Oliveri & Oliveri (No. 3)

[2021] FamCA 242

FAMILY COURT OF AUSTRALIA

Oliveri & Oliveri (No. 3) [2021] FamCA 242

File number(s):

ADC 2966 of 2018

Judgment of:

BERMAN J

Date of judgment:

29 April 2021

Catchwords:

FAMILY LAW – PROPERTY – Sale of property – Injunctions – Where the wife seeks sale of a property by private sale – Where the husband seeks the property be sold by auction – Where previous orders were made for the property to be sold by auction – Where the parties then agreed for the property to be sold by way of private sale - Where an offer has been made at the reserve price – Where the husband now seeks sale by auction – Deteriorating financial circumstances – Where there is a risk that the wife’s claim may be prejudiced – Orders.    

Legislation:

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

Cases cited:

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380

G & T (2004) FLC 93-176

Mullen & De Bry (2006) FLC 93-293

Number of paragraphs:

74

Date of hearing:

16 April 2021

Place:

Adelaide

Counsel for the Applicant:

Mr Richards

Solicitor for the Applicant:

Resolve Divorce Lawyers

Counsel for the Respondents:

Mr McGinn

Solicitor for the Respondents:

Clelands Lawyers Adelaide Pty Ltd

ORDERS

ADC 2966 of 2018

BETWEEN:

MS OLIVERI

Applicant

AND:

MR OLIVERI

First Respondent

MS R OLIVERI
Second Respondent

MR S OLIVERI

Third Respondent

ORDER MADE BY:	BERMAN J
DATE OF ORDER:	29 APRIL 2021

THE COURT ORDERS THAT:

1.Orders 2 and 3 of the property orders made by consent on 16 October 2020 be discharged.

2.On or before the elapse of forty eight (48) hours from the date of this order the husband shall do all things necessary to sign and execute the contract for the sale of the property situate at T Street F Town in the state of South Australia (“the F Town property”) to the nominated purchaser being Ms U and/or nominees for the fixed sum of $2,600,000 (TWO MILLION SIX HUNDRED THOUSAND DOLLARS) with settlement to occur on or before 21 July 2021.

3.In default of the husband entering into the said contract for the sale of the F Town property, a Registrar of the Family Court of Australia is hereby appointed pursuant to section 106A of the Family Law Act 1975 (Cth) upon proof by affidavit of the husband’s neglect or refusal to sign the said contract for sale, to execute the contract for sale for and on his behalf.

Note:   The form of the order is subject to the entry in the Court’s records.

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 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Oliveri & Oliveri has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

BERMAN J

1. By Application in a Case filed 18 February 2021, Ms Oliveri (“the wife”) seeks orders  that Mr Oliveri (“the husband”) do all things and sign all documents as may be necessary to cause the sale of the following properties:

   (a)V Street, Suburb W (“the Suburb W property”);

   (b)T Street, F Town (“the F Town property”);

   (c)BB Street, Suburb AA (“the BB Street properties”); and

   (d)CC Street, Suburb AA (“the CC Street property”).

2. In addition, should the husband fail to execute any document as may be required to cause the sale of any of the said properties then the wife seeks that she shall have sole authority to do so with a further alternative position that would enable a Registrar of the Family Court of Australia pursuant to s 106A of the Family Law Act1975 (Cth) (“the Act”) to sign such documents as may be required to effect the sale.

3. The interim proceedings are to be considered against the background of orders made on 18 March 2021, listing all applications for final orders for final hearing to commence on 20 September 2021.

4. Pursuant to further trial direction orders made on 23 April 2021, Ms R and Mr S Oliveri, being the second and third respondents (“the husband’s parents”), are to file and serve a Response setting out the final orders they seek by 29 April 2021 and other trial material by 21 May 2021.  The husband is to file his trial material by 23 July 2021 and the wife is to file her trial material by 13 August 2021.

5. The wife now only seeks orders in terms of paragraph 3 of the Application in a Case for the sale of the F Town property.

6. Further interim proceedings were filed by the husband in order that they be listed for hearing on the return date of the wife’s listed Application in a Case. 

