Martin and Buller

[2016] FamCA 165

FAMILY COURT OF AUSTRALIA

MARTIN & BULLER [2016] FamCA 165

FAMILY LAW – PROPERTY – INTERIM – application for the sale of real property in which the husband lives – where the husband has failed to particularise what property orders he contends are just and equitable – where the husband has repeatedly failed to meet repayments of a loan secured over that real property – where there is no evidence that the husband has the financial capacity to meet ongoing repayments – where the property is to be sold – where the wife seeks sole occupation of the property pending sale – where she does not currently reside at the property – where an order for sole use and occupation is not granted.

APPLICANT: Ms Martin

RESPONDENT: Mr Buller

FILE NUMBER:   BRC 8647 of 2014

DATE DELIVERED:  18 March 2016

PLACE DELIVERED:  Brisbane

PLACE HEARD:  Brisbane

JUDGMENT OF:  Hogan J

HEARING DATE:  14 March 2016

REPRESENTATION

SOLICITOR FOR THE APPLICANT:  Ms Turnbull
Fox Taylor Mildwaters Lawyers

RESPONDENT: In person

Orders

IT IS ORDERED BY WAY OF INTERIM ORDER THAT

1. The Applicant and the Respondent do all acts and things and sign all necessary documents to effect the sale of the property at I Street, J Town in the State of Queensland, more particularly described as Lot … on RP …, County of K, Parish of L, Title Reference … (“the property”) and for that purpose the following shall apply:

   (a)the property shall be listed for sale by private treaty with such real estate agent as is agreed between the parties and, failing agreement within 14 days from the date of this Order, the real estate agent shall be as nominated by the then President of the Real Estate Institute of Queensland at the request of the parties or either of them;  and

   (b)the list price of the property shall be such amount as is agreed between the parties and, failing agreement within 14 days of the date of this Order, the list price will be as nominated by the real estate agent;  and

   (c)the sale price of the property shall be such amount as is agreed between the parties and, failing agreement, any offer to buy the property that is at least 90 per cent of the list price and sufficient to repay the mortgage and associated sale costs shall be accepted by the parties as the sale price;  and

   (d)the parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale, including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.

2. Upon agreement being reached for sale of the property, the parties shall execute the contract of sale and all other documents necessary to complete the sale of the property, including all transfer documentation, forthwith upon its submission to them by the agent or their solicitor.

3. The contract of sale shall provide for completion within 30 days after the date of the contract.

4. In the event the property is not sold by private treaty pursuant to Clause 1 of this Order on or before four (4) months from the date of this Order, then the Applicant and the Respondent (“the parties”) shall do all acts and sign all documents as are necessary to sell the property by auction and the following shall apply:

   (a)the property shall be listed with the agent appointed under Clause 1(a) (hereinafter called “the Auctioneer”) for sale by auction within a further fourteen (14) days;  and

   (b)the parties shall execute all documents requested by the Auctioneer for sale of the property by auction;  and

   (c)the reserve price of the property shall be such amount as is agreed between the parties and, failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer;  and

   (d)the parties shall each pay to the Auctioneer one half of any sums requested for advertising or auction expenses and, if one of the parties pays all of the expenses, that party shall be reimbursed from the proceeds of sale in respect of one half of such payments before any payment of the nett sale proceeds between the parties;  and

   (e)the parties shall give such instructions as are necessary to a solicitor to prepare a contract of sale and provide it to the auctioneer prior to the auction and no later than the date sought by the Auctioneer;  and

   (f)the parties will co-operate in every way with the Auctioneer in relation to the sale by auction including allowing inspection of the property at all times reasonably requested by the Auctioneer and ensuring that the property is clean, neat and in good order at the time of any inspection and on the day of auction; and

   (g)the parties shall attend at the auction and negotiate with the highest bidder in the event the reserve price is not reached;  and

   (h)the sale price of the property shall be any amount in excess of the reserve price but, in the event the reserve price is not reached, the sale price of the property shall be such amount as is agreed between the parties or, failing agreement, any offer reached after the auction to buy the property at a price that is at least 90 per cent of the reserve price and sufficient to repay the mortgage and associated sale costs shall be accepted by the parties.

