Kellner & Kellner & Ors

[2020] FamCA 322

FAMILY COURT OF AUSTRALIA

KELLNER & KELLNER AND ORS [2020] FamCA 322

FAMILY LAW – PROPERTY – Enforcement of Orders – Non-compliance with orders – Where final orders were made some time ago – Where the applicant was required to transfer her right, title and interest in a property to the first respondent and the first and second respondents were to discharge the loan and refinance the property - Where the respondents have failed to comply with the orders – Where the applicant now seeks the sale of property – Orders

FAMILY LAW – PROPERTY – Enforcement of Orders – Where the applicant seeks an order pursuant to s 106A of the Family Law Act 1975 (Cth) – Where a previous order pursuant to s 106A was required for the sale of other properties – Orders

FAMILY LAW – COSTS – Circumstances justifying order – Conduct of the parties to the proceedings – Where the applicant seeks costs – Where the respondents have failed to comply with orders – Where cost orders should not be made on an indemnity basis but on a party/party basis – Orders

Family Law Act 1975 (Cth) ss 106A, 117, 117(2A)

APPLICANT: Ms Kellner

FIRST RESPONDENT:

SECOND RESPONDENT:

Mr Kellner

Ms King

INTERVENER: Mr IJ

FILE NUMBER: DNC 439 of 2012

DATE DELIVERED: 18 March 2020

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 18 March 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Farmer

SOLICITOR FOR THE APPLICANT: Withnalls Lawyers

COUNSEL FOR THE FIRST RESPONDENT: Litigant in person

SOLICITOR FOR THE FIRST RESPONDENT:

COUNSEL FOR THE SECOND RESPONDENT: No appearance

SOLICITOR FOR THE SECOND RESPONDENT: Litigant in person

COUNSEL FOR THE INTERVERNER: Mr IJ

SOLICITOR FOR THE INTERVENER: IJ Lawyers

Orders

1. That the wife solely be authorised for and on behalf of the parties to negotiate any changes to and any terms of a Contract of Sale and determine all matters necessary to complete the Contract of Sale for Property H, otherwise known as I Street, Suburb K in the Northern Territory (“I Street”) and provide the husband with written notice of all amendments to the Contract of Sale and decisions made by the wife in securing completion of the Contract of Sale for I Street, Suburb K.

2. That the first respondent Mr Kellner be restrained and an injunction be granted restraining Mr Kellner from attending at I Street without the written invitation of the sales agent selling I Street.

3. That I Street shall forthwith be listed for sale with NN Real Estate as the nominated real estate agent on the following terms and conditions:-

   a.I Street be listed for sale by private treaty for a period of sixty (60) days at a price of $525,000;

   b.The de facto wife and the de facto husband cooperate in every way with the real estate agent in relation to the marketing of I Street for sale, including making the keys readily available, allowing inspections of I Street at all times reasonably requested by the agent and ensuring I Street is clean, neat and in good order at the time of inspection by any prospective buyer;

   c.In the event an offer is received that is at least 90% of the listing price, the de facto wife and de facto husband shall accept the offer and shall execute the contract of sale and sign all other documents necessary to complete the sale, including all transfer documentation forthwith upon submission of the same by the agent or the solicitor for the purchaser;

   d.The contract of sale shall provide for completion within thirty (30) days of the contract;

   e.In the event I Street is not sold during the period of private treaty of sixty (60) days, I Street shall be listed for sale by auction with the contracts to be prepared on an unconditional cash settlement basis and the auction shall proceed on the following terms and conditions:-

   i.The auctioneer shall be as nominated by the de facto wife;

   ii.The auction shall take place within fourteen (14) days of the expiry of the said period of sixty (60) days;

   iii.The reserve price be as recommended by the auctioneer;

   iv.The de facto husband shall pay and be responsible for the payment of all auction expenses payable for the auction of I Street.

   f.In the event I Street has not sold by auction or private negotiation at the reserve price as recommended by the auctioneer pursuant to Order 1 herein, the de facto wife and the de facto husband shall do all acts and sign all documents necessary to list I Street for sale by a second auction on the following terms and conditions:-

   i.The auctioneer shall be as nominated by the de facto wife;

   ii.The auction shall take place within fourteen (14) days of the first auction;

   iii.There be no reserve price;

   iv.The de facto husband shall pay and be responsible for the payment of all auction expenses payable before I Street is auctioned.

   g.Upon the sale of I Street, the proceeds be paid in the following order and priority:-

   i.Sales agent’s commission and conveyancing expenses;

   ii.Payment in full of all amounts outstanding of the ANZ Loan …61.

