Manfield & Scriver
[2020] FCCA 3088
•17 November 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
Manfield & Scriver [2020] FCCA 3088
File number(s): MLC 6622 of 2020 Judgment of: JUDGE C. E. KIRTON QC Date of judgment: 17 November 2020 Catchwords: FAMILY LAW – Property – interim hearing – de facto relationship – neither party legally represented – sale of former de facto matrimonial home – compelling circumstances – significant arrears of mortgage – where mortgagee has threatened foreclosure on the mortgage – imminent prospect of mortgagee sale of property – application by de facto husband for urgent sale of property – where property occupied by the de facto wife – where property registered in the sole name of the de facto husband – where de facto wife seeks to retain property – where neither party has the capacity to meet the mortgage repayments – where the de facto wife has not made any repayments since separation – where the de facto wife has significant personal liabilities – where the de facto wife adduces no evidence of her ability to refinance – minimal equity in the property – orders for sale of property – sale proceeds to be held on trust pending property division – orders for exclusive occupancy to the de facto wife pending settlement. Number of paragraphs: 49 Date of hearing: 6 November 2020 Place: Melbourne Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: The Respondent appeared in person ORDERS
MLC 6622 of 2020 BETWEEN: MR MANFIELD
Applicant
AND: MS SCRIVER
Respondent
ORDER MADE BY:
JUDGE C. E. KIRTON QC
DATE OF ORDER:
17 NOVEMBER 2020
THE COURT ORDERS THAT:
1.The Applicant Husband (Applicant) do all such acts and things and sign all necessary documents as may be required to sell the real property situate at and known as B Street, Suburb C in the State of Victoria being the whole of the land more particularly described in Certificate of Title Volume ... Folio ... (Property), and the proceeds of the sale (Sale) be applied as follows:
(a)Firstly, to pay all costs, commissions and expenses of the Sale including legal costs and disbursements, agent’s commission, valuer’s fees and auction expenses (including repayment of any expenses paid by the Applicant);
(b)Secondly, to discharge the mortgage and any other encumbrance affecting the Property; and
(c)Third, the balance then remaining to be held on trust for the Applicant and the Respondent Wife (Respondent) by the solicitor and/or conveyancer appointed pursuant to these Orders until further order of this Court.
2.Pending the completion of the Sale:
(a)The Respondent have the sole right to occupy the Property;
(b)The Applicant and the Respondent pay all costs necessary to keep the Property insured at its current level of cover;
(c)The parties hold their respective interests in the Property upon trust pursuant to these Orders;
(d)Neither party shall encumber the Property without the consent in writing of the other party; and
(e)On settlement of the Sale of the Property the Respondent shall do all acts and things and sign all documents necessary to remove and/or withdraw the caveat she caused to be registered on the Property.
3.That for the purpose of effecting the Sale:
(a)Within 7 days of the date of these Orders, the Applicant shall provide the Respondent with a list of three (3) real estate agents (not including D Real Estate) nominated by the Applicant for the purposes of effecting the Sale and within a further 7 days, the Respondent shall nominate one of the real estate agents to have conduct of the sale (Selling Agent);
(b)Within 14 days of the date of these Orders, the Applicant shall appoint a solicitor and/or conveyancer to execute the Sale;
(c)The listing price for the Property shall be as agreed between the parties and in default of agreement as recommended by the Selling Agent;
(d)The Property shall be listed for sale by private treaty or auction, with the method of sale to be as recommended by the Selling Agent; and
(e)In the event the Property has not been sold within 120 days of the date of these Orders, the Applicant is to make all arrangements, do all acts, sign all documents and pay all moneys necessary to procure a sale by public auction on the following terms:
(i) The auctioneer shall be appointed by the Selling Agent;
(ii)The auction shall take place within 150 days of the date of these Orders;
(iii)The reserve price shall be as agreed between the parties, and in default of agreement, as determined by the Selling Agent; and
(iv)The Applicant shall be responsible for payment of the auction expenses payable before the Property is auctioned.
4.In the event the Property is not sold by auction or within 30 days of the auction, the Applicant shall do all acts and sign all necessary documents and pay all moneys necessary to procure a second auction within 6 weeks of the date of the first auction on the same terms and conditions as the first auction.
5.For the purposes of the Sale, the Respondent shall cooperate with all reasonable requests of the Selling Agent, including but not limited to:
(a)Facilitating the marketing of the Property for Sale;
(b)Making the keys available to the Selling Agent at all times; and
(c)Allowing inspection of the Property at all reasonable times when requested to do so by the Selling Agent;
(d)Ensuring that the Property including the grounds are in a neat and clean condition at the time of the inspection by the Selling Agent and prospective purchasers; and
(e)Signing all documents requested by the Selling Agent in relation to listing the Property, except a contract or agreement which has not been jointly authorised by the solicitor or conveyancer appointed pursuant to these Orders.
6.In default of the Respondent’s compliance with Order 2(e) hereof, a Registrar or Deputy Registrar of this Court is hereby appointed pursuant to s.106A of the Family Law Act 1975 (Cth) to execute the Withdrawal of Caveat upon the Applicant filing an affidavit sworn by him deposing as to the Respondent’s failure to comply with Order 2(e) of these Orders.
7.The Applicant have liberty to serve a sealed copy of these Orders on the National Australia Bank Limited by way of ordinary pre-paid post, with a covering letter from the Applicant.
