Hawkins and Hawkins (No. 2)

[2015] FamCA 735

FAMILY COURT OF AUSTRALIA

HAWKINS & HAWKINS (NO. 2) [2015] FamCA 735

PRACTICE AND PROCEDURE – Where the husband seeks interim orders that would allow him to solely execute the private contract for sale of the former matrimonial home – Where the wife opposes the husband’s application and the private sale of the former matrimonial home– Previous orders provide for sale of the former matrimonial home by auction – Contract for sale in question is financially advantageous and above the previously agreed reserve price for sale by auction – Where the former matrimonial home is heavily mortgaged and incurring further interest – Advantageous for the prospective sale to occur expeditiously in order to preserve the little equity remaining in relation to the former matrimonial home – Order pursuant to s 106A of the Family Law Act 1975 (Cth) that a registrar execute the contract for sale.

Family Law Act 1975 (Cth)

APPLICANT: Mr Hawkins

RESPONDENT: Ms Hawkins

FILE NUMBER: BRC 6561 of 2007

DATE DELIVERED: 8 September 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 8 September 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Wright, Wrightway Legal

FOR THE RESPONDENT: In person

Orders

IT IS ORDERED THAT:

1. Pursuant to section 106A of the Family Law Act 1975 (Cth) a Registrar of the Family Court of Australia, Brisbane Registry be appointed, in the name of the Wife in default, to execute the contract of sale and transfer documentation relating to the sale of the property situated at B Street, Suburb C in the State of Queensland, and to do all such acts and things necessary to give validity and operation to these orders.

1. Subject to any objection made by any recipient of a subpoena, the parties have leave to inspect and copy any documentation produced upon subpoena already issued.

1. The subpoena hearing listed before the Registrar on 24 September 2015 be vacated.

1. By 4.00 pm on 10 September 2015 the Husband is to file and serve an affidavit

   detailing each and every transaction he has made in relation to superannuation money or superannuation funds, annexing relevant bank statements or accounts detailing those transactions, since the parties’ separation.

1. Leave is given to the Wife by 4.00 pm on 11 September 2015 to file and serve an Application in a Case for litigation funding and a list of documents to be relied upon with such Application in a Case to be listed for hearing before the Honourable Justice Kent at 2.15 pm on 14 September 2015 at the Family Court of Australia, Brisbane Registry.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hawkins & Hawkins (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 6561 of 2007

MR HAWKINS

Applicant

And

MS HAWKINS

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. By an Application in a Case filed yesterday the husband seeks orders that would achieve a contract being entered into with a prospective purchaser of the former matrimonial home, situated at B Street, Suburb C. 

2. The circumstance in which that application is brought is that today was to be the day of a pre-trial mention of the upcoming trial of these proceedings on

   
   

   6 to 8 October 2015.  The wife suggests that there is no real urgency about the application and that she would seek further time in relation to it.  I did give her leave to file an affidavit today, which I have read, but which she says is not as complete as the affidavit she would seek to rely upon, if she were given more time to meet the application. 

3. The harsh reality of this matter is that the property at B Street, Suburb C was, as at the time of the parties’ separation, subject to a mortgage, from recollection in an amount of about $60,000.00 or $80,000.00.  The property was registered in the sole name of the wife.  Subsequent to separation and without any notice to the husband, the wife renegotiated a new loan on the property for $700,000.00.  The effect of that and the surrounding circumstances is dealt with at some length in the Reasons I delivered in this matter on 2 December 2014, and I do not intend to repeat those Reasons but adopt them and incorporate them in these Reasons by way of background to the current application. 

4. As is recorded in those Reasons, it had been the wife’s position throughout these longstanding property proceedings that the property ought be retained by her as part of property settlement.  The problem, of course, is that its value is little above the debt, that is, there is a formal valuation for the property of $825,000.00, but the combined debt secured by the Commonwealth Bank over the property amounts to some $790,000.00, incurring significant interest. 

