Marini & Marini
[2024] FedCFamC1F 832
•3 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Marini & Marini [2024] FedCFamC1F 832
File number: SYC 8211 of 2022 Judgment of: CAMPTON J Date of judgment: 3 December 2024 Catchwords: FAMILY LAW – ENFORCEMENT – Where the wife seeks to enforce consent orders made pursuant to s 79 of the Family Law Act 1975 (Cth) – Where the husband entered a loan with the second respondent secured by a mortgage over a real property occupied by the wife – Where the orders provide for the husband to pay instalments due on the mortgage loan for a specified period and to thereafter discharge the loan and mortgage and transfer the unencumbered real property to the wife – Where the husband is in default of his obligations pursuant to the loan and mortgage security – Where the second respondent mortgagee seeks possession of the subject property occupied by the wife and has commenced proceedings to recover possession of the property in the Supreme Court of New South Wales – Where the husband contends that he has filed a petition for his bankruptcy – Where the wife seeks to be appointed as trustee for the husband to sale of the real property, acknowledging the second respondent mortgagee has priority to the proceeds of sale – Where the second respondent resists the making of orders by way of the wife enforcing the consent orders contending that they affects the rights of the second respondent mortgagee and that they impermissibly expand the scope of the matrimonial rights – Where the gravamen of the orders sought by the wife do not prevent the second respondent mortgagee from pursuing its Supreme Court litigation – Where the concessions of the wife by way of a time frame to dispose of the real property provide an expeditious process to sell the subject property with safeguards providing solace to the second respondent mortgagee than a time frame that could be achieved by the NSW Supreme Court litigation – Consideration of prejudice – Some orders made broadly as sought by the wife and enforcement adjourned – Costs reserved. Legislation: Family Law Act 1975 (Cth) ss 79, 105, 109A
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 67
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 11.01, 11.04, 11.07
Real Property Act 1900 (NSW) s 60
Cases cited: Dovgan & Dovgan [2021] FamCA 306
Ramsay & Ramsay (1983) FLC 91-301; [1982] FamCA 42
Division: Division 1 First Instance Number of paragraphs: 40 Date of last submission/s: 26 November 2024 Date of hearing: 15 November 2024 Place: Sydney Solicitor for the Applicant: Mr Bistolaridis, Coleman Greig Lawyers The First Respondent: Did not appear Counsel for the Second Respondent: Ms Doyle-Markwick Solicitor for the Second Respondent: Holman Fenwick Willan ORDERS
SYC 8211 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MARINI
Applicant
AND: MR MARINI
First Respondent
B PTY LTD
Second Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
3 DECEMBER 2024
THE COURT ORDERS THAT:
1.By way of enforcement of the orders made pursuant to s 79 of the Family Law Act 1975 (Cth) on 25 November 2022:
(a)Ms Marini (“the wife”) is appointed as Mr Marini’s (“the husband”) trustee for sale of the property at C Street, City D (“the City D property”); provided that:
(b)Such appointment as trustee for sale will terminate on 24 January 2025 in the event contracts for sale of the City D property have not exchanged by that date.
2.The wife shall do all such things as are necessary to vacate and cease her occupation of the City D property on or before 10 January 2025, surrendering possession of that property to B Pty Ltd (“B Pty Ltd”).
3.As and from 4.00 pm on 10 January 2025, an order is made that B Pty Ltd have the possession of the City D property.
4.In the event the wife fails to vacate the City D property by 4.00 pm on 10 January 2025, pursuant to r 11.55(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) a Warrant for Possession, authorising an enforcement officer to enter the City D property and give possession of the property to B Pty Ltd be issued forthwith. The operation of such Warrant for Possession is stayed until 4.00 pm on 24 January 2025.
5.In the event the appointment of the wife as trustee for the husband in the sale of the City D property terminates pursuant to Order 1(b), B Pty Ltd shall be appointed the trustee for both the husband and the wife for the sale of the City D property.
