MEDFORD & MEDFORD

[2021] FamCA 404

FAMILY COURT OF AUSTRALIA

MEDFORD & MEDFORD [2021] FamCA 404

FAMILY LAW – PROPERTY – Mortgage repayments – Notice of Default – where the husband failed to meet monthly mortgage repayments – where the bank issued a notice of default – where the wife sought orders for the property to be transferred and sold upon default.

FAMILY LAW – COSTS – Consideration of s 117 – where the husband’s claim was wholly unsuccessful – costs ordered.

Family Law Act 1975 (Cth)

Family Law Rules 2004 (Cth)

APPLICANT: Ms Medford

RESPONDENT: Mr Medford

INDEPENDENT CHILDREN’S LAWYER: Seawater Legal

FILE NUMBER: DGC 1168 of 2017

DATE DELIVERED: 18 May 2021

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Johns J

HEARING DATE: 18 May 2021

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kanarev

SOLICITOR FOR THE APPLICANT: Dandenong Family Lawyers

THE RESPONDENT: In Person

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: Ms Papson

Orders

BY CONSENT IT IS ORDERED THAT

1. Within 14 days the Respondent Husband provide to the Applicant Wife’s solicitors the following written confirmation from the National Australia Bank that:-

   (a)it will not enforce the Notice of Default dated 14 April 2021 in relation to the mortgage secured over the title to B Street, C Town, Victoria, provided that the Husband pays instalments in the sum of $726 per month by the 22nd day of each month in respect of the said loan.

2. That the Respondent Husband provide to the Applicant Wife’s solicitors a monthly statement no later than the last day of each calendar month evidencing that the mortgage in relation to the property situated at B Street, C Town, Victoria, has been met in accordance to the payments schedule required under the mortgage with the National Australia Bank.

3. That the Respondent Husband shall pay each and every mortgage payment as it falls due over the property situated at B Street, C Town, Victoria.

BY THE COURT IT IS ORDERED

1. That in the event that the Respondent Husband fails to comply with orders 2 or 3 hereof or fails to meet his obligations pursuant to orders 3 or 4 hereof for a period of three consecutive months then the property at B Street, C Town, Victoria be:

   (a)Transferred into the joint names of the Husband and the Wife.

   (b)Placed on the market for sale with the real estate agent to be nominated by them, and failing agreement such agent as nominated by the president of the Real Estate Institute of Victoria or his nominee with the proceeds of sale to be distributed as follows:

   (i)     Firstly, to pay all costs, commissions of the sale;

   (ii)    Secondly, to satisfy any arrears, discharge the mortgage and any other encumbrance affecting the real property;

   (iii)   Thirdly, the balance of the proceeds of the sale be deposited into the trust account of Dandenong Family Lawyers.

2. That there be liberty to apply with respect to the terms and conditions of the sale. 

BY CONSENT IT IS ORDERED

1. That in the event that the Respondent Father refuses or neglects to execute a deed and/or instrument in compliance with the provisions of these Orders, the Registrar of the Family Court of Australia at Melbourne is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute all deeds and/or instruments in the name of the Respondent Father and do all acts and things to give validity and operation to the deeds and/or instruments.

2. That to give effect to order 2 made by consent on 20 November 2020 in relation to the child X born … 2009 spending supervised time with the Father, the parents do all acts and things necessary (including but not limited to completing application forms and attending interviews (if necessary)) to apply to Family Contact Service, within 28 days.

BY THE COURT IT IS ORDERED

1. The Court orders that the Husband pays the Wife’s costs set in the sum of $3,000 and to do so within 30 days of today.

NOTATION

A.The Father acknowledges that the Family Contact Service is a private supervision service and is aware that he is to pay for the costs of supervision at first instance.

B.The Wife reserves her right at final hearing to seek that the Husband be solely liable for all costs associated with supervised time spent with the child X. 

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 Medford & Medford 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 MELBOURNE

FILE NUMBER: DGC 1168 of 2017

MS MEDFORD

Applicant

And

MR MEDFORD

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. This matter comes before the Court today in a Judicial Duty List. 

