Falkner and Candle and Anor
[2019] FamCA 471
•2 July 2019
FAMILY COURT OF AUSTRALIA
| FALKNER & CANDLE AND ANOR | [2019] FamCA 471 |
| FAMILY LAW – PROPERTY – Where ongoing property proceedings – Where default by husband in obligations to pay mortgage payments in respect to property in his name where wife guarantor under the mortgage – Where prospective mortgagee action for default – Where such action would have adverse commercial impact on wife’s business – Where appropriate that the wife be appointed Trustee for Sale. |
| Family Law Act 1975 (Cth) s 114 |
| APPLICANT: | Ms Falkner |
| FIRST RESPONDENT: | Mr Candle |
| SECOND RESPONDENT: | Ms Mills |
| FILE NUMBER: | PAC | 623 | of | 2018 |
| DATE DELIVERED: | 2 July 2019 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 2 July 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Gardiner |
| SOLICITOR FOR THE APPLICANT: | Coleman Greig Lawyers |
| FIRST RESPONDENT – SELF-REPRESENTED LITIGANT: | No appearance |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Gardiner, by consent |
| SOLICITOR FOR THE SECOND RESPONDENT: | McPhee Kelshaw |
Orders
The wife Ms Falkner be appointed trustee for sale of the property situate at Town B in the State of New south Wales being the whole of the land identify … and for such purpose the said property shall vest in her and that the wife as trustee do all things necessary and sign all necessary documents to sell the subject property for the best price reasonably obtainable by such method of sale as she may in her discretion determine and that the wife as trustee pay the net proceeds of sale of the said property in the following order and priority:
(a)In payment of agent’s commission, advertising and selling fees and legal costs of sale;
(b)In discharge of any registered mortgage encumbrance secured against the said property;
(c)In payment of the balance then remaining to be held on trust in a controlled monies account by the wife’s solicitors in the joint names of the parties pending further order or agreement between the parties.
The husband vacate the said property not less than 21 days before settlement of the sale of the said property.
The husband be restrained from doing any act or things that is likely to hinder access to the said property, its appropriate presentation for sale and access to the property by the wife as trustee for sale and the selling agent for the purposes of open for inspections or as otherwise necessary.
That the wife have liberty to apply to have this matter restored to the list on short notice in appropriate circumstances by application to the Court in chambers.
Any application for costs by the wife of and incidental to the present application be by way of short written submissions filed and served within 14 days of today’s date.
The proceedings are adjourned for further judicial case management to 9.30am on Thursday, 1 August 2019.
The husband be in attendance in person on that date notwithstanding that he may be legally represented.
In default of any appearance by the husband on the adjourned date directions will be made for the wife’s property application to proceed on an undefended basis.
The wife effect personal service of a sealed copy of these orders on the husband as soon as practicable after they are available on the portal together with a letter informing the husband that in default of his appearance on the adjourned date the wife will seek to have her property application proceed to undefended hearing.
THE COURT NOTES THAT
The solicitor for the wife will inform the Second Respondent’s solicitors of the orders made today.
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 Falkner & Candle and Anor 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 PARRAMATTA |
FILE NUMBER: PAC 623 of 2018
| Ms Falkner |
Applicant
And
| Mr Candle |
First Respondent
And
| Ms Mills |
Second Respondent
EX TEMPORE REASONS FOR JUDGMENT
The application before the Court for determination is an interim application in the context of ongoing property proceedings between the applicant wife and respondent husband.
The primary proceedings were commenced with the wife filing an Initiating Application on 15 February 2018 and in that application she sought certain orders as to property and provided for, in summary, the husband to transfer to the wife his shareholding and interest in the company C Pty Limited and that, otherwise, the husband transfer to the wife his interest in the property situated at Town D.
Otherwise, in default of the husband complying with orders, the wife sought an order that the subject property in this application, a real estate property situated at Town B, be sold.
The wife in the present application relies upon:
a)her Application in a Case filed 5 June 2019;
b)her affidavit sworn 30 May 2019 and filed 5 June 2019; and
c)her further updating affidavit filed 1 July 2019.
The Application in a Case was listed before a registrar on 12 June 2019 following circumstances where in April 2019 the husband’s solicitor filed a Notice of Ceasing to Act.
On 12 June 2019 proceedings were before a registrar of this Court and a solicitor appeared with leave on behalf of the husband but that solicitor has not filed a Notice of Address for Service nor formally sought to appear on behalf of the husband in these proceedings.