8.The parties be granted liberty to apply to the Court with respect to the sale of the Property as may become necessary in order to give effect to these Orders.
9.All extant interim applications are otherwise dismissed save for paragraphs 5 and 6 of the Initiating Application relating to the parties’ chattels.
10.The Applicant’s costs of and incidental to the Interim Defended Hearing on 6 November 2020 be reserved.
AND THE COURT NOTES THAT:
A.Order 8 of the Orders made on 14 September 2020 shall remain in full force and effect and all extant applications are further adjourned to the pre-mediation compliance check (by telephone) on 1 December 2020 at 11.30 am.
B.Order 10 of the Orders made on 14 September 2020 shall remain in full force and effect and the parties, together with their lawyers attend a conciliation conference with a Registrar on 21 December 2020 at 9.15 am.
C.In the event that any party fails to comply with these Orders, the Court may order that they pay the legal costs of the other party resulting from their non-compliance or the matter may be listed for an undefended hearing.
E.If in any proceedings there are allegations of family violence and the provisions of s.102NA of the Family Law Act 1975 (Cth) apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
F.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (Scheme) for representation but any such application must be made at least 12 weeks prior to the final hearing.
G.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
H. If s.102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court.
IT IS NOTED that publication of this judgment under the pseudonym Manfield & Scriver is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE C. E KIRTON QC:
INTRODUCTION
This is an interim decision where the issue in dispute is the sale of the parties’ former home at B Street, Suburb C (Property). The Applicant seeks to sell the Property in circumstances where he asserts that he has been unable to make repayments on the mortgage since February 2019. The Respondent lives at the Property with the parties’ child and she seeks to retain the Property, however she is not agreeable to meeting the mortgage repayments or paying the arrears on the mortgage.
ISSUES IN DISPUTE
The following interim issues are in dispute between the parties:
• Whether the Property should be sold pending the final hearing of this proceeding; and
• In the event that the Court orders the interim sale of the Property, whether the Applicant or the Respondent should have sole use and occupation of the Property pending the sale of the Property.
SYNOPSIS
I have determined that:
(1)There should be an interim sale of the Property and that for the purpose of effecting the sale:
(a)Within 7 days of the date of the Court’s Orders, the Applicant provide the Respondent with a list of three (3) real estate agents (not including D Real Estate) nominated by the Applicant for the purposes of effecting the sale and within a further 7 days, the Respondent shall nominate one of the real estate agents to have conduct of the sale (Selling Agent);
(b)Within 14 days of the date of these Orders, the Applicant shall appoint a solicitor and/or conveyancer to execute the sale;
(c)The listing price for the Property shall be as agreed between the parties and in default of agreement as recommended by the Selling Agent;
(d)The Property shall be listed for sale by private treaty or auction, with the method of sale to be as recommended by the Selling Agent;
(e)In the event the Property has not been sold within 120 days of the date of these Orders, the Applicant is to make all arrangements to procure a sale by public auction on the following terms:
(i)The auctioneer shall be appointed by the Selling Agent;
(ii)The auction shall take place within 150 days of the date of these Orders;
(iii)The reserve price shall be as agreed between the parties, and in default of agreement, as determined by the Selling Agent; and
(iv)The Applicant shall be responsible for payment of the auction expenses payable before the Property is auctioned;
(f)In the event the Property is not sold by auction or within 30 days of the auction, the Applicant shall do all acts and sign all necessary documents and pay all moneys necessary to procure a second auction within 6 weeks of the date of the first auction on the same terms and conditions as the first auction.
(2)Pending completion of the Sale the Respondent have the sole right to occupy the Property.
BACKGROUND
The parties to this proceeding were both born in Australia. The Applicant was born in 1979 and is 40 years of age. The Respondent was born in 1978 and is 41 years of age.
The parties met and commenced cohabitation in 2001. There is one child of the relationship X (X) who was born in 2005 and is now 15 years of age.
In 2012 the Applicant and the Respondent purchased the Property for the sum of $330,000. The Property was purchased with a deposit of $53,270 and the balance of $276,73.88 was funded by way of a mortgage with the National Australia Bank Limited (Mortgage)[1]. The Property was registered in the name of the Applicant.
[1] Affidavit of the Respondent, affirmed 5.8.20 and filed 6.8.20 at [13]; Affidavit of the Applicant, filed 28 September 2020 at [16(i)].
The parties separated in about 2014 and then reconciled[2]. They separated again in July 2015[3] and reconciled in 2017 for a short period[4] and finally separated in October 2018. After final separation the Applicant initially lived at a property in Suburb E but then moved to live with his parents at their home in Suburb F. The Respondent remains living at the Property with X.
[2] Affidavit of the Respondent, affirmed 5.8.20 and filed 6.8.20 at [18]-[19].
[3] Affidavit of the Respondent, affirmed 5.8.20 and filed 6.8.20 at [17].
[4] Affidavit of the Respondent, affirmed 5.8.20 and filed 6.8.20 at [19].
Since final separation the parties have made numerous attempts to reach a property settlement[5]. The Applicant continued to pay the Mortgage payments and the Council rates until about February 2019[6]. Since separation the Respondent has not made any payments towards the Mortgage or the Council rates[7]. The Applicant is therefore now in default in paying the moneys owing pursuant the Mortgage.
[5] Affidavit of the Applicant, dated 15.6.20 and filed 23.6.20 at [13] and Annexures “B” and “D”; Affidavit of the Respondent affirmed and filed on 19.10.20 at [14] and [26]-[31].
