HAWKINS & HAWKINS

[2015] FamCA 284

FAMILY COURT OF AUSTRALIA

HAWKINS & HAWKINS [2015] FamCA 284

FAMILY LAW – PROPERTY – Interim – Application in a Case by the husband as to the sale of a residential property where the wife has failed to meet mortgage repayments – Where sale of the residential property in these circumstances was provided for in earlier interim orders – Where the wife has purported to unilaterally execute a 10 year lease over the subject property – Where it is ordered that, if the wife has not terminated any further lease agreement within 14 days, the husband may apply to the Court for an urgent listing of an application under s 106B of the Family Law Act 1975 (Cth) to seek to have the transaction set aside.

Family Law Act 1975 (Cth)

APPLICANT: Mr Hawkins

RESPONDENT: Ms Hawkins

FILE NUMBER: BRC 6561 of 2007

DATE DELIVERED: 20 April 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 20 April 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Wrightway Legal

FOR THE RESPONDENT: In person

Orders

it is ordered until further order that:

1. BY CONSENT Paragraph 5(a) of the Order of 9 December 2014 be varied to provide for the agreed sale price for the property at B Street, Suburb C (“the Suburb C property”) to be $825,000.00.

2. BY CONSENT On the sale of the Suburb C property, the proceeds of sale shall be applied as follows:

   (a)     as to the real estate agent’s commission and costs of sale;

   (b)     as to outstanding Council and water rates;

   (c)     as to legal costs of sale;

   (d)     as to discharge of the mortgage; and

   (e)     the balance remaining to Wrightway Legal trust account to be held pending final orders between the parties for property settlement.

3. The rental monies for the Suburb C property paid by the tenants to the Wife are to be paid directly to Commonwealth Bank of Australia mortgage account number ….

4. The Wife is to account to the Husband for all rental income paid to date in respect of the Suburb C property.

IT IS FURTHER ORDERED THAT:

1. If, within fourteen (14) days of the date of these Orders, the Wife has not ended or terminated any further lease arrangement concerning the Suburb C property beyond the term of the current tenancy, then the Husband is at liberty to seek an urgent listing of an application pursuant to s 106B of the Family Law Act 1975 (Cth) to have any such further lease arrangement set aside.

2. Leave is given to the Wife to correct her affidavit filed on 15 April 2015 by including page 13 to Annexure D.

3. Each party’s costs of and incidental to the Husband’s Application in a Case filed on 18 March 2015 be reserved to the trial of these proceedings.

NOTATION:

There is to be a compliance hearing before the Registrar of the Court at 2.15 pm on

21 September 2015 in respect of trial directions that have been made for the trial of

these proceedings listed for three (3) days commencing on 6 October 2015. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hawkins & Hawkins 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. On 9 December 2014, I made interim orders in this proceeding in relation particularly to the property at B Street, Suburb C, conveniently referred to as “the Suburb C property”.  Those orders governed the husband paying outstanding mortgage repayments, which he had not paid for the period from earlier orders made on 24 March 2014 to 9 December 2014.  They further provided for the husband to vacate the Suburb C property on or before 10 January 2015 and to be responsible for mortgage payments up to and including that date. 

2. Upon the husband vacating the Suburb C property and on and from 11 January 2015, conditional upon the wife maintaining repayments for the mortgage, the wife was to have the sole use and occupation of the Suburb C property and be responsible for mortgage payments to the Commonwealth Bank of Australia. 

3. Paragraph 5 of those orders specifically provided for a mechanism, in the event that the wife was unable, or failed, to meet mortgage repayments, for the property to be sold. 

4. The wife, at least by 3 March 2015, was aware that she was not able to meet the mortgage payments and by about 19 March 2015 advised or nominated, in accordance with the order referred to, the names of three agents who might sell the property.  Until today the husband had not, in compliance with that order, selected one of the nominated agents, but that has occurred in the course of exchanges in Court today. 

5. The wife’s nomination on 19 March 2015 of the agents is obviously a day after the husband had filed his application in a case on 18 March 2015 seeking the appointment of a specific agent.  That is referred to in paragraph 1 of his application, and it is rendered nugatory by reason of the fact the wife has, since the filing of the application, made the nomination and the husband proposes to respond to it and has responded to it by adopting one of the nominations. 

6. Paragraph 2 of the application filed is likewise rendered nugatory in the circumstances because the orders made on 9 December 2014 provided for the mechanisms for sale by private treaty.  As a matter of consent both parties agree that the list price for the property ought be $825,000.00 rather than the $800,000.00 that was provided for in the 9 December 2014 orders, so that as and by way of consent paragraph 5(a) of the orders made on 9 December 2014 can be amended to substitute the figure of $825,000.00 for the figure of $800,000.00 appearing in paragraph 5(a) of those orders.

