Neumann and Haas (No 2)

[2021] FamCA 39

FAMILY COURT OF AUSTRALIA

NEUMANN & HAAS (NO. 2) [2021] FamCA 39

FAMILY LAW – INTERIM PROPERTY – Where the wife seeks for the husband to vacate the former matrimonial home in order to effect its sale – Where the husband has failed to comply with previous orders for the sale and vacation of the property – Where the husband has frustrated the sale of the property – Where the husband did not seek to file any material in response to the wife’s application – Orders made for the husband to vacate the property within 48 hours, a warrant for possession issue and for the husband to be excluded from the sale process.

Family Law Act 1975 (Cth)

APPLICANT: Ms Neumann

FIRST RESPONDENT: Mr Haas

SECOND RESPONDENT: Mr B Neumann

FILE NUMBER: CSC 618 of 2019

DATE DELIVERED: 10 February 2021

PLACE DELIVERED: Cairns

PLACE HEARD: Cairns

JUDGMENT OF: Tree J

HEARING DATE: 8 February 2021

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Raeburn

SOLICITORS FOR THE APPLICANT: Miller Harris Lawyers

THE FIRST RESPONDENT: Self-represented litigant

SOLICITORS FOR THE SECOND

RESPONDENT:

Hartley Whitla Lawyers

Orders made 8 February 2021

1. That in exchange for removal of the writ over the F Town Property, the sum of $34,656.10 owing to N Lawyers Pty Ltd by the husband be paid out of the sale proceeds at settlement, said payment being solely attributable to the husband in any final property settlement.

2. That the husband must provide vacant possession of the F Town Property to the wife, as stipulated in the interim orders of 15 December 2020, by no later than 4.00 pm on 10 February 2021.

3. That a warrant for possession issue pursuant to Rule 20.54 of the Family Law Rules 2004 (Cth), authorising and directing an enforcement officer to enter the real property described in the warrant and give possession of the real property to the person entitled to possession, if the husband fails or refuses to vacate the property within the time stipulated in Order 2.

4. For the purpose of facilitating the sale of the F Town Property, the wife and second respondent are jointly appointed trustee for the sale, empowered to:

   (a)do all acts and things in accordance with the interim orders of 15 December 2020;

   (b)make all decisions in relation to the conduct of the sale, save for any reduction in the sale price; and

   (c)instruct the real estate agent and conveyancer on behalf of all parties.

5. That the costs of and incidental to this application be reserved. 

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 Neumann & Haas 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 CAIRNS

FILE NUMBER: CSC 618 of 2019

Ms Neumann

Applicant

And

Mr Haas

First Respondent

And

Mr B Neumann
Second Respondent

REASONS FOR JUDGMENT

Introduction  

1. On 15 December 2020, following a contested interim hearing, I ordered that Mr Haas (“the husband”) sign a contract for sale for the former matrimonial home at F Town in Queensland (“the F Town property”). I further ordered that the parties jointly instruct a solicitor for the purposes of effecting the sale, and cooperate “in every way with the agent and the solicitor, including, but not limited to, allowing access to the property for the completion of the building and pest inspection …”

2. Significantly, I allowed the husband some 28 days from the date when the contract for sale became unconditional (it being subject to inspection and finance) to vacate the F Town property, but thereafter Ms Neumann (“the wife”) was to have the sole use and occupation of it. On the other hand, the husband was to have sole use and occupation of a unit at H Town in the State of Queensland.

3. To cover the eventuality that the husband did not cooperate in the sale process, there were orders made permitting a Registrar to sign the contract on his behalf, and to sign any documents necessary to give effect to the terms of the orders.

4. As I shall shortly detail, thereafter the husband did not sign the contract, and has not cooperated in any significant way with the agent and solicitor that was ultimately appointed by the President of the Queensland Law Society to act in the sale.

5. Now, by Application in a Case filed 8 January 2021, the wife seeks a suite of orders, most importantly requiring the husband to provide vacant possession of the F Town property within 48 hours, in default of which a warrant for possession would issue in the wife’s favour. Further, the wife proposed that she and the parties’ son be jointly appointed trustees for the sale of the F Town property, in order to ensure that the husband’s lack of cooperation cannot continue to frustrate any sale. Other less significant orders sought by her will be addressed later in these reasons.

6. On 8 February 2021, I made orders substantially in the terms sought by the wife but reserved my reasons for doing so. These are those reasons.

