Martin and Martin

[2011] FamCA 17

FAMILY COURT OF AUSTRALIA

MARTIN & MARTIN [2011] FamCA 17

FAMILY LAW – PROPERTY - Interim – Reserve price to be fixed for sale of holiday home – Undertaking by husband – Guarantee of minimum price for property proceedings – Costs reserved to trial Judge

Family Law Act 1975 (Cth) s 114(3)

Waugh v Waugh (2000) FLC 93-052
M & DB (2006) FamCA 1380

APPLICANT: MS MARTIN

RESPONDENT: MR MARTIN

FILE NUMBER: MLC 9829 of 2007

DATE DELIVERED: 21 JANUARY 2011

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 21 JANUARY 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

SOLICITOR FOR THE APPLICANT: Ms Blizzard

COUNSEL FOR THE RESPONDENT: Mr Taussig QC

SOLICITOR FOR THE RESPONDENT:

Orders

AND UPON THE UNDERTAKING given to the Court by Senior Counsel upon instructions of his client provided to him by telephone this day, that he:

§Will guarantee a market value of the property at E in the State of Victoria (“E property”) of no less than $1,560,000;  and

§Will indemnify and keep indemnified the wife for any shortfall in the sale price of E property

THEN IT IS ORDERED:

1. THAT paragraph 2(c) of the consent orders dated 10 December 2010 be varied by substituting a reserve price of $1,600,000 therefore.

2. THAT pending settlement of any sale of E property, or further order of the Court, the husband continue to make all mortgage payments, and any other required outgoings, as and when they fall due.

3. THAT the application in a case filed urgently by leave this day be adjourned to a date and time to be fixed before Dessau J within the next twenty-eight (28) days and upon arrangements made with her associate and the Court.

4. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

5. THAT the costs of each party of and incidental to this urgent application and hearing this day be reserved to the trial Judge.

IT IS CERTIFIED

1. THAT pursuant to Rule 19.50 of the Family Law Rules this matter reasonably required the attendance of Senior Counsel for the husband and Solicitor appearing as Counsel for the wife.

IT IS NOTED

A.THAT both legal practitioners were given an opportunity during the hearing to telephone and discuss all issues with their clients and obtain updated instructions.

B.THAT Mr Taussig advised the Court that his client had given him clear and precise instructions to consent to the Undertaking now given to the Court to indemnify and keep indemnified the wife and to guarantee the market value and sale price of no less than $1,560,000 (gross) for E property.

IT IS NOTED that publication of this judgment under the pseudonym Martin & Martin is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9829 of 2007

MS MARTIN

Applicant

And

MR MARTIN

Respondent

REASONS FOR JUDGMENT

1. The matter of Martin has been listed before me as a matter of urgency upon application by the solicitors for the wife.  Ms Blizzard, solicitor, appears for her client whom, I am informed, has recently had some form of minor operation and is not in Court.  Mr Taussig, one of Her Majesty’s Counsel, appears for the husband, who is enjoying Canada and the snowfields, with the four children of the marriage.  Both the husband and wife have been available by telephone and, some 30 minutes ago or thereabouts, I stood the matter down for instructions to be obtained by each of the legal practitioners from their clients.  They have now addressed the Court on the basis of those updated instructions.

2. The order sought as a matter of urgency today, and with leave being granted to abridge all times for the matter to come on before me, is for a Registrar of this Court to be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to sign all documents and do all acts and things in the name of the husband, so as to facilitate and finalise the sale of the property at E, for a price of $1.56 million. That property is registered in the name of the corporate entity Martin Pty Ltd. In support of that application the wife relied on the affidavit of her instructing solicitors, sworn and filed this day, and the various exhibits to the affidavit.

3. I have carefully read and evaluated that affidavit and the particular exhibits to which Ms Blizzard directed my attention.  Mr Taussig has had very limited notice of this application and has come to court with some documents, but not all of the file.  I do record that he is not the solicitor in his office handling this matter, but that both Ms Cherrie and Ms Goldberg are out of the office and not available at this late hour on Friday afternoon. 

4. The property proceedings are before the court and have a defended hearing listed before Dessau J on or about 25 March 2011.  The relevant previous applications and evidence before the court, insofar as they touch upon the matter before me today, have been briefly summarised by the practitioners and I have identified those documents for the purposes of this ex tempore judgment.

5. I do highlight that this judgment is given without rising from the Court Bench, and without a more detailed reference to the case history, but with sufficient detail to fairly consider the legal and factual issues now before the Court. 

