Kundert & Kundert
[2024] FedCFamC1F 218
•29 February 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kundert & Kundert [2024] FedCFamC1F 218
File number(s): NCC 3891 of 2022 Judgment of: SMITH J Date of judgment: 29 February 2024 Catchwords: FAMILY LAW – PROPERTY - Interim hearing – real property owned by a company owned by the husband and wife – company in liquidation – liquidator a party – all parties agree real property to be sold – issue whether husband should vacate property prior to sale as sought by liquidator and wife or only after sale when vacant possession required – issue as to work to be carried out – issue as to liquidator keeping informed – issue as to costs: Husband to vacate the property by no later than 23 March 2024 – no works to be carried out on the property without consent of all parties – liquidator to keep other parties informed – reserve all parties costs. Legislation: Family Law Act 1975 (Cth) Pt XV, s 117. Division: Division 1 First Instance Number of paragraphs: 28 Date of hearing: 29 February 2024 Place: Newcastle by Microsoft Teams Counsel for the Applicant: Ms Foda Solicitor for the Applicant: Everingham Solomon Solicitors Solicitor-advocate for the First Respondent: Ms Neville Solicitor for the First Respondent: Blackwell Short Lawyers Solicitor-advocate for the Second Respondent: Mr Evans Solicitor for the Second Respondent: Whiteley Ironside & Shillington ORDERS
NCC 3891 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KUNDERT
Applicant
AND: MR KUNDERT
First Respondent
B PTY LTD
Second Respondent
ORDER MADE BY:
SMITH J
DATE OF ORDER:
29 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The matter be listed for mention on Friday, 26 July 2024 at 9.30 am by Microsoft Teams.
2.Liberty is granted to the parties to have the matter relisted on short notice if any issues arise.
3.Prayers 7, 8 and 9 of the Application in a Proceeding filed 26 February 2024 be stood over to a date to be determined for hearing and determination.
4.Definitions:
4.1.“Agent” means C Real Estate appointed sales agent in respect of the D Property by way of agency agreement dated 26 February 2024, or such other sales agent as may be subsequently appointed by the Second Respondent from time to time.
4.2.“D Property” means the property located at E Street, Suburb F NSW, folio identifier …
4.3.“Liquidator” means Mr G of H Street, City J in the state of New South Wales.
4.4.“Husband” means Mr Kundert born 1959.
4.5.“Wife” means Ms Kundert, born 1960.
4.6.Parties means – Ms Kundert (Applicant/Wife), Mr Kundert (1st Respondent/ Husband) and B Pty Ltd (in liquidation) (2nd Respondent/Company)
5.By no later than 25 March 2024 the Liquidator shall do all acts and things necessary for the D Property to be placed on the market for sale for the best price reasonably obtainable.
6.The Husband will vacate the D Property by no later than 23 March 2024.
7.The Parties undertake that they, their family members and/or agents will not interfere with or delay the settlement of the D Property.
8.The Parties undertake to co-operate in every way with the Agent including (without limiting the generality of the foregoing):
8.1. Making the keys, available to the Agent;
8.2.Allowing inspection of the D Property being the whole of the land in by the Agent at all reasonable times requested by the Agent;
8.3.Ensuring the D Property is in a tidy, neat and orderly condition at the time of inspection by the Agent and prospective purchasers;
8.4. Doing or saying nothing to hinder or prevent a sale being affected; and
8.5.Signing all documents requested by the Agent in relation to the listing for auction the D Property except a contract or agreement for sale which has not been authorised by the lawyer acting on the sale.
9.Except as otherwise agreed by the Parties, the manner and process for the sale of the D Property shall be as follows:
9.1.The D Property shall be sold:
i)Inclusive of all fixtures, fittings, improvements, fencing, yards, water tanks, and installed generators; and
ii)Excluding all moveable plant, equipment and livestock.
9.2.Whiteley Ironside & Shillington Solicitors shall be appointed the solicitors acting on the sale;
9.3.By no later than 25 March 2024 the D Property will be on the market for sale by way of auction.
9.4.The D Property will be offered for sale by public auction no later than 16 May 2024 at a venue agreed by the Parties or failing agreement shall be at the real estate agent/auctioneer’s nomination.
9.5.The reserve price for the D Property shall be as agreed between the Parties or failing agreement shall be at no less than 95% of estimate sale price nominated by the real estate agent.
9.6.As regards the auction of the D Property:
i)If the bidding does not reach the reserve price, the Liquidator may negotiate with the highest bidder or any other interested person and effect a sale of property at a price which is not more than 5% below the reserve price, or at such other lower price as the Parties agree in writing; and
ii)If the D Property is not sold on the day of the auction the Liquidator will relist the property for sale by private treaty.
9.7.On completion of the sale of the D Property the following will occur in order of priority:
i)The amount required to discharge and pay the tax liability of the Second Respondent as a consequence of the sale of D Property will be paid from the settlement proceeds;
ii)The amounts required to pay all municipal and water rates outstanding with respect to D Property will be paid from the settlement proceeds;
iii)All costs and expenses of sale including legal costs and disbursements, agent's commission and auction expenses with be paid from the settlement proceeds.