5. The history of interim orders made in the matter would show that at one point the wife was given permission to occupy the property and tenant it, subject to her meeting the ongoing obligation of paying the mortgage payments with respect to the property.  That she was unable to do.  Orders were made for sale of the property in the event that the wife could not maintain the mortgage payments.  That culminated in orders being made on 7 August 2015, whereby the husband was appointed the trustee for the sale of the property. 

6. It was at that time contemplated that V Agents would be the real estate agents or auctioneers appointed for the purpose of the sale of the property and that the sale proceed by way of an auction.  The parties agreed as at 7 August 2015, in light of a formal valuation for the property at $825,000.00, that the reserve price for the auction of the property ought be $800,000.00. 

7. In the event, subsequent to that order, the husband discovered that V Agents required an upfront payment in the order of $10,000.00 to meet potential advertising costs for the property.  His inquiries with another agency revealed the potential for there to be less expense if he proceeded in another direction.  However, as it happens, a nearby neighbour became aware that the property was on the market, and it is that contract from that neighbour containing the offer of $850,000.00 which is the subject of this application. 

8. It is true that the contract is conditional upon the purchaser being able to effect, within 28 days of the date of the contract, a sale of their own property.  That condition obviously may or may not be fulfilled.  There is then provision for settlement of any sale to occur within 60 days of the date of contract.  The wife agitates that there is expense having to be incurred to satisfy that purchaser with respect to termite damage in respect of the property.  Something like $6,000.00 or $6,500.00 has already been spent repairing the roof on the property, and there is further repair to be undertaken to a wall within the property. 

9. As it seems to me, the private sale, if it can be achieved, would mean that there is a potential saving of $10,000.00 in advertising fees as well as a sale being completed without a real estate agency involved and potentially the saving of $25,000.00 to $30,000.00 dollars in real estate commission fees.  Obviously, sale and repayment to the mortgagee of its debt would end the increasing liability for interest on an overall debt of about $790,000.00.

10. On the material which I have read, it would seem that the agency agreement that the wife previously entered into with V Agents expired at the end of August 2015.  She asserts that there are terms which would mean V Agents might still have a legitimate claim for commission.  As it seems to me, that would appear doubtful, given the date inserted on the appointment agreement indicating that it expired at the end of August 2015, and moreover it would not seem to me that V Agents could maintain any claim to the effect that they were the agency which were the effective cause of this sale, that is, that their efforts were the effective cause of the sale.  Moreover, as it seems to me, the agency agreement entered into by the wife was probably frustrated by the order that I made on 7 August 2015 by which the husband was appointed the trustee for sale and the person authorised by law to deal with the sale. 

11. Whether or not I am right about that in terms of any claim by the agency for commission, there is urgency about this matter in circumstances where the wife’s debt to the Commonwealth Bank on a consolidated basis has now grown to $790,000.00.  Simple mathematics says that that debt amount will increase exponentially if there is yet further delay in achieving a sale and extinguishment of the debt. 

12. As the solicitor for the husband points out, any issues concerning the husband’s expenditure on the property to achieve a sale can be revisited at the forthcoming trial if it is said that he has been exorbitant in the expenses that he had met in terms of addressing issues with the property.  The wife has certainly indicated an intention to address at the trial the state of the property or the state in which it was in when she resumed possession of the property following orders previously made at an interim stage. 

13. In my judgment, the urgency about this matter is achieving, if possible, a sale offered at $850,000.00, albeit with the potential expense referred to of some minor repairs to the termite damage and the like.  It may well be, as the wife says, that the purchaser will raise other issues.  If the purchaser does, the husband is obliged to keep the wife informed of any issues raised, and again they may be matters that have to be revisited at a trial. 

14. However, as it seems to me, in the interests of preserving, as far as possible, the property of the parties or either of them and in particular preserving what little remaining equity there exists in the subject property, it is in the interests of both parties that this contract be signed so that there is the prospect of a settlement of its sale sooner rather than later and avoiding the other expenses of the alternative, namely an auction and agent’s commission, or the certainty of agent’s commission, if that course is followed, as well as the uncertainty of the property selling at auction. 

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 8 September 2015.

Associate:

Date:  9 September 2015