6. By a response to an application filed 4 November 2010 the husband sought an order for the property at E to be placed on the market for sale forthwith.  In his affidavit in support of that application, at paragraph 45 thereof, he provided some history to the property, its then valuation by a single expert at $1.250 million, and the debt owing to the ANZ Bank upon that property.

7. Thereafter, Ms Blizzard referred me to the concluding paragraphs of that affidavit – in particular paragraphs 58-62 (inclusive) thereof – in the context of the overall property settlement and what was said to be the particular matters of interim concern to her client.

8. More particularly, the husband has filed a further substantial affidavit on 10 December 2010 – that is the day of the most recent court orders.  In paragraph (h) thereof he deposed to previous correspondence from his solicitors, albeit that they were dated 17 March 2009, and identified both the need to sell the property and that an asking price of $1,500,000 was to be fixed on the selling agent’s advice.  I have read that subparagraph and the subsequent paragraphs of that affidavit.  The husband has no more recent affidavits filed with the court.

9. Ms Blizzard’s affidavit identified that an independent offer in writing has been submitted for the E property.  Paragraph 8 of her affidavit, the second of the exhibits, is of particular relevance to the issue.  That paragraphs sets out the correspondence between the real estate agent, Mr S, and the husband.  What can be clearly understood from that paragraph and the exhibit is that the husband has now identified $1.650 million as the appropriate sale price, based on his knowledge of the purchaser, his local area knowledge, and the value of property next door, which is said to be comparable.  Paragraph 9 of Ms Blizzard’s affidavit evidenced a discussion between the husband and the real estate agent and would imply that the husband would accept $1.6 million as a sale price.

10. I pause there to record Mr Taussig had indicated to the court that that is the sum for which the husband would sell E property – that is, $40,000 more than the current written offer.  There have been substantial communications between the selling agent and the wife’s solicitor and perhaps the wife, although I am unsure of her personal circumstances given what the court was advised at the commencement of the proceedings.  I well understand that the wife wishes to lock in that sale price of $1,560,000.  I have been referred to paragraph 16 of Ms Blizzard’s affidavit, and annexure 9 thereto, and I have carefully read that email.  Subsequently, the penultimate page of Ms Blizzard’s last annexure is a letter dated 21 January, from Mr S to her firm, indicating the term of the offer and the various recommendations and discussions that he had with parties.  Finally, annexed thereto is an email from the purchaser, Mr H, which reads as follows:

    “Hi Michael.  Yes, I confirm our offer stands on [E property] of 1.56 million until midnight, Friday, 21 January 2011”.

    Thereafter the email records:

    “That is the absolute latest.  May I say, [Ms V] is really getting concerned at this purchase, and the negative recent press over beach property is not helping”.

11. That, then, is a brief summary, as time now permits, of the evidence before the court.  I have sought to obtain from experienced practitioners the position of each of their clients.  That can be summarised as follows.  The wife wants to accept the offer, have the certainty of $1.56 million, and have the moneys available for any further distribution or partial property settlement within the settlement period of 45 days.  She does not chase any higher offer or any greater purchase price.

12. On the other hand the husband wants to achieve a sale price of $1.6 million.  He says that the property has not been prepared and presented as was contemplated by the parties, though I have no such evidence of what was to be done and I do struggle to decipher what was intended by paragraph 4 of the consent orders of Dessau J dated 10 December 2010.  The husband is prepared to offer up a formal guarantee and undertaking to the wife to protect her financial interests, vis-à-vis sale price and market value of this property.  He guarantees that a sum of no less than $1.56 million (gross) will be the value at which E property is before the Court in property proceedings hereafter.  I carefully make no concluded judgment upon any achieved increased sale price and the benefit of that to both the husband and wife.  That is a matter for the trial judge but, presumably, it will be reflective of the actual price of the property when sold.

13. I turn to the consent orders of 10 December 2010 made by Dessau J, and that is the most important event in the legal background to these proceedings.  Both parties were at Court that day, represented by their current solicitors.  Ms MacMillan of Senior Counsel represented the wife, and Mr Puckey of counsel, the husband.  Consent orders were prepared and, omitting all formal parts and in brief summary, those orders:

    ·provided for the sale of E property;

    ·provided for the reserve price to be $1,350,000;

    ·provided for the real estate agent and solicitor to act upon the conveyance and sale;

    ·provided for the distribution of the net proceeds of sale in payment of the ANZ Bank with the balance of moneys available to the parties to be held in an interest-bearing deposit.

