Nixon and Nixon and Ors

[2010] FamCA 222

FAMILY COURT OF AUSTRALIA

NIXON & NIXON AND ORS [2010] FamCA 222

FAMILY LAW – PROPERTY – Interim and urgent orders affecting sale of property – Application for appointed real estate agents to be disqualified – Reserve price and sale issues – Costs

APPLICANT: MS NIXON

1^ST RESPONDENT: MR NIXON

2^ND RESPONDENT L ASSET MANAGEMENT

INTERVENOR L CAPITAL PARTNERS

FILE NUMBER: MLC 2061 of 2009

DATE DELIVERED: 12 MARCH 2010

PLACE DELIVERED: MELBOURNE

PLACE HEARD: MELBOURNE

JUDGMENT OF: YOUNG J

HEARING DATE: 12 MARCH 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR BROWN SC

SOLICITOR FOR THE APPLICANT: KLIGER PARTNERS

COUNSEL FOR THE RESPONDENT: IN PERSON

SOLICITOR FOR THE RESPONDENT:

COUNSEL FOR THE 2^ND RESPONDENT: MR DICKSON

SOLICITOR FOR THE 2^ND RESPONDENT LANDER & ROGERS

COUNSEL FOR THE INTERVENOR: MR DICKSON

SOLICITOR FOR THE INTERVENOR LANDER & ROGERS

Orders

IT IS ORDERED:

H STREET PROPERTY

1. THAT the Husband and Wife forthwith jointly instruct Mr Y of Y Valuers to prepare a sworn valuation of the current market value of the home and property at H Street, Victoria (“H Street”).

2. THAT the costs of the valuation (up to $5,000.00 plus GST) be paid at first instance by the Intervenor, such sum to be repaid to them upon settlement of the sale of H Street prior to the payment referred to in paragraph 3(c)(iv) of the Orders of 24 August 2009.

3. THAT in lieu of paragraph 3(b) of the Orders of 24 August 2009, the reserve price for the H Street sale be the sworn valuation sum determined by Mr Y.

4. THAT H Street be forthwith listed for sale by public auction on 1 May 2010 (or such other date as is reasonably nominated by K Real Estate) at an available time to be agreed (and failing agreement, as nominated by the Wife), such auction to be conducted by K Real Estate and their auctioneer.

M PROPERTY

1. THAT paragraph 5 of the Orders of 24 August 2009 be varied as follows:

   (a)by deleting the words "by [A] Real Estate in accordance with an Exclusive Sale Authority dated 24 August 2009" and substituting "by [E Real Estate] in conjunction with [A] Real Estate (if such agents agree to act in conjunction) (“the Joint Agents”) pursuant to a joint sale authority;

   (b)paragraph 5(c) be discharged;

   (c)the words "[A] Real Estate" be deleted in paragraph 5(e) and replaced with "the Joint Agents".

2. THAT the husband and wife are not to extend any current or proposed Exclusive Sale Authority, save as provided in paragraph 5.

3. THAT paragraph 2 of the Wife's Application in a Case filed 10 March 2010 be otherwise dismissed.

4. THAT the balance of the Wife’s interim Application be otherwise adjourned to Registrar Field for fixing as required before Dessau J.

5. THAT the orders sought (unnumbered) in the Husband's Application in a Case (dealt with as a response to the interim orders sought by the wife) filed this day be dismissed with a right of reinstatement only upon issues identified in the reasons for judgment as remaining outstanding and upon the filing of proper material.

6. THAT the orders sought by the Intervenor in the response filed this day be dismissed.

7. THAT the Intervener's costs of this day be fixed in the sum of $4,000.00 (plus GST) and the question of liability for their payment (as between the Husband and the Wife) be reserved to the trial Judge.

8. THAT the Husband pay $10,000.00 (plus GST) towards the Wife's costs of and incidental to the preparation and hearing this day, payment to be stayed until trial the listing of that issue for earlier hearing at an agreed date and time by the parties.

9. THAT the extempore reasons for judgment, on both the substantive interim issues and the costs issues, be transcribed, be placed upon the Court file and be made available to the parties.

