Markell and Markell

[2019] FamCA 141

FAMILY COURT OF AUSTRALIA

MARKELL & MARKELL [2019] FamCA 141

FAMILY LAW – PROPERTY – Where final property adjustment orders were made between the parties by consent – Where there has been default by both the parties in carrying out the obligations imposed upon them by the orders – Where both parties seek to vary the order – Where it is just and equitable to vary the orders in the form requested by the Applicant.

Family Law Act 1975 (Cth)

APPLICANT: Ms Markell

RESPONDENT: Mr Markell

FILE NUMBER: BRC 6823 of 2012

DATE DELIVERED: 14 March 2019

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 22 February 2019

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Evans
Evans & Company
Family Lawyers

THE RESPONDENT:

Self-Represented

(appearing by telephone)

Orders

1. That the Orders of the Court made on 7 August 2018 be amended pursuant to s 79A(1)(c) of the Family Law Act 1975 (Cth) and that the terms of the amendments are as set out in paragraphs 2-7 inclusive below.

2. That paragraph 1.2 of the Orders be amended as follows:

   a.Where the words “Within 6 months of the date of these Orders” appear, amend those words to read, “Within 3 months of the Husband having remitted to the Wife, the sums due by the Orders pursuant to paragraphs 1.5(a)-(c) inclusive, and refinanced or paid out the debts referred to in paragraphs 1.5(d)-(e) inclusive hereof”.

3. That paragraph 1.5 of the Orders be deleted and in its place, the following paragraph be substituted:

   “1.5.The Husband shall retain, free from any and all claims of the Wife, the property at I Street, G Town (“the I Street property”), PROVIDED THAT within thirty (30) days of the date of this Amending Order the Husband shall first have:

   a.   Paid to the Wife via her Solicitors' trust account, the sum of $150,000 due by paragraph 1.2(b) hereof;

   b.   Paid to the Wife via her Solicitors' trust account, any child support payments which are then due or in arrears by operation of these Orders;

   c.   Paid to the Wife via her Solicitors' trust account, any adult child maintenance payments which are then due or in arrears by operation of these Orders;

   d.   Paid or otherwise refinanced into his sole name, and thereafter indemnify and keep the Wife indemnified for, the following debts to the Westpac Banking Corporation:

   i.Such sum as is owed to the bank under the mortgage encumbering the former matrimonial home property under account number …96 in excess of $600,000;

   ii.Such sum as is owed to the bank under the mortgage encumbering the former matrimonial home property under account number …93; and

   iii.Such sum as is owed to the bank under the line of credit account, supported by mortgage security encumbering the former matrimonial home property under account number …10;

   e.   Paid the sum of $43,710.30 to Cooper Grace Ward Lawyers, the costs of his legal representation for the trial in this matter;

   AND FURTHER PROVIDED THAT in the event that the Husband complies with this Order, then the Wife shall deliver to the Husband or his agent, in return for the payments referred to and upon being supplied with evidence of the payments or refinance of the Westpac Banking Corporation debts referred to, the documents necessary to release or withdraw her caveat lodged against the title to the I Street property.”

4. That paragraph 1.6 of the Orders be deleted and in its place, the following paragraph be substituted:

   “1.6. Upon the expiration of thirty (30) days from the date of this Amending Order, in the event that the Husband has not complied with the obligations in paragraph 1.5 (and all of its sub-paragraphs) in any respect, the I Street property shall forthwith be sold on the following terms and conditions:

   a.   That the Husband shall forthwith do all acts and things as are necessary, including but not limited to signing documents, to cause the sale of the I Street property;

   b.   The Husband shall, within seven (7) days, appoint a real estate agent based in the G Town area to sell the property and advise the Wife of the person appointed PROVIDED THAT in the event that the Husband does not appoint an agent within that period and provide the advice of appointment to the Wife by her solicitors, then Mr Q, the Principal of T Group, G Town or his delegate shall conduct the sale of the I Street property;

   c.   The Husband shall, within seven (7) days, appoint a conveyancing solicitor to act in the sale and advise the Wife of the person appointed PROVIDED THAT in the event that the Husband does not appoint such solicitor within that period and provide the advice of the appointment to the Wife by her solicitors, then V Lawyers of R Street, G Town are appointed as the conveyancing solicitors in relation to the sale of the I Street property;