2. The applications before the Court are, firstly, the wife’s Application in a Case filed 26 April 2021.  In that Application, the wife seeks orders for the matrimonial home at B Street, C Town, to be transferred to her for the purposes of sale.  She seeks that upon payment of sale costs and the discharge of the mortgage to the National Australia Bank secured over the title to the property, that the proceeds of sale be held on trust, pending final resolution of the parties’ competing property applications.

3. The husband filed a Response to Application in a Case on Friday, 14 May 2021.  In his response, the husband seeks that the wife’s Application be dismissed.  He also seeks parenting orders in relation to the parties making application to a contact service provider and  that the wife facilitate the attendance of the parties’ child Ms D at that contact service when changeover is effected between the wife and the husband in relation to the parties’ youngest child, X, who is aged 12.

4. The parenting issues were considered by the parties earlier today when the matter was stood down.  At that stage, the Independent Children’s Lawyer appeared at court and those issues were resolved by consent. 

5. The outstanding issues requiring determination relate to the wife’s application for the sale of the former matrimonial home.  There is also, as a result of my rulings in respect of that issue, an application by the wife for the husband to pay her costs of this day, to be fixed in the sum of $3500.

6. The background to the application is as follows. 

7. The wife is Ms Medford.  She is aged 42 years.  She is employed as a finance officer. 

8. The husband is Mr Medford.  He is aged 43 years and he is a technician.  He represents himself in these proceedings.  The wife is represented by counsel.

9. The parties commenced cohabitation in about 2004.  They married in 2013 and separation occurred in January 2017.  There are three children of the marriage namely Ms D, who is an adult, aged 21, Ms F, aged 14 and X, aged 12.  The two younger children live with the wife.

10. The background to the wife’s application is set out in the affidavit of her lawyer, Ms McHugh filed 26 April 2021.  She there deposes to some of the history of these proceedings.  With respect to the property the subject of this application Ms McHugh deposes that the wife was served with a Notice of Default from the National Australia Bank, that notice having been served on or about 16 April 2021.  The Notice of Default states that the sum of $126,713.25 is outstanding in relation to the mortgage secured over the property at B Street, C Town.  It also indicates that as at 14 April 2021 there were arrears under the mortgage of $16,692.71.  In addition, there were claimed enforcement expenses of $460.52.  Therefore, the total amount due under the Notice of Default is $17,153.23. 

11. The Notice of Default provides that in order to remedy the default, the total amount payable under the default notice is to be paid no later than 24 May 2021. Further, it provides that if the default is not remedied by the due date, the lender may exercise its rights to repossess the property and move to a sale of the property.

12. As a result of her receipt of that default notice, the wife made application to the Court for the transfer of the property into her name to enable her to effect sale of the property.

13. The husband, in his affidavit in response to that application filed 14 May 2021, deposes that he was unaware that the bank had been attempting to communicate with him in relation to the home loan secured by way of mortgage over the B Street property.  He deposes at paragraph 7 of his affidavit that he has now contacted the bank and that the matter has been resolved.  He states that the bank will not be exercising its rights under the default notice.  The husband relies upon exhibit M1 to his affidavit, which is an email sent on a “without prejudice” basis to him, from a bank officer for NAB Assist.  That email states, in part:

    As discussed, I am confirming that while you are on your current payment arrangement with NAB, there will be no further enforcement action taken on the above home loan account.

14. No further information is provided in that correspondence as to what arrangements have been made between the husband and the bank.  As a result of that position, the wife sought to proceed with her application this day. 

15. The matter has been stood down during the course of the day and there have been sensible discussions between counsel for the wife and the husband.  There is some agreement between them as to how to resolve the issue.  It is agreed between the parties that in order to avoid action to sell the property, the husband should provide to the wife within 14 days, confirmation from the bank that it will not enforce the Notice of Default dated 14 April 2021 and  the terms upon which that arrangement has been made. 

16. The husband has informed the Court this day that it has been agreed that he will pay instalments of $726 per month by the 22^nd day of each month in respect of the mortgage and, provided he meets those payments, the bank will take no action under the Notice of Default.  He is required to provide evidence of that agreement to the wife within 14 days. 