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 wife and Counsel for the Intervenor and Second Respondent.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 206 of 2009

MS NIXON

Applicant

And

MR NIXON

1^st Respondent

And

L ASSET MANAGEMENT

2^nd Respondent

And

L CAPITAL PARTNERS
Intervenor

REASONS FOR JUDGMENT

1. The matter of Nixon is before the court as a matter of some urgency.  Mr Brown SC appears for the wife.  The husband appears in person.  Mr Dickson of counsel appears for the intervenors, L Capital Partners Pty Ltd, who were granted leave pursuant to the order of 24 August 2009, and L Asset Management Limited as a second respondent to the application now filed on behalf of the wife.  That application of the wife was filed 10 March 2010.  It is supported by an affidavit and significant annexures thereto, also filed 10 March 2010.  I have carefully read and evaluated both that application and the wife’s affidavit in support thereof. 

2. With the leave of the court this day the husband filed an application in a case which, in effect, is a response to the orders sought by the wife.  In support, he has prepared himself and filed a substantial affidavit with an annexure thereto, which, likewise, I have read.  At the commencement of the hearing, Mr Dickson, on behalf of his clients, sought leave to file an affidavit and a response to the application in a case.  That affidavit was sworn by a director of the intervening company, and also a director of the second name respondent, Mr F.  Likewise, I have read that affidavit, albeit in court and during these proceedings this morning, and the orders sought in that response. 

3. In essence, leave was given by Registrar Field for certain limited matters to have time abridged and to be heard before the court.  By letter dated 11 March 2010, abridgment was granted in respect of the orders sought in paragraph 2 of the wife’s application, together with ancillary orders which might necessarily flow from the sale of the H Street property, and the M property.  In paragraph 2 of that application, the wife seeks the discharge of earlier orders contained in paragraphs 3(a), 3(b), and 5 of the orders made 24 August 2009.  Otherwise, in that application, the consequential orders sought by the wife are particularly described in paragraphs 3-8 (inclusive) thereof, and there are thereafter further and other related orders sought in the balance of that document. 

4. The husband in his application, which I am treating as a response, seeks for the wife’s application to be dismissed with costs, seeks for himself the conduct of the sale of H Street, with subsequent opportunities for him to withdraw that property or M property from sale, if appropriate, and otherwise consequential refinancing orders, and other orders of an injunctive basis directed to the wife.  The intervenor and second respondent, by their response, seek the various orders sought by the wife to be dismissed in this hearing, but otherwise strongly endorse the sale of both H Street and M properties, and seeks orders for each of the husband and wife to forthwith execute all necessary authorities and documents to authorise the intervenor to have the sole conduct of the sale of each of those properties, on terms and conditions as recommended by the current selling agents. 

5. Thereafter, there are further consequential orders sought by Mr Dickson, including an order pursuant to section 106A of the Family Law Act 1975. The brief property background to the orders sought is that the wife is the sole registered proprietor of the H Street property (which hereafter I shall refer to as H Street). The value of that property is a central issue in dispute. Previously professional real estate valuation advice had indicated a current market value of approximately $7.5 million. Thereafter, in the material filed on behalf of the wife, it is suggested that value is in excess of that which the market would now realise, and a figure of $6.5 million is identified by the wife upon advice from the firm of real estate agents K Real Estate, in the current value of $6.5 million.

6. Westpac Banking Corporation have various registered mortgages or cross-collateral securities over title, and the court has been advised that the totality of their liability owed is $6.7 million or thereabouts.  Additionally, Mr Dickson has advised the court that there are further liabilities secured against the property, to which I note the strong objections of Mr Brown on behalf of the wife, totalling some $2.3 million.  It is unnecessary for me, on these limited proceedings, to further identify or make any findings in respect of those purported liabilities, and that is entirely another issue for another day.  The property at M, more particularly described as …, M, is owned by a corporate entity of or associated with the husband and wife, and in a complex structure (if the husband’s submissions are to be accepted), which is likewise unnecessary to more particularly identify this day.

7. That property is part of the Westpac security, and its valuation is said to be approximately $1.4 million.  Formerly, a local real estate agent, Mr A, had an exclusive sale authority on that property, but that has lapsed as at the end of February of this year.  The husband advised the court that he had intended to roll over that exclusive authority, but as at this day, that has not been so extended.  The wife, in her application, has proposed the addition of E Real Estate, through their local agency to act in conjunction on the sale of M property, together with Mr A.  The husband has indicated what I take to be a preference for Mr A, but expressed no strong disagreement with a joint agency, sale in conjunction as between both Mr A and the office of E Real Estate.  With that background, albeit brief in the circumstances of this urgent hearing, in delivering these reasons ex tempore, I turn to consider the two most recent orders of this court. 