5. Upon agreement being reached for sale of the property, Clause 2 and 3 shall apply.

6. In the event that the property is not sold at the auction pursuant to Order 4 or within 14 days after the date of the auction by further negotiation, then the parties shall cause a further auction of the property to be held within eight (8) weeks after the date of the first auction and for that purpose the provisions of Clause 4 shall apply.

7. The proceeds of sale of the property shall be paid in the following manner and priority:

   (a)       to discharge the mortgage;  and then in

   (b)payment of the agent’s commission and advertising or other expenses, if any, payable on the sale; and then in

   (c)       payment of the legal costs and outlays relating to the sale; and then

   (d)the balance shall be paid to the Applicant Wife’s solicitor’s trust account, to be held on behalf of the parties pending agreement between the parties or Order of this Court.

8. The party occupying the property shall do all things necessary to ensure it is presented for sale in a clean and orderly manner and is maintained in such a state pending its sale.

9. The Applicant has liberty to apply on the giving of 24 hours’ notice in writing.

IT IS DIRECTED THAT any approach to the Court made by the Applicant pursuant to the liberty to apply extended to her by this Order be referred to the Chambers of the Honourable Justice Hogan for urgent listing.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 8647/2014

Ms Martin

Applicant

And

Mr Buller

Respondent

REASONS FOR JUDGMENT

1. By Application in a Case filed 9 December 2015, the Applicant seeks orders for the sale of real property located at I Street, J Town in the State of Queensland.[1] She proposes that the proceeds of sale received from the sale of the property be paid to discharge the mortgage secured over it, meet the costs of agent’s commission, advertising or other expenses payable on sale, pay legal costs and outlays relating to sale and that any money remaining after these debts have been paid is paid into her solicitor’s trust account to be held on behalf the parties pending agreement or further order of the Court.

   [1]The Court clearly has the power to make orders in terms sought by the Applicant; s 114 of the Family Law Act 1975 (Cth) empowers the Court to make such order or grant such injunction as it considers proper.

2. The I Street property was the parties’ former matrimonial home. The Applicant and Respondent lived together for approximately 10 years, during which time both worked for remuneration: the Applicant as a barista and the Respondent as a service attendant.

3. The Applicant and the parties’ two children (B, born in 2008, and C, born in 2010) left that property when the parties separated in late January 2014.

4. The Respondent continues to live in the I Street property.

5. Whilst the orders sought by the Applicant on a final basis, as outlined in the First Amended Initiating Application filed on 19 March 2015, propose she retain the I Street property, this position has clearly been overtaken by events which have occurred since this document was filed.

6. A number of Orders have previously been made directing the Respondent to file and serve an Amended Response to the Applicant’s Amended Initiating Application:

   a)on 5 August 2015, Registrar Brooks ordered that he file and serve a Financial Statement by 21 August 2015; and

   b)on 8 July 2015, Forrest J ordered that, on or before 24 July 2015, he file and serve an Amended Response outlining the orders sought on a final basis in relation to the property adjustment as between the parties pursuant to s 79 of the Act and that he file a Financial Statement on or before 24 July 2015; and

   c)on 21 October 2015, Registrar Brooks ordered that, by 13 November 2015, he file and serve a Response outlining the final orders he seeks in relation to property issues.

7. Despite these Orders by both Forrest J and Registrar Brooks, the Respondent has not filed an Amended Response to the Applicant’s Amended Initiating Application. He has not provided details of the orders in relation to property that he proposes are made on a final basis.

