FRENTZ & MARTENS

[2020] FamCA 871

FAMILY COURT OF AUSTRALIA

FRENTZ & MARTENS [2020] FamCA 871

FAMILY LAW – PROPERTY – Final orders – Where the parties agree the property of the marriage should be divided equally between them – Where the parties are agreed on the value of all assets except for the former matrimonial home – Where the parties agree the former matrimonial home should be sold – Where the parties are in dispute as to the method and manner of sale and the sale price of the former matrimonial home – Where the property is currently listed at a price significantly above the valuation figure – Where the wife seeks a graduated reduction in sale price should the property not sell over time – Where the husband seeks the property remain on the market with no proposal if the property should not sell – Where the only reliable evidence of value is in a valuation report from 2019 – Where the Court should explore all reasonable avenues to end the financial relations between the parties – Orders.

Family Law Act 1975 (Cth) ss 80, 81

APPLICANT: Ms Frentz

RESPONDENT: Mr Martens

FILE NUMBER: ADC 3868 of 2018

DATE DELIVERED: 16 October 2020

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 30 September 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Lewis

SOLICITOR FOR THE APPLICANT: Barnes Brinsley Shaw Lawyers

COUNSEL FOR THE RESPONDENT: Ms O'Connor SC

SOLICITOR FOR THE RESPONDENT: Adelaide Family Lawyers

Orders

1. That in full and final settlement of all applications for property settlement past, present and future:-

   (a)The property located at B Street, Suburb C (“the Suburb C property”) be sold as follows:-

   (i)The property remain on the market for sale with the agent Mr D of E Real Estate (“the selling agent”) on the following terms and conditions:-

   1.The Suburb C property be sold in its current condition PROVIDED that if the selling agent recommends that any work be undertaken on the property THEN the parties will give proper consideration to any such recommendation but shall not be compelled to undertake any remedial work or fund any additional improvements except by written agreement of both parties through their solicitors;

   2.The parties shall consider the advice of the selling agent as to the best method of sale and the price at which the property is to be offered for sale at any point in time PROVIDED that the parties shall accept any sale price at or exceeding $3,550,000;

   3.The husband is to remove any rubbish and/or items remaining in or about the Suburb C property on or before fourteen (14) days from the date of this order but that thereafter the wife shall be entitled to arrange for the removal of rubbish and/or items and any reasonable costs incurred by her in doing so shall be paid equally by the parties;

   4.That in the event the Suburb C property remains without a contract for sale conditional or otherwise at the conclusion of the current Sales Agency Agreement being 1 November 2020 the parties shall either extend or enter into a further Sales Agency Agreement with Mr D of E Real Estate for a further period of three (3) months;

   5.In the event that the Suburb C property remains unsold at the conclusion of the renewed or further extended sales agency agreement THEN if after fourteen (14) days the parties are not able to nominate and agree to appoint an alternative selling agent THEN an agent shall be appointed by the President of the Real Estate Institute of South Australia with either party being at liberty to request the nomination;

   6.Unless the parties agree otherwise within fourteen (14) days of the date of this order the selling agent or such other agent as the parties may agree or may be nominated by the President of the Real Estate Institute of South Australia shall be notified in writing that the parties agree to accept and shall accept any sale price at or exceeding $3,550,000;

   7.If the Suburb C property is not sold within one hundred and five (105) days of the date of this order THEN subject to the advice of the selling agent it shall be offered for sale by auction at a reserve price of no more than $3,550,000 or such other amount as may be agreed between the parties;

   8.That the net proceeds of sale of the Suburb C property shall be divided between the parties such that the first ONE MILLION SEVEN HUNDRED AND THIRTY SIX THOUSAND FIVE HUNDRED AND THREE DOLLARS ($1,736,503) be paid to the wife and the balance of the net proceeds of sale shall be divided equally between the parties;

   9.Until settlement on the sale of the property the husband shall continue to pay 100 percent of all amounts due and owing in respect of the property including all outgoings.

   (b)That contemporaneously with the settlement of the sale of the Suburb C property the wife shall do all such things as may be necessary to transfer to the husband at his sole cost her interest at law and equity in the property at F Street, Suburb G (“the Suburb G property”) to the intent that the husband shall hold the same free of any claim of the wife.

   (c)That the husband shall be solely responsible for all costs and outgoings connected to the Suburb G property and the husband shall indemnify the wife and keep her forever indemnified in relation thereto;

   (d)The wife shall retain for her sole use and benefit absolutely free from any further claim or demand by the husband the following:-

   (i)The furniture, furnishings and other articles of domestic use and ornament presently in her possession, power or control;

   (ii)The Motor Vehicle 1;

   (iii)The savings and investments in her sole name;

   (iv)Her superannuation pursuant to her membership of H Super Fund:

   (v)Her personal effects; and

   (vi)Any other real or personal property or financial resource in her possession.

   (e)That the husband shall provide to the wife upon her request and expense the 1.5 meter by 1.2 meter (mantel mirror) situate in the Suburb C property;

   (f)That the husband shall retain for his sole use and benefit absolutely free from any further claim or demand by the wife the following:-

   (i)Furniture, furnishings and other articles of domestic use and ornament presently in his possession, power or control;

   (ii)His interest in law and equity in the property located at F Street, Suburb G;

   (iii)His interest in law and equity in the property located at J Street, Suburb K;

   (iv)The Motor Vehicle 2;

   (v)The savings and investments in his sole name whether domestically or internationally held;

   (vi)His personal effects; and

   (vii)Any other real or personal property or financial resources of his or in his name or possession not otherwise specified herein;

   (g)That each party shall do all such acts and things and sign all such necessary documents to give effect to the terms of this order;

   (h)That subject only to compliance with the specific provisions of this order, that each party do release the other from any liability for any claim that either one may have against the other in respect of any property or financial resources, present or future, whether at law and equity, vested or contingent, either now or hereafter owned by either of them;

   (i)That hereafter each party shall discharge without calling upon the other to contribute thereto their several debts contracted for or by them;

   (j)If either party shall refuse, neglect or fail to execute any documents necessary to give effects to the terms of this order, THEN, but not otherwise, upon proof by affidavit of such refusal or failure to sign, after providing such documents to the other party for a period of not less than seven (7) days a Registrar of this Honourable Court is hereby appointed to execute on behalf of the defaulting party and the Registrar shall do all such other further acts, matters, deeds and things required to settle the same and to do all such other acts as shall be necessary to give full force and effect thereto.

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 Frentz & Martens 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 ADELAIDE

FILE NUMBER: ADC 3868 of 2018

Ms Frentz

Applicant

And

Mr Martens

Respondent

REASONS FOR JUDGMENT

Introduction  

1. Ms Frentz (“the wife”) and Mr Martens (“the husband”) have competing applications for property orders.

2. The Further Amended Initiating Application filed by the wife on 25 September 2020 seeks that in full and final settlement the property of the parties be divided equally between them.

3. By Further Amended Response to Initiating Application filed 25 September 2020 the husband seeks a similar order.

4. The agreement of the parties extends to their assets as follows:-

Asset Description	Ownership	Agreed Value
B Street, Suburb C (“the Suburb C property”)	Joint	Value not agreed
F Street, Suburb G (“the Suburb G property”)	Joint	$210,000
Funds spent to purchase property at J Street, Suburb K (“the Suburb K property”)	Husband	$820,000
Motor Vehicle 1	Wife	$12,000
Motor Vehicle 2	Husband	$250
Wife’s savings (including payment from Suburb L property)	Wife	$409,612
Husband’s payment from Suburb L property	Husband	$324,946
M Bank account	Husband	$9,616
N Bank account	Husband	$27,736
O Bank account	Husband	$32,378
O Bank Securities account	Husband	$327,824
Share Broker Cash account	Husband	$369,625
Silver Bullion	Husband	$521,693
Furniture and effects	Husband	$30,000
H Superannuation Fund	Wife	$515,953
TOTAL (excluding Suburb C property)		$3,611,633

1. On the basis of the parties agreement that the property of the parties should be the subject of equal division, each party is to receive $1,805,816 from the agreed assets and one half of the net proceeds upon the eventual sale of the Suburb C property.

2. The wife retains the following property:-

Motor Vehicle 1	$12,000
Wife’s savings	$409,612
H Super Fund	$515,953
TOTAL	$937,565

1. The parties are agreed that upon the sale of the Suburb C property the wife is to first receive the sum of $1,736,503, being the difference between $2,674,068 and $937,565 with the balance of the net proceeds of the Suburb C property being divided equally between the parties.

2. The parties are agreed that the Suburb C property is to be sold, however, they are not agreed as to the method and manner of sale and in particular the initial sale price.

Orders sought by the wife for the sale of the Suburb C property

1. The wife seeks that the Suburb C property remain on the market for sale with the current selling agent, but if by 1 November 2020 the Suburb C property remains unsold then she seeks that the parties jointly appoint a sales agent nominated by her for a period of three months.

2. If the parties are not able to agree a sales price then the wife seeks that the agent shall be notified in writing that the parties will agree to accept any sales price at or exceeding $3,700,000.

3. If the Suburb C property does not sell within a further 60 days then the wife seeks that the sale price drop to $3,600,000, if not sold within 90 days then the wife seeks that the price drop to $3,550,000 and if not sold within a further 105 days then the wife seeks that the property be offered for sale by auction at a reserve price of no more than $3,250,000.

Orders sought by the husband for the sale of the Suburb C property

1. The husband seeks that the current agent retain the agency to sell the Suburb C property, but if the parties decide to appoint an alternate agent then such agent shall be agreed within 14 days and failing agreement the agent shall be appointed by the President of the Real Estate Institute of South Australia with either party being at liberty to request the nomination.

2. The husband does not nominate either a current sale price and nor do his orders contemplate what is to happen if the property is not sold.

3. The parties are therefore agreed as to all matters save as to the method and manner by which the Suburb C property is sold.

4. It is a fair reflection on the presentation of the parties that the wife is anxious to sell the Suburb C property and is of the view that the husband is delaying the inevitable namely, that the Suburb C property be sold for a figure less than his sale price expectations.

5. For his part, the husband considers that the Suburb C property is a prestige high-end property and should command a significant sale price.  He is determined that he would not accept a proposal to purchase that was less than the amount as stated in the initial Sales Agency Agreement, namely $4,800,000.

Current status of the Suburb C property

1. By consent order made 8 July 2020 the parties agreed the following:-

   1.That the net proceeds of sale of the Suburb L property, after meeting payment of any sales costs, shall be divided equally between the parties by way of interim property order and paid into the solicitors trust account for and on behalf of the husband and wife.

   2.The Suburb C property shall be marketed by Mr D of E Real Estate or such other agent as may be agreed.

   3.That any further repairs the husband seeks to undertake in respect of the Suburb C property, must be undertaken and completed within 14 days, and at his cost.

   4.The husband shall ensure any of his possessions at the Suburb C property, which Mr D recommends should be removed, shall be done so within 14 days.

   5.That within 15 days the husband shall ensure the Suburb C property is presented appropriately to be marketed for sale consistent with the directions of Mr D.

   6.Without admission about the ownership of such the wife agrees to not remove any item from the Suburb C property without the written consent of the husband.

   7.That in the event of a dispute as to the appropriate sale price the parties shall follow all reasonable directions of the President of the Real Estate Institute.

2. Upon the joint instruction of the parties, Mr P, registered land valuer, was instructed to inspect and provide a valuation report of the Suburb C property.  His report was produced on 13 February 2019 (being the date of valuation) and having considered the two most appropriate methods of valuation namely, the direct comparison approach and the summation approach, Mr P considered the current market value of the Suburb C property to be $3,550,000.

3. Consistent with the representations of the parties the property represents a substantial home comprising 640 square meters situate on a total land area of 3,525.5 square meters.

4. The Suburb C property is in an area where houses command a significant price.  Mr P annexes comparable sales in Appendix 4 to his report.  He considered that if the property was placed on the market for sale it “would generate a great deal of interest because of principally its location, exceptionally large land size and general structural integrity of its improvements”.[1]

   [1] Valuation of Mr P dated 13 February 2019 at 8.

5. Mr P considered a property at Q Street, Suburb C which sold for $5,100,000.  Whilst the property was of smaller dimension and less land area, its improvements were of a higher quality and of more modern presentation.

6. Mr P considered that if the Suburb C property was upgraded to a similar standard as the Q Street property then it might well command a figure greater than $5,100,000.

7. Exhibit “4” is the initial Residential Sales Agency Agreement which expires on 1 November 2020.  The agent’s estimate of price was $4,800,000 with the husband placing a figure of $5,000,000 on the property and the wife $4,000,000.

8. The husband’s position has altered in that he now would accept a sale price of $4,800,000.  As far as the wife is concerned, she would accept a sale price consistent with the valuation.

9. The parties are significantly apart in terms of sale price and there is no circumstance where they are likely to reach agreement.

10. The Suburb C property has not sold.  Neither party has presented any evidence from Mr D, nor did they seek a current valuation of the property from a licensed real estate valuer.

11. The wife gave evidence that she had consulted some other agents but did not present any evidence as to their assessment of the Suburb C property, a possible sale price or a method and manner by which the property could be sold.

12. The Suburb C property has been on the market for a significant period of time without success.  The wife complains that she has no relationship with the agent and for reasons not known to her, it is her perception that he appears reluctant to engage with her.  She was frank in her view that the agent is “out of his depth” in respect of the subject property and that he does not have the necessary expertise, experience or contacts to properly market the property.

13. The husband’s assessment of the agent is entirely different.  His evidence is that he has a good relationship with the agent and that there appears to be a free flow of communication.  He does not seek to change the agent and considers that Mr D has been working assiduously to effect a sale.

14. As matters transpired, an open inspection was listed to occur on the day of trial.

Documents relied upon

1. The wife relies upon the following documents:-

   (1)Further Amended Initiating Application filed 25 September 2020

   (2)Trial affidavit of the wife filed 25 September 2020

   (3)Financial Statement filed 25 September 2020

2. The husband relies upon the following documents:-

   (1)Further Amended Response to Initiating Application filed 25 September 2020

   (2)Trial affidavit of the husband filed 25 September 2020

   (3)Financial Statement of the husband filed 25 September 2020

   (4)Affidavit of Ms R (the husband’s solicitor) filed 25 September 2020

Background

1. The husband was born in 1948 and is currently 72 years of age.  The wife was born in 1950 and is currently 70 years of age.

2. The parties commenced cohabitation in about 1991 and were married in 1991 in Country O.  The parties separated on 14 August 2017.

3. There is one adult child of the relationship now aged 27 years.

4. The husband retired from his employment in 2015 having been diagnosed with a medical condition.  The wife retired in about 2010.

5. The parties purchased the Suburb C property in 1992.  Following separation the wife vacated the Suburb C property and took up residence in rental accommodation.

6. Since separation the husband has remained principally living in the Suburb C property with the intention that following the sale of that property he will live in his recently purchased property at Suburb K.

7. It is apparent from the presentation of the parties that they remain in high conflict over the sale price that should be attributed to Suburb C and the method and manner by which it should be sold.

8. The wife sought an advice from Ms S, real estate agent, then of T Real Estate, to inspect the property and provide an assessment of sale.  The wife contends that Ms S advised a flexible sale price of $4,100,000 for the Suburb C property.

9. It is not controversial that the orders for sale made provision for the husband to clean up the grounds of the property and remove rubbish and unwanted goods and possessions, but also to give the husband an opportunity to effect some minor repairs to the property.

1. The husband has done some minor work on the interior of the house but he concedes that his health has been poor and he has not been able to comply with the order in respect of the removal of rubbish and other unwanted items.

2. It is not agreed as to whether the removal of rubbish and unwanted items would make much difference to the saleability of the property.

3. Mr D was not called and the husband sought to rely upon the affidavit of his solicitor which contained her evidence of various conversations with Mr D as to the current status of the sale of the Suburb C property.

4. The wife objected to the affidavit being read into evidence in circumstances where Mr D was not called and made available for cross-examination.

5. It is not controversial that the property has now been on the market for sale for a number of months and it has not sold.  The husband concedes that the price he seeks is substantial and may well result in the property remaining on the market for some considerable period of time.  His position is clear.  He would rather the property remain unsold than it be disposed of for a sum less than $4,800,000.  As discussed, the wife’s position is quite different and she seeks that the property be sold as soon as possible and that the parties recognise that in its current state and taking into account the current state of the market, the fact that the property has not sold is a reflection of an unrealistic selling price.

Determination of the sale price

1. The husband is not prepared to contemplate a sale price less than $4,800,000.  The wife had been prepared to sell the property at $4,000,000 but in circumstances where it has not sold and she has lost confidence in the agent she is prepared to sell the property at a sale price of $3,550,000, being the valuation figure as determined by Mr P.

2. The husband considers that the valuation figure did not then and certainly not now reflect the current value of the Suburb C property.

3. The husband initially sought the following orders:-[2]

   1.That in full and final settlement of all claims for property:

   (a)The land at Suburb L be sold and the proceeds be divided equally between the parties save and except for an amount of $100,000, such amount, or other agreed amount, to be paid into the Adelaide Family Lawyers Trust Account;

   (b)The amount referred to in paragraph 1(a) herein to be used for the purpose, under joint instructions of both parties, of providing payment for tradespeople to upgrade the property at Suburb C to achieve a higher sale price than the current valuation provides.

   (c)…

   [2] Amended Response to Initiating Application filed 27 March 2019.

4. In evidence the husband conceded that the “current valuation” referred to was the valuation of Mr P.

5. The husband recognised that in order for a higher price to be achieved upon the sale of Suburb C and consistent with the matters raised by Mr P in his valuation report when comparing the Suburb C property to a comparable sale, a substantial sum would need to be spent to upgrade the property.

6. The husband agrees that upon the sale of Suburb L the proceeds were divided between the parties and the sum of $100,000 was not quarantined.

7. The husband has effected some modest repairs to the property but the extent of remediation contemplated by the husband in his response would require tradespeople to undertake the extra work at considerable expense.

8. I am left with the assertions of the parties as to their opinion as to value and the report of Mr P which was accepted by the parties at the time.

9. I consider that the only reliable evidence of value is as appears in the valuation report.  There is an explanation as to why the figure determined by Mr P to represent fair value is less than the most appropriate comparable sale available to Mr P at the time.  The parties did not agree the added cost of the renovation and improvement to the property and accordingly it is reasonable, in the absence of other evidence, for the Court to find that there is a basis for the current sale price to reflect the value placed on the Suburb C property by Mr P in February 2019.

10. The wife seeks a graduated reduction in the sale price of the property should it not sell over a period of time.  I consider the wife’s approach to be uncontroversial in its intention but that it represents a bridge too far in the absence of any evidence to support the proposal.

11. The orders sought by the husband provide no assistance in terms of the certainty of sale and a timely resolution to the litigation for settlement of property.

12. Section 81 of the Family Law Act 1975 (Cth) (“the Act”) provides:-

    In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.

13. I am cognisant that s 80 of the Act provides for the general powers of the Court and I consider there is merit in the wife’s application that the Court should explore all reasonable avenues to end the financial relations between the parties.

14. They have agreed all other matters and a final settlement is entirely dependent upon the sale of the Suburb C property.

15. I propose to order that if offered, the parties accept a sale price for the Suburb C property of $3,550,000.  That does not prevent the parties from instructing the agent to market the property at a higher figure but will require the parties to enter into a contract for the sale and purchase of the Suburb C property if an offer is received at or above the nominated sale price.

16. The husband resists a change of agents.  I consider there is merit in the husband’s position.  Even though the wife has lost confidence in Mr D, I am not satisfied that if Mr D is not able to sell the property a new agent should be appointed.

17. I propose to order that the parties enter into an extension of the Sales Agency Agreement for a further three months from 1 November 2020.  Thereafter, if the property has not sold or there is not a contract for sale placed on the property then the parties will seek the nomination of an agent by the President of the Real Estate Institute.

18. In the absence of evidence, I do not consider that I am able to set out orders which will regulate a marketing plan or the method and manner by which the property is to be sold.

19. At present the property is on the market for sale.  If that marketing strategy does not bear fruit then it would be reasonable for the parties to list the property for sale by auction if private treaty does not result in a sale.

20. The process of sale is not a matter that I consider to be by way of substantive relief and whilst undesirable for the parties to return to Court upon application, they are not prevented from doing so.

21. I make orders as appear at the commencement of these reasons.

I certify that the preceding sixty six (67) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 16 October 2020.

Associate:

Date:  16 October 2020