7. By Application in a Case filed 6 April 2021, the husband seeks the discharge of order 2 of orders made 8 July 2020 which provided that 30 days prior to the marketing for sale of the F Town property the husband do pay to the wife’s solicitors’ trust account the sum of $30,000 to be applied by the wife solely for the purpose of securing alternate accommodation for herself and the children. 

8. The husband in his Application in a Case also seeks the discharge of interim parenting orders in preference for orders that X and Y, both born in 2017 (collectively “the children”), spend time with him each alternate weekend from 5.00 pm Friday to 5.00 pm Sunday and each Wednesday from 3.00 pm to 7.00 pm.

9. The husband’s application of 6 April 2021 also seeks the production of documents provided by the wife to the South Australian Police since 2 March 2020, although it appears that the only remaining issue is the status of a 76 page document referred to by the wife at paragraph 7 of her affidavit of 23 October 2020.

10. The wife’s Response to an Application in a Case filed 14 April 2021 seeks that the husband’s application of 6 April 2021 be dismissed.

11. Unrelated to the interim proceedings, but of significance to the listed final hearing is the status of the husband’s parents.

12. Arising from an assertion by the husband that the parties remain indebted to his parents in the total sum of $2,705,404, the wife joined the husband’s parents as parties on her Further Amended Initiating Application filed 13 October 2020.

13. Despite their solicitor’s attendance at recent court hearings, neither a Notice of Address for Service nor a Response to Initiating Application had been filed as at 16 April 2021.

14. Of more immediate moment is the current uncertainty in respect of the husband’s parents’ ability to give instructions to their solicitor.  It is apparent that there has not been any voluntary production of documents in support of the husband’s parents’ purported claim.

15. The wife’s counsel was vocal in his complaint as to the paucity of discovery from the husband following various requests for production of documents. 

16. I am not in a position to make any determination as to whether any or all of the parties have been recalcitrant in making full and frank disclosure of documents relevant to any issue within the proceedings but it has the potential to cause the Court to consider whether the listing of the matter for final hearing was premature.

17. The proceedings were adjourned to consider the status of the husband’s parents, the issue of discovery and to further hear the balance of the interim proceedings.

    BACKGROUND

    Suburb W Property

18. On 8 July 2020 an order was made, by consent of the parties, for the sale of the Suburb W and F Town properties.

19. In relation to the Suburb W property, the wife asserts that following an agreement between the parties on 20 July 2020 for the appointment of three agents to prepare an appraisal, the husband thereafter did not engage in the process.  On 4 September 2020, the wife filed an Application in a Case seeking orders necessary to progress the sale which resulted in the eventual appointment of an agent and an auction on 5 December 2020.  The auction was unsuccessful. On 7 December 2020 the agent advised the parties that whilst the property did not sell there was an interested potential purchaser.  The agent recommended that the parties revise the price down to $420,000.

20. The parties agreed to pause the marketing of the Suburb W property, however the wife considered that given the then current sales agency agreement was to expire on 18 January 2020, a new sales agency agreement needed to be entered into.

21. Invoices as to the marketing campaign and auction expenses remain outstanding to the real estate agent in the sum on $3,660.

22. As at February 2021, the wife asserts that she had not been able to obtain the husband’s consent and cooperation in relisting the Suburb W property for sale and in particular his refusal to follow the recommendations of the agent as to a revised sale price.

23. The liabilities in respect of Suburb W are significant.  Over and above the amount owing to the real estate agent are the arrears of strata fees in the sum of $4,646 and mortgage repayments of approximately $1,960 per month, partially offset by rental income of $1,580 per month.  Of perhaps greater moment is the acknowledgment by the husband that as at 9 February 2021 he has not been paying the insurance premiums on any of the investment properties, including the Suburb W property.  It appears that the property portfolio of the parties, including the F Town property, remains uninsured.

24. The husband acknowledges the chronology as set out by the wife and now considers that the agent’s recommendations are appropriate and should be followed.

25. It is an important concession by the husband that he is not in a financial position to pay any of the outstanding fees, liabilities or mortgage short fall on an ongoing basis.  That also includes an inability to properly insure the investment property portfolio.

    BB Street and CC Street properties

26. Similar concerns exist in respect of the BB Street properties.  On 26 November 2020, the wife was made aware of a default notice in respect of mortgage loans secured over the BB Street properties.  The husband eventually dealt with the default notices by borrowing $40,000 from his parents and refinancing with a loan of $1,225,000 at an interest rate of 13.5 per cent.