6.Upon completion of the sale of the City D property, the wife or B Pty Ltd shall apply the proceeds of sale as follows:
(a)In payment of the real estate agent’s commission, advertising and selling fees, and legal costs of sale;
(b)In payment to B Pty Ltd to discharge the husband’s obligations pursuant to the loan and mortgage secured over the City D property being Mortgage Number … In payment to B Pty Ltd to discharge and pay the total amount of daily interest accrued by the wife pending sale of the property;
(c)In payment to discharge all the outstanding strata levies and land and water rates;
(d)In payment of the balance remaining to the Coleman Grieg Trust Account on behalf of the husband and the wife.
7.On or before 4.00 pm on 4 December 2024 the wife shall cause a copy of these reasons for judgment and a sealed copy of these orders to be served on the husband by email at …@..., and to be sent to him by him by prepaid post.
8.Within seven days from the date of these orders, the wife is to undertake a search to ascertain whether a trustee has been appointed in the husband’s debtors petition in bankruptcy and serve upon them these orders and judgment.
9.On or before 18 December 2024, the wife is to file an affidavit as to her compliance with Order 7 and Order 8 above.
10.The wife and B Pty Ltd have liberty to apply by way of short notice to chambers for any application to vary these orders, such notice to be supported by a filed Application in a Proceeding and affidavit in support thereof.
11.The balance of the wife’s Application – Enforcement is adjourned for further case management to 9.30 am on 28 February 2025 in person. In the event of a non‑appearance by any party on that day, the enforcement application may proceed to final determination in their absence.
12.The costs of both the wife and B Pty Ltd as to the Application – Enforcement filed on 5 June 2024 and as amended on 2 August 2024 are 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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Marini & Marini has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
These reasons determine in part an Application – Enforcement filed by Ms Marini (“the wife”) on 5 June 2024, as amended on 2 August 2024, seeking the enforcement of consent orders made pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) adjusting property between she and Mr Marini (“the husband”) in the Federal Circuit and Family Court of Australia (Division 2) on 25 November 2022.
B Pty Ltd (“B Pty Ltd”) was not a party to the 2022 consent orders, being entered without notice to B Pty Ltd. It was joined as a party to the proceeding on its application at the enforcement hearing on 15 November 2024.
No appearance was made by or on behalf of the husband at the hearing on 15 November 2024. The husband sent emails to the Court on 13 and 14 November 2024 forecasting that he would not attend the hearing (Exhibits 1 and 2) and advising that he had filed a debtor’s petition for bankruptcy. There is no evidence that the husband has become a bankrupt, or that any sequestration order has been made.
BACKGROUND
In late 2019, prior to the making of the 2022 consent orders, the husband exchanged contracts to purchase a property off the plan from B Pty Ltd at C Street, City D (“the City D property”) for $2.6 million on the condition of the provision of vendor finance by way of a fixed interest only loan of $1.891 million for a period of 36 months secured by way of first registered mortgage over the City D property.
The relevant parts of 2022 consent orders to the enforcement proceeding provided:
The [City D] property
3.The Applicant shall complete the purchase of the [City D] property in accordance with the terms of the Contract for Sale, and will be:
(a)solely responsible for the payment of any and all costs associated with the completion of the purchase, including but not limited to legal costs and any further stamp duty; and
(b)entitled to rely upon the vendor finance provisions in the Contract for Sale in payment of the balance of the purchase price, and to encumber the title to the [City D] property by means of registered mortgage to the vendor.
…
5.Upon completion of the purchase of the [City D] property, and during the Vendor Finance Period:
(a) The Respondent shall have exclusive occupation of the [City D] property; and
(b)The Applicant shall be solely responsible for all outgoings in respect of the [City D] property including, but not limited to, mortgage payments, strata levies, council rates and other rates.
6.Upon the expiration of the Vendor Finance Period, the Applicant shall do all acts and things necessary to discharge any mortgage registered on the title of the [City D] property.