[6] Affidavit of the Applicant, dated 15.6.20 and filed 23.6.20 at [11].
[7] Affidavit of the Applicant, dated 15.6.20 and filed 23.6.20 at [12].
On 20 February 2020 the Applicant received a Default Notice Under Consumer Loan Facility (Secured), dated 11 February 2020 (Default Notice), in relation to the home loan secured by the Mortgage[8] (Credit Contract). The default amount specified in the Default Notice was $11,034.26 (Default Amount). The whole amount due pursuant to the Credit Contract, in the event that the Default Amount was not paid within 31 days, was specified to be $269,779.26 as at the date of the Default Notice.
[8] Affidavit of the Applicant, dated 15.6.20 and filed 23.6.20 at [14] and Annexure “A”.
By a letter dated 13 March 2020 the solicitors then acting for the Applicant advised the National Australia Bank Ltd (NAB)[9] that:
• The Applicant was not in a position to pay the Default Amount;
• The Applicant and the Respondent had attempted to negotiate a family law property settlement however agreement had not been reached. As the Respondent remained living in the Property the Applicant was unable to access the Property to sell it;
• The Applicant intended to commence proceedings in this Court seeking a property division and urgent interim orders for possession and sale of the Property; and
• The Applicant proposed to keep the NAB informed of the progress of his application before the Court.
[9] Affidavit of the Applicant, dated 15.6.20 and filed 23.6.20 at [20] and Annexure “C”.
PROCEDURAL HISTORY
The Applicant commenced this proceeding by an Initiating Application filed on 24 June 2020 (Initiating Application) seeking interim and final property orders. When the Applicant filed the Initiating Application he was self-represented and he has continued to be self-represented. The interim property orders sought by the Applicant may be relevantly summarised as follows:
1. The proceeding be listed urgently for an interim defended hearing.
2. The Respondent remove the caveat registered on the Property at her cost within 7 days.
3. The Respondent vacate the Property within 14 days to allow for the sale of the Property and the Applicant thereafter have sole occupation of the Property.
4. The Respondent leave various chattels at the Property and take various chattels with her when she departs the Property (Interim Chattel Orders)[10].
[10] Initiating Application, Interim or Procedural Orders Sought at [5] and [6].
5. Within 14 days the Applicant do all acts and things and sign all documents necessary to effect the sale of the Property for the best price reasonably obtainable in the following manner:
(a)The Property be listed for sale by private treaty with the agent, D Real Estate, or any other such agent that the Applicant may choose;
(b)The sale price for which the Property be listed be chosen by the Applicant;
(c)The parties shall co-operate in every way with the agent (without limiting the generality of the foregoing) by:
(d)Making the key available to the agent;
(e)Allowing the inspection of the property at all reasonable times requested by the agent;
(f)Ensuring the Property is in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(g)Signing all documents requested by the agent in relation to the listing for sale of the Property, except a contract or agreement for sale which has not been authorised by the Applicant’s solicitor.
6. The Applicant instruct G conveyancing, or any other such solicitor that the Applicant may choose to have the conduct of the sale on behalf of the Applicant.
7. In the event that the Property is not sold by private treaty within three months of being listed for sale by private treaty:
(a)The Applicant list the Property for sale by public auction with the agent;
(b)The reserve price for the purpose of such auction to be determined by the Applicant;
(c)In the event the bidding at the auction does not reach the reserve price the Applicant may negotiate with the highest bidders or any other interested person and if the offer to purchase the Property is made on the day of the auction or within 30 days after the auction, for a sum not more than 5% below the reserve price, then the parties must sell it to the purchaser for that sum;
(d)If the Property remains unsold for 30 days after the auction referred to in sub-paragraph (a) the Applicant do all acts and things and sign all documents necessary to immediately relist the Property for sale by public auction again, on a date nominated by the agent with a reserve price of 5% below the price provided for in sub-paragraph (b);
(e)If the Property remains unsold it shall be listed for sale by auction every 30 days until sold with the reduction of the reserve price by a further 5% on each occasion.
8. On settlement of the sale of the Property the proceeds of sale be paid in the following manner and priority:
(a)All costs and expenses of sale including legal costs and disbursements, agent’s commission, the valuer’s fee and auction expenses (including repayment of any expenses paid by the Applicant);
(b)The amounts required to discharge the Mortgage including any Mortgage arrears;
(c)The amount required to pay all municipal and water rates outstanding to the Property; and
(d)The balance to be transferred into the trust account of Russell Kennedy Aiken lawyers in Sydney until such time that the parties reach agreement as to a property settlement or a Court Order.
9. The Respondent be restrained from causing any damage to the Property.
10. The Respondent pay the Applicant’s costs of and incidental to the application on an indemnity basis.
The Applicant seeks final orders in the Initiating Application that may be relevantly summarised as follows:
1. The net proceeds of sale of the Property be divided equally between the parties;
2. Each party be solely entitled to all chattels, goods, motor vehicles, furniture, furnishings and any other property in their possession or control;
3. Each party be solely entitled to any moneys, shares and debentures which stand in their name;
4. Each party be solely entitled to any superannuation benefits held in such party’s name and each party forgo any claim they may have to any superannuation benefits to or earned by the other party;
5. Each party be solely liable for and indemnify the other against any debt, loan or liability whatsoever held in such party’s name; and
6. An order pursuant to s. 106A Family Law Act 1975 (Cth) (Act).
On 23 June 2020 the Applicant also filed an Affidavit (Applicant’s June 2020 Affidavit). The Applicant’s June 2020 Affidavit was not witnessed at the time of signing by the Applicant due to the COVID-19 restrictions and was filed with the Court in accordance with Joint Practice Direction 2: JPD of 2020 – Special Measures in response to COVID-19 Electronic filing, Viewing of Subpoenas, Annexures to Affidavits, Signatures on Documents to Affidavits, and Fees (Joint Practice Direction 2). On 23 June 2020 the Applicant also filed a Financial Statement in accordance with Practice Direction 2 (Applicant’s Financial Statement).