27. The uncertainty in respect of the BB Street properties is the extent to which it may be an intention of the husband for the properties to be the subject of development and whether valuation issues may arise.  This may be further unknown in circumstances where the husband wishes to retain them.

28. In circumstances not dissimilar to the HH Street, F Town and BB Street properties, the CC Street property is also the subject of a default notice in respect of a mortgage securing a loan over the property which is in arrears of $19,554 as at 6 January 2021.  The total amount secured over the property is $720,639.

29. The husband now agrees that the CC Street property needs to be sold but as yet there is no agreement as to the terms and conditions of sale.

    SALE OF THE F TOWN PROPERTY

30. The orders of 16 October 2020 provided for the sale of the F Town property, by auction, following the agreement of the parties as to the extent and nature of improvements to be carried out in preparation for sale.  The orders provided for the reserve price for the F Town property to be determined by a valuation jointly obtained by the parties.

31. It is agreed that a valuation prepared by CC Group as at 11 December 2020 valued the F Town property at $2,600,000.

32. To date, the husband has not fully complied with the order of 8 July 2020 that he pay the wife the sum of $30,000 to enable her to relocate with the children to new premises in preparation for the sale and settlement of the F Town property. 

33. Also outstanding are the competing applications of the parties as to a further disbursement from the net proceeds of sale, by way of partial property settlement and/or litigation funding.  The wife seeks the sum of $250,000 with the concession that the husband should receive $150,000.  In his response to the wife’s Application in a Case the husband seeks $250,000. 

34. The wife complains that on 18 January 2021 the agent, agreed to conduct the sale of the F Town property, advised her that she had not received, any response to communications forwarded to the husband between December 2020 and 12 January 2021.  Of more significance was the advice that the sales agency agreement forwarded to the husband on three occasions had not been signed and returned.

35. The husband explains his inability to respond to the agent’s requests by his hospitalization from 30 December 2020 to 13 January 2021.

36. Financial circumstances that impact upon the F Town property appear to be worsening.  As at the date of the husband’s affidavit of 16 March 2021, he sets out a schedule of assets and liabilities taking into account all of the properties and the valuations undertaken by CC Group.  According to the husband, the total value of the real properties is $13,565,000 with liabilities of $11,295,707.  The husband contends that there is approximately $2,269,293 of equity in the property which will also be the subject of potential capital gains tax upon the sale of some of the investment properties.

37. As considered, the F Town property has been valued at $2,600,000 with an estimated mortgage liability of $2,150,000.

38. At paragraph 45 of the wife’s affidavit filed 18 February 2021, in support of her application, she sets out the current arrears in respect of the F Town property as follows:

    (a)DD Bank   $72,868.00

    (b)SA Water    $12,627.00

    (c)Electricity  $16,072.00

    (d)Gas  $1,091.09

    (e)F Town – Council rates   $9,616.00

    (f)Mowing Service  $2,130.00

    (g)House Insurance           $2,440.00

    Total      $116,884.09

39. The home loan continues to increase at the rate of $8,977 each month.

40. The wife has no ability to meet any of the arrears and an application made on November 2020 to DD Bank, requesting that the mortgage be placed on hold by way of an application for hardship, was not completed by the husband and accordingly was unsuccessful.

41. The agent has advised the wife that there is a purchaser interested in the property at the reserve price.

42. Paragraph 9.1 of the husband’s affidavit of 16 March 2021, responds to the wife’s complaint that she has experienced difficulty with the husband engaging with the proceedings, accepting the advice of the agent and doing all that is required to implement the long standing orders for the sale of F Town, in the following terms:

    9.1I have agreed to sell the F Town property “as is”. I have renegotiated with the agent a lower commission rate and the contract has been sent to the wife for her to countersign.

43. As at 18 March 2021, the husband appeared to be keen to progress the sale.

44. Exhibit “2” in the proceedings is comprised of a residential sales agency agreement entered into between the parties and Ms EE, real estate agent for FF Group.  The husband signed the document on 16 February 2021 and the wife on 18 March 2021.