7.Simultaneously with his compliance with Order 8 above, the Applicant shall do all acts and things necessary to transfer to the Respondent the whole of his right, title and interest in the [City D]Property and thereafter the Respondent shall be solely responsible for all payments and outgoings in respect of the [City D]Property.
…
Cash Adjustment
12.Within 28 days of the completion of the purchase of the [City D] property, the Applicant shall pay to the Respondent, or as she directs in writing, the sum of $70,000.
13.That the Applicant pay to the Respondent the amount of $2,250,000, and for the purpose of this Order:
(a)the Applicant shall make 14 annual instalments of $150,000 to the bank account nominated by the Respondent in writing;
(b)it is noted that the first instalment is to be paid by way of two payments being:
(i) $120,000 paid on 29 July 2022; and
(ii)the husband shall pay the balance of $30,000 by no later than 30 May 2023.
(c)each subsequent instalment to be paid on or before 30 June in each year, with the final instalment to be paid on or before 30 June 2025; and
(d)the amount payable by the Applicant is to be varied on 1 July each year to such amount as shall be determined by multiplying the amount paid on the review date by the fraction N/B where N is the Consumer Price Index for Sydney (All Groups) published by the Australian Bureau of Price Statistics (CPI) in respect of the quarter year ended on the day immediately preceding the review date and B is the CPI in respect of the quarter of the year ended on the day 12 months prior to the review date for example
2023 payment = $150,000 x June 2023 CPI / June 2022 CPI
14.In the event that the Applicant fails to make one or more of the payments referred to in Order 13 on or before the relevant date for payment, interest shall accrue on the amount that remains unpaid at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules until payment of the relevant instalment is made in full.
15.In the event that any default arising from the Applicant’s failure to make an instalment payment pursuant to Order 13 is not rectified for a period of 12 months from the date upon which that instalment becomes due and payable, the balance of that instalment and all remaining instalments shall be due and payable by the Applicant within 42 days of the Respondent providing written notice of the default and a request for a lump sum payment.
…
The settlement of the acquisition of the City D property was completed by the husband in mid‑2023. The wife has had the occupation of the City D property since that time.
Between May and October 2024 B Pty Ltd issued notices to the husband identifying defaults on payments due pursuant to the mortgage, demanding payment, and, in default of payment, asserting the right to take possession of the City D property.
On 5 June 2024 the wife filed her Application – Enforcement in Division 2.
On 29 September 2024 the matter was referred to the National Assessment Team for consideration of transfer to this Court. Notation D as made that day records:
D.The [wife] is currently living in the [City D] property and is ready to immediately place the property on the market for sale. The [husband] is in agreement with the property being sold including the [wife] being appointed Trustee to conduct the sale on his behalf. [B Pty Ltd] object to the parties or either of them conducting the sale. Each day that passes the [husband] is accruing a further E$777.00 in daily default interest, as well as [B Pty Ltd] mortgage enforcement costs which is decreasing the residual from the sale available to the [wife]. The [husband] agrees to the sale of the [City D] property whether by [B Pty Ltd] or the [wife] and will sign all documentation required for the purposes of the sale and/or transfer of title with the net proceeds after payment of all outstanding associated fees and costs being transferred to the [wife]. The [wife] has signed an undertaking to [B Pty Ltd] to provide vacant possession by [late] 2024.
(Emphasis added)
The wife has engaged in negotiations with B Pty Ltd on the basis of she selling the property on behalf of the husband. The wife did not comply with her undertaking to vacate the property.
On 30 September 2024 the proceeding was transferred to this Court.
In late 2024, B Pty Ltd commenced proceedings in the Supreme Court of New South Wales seeking possession of the City D property. Notation A made on 11 November 2024 informed those proceedings to be in the preliminary stages and that B Pty Ltd was seeking substituted service upon the husband.
