Collins and Collins (No.2)
[2008] FMCAfam 887
•21 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| COLLINS & COLLINS (No.2) | [2008] FMCAfam 887 |
| FAMILY LAW – Property settlement orders – liberty to apply given when principal orders pronounced – Court not functus officio – order amended to implement division of property effectively – costs – offer bettered – financial position of parties – no order for costs. |
| Family Law Act 1975, s.117 Federal Magistrates Court Rules 2001, rr.1.06, 16.05 Family Law Rules |
| Applicant: | MS COLLINS |
| Respondent: | MR COLLINS |
| File Number: | DNC 439 of 2007 |
| Judgment of: | Cameron FM |
| Hearing date: | 13 August 2008 |
| Date of Last Submission: | 13 August 2008 |
| Delivered at: | Darwin (by video-link from Sydney) |
| Delivered on: | 21 August 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr C. Black |
| Solicitors for the Applicant: | Cecil Black, Family Lawyer |
| Counsel for the Respondent: | Ms V. Farmer |
| Solicitors for the Respondent: | Withnalls |
ORDERS
Vacate orders 1, 2, 3, 4, 5, 19, 20, 21, 22 and 23 of the orders made on 15 July 2008.
In lieu thereof,
The husband and the wife do all acts and things necessary and execute all deeds, documents, instruments and writings necessary to sell the property at Property H, NT (“residential property”) being Section [X] on Plan [X], and being the whole of the land contained in certificate of title volume [X] Folio [X] on the following terms:
(a)the residential property be listed for sale with a real estate agent agreed between the parties;
(b)in the event that the parties cannot agree on the nomination of such agent they shall jointly approach the President of the Real Estate Institute of the Northern Territory and accept his or her nomination of a real estate agent to sell the residential property;
(c)in the event the parties are unable to agree on a listing price, the time of listing, the method of sale and conditions of such sale in respect of the residential property they shall accept the recommendations of the real estate agent appointed pursuant to these orders for the sale of the residential property in respect of each such matter;
(d)upon completion of the sale the proceeds of sale shall be applied as followed:
(i)firstly to pay all costs, commissions and expenses incurred in respect of the sale;
(ii)secondly to pay all outstanding Municipal rates and other levies due in respect of the residential property;
(iii)thirdly to pay the amounts required to discharge the mortgages registered over the residential property with the exception of the mortgage [5] to the Commonwealth Bank;
(iv)fourthly, the remaining balance to be paid as to 92.63% to the wife and 7.37% to the husband.
Until the completion of the sale of the residential property the parties shall contribute equally to the payment of the home loan for the residential property.
Contemporaneously with the sale referred to in order 2, the wife shall discharge the mortgage [5] to Commonwealth Bank of Australia, secured against the title of the residential property and pending such release shall indemnify and hold the husband harmless in respect of the liability secured by that mortgage.
Contemporaneously with the sale referred to in order 2, the wife shall cause the husband to be released from all liability in respect of the joint loan from Esanda in respect of the 2003 Toyota Camry motor vehicle registered number NT [omitted], and pending such release shall indemnify and hold the husband harmless in respect of his liability to Esanda.
IT IS NOTED that publication of this judgment under the pseudonym Collins & Collins is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
DNC 439 of 2007
| MS COLLINS |
Applicant
And
| MR COLLINS |
Respondent
REASONS FOR JUDGMENT
Variation of earlier orders
On 15 July 2008 I delivered judgment in this matter which provided, amongst other orders, for the wife to have the property at Property H, NT (“residential property”) upon certain conditions including the payment of an amount to the husband but, if this was not possible, the husband was to have the property subject to a payment to the wife. Liberty to apply was given in respect of the implementation of the orders. The matter came before the Court again on 13 August 2008 because neither of the parties is in a position to assume ownership of the property and pay the other the sums ordered as condition of that ownership.
The husband seeks orders providing for the sale of the property and the division of proceeds and the wife opposes the application. She does so on the basis that the orders pronounced on 15 July 2008 do not make provision for the sale of the property. She submits that the proper construction of the orders is that if she is unable to make the necessary payment to the husband such that she can keep the house, the orders provide merely for the husband to acquire the house and, amongst other things, to pay her a fixed sum which can be enforced as a judgment debt. She submits that the Court is functus officio and if the orders made on 15 July 2008 are to be varied, this can only happen on appeal.