   d.   The property shall be listed for sale by public auction, which auction shall be arranged to occur by no later than thirty (30) days after the appointment of the real estate agent by this Order;

   e.   The auctioneer shall be chosen by the principal of the real estate agent appointed by this Order;

   f.   The reserve price for the property shall be determined by the auctioneer who has been chosen by the real estate agent appointed by this Order PROVIDED THAT if there exists any dispute whether by the Husband or the Wife about the reserve price determined by the auctioneer, then the dispute shall be resolved by obtaining a valuation opinion from S Group, City U and setting the reserve price at the valuation determined by the valuer less 10%;

   g.   The Husband shall cooperate, or given his incarceration, shall cause his agents to cooperate in every way with the real estate agent and/or auctioneer in relation to the sale and auction of the property including making a key available for allowing inspection of the property at the times requested by the agent and/or auctioneer and providing notices to any tenant occupying the property so as to facilitate inspection at those times;

   h.   The Wife shall provide notice of the making of these Orders and the arrangements for the auction to the Public Trustee of Queensland;

   i.    The Husband shall, in conjunction with and on notice to the Public Trustee of Queensland appoint an agent to attend the auction to sign any contract on his behalf in the event that the reserve price is met;

   j.    In order to facilitate the sale of the property, the Wife shall cooperate to remove or withdraw the caveat she has against the title to the I Street property in return for the payments reserved to her by paragraph 1.7 of these Orders;

   k.   In the event that the property is not so sold by auction or by private negotiation for the reserve price, within fourteen (14) days after the auction then the Husband and Wife are at liberty to apply for further Orders with respect to the sale upon the giving of fourteen (14) days’ written notice to the other party.”

5. That paragraph 1.7 of the Orders be deleted and in its place, the following paragraph be substituted:

   “1.7. The proceeds from the sale of the I Street property will be applied in the following manner and priority:

   a.   To pay the costs of sale;

   b.   To pay the following debts to the Westpac Banking Corporation:

   i.Such sum as is owed to the bank under the mortgage encumbering the former matrimonial home property under account number …96 in excess of $600,000;

   ii.Such sum as is owed to the bank under the mortgage encumbering the former matrimonial home property under account number …93; and

   iii.Such sum as is owed to the bank under the line of credit account, supported by mortgage security encumbering the former matrimonial home property under account number …10;

   c. To pay to the Wife via her Solicitors’ trust account, the sum of $150,000 due by paragraph 1.2(b) hereof plus any interest applicable to the period between 7 February 2019 and the date of payment, at the rate prescribed by the Family Law Rules 2004 (Cth);

   d.   To pay to the Wife via her Solicitors' trust account, any child support payments which are then due or in arrears by operation of these Orders;

   e.   To pay to the Wife via her Solicitors' trust account, any adult child maintenance payments which are then due or in arrears by operation of these Orders;

   f. To pay the sum of $60,000 less any amounts already paid by reason of sub-paragraphs (d) and (e) hereof, to the trust account of the Wife's Solicitors for the purposes of acting as security for the payment of the liabilities for child support and adult child maintenance as and when due, by these Orders PROVIDED THAT upon satisfaction of the terms of the child support and adult child maintenance Orders, any balance then remaining shall be paid to the Public Trustee of Queensland as manager of the Husband's estate under Part 7 of the Public Trustee Act 1978 (Qld) or as he may direct;

   g.   To pay the sum of $43,710.30 to Cooper Grace Ward Lawyers; and

   h. To otherwise pay the Public Trustee of Queensland as manager of the Husband's estate under Part 7 of the Public Trustee Act 1978 (Qld) or as he may direct, the balance.”

6. That a new Order numbered 1.29 be inserted as follows:

   “That the injunction pronounced by the Court on 22 February 2019, be discharged, upon the making of the payments in compliance with paragraph 1.5 or otherwise upon the making of the payments at the completion of the sale of the I Street property.”

