Harrold and Harrold

[2010] FamCA 1137

FAMILY COURT OF AUSTRALIA

HARROLD & HARROLD [2010] FamCA 1137

FAMILY LAW – PROPERTY PROCEEDINGS – Soil contamination issues – Case management

APPLICANT: MS HARROLD

RESPONDENT: MR HARROLD

FILE NUMBER: MLC 6406 of 2008

DATE DELIVERED: 24 NOVEMBER 2010

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 24 NOVEMBER 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: 24 NOVEMBER 2010

SOLICITOR FOR THE APPLICANT: MR ROYSTON

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT: MR WILKINSON

Orders

IT IS ORDERED:

1. THAT leave be granted to the solicitor for the wife to withdraw the Contravention Application filed 12 July 2010 subject to a right of reinstatement thereof upon proper material filed and the leave of the Court being granted.

2. THAT all costs of and incidental to the filing of that application and the listing of the matter on 19 July 2010 (as was provided for in Order 7 of that day) be reserved to the trial Judge.

3. THAT all extant applications be otherwise listed for case management and further directions before Young J on Monday 21 March 2011 at 10.00 a.m.

4. THAT the defended hearing of all applications be listed as a three (3) day defended hearing before Young J commencing at 10.00 a.m. on Monday 27 June 2011 (and all appropriate trial orders, practice direction documents and valuation issues will be resolved at the earlier case management date).

5. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

6. THAT both parties are to attend at Court on 21 March 2011 with their solicitors.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6406 of 2008

MS HARROLD

Applicant

And

MR HARROLD

Respondent

REASONS FOR JUDGMENT

1. The matter of Harrold is again before me for case management and further directions.  Mr Royston, solicitor, appears for the wife, and Mr Wilkinson, solicitor, appears for the husband.  Both parties are in Court.

2. The first matter I record is that the Federal Magistrate’s file on child support issues has been closed and there is now a consolidated file of this Court and the ongoing section 79 proceedings and those matters outstanding on child support, which are before Federal Magistrate Hughes.

3. I have therefore had the opportunity of reading the order of 11 October of the Federal Magistrate and I understand this matter is listed as to the appeal of the husband, in respect of the child support assessment findings, on 11 January next year. 

4. I carefully make no comment upon any of those proceedings, though I highlight I have read the declaration as to the outstanding amount payable and order 2 of those orders of 11 October 2010 and otherwise and, in particular, the security orders made in paragraphs 4, 5, 6, and 7 thereof.

RECORDED   :   NOT TRANSCRIBED

1. My orders were last made 19 July 2010.  I appointed a Financial Conciliation Conference before Registrar Sikiotis.  That has been held but was wholly unsuccessful, and no orders could be made, and there is a note as to that hearing as of 17 November 2010 endorsed by the Registrar upon the court file.

2. Otherwise there was a Contravention Application issued 12 July 2010, on behalf of the wife seeking to have the husband dealt with for his alleged refusal and failure to appoint O Testing to carry out an environmental report and audit on the property at Number 5 L Street, pursuant to orders which I had earlier made on 11 May 2010.

3. The reality now seems to be that those tests have or will soon be concluded.  Moneys have been paid and it is not the alleged contravention that remains alive but costs of and incidental thereto.

4. I had earlier ordered in paragraph 7 of my orders of 19 July of this year that the wife’s costs of the hearing of that day and the earlier costs of and incidental to the amended Contravention Application were to be reserved.  I intend to continue the reservation of all of those costs which I will hear and determine as part of the property proceedings adjustment as between these parties.  I have raised with Mr Royston, and there is no objection, if leave is offered to him to withdraw that Contravention Application, and I will so order.

5. The principal Application then remaining before the Court is the section 79 division of property.  That currently is a matter of conflict between the parties.  The two principal assets are the properties which I have earlier identified in L Street.  The address 4 L Street is the home where the husband is presently residing.  The wife lives in rented accommodation elsewhere.  Number L Street is the subject property where there has been some level of underground petroleum seepage and an, as yet, unknown degree of soil contamination.

6. The real issue with this property is ultimately determining, in a timely manner, its current market value.  That involves ascertaining the extent of contamination, whether it only be soil or water, and the cost of rectification thereof.  That is not an easy task.  As I presently understand the instructions provided to both solicitors that process to determine the repair and rectification costs may well involve a demolition of the premises on that site and clearing up a considerable amount of items and goods stored thereon. 

7. The persons looking to undertake the works to provide a quotation for clean-up costs evidently need a clear site to access their equipment for a total coverage of the area below ground.  Currently that is not possible.  By reference to very general documents, solicitors have quoted potential repair costs of between $200,000 and $300,000, and likewise I have had floated in Court, but on no proper evidentiary basis, demolition costs of up to $100,000.

