NEUMANN & HAAS
[2020] FamCA 1076
•15 December 2020
FAMILY COURT OF AUSTRALIA
| NEUMANN & HAAS | [2020] FamCA 1076 |
| FAMILY LAW – INTERIM PROPERTY – Where the wife seeks orders for the sale of the former matrimonial home and for the husband to vacate that property – Where the husband opposes the sale and seeks to retain the property in the ultimate property settlement between the parties – Whether there is any practical possibility of the husband ultimately retaining the property – Where the prospects of the husband being able to retain the property in any final property settlement are effectively nil – Where the property will need to be sold in order to finally determine the parties’ financial relationship – Where orders made for the sale of the property and for the husband to vacate it – Further interim property orders made. |
| Family Law Act 1975 (Cth) ss 75, 79, 114 Family Law Rules 2004 (Cth) rr 6.03, 13.01 |
| Australian Broadcasting Corporation v O’Neil (2006) 227 CLR 57 Liwszyc v Smolarek (2006) 24 ACLC 58; [2005] WASC 199 Shepherd Homes Ltd v Sandham [1971] Ch 340 |
| APPLICANT: | Ms Neumann |
| FIRST RESPONDENT: | Mr Haas |
| SECOND RESPONDENT: | Mr B Neumann |
| FILE NUMBER: | CSC | 618 | of | 2019 |
| DATE DELIVERED: | 15 December 2020 |
| PLACE DELIVERED: | Cairns |
| PLACE HEARD: | Cairns |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | 15 December 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Raeburn |
| SOLICITOR FOR THE APPLICANT: | Miller Harris Lawyers |
| THE FIRST RESPONDENT: | Self-represented litigant |
| SOLICITOR FOR THE SECOND RESPONDENT: | Hartley Whitla Lawyers |
Orders
Contract of sale of F Town Property
That no later than 4:00pm on Thursday 17 December 2020, Mr Haas (“the husband”), must do all acts and things necessary to sign the contract for sale contained in Annexure A to the Application in a Case filed 1 December 2020, for the property situated at C Street, F Town, in the State of Queensland, more particularly described as Lot … on Registered Plan … with Title Reference … (“F Town Property”), and thereupon send the signed contract to D Real Estate, G Town (“the agents”) by express post.
That the husband and Ms Neumann (“the wife”) (collectively “the parties”) must jointly instruct such solicitor as they agree upon to have the conduct of the sale on behalf of the parties or, in the absence of agreement reached within seven (7) days of the date of these orders, such solicitor as may be appointed by the President for the time being of the Law Society of Queensland (“the solicitor”) the costs of and incidental to such appointment to be borne equally by the husband and wife, and paid from sale proceeds, or should sale proceeds be insufficient, by the wife in the first instance, as and when they fall due.
That the parties are required to co-operate 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; keeping the property in a reasonably clean condition; and signing any documentation prepared by the solicitor to facilitate the sale of the property, including, but not limited to, Land Titles transfer documentation and mortgage discharge authority, within two (2) days of a request to sign such documentation being received by said solicitor or agent.
That in the event that the contract is then unconditional, within twenty-eight (28) days of these orders, the husband is to vacate and deliver to the wife, vacant possession of the F Town Property. The wife is to have sole use and occupation of the F Town Property from the date the husband vacates the property in accordance with this order until the date of settlement of sale of the F Town Property. For the purposes of this order, vacant possession includes that the husband:
(a) vacate the property;
(b) remove his belongings from the property;
(c)leave all chattels that are included in the contract for sale contained in Annexure A to these orders at the F Town Property;
(d)not remove any fixtures from the property;
(e)hand over all keys for the property to the applicant or her nominated agent; and
(f)leave the property in a reasonably clean condition.
Proceeds of sale from F Town Property
On settlement of the sale of the F Town Property the proceeds of sale shall be paid in the following manner and priority:
(a)the amounts required to pay all municipal and water rates outstanding with respect to the F Town Property;
(b)the amounts required to discharge the National Australia Bank Limited registered mortgage number …;
(c)all costs and expenses of sale including legal costs and disbursements, agents commission, advertising expenses and valuers fees, (including reimbursement of either party for expenses incurred in the preparation of the property in accordance with the recommendation of the agent); and
(d)the balance then remaining be held in the trust account of the wife’s solicitor pending further order of This Honourable Court.
J Street, H Town
That from the date of these orders, until further order, the husband shall have sole use and occupation of the property situate at J Street, H Town, in the State of Queensland, more particularly described as Lot … on Building Unit Plan …, with Title Reference ...