7. That a new Order numbered 1.30 be inserted as follows:

   “That the Wife is authorised by force of this Order, to make requests on behalf of both parties and to receive, and thereafter share information with the Husband and the Public Trustee of Queensland, in relation to the following:

   a.The preparation and execution of any instructions to the mortgagee in relation to the release of mortgage documents in relation to the former matrimonial home property;

   b.The provision of mortgage/loan bank statements and payout figures in relation to any encumbrances attaching to the former matrimonial home; and

   c.The booking of settlements.”

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Markell & Markell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 6823 of 2012

Ms Markell

Applicant

And

Mr Markell

Respondent

REASONS FOR JUDGMENT

1. On 7 August 2018, the parties to these property adjustment proceedings asked the Court to make final Orders in accordance with a Minute of Order agreed upon by them just prior to the commencement of a trial that had been pending in this Court for years.

2. Orders were made in the terms they had agreed upon. Each party was legally represented by very experienced family lawyers. The Minute of Proposed Order handed to the Court, which the Court made into an Order, was lengthy and had clearly taken some careful drafting.

3. The Order provided, relevantly, for the transfer by the husband of his interest in the former matrimonial home to the wife subject to a mortgage debt that was to be limited to no more than $600,000 and the husband was to pay the wife an additional $150,000.  The wife was to refinance that single encumbrance into her sole name, thus releasing the husband from any liability pertaining to that property or secured by it. If the wife could not achieve the refinancing of that significant debt within six months the property was to be sold with that single liability to be paid out and the balance sale proceeds to be paid to the wife.

4. At the same time, the husband was to retain a second property at G Town as his property and was to take steps to ensure (by refinancing) that debts to the Westpac Banking Corporation on two different loans were from that time on secured by that property, if not otherwise paid out. At the same time, he was to pay the wife that sum of $150,000 (presumably to be borrowed and secured by mortgage over that G Town property). Save for a further borrowing by him of $25,000 to pay his legal costs, the husband was expressly restrained from further borrowings other than such amounts as necessary to pay the wife the sum of $150,000, some child support payments the Orders also provided for, and some adult child maintenance payments the Orders also provided for. Only if all of those amounts were paid to his solicitors and the wife or her solicitors’ trust account could the husband borrow any further funds.

5. The Order also provided that the G Town property was to be sold if the husband could not pay the wife the sum of $150,000 and meet the balance of his obligations within six months. The Order provided for how the proceeds of sale of the G Town property were to be disbursed in the event of a sale.

6. The six month deadline expired without the husband or the wife having discharged their obligations pursuant to the Order they consented to.

7. The wife, apparently unable to refinance, particularly without the husband having paid her the sum of $150,000 and also without having refinanced the debts that were to remain his responsibility, determined to sell the former matrimonial home. She considered, with some justification, that it would be better to be able to market the property registered in her sole name. She made an application to the Court for an order that the husband transfer his interest in the property to her so that she could sell it registered in her sole name. She also sought orders for the sale of the G Town property as the husband had seemingly taken no steps to bring about its sale.

8. In the lead-up to the hearing of the wife’s application, the husband agreed to sign a transfer of his interest in the formal matrimonial home to the wife and he did that. At the hearing of the application, the husband, who is serving a very long prison sentence, informed the Court that he still wishes to refinance debt as provided for in the final Orders and to retain the G Town property if he possibly can. He gave some explanation as to why he believes he has not been able to do that by now though the six months has recently expired.

9. The wife’s solicitor told the Court that the wife was willing to give the husband a little more opportunity to organise a refinance if he can. It was proposed the Court give the parties a few more days to put drafts of orders that each proposes be made before the Court determines which orders to make.

10. The husband had said in an affidavit that he filed that he had been wanting to access one of the lines of credit secured by mortgage (registered over the former matrimonial home and not the G Town property) for some purpose purportedly connected to his refinance application, but that a “freeze” on that account that the wife’s solicitor had directed the bank to make some time ago was hampering that. The husband told the Court that he believed the first paragraph of the 7 August 2018 consent Order required the discharge of the “freeze” imposed by the wife’s solicitor. 

11. That paragraph provides:

    That all previous financial orders be discharged.

12. The so called “freeze’ was not contained in a previous order. It was something between the bank and the parties. The husband’s belief was incorrect.