4. That the husband pay to the wife her costs pursuant to paragraphs 4 and 8 of the Application in a Case filed 13 December 2019 and her application filed 3 February 2020 with those costs to be agreed or in default of agreement as may be assessed by a Registrar to be calculated on a party/party basis.

5. That pursuant to section 106A of the Family Law Act 1975 (Cth) a Registrar of this Court be appointed to execute all deeds or instruments and sign all documents necessary in relation to the discharge of any mortgage and/or the transfer or sale of the I Street property for and on behalf the 1st respondent and if necessary the 2nd respondent upon presentation to the Registrar of an affidavit as to the request made to the first respondent to execute docs and his failure to do so within seven (7) days of the presentation to him of the instrument to be signed.

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 Kellner & Kellner 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: DNC 439 of 2012

Ms Kellner

Applicant

And

Mr Kellner

First Respondent

And

Ms King

Second Respondent

And

Mr IJ
 Intervener

EX TEMPORE REASONS FOR JUDGMENT

1. The applicant in the proceedings is Ms Kellner, the respondent is Mr Kellner and the second respondent is Ms King.  The proceedings between the parties involve significant and complex property proceedings, which were dealt with by Strickland J on 28 November 2018, whereupon his Honour delivered reasons and made orders resolving the outstanding property issues as between all of the parties.  There were further proceedings thereafter in terms of an appeal.  However, that issue has now been resolved.  The appeal by the husband was dismissed and the focus of the parties has then turned to the implementation of orders made by his Honour. 

2. By Application in a Case filed 3 February 2020, the wife seeks that the property at I Street, Suburb K (“the I Street property”) be placed on the market for sale.  The application has its genesis in the final orders made on 28 November 2018 which provided that within 28 days, the applicant sign all documents necessary to effect a discharge of any mortgage, and to transfer to the first respondent husband her right, title and interest in the I Street property.

3. Contemporaneously with the transfer in order 1 of the final orders, order 2 provided that the first respondent and, to the extent that it is relevant, the second respondent, at their sole cost, do all things necessary to discharge the ANZ investment loan over the I Street property, and to refinance the property such that the applicant is indemnified in respect of the payment of all loans, rates, insurance and expenses in relation to that property.  Whilst again not necessarily relevant to the current application, order 3 of his Honour's orders provided that the first and second respondents indemnify the applicant against all and any capital gains tax assessed in relation to the transfer or sale of the I Street property.

4. What is immediately apparent is that the order of 28 November 2018 has not been complied with.  There is no suggestion that the wife has not complied with the order.  I find that she has done all that she could and has executed all documents that are possible to satisfy her obligation pursuant to his Honour's order.  What has happened is that the first respondent and possibly the second respondent have not complied with his Honour's order in terms of refinancing the property such that the transfer could occur, but more relevantly as far as the applicant is concerned, so that the ANZ investment loan could be discharged.

5. It is an important aspect of the orders that the wife seeks that she be released from liability in respect of the ANZ investment loan in order that she can refinance and rearrange her own finances.  At the moment the position of the wife is in hiatus in that she can do nothing in circumstances where she asserts the husband either has refused to refinance, or may well be unable to refinance the property.  That is a matter for him, but in circumstances where there is not a clear plan or orders sought by the husband which would see the issue being resolved, the wife brings the application of 3 February 2020.

6. The application is unremarkable in terms of orders relating to paragraphs 2, 3, 4(a) through to (g)(i) and (ii).  As indicated, the applicant is before the Court today in respect of her application.  The first respondent husband is present with the assistance of Madam Interpreter.  Mr IJ is present by telephone link pursuant to his Application in a Case filed 15 January 2020 and the leave given for him to intervene in the proceedings in circumstances where he is not intervening in the substantive proceedings, but rather, intervening in the enforcement proceedings.