The wife adduced hearsay opinion evidence that the City D property will achieve in the range of $3 to $3.5 million upon sale. At the hearing of the enforcement application, B Pty Ltd submitted that the City D property will achieve in the range of $2.6 to $2.8 million. The value of the B Pty Ltd mortgage security at the date of the hearing on 15 November 2024 was $1,995,598.97 plus interest.
The wife conceded that B Pty Ltd would have priority to the proceeds of sale by way of its loan and mortgage security upon completion of the sale of the City D property. Both the wife and B Pty Ltd agreed that there is sufficient equity in the City D property to discharge B Pty Ltd’s entitlement to the proceeds of sale.
At the enforcement hearing on 15 November 2024 both the wife and B Pty Ltd agreed that the City D property needed to be sold as soon as was possible. The dispute is as to the mechanics of the sale and the wife’s continued occupation of the City D property pending that disposal. The hearing was adjourned part heard with orders made providing for the wife to file an amended minute of order sought and for she and B Pty Ltd to file written submissions. On completion of those processes, judgment was reserved to chambers.
THE COMPETING RELIEF SOUGHT
At the enforcement hearing the wife sought orders in accordance with Exhibit 3. Orders were made granting her leave to file an Amended Minute of Order (Exhibit 7). On 20 November 2024 she filed submissions, including what was identified as “refined orders”. Pursuant to those refined orders, she seeks:
1.That pursuant to Rule 11.07(a), that the Court declare the total amount owing under an obligation to pay money by the [husband] to the [wife], created by Orders 3, 5 (b) and 6 of the Orders made 25 November 2022 is:
$1,995,598.97 (plus interest accrued at a daily rate of $777.12 (calculated at 15% per annum) since 9 October 2024)
2.That pursuant to Rule 11.05, an Enforcement Order, namely, an Order for seizure and sale of real or personal property, be made in relation to the enforceable obligation declared by Order 1 above as against the property known as [C Street, City D] in the state of NSW, being the whole of the land contained in title reference/folio identifier […] (“the [City D] property”) in favour of the [wife].
3.That pursuant to Rule 11.26, the [wife]be appointed Trustee for sale of the [City D] property and, to this end:
3.1That the [wife] be and hereby is appointed as trustee of the sale of the [husband’s] interest in the [City D] property being his interest as Registered Proprietor of an estate in fee simple;
3.2That the [wife]shall do all acts and things and sign all documents necessary to cause the [City D] property to be sold by [early] 2025 at the best price reasonably obtainable.
4.That the [wife] vacate the [City D] property by 10 January 2025 (and by this Order, an order for possession is granted to [B Pty Ltd] to take effect from 4pm on 10 January 2025).
5.That pursuant to Rule 11.56, a warrant for possession be issued in favour of [B Pty Ltd] in relation to the [City D] property with said warrant stayed to 4pm on 24 January 2025.
6.That should the [wife] fail to have exchanged contracts with a purchaser in relation to the [City D] property by 4pm on 24 January 2025, [B Pty Ltd] shall be appointed Trustee for sale in her stead and by default.
7.That upon completion of the sale, the proceeds of sale shall be distributed as follows:
7.1In payment of the Real Estate Agent’s commission, advertising and selling fees, legal costs of sale;
7.2In payment to [B Pty Ltd] to discharge the Mortgage secured over the [City D] property being Mortgage Number […], including any arrears as at that date;
7.3In payment to [B Pty Ltd] to discharge the total amount of daily interest accrued by the Wife pending sale of the property;
7.4 In payment to discharge all the outstanding rates;
7.5A reimbursement to the Wife for any costs incurred by her in advertising expenses;
7.6In payment for the Wife’s outstanding legal costs of and incidental to these proceedings into Coleman Greig Office Account (pursuant to signed authority dated 17 October 2024);
7.7 The balance then remaining to the Coleman Grieg Trust Account.
8.That the [wife] and [B Pty Ltd] to do all acts and things necessary to engage a valuer to be appointed for the valuation of the [City D] property to obtain the minimal sale price of the property within 14 days of these Orders and to this end:
8.1The [wife] propose the names of three (3) real estate valuers (complete with their CV and Costs Schedule) to [B Pty Ltd], together with a draft letter of instruction to the valuer, within 7 days of these Orders;
8.2[B Pty Ltd] elect one of the three (3) real estate valuers proposed by the [wife] to undertake the valuation within seven (7) days;
8.3The parties to execute and forward a letter of instruction to the valuer elected pursuant to these orders forthwith [B Pty Ltd’s] election.