The orders made on 15 July 2008 included an order that the parties have liberty to apply “in respect of the implementation of these orders”. It was apparent during my preparation of the orders and reasons for judgment of 15 July 2008 that the parties had not addressed the issue of what would occur if neither party could afford to acquire the residential property and it was for this reason that liberty was granted. Indeed, the reasons for that order, although not reduced to writing in the written reasons published on 15 July 2008 were, nevertheless, articulated orally in court on that occasion when I said that the liberty was granted to deal with the circumstance which, as it turns out, has now occurred.
Consequently, I do not consider myself to be functus officio on the question of how most appropriately to effect the division of assets which was ordered, as far as that relates to the residential property and associated mortgages.
Further, to the extent that the wife’s submission relied impliedly on r.16.05 of the Federal Magistrates Court Rules 2001, it is to be noted that pursuant to r.1.06(2), the orders to be made concerning the sale of the residential property prevail over r.16.05 should they be inconsistent with it.
An analysis of the figures set out in the reasons for judgment of 15 July 2008 reveals that, from the residential property, the wife was to net $504,561.64 and the husband was to net $40,162.36. Of a total net figure of $544,724, this amounts to a division between the parties of 92.63% to the wife and 7.37% to the husband. Given that neither party is in a financial position to retain the residential property and, I am told, in fact they have now taken steps to list it for sale, I will now make the order which was impliedly contemplated by the liberty to apply which was ordered on 15 July 2008. It will also be necessary to re-make other orders which depended on the transfer of the property so that they now depend on its sale.
Costs
The husband seeks an order for costs and submits that the negotiations between the parties was characterised by a willingness on his part to compromise his position and recalcitrance on the wife’s part in that she insisted on retaining the residential property. It was submitted that, as the figures ultimately worked out, the husband did better than the offers he had made and that the wife’s intransigence led to the unnecessary incurring of costs for which the husband should be indemnified.
The wife opposes the application noting that, although in a percentage sense, she did not do as well in the proceedings as she had hoped, she nevertheless achieved, in percentage terms, more than the husband had offered.
On 24 August 2007 through his solicitor the husband offered to settle on the basis of a division of the assets 55% to the wife and 45% to him. In that offer, the wife’s net position was calculated to be $409,988.15 and the husband’s $335,444.85. On 8 October 2007 the wife’s solicitor responded to the effect that the husband’s financial position was insufficiently particularised for the wife to be in a position where she could consider the offer which he had made.
On 27 November 2007 a conciliation conference took place at which the wife may have offered to accept 50% of the net assets. The actual position is not clear. Whatever the case, the husband’s solicitors responded on 20 December 2007 making an offer that the parties retain the specific assets which were particularised in that letter. The offer was formally documented in an Offer to Settle which was enclosed with the letter of 20 December 2007. An analysis of that Offer to Settle discloses that of those matters in the offer remaining in dispute at the time of the hearing, the husband obtained a more favourable outcome than the offer which he put. The ultimate division of assets included an agreement that the wife keep two lawnmowers and the husband keep a 4m aluminium boat with trailer and a cut off saw. The lawnmowers and the husband’s items were valued at $935 and $2120 respectively. To be balanced against this was the value of the mortgage and the $15,000 the husband offered to accept from the wife. As far as those latter two matters are concerned, the husband bettered his offer by more than $20,000.
The Offer to Settle was made in a form under the Family Law Rules. There is no provision in the Federal Magistrates Court Rules 2001 for such a procedure, but parties should be encouraged to attempt settlement. Should a reasonable offer be made and the offering party do better than they offered, this is an important factor to be taken into account under s.117 of the Family Law Act 1975 (“Act”) when considering an application for costs.
I also take into account the parties’ respective financial positions. However, in doing so, I am not of the view that the proceeds of the residential property should be overemphasised as a financial asset. Once the house is sold, its proceeds will need to be applied, at least by the wife, if not by the husband, to purchase alternative accommodation. This fact is important when taking into account the financial circumstances of the parties. Although the husband is still not working, once he does his financial position will be considerably stronger than the wife’s and he also has the benefit of his defence force pension for the rest of his life. An order for costs against the wife would, in my view, be of no particular financial significance to the husband but have a real impact on the wife.
As to the other matters I am required to consider under s.117(2A) of the Act, I note that neither party was legally aided. I also note that no conduct of the parties during the course of the proceedings would warrant special consideration under ss.117(2A)(c) or (d). It is also apparent that neither party has been wholly successful in the proceedings.
Had all other things been equal, the husband’s offer of 20 December 2007 would probably have been decisively to his advantage in this application. However given the financial position of the parties, I am not of the opinion that it is appropriate to make an order for costs.
I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of CAMERON FM
Associate:
Date: 21 August 2008
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