7. Mr IJ has a warrant of execution secured over the I Street property, in respect of a sum certain for outstanding legal fees that date back to the first respondent husband’s instructions to him in or about 2012.  The matter was, at least in part, given some consideration in orders that I made on 20 January 2020 that provided for Mr IJ to be paid the sum of $100,000, with the wife's solicitors to be paid $268,740 in respect of their costs.  That order of 20 January 2020 has some relevance to the orders that I am being asked to make in respect of the I Street property.

8. The final order provided for the payment by the husband to the wife of a settlement sum of $361,234, and various outstanding orders in the sum of $31,838.  Order 10 provided that in circumstances where there is a default, the property at U Street, Suburb V (“the Suburb V property”) is to be listed for sale, with NN Real Estate as the nominated real estate agent, upon terms and conditions as set out in the order.

9. It is not controversial that the husband did not provide the settlement sum and, accordingly, the wife seeks recourse to the default provisions of his Honour's order, which resulted in an application for the sale of the Suburb V property.  The wife, by her affidavit of 3 February 2020, refers to the sale of the Suburb V property and, in particular, the difficulties experienced in respect of the sale of that property caused by the husband.  The wife also relies upon an affidavit of Mr LM filed on 3 February 2020. 

10. Mr LM is a real estate agent and a director of NN Real Estate.  He sets out that in relation to the Suburb V property, the contract for the sale of the property was exchanged, that the husband failed to provide vacant possession to enable completion of the property, requiring the sale and settlement of the property to be rescheduled.   It was only as a result of an order made on 20 January 2020 providing for a warrant of possession to issue without further notice and authorising the Australian Federal Police to attend, find, and if necessary, remove the husband and any third parties who may be in occupation from the Suburb V property, that the property was ultimately able to be settled.  Unfortunately, on 21 January 2020 at 1.00 pm, the Australian Federal Police did attend and did remove the husband from the Suburb V property. 

11. The husband's position in respect of the I Street property is uncertain.  I refer to his Amended Response to an Application in a Case, filed 17 March 2020, and the affidavit that he files in support.  It is not clear what it is he seeks, but in circumstances where I consider it is reasonable to confine the hearing to the sale of the I Street property, I note that the husband's position is that if the property is to be sold, he should sell it because of concerns that he raises that the sale, if it is to be managed by the wife, would likely result in either increased expenses, and/or a reduced sale price.

12. The husband appears today, and his position has changed a little in that he now says there is some consideration that he would wish the Court to give to either his desire or, perhaps more relevantly, that of his current wife, that she should purchase the I Street property.  There has not been an impediment since 28 November 2018 for the husband to cause the property to be transferred to him.  He has not done so.  It is notable that the order provided 28 days for that to occur.  There is no affidavit from the husband's current wife, nor is there anything raised in the husband's affidavit in support of his amended response, which would assist in the plan necessary for the sale of the I Street property.

13. Whilst the husband does not accept the observations of the wife and Mr LM in respect of his conduct pertaining to the sale and disposal of the Suburb V property, in the circumstances of this case, and taking into account that I was satisfied it was appropriate on 20 January 2020 to make an order that a warrant of possession issue for the removal of the husband, I consider that I can place more weight and have more confidence in the evidence of Mr LM and the wife than I can in the husband.

14. That does not mean that the husband is in any way prevented from putting forward any other reasonable proposal in respect of the sale of the property.  If the property is to be sold, it matters not who it is sold to, at least as far as the wife is concerned, in circumstances where predominantly and primarily what she seeks is compliance with the order and the discharge of the ANZ Bank loan. 

15. There may be other issues that bring Mr IJ into the matter, but in respect of the balance of his involvement in these proceedings, I do not consider that it is appropriate that this Court be used to try and collect Mr IJ's outstanding fees in the circumstances of this particular application.  A different circumstance arose in respect of the sale of the Suburb V property as opposed to the sale of the I Street property, which is the subject of this application.

16. It is entirely a matter for the husband and it may be that if his wife intends to purchase the property, then there would reasonably be no impediment to that occurring.  The mortgage would be discharged, and whatever net balance remains would, I assume, be in some way held pending the final resolution of whatever it is that each of the parties consider to be outstanding.

17. I consider that the orders sought by the wife in respect of the sale of theI Street property are reasonable.  They mirror that which was required in respect of the sale of the Suburb V property, and I think an important consideration is that they are consistent with the orders that his Honour made in order 10 of the final orders. 