B Pty Ltd filed written submissions on 26 November 2024. B Pty Ltd identified that the wife had not obtained leave to seek orders in terms of the revised amended minute attached to her submissions as filed. That said, B Pty Ltd did not identify any prejudice in engaging with the relief sought in the revised amended minute. In so far as is necessary, the wife is granted leave to seek relief in terms of the revised amended minute of order attached to her submissions filed on 20 November 2024. B Pty Ltd seeks that the orders sought by the wife be refused. It does not seek any other relief in this forum.
THE LAW
Section 105 of the Act empowers the Court to enforce its decrees. To enforce or refuse to enforce an order is discretionary (Ramsay & Ramsay (1983) FLC 91-301). The considerations in the exercise of that extremely wide discretion were not identified by either party in submissions.
Section 109A of the Act specifically empowers the Court to make rules of the Court in respect of enforcement. Rule 11.07(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provides:
11.07 General enforcement powers of court
The court may make an order:
(a) declaring the total amount owing under an obligation; or
…
(d)for enforcement of an obligation to pay money (see rule 11.05); or
(e) in aid of the enforcement of an obligation; or
(f)to prevent the dissipation or wasting of property; …
CONSIDERATION
I find that the wife has an interest in the City D property pursuant to the s 79 consent orders enforceable pursuant to the Act and Rules (r 11.01 and r 11.04).
The declaration sought by the wife as to the amount “owing under an obligation to pay money” by the husband to her pursuant to Orders 3, 5(b) and 6 of the orders made on 25 November 2022 will not be made at this time because:
(a)The husband’s current obligation to pay money pursuant to the specified orders is to pay periodic sums relating to the City D property. Notwithstanding those sums are in arrears, the requirement for the husband to discharge any mortgage obligation secured on the City D property is not triggered, on a strict reading of the orders, until the “expiration of the vendor finance period”. Submissions were not made by the wife or B Pty Ltd as to whether the husband’s failure to comply with the terms of the B Pty Ltd loan and mortgage can be properly considered to be a trigger event for the “expiration of the vendor finance period”.
(b)The value of the sum payable by the husband pursuant to Orders 3, 5(b), and 6 will crystallise on the completion of the sale of the City D property.
(c)Added to that value, when quantified, will be the crystalised value of the obligation of the husband to pay monies to the wife pursuant to Orders 12–15 inclusive as made on 25 November 2022. Hence the value payable by the husband will be a single sum that includes interest to the date of the declaration.
(d)The wife did not identify any prejudice should the declaration sought not be made.
B Pty Ltd opposes any orders by way of enforcement appointing the wife trustee for sale of the City D property or prescribing any time frame for the wife to vacate the property, because “the proposed orders affect the rights of [B Pty Ltd]”.
B Pty Ltd’s written submissions record:
6. The Husband is the registered proprietor of the Property, subject to a registered mortgage to [B Pty Ltd] (Mortgage). The Mortgage secures amounts owing by the Husband to [B Pty Ltd] under a credit contract. Under the Credit Contract, [B Pty Ltd] advanced a loan of $1,891,000 to the Husband, for the purchase of the Property, the interest on which was payable in monthly instalments over three years, following which the principal was repayable. The Mortgage provided that the Husband would be in ‘default’ if (inter alia) he did not pay ‘any part of the Monies hereby secured when it is due’, which Monies were defined to include monies payable under the Credit Contract. The Mortgage also provided that, if the Husband was in default, and [B Pty Ltd] served on him a notice of default with which he did not comply within the period specified, [B Pty Ltd] could (inter alia) take possession of the property and eject any occupants from it, and sell the property, using any proceeds to repay the monies secured. Upon default by a mortgagor, a mortgagee such as [B Pty Ltd] also has statutory rights, including to bring proceedings for possession of the mortgaged land (Real Property Act 1900 (NSW), s 60(c)), and to sell the mortgaged property (under s 109 of the Conveyancing Act 1919 (NSW), subject to the provisions of ss 57, 58, and 58A of the Real Property Act 1900 (NSW)).