8. As I indicated during the hearing, I proceed to determine the Application on the premise that the Respondent seeks to retain the I Street property: in order to do this, he will have to refinance the existing joint borrowings into his name alone and, potentially, obtain such additional funds as he may be required to pay to the Applicant to reflect properly those matters required to be considered pursuant to s 79 of the Family Law Act1975 (Cth).

9. According to a Balance Sheet filed on 9 October 2015 the property of the parties is extremely modest. The I Street property, which is owned by the parties as joint tenants and which secures, by way of mortgage, funds obtained by the parties from Suncorp-Metway bank, is the parties’ most valuable asset.

10. Whilst there is no expert evidence to establish this, the parties assert that the I Street property is valued at between $250,000 and $300,000. The current borrowing secured by mortgage over it is about $219,000.00.  Thus, the nett value of the property (exclusive of allowance for costs of sale) is no more than about $85,000.00.

11. The mortgage repayments required by the bank are $1,327.74 per month (or approximately $306.00 per week). As the Applicant and the children live in rental premises at a cost of $385.00 per week, she cannot afford to contribute anything toward the mortgage repayments.

12. It is not in dispute that the Respondent has failed to make mortgage repayments as and when they have fallen due on a number of occasions in the time since the parties separated. For example, in November 2014, the Applicant received correspondence from the bank about late repayments: she subsequently agreed that the parties enter into a repayment plan with the bank and that the amount of mortgage repayments be decreased for three months so that the arrears could be addressed.

13. It is also clearly established that, on a number of occasions, the bank has issued a Notice of Default and accompanying proposal to exercise the power of sale. The first of these issued in about mid-February 2015. Following that, two lump-sum payments were made to the loan accounts by the Respondent’s father:  $6,695.10 on 5 May 2015 and $3,587.64 on 6 May 2015.

14. However, the Applicant later received correspondence from the bank to advise that the loan repayment payable on 9 July 2015 had not been received.

15. The second Notice of Default and accompanying proposal to exercise the power of sale was received by the Applicant in early October 2015. In about November 2015, the Respondent paid about $3,000.00 to bring the loans into account.

16. The Respondent’s Financial Statement, filed 9 September 2015, particularises his financial situation. He is unemployed and has not worked for about 2 years. He receives $264.00 per week by way of unemployment benefits. He has significantly more weekly expenses ($562.89/week) than weekly income ($265.00/week). It is, simply, financially impossible for him to continue to meet mortgage repayments on the loans secured over the I Street property without either:

    a)borrowing funds from family members - which has previously occurred but, in the absence of any direct evidence from any potential provider of funds, cannot, I think, be assumed to recur, especially given the Respondent’s assertion from the bar table that he was required to repay these advanced funds in a short period of time; and/or

    b)accessing his existing superannuation entitlements – which has the obvious consequence that funds which existed at separation are being diminished to meet his day to day living expenses, thereby reducing the value of the property of the parties.

17. The Respondent’s evidence is that the loans are now up to date and will be for the next fortnight or so until the next repayment is due. He asserts that he will be able to meet the next repayment when it is due but the history of his inability to meet this obligation on an ongoing basis without the assistance to which I have referred does not support significant weight being given to this assertion.

18. When asked how he would be able to afford to continue to meet the mortgage repayments given the obvious and established shortfall between the quantum of his Centrelink benefits and the quantum of the mortgage repayments, the Respondent said that he could not, and would have to get a job.

19. However, he provides no evidence of any attempts to find employment. Additionally, the fact that Default Notices have previously issued has not caused him to actually obtain or seek to obtain such employment.

20. He submitted that, historically, he has not had difficulty obtaining work and would just have to return to it. Unfortunately, it seems that he has not engaged in paid employment for the last two years or so.

21. Whilst he says this is because of the work he has been required to do as a consequence of acting on his own behalf in litigation in various forums since separation, the litigation – at least in this forum – is ongoing. Thus, there appears to be no likelihood of any particular change to the circumstances which have, in the last two years on his own submissions, rendered him unable to seek paid employment.