13. The Court was told the bank had suggested it would lift the “freeze” that day if the matter was not dealt with in further orders.

14. The wife opposed the lifting of the “freeze” given the particular limitations imposed on the husband’s refinancing by the final consent Order and the fact that the particular line of credit he was wanting to be able to access was secured by mortgage over the property that the wife was to retain or sell.

15. On the day of the hearing, whilst I reserved my determination of the matters the subject of the application before the Court, I made an Order restraining the husband from further borrowings on that particular line of credit until further order or agreement from the wife. The husband was unable to persuade me that he should have unrestrained access to that line of credit, without the wife’s agreement, pending the finalisation of the matters between them. I considered it necessary to issue the Order restraining him.

16. Subsequently, each of the parties has filed a draft of the orders they respectively want the Court to now make.

17. For the wife, it is proposed that the final Order made on 7 August 2018 be amended pursuant to ss 79A(1)(b) and (c) of the Family Law Act 1975 (Cth) in certain terms.

18. Those subsections provide:

    Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:

    …

    (b)in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or

    (c)a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order…

    …

    the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.

19. I am not persuaded that subsection (b) applies. The Order provided for certain things to be done within six months from the date of the Order and then provided for sale of the properties if those things were not done. Those things were not done within the six months. Nevertheless, it is not “impracticable” for the default sale provisions of the Order now to be carried out.

20. However, there has been default by the parties in carrying out obligations imposed upon them by the Order. The husband has not refinanced and paid the wife $150,000 within the six month period. Similarly, the wife has not been able to refinance so as to retain the former matrimonial home. However, the husband still wants some time to arrange a refinance if he can. The wife does not oppose that and is prepared to give him another 30 days to do that but with sale provisions then to apply if he has not been able to arrange the refinance. I am quite satisfied that in the circumstances that have arisen as a result of the defaults it is just and equitable to vary the final Order made. Subsection (c) of s 79A(1) applies, in my judgment.

21. In so far as the wife was given six months to refinance the former matrimonial home that part of the Order will be amended so as to replace the six month period with a period of three months commencing when the husband has paid the wife the money he is to pay her pursuant to the final Order and also refinanced or paid out the debts the final Order left him with. That way, the wife might still have a chance to organise refinancing of the significant debt that she will be left with and to keep the property if she can.

22. That part of the Order giving the husband six months to refinance certain debts and have them secured on the G Town property as well as paying the wife the sum of $150,000 he is to pay her as well as any child support and adult child maintenance liabilities which are then due will be amended so that he has another 30 days to achieve that from the date of the amending Order with the default sale clauses to be operable after that. That is all the additional time the husband himself asks for in his proposed amending Order, as well. The husband’s obligation to pay his lawyers who represented him for the trial will also be formally included in the amending Order as something to be paid by him within that 30 day period to avoid the default sale provisions becoming operative. Those lawyers have advised that he owes them $43,710.30. The amending Order will also oblige the wife to deliver to the husband documents necessary to cause the caveat she lodged on the title to the G Town property to be released on the husband meeting his obligations within that 30 day period.

1. The amending Order will provide a new default clause providing for the sale of the G Town property by the husband by public auction within 30 days of the happening of default with the husband to have control of that process but with clauses built in providing for alternative processes in the event of further default by the husband. I am completely satisfied that these default clauses and the requirement for auction sale within that further 30 day period are appropriate, just and equitable in all the circumstances, particularly having regard to the real concerns that the husband may act to delay and defeat the sale process and to continually re-engage the wife in the litigation process, thus causing her further costs. As he is incarcerated until sometime in the 2030s, this litigation against his ex-wife is something that clearly occupies much of his energy and attention. I am not satisfied that he is motivated to finalise it as soon as it can possibly be finalised. The interests of the wife and their children (some of whom are now young adults) will be best served by achieving that finality as soon as possible.

2. I am satisfied that the terms of the amending Order proposed on behalf of the wife are all appropriate, just and equitable, and I will make them. In addition, I will include express provision for the husband to pay his lawyers what he owes them as well. The Orders I will make are the Orders that are set out at the commencement of these written reasons.