17. Further, the husband agrees that it is appropriate that there be an order that he will provide to the wife’s solicitors, on a monthly basis, statements in relation to the loan secured by way of mortgage over the B Street property.  Those monthly mortgage statements are to be provided by the last day of each calendar month. 

18. Further, the husband agrees to an order that he pay the loan instalments under the mortgage facility as and when they fall due. 

19. I will make orders by consent in relation to those matters. 

20. The vexed issue between the parties is what should occur if the husband fails to meet those obligations.  It is conceded by the husband, sensibly, in my view, that in the event that he does not meet his obligations pursuant to the agreed orders for a period of three consecutive months, there should be a sale of the property.  What is in dispute is how that sale should be conducted. 

21. The husband is the sole registered proprietor of the property.  He submits that he is the appropriate person to conduct a sale, should one be required.  The wife seeks that the property be transferred to her.  She has no confidence that the husband will comply with his obligations and therefore says it is necessary for the property to be transferred to her to ensure that those matters are attended to in a timely fashion, if so required.  She is keen to ensure that any action by the bank, as against the parties, is avoided because the consequence of that will be additional costs levied by the bank. 

22. Having regard to the history of the matter, and particularly the husband’s failure to meet his obligations under the mortgage, I am satisfied that it is appropriate that the parties jointly have responsibility for conducting a sale of the property, should it be required.  If the husband fails to meet his obligations, as required by the orders, for three consecutive months, there should be a transfer of the property into the joint names of the parties.  That way, the wife will be able to participate in the necessary arrangements for a sale and ensure that the matters are attended to in a timely fashion to maximise the benefit for both parties should a sale be necessary. 

23. The final issue is the wife’s application for costs.  As indicated earlier, she seeks costs in the sum of $3,500 in relation to the application that has been brought by her this day. 

24. The wife says that the husband has been wholly unsuccessful in opposing the orders she seeks.  Given the orders that I have been asked to make by consent, there is much force in that submission.  The reality is that absent information from the husband as to the bank’s position, it was necessary for the parties to attend court today to resolve these issues. The wife’s application was necessitated as a result of, firstly, the husband’s failure to meet obligations under the mortgage, and further, his failure to communicate with the wife in relation to these matters.  The reality is that the mortgage balance is in excess of $120,000.  The arrears under the mortgage are in excess of $16,000.  It is clear that the husband has not met mortgage payments in relation to that facility for a prolonged period of time.  He has sat on his hands and done nothing, to the detriment of both parties in these proceedings.  It is as a result of that conduct and the resultant Notice of Default issued by the bank that the wife has brought this application, which was opposed by the husband.  Ultimately orders were made largely in the terms sought by the wife.

25. Having regard to those matters, I am satisfied that the usual position in relation to costs does not apply. 

26. The general rule in proceedings under the Act is that subject to the provisions of s 117(2), the parties to the proceedings shall bear their own costs of the proceedings. 

27. Section 117(2) of the Act provides that if the Court is of the opinion that there are circumstances that justify it doing so, the Court may, subject to sub-sections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs as the Court considers just.

28. Section 117(2A) of the Act provides that in determining what order (if any) should be made under sub-section (2), the Court must have regard to the following:-

    (a)the financial circumstances of each of the parties to the proceedings;

    (b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

    (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

    (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

    (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

    (f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

    (g)      such other matters as the court considers relevant.

29. As I have indicated earlier in these reasons, I am satisfied that the husband has been wholly unsuccessful in the matter.

30. I am also satisfied that his conduct as referred to earlier is such as to justify an order for costs.

31. I have regard to Schedule 3 of the Family Law Rules 2004 in assessing the wife’s claim as to costs. Counsel has been required to appear on behalf of the wife today. She has been put to the expense of the preparation of an Application in a Case and an affidavit as to these matters. Having regard to those considerations, I am satisfied that costs should be awarded to the wife and fixed in the sum of $3,000, and I will make an order to that effect, in addition to the orders already made.

I certify that the preceding twenty-four (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 18 May 2021.

Associate: 

Date:  16 June 2021