8. Seemingly, the market value of this property, at least land value, if it had no environmental or contamination issues could be up to or about $800,000, but I carefully make no finding in that regard. 

9. The husband’s solicitor has otherwise identified but not referred to some government valuation, said to be $400,000 or thereabouts, and has disclosed that this property is listed on the environmental site of contaminated properties.  Thus it is important to realise that it is known beyond the Court and the parties, and proper declarations have been made of the existence of some level of the contamination.

10. Ultimately when this property is dealt with by the Court, whether by property transfer or division of property or otherwise by sale, there will have to be proper notifications of all contamination and related issues.  They may already have been fully attended to, but that is a matter for another day.

11. Ultimately, where the parties must direct their considerations are the ways by which the maximum value may fairly be determined for the subject property.  Neither party has the available moneys to pay from their own resources the very considerable costs of the clean-up, or indeed of the demolition of the structures and removal of items on 5 L Street to facilitate that detailed works quotation.

12. I have had various discussions with solicitors in the presence of their clients emphasising that the obligation of the Court is to determine a just and equitable settlement of property.  One option may be the sale of the subject property so that the market, by public auction or tender or otherwise as the parties may be advised can be satisfied that the public have had the opportunity to offer the maximum sum to acquire a property that I am otherwise told is in a desirable locality. 

13. I carefully make no findings on any of these issues but highlight that the sale of the property may be a very real option to provide certainty and maximum benefit to the parties.  The Court remains particularly alert to all other options, though very clearly the wife’s position, as communicated to the Court by her solicitor, is that she does not want to buy or have transferred to her name 5 L Street.

14. One of the very real concerns of the Court is the delay in this matter.  It is unacceptable.  However, the caveat is that it is a unique circumstance with the petroleum seepage, and tests are both expensive and time-consuming.  Nevertheless, these proceedings were issued in mid-2008, and they have been awaiting hearing now more than two years.  Otherwise, the issues surrounding contribution and section 75(2) factors should not prove to be over-difficult.

15. The issue is in determining the pool of assets, and enough time has passed for that to be known.  Both solicitors have indicated that over the next few months, they can and will work through a process of certainty vis-à-vis the conclusion of testings, at least by O Testing, and will ascertain the costs of further testing as to repair, quote, clean-up.  These matters should be known to the Court on the adjourn mention date.

16. I am unable to hear this case before late June.  I simply have no two or three-day available time period in my roster.  What I will do in this matter is bring the matter back before me for case mention and court management on Monday, 21 March 2011. 

17. On that day I must be told, and I record that in blunt terms for solicitors’ understanding, what is intended by both parties with the subject property, what orders will be sought on hearing, what are the tests currently available and otherwise planned, what quotations have been obtained, and what timetable for any further testing.

18. My intention is that the defended hearing in this matter will be listed for three days, commencing Monday, 27 June.  Solicitors must understand that the matter will proceed on those days.  I have been given an estimate of two days as a hearing duration, but I am somewhat sceptical and have allowed three days.

19. I will make the trial orders as to the affidavits to be filed, the witnesses permitted, the practice documents required all on 21 March of next year.  Likewise, the updated valuations will be ordered on that day so that they are available by May or thereabouts. 

20. Given that the Conciliation Conference was wholly unsuccessful and, indeed, in reality had no possible chance of discussion because both the pool was unknown and the attitude of the parties to particular properties sought were somewhat clouded, I will likely require a further Conciliation Conference so that it can be meaningful.  But I would not order that before early to mid-June of next year, and likewise, it would seem now that those dates will not be available, so I will delay making that order until 21 March case mention date.

21. I take this opportunity to stress to both solicitors and to the clients that this matter must be ready for trial.  I will not entertain any other excuse, and the matter will simply go on for hearing however it is, come June of next year.

22. In reality, I am giving a further seven months for both parties to make up their minds as to what orders they seek to get their respective “houses” in order - meaning trial preparation, affidavits, valuations, and the like.  There is a point when enough delay is enough, and this case is fast reaching that scenario.

23. The other benefit of having a mid-year trial date is that any and all child support issues will be long resolved, and if any security issues arise, then they will be likely dealt with by the Court in determining a section 79 outcome, that in all of the circumstances is just and equitable. 

24. That will include all reserved costs issues, and again, solicitors must have before the Court an itemised account of all such costs said to have been incurred.  I would not intend to make any other reserve costs orders, and some level of finality is needed in this matter.

25. I will have those very brief reasons transcribed, as they will form the basis of further management hearing and make it perfectly clear to solicitors and clients that time is of the essence in this matter, and enough court time has been spent, let alone clients’ time, legal costs and the like.

ORDERS DELIVERED

RECORDED   :   NOT TRANSCRIBED

I certify that the preceding twenty nine
(29) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Young
delivered on 24 November 2010.

Associate: ……………………………………………………………

Date:  …………………………………………………………………