At the time of filing the documents to commence this proceeding the Applicant also filed a letter, dated 23 June 2020 seeking an urgent listing of the proceeding (Applicant’s Letter).
The Respondent filed a Response on 6 August 2020 (Response). When the Respondent filed the Response she was self-represented and she has continued to be self-represented. In the Response the Respondent did not seek any interim orders other than to oppose the interim orders sought by the Applicant.
In the Response the Respondent sought final orders which may be relevantly summarised as follows:
1. Within 30 days of the date of the written approval (or earlier by agreement), the parties do all such acts and things and sign all documents as may be required to:
(a)Transfer to the Respondent all of the Applicant’s right, title and interest in the Property at the parties’ joint expense;
(b)Discharge the Mortgage at the Respondent’s expense.
2. Pending completion of the transfer of the Property and discharge of the Mortgage:
(a)The Respondent have the right to occupy the Property;
(b)The Respondent pay all costs necessary to keep the Property insured and at its current level of cover;
(c)The parties hold their respective interests in the Property upon trust;
(d)Neither party encumber the Property without the consent in writing of the other.
3. In the event that the Respondent does not comply with Orders 1 and/or 2, the parties do all acts and things and sign all documents necessary so as to effect the sale of the Property as follows:
(a)The parties list the Property for sale by private treaty with an agent the parties agree to appoint;
(b)The sale price at which the Property be sold be mutually agreed upon by the parties;
(c)The parties cooperate with the agent and without limiting the generality of the foregoing:
(i)Make the key available to the agent;
(ii)Allow the inspection of the Property at all reasonable times requested by the agent;
(iii)Not do or say anything to hinder or prevent a sale been effected; and
(iv)Sign all documents requested by the agent in relation to the listing for sale of the Property, except a contract or agreement for sale which has not been authorised by both the parties;
(d)On settlement of the Property the proceeds of sale be paid in the following manner priority:
(i)All costs and expenses of the sale including legal costs on sale and disbursements and agent’s commission, valuer’s fees and auction expenses;
(ii)The amounts required to discharge the Mortgage including any Mortgage arrears;
(iii)The amount required to pay all municipal and water rates outstanding to the Property; and
(iv)The balance to be transferred to the Respondent;
(e)At settlement the Respondent do all acts and things and sign all documents to remove and/or withdraw the caveat registered on the Property;
(f)There be superannuation splitting orders pursuant to s.90XT of the Act, with the Respondent being entitled to a base amount of $44,250; and
(g)Within 14 days of the orders the Applicant return various chattels to the Respondent and also collect various chattels from the Respondent.
4. Each party be solely entitled to the exclusion of the other to all property owned by them or in their possession as at the date of the orders, and that:
(a)The Respondent retain:
(i)All bank accounts held solely in her name;
(ii)The Motor Vehicle 1;
(iii)The camper trailer; and
(iv)Her superannuation entitlements with Super Fund H (in addition to the superannuation splitting order referred to in sub-paragraph (c)(vi)) of the Response and her work related benefits and/or entitlements;
(v)The chattels referred to in paragraph 13 of the Response as belonging to the Respondent.
(b)The Applicant retain:
(i)All bank accounts held solely in his name;
(ii)The chattels referred to in paragraph 13 of the Response as belonging to the Applicant; and
(iii)His superannuation entitlements with Super Fund H (less the superannuation splitting order referred to in sub-paragraph (c)(vi)) of the Response and his work related benefits and/or entitlements;
(c)Each party forgo any claim they may have to any superannuation, long service leave, redundancy, retirement and like benefits belonging to or earned by the other;
(d)All insurance policies remain the sole property of the owner named therein;
(e)Any joint tenancy between the parties in any property be severed; and
(f)Each party be solely liable for and indemnify the other against any liability.
5. The Applicant pay all costs incurred by the Respondent in relation to all attempts at seeking an agreement.
The Respondent also filed an Affidavit on 6 August 2020 (Respondent’s August 2020 Affidavit) and a Financial Statement (Respondent’s Financial Statement).
On 7 September 2020 the Respondent filed an Amended Response (Amended Response). In the Amended Response the Respondent sought the following amendments to the final orders:
1. Within 120 days of the date of the written approval (or earlier by agreement) the parties do all such acts and things and sign all documents as may be required to:
(a)Transfer to the Respondent all of the Applicant’s right, title and interest in the Property at the parties’ joint expense;
(b)Discharge the Mortgage at the Respondent’s expense.
2. There be superannuation splitting orders pursuant to s.90XT of the Act, with the Respondent being entitled to a base amount of $44,250 or equal to 50% of the total value.