Background

1. At [7]–[18] of the 15 December 2020 reasons, I said as follows:

   7.The wife was born in 1957, and hence is presently 63 years of age. She is a health professional. The husband was born in 1959 and hence is presently 61 years of age. Although currently unemployed, for most of his life he worked as a health professional, initially in the public service, but later in M health services.

   8.The parties married in 1986. It seems uncontentious that at that time, neither party had any property of significant value, but thereafter accumulated modest assets from savings from their respective incomes.

   9.In due course, two children were born to the parties’ marriage, being the son, born in 1989, and a daughter born in 1992. It appears uncontroversial that during their childhoods, the husband was the main breadwinner, and worked considerably long hours, whilst the wife principally devoted her attention to her role as homemaker and parent.

   10.In about 2006/2007, the husband and wife purchased four units at J Street, H Town, for approximately $30,000 each. They were acquired with a mix of joint savings and borrowings. In due course, they sold two of those units, leaving them owning only units 2 and 3 (“the H Town units”).

   11.      The wife returned to work in about 2010.

   12.On 13 April 2015, the husband, wife and son purchased the F Town property for $480,000. The property was purchased using a deposit of $140,000 sourced from the wife’s superannuation, with the balance being loaned from the National Australia Bank (“NAB”). Stamp duty and legal fees were met from a joint savings bank account. The husband, wife and son are jointly and severally liable for the NAB loan. The son claims that he was unaware that his name was placed on the title (albeit only to the extent of one per cent) and hence mortgage, but rather thought that he was a guarantor for the NAB loan.

   13.Initially the parties intended to operate a manufacturing business on the F Town property. However, although the parties are not agreed why, it is common ground that thereafter the business did not proceed, but rather the parties renovated and improved the F Town property, in the course of which they expended a further $140,000 (much of which was again sourced from the wife’s superannuation), so as to recommence a business that had previously operated there. Unfortunately the recommenced business was not a success, and ultimately failed.

   14.Although the wife (and indeed the husband) had retired by the time of the purchase of the F Town property, thereafter the wife had to return to casual part-time employment to fund the ongoing costs of the failing business, which eventually ceased trading in about December 2016.

   15.In August 2017, the wife returned to permanent part-time work as a health professional, as she was left with no other choice financially.

   16.The parties separated on 29 September 2017. Since then the husband has remained living in the F Town property, and the wife has lived elsewhere.

   17.In June 2019, the wife obtained full-time employment as a health professional in L Town. She is presently on a salary of somewhere in the order of about $180,000 per year, which is used to meet the mortgage repayments in respect of the F Town property, the mortgage repayments in respect of the H Town units, and, amongst other expenses, to meet the rates, insurance and other outgoings for all the three properties, and body corporate fees for the H Town units. Additionally, post separation, the wife has been paying the husband the sum of $150.00 per week so that he can meet his personal expenses.

   18.In her affidavit filed 21 July 2020, the wife says that she no longer wishes to work full time, and finds her present role at L Town exhausting, as she is the only medical professional (or indeed healthcare provider) within a 160 kilometre radius, meaning that she is the only person available to attend to patients, and is therefore constantly on call.

2. The principal matter in contention in the 15 December 2020 hearing was whether the F Town property should be sold at a price of $435,000. At [34]–[39] I said as follows:

   34.Assuming a net asset pool of $251,000, equal contribution based entitlements, but a seven per cent differential for s 75(2) factors in the husband’s favour, the husband’s property settlement would see him receive a little over $143,000. That would be insufficient, by some $292,000, to permit him to take the unencumbered F Town property in any property settlement. Indeed, ultimately, the husband appeared to concede that. That concession was sound. Given his present unemployment, and his lack of recent employment history, one would have to assume that he would have real difficulty in being able to find a commercial lender prepared to fund the amount which he would need to borrow in order to retain the F Town property. That is particularly so if, as seems possible, a lender were to require the loan/value ratio in relation to a remote, rural property, to not be in excess of 60 per cent, as here, the husband’s $143,000, would be only about 33 per cent of the value of the F Town property.

   35.In any event, given that the husband’s expressed intention to obtain future employment as a health care trainer, it is difficult to see how he could obtain such employment while continuing to live at F Town, which is extremely isolated.

   36.It therefore seems inevitable that, in order to finally determine the parties’ financial relationship, the F Town property will need to be sold. I am satisfied that the likelihood of that is so great, that the prospects of the husband being able to retain the F Town property in any final property settlement are effectively nil. The wife’s claim to have it sold is therefore strong, and almost certain to succeed at trial.