8. On 10 June 2009, the husband and wife were before the court, and at that time, Mr Dickson’s clients were not involved in these proceedings.  Both the husband and wife were then represented by solicitors and experienced counsel.  In paragraph 10 of those orders, and by consent, there was an order for the parties (that is, each of the husband and wife) to do all things necessary to facilitate the sale of H Street, and jointly to instruct K Real Estate.  There were consequential orders as to the preparation and preparedness of H Street for sale, and orders as to the investment of the proceeds of sale.  In paragraph 11, there was a like order for the parties (that is, the husband and wife) to do all things reasonably necessary to sell their interest in M property, and all associate interests in W Entity, including car park rights, by either of Mr A or E Real Estate.

9. The husband then had the opportunity to select such of those agents, on terms and conditions agreed by both parties.  Again there were consequential agreements between the parties that are further recorded in paragraph 11 of that consent order.  On 24 August 2009, the matter was again before the court, with all parties represented by solicitors and experienced counsel, and at a stage when the intervenor was then granted to leave to intervene in the proceedings, and Mr Dickson then appeared on that occasion.  Again, there were consent orders.  Those orders provided for a discharge of paragraph 10(a) and 10(c), and paragraphs 11 and 12 of the earlier orders to which I have referred.  The orders then by consent pronounced were for the wife to do all acts and things necessary to facilitate the sale of H Street, and to instruct K Real Estate for sale on an expression of interest basis or thereafter by public auction.

10. The reserve price was set at $7.5 million, and there were orders for the disbursement of the proceeds of sale in accordance with subparagraph (c) thereof.  Various caveats were ordered to be withdrawn from the title to H Street.  As to M property, an order was pronounced for the husband and wife, forthwith to do all things necessary to sell their interest in that property, together with associated interests in W Entity, and including car park rights.  That sale was to be handled by A Real Estate, pursuant to a then continuing exclusive sale authority that the husband had provided to that real estate agent, and which I have now recorded has lapsed.  The reserve price for M property was $1.45 million, and there were consequential orders recorded in the balance of paragraph 5 of those orders. 

11. Those orders further provided for the conveyance to be undertaken by Aitken Partners, and an order was made pursuant to section 106A of the Family Law Act 1975 for the Registrar of this court to be appointed to execute deeds and documents required to be executed by or on behalf of the husband and wife, or any corporate entity owning M property, so as to give validity and operation to these orders. I turn to the limited matters upon which time was abridged for these matters to be before me today for this urgent hearing and ex tempore reasons for judgment. As to H Street, there are live issues as between the various parties, as to the necessity for sale and as to the manner of sale, including by what real estate agent, and the asking price.

12. I have had submissions from counsel appearing for the wife, and the intervenor and second respondent, and otherwise from the husband.  The wife would maintain K Real Estate as the sole real estate agents to conduct the sale.  The husband would propose that their appointment, that is, K Real Estate, be revoked, and that Mr C, of C Real Estate, be appointed as agent to conduct the sales campaign for the sale of H Street.  The proper approach that I have followed is to give substantial credence and validity to the prior consent orders which the parties reached.  Under those orders, K Real Estate were initially appointed, and to be jointly instructed, with task of the sale of H Street. Significantly, in the subsequent orders of 24 August, that was reaffirmed by consent, as was the sole appointment of the wife then to handle the sale.  I have read the circumstances as outlined by the wife in her material.  It is abundantly clear that there are very diverse and complex personal, and perhaps somewhat bitter relations between the husband and wife and enmeshed within the financial situation. 

13. It may or may not be that Westpac urgently require a sale of H Street, and for that matter, M property.  The determination of that matter is perhaps unnecessary, given the prior orders of the court, the agreement to sell, and the clear level of indebtedness carried by or on behalf of the parties and their corporate entities.  As to the question of what real estate agent should sell the property, I will order K Real Estate remain for H Street on an exclusive basis, and not in conjunction that should afford the maintenance of past work and contacts made as to this particular property, and it is clearly in accord with the former agreement of both parties.  There is nothing in the material of the husband that so directs me, as a matter of urgency, to replace that well-known real estate agency firm with any other, perhaps equally well-known, real estate agency firm. 