(Citations omitted)
The gravamen of B Pty Ltd’s contention is that if the wife achieves her orders sought as against the husband, they will “prohibit [B Pty Ltd] from exercising” its rights, including its statutory rights pursuant to s 60(c) of the Real Property Act 1900 (NSW), until 10 or 24 January 2025 and provide the wife with rights of possession and sale in the meantime so as to impermissible expand the scope of the matrimonial rights in the City D property.
I do not accept that submission because:
(a)The wife seeks to be appointed as the husband’s trustee for sale, not B Pty Ltd’s. In her position as a trustee, she will be subject to the same obligations as imposed on the by the mortgage security and any orders achieved by B Pty Ltd in the Supreme Court proceedings; and
(b)B Pty Ltd is not precluded from progressing its Supreme Court litigation as it considers appropriate.
The wife contended that there would be no prejudice to B Pty Ltd if she is appointed as the husband’s trustee for the sale of the City D property because the value of the City D property has sufficient equity to discharge B Pty Ltd’s entitlement to the sale proceeds. Further, B Pty Ltd is charging an interest rate of $777.12 per day on the funds owed to them by the husband and “in this sense, [B Pty Ltd] is, and continues to be, remunerated for their loss”. I accept that submission.
The wife seeks to maximise the sale price achieved on the City D property. Implicitly, she apprehends that B Pty Ltd is focused on securing a sale price sufficient to discharge the monies owed to them by way of the loan to the husband. There is no evidence to support that concern.
The evidence suggest that B Pty Ltd has not commenced its “rigorous marketing campaign [of the [City D] property] from 28 September 2024” (Exhibit 6, p.87), and has been less than expeditious in securing possession of the City D property by way of the Supreme Court litigation.
B Pty Ltd did not make a submission that the husband could not, if motivated at the current time, market the property for sale expeditiously in circumstances where B Pty Ltd has not done so, to mitigate the value payable to B Pty Ltd pursuant to its loan and security and to maximise the equity to be achieved and adjusted between the husband and the wife pursuant to the s 79 orders.
CONCLUSION
The wife’s relief to be appointed trustee for sale
In the event the wife is appointed the husband’s trustee for the sale of the City D property, she does not achieve any greater control over it than the husband would have as the owner of the property at law. B Pty Ltd did not articulate how this circumstance would prejudice their interests. There is no issue that the funds owing to them will be achieved in priority to the wife upon the sale of the property, including interest will accruing at a rate of $777.12 per day, while the terms of their mortgage security provides them with an indemnity as to recovering their costs seeking to enforce the security from the proceeds of sale.
B Pty Ltd has not adduced any evidence as to its proposal to market the City D property, or the foundations for its appraisal as to value. The wife has put into evidence appraisals from local real estate agents to forthwith list and market the property for sale. She in a position to immediately proceed with the proposed disposal as trustee for the husband. I accept she is motivated to achieve the best reasonable price for the property in an effort to maximise her potential entitlement while being cognisant of the rapidly increasing value of the costs of holding the property. There is no evidence that she will not appropriately discharge her function and obligations as a trustee.