7. Paragraph 4 of the application of the husband deals with the manner in which the proceeds of sale of the Suburb C property ought be applied, and there is no issue as between the husband and wife as to that order, and that order can be made by consent.  Paragraph 5 seeks that henceforth all rental monies (that are actually now being received by the wife rather than any agency) be paid directly to the Commonwealth Bank of Australia mortgage account number.  The wife agrees that there is no reason that henceforth the rental payments cannot be paid directly to the mortgage. 

8. In the course of exchanges this morning the wife confirms that there is an amount of $600.00 held by her in an account and likewise in exchanges this morning the wife’s concern was having an ability to meet any emergency repairs for the property in the meantime.  The $600.00 provides for meeting such emergencies, and if there be emergency repairs needed over and above the amount of $600.00 I have explained to the wife that she can approach the husband with respect to that in the hope that such matters can be agreed without having to come back to Court.  If they have to come back to Court, so be it, but the question of costs of such an application will need to be addressed. 

9. Paragraph 6 of the application of the husband seeks an order that the wife account for all rental income received to date, and I am satisfied that such an order should be made.  The wife may suggest that her current affidavit does that, but, as it seems to me, the exchanges this morning show that there are some gaps in the evidence so far as the rental income received thus far by the wife since she has been in control of the property from 11 January 2015.   Mr Wright acknowledged that paragraph 7 of the application is rendered superfluous if the wife accounts for all rental income received to date and in light of the order that rental income henceforth be paid directly to the mortgage. 

10. In the course of argument today, by reference to the wife’s material and confirmed by her in oral submissions to me, the wife has purported, notwithstanding the orders that were made on 9 December 2014, to grant a

    
    

    10 year lease apparently to a company which has an association with one Mr D, who in turn has a personal association with the wife.  I find that conduct to be extraordinary in circumstances where the sale of the subject property, that is, the Suburb C property, has been at the centre of the disputes in this matter for some time.  It would have been readily apparent, as it seems to me, that the orders of 9 December 2014 were to afford the wife an opportunity to reside in the property pending the trial, which has been set down for October of this year, provided she could continue to meet the mortgage payments.  Otherwise the orders were clear in their provision that the property was to be sold on the best terms possible in the event that the wife could not continue to meet the mortgage. 

11. I interpolate here that historically the husband has been agitating for a long time for the sale of the Suburb C property, essentially on the contention that it was not commercial for the parties to continue to have to meet a very substantial mortgage on that property and the interest involved in circumstances where the value of the property indicated that there would be little in relative terms by way of equity in the property between its value and the mortgage debt. 

12. The wife has persistently resisted orders for sale of the property up until 9 December 2014.  As I say, those orders were framed to give the wife an opportunity to retain the property if she could meet the mortgage by tenanting it, but if not, for the sale of the property. 

13. A long term lease of a property immediately eliminates from the market for purchase of the property those who might wish to reside in the property.  I attempted to explain to the wife this morning, and I do not know that it requires much explanation, that by acting unilaterally in this way without reference to the husband or indeed to the Court, the wife has potentially prejudiced the sale of the property.  She asserts that to a particular market it is in fact to the advantage that there be a lease.  However, the point to be made is that regulation of what is to occur with the property is in the hands of the Court and has been for some time by way of orders, in circumstances where the parties have been in significant dispute as to what should occur with the Suburb C property over a long period now, culminating in the orders that were made on 9 December 2014. 

14. In the circumstances I have informed the wife that she ought do what she can in the next 14 days to extract herself or bring an end to any further lease (beyond the current tenancy) she purports to have entered into without reference to the husband or to the Court.  If at the end of 14 days she has not so done, I have indicated to Mr Wright, the solicitor for the husband, that the husband may bring an application pursuant to the relevant provisions of the Family Law Act 1975 (Cth) for the Court to set aside the transaction referred to, namely the lease which the wife has purported to enter into and the Court will give priority to the listing of that application. I would hope that a formal application might be avoided because, as it seems to me, it will be necessary to serve such an application on Mr D’s company and on Mr D and for him to have the opportunity to be heard with respect to that application. That may entail yet further costs in this unfortunate matter, so far as the incurring of costs is concerned.

15. For these reasons I make the orders set out at the commencement of these reasons.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 20 April 2015.

Associate: 

Date:  20 April 2015