Bradley and Bradley

[2008] FamCA 330

FAMILY COURT OF AUSTRALIA

BRADLEY & BRADLEY [2008] FamCA 330

FAMILY LAW  -  PROPERTY  -  interim orders for sale of real and personal assets

Family Law Act 1975 (Cth) s 106A

HUSBAND: Mr Bradley

WIFE: Mrs Bradley

FILE NUMBER: MLC 13366 of 2007

DATE DELIVERED: 30 April 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Brown J

HEARING DATE: 30 April, 2008

REPRESENTATION

COUNSEL FOR THE HUSBAND: Mr J. S. Jassar

SOLICITOR FOR THE HUSBAND: Rigoli & associates

COUNSEL FOR THE WIFE: Mr J. Melilli

SOLICITOR FOR THE WIFE: Lander & Rogers

Orders

1. That to give force and effect to paragraph (1) of the orders made herein on 22 January, 2008 the husband sign an auction authority in respect of the real property situate at and known as W in the State of Victoria by 12:00 noon on 1 May, 2008. 

1. That if the husband fails to comply with the provisions of paragraph (1) hereof then pursuant to s.106A of the Family Law Act 1975 a registrar of this court in Melbourne is hereby appointed to execute the auction authority and all other documents necessary to give validity and operation to the orders made herein on 22 January, 2008 in the name of the husband, and :

   (a)the husband, in default, is ordered to pay any and all foreseeable damages to the other party caused by his default;  and

   (b)the husband is ordered to pay all reasonable costs incurred by the other party for the purpose of enforcing this order and proving his or her damages,

   and it shall be sufficient authority for a registrar to act pursuant to this order to have before him or her an affidavit sworn by the wife’s solicitor deposing to the non-compliance.

1. That the husband forthwith do all acts and sign all documents as may be required to sell the motor boat and trailer in his possession and to effect the sale (subject to any agreement between the parties to the contrary) :

   (a)within fourteen days hereof the husband deliver the boat and trailer to an agent engaged in the business of selling boats;

   (b)the boat and trailer be offered for sale on a cash basis, with the whole of the price to be payable within fourteen days of the sale;

   (c)within fourteen days hereof the husband advise the wife in writing of the name of the agent and the price at which the boat and trailer are offered for sale;

   (d)on delivery to the agent, the husband shall authorise him or her to provide all information relevant to the sale to the wife or her nominated agent;

   (e)forthwith upon the sale the husband shall advise the wife in writing of the name and address of the purchaser and the sale price;  and

   (f)subject to paragraph (4) hereof, the husband shall have the conduct of the sale. 

1. That if the boat and trailer are not sold within six weeks of placement with the selling agent, the boat and trailer shall be immediately transferred to the wife on a trust for sale and in respect of the sale she have all the rights and obligations of a mortgagee in possession.

1. That the proceeds of sale of the boat and trailer be applied to such of the following debts as then remain outstanding :

   (a)the National Australia Bank, pursuant to a first mortgage registered over the real property;

   (b)Defence Homeowners Scheme pursuant to a second mortgage registered over the real property;  and

   (c)the National Australia Bank, pursuant to the personal loan in the name of the parties;

   and any balance remaining thereafter be held in an interest bearing account in the name of the parties and be disbursed only pursuant to order of the court or with the written agreement of both parties. 

1. That the costs of this day be reserved and counsels’ fees be fixed :

   (a)for the wife, at $1,750;  and

   (b)for the husband, at $660. 

1. That all applications for interim financial orders be otherwise dismissed. 

1. That all interim applications for parenting orders be adjourned to the registrar’s duty list at 9:45 am. on 2 June, 2008. 

1. That the reasons for judgment this day be transcribed and copies made available to the parties.

1. That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 13366 of 2007

MR BRADLEY

Husband

And

MRS BRADLEY

Wife

REASONS FOR JUDGMENT

1. This is the third time this case has been before the court, which probably does not bring any joy to either of the parties. 

2. In terms of background, the parties met in December 1995 and separated in September 2007.  They have a son, who is eight.  On separation, the husband left the former matrimonial home.  The wife stayed there till late December 2007.  The home has been vacant since. 

3. The wife is 40 and employed as a compliance officer.  The husband is 42.  He was with the defence forces for about 21 years.  He is presently employed as a fleet manager and has financial entitlements arising from that period with the defence forces, which concluded last year.

4. On 11 December 2007 the wife filed an application in which she sought the sale of the parties' home in W, the sale of a motor boat and trailer and the sale of a car, and that the husband pay mortgage instalments pending the sale of the real property.  The husband filed a response on 6 February in which he sought a number of parenting orders in respect of the child.  In relation to financial matters, he simply sought an equal division of property.

5. When the case was first before the court on 21 January, 2008, an order was made, by consent, for the sale of the former matrimonial home.  The order provided for the first and second mortgages and a personal loan to the National Australia Bank to be repaid.  Even at that time, there was some doubt as to the adequacy of the sale price to cover those debts.  Any balance was to placed in trust.  Neither party sought to review that order.  The case was otherwise adjourned to 11 February.

6. On 11 February, a number of parenting orders were made in relation to the child.  Orders provide for him to live with the wife, for the parties to have equal shared parental responsibility for him and for the father to spend time with him.  The parties are seeing Mr H, who is preparing a family report.  That is not presently available.  On 11 February, an order was also made for the sale of a Suzuki car.