14. I will, however, on the issue of valuation, require a sworn valuation to be forthwith obtained.  I appoint Mr Y, licensed valuer, to forthwith undertake a current market appraisal of that property.  Mr Dickson, on behalf of his clients, has volunteered to the court that they will meet the reasonable cost of that valuation exercise forthwith generally, and from what was discussed in court, a sum of up to $5000 plus GST would more than cover the cost of that valuation.  I emphasise that valuation is to be obtained of the current market value and expected sale price of H Street, having regard to all of the particular aspects, size and dimension of that property, both as to land and as to home.  I intend that valuation to be the reserve price at which the auction will take place.  I will direct that the property be sold by public auction on 1 May 2010, or such other date as the selling firm of the real estate agents may recommend to all parties in these proceedings.

15. I leave the time of auction on that day to be fixed by negotiation, or otherwise by the wife. The proceeds of sale can be applied in accordance with subparagraph 3(c) of the orders of 24 August 2009, save that the intervenor and second respondent are to have repaid to them as a priority the costs of the sworn valuation.  From what I have heard in court this day, all of the caveats that previously were lodged were uplifted, and no further order is required in that regard.  I make no order in respect of excluding the husband from H Street, on the basis that there is a current and validly operating intervention order from a Magistrates Court, of which I have no details, and which I have not seen, but Mr Brown has provided an assurance to the court that that is currently in place, though perhaps its existing days and operation are limited, but upon that I make no comment whatsoever.

16. To the extent, therefore, that Mr Dickson sought orders for his client to be appointed to have the sole conduct of the sale of H Street, I decline to make those orders for the reasons above identified.  As to M property, and both the sale of that property and its associated interests within S Entity and any car park rights, I intend to vary the current order to provide a sale by conjunction as between A Real Estate and E Real Estate.  I would therefore direct that the husband not extend any exclusive agency agreement to Mr A, but that the appointment for a sale in conjunction by each of those firms be effective immediately.  The reserve price for M property remains at $1.45 million, and that is a matter of agreement, or at least acquiescence as between the husband and wife.

17. The practical difficulty of and associated with M property will be the responsibility for facilitating the cleaning and presentation, so that it is sold to obtain the best possible price.  Given the lack of cooperation between the husband and wife, that will likely be a difficulty.  Common sense should apply, though I am not confident that will or could be the case.  Given that I have significantly balanced the previous orders of this court and required the parties to stand by their earlier agreements, at this stage, I am not prepared to vary subparagraphs (d) and (e) of paragraph 5 of the orders of 24 August.  That means, save for the addition of the agent in conjunction in subparagraph (e), that the husband must prepare, present, and facilitate maintenance, and pay cosmetic costs in improvements and maintenance of M property.

18. It follows, therefore, that to the extent that the wife sought orders of a consequential nature in paragraph 4 of her application this day, for the husband to be ordered to resign as a director of G Properties No. 1 Pty Ltd, and that the wife be thereafter appointed as sole director.  I decline to make that order on the material now before me, and at this stage, in these proceedings.  Likewise, it would follow that I do not make the orders sought in paragraph 5, 6 or 7 of the wife’s application.  Paragraph 8 of those orders sought is in conflict with the current order, and I have not varied the current order as to the husband’s obligations to act in the preparation and presentation of M property for sale.

19. In part, I balance the retention of that order with the fact that the appointment of E Real Estate as the agent in conjunction for M property will facilitate a reasonable flow of information to the wife and her lawyers about the efforts of the husband in meaningfully acting to prepare, present and offer M property for sale, presumably on the basis that the best sale price will be obtained prior to the upcoming holiday season, commencing on or about Queen’s Birthday weekend in mid-June.  It follows, therefore, that Mr Dickson’s application for his client to be appointed to have the sole conduct of the sale of M property also fails, for the reasons expressed in these brief ex tempore reasons for judgment.  In summary, therefore, the orders sought in the response by the intervenor and second respondent are to be dismissed.