22. There is no evidence whatsoever to suggest that the bank would likely be amenable to any application to refinance the loans. Given that the Respondent’s most recent paid employment is now some two years ago and he has little other property, I suspect any such application is unlikely to be considered favourably.

23. Whilst I accept that the Respondent very much wishes to retain the I Street property, that a party wishes to retain a particular property is but one factor to be weighed and assessed in determining whether it is proper to make the orders for sale sought by the Applicant. The evidence before me suggests that such a wish is highly unlikely to eventuate.

24. I take into account and accept the Applicant’s concerns about the potential negative impact on her future ability to borrow funds which may result from the consequence of ongoing defaults in meeting mortgage repayments as and when they fall due. I also take into account that, whilst of a relatively minor amount, an additional consequence of the Respondent’s ongoing default in making mortgage repayments when due is that the parties are charged a monthly arrears administration fee. This further diminishes the nett value of the property of the parties.

25. Whilst the Respondent appeared to assert from the Bar table that one of the loans is a three year fixed interest loan and there may be break fees associated with a premature repayment of it, there is no evidence to establish this as a fact.

26. I also take into account that the Applicant’s enquiries of the relevant local Council reveal that it is owed $2,137.55 for land rates in respect of the property. Given the parties’ straightened financial circumstances, it is more likely than not that this debt will only continue to grow.

27. Given that the existing borrowings secured over the home (said to be valued at between $250,000.00 and $300,000.00) are about $219,000.00, the absence of secure employment persuades me that it is highly unlikely that the Respondent will be able to refinance the existing debt into his name alone. There is no evidence to suggest that the Respondent has attempted to determine whether the bank is likely to permit the refinance of the existing loans into his name and the name of another family member. There is no evidence from any family member to corroborate his assertions that they might be prepared to enter into some sort of joint ownership of the property with him. In fact, his submissions seemed to me to assert that, whenever funds have been provided by members of his extended family, they have only been provided for a short period of time and then repaid by him – using at least on one occasion funds he withdrew from existing entitlements to superannuation.

28. I consider that the established pattern of Default Notices and the subsequent payment of lump sums obtained from family members on short term loans and then repaid using funds drawn down from superannuation entitlements may well be repeated if action is not taken now to sell the property.

29. The Applicant does not want to retain the property herself. As noted the evidence suggests it is unlikely that the Respondent could obtain the banks’ permission to refinancing it into his name alone.

30. For the reasons already expressed, it is appropriate and proper to make orders which preserve for the parties as much of the current equity in the property as is possible. Accordingly, I am persuaded to make Orders for the sale of the I Street property.

Should the Applicant occupy the I Street property pending sale?

1. The Applicant also seeks that, pending the sale of the property, she have the sole right to occupy it, during which time the parties be equally responsible for all mortgage payments, rates and outgoings as and when they fall due. She seeks this order because of her concerns the Respondent will make it difficult for the property to be marketed.

2. I am not persuaded at this stage to make an order requiring the Respondent to vacate the property forthwith. In arriving at this decision, I have taken into account that the Respondent has previously asserted he wants the property aspect of the proceedings between the parties determined after the parenting issues are determined, that he has previously failed to comply with orders requiring him to address the property aspect of the proceedings and has failed to attend a Conciliation Conference listed for 19 November 2015.

3. Despite this, I consider that he should be afforded the opportunity to demonstrate compliance with the Orders made today. If he does not, it is highly likely that an Order will be made requiring him to vacate the property forthwith.

4. In order to ameliorate any additional cost which the Applicant may incur if required to return the matter to Court and to ensure that there is no further delay if this is necessary, I will give her liberty to apply on the giving of 24 hours’ notice in writing and direct that any approach made to the Court pursuant to this liberty be referred to my chambers for urgent listing.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 18 March 2016.

Associate:                 

Date:  18 March 2016