7. The difficulty the parties face is that the debts exceed the assets.  There is a dispute on the papers as to who is responsible for the aggregation of some debt, and rises in debt.  The bottom line is that a first mortgage sits at around $297,000, increasing by $3,000 a month.  There is a second mortgage of around $83,000 and there is a personal loan to the National Australia Bank which, I am told by counsel for the husband today, sits at $46,384.  No payments have been made on the registered mortgages since December 2007, by either party.  Clearly, with every month that passes, the equity is reducing.

8. The personal loan has been in default for, at the time a letter was written recently, more than 160 days, and has, to use counsel for the husband's expression, gone to the debt collectors.  There are also credit card and store card debts of close to $30,000.  There is some disagreement as to whether the personal loan is secured or not secured. Whether it is or not, the bulk of the parties' debts are secured.

9. The real property, it is said, was put on the market.  The wife signed the documents with L.J. Hooker in January.  There is a dispute as to the husband's involvement at that time, whether he acted proactively to assist or failed to assist.  On any basis, it is conceded that locks were either changed on the property some two weeks ago or an additional lock was added.  That was the husband’s doing.  The husband has, in this last week or two, refused access to L.J. Hooker, advising he would not sign an auction authority until after today.  I understand he put that on the basis that he wanted to make an application to this court today and would then cut his cloth according to the outcome of that application.

10. The wife seeks that if the auction authority is not signed by 12 noon on 1 May, which is tomorrow, a registrar sign the document pursuant to section 106A of the Family Law Act 1975. She also seeks the sale of the boat and trailer and that they be delivered to her. The boat and trailer, it seems, were purchased with part of the funds which came to the husband by way of superannuation entitlements and long service leave when he left the defence forces. A total of $120,000 was paid to him then, but some part of that is for long service leave entitlements. As his counsel said, the parties were married for only some 12 years of his 21 years with the defence forces and that is obviously a relevant matter in the long term.

11. It seems, on what counsel says, that an application was made by the husband to the superannuation trustee to access some part of his superannuation benefits. As I say, an application would not normally be granted to enable someone to buy a boat and trailer for recreational purposes but I cannot know what was put to the trustees of the relevant fund.  The husband uses the boat and he says - and no doubt he is right - that the child gets enjoyment from it, too. 

12. Orders of 11 February provided for the sale of the Suzuki.  That has not occurred.  The husband says it is with a wholesaler for sale.  Some work has been done on it and no other order needs to be made in respect of it.

13. The husband's position, set out in his most recent affidavit, was that he had spoken to the bank about refinancing the mortgages, to “save his credit rating”.  He made some preliminary inquiries.  He hoped to buy the property for the amount due under the first and second mortgages, discharge the mortgages, and assume all liability for fresh mortgages.  There is a real issue about the value of the property.  Material refers to a figure of about $420,000, but there is also reference to $389,000 as the current agreed reserve figure.  The husband says it is now only worth in the mid-300s.  It must be said the four months' delay will have done nothing to increase its price, having regard to current movements in real property.

14. The husband says nothing in his material about how he could refinance the mortgages and meet those commitments, and on the financial material before the court, it must be said it would seem improbable.  Nevertheless, people sometimes have access to funding from third parties, of whom the court is not aware.  His proposal does not touch the personal loan, which has “gone to debt collectors”, already.  One can envisage proceedings, and a judgment debt.  The consequences then (assuming it is not secured) are likely to be the sale of assets (such as the boat and trailer) or a bankruptcy petition.  If the husband is genuinely worried about his credit rating, the latter would be a far more significant barrier in the future.

15. In his affidavit, the husband also sought that costs orders made by Registrar Sikiotis be discharged.  The court's jurisdiction is constrained by the Family Law Act 1975. I have no power to simply discharge an order made by a person exercising delegated judicial authority. An order of a registrar can be the subject of a review. In those circumstances, the matter would come before a judge for a rehearing. No review has been filed in relation to the order for sale of the property or the order for costs. I have no power to go behind those orders.

16. Late in submissions, counsel for the husband obtained different instructions.  I understand they are probably instructions borne of desperation and frustration but, nevertheless, the husband now agrees that the house be auctioned and the boat and trailer sold.  The question then arises as to who should have the conduct of the sales. 

17. In relation to the house, there is an existing order for its sale.  The order sets out what is to be done in relation to a reserve price, and listings.  Nothing stops the husband buying that property at auction;  there is no prohibition on either party bidding for that property. 

18. I do propose to order that unless the husband signs the auction authority by 12 noon tomorrow, a registrar be appointed to sign it pursuant to s.106A. There will be an order that it will be sufficient authority to do that to have an affidavit from the wife's solicitor, deposing to the breach. I accept, through his counsel, that the husband has said he will sign the authority; in those circumstances, the s.106A order should not have to be activated.

19. I propose to order that the husband provide full access to the property to the agent appointed pursuant to the earlier order.  The wife shall have the conduct of the sale.  I make it clear that does not affect any existing orders that require agreement.  There will be no changes to the orders relating to the disposition of the sale proceeds.

20. The boat and trailer are at the husband's premises in a nearby suburb.  I will make an order for its sale and the husband will initially have the conduct of that sale.  He will be required to provide details of the agent with whom the boat is to be placed for sale within 14 days and the wife will be authorised to make all necessary inquiries of the agent.  Funds from the sale of the boat will be used to discharge any of the secured debt and personal loan still outstanding.  If the boat is not sold within six weeks of placement, it will be transferred to the wife on a trust for sale, on the same terms and conditions as a mortgagee in possession. 

21. I will fix the parties’ costs of today and reserve them.  All extant applications will otherwise be dismissed. 

I certify that the preceding
21 paragraphs
are a true copy of the reasons for
judgment herein of the
Honourable Justice Brown AM.

Dated the           day of            2008.

…………………………………………
Associate.