14. Significantly I observe that paragraph 6 provides that, pending settlement, the husband continue to make all mortgage payments as and when they fall due.  By that paragraph the wife is protected from any payment of moneys pending sale, and, ultimately, if the sale price is no more than $1,560,000 there may be before the trial Judge issues about the decreased equity then available in E property because of the ongoing mortgage costs and perhaps other related costs of the upkeep of the property, outgoings and other charges.  I leave all of those matters to the parties and the trial Judge.

15. What is sought by the wife today is an order for the Registrar to sign documents in the name of the husband to effect sale.  The evidence before the court from the wife’s legal practitioners is, I accept, the very best that could be obtained in the space of a few hours.  There is a distance issue between Melbourne and E and one could not expect after hours that the real estate agent would urgently travel to Melbourne for this hearing this afternoon.  Whether or not the purchaser will withdraw his offer, or make any other offer, I do not speculate upon, but it is a matter of some importance that the wife have financial certainty as to the sale price and clear protection that the proceeds of this home will be at no less than $1,560,000 (gross).

16. Mr Taussig has had the opportunity to discuss with his overseas client his preparedness to provide an undertaking, through Senior Counsel, to the court of the husband’s very specific instructions that he will both guarantee $1.56 million as the market value of this home on a gross basis, subject to costs of sale and other outgoings and that he will indemnify, and keep indemnified, the wife for any shortfall should the property sell for a lesser sum.  He is prepared to give such an undertaking and I have accepted the very clear and explicit statement of Mr Taussig on the basis that he is acting wholly upon the instructions of his client.

17. There is a balance in this case between the current orders, which likely justify the wife and her solicitor making this application, and the opportunity that there may be upside and a competitive market over January and February and that the property sell for a higher sum.  Mr Taussig has emphasised his client’s instructions that the next six weeks are the best selling period in E, and both he and the parties, jointly, should not be disadvantaged by taking an early offer for sale when the property has been actively marketed for no more than two weeks.

18. I have contemplated an order that the E property must sell at whatever price, on or before 15 March 2011.  On balance, I will not make that order because these are interim injunction and property related proceedings.  The matter has not been addressed by the parties and is not the subject of an application.  It clearly is the preferred scenario that this property sell before the s 79 defended hearing commences so that the trial judge has absolute certainty of the sale price and if it is to be over and above the sum of $1,560,000.

19. I have carefully asked of Ms Blizzard and Mr Taussig the informed and prepared position of each party vis-à-vis the pool of assets.  On the past valuation of the property, the wife’s documents filed with the Court and without add-backs have a total pool of no less than $3 million.   The husband has a lesser pool but, in any event, there is a sufficient sum to ensure that the difference between the guaranteed market value of E property at $1.56 million and any lesser actual sale price can be satisfied.  The wife, thus, is protected financially from any lesser sale price, and the husband is obliged to make up any shortfall from his division of assets.

20. Section 114(3) of the Family Law Act 1975 (Cth) authorises a court exercising jurisdiction:

    “To grant an injunction, by interlocutory order or otherwise in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate”.

21. Whilst discretionary the guiding principle for the exercise of such discretion is that any order or injunction should be made only for good cause.  The discretion is not to be exercised lightly.  I have therefore carefully reflected upon the proper order to be made throughout this urgent hearing.  I have raised with legal practitioners various options and sought further submissions from them on matters of concern.  I have proceeded with caution.

22. I was at all times mindful of the decision of the Full Court in Waugh v Waugh (2000) FLC 93-052 and subsequent decisions of that Court including M & DB (2006) FamCA 1380. In particular there were, because of the urgency of this application, issues as to the proper and admissible evidence before the Court both of the offer and of the advice to sell on behalf of the appointed real estate agent handling the sale.

23. I have therefore sought to balance the issues of the existing consent order, the balance of convenience and hardship as between the parties and the evidence of current market value and achieving the best possible sale price for the parties given the conflicting position adopted by each of them.

24. What I will order, and this seems to fit with the submission of both legal practitioners, is to vary the current consent order so as to fix the reserve price at a more realistic price in the current market and on the evidence before me, particularly giving due weight to the present independent and arm’s length offer to purchase.  Accordingly then, I will order, based upon an undertaking and guarantee from the husband given in the terms outlined above to preserve and to protect the price of this property, that the reserve price be set at no less than $1,600,000.

25. The balance of the proceedings can be adjourned to a date to be fixed before Dessau J.  I am not to be seen to be encouraging any other litigation.

I certify that the preceding twenty-five
(25) paragraphs are a true copy of the reasons
for judgment of the Honourable Justice Young
delivered on 21 January 2011

Associate: ……………………………………………………………

Date:  …………………………………………………………………