In the exercise of the broad enforcement discretion, an order will be made appointing the wife the husband’s trustee for sale of the City D property confined to the specified time she sought in her refined orders to conclude on 24 January 2025. In the event she is unable to secure an exchange of contracts for the sale of the City D property by that time, consistent with her relief sought, B Pty Ltd shall be appointed trustee for the sale of the property. In the event B Pty Ltd will not accept that appointment, the matter can be relisted to discharge that order. So as to ensure an absence of prejudice to B Pty Ltd, it will have the capacity to either make an application to this forum to discharge these interlocutory orders to facilitate the sale if they are unsatisfied with the wife’s performance in her capacity as the husband’s trustee for sale from the date of these orders until 24 January 2025. In the alternative they can progress the Supreme Court proceedings
The wife in her capacity as trustee for sale will determine the identity of the listing agent, the sale price, and the exchange price. How she exercises that fiduciary obligation is a matter for her, acknowledging that the B Pty Ltd mortgage will be discharged in priority. Orders will not be made as to the distribution of the proceeds of sale except as to paying selling costs, discharging the B Pty Ltd liability, and adjusting for statutory charges on the property in circumstances where a trustee for the husband in bankruptcy may have been appointed and that trustee may wish to be heard, where the value of the wife’s interest pursuant to the s 79 orders in those proceeds of sale have not yet crystallised, and where the quantum of any costs incurred by the wife in her capacity as the husband’s trustee for sale similarly have not been quantified. The balance of proceeds of the sale will thereafter be deposited by the wife in her capacity as trustee to her solicitor’s trust account pending further determination of her Application – Enforcement.
Possession pending sale
The wife is in possession of the City D property between she and the husband pursuant to Order 5(a) made on 25 November 2022.
B Pty Ltd submitted that allowing the wife to remain in possession “would be to impermissibly expand the scope the matrimonial rights” in the City D property, citing Dovgan & Dovgan [2021] FamCA 306. I do not accept that submission. The Act is not being applied to “deprive a third party of its rights simply to benefit a party to the marriage”. For the reasons identified above, and as outlined, B Pty Ltd are not being deprived of its rights. There is no injunction preventing B Pty Ltd from proceeding with their NSW Supreme Court proceedings if they consider that to be expedient, so as to obtain possession of the City D property.
The wife has not explained why she gave a previous undertaking to vacate the property and has not done so. I do not accept B Pty Ltd’s submission that the wife is attempting to delay B Pty Ltd taking possession of the property. The wife has proposed an order that she vacate the City D property by 10 January 2025, conceding to B Pty Ltd possession of the property in her capacity as the husband’s trustee and surrendering her rights pursuant to Order 5(a) made on 25 November 2022, on 10 January 2025. The wife has additionally offered further security to for B Pty Ltd to obtain possession of the property by way of her proposal for a warrant for possession issuing in favour of B Pty Ltd, with the operation of the warrant to be stayed until 4.00 pm on 24 January 2025, being the time the wife’s capacity as trustee would terminate.
There is no evidence that the Supreme Court litigation will progress in any meaningful way over the Christmas period to secure in favour of B Pty Ltd the possession of the property as against the current occupier, the wife. One solution would be not to make any orders as to occupation or possession and let the matter progress in the Supreme Court, however as the wife volunteered to vacate the property and surrender any right she may have for occupation, whether by way of order or otherwise.
In circumstances where B Pty Ltd’s objectives can be achieved expeditiously by orders being made in this forum, and its capacity to progress the Supreme Court litigation is not restrained, in compliance with s 67 of the Federal Circuit and Family Court of Australia Act 2021 (Cth), it is proper that, to the extent possible, to quell the controversy as to this issue. The concessions made by way of the wife as to the timeframes to dispose of the property expeditiously, with safeguards providing a fixed time pathway for the second respondent to secure possession of the property that, on the evidence appears superior to that available to B Pty Ltd in the Supreme Court, tips the balance such that orders will be made as broadly sought by the wife as modified by way of these reasons.
Additionally, as identified earlier in these reasons, the wife and B Pty Ltd will have a liberty to apply to vary or discharge these orders should they have sufficient foundation to do so.
For all of the above reasons, I make the orders as set out herein.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 3 December 2024
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