3. The Applicant’s superannuation fund membership number was amended.
On 14 September 2020 a Registrar of this Court made Orders (14 September 2020 Orders) that may be relevantly summarised as follows:
1. The proceeding be designated a “Priority Property Pool under $500,000” matter pursuant to the Federal Circuit Court of Australia Practice Direction No.2 of 2020.
2. All extant applications be listed before myself for an interim defended hearing on 6 November 2020 with respect to the issue of the interim sale of the Property[11] (Interim Defended Hearing).
[11] Order 4, 14 September 2020 Orders.
3. All extant applications be further adjourned to a pre-mediation compliance check (by telephone) on 1 December 2020 at 11.30 am[12].
[12] Order 8, 14 September 2020 Orders.
4. The parties, together with their lawyers attend a conciliation conference with a Registrar on 21 December 2020 at 9.15 am[13] (Conciliation Conference).
[13] Order 10, 14 September 2020 Orders.
5. In relation to the Interim Defended Hearing:[14]
[14] Orders 5-7, 14 September 2020 Orders.
(a)The Applicant file and serve any further affidavit upon which he sought to rely by 4:00 pm on 28 September 2020;
(b)The Respondent file and serve any further affidavit upon which she sought to rely by 4:00 pm on 19 October 2020;
(c)Each party file and serve a Case Outline by 4:00 pm 4 November 2020 which contained:
(i) A list of the documents filed in the Court that they rely upon; and
(ii) A dot point summary of the reasons why the Court should make the orders they seek.
(d)Within 21 days each party make discovery:
(i) In accordance with r.24.04 of the Federal Circuit Court Rules 2001 (Cth)[15];
(ii) Of statements from all bank and credit union accounts in which a party has an interest for the period from 12 months before the date of separation to the date of the 14 September 2020 Orders[16];
(iii) Of various specified categories of documents[17].
[15] Order 2(a), 14 September 2020 Orders.
[16] Order 2(b), 14 September 2020 Orders.
[17] Order 2(c)(i)-(vi), 14 September 2020 Orders.
The 14 September 2020 Orders included the following Notation:
A. The interim issue in dispute is the sale of the parties’ former home at B Street, Suburb C. The Applicant seeks to sell the property in circumstances where he asserts he has been unable to make repayments on the mortgage since February 2019, where the Respondent lives in the property with the parties’ child, and where the Respondent seeks to retain the B Street, Suburb C property but is not agreeable to meeting the mortgage repayments or arrears.
On 14 September 2020 the Respondent filed a Second Affidavit (Respondent’s September 2020 Affidavit).
The Applicant then filed a second Affidavit on 28 September 2020 (Applicant’s September 2020 Affidavit). The Applicant’s September 2020 Affidavit was filed in accordance with Joint Practice Direction 2.
On 19 October 2020 the Respondent filed a third Affidavit (Respondent’s October 2020 Affidavit).
The Interim Defended Hearing was to be conducted remotely and electronically via Microsoft Teams video conference due to the restrictions in force in the State of Victoria, as a result of the global pandemic of COVID-19. However during the course of the day on 6 November 2020 at the time of the Interim Defended Hearing, Microsoft Teams was not available to the Court and the Interim Defended Hearing was conducted by audioconference. The Applicant and the Respondent each appeared on their own behalf. Prior to the Interim Defended Hearing neither the Applicant nor the Respondent filed a Case Outline in compliance with the 14 September 2020 Orders[18]. After hearing submissions from each of the Applicant and the Respondent, Interim Judgment in relation to the sale of the Property was reserved.
[18] Order 7, 14 September 2020 Orders.
THE APPLICANT’S POSITION
At the Interim Defended Hearing the Applicant confirmed that he wanted to proceed with his application for an interim sale of the Property. I have therefore proceeded on the basis that I will consider the interim orders that are sought in the Initiating Application that relate specifically to the sale of the Property[19]. I will therefore not consider the Interim Chattel Orders. This is for three reasons. Firstly there is no affidavit evidence from either party that adequately addresses the issue of chattels in any detail for the Court to be able to make any interim determination. Secondly after reviewing the orders the Respondent seeks in relation to chattels, it is not clear to me what orders the Respondent is seeking [20]. Thirdly this issue should be addressed at the Conciliation Conference. This will give the parties the opportunity to directly address the Registrar in relation to individual items on their respective chattel lists[21].
[19] Initiating Application, Interim or Procedural Orders Sought at [3]-[4] and [7]-[9].
[20] Amended Response, Final Orders Sought at [13].
[21] Interim Chattel Orders; See also Amended Response, Final Orders Sought at [13].
The Applicant relied on the following documents:
• Initiating Application;
• Applicant’s June 2020 Affidavit;
• Applicant’s Financial Statement; and
• Applicant’s September 2020 Affidavit.
The Applicant’s Position is succinctly stated in the Applicant’s Letter filed with the documents commencing this proceeding. The Applicant stated:
I make this application seeking an urgent listing in circumstances where I am currently in default of the mortgage repayments to my property […]
On 20th February I received a letter from NAB stating that I had to pay the outstanding amount of approximately $14,786.47. If that amount wasn’t paid by 17 March, 2020, NAB may commence enforcement proceedings and secure possession of [the Property] to sell it.
As [the Respondent] and I have been unable to come to an agreement of paying the outstanding amount, I seek to have [the Property] sold to stop further bank and legal fees.