18. The wife’s solicitor made an oral application that an order should be made pursuant to s 106A of the Family Law Act 1975 (Cth) (“the Act”) in respect of the sale of the I Street property, in circumstances where orders in respect of s 106A of the Act were made for the sale of other properties, in particular the Suburb V property, but it was not contemplated by the parties, nor by his Honour, that there would be any difficulty or impediment to the husband in complying with orders 1 and 2, namely, for the transfer of the I Street property to him. If documents are presented to the husband and he signs them, there is no need for any recourse to a Registrar pursuant to s 106A of the Act.

19. The history, however, in respect of the Suburb V property, is that it is necessary, and, accordingly, I think it is a reasonable step.  It does not prejudice the husband, but simply ensures that this litigation, which has so exercised the parties for so long, at enormous cost, is brought to an end sooner rather than later.  Each of the parties in this case may well need to step back somewhat and give some consideration as to whether all applications need to be pursued to a point beyond which they represent more than a pyrrhic victory.  That is a matter for the parties.  The Court considers that it is required to make orders that assist in respect of the compliance with its own orders, but a point has been reached where the Court considers that the ability of the Court to assist these parties is exhausted.

20. Paragraph 5 of the orders made on 20 January 2020 provide for the wife's costs to be reserved in respect of paragraphs 4 and 8 of the wife's Application in a Case filed 13 December 2019. Paragraph 4 relates to the costs incurred by the wife in making an application to a Registrar pursuant to s 106A of the Act, in circumstances where it was required for the Suburb V property to be sold and settled. Paragraph 8 relates to the costs of and incidental to the application on an indemnity basis. I consider that each of those applications, that is, paragraphs 4 and 8 of the application of 13 December 2019, have merit.

21. All orders for costs, all applications for costs, have to be considered pursuant to s 117 of the Act and, in particular, where the Court considers that it should have regard to making an order for costs, the provisions of s 117(2A) of the Act are then required to come into sharp focus. There is little difficulty in the Court finding that the husband's recalcitrant conduct necessitated the applications pursuant to s 106A, and then ultimately in respect of the Application in a Case of 13 December 2019. Again, it must be remembered that the resolution of the sale of the Suburb V property was only able to be effected by the regrettable order for a Warrant of Possession to issue, the attendance by the Australian Federal Police at the property and, in effect, the forced removal of the husband.

22. I propose to make an order that the wife have her costs in respect of paragraphs 4 and 8.  The orders sought have been quantified, and I am satisfied that whilst the annexures are not before the Court, the quantum has been determined by reference to solicitor/client costs.  In the circumstances of this case and where we now are at, I consider that the costs orders should not be made on an indemnity basis, but on a party/party basis.  I propose to order that the wife's costs in respect of paragraphs 4 and 8 of the Application in a Case filed 13 December 2019 be her costs, and that they be either agreed or taxed, but in any event, to be determined or calculated on a party/party basis.

23. The balance of the Application in a Case of 3 February 2020 seeks, in terms of paragraph 4(g)(iii), five further areas of costs that are being sought.  The first relates to paragraphs 4 and 8 of the application that I've just dealt with;  I do not need to deal with those.  The second relates to the Application in a Case of 3 February 2020, which is the current application, and in that regard, I consider that the wife should have her costs of the Application in a Case, it being necessary to resolve the sale of the I Street property in circumstances where the order has been extant since 28 November 2018.

1. I do not consider that the Court should consider further the matters in respect of 4(g)(iii)(c), (d) and (e). They are issues of outstanding costs. They can be dealt with in another place. As far as the Court is concerned, nothing further is required, at least in respect of the applications that are currently before it. If a further application is required in relation to a section 106A application concerning the I Street property, obviously the Court will entertain such an application.

2. Equally, I do not consider that the Court should in some way take on the cause for Mr IJ, in terms of the amounts that he is owed and has secured over the property by the writ of execution.  That is obviously a matter for Mr IJ.  There is nothing in the order that I propose to make today which in any way impacts adversely, or affects the interests of Mr IJ as a third party, but equally, I accept that it is also not a matter for the Court to assist Mr IJ in respect of the collection of his outstanding fees.  He has a warrant of execution and he is able to proceed in that regard.

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

I certify that the preceding twenty-five (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 18 March 2020.

Associate: 

Date:  5 May 2020