real conundrum in this case.
The husband takes the view that it is consistent with the arbitral award for the wife to meet the mortgage payments until the property at D Town is sold. He relies on the indemnity ordered by the arbitrator. His point may very well be well made. However, the reality of the situation is that the wife is unable to work so as to generate revenue to meet the mortgage instalments. It is no matter of conjecture or speculation that unless the mortgage is serviced between the date of the arbitral award and the discharge of the mortgage, the mortgagee is likely to serve a notice of default under the mortgage. That has the potential to alter the outcome of the sale, possibly even by requiring the vendors to reveal their default with the consequence that an opportunistic purchaser may very well thereby endeavour to drive down the sale price. Common sense suggests that the vendors should not allow that to occur. But if the vendors fail to service the mortgage in the intervening period, the scenario set out above may very well come to pass. While I accept that the husband is keen to ensure the wife meets all mortgage sums due until settlement of the sale of the D Town property, the wife is financially unable to do so and unless other arrangements are made, the mortgagee may very well take control of the sale over the wishes of the parties.
As a justice of this court, it is not my role to provide advice to the parties. They are well advised by their legal representatives. Unless the mortgage is serviced, the mortgagee is likely to step in. Beyond making those observations I decline to make orders requiring one party or the other to pay sums due to the mortgagee. Similar comments apply in response to the husband’s contentions in relation to the payment of interest.
Caveat
Unless all caveats lodged by all parties asserting a caveatable interest are removed prior to settlement of the sale of the D Town property the vendors will be unable to give clear title to the purchaser. That will have the obvious consequence that any sale of the D Town property will be in jeopardy. At present no formal application has been filed for the removal of any party’s caveat. The point may be moot until a contract for sale is executed. That said, an astute purchaser will undoubtedly insist that all caveats are removed prior to settlement thereby removing all impediments to the purchaser acquiring clear title to the property. If a problem persists this court along with a state Supreme Court have coterminous jurisdiction to make orders for the removal of caveats. It is not yet necessary for me to make any such order.
Orders
In the upshot, I make orders –
a)requiring the D Town property to be sold by private treaty by 26 February 2021;
b)if no contract for sale is entered into by 26 February 2021 then the D Town property must be sold by public auction, the auction to be conducted by 31 March 2021;
c)the reserve price for the sale of the D Town property by public auction is to be fixed by the auctioneer;
d)I decline to make an order in relation to meeting the mortgage debt; and
e)I decline to make orders for the removal of any particular caveat as none was specified.
I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 22 December 2020.
Associate:
Date: 22 December 2020
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