3. The husband, in his proposed orders, again seeks to have the “freeze” on the parties’ Westpac Banking Corporation accounts lifted or removed. He seeks the condition “on the proviso that both parties shall not further encumber either property” to be added to it.

4. I am not satisfied that he will not draw against one of those lines of credit or loan accounts and that such further drawings would not increase debt that is, at the moment, solely secured against the former matrimonial home. I will not make an amending Order that permits him to do that without the wife’s agreement.

5. The husband’s proposed draft orders then seek significant changes to the substance of the August 2018 final Orders that he consented to when legally represented. As I understand his proposed amendments, he seeks amending orders that cause the wife to have to retain debt not just limited to $600,000 but rather limited to $950,000 by having her take two loans, including one that the August 2018 Order required him to take and be responsible for. He also seeks amending orders that reduce the amount he is to pay her from $150,000 to $100,000.

6. Having read the husband’s evidence and his written submissions, I do not understand his arguments as to the reasons why the Court would so significantly amend his obligations pursuant to the original final Order. In particular, I do not even comprehend the basis upon which the Court would now increase the debt the wife is to retain responsibility for by another $350,000 at the same time as reducing the cash that he is to pay her by $50,000, representing a $400,000 net reduction in the amount the wife is to receive from orders the husband consented to only seven months ago and that I considered at the time were “just and equitable”.

7. The husband asserts that the “spirit in which the consent orders were negotiated” requires amendment that shifts the liability for an extra $350,000 of debt to the wife, as that liability is actually currently secured by mortgage over the former matrimonial home.  Doing the best I can, I interpret that to be an argument that the debt should be retained by the party who retains or sells the property that it actually encumbers by registered mortgage security.  Even if the wife and her legal representatives mistakenly thought that debt was encumbered by mortgage over the G Town property (which I cannot say I am satisfied of, in any event), the consent Order plainly requires that debt (Account No. …93) to be taken by the husband along with the other debt (Account No. …10) and secured, if necessary, against the G Town property if he was to retain it, or to be paid out of its sale proceeds if he could not retain it.  The husband has failed to convince me that the Order meant something different to that or that they ought to be amended now to result in something different to that.

8. The husband has made some other assertions that the wife did not frankly declare social security benefits she was getting at the time of the final consent Order, some money that she was receiving from her father at the time and a small amount of money he said she had in a bank account at the time. Even if that were true (and I can simply make no findings of fact about that), it would not in any way persuade me that there has been a miscarriage of justice that would require me to vary or set aside the order in the manner the husband proposes.

9. The husband also proposes that an amending order be made requiring the wife to remove the caveat she has lodged on the title of the G Town property within three working days of the husband notifying her solicitors that he has obtained “approval of finance to maintain the property” at G Town “and make any due payments pursuant to the Orders”.

10. With respect to the husband who has always asserted that he has a working knowledge of property and real estate sales and transactions, such a proposal demonstrates a fundamental lack of understanding as to how the settlements of conveyancing and financing transactions are finalised. No caveator competently advised in circumstances like this could be expected to agree just to remove a caveat protecting an interest in real property on the advice of the caveatee that they have obtained approval for financing that will enable them to pay out the caveator’s interest at some point in the future. The husband obviously does not appreciate that a prospective financier would understand that the usual practice is for a release of the caveat in registrable form to be handed to them at settlement in return for the payment to the caveator of the monies the caveat has been lodged to secure.

11. I will not make that order. Clearly, the amending Order that is proposed by the wife, that I will make, obliges the wife to hand over the release of caveat in registrable form in return for payment to her of the amounts the husband is obliged to pay her pursuant to the Order. If that does not happen pursuant to a refinancing and a retention of the property by the husband, then at the settlement of a sale of the G Town property the purchaser will get that release in registrable form in return for the wife being paid the money the husband is obliged to pay her.

12. The husband also proposed deletion from the August Order of a paragraph relating to adult child maintenance obligations that he agreed to then. I will not delete that paragraph in the determination of this application. The husband should take his own advice on what he must do if he wants that paragraph to be amended or discharged. No such application, on notice to the wife, was properly before the Court on this occasion.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 14 March 2019.

Associate: 

Date:  14 March 2019