The Applicant works as a tradesman for a firm in Perth. The Applicant’s Financial Statement discloses:
• A total average weekly income of $486.78 derived from the Jobseeker Payment of $261.78 and the COVID-19 supplement of $225[22];
• Estimated weekly expenditure of $410 including $53 for child support for X, $20 for car registration, $45 for repayments on a personal loan from the NAB and $60 for credit card payments to the NAB[23];
• Estimated total value of property owned by the Applicant of $461,490, being $450,000 for the Property, savings of $2,490, a Motor Vehicle 2 valued at $3,000 and $6,000 for tools and firearms[24];
• Estimated liabilities of $284,814 being the balance of the Mortgage of $273,530, a NAB personal loan in the sum of $6,510 and NAB credit card debt of $2,474[25]; and
• Superannuation with Super Fund H with a gross value of $87,990[26].
[22] Applicant’s Financial Statement at [2] and [16].
[23] Applicant’s Financial Statement at [2] and [33].
[24] Applicant’s Financial Statement at [2] and [44].
[25] Applicant’s Financial Statement at [2] and [55].
[26] Applicant’s Financial Statement at [2] and [45].
In the Applicant’s September 2020 Affidavit the Applicant stated:
Given the COVID-19 situation, and the restrictions with respect to travel interstate, I have been off work since 30th July 2020. As a result, I am currently receiving Job seeker payments in the sum of $824.50 per fortnight[27].
[27] Applicant’s September 2020 Affidavit at [22].
The Applicant has produced a Centrelink Income Statement, dated 28 September 2020[28] (Centrelink Income Statement) which indicates that on 28 September 2020 the Applicant received a payment totalling $1,124.50 that included $554.84 for the JobSeeker Payment and $550 for the Coronavirus Supplement. The Centrelink Income Statement also indicates that on 12 October 2020 the Applicant received a payment totalling $824.50 that included $554.84 for the JobSeeker Payment and the decreased amount of $250 for the Coronavirus Supplement.
[28]Applicant’s September 2020 Affidavit at [22] and Annexure “D”.
The Applicant has produced an email from himself to the NAB dated 20 September 2020 forwarding a copy of the 14 September 2020 Orders and updating the NAB on his position[29]. On 28 September 2020 the NAB sent an email to the Applicant which stated the following[30]:
[29] Applicant’s September 2020 Affidavit at [13] and Annexure “A”.
[30] Applicant’s September 2020 Affidavit at [14] and Annexure “B”.
As per our discussion, your loan ...29 has an outstanding balance of $17,608.26 and is at risk of escalating to the next level.
External solicitors will then be involved which incur additional costs and external demand notices which also affect your credit rating.
You are in default under your credit contract and mortgage with [NAB].
If the Default Amount is not paid, or a payment arrangement in place the bank may: commence enforcement proceedings in relation to the default: which may include securing possession of and selling the property.
• We need a definite plan in place for the future of this loan.
• If you are selling, please provide a real estate agency agreement
• If re-financing, we require pre-approval documentation from the bank
• Property sold, we need a Contract of Sale and a Discharge form
• Or if you are intending to keep the property we need a payment schedule to maintain your minimum payments and to clear your outstanding balance
• If you would like NAB to take over the sale for you, please have property vacant
THE RESPONDENT’S POSITION
At the Interim Defended Hearing the Respondent confirmed that she continued to oppose the interim orders sought by the Applicant. The Respondent did not propose any orders that the Court should make in the event that the Court was to order the interim sale of the Property.
At the Interim Defended Hearing the Respondent relied on the following documents:
• Amended Response;
• Respondent’s August 2020 Affidavit;
• Respondent’s Financial Statement;
• Respondent’s September 2020 Affidavit; and
• Respondent’s October 2020 Affidavit.
The Respondent’s opposition to the Interim Application may be summarised as follows:
During the relationship the Applicant committed family violence and final intervention orders were made in favour of the Respondent against the Applicant in July 2015, June 2019 and August 2020. X was named in addition to the Respondent in the latter two intervention orders. The current intervention order expires on 27 August 2022[31]. The Respondent alleges that during communications with the Applicant’s lawyers from July 2019 to June 2020 “there have been many threats to remove me from my home”[32].
[31] Respondent’s October 2020 Affidavit at [8]-[9].
[32] Respondent’s October 2020 Affidavit at [11].
The Respondent questions the real urgency of the interim application, and claims that the Applicant has been in arrears since November 2018[33]. At the Interim Defended hearing the Respondent expressed her disbelief to the Court that the NAB would actually foreclose on the Property pending final orders being made in this proceeding. The Respondent alleged the Applicant had failed to provide full disclosure of communications with the NAB pursuant to the 14 September 2020 Orders. The Respondent deposed[34]:
[33] Respondent’s October 2020 Affidavit at [12(a)].
[34] Respondent’s October 2020 Affidavit at [12(g)].
The communications I have been provided would not suggest there is a need for an interim order for an urgent action.
The Respondent did not produce any relevant correspondence from the NAB in support of this assertion. Further the Respondent’s allegation is contrary to the position adopted by her former solicitors over seven months ago. On 30 March 2020 the Respondent’s former solicitors wrote to Applicant’s former solicitors in the following terms[35]:
[35] Respondent’s August 2020 Affidavit at [33] and Annexure “A”.
Given that the NAB has now issued a default notice to your client, it appears that it would be in the best interests of both parties to resolve this matter without further delay. Failing resolution, we note that the NAB may in fact issue proceedings against your client, hence not only complicating the circumstances of this family law matter, but also resulting in unnecessary and additional costs to both parties.