   37.Further, the wife is presently solely servicing the costs associated with the F Town property, to which the husband makes no contribution whatsoever, and indeed the wife is presently meeting the husband’s personal expenses, including by paying him $150.00 per week. In large part that is likely because of the husband’s lack of employment, and in that sense, I note that the significant maintenance and security issues associated with the F Town property likely practically require the husband to live on site, and hence preclude him from presently obtaining employment. In a sense therefore, the sale of the F Town property is in the husband’s interests, because it would free him of the burden of responsibility which attaches to it, and enables him to obtain employment.

   38.I am also mindful that the F Town property has now been on the market for about two years, and yet in all that time, the current offer is the only one which has been able to be attracted. It is an offer at full list price, and I note that when the F Town property was listed for $450,000, no offer was elicited.

   39.I am therefore satisfied that the balance of convenience, and indeed the interests of justice, make it appropriate that there be an order that the husband sign the contract for the sale of the F Town property, and that he be required to vacate it. That said, the wife sought in her application that he be required to vacate it within seven days, but given the imminence of Christmas, and the likely need for the husband to relocate to one of the H Town units, as the wife proposes, seven days was simply unreasonable. I am satisfied that he should be given a period of 28 days to vacate the property, given that settlement is to occur within 35 days of him signing the contract. Ultimately, the wife conceded 28 days was reasonable. However the husband should not be required to vacate if the contract, which is subject to inspection and finance, does not become unconditional. Otherwise, I am satisfied that there should be orders substantially in the form proposed by the wife in the second application.

3. Since 15 December 2020, the husband has, amongst other things:

   (a)Not signed the contract as my 15 December 2020 orders required him to;

   (b)Failed to comply with my order that the parties jointly instruct a solicitor to conduct the sale of the F Town property;

   (c)Only permitted the agent and prospective purchaser to inspect the F Town property on condition that he accompany them on the inspection;

   (d)During that inspection, told the agent and purchaser that he had been removing and selling fixtures from the F Town property and intended to continue to do so;

   (e)Failed to sign and return the transfer document for the F Town property, as requested by the parties’ solicitor;

   (f)Refused to permit a valuer to inspect the F Town property in order to assist the purchaser in obtaining finance to complete the purchase.

4. The above conduct makes it tolerably clear that the husband is seeking to frustrate the sale of the F Town property under the contract which I required him to sign. Whilst he says that he is doing so because he believes the F Town property to be more valuable than the purchase price in the contract, contradictorily part of his justification for attending the purchaser’s inspection was because he wanted to point out to them problems associated with the property, no doubt to try and dissuade them from completing the purchase at that price.

5. On 11 January 2021, a Registrar made directions for the husband to file any material in response to the wife’s 8 January 2021 application, which he failed to do. Whilst in submissions before me, he protested the accuracy and truthfulness of many of the wife’s witnesses’ assertions, as I explained to the husband during the course of the hearing, absent any contradictory evidence, there is little reason for me not to accept the evidence proffered on behalf of the wife.

THE ORDERS SOUGHT BY THE WIFE

Husband’s debt for legal fees

1. The husband has a debt owing to his former lawyers whom he engaged in these proceedings. That debt is now the subject of a judgment in the Magistrates Court in the sum of $34,656.10. An Enforcement Warrant issued on 2 November 2020 and has been registered against the F Town property. Doubtless, the husband’s former solicitors will insist upon the discharge of the debt as a condition to permitting the sale of the F Town property to settle. The wife contends that indeed that should occur, but the payment should be “solely attributable to the husband in any final property settlement.”

2. Despite repeated attempts to have the husband focus upon the issues which this part of the application raised, he advanced no argument as to why he should not bear ultimate responsibility for that debt in the property proceedings. I am satisfied that he should, and therefore so ordered.

Undefended hearing

1. It seems uncontentious that the husband has failed to comply with a number of orders made in these proceedings from time to time including, significantly, disclosure of documents. On that basis the wife sought that the final hearing proceed on an undefended basis. However it is plain that the husband intends to defend the proceedings. In any event, given that the sale of the F Town property is yet to settle, it would be premature in the extreme to set the matter down for a final hearing. It is likely that once the F Town property sale has settled, much of the angst currently associated with this litigation will subside.

2. I was not persuaded that the matter was ready for trial, and in any event, was not persuaded that it should proceed by way of an undefended hearing, and therefore refused to make orders in terms of paragraphs 2 and 3 of the wife’s application.

