Chai and Carvill

[2020] FamCA 469

FAMILY COURT OF AUSTRALIA

CHAI & CARVILL [2020] FamCA 469

FAMILY LAW – ENFORCEMENT OF ORDERS – Where the wife seeks to enforce existing property settlement orders regarding sale of a property and disbursement of the proceeds of sale – Where each of the parties delayed in fulfilling their obligations under those orders – Where the parties’ conduct and other external factors delayed the fulfilment of those orders – Orders made for the husband to continue to have carriage of the sale – Wife to be appointed as trustee for sale in the event that the property is not sold within two months.

APPLICANT: Ms Chai

RESPONDENT: Mr Carvill

FILE NUMBER: SYC 3351 of 2019

DATE DELIVERED: 1 June 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney by telephone

JUDGMENT OF: Loughnan J

HEARING DATE: 1 June 2020

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Dowdle of Mills Oakley Lawyers

SOLICITOR FOR THE RESPONDENT: Ms Kermode of Duffy Law Group

Orders

1. Subject to any further agreement between the parties, by way of enforcement of the orders made on 8 August 2019, the husband continue to have carriage of the sale of the property B Street, Suburb D in the State of New South Wales whether by auction or private treaty at a price agreed by the parties or at $749,950 (which is a price nominated by the selling agent).  In the event that the husband proposes to sell the property for less than $745,000 the property may only be sold with the agreement of both parties.

2. In the event that contracts are not exchanged on the sale of the property within two months from today’s date or such further time as the parties agree in writing, the wife is thereafter appointed trustee for sale of the property and she is authorised to take all steps including engaging an agent, engaging a solicitor to act on the sale, signing any documents for the purposes of selling the property for the best price reasonably obtainable and disbursing the proceeds of sale in accordance with Order 2 of the orders made on 8 August 2019 as those orders continue to apply mutatis mutandis.

3. In the event that order 2 applies the wife is appointed pursuant to section 106A to sign any necessary documents in the name of the husband to give effect to that order.

4. The party having carriage of the sale of the property from time to time shall notify the other party of all relevant communications with the selling agent, of the date of any auction, of the terms of any offer to purchase the property and in the event that it is proposed to accept an offer that such notice be provided at least 24 hours prior to the acceptance of that offer.

5. Otherwise the Applications of the parties are dismissed.

6. Leave is granted to the parties to apply on 24 hours’ notice to the Court and the other party in relation to the wording of these Orders.

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 Chai & Carvill 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 SYDNEY

FILE NUMBER:  SYC3351 of 2019

Ms Chai

Applicant

And

Mr Carvill

Respondent

REASONS FOR JUDGMENT

1. These are proceedings that arise as a result of orders that were made on 8 August 2019.  The parties entered into final orders for settlement of property which provided for the disposition of some real estate and the disbursement of the proceeds of sale.  An application has been filed on 5 May 2020 by the wife seeking enforcement of the orders in the form of a change to the mechanism for sale in respect of one of the properties and that she be appointed trustee for sale.

2. The husband responded opposing those orders and seeking some other orders.  Those other orders were not strictly in the character of orders for enforcement but more in the character of orders varying or reopening the property settlement and they are no longer pressed.

3. There are two relevant properties.  One of them is at Suburb D.  By way of final consent orders the parties agreed that they were to take all necessary steps to cause the property to be sold by private treaty, and after sale and payment out of the mortgage and the sale costs, the proceeds were to be divided as to $190,000 to the wife and the balance to the husband.

4. The orders provided that in the event that the property failed to be sold by private treaty within three months, then each party was to take necessary steps to cause the property to be sold by auction at the earliest possible date at a reserve to be agreed by the parties, and failing agreement, to be determined by the proper officer of the Real Estate Institute, and then a similar order was made about the disbursement of proceeds of sale.

5. There were some other orders about indemnity and so on, and there were orders for the sale of a property at Suburb F.  That property was to be transferred to the wife on the basis that she refinance it into her own name.  In the event that should was not able to do that, the property was to be sold and the balance of the proceeds be paid to her.  As to the Suburb F property, I am told that settlement to the sale of that property is imminent or that a sale is imminent and that issue is no longer pressed.

6. As to the Suburb D property, three months passed from the date of the orders and the property did not sell.  Neither of the parties took any immediate steps then to organise an auction.  Some weeks later the wife said, well, let’s get on with having an auction; the husband then wrote back and proposed a longer period to sell it by private treaty.  The agreement with the agent expired.  The husband found another agent.  However, the parties weren’t able to agree on the agent.

7. Ultimately, the husband found another agent.  There is some dispute between the parties about this, but the agent says that he met with the wife and that he understood that there was an agreement about him acting on the sale.  Soon thereafter, however, the wife’s solicitors wrote to the husband’s solicitors saying that she did not agree to the agent.  Some very short time later there was an auction by that agent.  The wife attended the auction but the husband did not, and the property was passed in.

8. Each of the parties had obligations under the orders, and each of them delayed in taking steps they could take under the orders to give effect to the terms of the orders.  That is relevant to an application for enforcement.  The legal position is that the enforcement of financial orders is discretionary.  The court looks to whether the parties took all the actions they could, acted on their rights under the orders, acted in a timely way, took all available steps to sell the property.

9. The next thing to say is that the orders did not make provision for a lack of agreement about some issues, including who the agent would be.  The other thing to say is that there have been some events that probably interfered with the sale of the property.  As has been said, it is possible that a problem with structural faults in another building at Suburb D may well have discouraged purchasers in that area.  The other problem is that the COVID-19 restrictions may have interfered with the proposed sale and may have affected the whole property market.  They certainly interfered with the processes that would normally precede an auction such as open house inspections, other than by private arrangement.

10. The orders mean that, as things stand today, the wife has a guaranteed amount, provided that the property achieves a net return of more than $190,000.  She will receive the first $190,000 of the net proceeds of sale.  According to the agent, the parties not having taken up the mechanism provided for in their orders, the value of the property is being reduced over the value that the parties have agreed upon in the past, and there may be only about $200,000 equity in the property in any event.

11. As I indicated to the parties, I am inclined to leave things in place, give the husband some more time to discharge his obligations in relation to the property.  There is an efficiency about that because he has the relationship with the agent; the property is in his name; and he is the one who will benefit from the proceeds of sale being any higher than $190,000.

12. What I am inclined to do is to give him another two months and in the event that the property is not sold – that is to say there is not an exchange of contracts within two months – then the wife will become trustee for sale and she will have her opportunity to sell the property for the best price she can obtain.

13. Two months is not calculated with any particular science.  I am told that an auction campaign requires something like four weeks.  Sometimes properties are passed in at auction but sell through negotiation soon thereafter.  In my view two months will give the husband a fair opportunity for one further auction and then the wife will take over.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 1 June 2020.

Associate: 

Date:  10 June 2020