It would be unjust for the Applicant to have sole control over the Property and the sale of the Property[36].
The Respondent would potentially suffer financial loss if she was required to remove the caveat that she had caused to be registered over the Property[37].
Requiring the Applicant and X to relocate their accommodation within 14 days was unreasonable[38]. The Respondent deposed[39]:
To be forced to relocate under the orders sought in this application would cause immense financial and psychological stress on myself and X. We would be forced into a homeless situation as I do not have the finances available to pay for accommodation.
The Respondent wishes to retain the Property[40].
[36] Respondent’s October 2020 Affidavit at [12(b)]
[37] Respondent’s October 2020 Affidavit at [12(c)].
[38] Respondent’s October 2020 Affidavit at [12(d)].
[39] Respondent’s October 2020 Affidavit at [25].
[40] Respondent’s October 2020 Affidavit at [12(f)].
The Respondent works as a health care worker for a regional healthcare provider. The Respondent’s Financial Statement discloses:
• A total average weekly income of $1,092 derived from an income of $900, the Family Tax benefit of $164 and $28 in child support for X[41].
• Estimated weekly expenditure of $1,157, which includes $169 in tax, $80 in superannuation, $26 in car insurance, $30 in motor vehicle registration, $190 in personal loan repayments to the ANZ Bank and $400 on expenses relating to X[42].
• Estimated total value of property owned by the Respondent of $15,066, being $10,000 for a 2003 Motor Vehicle 1 and $5,000 for household contents[43].
• Estimated liabilities of $52,675, being $39,288 for an ANZ Bank personal loan and $13,387 for a HELP Debt[44].
• Superannuation with Super Fund J in the gross value of $1,585[45].
[41] Respondent’s Financial Statement at [2] and [16].
[42] Respondent’s Financial Statement at [2], [33] and [34].
[43] Respondent’s Financial Statement at [2] and [44].
[44] Respondent’s Financial Statement at [2] and [55].
[45] Respondent’s Financial Statement at [2] and [45].
In the Respondent’s October 2020 Affidavit the Respondent deposed to the following in relation to her current financial circumstances[46]:
19. In August 2019 in the hope of an agreement forthcoming I sought and was successfully preapproved for a mortgage via K Bank to purchase the property from the applicant. That pre-approval has since expired.
20. In April 2020 I again began the process of bank approval for a loan to discharge the mortgage in the applicant’s name as per the in principle agreement reached at that time, this process was ceased when it became apparent the agreement would not be finalised. It was decided that continued applications would be futile without an agreement to purchase in place.
21. Given the increase in the principal amount of the loan by way of arrears and the personal loan that I am obliged to and have continuously serviced, I am not in a position to rectify the financial position which the applicant has placed himself in order to make ongoing mortgage payments.
22. Without the certainty of a full order stating that I will retain the property and restructure of my personal finances to consolidate my current liabilities, of which the responsibility is also yet to be determined by the court I am unable to service a further liability at this time.
[…]
24.Given the current restrictions regarding the covid-19 situation I have only recently returned to work in regular hours as I was forced to stay home to support our daughter X with remote learning. This put a huge financial strain on me and resulted in having to borrow from friends to make ends meet. I am yet to recover financially.
[46] Respondent’s October 2020 Affidavit at[19]-[22] and [24].
CONSIDERATION AND CONCLUSION
The Court has before it credible evidence that payments pursuant to the Credit Contract are in default and that the NAB is threatening to exercise its rights as Mortgagee pursuant to the Mortgage. As at 28 September 2020 the Default Amount was $17,608.26 and that amount will have increased since that date. The Default Notice was dated 11 February 2020 and by that time $11,034.24 in arrears had accrued. No payments had been made at that time for a period of 12 months since February 2019. No payments have now been made pursuant to the Credit Contract for a period of some 19 months. If the NAB exercises its rights as Mortgagee further expenses will be incurred which will cause loss potentially to both the Applicant and the Respondent. I have already referred to the Respondent’s Solicitor’s letter dated 30 March 2020 adverting to this potential outcome. The Applicant’s former solicitors have also described the situation to the Respondent in correspondence dated 2 March 2020 as follows:[47]
The mortgage is in arrears in the sum of $11,034.26. Payment of this amount is required by 13 March 2020 otherwise the bank will take action to recover the amount owing on the mortgage, the sum of $269,779.26
Our client is not in a position to pay the mortgage arrears and therefore requests that you pay the arrears in the event you wish to retain the B Street, Suburb C property. If you do not pay the mortgage arrears then the bank may repossess the B Street, Suburb C property.
Should you not repay these arrears than our client will be civilly liable to the mortgagee (NAB) for any shortfall. Ordinarily a mortgagee will commence proceedings in the Supreme Court of Victoria for possession of the property, sale of property by an agent chosen by the mortgagee. Importantly, the mortgagee has no obligation to either yourself or our client to ensure any equity remains in the property and further, the mortgagee may seek the costs of its enforcement to be paid from the proceeds of sale of the property. If this action occurs our client will look to you for the damages […]
[47] Applicant’s June 2020 Affidavit at [18] and Annexure “B”.
