Elphinghorn and Elphinghorn

[2010] FamCA 630

FAMILY COURT OF AUSTRALIA

ELPHINGHORN & ELPHINGHORN [2010] FamCA 630

FAMILY LAW – PROPERTY – Appointment of sales agent

Family Law Act 1975 (Cth)

APPLICANT: Ms Elphinghorn

RESPONDENT: Mr Elphinghorn

FILE NUMBER: MLC 252 of 2009

DATE DELIVERED: 13 JULY 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 13 JULY 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR INDOVINO

SOLICITOR FOR THE APPLICANT: INDOVINOS LAWYERS

COUNSEL FOR THE RESPONDENT: MR PINNER

SOLICITOR FOR THE RESPONDENT: BEAUMONT LAWYERS

Orders

1. That all outstanding applications be adjourned to 9.00am on 1 September 2010.

2. That by 4.00pm on 30 August 2010, each of the husband and the wife file and serve a list of the following documents:

   (a)letters by three estate agents who consent for a prescribed fee to sell the real property at B, setting out in those letters, their proposed letters of sale and the expected/anticipated sale price or in the case of an auction, the reserve price;

   (b)three business sales agents who consent for a prescribed fee to sell the business known as E Business through E Pty Ltd setting out in their proposed letters, the requirements to implement such method of sale, the method of sale and the expected/anticipated sale price.

3. That upon the return date, the issue of the method of sale of each of the business and real property be determined according to the information provided in paragraphs 1 and 2 hereof.

4. That each party have liberty to file and serve any further material upon which they intend to rely by 4.00pm on 23 August 2010.

5. Reserve costs of both parties of this day.

6. Liberty to apply generally.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 252  of 2009

MS ELPHINGHORN

Applicant

And

MR ELPHINGHORN

Respondent

REASONS FOR JUDGMENT

1. Mr Elphinghorn (“the husband”) and Ms Elphinghorn (“the wife”) sought and obtained final property orders before Young J on 8 September 2008.  On that day, each was represented by a legal practitioner.

2. In relation to the orders of 8 September 2008 which it is common ground, were final property orders, the following may be seen:

   1.THAT the husband and wife forthwith do all acts and things and sign all such documents  to cause the business known as [E] Pty Ltd (“the business”) to be sold and that [M] Business Brokers have the conduct of that sale.

   2.(a)      THAT the reserve price of the business be initially fixed at $470,000.00 (“the reserve”) until 10 October 2008 and thereafter if the business fails to sell, the reserve price be reduced by agreement in writing between the parties.

   (b)for the purposes of reaching agreement, the parties if necessary, confer with their respective lawyers and obtain a written estimate of the reserve price from [M] Business Brokers or any other broker appointed to market the sale of the business.

   …

   4.THAT the debts and liabilities referred to in paragraph 3(b) hereof are to be determined by way of agreement in writing between the parties or, failing agreement, by Mr [F], Chartered Accountant.

   …

   6.THAT the initial reserve price of the property be fixed at $680,000.00 unless otherwise agreed between the parties in writing.  Failing agreement between the parties as to the method of sale or the reserve price of the property, the same is to be decided by the president of the Real Estate Institute of Victoria or his agent.

   …

   8.THAT pursuant to paragraph 6(d) the wife be at liberty to roll over her superannuation entitlements in the [Elphinghorn] Superannuation Fund into a fund of her choosing subject to compliance with the current Superannuation Rules and Regulations.  The cost of such rollover shall be borne equally by the parties.

   I note that the reference to paragraph 6(d) should most probably be paragraph 7(d).

   12.THAT there be liberty to apply with respect to the sale terms of the business and property.

   …

3. On a simple reading of the order, there is a conflict between paragraph 6 and paragraph 12.  There is also potentially a conflict between paragraph 2 and paragraph 12 but that may be covered by the last words of paragraph 2.

4. What is abundantly clear is that as the parties approach the second anniversary since the making of the orders, they have not progressed in relation to the sale of either the business or the real property.

5. On 7 June 2010, the wife filed an application seeking orders to enforce the orders of 8 September 2008 including pursuit of an order that the Registrar sign any necessary documents to give effect to the orders.  The wife also sought an order that the husband vacate the property at B and that the wife have exclusive occupancy for the purposes of the sale and the husband be restrained from doing anything with the “assets of [E] Pty Ltd”.

6. The husband filed a response to the wife’s application in which he simply sought a dismissal.  He then sought an order that in the event that the wife refused or neglected to comply with the orders of 8 September 2008, the Registrar of the Court be appointed to execute all documents and deeds in the name of the wife.

7. Each application for orders in its own way realistically reinforces what the parties had agreed upon in September 2008.  Having read the material of the parties and heard submissions from each of their counsel, I declined to make orders in those terms.  At the time that I heard the argument, I delivered to the parties, the orders I intended to make and said that I would subsequently deliver these reasons.

8. It was common ground between the parties that the power under s 79 of the Family Law Act 1975 (Cth) (“the Act”) had been exhausted and the only power (absent an application under s 79A of the Act) to do anything was either in the form of an enforcement process or as a machinery order to give effect to the orders of 2008.

9. In her affidavit seeking to support the orders she sought, the wife said that she and the husband had been attempting to negotiate with respect to the realisation of the business and the real property but had failed to arrive at any agreement.  She referred to correspondence and adopted the position that the husband remained in possession of the business and the real property and unless he was forcibly removed, it would be improbable for the sale of the business to be realised.

10. In a much more comprehensive affidavit, the husband said that he denied that he had failed to comply with any of the orders.  He asserted that the wife was in breach of the orders by failing to cooperate with the business brokers referred to therein.  He asserted that the wife was also in breach of the orders by failing to cooperate with respect to the appointment of a substitute broker. 

11. The husband referred to a discussion with the named business broking firm and referred to the fact that they had terminated the relationship because of derogatory comments that were made by the wife.  All of this was hearsay and not corroborated by the business brokers.  Accordingly, it is of little probative value. 

12. The husband then referred to the fact that there was a subsequent meeting with a business broker by the name of N Business Brokers but there too, the communication lines broke down.  For the same reasons, I am unable to give the evidence any significant weight.

13. The husband then referred to the fact that he tried to negotiate a buy-out of the wife and that had not been successful and he was concerned about the employees of the business.  As I pointed out at the time, all of those matters were the subject of not only dispute but also the final orders and as such, the only way I could see that the husband could buy the business was by seeking to be an arms-length purchaser when the ultimate sale provisions were implemented.

14. The husband set out in considerable detail the correspondence about his complaint.  In the end, the husband said that despite the wife actually agreeing on terms, she resiled from the agreement and in doing so, had failed or refused to take any of the necessary steps to once again follow the mechanisms provided in the final orders.

15. As will be seen from the final orders, the mechanisms were in conflict because one method suggested that the Real Estate Institute take control but the other gave the parties liberty to apply to the Court for the mechanism to be fixed.

16. At the hearing, Mr Indovino of counsel on behalf of the wife produced a set of proposed orders in which it was suggested that the Law Institute take responsibility for the appointment of various sales agents.  I have considerable doubt about the power to delegate the responsibility of the Court that widely.  More importantly, whoever was nominally in that position would have to then appoint agents and make various inquiries that should in effect be made by the parties.

17. Accordingly, I propose that each party provide all of the necessary information and I will make the necessary appointment on 1 September 2010.

I certify that the preceding Seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  26 July 2010