10.No works are to be carried out at the D Property without the prior written consent of each of the Parties.
11.Any current works being undertaken at the D Property, without the consent of all the Parties must cease immediately.
12.The Parties will provide to each of the other Parties a copy of any correspondence received by them from either of the other Parties in relation to these proceedings.
13.The Liquidator will update all Parties via email, of any discussion whether oral or in writing which will include but not limited to email and sms exchanges, between any party and the Liquidator, within 24 hours of the said discussion having taken place.
14.The matter be listed for further mention at a date convenient to the Court no earlier than 8 July 2024.
15.Liberty to apply to relist the proceedings on 7 days notice.
16.The Parties execute all Deeds or instruments and do all acts and things necessary to give validity and operation to the Deed or instrument to give effect to these Orders.
17.If either party refuses, fails or neglects to execute any document necessary to put these orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Federal Circuit Family Court of Australia at Newcastle is hereby appointed pursuant to Section 106A Senior Judicial of the Act to execute such document in the name of such party.
18.If a Party is required, as a consequence of a breach of the above Order to make an Application to the Federal Circuit and Family Court of Australia then the defaulting party will be liable for the costs of the application.
Costs
19.The costs of the parties of and incidental to the Interim Hearing on 29 February 2024 be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kundert & Kundert has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
SMITH J:
These are short oral reasons for decision in respect of an interim application by the applicant wife to sell a substantial item of rural real property.
The property is occupied by the first respondent husband and has been for many years now.
The property is owned by a company owned by the husband and the wife. The company is in liquidation and has been for many years now. The second respondent is the liquidator.
The liquidator has requested occupation fees from the husband for his long-term use of the property. The husband has not paid any occupation fees. The husband says, as I understand it, that the work he has done on the property has justified him living there rent free for many years. The wife contests that. In the meantime, the wife has had to pay rent. This will be one of many issues for trial.
There is a long and complex history post-separation and prior to this litigation which I have taken into account. However, it is now agreed by all parties that the liquidator is to sell the property, which is valued in the millions of dollars, and this significantly and sensibly narrowed the issues before me today. In these circumstances I do not consider it necessary, on an interim application dealing with what are now very narrow questions, to detail all that material now.
The company’s outstanding creditors, excluding the liquidator and his solicitor, are owed just over $65,000. The property is valued in the millions of dollars. Accordingly, once the property is sold, I understand from the liquidator, that it is anticipated that the company will then soon after be wound up. That should leave a sum certain of money, after payment of liabilities, to be included in the assets of the parties for these property proceeding.
There were a number of issues at the start of the day. The issues narrowed significantly in the course of the application today and I congratulate the parties on that.
The wife and the liquidator ultimately agreed on orders for the sale process. The only issue between the wife and the liquidator is the costs of this application. Costs must be considered by reference to the detailed considerations required under s 117 of the Family Law Act 1975 (Cth) (“the Act”). Those issues are not easily addressed on the available evidence nor am I persuaded that today is the appropriate time. I am satisfied that this is a case, in relation to the application, in which all parties’ costs, both the wife’s, the liquidator’s and the husband’s, should be reserved and dealt with at a later time, as part of the overall final hearing.
The husband agrees to most of the sale orders and there is no issue that the property is to be sold and the husband is to vacate the property.
The husband’s main objection is to Order 3 of the proposed Minute of Order contained in MFI 10. Order 3 concerns the vacation date. It is agreed by Order 2 that by no later than 25 March this year, the liquidator shall do all acts and things necessary for the property to be on the market.
The wife and the liquidator agreed that it would be most appropriate for the husband to vacate the property by no later than 23 March 2024. The husband’s position is that while he agrees to the sale order, he should not be required to vacate the property until vacant possession is required pursuant to a sale agreement.
The wife’s initial application was that the husband pay an occupation fee for any such time in which he is to remain in the property and that the husband also objected to that, so that consistent with the husband’s current position to date, his position was that he should not have to pay any money until he is required to vacate the property and should be able to continue to reside rent free at the property until it is sold and vacant possession is required. As I have said, the question of whether or not he should have been paying rent as requested by the liquidator, or whether there has been what might be dealt with as a negative contribution through is rent free occupation of an asset which could have been rented to someone else, will be a significant issue at trial.
My general and usual preference and order, where there is a dispute of this nature, is for a vacant property for sale. That preference has been developed as a result of having to deal with the many issues that can arise otherwise, and which have and do arise and which unfortunately, I have had to deal with on many occasions.