Vacant possession

1. The wife sought vacant possession of the F Town property within 48 hours of orders being made. Her justification for doing so was that, unless and until the husband is no longer present on the F Town property, it is likely that he will continue to seek to frustrate the sale of the F Town property, either by trying to involve himself in any inspection, or refusing any further inspection (as he has done with the valuer), or alternatively, by acting to remove items from the property which are part of the sale.

2. The husband opposed being required to vacate the F Town property, essentially because the alternative accommodation at H Town is too distant from appropriate medical care. However the issue of whether he should be required to leave the F Town property was resolved in the 15 December 2020 judgment, from which no appeal has been brought.

3. In my 15 December 2020 orders and reasons, I recognised that to then require the husband to vacate the F Town property on short notice was potentially unfair to him, and further, given that the contract was not then unconditional, may see him required to move from the F Town property, which may not thereafter sell for a considerable period of time.

4. Unfortunately the husband used the opportunity which I afforded him not to cooperate in an orderly way, but rather as I have explained, to seek to frustrate the sale. He pays no rent for his occupation of the F Town property, and the mortgage over it is presently being solely serviced by the wife, as it has been since separation. Unfortunately it appears likely that the husband is seeking to extend his occupation in the F Town property for as long as possible, and has used the 15 December 2020 orders in a way to achieve that ambition. It is plain that he does not support the sale. It is therefore likely that he will continue to use his presence on the F Town property to try and further frustrate the sale, as he has done already.

5. I was therefore satisfied that the arrangement provided for in the 15 December 2020 orders, namely that he vacate the F Town property within 28 days of the contract becoming unconditional, was no longer appropriate, and he should forthwith remove himself from the premises. I was satisfied, given that it is now over six weeks since the 15 December 2020 orders, that he has had ample opportunity to prepare himself to leave the F Town property, particularly in light of the wife’s Application in a Case filed 8 January 2021, of which he has been on notice since at least 11 January 2021, and therefore 48 hours should be sufficient notice to him to do so. In any event, the risk of him further using his occupation of the F Town property to sell fixtures included within the sale mandates his removal. I therefore so ordered.

Warrant for possession

1. The wife sought that, in the event that the husband did not vacate the F Town property by the time ordered, that a warrant for possession issue in her favour. That warrant would authorise and direct an Enforcement Officer to give her possession of the real property.

2. As I have already said, it seems relatively clear that the husband is intent on seeking to frustrate the present sale. It is my provisional view that he is doing so, in order to continue to occupy the property rent free for as long as possible. I therefore had grave reservations as to whether he would in fact vacate the premises by 4.00 pm on 10 February 2021 as ordered. Particularly I note that in the past he has, contrary to orders, not signed the contract, not agreed to a solicitor with the wife, and not cooperated with the solicitor ultimately appointed by the President of the Queensland Law Society. In those circumstances, with a history of non-compliance with court orders, and with conduct at least consistent with seeking to frustrate the sale, I was satisfied that a warrant for possession should issue in the event that the husband did not vacate the property by the time I ordered.

Trustees for sale

1. Given the husband’s lack of cooperation in the sale process to date, and his use of every opportunity which the 15 December 2020 orders, and the sale process itself, afforded him to frustrate the sale, the wife seeks to remove him altogether from having anything further to do with the sale, by having her and the parties’ son appointed as joint trustees for sale of the F Town property. However significantly, one of the orders which she sought in this respect would authorise her and the parties’ son to “further negotiate in relation to, and agree upon a reduction in sale price, having regard to the results of the diligence enquiries carried out by the buyer…” That order, if made, would be without any constraint as to the extent of any variation, even accepting that it would be in the wife’s interest to achieve a maximum sale price. Counsel for the wife suggested that any injustice effected by the reduction in sale price could be the subject of investigation at the final trial, but as I indicated to him, that was a most unattractive way of dealing with the issue, but rather that any reduction in sale price below $435,000 should be the subject of a further application, as inconvenient to the wife as that may be.

2. That said, the lack of cooperation of the husband in the past only predicts that he is likely to continue to fail to cooperate in any sale other than one which meets his convenience, and therefore the appropriate response to his attempts to frustrate the sale are indeed to appoint the wife and the parties’ son as joint trustees for its sale. However their power in such respects should be constrained in that, whilst they may do all acts and things, and make all decisions, in relation to the conduct of the sale, that should not extend to any reduction in price from that which was agreed in the initial contract.

3. I therefore made orders to that effect on 8 February 2021.

Conclusion

1. For these reasons I made the orders which I did at the conclusion of the hearing on 8 February 2021.

I certify that the preceding twenty six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 10 February 2021.

Associate:

Date:  10 February 2021