The wife’s Application in a Case was listed before a registrar on that day and it was noted that the husband at that stage had failed to make ongoing mortgage payments in relation to the Town B property. As a consequence, proceedings were listed in the judicial duty list on 18 June 2019.
On 18 June 2019 proceedings were before the Court. There was no appearance by or on behalf of the respondent husband and directions were made that the wife’s Application in a Case be listed for interim hearing to 9.30 am on 2 July 2019.
The husband was, otherwise, ordered to file and serve a Response to the Application in a Case together with any affidavit sought to be relied upon by him by no later than 28 June 2019. It was further ordered that in default of the respondent complying with the previous order, the wife’s Application in a Case shall proceed to undefended hearing on the adjourned date.
The husband has been notified of the listing today and, indeed, the Court’s orders of 18 June 2019 are on the Court portal for his attention.
The wife relies upon the affidavits identified above. Her evidence, in summary, is that she is presently self-employed as a franchisee of F Company at Suburb E, an occupation she has had since about April 2005. To the best of her knowledge the respondent husband is not working. The parties commenced to reside together in 2003, married on 29 November 2008 and were divorced in June 2018 after separating on 10 February 2017.
The husband presently resides in the property at Town B, that is registered in his name, but the mortgage security over the property is subject to a personal guarantee by the wife, most likely as a consequence of her primary income earning ability through her business. The husband has resided in the property since separation and since that time it has been assumed that he has been responsible for meeting mortgage payments on the property and outgoings, of course, as is his obligation as the legal owner and primary mortgagor.
The wife asserts that on two occasions subsequent to separation in May 2018 and September 2018, the husband has defaulted on mortgage payments and the default was only remedied following correspondence sent to the husband’s then solicitors.
The wife expresses concern that on 12 April 2019 she received a demand notice for arrears from the mortgagee arising from defaults in mortgage payments by the husband. As at 12 April 2019 the mortgage payments on the property were in default in the sum of $14,047.69.
Under the demand notice dated 12 April 2019, the mortgagee informed the wife that in default of arrears being paid by 21 April 2019, they would foreclose on the property and sell it.
Subsequently, the mortgagee was informed of the ongoing family proceedings relating to property in this Court. To the wife’s knowledge, for whatever reason, the husband is refusing to pay arrears of mortgage and they continue to accumulate.
The wife asserts that as a part of the final orders sought by her, she’s seeking to retain a property at Town D, which is registered in the joint names of the parties. It will be necessary for her to refinance the loan over that property so as to remove the husband’s name from the title if she is successful in obtaining that order.
It is axiomatic to say that the impact of any default under the current mortgage may well have an adverse result on her credit rating and her ability to refinance the mortgage over the Town D loan.
The wife complains that throughout the period of the litigation the husband has simply delayed and procrastinated such that some 18 months after the commencement of the proceedings, they as yet are not the subject of any trial directions or, indeed, any date for hearing. The wife complains that she has been to significant expense in dealing with the husband’s prevarication in paying her solicitors in terms of correspondence and unnecessary court appearances.
The wife’s updating affidavit filed on 1 July 2019 reveals that on 11 June 2019 she received a further demand in relation to arrears under the subject mortgage from the mortgagee, G Pty Limited. The mortgage arrears as at that date had accumulated further to the sum of $21,256.50 with payment being demanded by 16 June 2019, otherwise, recovery action would commence.
Clearly the accumulation of arrears is diminishing the equity in the property and may have an adverse commercial impact on the wife.
Section 114 of the Act provides that the Court may make such order as it considers proper.
Subsequently, the wife’s solicitors informed the mortgagee of the current Application in a Case and one would expect that the mortgagee may well abstain from any default action pending the outcome of the present application.
The wife exhibits to her affidavit of 1 July 2019 various bank statements relating to the husband’s accounts. They reveal that as at 3 June 2019, he had a credit balance with his Westpac Choice account, account number …006, in the sum of $59,796.93, and outstanding credit card liabilities of which he is aware of about $11,000.00.
The wife makes complaint as to funds expended by the husband on his lifestyle over the period since separation and otherwise. The husband, for whatever reason, has chosen not to engage in the present proceedings. He is on notice that the wife seeks an order that he remedy arrears of mortgage and, otherwise, she be appointed trustee for sale of the subject property.
In the circumstances outlined above, it is appropriate to make injunctive interim orders as sought.
I certify that the preceding twenty six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 2 July 2019.
Associate:
Date: 2 July 2019
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