The Default Notice specified that the amount owing pursuant to the Credit Contract as at the date of the Default Notice (11 February 2020) was $269,779.26. The Respondent claims that in November 2018 the Applicant agreed that the Property was valued at $310,000[48] and that in July 2019 the value was agreed to be $322,000[49]. The Applicant now contends that the Property is valued at $450,000[50]. Regardless of whether the Applicant or the Respondent’s valuations are adopted, it is evident that there is not a great deal of equity in the Property. If the Mortgagee was to enter into possession what little equity the parties’ have in the Property would rapidly evaporate.
[48] Respondent’s August 2020 Affidavit at [21]; Respondent’s October 2020 Affidavit at [14].
[49] Respondent’s August 2020 Affidavit at [27]; Respondent’s October 2020 Affidavit at [28].
[50] Applicant’s Financial Statement at [35].
The Court also has before it credible evidence by way of the Centrelink Income Statement that the Applicant is presently unable to meet the payments pursuant to the Credit Contract by reason of the Applicant being in receipt of the Jobseeker Payment.
The Respondent has deposed that she is unable to rectify the default under the Credit Contract or meet the regular mortgage payments. The Respondent is presently significantly in debt having liabilities of $52,675 as disclosed in the Respondent’s Financial Statement. The Respondent has a gross income of $900 per week, being approximately $47,000 per annum. There is no evidence before the Court of the Respondent’s ability to obtain a loan to pay out the amount owing under the Credit Contract in her current financial circumstances. The Respondent claims that she needs a final order “stating that I will retain the property” so that she can consolidate her liabilities[51]. It is likely to be some time before there will be a final hearing in this matter. It will be a matter for the trial judge as to what orders are made. There is no certainty that Respondent will obtain an order in terms of the final orders that she seeks, being that all of the equity in the Property be transferred to her[52]. The Applicant is seeking half of the equity in the Property[53].
[51] Respondent’s October 2020 Affidavit, at [22].
[52] Amended Response, Final Orders Sought, at [4].
[53] Initiating Application, Final Orders Sought, at [1].
The Respondent claims to have been aware of the Applicant’s failure to make payments pursuant to the Consumer Contract since either November 2018 or February 2019. The situation in relation to the default in the payments pursuant to the Consumer Contract has been escalating since that time. The Respondent now makes various claims against the Applicant for deliberately not working, not making mortgage payments which he could afford and withholding financial information. These claims may have some substance, however on an interim hearing, they are not tested with cross-examination. The Respondent did not commence Court proceedings to protect her own position in relation to the Property and instead has persisted with fruitless attempts at negotiation with the Applicant. In the meantime the default interest has accrued pursuant to Credit Contract.
In the circumstances it is unfortunate, particularly with the manifestation of the COVID-19 pandemic, there is little else that the Court can realistically do but order the sale of the Property to prevent the NAB exercising its rights as Mortgagee. In so ordering I intend to make orders that will protect the Respondent’s interests, whilst taking into account the parties are self-represented, that there is a high degree of animosity between them and the legal reality is that the Applicant is the sole registered proprietor of the Property.
The Respondent is to have the right to remain living at the Property until settlement of the sale of the Property. This is because X lives with the Respondent and the Respondent receives little financial support from the Applicant. The Applicant also presently has accommodation at his parent’s home for which he has not disclosed any financial expenses relating to this accommodation. I therefore infer that the Applicant is living rent free at his parents’ home. After settlement of the sale of the Property the proceeds of the sale will be held in trust on behalf of the Applicant and the Respondent pending final orders of the Trial Judge. It will then be open to the Respondent, pending the final hearing to apply to the Court for an interim property settlement, should the Respondent find herself in need of a partial distribution of funds.
The Applicant seeks an order that the Respondent be restrained from causing any damage to the Property and I decline to make such an order. It is in the Respondent’s direct financial interest that the Property achieve the best possible price when sold. There is no evidence before the Court from which the Court could conclude that the Respondent would act in an irresponsible manner towards the Property. The Court will nevertheless make an Order that the Respondent ensures that the Property is kept in a neat and clean condition at the time of inspection by the selling agent and prospective purchasers. This is a usual order where one party is in occupation of the former matrimonial home during the sale of the home.
The caveat that the Respondent caused to be registered over the Property is to remain over the Property until settlement of the sale of the Property, whereupon the Respondent is to provide the appropriate documentation for the withdrawal of the caveat to enable settlement to take place.
At the Interim Defended Hearing the Respondent expressed the view that she was opposed to the Applicant appointing D Real Estate as selling agents. I intend to order that the Applicant shall provide to the Respondent within seven days a list of three estate agents, of which D Real Estate is not to be included, and from which list the Respondent is to nominate one estate agent within 7 days.
As discussed above, I will make an order that the Interim Chattel Orders are to be considered at the Conciliation Conference on 21 December 2020 at 9.30 am.
COSTS
The Applicant seeks an order that the Respondent pay the Applicant’s costs of and incidental to the interim application on an indemnity basis. I note that the Respondent has sought costs as a final order but not as an interim order[54].
[54] Amended Response, Final Orders Sought, at [15].
The Applicant appeared on his own behalf at the Interim Defended Hearing and made no submissions in relation to costs. It is nevertheless possible that the Applicant may have incurred some legal costs associated with this interim application. I will therefore reserve the Applicant’s costs of and incidental to the Interim Defended Hearing. It will then be a matter for the Trial Judge to hear any submissions the Applicant may wish to make in relation to costs of this interim application.
50 I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of Judge C. E. Kirton QC.
Associate:
Dated: 17 November 2020
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Injunction
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Costs
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Jurisdiction
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Procedural Fairness
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