Company and Partnership
That within seven (7) days of the date of these orders, the husband and Mr B Neumann (“the son”) are to do all acts and things necessary to comply with paragraphs 1 to 3 of the Interim Orders made by the Federal Circuit Court of Australia at Cairns on 17 February 2020.
In the event the husband or son fail to comply with paragraph 7 of these orders, the wife is authorised as trustee of the husband and is hereby authorised to do all acts and things necessary to comply with the Interim Orders made by the Federal Circuit Court of Australia at Cairns on 17 February 2020.
Disclosure
That within fourteen (14) days of the date of these orders, the husband must make full and frank disclosure in accordance with r 13.01 of the Family Law Rules 2004 (Cth) in respect of all financial and other documents relevant to the issues in question.
Other Orders
That the parties do all acts and sign all documents required to implement these orders.
That:
(a)if the husband refuses or neglects to sign the contract for sale of the F Town property by 4:00pm on Thursday 17 December 2020; or
(b)if either party refuses or neglects to sign (within 7 days of a written request to do so) any documents necessary to give effect to the terms of these orders;
then the Registrar of the Family Court of Australia is hereby appointed pursuant to the provisions of s 106A of the Family Law Act 1975 (Cth) to execute the contract or such documents on behalf of such party.
That the costs of and incidental to the wife’s Applications in a Case filed 16 September 2020 and 1 December 2020 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
By Applications in a Case filed 16 September 2020 (“the first application”) and 1 December 2020 (“the second application”), Ms Neumann (“the wife”) seeks a suite of interim orders in property settlement proceedings between her and Mr Haas (“the husband”) and one of the parties’ two children, Mr B Neumann (“the son”).
Most significantly, by the second application the wife seeks orders requiring the husband to sign a contract for sale of the former matrimonial home at C Street in F Town (“the F Town property”) for him to vacate it within seven days, and to cooperate in effecting its sale. She further sought orders that the proceeds of that sale be used to pay outstanding municipal charges against the property, discharge the mortgage over it, and pay the costs of sale, with the balance to then be held in her solicitor’s trust account pending further order.
The wife also proposed in the first application, that the husband do all things to comply with earlier orders made by the Federal Circuit Court in these proceedings on 17 February 2020, to facilitate the conclusion of the parties’ now defunct business, for disclosure by the husband, and for the parties to do all things required to implement the orders.
Pending further order, the wife proposed that the husband have sole use and occupancy of one of two units owned by the parties at J Street in H Town.
The husband opposed the orders sought by the wife, although ultimately appeared to concede that the F Town property should be sold, but at a much higher price than the current contract provides. The son did not oppose any of the orders sought by the wife.
On 15 December 2020, I heard the wife’s Applications in a Case and reserved my decision. This is that decision and the reasons for it.
Background
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 care professional, initially in the public service, but later in M Health Services.
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.
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.
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”).
The wife returned to work in about 2010.
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.
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 manufacturing 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.
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.
In August 2017, the wife returned to permanent part-time work as a health professional, as she was left with no other choice financially.
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.
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.
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.
The applications
The main thrust of both the wife’s applications relates to the sale of the F Town property. Particularly the second application, which in large part has overtaken the first application, seeks to require the husband to sign a contract for the sale of the F Town property at a price of $435,000, and to vacate it. It also makes provision for the disbursement of the proceeds, with the usual costs of sale, and repayment of liabilities attached to the property being met, and the balance invested.
The husband opposes that application, on the grounds that he wishes to retain the F Town property in the ultimate division of property between the parties.
The power to make the orders sought by the wife is contained within s 114(1) of the Family Law Act 1975 (Cth) (“the Act”), which relevantly provides as follows:
(1) In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:
(a) …
(b)an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;
(c) …
(d) …
(e)an injunction in relation to the property of a party to the marriage; or
(f)an injunction relating to the use or occupancy of the matrimonial home.
The orders compelling the husband to sign the contract, and to vacate the property, are necessarily in the form of interlocutory injunctions. The test for the making of prohibitory interlocutory injunctions was established by the High Court in Australian Broadcasting Corporation v O’Neil (2006) 227 CLR 57, where, at [65], Gummow and Hayne JJ (on which point Gleeson CJ and Crennan J agreed) said:
The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:
“The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.”
By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:
“How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.”
(Footnotes omitted)
Of course, here the wife’s proposed injunctions are mandatory in nature, but nonetheless, the strength of her case, and the balance of convenience, loom large for consideration (Shepherd Homes Ltd v Sandham [1971] Ch 340; Liwszyc v Smolarek (2006) 24 ACLC 58 at 65).