1. The orders sought by the wife in paragraph 2 of her application filed 10 March 2010 are in part successful, and have been acted upon by the court.  I do not, at this stage, intend to dismiss paragraphs 3 to 8 inclusive of that application, but they can remain extant and be adjourned to a further hearing date, and be consolidated with other matters outstanding, pending the compliance of the husband and wife with the orders that I have pronounced this day.  As to the husband’s application, filed by leave this day (and where orders sought are not numbered), for the reasons expressed I have clearly not dismissed the wife’s application, and that part of the husband’s application is unsuccessful.  I have made orders in dealing with the second paragraph of those orders that render unnecessary the orders sought by the husband, which I decline to pronounce.

2. I will not withdraw H Street or M property from sale unless there are consent orders for an overall section 79 settlement, and I envisage this matter to be a long, long way removed from any discussion, let alone conclusion of financial issues between the parties.  I make no restraining orders against the wife in respect of the business or Westpac.  I will dismiss all applications for such restraining orders, but so as not to prejudice the husband in any way, I will allow him the right to reinstate his application for such orders upon proper material hereafter, but only if necessary and financially prudent.  I emphasise that I do not encourage, nor do I otherwise comment upon those subsequent applications which may or may not be reissued, and each matter will need to be treated on its own individual facts, as and when the matters arise, if they so arise.  What I have asked Mr Dickson to do is to therefore prepare minutes of order in accordance with these ex tempore reasons.  I will have these reasons transcribed, placed upon the court file and made available to all parties.  Otherwise, I will stand the matter down for the drafting of appropriate orders in all ways consistent with these reasons. 

COSTS

1. I will give some brief reasons, arising out of the ex tempore judgment which I have just delivered, and the orders which I have foreshadowed. Mr Brown, on behalf of the wife, makes an application for costs pursuant to section 117 of the Family Law Act 1975. His costs, on brief, and the costs of his instructing solicitor at court this day, and preparation of the wife’s material is said by him to be costed at $12,250 plus GST. He seeks an order that the husband pay those costs. The husband appears in person. He does so, he has indicated to the court, on the basis of an inability to pay his past solicitors, with whom he has no disagreement as to their level of representation for him on all previous occasions. He opposes any order to pay the wife’s costs, on the pragmatic basis that the husband and wife should pay their costs of and incidental to this hearing. The wife, of course, has legal costs. He, of course, does not have legal costs. The Family Law Act requires each party to pay their own legal costs, save in circumstances where the court determines that it is just for an order to be made for costs. 

2. The court determines what is just on the basis of those factors set forth in section 2A of section 117 thereof. Those factors include the conduct of the proceedings, the particular issues before the court, the manner of litigation, as encapsulated within subparagraph (c) thereof, and otherwise and significantly, the financial situation of both parties, and the outcome. That is, whether one party has been wholly unsuccessful or otherwise. There is a broad discretion to the court on costs and I can have regard to any other matter of particular relevance. What I have in this case are substantial affidavits of and related to the interim issues upon which I have made findings and orders. Those issues are significantly identified as to procedure and conduct, to provide a reasonable basis for determining an order that it would be just for some part of the wife’s costs to be paid by the husband.

3. The orders provide for H Street to be dealt with in a matter largely consistent with the orders sought by the wife.  The orders provide for M property to be dealt with on a conjunction sale basis, at a price that was not in dispute, but otherwise and somewhat consistent with previous orders.  I have not made orders that the wife sought in respect of the corporate variations to facilitate the sale of M property.  They are matters that I balance in the overall costs discretion.  As for Mr Dickson’s client, is it proper that his costs and those of solicitors instructing him be fixed in the sum of $4,000, and I will reserve the obligation for payment of that quantum to the trial judge, on the basis that either the husband or the wife, or a combination thereof should pay that $4,000 cost sum. 

4. Returning to the issue of the wife’s costs and the payment thereof, I intend to order the husband pay the wife’s costs as to $10,000, but not as to $12,250 thereof.  GST is applicable and must be paid on that costs order.  I defer payment to either the trial judge or to any further application for payment to be made on proper material filed for the judge who has primary conduct of this matter, or any other judge appointed to hear that payment of costs issue, as may arise.  I will therefore require the order to incorporate a requirement for the husband to pay the wife’s costs, fixed in the quantum of $10,000 plus GST, for all matters of and incidental to the hearing of the various applications before me this day.  I will have this costs judgment transcribed and placed upon the court file, and made available to the parties. 

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

………………………………………………………..
Associate: