HAMPTON & HAMPTON
[2013] FCCA 1155
•22 August 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HAMPTON & HAMPTON | [2013] FCCA 1155 |
| Catchwords: COSTS – Husband’s conduct – husband failed to provide full discovery until morning of trial. |
| Legislation: Family Law Act 1975, ss.75(2), 79, 117 |
| Stanford & Stanford [2012] HCA 52 Lee Steere v Lee Steere (1998) FLC 91-626 Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143 In the Marriage of Omacini (2005) 33 Fam LR 134 D & D [2003] FamCA 473 |
| Applicant: | MR HAMPTON |
| Respondent: | MS HAMPTON |
| File Number: | ADC 1835 of 2010 |
| Judgment of: | Judge Kelly |
| Hearing dates: | 22 and 23 July 2013 |
| Date of Last Submission: | 23 July 2013 |
| Delivered at: | Adelaide |
| Delivered on: | 22 August 2013 |
REPRESENTATION
| Counsel for the Applicant: | Ms K Kovacs |
| Solicitors for the Applicant: | Mead Robson Steele |
| Counsel for the Respondent: | Ms J Cocks |
| Solicitors for the Respondent: | The Family Law Firm |
ORDERS
In full and final settlement of any claim that either party may have against the other by way of property settlement
The former matrimonial home situate at Property H in the State of South Australia being the whole of the land comprised and described in Register Book Volume (omitted) Folio (omitted) be sold and the net proceeds of sale be applied as follows:
(a)in payment of all costs and expenses of sale including conveyancing costs and disbursements, agents’ commission, advertising expenses and auctioneer’s expenses incurred;
(b)in payment of all rates and taxes outstanding in relation to the property;
(c)in discharge of the registered mortgage no. (omitted) to the (omitted) Ltd;
(d)in payment of any costs and disbursements still outstanding to (omitted) Real Estate (if any);
(e)the sum of $2,400 to the wife as reimbursement for her payments towards the marketing and auction costs incurred by (omitted) Real Estate (“the selling agents”);
(f)in payment and full discharge of the (omitted) Bank Mastercard and the (omitted) Bank Visa Card;
(g)the balance then remaining to be divided between the parties as to 49% to be directed to Mead Robson Steele Trust Account on behalf of the husband and 51% to The Family Law Firm Trust Account on behalf of the wife.
The husband’s solicitors shall disburse the husband’s share of the net proceeds as follows:
(a)to the wife a sum equal to one half of the house insurance premiums paid by her since separation until the date of settlement;
(b)the sum of $15,000 to be retained in the Mead Robson Steele Trust Account, pending finalisation of the costs order in the wife’s favour, in accordance with paragraph 10 of these Orders;
(c)the balance to the husband.
Each party retain such other assets as may be in their possession including, but not limited to, household effects, motor vehicles, personal effects and savings.
The former matrimonial home continue to be listed for sale with (omitted) Real Estate (“the selling agents”) on the following terms and conditions:
(a)the property be listed with a reserve price of $550,000;
(b)the property be listed with an asking price range to be agreed between the wife and the selling agents;
(c)the property be listed for sale by private treaty for a period of three (3) calendar months;
(d)thereafter the selling agents shall list the property for sale by auction on such terms as may be nominated by the wife, taking into account advice received from the selling agents;
(e)in the event the property is passed in at the auction referred to in sub paragraph (d) then the property shall again be listed for auction at a later date to be agreed between the selling agent and the wife and at a lower reserve price to be nominated by the wife taking into account advice received from the selling agents.
The parties must:
(a)sign and execute any further Sales Agency Agreement within 48 hours of the Agreement being presented to them by the selling agents;
(b)liaise with the selling agents or any auctioneer instructed by them, as required by the selling agents from time to time;
(c)co-operate fully with the selling agents and ensure they are not impeded in their efforts to market the property effectively;
(d)make themselves available to communicate by telephone with the selling agents or any auctioneer for a period of one hour prior to and after each auction, or as otherwise requested by the selling agents;
(e)in the event the property does not achieve the reserve price of $550,000 at auction, engage in any further negotiations as the auctioneer or selling agent may recommend;
(f)accept any Offer and forthwith sign any associated Contract for Sale presented to them by the selling agent where the sale price exceeds the reserve price of $550,000.
Pending sale and settlement of the property the husband shall:
(a)maintain the home and grounds in good order and to a standard that the selling agents may recommend from time to time for the purpose of effectively marketing the property;
(b)allow inspection of the property at all reasonable times requested by the selling agents;
(c)provide proper access to the property at times nominated by the selling agents for the purposes of conducting open inspections, private inspections or auctions;
(d)absent himself from the property for a period of at least 30 minutes prior to, during and 30 minutes following each open inspection and/or private inspection provided he is given at least 48 hours notice of any open inspection and 4 hours notice of any private inspection;
(e)absent himself from the property for a period of at least one hour prior to, during and for a period of one hour following any auction that takes place provided that the husband is given at least 48 hours notice of the time and date for the auction.
In the event the husband fails to sign or execute any document in accordance with these Orders then the wife is authorised to execute any document including any Sales Agency Agreement, accept any Offer and sign any Contract for Sale on behalf of both parties.
Upon a Contract for Sale being signed, the parties instruct Messrs Mead Robson Steele to undertake all conveyancing in relation to the sale of the former matrimonial home.
The husband remove his personal effects from the property at least 48 hours prior to settlement AND in the event he fails to do so the wife is at liberty to arrange for the removal and disposal of such personal effects with any costs incurred to be met from the husband’s share of the net proceeds of sale of the property.
The husband pay such sum towards the wife’s costs as the parties may agree, or as ordered by the Court.
Liberty to either party to apply with respect to costs within 42 days.
Liberty to apply for further directions with respect to sale of the former matrimonial home.
IT IS NOTED that publication of this judgment under the pseudonym Hampton & Hampton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 1835 of 2010
| MR HAMPTON |
Applicant
And
| MS HAMPTON |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Hampton and Ms Hampton were married for 35 years. They separated in July 2008 but continued living together under the one roof until June 2010, when the wife moved into separate accommodation. They have been unable to reach agreement in relation to their property settlement and it now falls to the Court to determine this issue.
In the course of these reasons any statements of fact should be regarded as a finding of fact unless otherwise clarified.
Background
The husband was born in 1938 and is 75 years old. The wife was born in 1953 and is 59 years old. The parties married on (omitted) 1972. Earlier that year they established their business “(omitted)”, operating (omitted) through venues such as the (omitted).
The husband was the driving force behind the day to day operation of the business. The wife worked part time in a (omitted) but also assisted with the bookkeeping for the business. (omitted) traded well and the parties purchased further (omitted) equipment to expand their operations.
The parties have two children, X, born (omitted) 1974 and Y, born (omitted) 1977. The wife took on the role of primary homemaker and parent for the two children albeit the husband was also involved in the children’s care.
In 1972 the parties purchased two properties at (omitted) and subsequently undertook various renovations and improvements to those properties. In 1984 they sold one of the properties and used those funds to purchase a property at (omitted). They sold the second (omitted) property in approximately 1986 and paid the net proceeds towards the existing mortgage on their (omitted) property. The parties continued living at (omitted) until 1996.
In 1994 the parties purchased 8 hectares of land at Property H. They planned to sell their (omitted) property and build a new home at Property H. The (omitted) property was listed for sale with an asking price of $250,000 and eventually sold in 1996 for the sum of $166,000. The parties lived in numerous rental properties over the next few years, until their new home was completed. The family finally moved into the Property H property in April 2004.
Both parties received inheritances during the marriage. I am satisfied that both parties directed any lump sum payments they may have received to the benefit of the family, whether the funds were by way of sale of assets, inheritances, or compensation claims.
The husband continued to run the (omitted) business throughout the marriage. The husband also bought various vehicles and equipment across the years, which he would repair and sell for a modest profit.
The wife worked in various different positions once the children were older. She was employed in the (omitted) sector before opening her own (omitted) shop on (omitted) in 1987. Unfortunately, that venture was unsuccessful. She also worked part time at (omitted) before suffering a serious back injury in 1990. She pursued compensation for her injuries and received an initial compensation payment of $31,275. She eventually finalised her Workcover claim in July 2000, when she received a redemption payout of approximately $90,000 net.
The husband also suffered serious health issues throughout the marriage. In 1994 he underwent surgery for bowel cancer. Some years later he underwent further surgery in relation to stomach hernias. He also experienced psychological difficulties. Both parties eventually received a disability pension as a result of their various injuries and health difficulties.
The (omitted) business was successful for a number of years, but the parties’ health issues meant they were unable to devote the same time and effort to the business and it eventually declined. In December 2008 the husband sold (omitted) for the sum of $8,800.
The parties’ relationship became increasingly unhappy. They ended their marital relationship in July 2008 and began living separately within the former matrimonial home. Notwithstanding their separation, both parties continued to contribute to household expenses. The wife continued shopping for the household and also attended to domestic duties within the home.
In 2009, the wife went on a six month driving holiday with her sister, travelling to (omitted) to collect a (omitted) that her sister had purchased there. The wife finally moved out of the former matrimonial home in June 2010 and the parties’ Divorce became final in July 2010. In September 2010 the wife moved to New South Wales and commenced a relationship with Mr B.
The parties placed the former matrimonial home on the market in November 2010. The property was initially listed with (omitted) Real Estate at an asking price of $815,000. The parties have reduced the asking price substantially but to this date, the property remains on the market for sale.
History of proceedings
On 6 July 2011 the husband filed his Initiating Application seeking an equal division of the matrimonial asset pool and various orders in relation to discovery and the sale of the former matrimonial home.
The husband’s application was listed on 3 August 2011. The wife did not attend, but the Court was informed that she had been in contact with the husband’s solicitors. Accordingly the wife was ordered to file answering documents and the matter was listed for a Conciliation Conference on 1 November 2011. The parties were directed to provide full discovery and the Court otherwise noted the property was already listed for sale with (omitted) Real Estate.
The wife filed her Response on 9 September 2011. She also filed an interim Application seeking a range of orders directed to the sale of the property, including specific orders with respect to the agent and the asking price. The wife was concerned that the husband’s nominated asking price was too high and sought to instruct a different real estate agent, Ms M. Ms M suggested that the property be marketed at a price of $660,000.
The parties failed to reach an agreement at the Conciliation Conference. A further directions hearing took place on 18 November 2011. The wife’s interim Application in relation to sale of the property was dismissed by consent on the basis that the parties had agreed to leave the property listed with (omitted) Real Estate but at a reduced asking price of approximately $700,000.
The proceedings were adjourned to 8 February 2012. On that occasion the parties informed the Court that they were engaged in ongoing negotiations. The Court directed that they attend a further Conciliation Conference on 10 April 2012 and the matter was listed for trial to 16 and 17 July 2012.
The parties appeared to have reached agreement at the Conciliation Conference but were unable to agree upon the final Minutes of Order. They subsequently agreed to vacate the trial dates in order to facilitate further negotiations. Unfortunately those negotiations also broke down and the parties again found themselves in dispute about the terms and conditions of sale of the former matrimonial home.
The wife filed a further Application in a Case on 7 September 2012 again seeking to list the property with her preferred agent, Ms M. That Application proceeded to argument on 27 September 2012. The husband opposed the property being listed with Ms M arguing that she was no longer in business. That was strictly correct, as Ms M had joined (omitted) Real Estate in August 2012.
Following submissions, the Court was satisfied to grant the wife’s application, given there had been no success in the listing with (omitted) Real Estate and Ms M was still working as a real estate agent in the area. The Court was also satisfied that the asking price for the property should be reduced and the following orders were made:
“1.The parties do all things and sign all documents necessary to list the property situate at Property H in the State of South Australia for sale with the real estate agent, Ms M at (omitted).
2.The parties list the property for sale at a reserve price of $610,000 and an asking range of $600-$650,000 or such other figures in that range as may be advised by Ms M.
3.In the event sale by private treaty has not been reached as at 30 November 2012, then the property proceed to sale by auction on terms and conditions to be nominated by Ms M with a reserve price of $610,000.”
On 28 November 2012, the matter was listed for trial to 22 and 23 July 2013. At the time of trial, the Property H property remains unsold.
The hearing
The hearing proceeded on 22 and 23 July 2013. Both parties were represented by Counsel. In addition to the substantive Applications for property settlement, the husband had also filed a further interim Application on 24 May 2013 seeking to list the property with yet another real estate agent. The wife filed a Response on 14 June 2013 seeking to retain the existing real estate agent and allocate a lower reserve price.
Initially the Court indicated it would rule on this issue on the papers but as the hearing progressed it became clear there was sufficient time for each party to present their case with respect to the substantive property settlement and also hear brief evidence from each of their nominated agents.
The husband relied upon the following documents:
a)Initiating Application filed 6 July 2011;
b)Amended Initiating Application filed 31 May 2013;
c)Husband’s Trial Affidavit filed 31 May 2013;
d)Financial Statement filed 31 May 2013;
e)Application in a Case filed 24 May 2013;
f)Affidavit of Hugh Steele filed 22 May 2013; and
g)Affidavit of Mr J, real estate agent filed 18 July 2013.
The wife relied upon the following documents:
a)Amended Response filed 9 May 2013;
b)Wife’s Affidavit filed 10 May 2013;
c)Financial Statement filed 10 May 2013;
d)Response to Application in a Case filed 14 June 2013;
e)Wife’s Affidavit filed 14 June 2013; and
f)Affidavit of Ms K filed 19 July 2012.
At the commencement of trial the husband sought orders that the matrimonial asset pool be divided 60/40 in his favour or alternatively that the wife account for various funds allegedly retained by her during the marriage. The wife sought orders for a 55/45 division of the asset pool in her favour, together with a range of orders in relation to the sale of the former matrimonial home. She also sought an order that the husband meet all outgoings in relation to the property, pending sale and final settlement on the property.
Both parties gave evidence and were cross examined during the course of the hearing. At times the husband demonstrated a prodigious memory for financial transactions that had occurred across the years. At other times, however, his answers were non-responsive, long winded and contradictory.
Having observed the husband in the witness box, I conclude that he was content to present “chapter and verse” on past financial transactions where he felt that evidence would fall to his benefit, but not otherwise. The husband’s evidence was often confusing and misleading, particularly in relation to his understanding of the wife’s finances, his failure to provide discovery and his interaction with Ms M and Mr C, the real estate agents.
At the commencement of his evidence the husband acknowledged that he had instructed his lawyer not to release various financial records that were in his possession, only producing those documents on the morning of trial. The husband continued to allege that the wife had taken the bulk of the family financial records when it was clear from his own evidence that he had these documents in his possession and had not complied with earlier orders for discovery.
The husband had repeatedly denied that any of the wife’s Workcover redemption monies were used to benefit the family. It was only in the course of giving oral evidence that he finally conceded a large portion of those funds had been spent on the construction of the former matrimonial home at Property H. I am satisfied that the husband knew that the banking records in his possession confirmed this and that he withheld these records until the morning of trial, in order to cast some doubt on the wife’s contribution.
Turning to the wife’s evidence, I am satisfied she answered most questions openly and honestly. For example, she conceded that some of the expenditure incurred on the (omitted) Bank Visa card in the period 2008-2010 was her own personal expenditure. When asked if she may rekindle her relationship with her former partner Mr B, the wife answered honestly saying “I don’t know”, suggesting there is a possibility that the relationship may resume.
Where the parties’ evidence is in conflict, I prefer the wife’s evidence.
The wife also called Mr C, her nominated real estate agent with (omitted) Real Estate. The husband called two real estate agents, Mr J, who operates his own real estate agency and Mr W from (omitted) Real Estate Agents. These three witnesses gave their evidence in an open and professional manner.
Legal principles
The relevant legal principles governing any application for property settlement are set out in Part VIII of the Family Law Act. Section 79(1) allows the Court may make such orders in property settlement proceedings as it considers appropriate. Section 79(2) directs that a Court shall not make such an order unless it is just and equitable to do so. The recent High Court decision of Stanford & Stanford[1] clarifies that the Court can only make an order adjusting the property interests of the parties when the Court is satisfied that it is just and equitable to do so. Obviously, in most circumstances where parties have separated, that condition is easily met.[2]
[1] Stanford & Stanford [2012] HCA 52, paras 37-40
[2] Stanford & Stanford, ibid, para 42
In considering the terms of any such order, s.79(4) directs the Court to take into account the parties’ contribution to the maintenance and acquisition of the asset pool during the marriage, including direct and indirect financial contributions, direct or indirect non financial contributions and any contribution to the overall welfare of the family, including in the capacity of homemaker or parent.
Section 79(4)(d) directs the Court to consider the impact of any proposed order upon the earning capacity of either party. Section 79(4)(e) directs the Court to refer to the matters set out in section 75(2), factors that generally direct the Court’s attention to each party’s future needs.
Various Full Court authorities confirm that determining a property settlement application involves a four step process.[3] Assuming the Court is satisfied that it is just and equitable to proceed, the Court must identify the assets and liabilities arising from the parties’ marriage. Once the asset pool has been identified, the Court should then assess each party’s contribution during the marriage in accordance with s.79(4)(a)-(c). The third step requires the Court to consider the matters set out in s.79(4)(d)-(g), including the future needs factors identified in s.75(2).
[3] Lee Steere v Lee Steere (1998) FLC 91-626; Hickey v Hickey & Attorney General of the Commonwealth of Australia (Intervenor) 2003 FLC 93-143; In the Marriage of Omacini (2005) 33 Fam LR 134
The Court should then consider its findings and make appropriate orders regarding the property interests of the parties, ensuring that the proposed orders are just and equitable as between the parties. As the Full Court said in D & D[4]:
“The task is to examine the facts of each case carefully to decide what is appropriate and just and equitable in the circumstances. There cannot be expected to be a universal answer to that question on any given set of facts. It is of the essence of judicial discretion that different minds may comfortably arrive at different conclusions.”
[4] D & D [2003] FamCA 473 at 49
On the facts before me in this matter, I am satisfied that it is just and equitable to make orders altering the parties’ interests in the matrimonial property.
Asset pool
The parties agree that they should each retain the assets currently in their possession such as motor vehicles, household furnishings and personal effects. Counsel confirmed that neither party sought any adjustment in relation to the value of those assets, at the end of the day. Given that the assets are all of modest value, I am satisfied this is an appropriate way to proceed.
The husband argued that the wife has failed to disclose bank accounts in her sole name but there is no evidence to support this assertion. Accordingly the only relevant asset is the former matrimonial home at Property H. Both parties obtained valuations of the Property H property in mid 2012. The husband instructed Mr H, who valued the property at $675,000. The wife instructed Ms K, who valued the property at $560,000. As the property is to be sold, neither party sought to call evidence from their respective experts, however the large discrepancy in the two opinions has caused considerable uncertainty about the proper marketing of the property. At the end of the day of course, the only value that matters is the price specified in a fully executed Contract for Sale.
The property has now been on the market for sale for over nine months with a reserve price of $610,000, in accordance with the existing orders. It was passed in at auction in March 2013. The wife argues that this suggests the property should be marketed with a lower reserve price, in the vicinity of $550,000-600,000. The husband continues to argue that the property should be marketed at a higher price.
Turning to the matrimonial liabilities, the parties have a mortgage with (omitted) Ltd and presently owe $87,385, according to the most recent bank statement. In addition, there are two other credit card debts outstanding – a (omitted) Bank Mastercard with a balance owing of $7,890 and an (omitted) Bank Visa card with a balance owing of $6,208.
The wife argues the credit cards are matrimonial debts and should be taken into account in determining the asset pool. The husband agrees that the (omitted) Bank Mastercard should be included but argues that the bulk of expenditure on the (omitted) Bank Visa card was the wife’s personal expenditure. He says the wife should be held personally responsible for 80% of the balance owing, with only 20% of the debt allocated as a matrimonial debt.
The wife acknowledges that some of the expenditure on the (omitted) Bank Visa card was personal to her but not to the extent claimed by the husband. In any event she argues that this occurred at a time when the parties’ were cohabiting under the one roof and their finances were still intermingled, particularly with respect to household expenditure.
In the absence of a forensic analysis of the Visa card statements, it is impossible to determine which portion of the expenditure on the Visa card was for the wife’s personal benefit, as opposed to household expenditure. The amount in question does not justify such an expenditure of time and effort.
On balance, I am inclined to include both credit card debts as matrimonial liabilities. However the wife clearly incurred some personal expenditure and this should be taken into account when discussing the parties’ post separation contributions.
Accordingly, the matrimonial liabilities are as follows:
(omitted) Ltd mortgage
$87,385
(omitted) Bank Mastercard
$7,890
(omitted) Bank Visa card
$6,208
$101,483
Assuming the Property H property sells for at least $550,000, the net asset pool is likely to be approximately $440,000, allowing for the costs associated with the sale.
Contributions
The parties were married and lived together for nearly 40 years. Both parties worked hard to support the family financially and have made a significant direct financial contribution to the matrimonial assets in that regard. Notwithstanding each party’s criticisms of the other, I am satisfied that both parties devoted all of their efforts to the welfare of the family and to creating a secure financial base for their family.
Given the length of the parties’ marriage, I see no basis now to make any adjustment on account of any savings that either party may have held at the commencement of the marriage. I accept the husband may have contributed some savings to the purchase of the (omitted) properties in 1972, but the parties also entered into a mortgage of approximately $15,000 and an overdraft facility of $5,000, which suggests that the equity arising from his savings was very modest. The parties have bought and sold numerous properties since that time and given that four decades have since passed, I do not consider any adjustment is warranted.
The husband received an inheritance of approximately $22,000 from his Aunt’s estate in the early 1980’s. In July 2005 the wife received an inheritance from her mother’s estate in the sum of $19,973. She spent $14,000 on a Ford (omitted) vehicle which she still owns. The wife also received an initial compensation payment of approximately $31,000 shortly after her workplace injury in 2000. I am satisfied that both parties directed these funds to the overall benefit of the family across the years and I decline to make any adjustment in favour of either party.
The wife argues that the Court should treat her later Workcover redemption payment of $90,000 differently, however. These funds can be traced to the current equity in the former matrimonial home, as the husband now concedes at least $53,000 was paid towards building the parties’ home at Property H. At the same time, the very nature of a Workcover redemption payment is to compensate an injured worker for loss of future wages. Had the wife remained in the paid workforce, her income would also have been directed towards the benefit of the family finances. This should also be taken into account in assessing the weight to be attached to this direct financial contribution.
I accept that a significant portion of the wife’s Workcover payment can be traced directly to the former matrimonial home. However given the nature of this payment, the length of the parties’ marriage and the extent to which they have both devoted their energy to improving their overall financial circumstances across those years, I decline to make any formal adjustment now.
Turning to the parties’ post-separation arrangements, the wife concedes that she paid some of her personal expenses on the Visa card during 2008-2010. This debt is to be discharged at settlement, which is to the wife’s financial benefit and I take this into account. At the same time, she has continued to pay one half of the mortgage repayments and other outgoings associated with the former matrimonial home since June 2010. In addition, she has maintained the insurance cover for the property.
The husband has also paid one half of these expenses (excluding the insurance cover) and has maintained the property since separation. As joint owners, both parties have some responsibility to contribute towards the costs associated in maintaining the former matrimonial home. However the husband has remained living in the property. The wife’s ongoing payments have directly subsidised his accommodation expenses, which has been a considerable benefit to him across the last three years.
Clearly this post separation contribution made by the wife far exceeds any benefit she may have received through her personal use of the Visa card. I am satisfied that the wife’s ongoing direct financial contribution should be taken into account and I conclude that a modest adjustment in the wife’s favour is appropriate. I assess the wife’s contribution as 51% and the husband’s contribution as 49%, allowing a modest 2% differential between the parties’ respective contributions overall.
Section 75(2) factors
The husband is 75 years old and the wife is nearly 60 years old. Both parties are in receipt of disability pensions. Neither party has any financial resources available to them other than the assets they will retain as a result of this property settlement.
Neither party is responsible to support any other person. Both parties lead a very modest lifestyle and live within their means. The former matrimonial home is on the market for sale but there have been a number of difficulties associated with the sale process and both parties seek further guidance from the Court in that regard. I will return to this issue shortly.
Once the property is sold the husband will need to find new accommodation. The wife is in a similar situation. She is presently living with her former de facto partner Mr B but tells the Court that this informal arrangement is only available until the property settlement is finalised.
There is some uncertainty about the future status of the wife’s relationship with Mr B, in light of the wife’s evidence. Whether or not the wife resumes a de facto relationship with Mr B, she still has the advantage of settled accommodation while she looks for other housing opportunities. By contrast, the husband will need to arrange other accommodation immediately upon sale of the former matrimonial home.
Sale of former matrimonial home
The former matrimonial home has been on the market for over two years. I am satisfied that the property was initially listed at a grossly over inflated price, at the husband’s insistence. The husband agreed to reduce the asking price to $700,000 in October 2011, but only once the wife had filed an interim Application on this point. The property then remained listed with (omitted) Real Estate for another ten months, but no formal offers to purchase were received.
In circumstances where the property had been on the market with (omitted) Real Estate for a considerable period of time, the Court heard further argument in September 2012. Given the widely divergent valuation reports, it is hardly surprising that the parties were unable to reach agreement as to a realistic asking price. The Court ordered that the property be listed with Ms M at a lower price, as discussed above.
The husband was clearly unhappy with the Court’s decision. Ms M eventually complained about the husband’s behaviour and withdrew her personal services in January 2013. (omitted) Real Estate then nominated another agent within their company to take over the listing, Mr C.
I find that the husband’s evidence on matters surrounding the marketing of the property is entirely unreliable. He was highly critical of Mr C’s conduct and went on to compare Mr C’s allegedly offensive behaviour with Ms M, who he said had acted appropriately in her role as agent. The husband then contradicted this evidence when he conceded that he had previously threatened to report Ms M to “A Current Affair” (or some similar television programme) because he had been so unhappy with her conduct as well.
Clearly the situation deteriorated once Mr C took over the listing. The husband refused to leave the premises during open inspections and behaved in other ways that were intended to intimidate either Mr C and/or any potential purchasers.
Mr C went so far as to allege that the husband had left spent shotgun cartridges near the front door of the premises alongside Mr C’s business card. The husband denied this, arguing that he is a shooter and the cartridges were simply occasional litter about the property.
Having heard both the husband and Mr C on this topic, I prefer Mr C’s evidence. I am satisfied that the husband deliberately left the shotgun cartridges near the front door, alongside Mr C’s business card. This is hardly a welcoming scene for potential purchasers, let alone Mr C himself.
The husband then sought to terminate the Sales Agency Agreement with (omitted) Real Estate, arguing the Court order referred only to Ms M. While that is strictly correct, Ms M worked with (omitted) Real Estate. Another agent only took over responsibility for the listing as a result of the difficulties between the husband and Ms M. That history does not justify the husband’s subsequent attempt to terminate the Sales Agency Agreement. I conclude that the husband has been deliberately unco-operative with the sale process.
The husband’s relationship with (omitted) Real Estate and Mr C has broken down and he now argues that this situation justifies moving to another real estate agent. He proposes two other agents that he is prepared to work with. However, the husband’s nominated agents continue to promote a price range in the region of $675,000-$700,000, notwithstanding there had been no significant interest shown in the property at a lower price range.
The wife opposes any such change. She has no confidence that the husband will engage any more effectively with a third real estate agent and argues that this is simply a further delaying tactic by the husband.
The Court heard evidence from Mr C as well as the two agents nominated by the husband. I do not consider Mr D is a realistic option given he has only recently returned to the real estate industry. The second agent was Mr W, from (omitted) Real Estate in (omitted). Having heard Mr W’s evidence, I am satisfied there is no personal relationship between the husband and Mr W that would disqualify Mr W from acting impartially for both parties. Mr W confirmed that (omitted) Real Estate would be prepared to await payment of all costs incurred (including advertising costs) until settlement.
Mr W acknowledged that he is not a licensed valuer, but his professional view was that the property should sell in a range between $680-690,000. This optimistic view seems at odds with the reality that the property was passed in at auction in April 2013, with a reserve price of only $610,000.
Clearly there will be further costs involved if the property is again listed with a third real estate agent. That is a significant concern from the wife’s perspective, as the parties have already incurred advertising and associated costs with both (omitted) Real Estate and (omitted) Real Estate.
It is difficult to see how another agent will achieve a better outcome, given the property has been on the market for two years and has not yet sold. (omitted) Real Estate remain willing to keep the property on their list provided that the husband is directed to leave the premises during any open inspection or auction. That seems a sensible order to make in the circumstances, no matter who the relevant agent may be.
On balance, taking into account all of the evidence, I conclude that the property should remain listed with (omitted) Real Estate. I have no confidence that the husband will engage any more appropriately with a new real estate agent than he has done with (omitted) Real Estate. I cannot be satisfied that moving to a new real estate agent will make any significant difference to achieving a successful sale. I conclude that the parties have little option but to lower the reserve price, in order to sell the property.
Given the husband’s past intransigence, I conclude that the wife should be authorised to manage the future sale of the property, in accordance with these Court orders. Given the difficult relationship between the husband and staff at (omitted) Real Estate, she should also be authorised to sign documents on his behalf, in the event he fails to sign any relevant documentation promptly.
The Court will specify the reserve price at $550,000, which I note is close to the opinion expressed in Ms K’s valuation report. In the event the property remains on the market after a further auction, there seems little option available to the parties than to again reduce the reserve price. Should that be necessary, the wife will again be authorised to take that decision.
In the event an offer is received that exceeds the reserve price, then both parties are required to sign the Contract for Sale forthwith. Should the husband refuse or fail to sign promptly, the wife will be authorised to sign on his behalf. I do not consider it necessary to authorise the agent to sign on behalf of the parties.
A further issue arises regarding the ongoing expenses associated with the property. Presently the parties are paying roughly one half of these expenses, but the wife seeks an order that the husband now meet all outgoings, including the mortgage, rates, taxes and routine maintenance, pending sale of the former matrimonial home. She also seeks an adjustment in relation to her past expenditure in this regard, to the effect that the parties share all the outgoings and costs associated with marketing and selling the property equally.
I have already taken the wife’s expenditure in this regard into account in my assessment of the parties’ contributions. Accordingly I decline to make any further adjustment, save that the husband should reimburse the wife in relation to one half of the insurance premiums paid by her. Otherwise I conclude the existing arrangements should continue, pending settlement.
Conclusion
I conclude that the net matrimonial asset pool should be divided 51/49% in the wife’s favour, with some minor adjustments at settlement. I do not consider any further adjustment is required on account of s.75(2) factors.
The asset pool is as yet undefined, but is modest. Both parties will receive a lump sum cash settlement following the sale of the former matrimonial home. It is unlikely that either party will be able to re‑enter the real estate market, given their age and limited income, but the property settlement provides both parties with a small nest egg to ensure some level of comfort and financial security in their coming years.
On balance, I am satisfied that this outcome is just and equitable as between the parties.
Costs
The wife seeks an order that the husband pay her legal costs. Section 117(1) provides that each party bear their own costs in family law litigation. However, s.117(2) allows the Court to make an order for costs in favour of a party when the Court considers that it is just to do so, taking into account the factors set out in s.117(2A).
The wife argues that the husband has deliberately delayed the litigation process and the sale of the property, as it is to his advantage to remain in the former matrimonial home as long as possible. While I agree there are criticisms to be made of the husband’s conduct, the Court cannot ignore the fact that the parties’ negotiations were complicated by the vastly different opinions provided by the parties’ valuers.
The wife also argues that the husband’s conduct within the litigation has extended the proceedings and forced her to incur unnecessary legal costs. I agree that the husband’s conduct has caused the wife further expense and delay in these proceedings. In particular, the husband’s failure or refusal to provide full discovery in a timely manner has made the litigation process more difficult. Indeed, some documents were only discovered on the morning of trial.
The husband’s failure to provide proper discovery is further compounded by his refusal to acknowledge that the wife’s Workcover redemption payout was used for the benefit of the family. On the contrary, he argued the wife retained these funds for her own benefit and sought an adjustment in his favour at trial in that regard. It was only in the course of giving oral evidence that the husband finally conceded that a significant portion of those funds were directed to the former matrimonial home.
I am satisfied that a costs order should be made in favour of the wife, but only as to a portion of her costs incurred. As to the quantum of the order, there is no evidence that would assist the Court in that regard. In the circumstances I will order the husband pay such sum towards the wife’s costs as may be agreed between the parties, or as ordered by the Court. Should the costs issue be re-listed before the Court, the parties should proceed on the basis that the Federal Circuit Court Costs scale will apply.
I now make orders as set out at the commencement of these Reasons.
I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Judge Kelly
Date: 22 August 2013
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Discovery
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Offer and Acceptance
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Remedies
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