But every case must be determined on its own facts. The husband specifically referred me to paragraph 23 of his affidavit contained in MFI 5. Paragraph 23, page 13 of MFI 5 reads “[i]t is the case that the Liquidator’s chosen agent is of the view that [D Property] is best marketed in occupation.” In support of the proposition that it was the liquidator’s chosen agent’s view that the property be best marketed in occupation, the husband referred me to Annexure B to his affidavit. That is at page 25 of MFI 5. It is a document from C Real Estate, headed, “[D Property] Presentation List”. It reads:
"front to back"
•Front fence fronting [E Street]. Good, no action required
•Entrance and drive to house. Good, no action required, maintenance only (mowing etc)
•Immediate curtilage around house & sheds to be slashed/mown
•Old […] shed to be removed
•Old [facility] demolished to concrete level
•New [facility] to be removed
•Inspection track to be slashed (2 slasher widths)
•Any potential environmental issues (any old tires, rusted chemical drums etc to be removed)
Whilst the work quoted above may be difficult to quantify with regard to lifting the sale price it will reduce a fair amount of negative feedback and may add one or more bidders on the day, in-turn creating more competition.
Slashing – [Mr K] (don't know him but I understand he does a lot of work for [the] Council)
It is our understanding [Mr Kundert] has quotes to remove old shed and [facilities] as quoted above.
Quote is c. $30,000
Now, it is not apparent to me that the letter says anything about the property being best marketed in whilst occupied. It refers to the fact that maintenance is required, and certain things should be done. Now, the husband says he spends a day a week maintaining the gardens and lawns, and that this will assist the sale. However, the order to vacate will not stop him from attending the property and doing unpaid gardening work one day a week, which he says will increase the sale value for the benefit of all parties, should he want to. Should the husband choose not to attend and do that work to improve the sale price, the liquidator may consider hiring someone to do that. That is not the same as an opinion that the property is best marketed in occupation.
I should note that I will assume that paragraph 23 of the husband’s affidavit (MFI 5, p.13) may also refer to the liquidator having said something to the husband. But even if it was the liquidator’s view that it might be better to be presented as an occupied property, that is only one factor I will weigh. Similarly, the husband says there is a lot of work to do and things to be cleaned up which would be difficult if he vacates the property. Again, I do not see that vacating the property will stop the husband from attending while the process of vacation occurs and doing that work. If he does not want to do that work, then, again, the liquidator can consider whether, on balance, it is appropriate to pay someone to do it.
The husband says the property is a large rural property, which it clearly is. It is about 20 kilometres from Suburb L, less than five kilometres from Suburb F. The husband says if it is not occupied, there is a risk of theft of equipment and material. That is a serious consideration.
However, weighing up the unquantified risk of theft as best I can against the concerns I have about the sale of the property in the context of the long and complex history of the matter, whilst theft is a serious consideration, which I have placed some weight on, that is not a factor which I think should lead to the husband remaining in occupation of the property until vacant possession is required after sale.
The husband says his daughter will also have to vacate the property, I am not sure if she is a minor, but even if she is, that is a common and inevitable consequence, and I note, of course, that the issue is not whether she will have to vacate, merely, when.
The husband says he is not allowed enough time to vacate, but he has had years living there and was aware of the application, and I consider, in the context of this case, and the amount of time that has occurred since the events in 2017, that he has on balance sufficient time.
In those circumstances, I am satisfied that the husband should vacate the property pursuant to the proposed Order 3, noting it was consented to by the liquidator who owns operates the company that owns the property, and the husband has no separate right to be present.
The other issues the husband raised, as I understand it, are in respect of proposed Order 6.4 (MFI 10). The proposal by the wife and the liquidator are that the D Property will be offered by sale by public auction no later than 16 May 2024, the contentious bit being, “at a venue agreed by the parties, or failing agreement shall be at the real estate agent/auctioneer’s nomination”. The husband says the parties should not have an opportunity to discuss and agree before, but it should be at the auctioneer’s nomination.
I do not see why the parties should not have an opportunity to discuss it. If they cannot agree, there is a default mechanism and it ultimately will be the auctioneer’s nomination, as the husband proposes. If he merely says to the wife and liquidator, whatever the auctioneer says is what I want, that will deal with that. But I will make the order.
The husband objects to the proposed Order 8, which states that “any current works being undertaken at the [D Property], without the consent of all the parties must cease immediately”. He says there is no work ongoing, in which case I don’t see what the objection is. I note what we see in the real estate agent’s note. If the parties agree on work, perhaps in line with the real estate agent’s recommendations, then qualified builders or tradespeople can be retained, and that work can be done.
Or if there is unpaid work that can be done, and the parties agree, then the husband can do that work either unpaid, or if all parties agree, on a paid basis. That is something that can be agreed by the parties. Both the husband and the wife will benefit by getting the best sale price. How that is achieved is something they can either agree on, or else the property can just be sold as it is.
The husband also objected to proposed Order 10, which the liquidator and the wife agree on. Order 10 states that:
10.The Liquidator will update all Parties via email, of any discussion whether oral or in writing which will include but not limited to email and sms exchanges, between any party and the Liquidator, within 24 hours of the said discussion having taken place.
I cannot see any possible basis for the husband opposing the liquidator being required to update the parties for transparency, particularly when the liquidator agrees to do so. It seems a sensible order to me, and I can see no rational basis for the objection. Accordingly, I make Order 10.
Those are my reasons.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Smith. Associate:
Dated: 3 April 2024
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