The wife’s applications, or more precisely the husband’s basis for resisting them, necessitates a consideration of whether there is any practical possibility of the husband ultimately retaining the F Town property, or whether it will need to be sold. That in turn directs focus to the pool of property available for division in the final exercise of the s 79 discretion.
Far and away the most valuable asset which the parties have available for division is the F Town property. Although the single expert valuer has placed a value of $450,000 upon it, when listed for sale at that price, it proved unable to be sold, or even attract an offer, and indeed the only offer that has ever been made is the current one of $435,000. The husband contends that the F Town property is worth more than $435,000, but there is no evidence to support that.
There appears to be something in the order of $270,000 owing under the mortgage secured over the F Town property, therefore leaving an equity of $165,000. Whilst I do not presently have any estimate of the costs of sale, or indeed the amount of any outstanding rates and taxes, for present purposes I propose to adopt the figure of $165,000 as being the net equity in the F Town property.
The H Town units are estimated by the husband to be worth respectively $45,000 and $95,000, but there are mortgages over them of at least $50,000, and perhaps considerably more. However for the purposes of present calculations, I propose to adopt a figure of $90,000 as the likely net equity which the parties have in the H Town units.
Otherwise the parties’ assets are slender. The wife has superannuation which, as at 16 August 2019, was said by her to be worth $33,341.86. As at that date she also had a little under $20,000 by way of savings, albeit liabilities comprising loans, financing agreements and credit cards, then totalling about $57,000. The only other assets identified by the husband in his financial statement of 20 January 2020 totalled $3,500. I propose to ignore the latter for the purposes of assessing the pool.
I do not overlook that the husband contends that the wife has an entitlement to claim past allowances arising out of her employment, but other than that bare assertion, there is no evidence of that.
Further, the husband says, that he has been in negotiations with National Parks to sell 20 acres of the F Town property, but no documents were produced by him to substantiate that claim. To like effect is his evidence that he has proposed joint venturers who are prepared to assist him to re-finance the F Town property as part of a property settlement with the wife, but again no documentary material was produced by him to support that claim, and in any event, it is unclear why those persons are not prepared to presently finance the purchase of the property by the husband, but rather must await property settlement.
I do not propose to include any of these contended assets into the balance sheet for present purposes.
In the case of a long marriage, where neither party brought in assets of substance, and both contributed in their respective ways to the asset pool at separation, it is difficult to see why one would contend that, at that time, their contribution based entitlements would be other than equal, as indeed the wife conceded. However post separation, the wife calculates that, as at 21 July 2020, she had paid $174,010.43 relating to the parties’ properties, or in relation to the husband’s living expenses, or the parties’ joint financial situation generally. To err on the side of caution, I nonetheless propose to work on the basis that the parties’ contribution based entitlements are equal.
That then brings into focus the s 75(2) factors, which on one view favour the husband. Particularly, he has no recent history of employment and apparently has some health issues which might make employment difficult to obtain. That said, in his affidavit filed 20 January 2020, he contemplated returning to work training health care professionals. He therefore does not assert that he is wholly unemployable.
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.
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.
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.
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.
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.
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.
Turning then to the first application, the relief sought by paragraphs 4 to 7 (both inclusive) has now fallen away, leaving only an application for orders requiring compliance with orders of the Federal Circuit Court of 17 February 2020, and for disclosure by the husband. Whilst it is always rather unseemly to make orders requiring compliance with earlier orders, I understand that the purpose of that, in this case, is to permit the wife to undertake those things in the event that the husband continues to fail to comply. In those circumstances, I am satisfied that there should be orders in terms of paragraphs 2 and 3 of the first application. Plainly there is also a need for disclosure by the husband, and I will therefore make an order in terms of paragraph 8 of the first application. I am otherwise satisfied that orders should be made in terms of paragraphs 9–11 and 12 (with some modification) of the first application.
As to the order sought by paragraph 1 of the first application, being for leave to join the son as a party, as I said to the parties during submissions, it is unnecessary, as joinder is effected simply by naming the party to an Amended Initiating Application (r 6.03 of the Family Law Rules 2004 (Cth)). Therefore I decline to make an order in terms of paragraph 1, and it thus follows that the undertaking as to damages in relation to costs, which the son seeks from the wife by his Response filed 20 October 2020, does not properly arise for consideration. In the event that the son seeks, in effect, an order for security for his costs from the wife, that application will need to be separately brought.
Conclusion
For these reasons there will be orders as set out at the commencement of this judgment.
I certify that the preceding forty two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 15 December 2020.
Associate:
Date: 15 December 2020
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