45. The parties apparently agreed that the property would be marketed with a fixed price of $2,600,000 by private sale and not by auction.  The document is in standard form and deals with the terms and conditions of sale, the renegotiated agents’ commission reduced from 1.76 per cent including GST to 1.3 per cent plus GST.  The settlement date was to be 30 days.

46. On 7 April 2021, the parties received an unconditional offer to purchase the F Town property for the sum of $2,600,000 with a deposit of $100,000 and a settlement date to be on or before 21 July 2021, affectively three calendar months.

47. The husband is now not prepared to sign the contract for sale.  He seeks that there be compliance with the order that the property be marketed by auction.

48. The basis for the husband’s change of position is the agent’s advice to the wife that there are interested purchasers.

49. The wife is anxious for the contract to be signed to bring certainty to the sale of the F Town property given the increasing level of liability across the property portfolio of the parties, but in particular the F Town property.  The wife highlights that the advice as to the level of interest in the F Town property predated the parties’ agreement pursuant to the residential sales agency agreement for the property to be sold by private treaty at a fixed sum of $2,600,000.

    LEGAL PRINCIPLES

50. The husband opposes the wife’s application seeking orders that would either require him to sign the contract for sale as presently presented or in default that she have sole authority to sign.

51. By necessary implication, the wife’s current application seeks a discharge of the orders made 8 July 2020 for the sale of the F Town property by auction rather than sale by private treaty.   

52. The wife argues that given the deteriorating financial circumstances of the parties, the application for sale should be seen as an attempt to preserve assets and provide a source of litigation funding.

53. The husband counters the wife’s argument and contends that the wife’s application should be considered as a mandatory injunction.

54. When proceedings are before the Court, the Court has broad powers to grant injunctive relief including for the purposes of preserving the property of the parties and or otherwise regulating the parties’ conduct pending final hearing (see G & T (2004) FLC 93-176 at 78,989-78,990.)

55. Before a court should make an order for the imposition of an injunction it must be considered proper.

56. In those circumstances, pursuant to s 114(3) of the Act, the Court must be satisfied that it is just or convenient to grant such an application or to make an interlocutory order (see Mullen & De Bry (2006) FLC 93-293 at 80,999.)

57. The applicant seeking the injunctive order bears the onus of satisfying the Court as to the circumstances justify the making of that order.

58. Before an injunctive order is made pursuant to s 114(3) of the Act, the Court must be satisfied that it is “just or convenient” to grant such an injunction or make an interlocutory order.

59. By way of summary, the following principles are relevant to the Court’s consideration of the parties’ respective applications in this matter:

    (a)In so far as the purpose of the proposed injunction is to restrain dealing with property pending the final hearing, the Court must address the question as to whether there is evidence of a risk of the disposal of any assets that would defeat any anticipated order in the substantive proceedings.  However, that is but one of a number of factors to be considered. 

    (b)The applicant seeking such an order must establish “a real risk of assets being disposed of”[1] prior to hearing.

    (c)In assessing that risk, it is not necessary for the applicant to satisfy the Court as to the probability of success of the applicant’s case.

    (d)Given the applicant bears the onus of establishing on the evidence a real risk of assets being disposed of, it is not sufficient merely to show that there is a risk of disposal or the asset pool being diminished without establishing that there is a risk that the party’s claim may be defeated or prejudiced if the injunction is not granted.

    [1] Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at [122].

    CONCLUSION

60. The chronology is straight forward.  The orders of 8 July 2020 provided for the F Town property to be the subject of improvement and that thereafter the F Town property was to be marketed by public auction, with a reserve figure to be determined upon a valuation being obtained.

61. After some considerable delay, the parties agreed that they would sell the property as is and eventually both parties entered into a residential sales agency agreement for the property to be sold for $2,600,000, by way of private treaty with a settlement date of 30 days.

62. The agent negotiated a contract for sale upon terms as previously agreed by the parties, other than the settlement date which was 21 July 2021 rather than a 30 day settlement.

1. The only basis for the parties not to follow through with the unconditional contract for sale of the F Town property would be evidence of a significantly higher value. 

2. Neither party sought to tender any evidence of current value nor did they seek an adjournment of the interim proceedings to enable that to occur.

3. I do not consider that it is a matter that would satisfy the provisions of s 144 of the Evidence Act 1995 (Cth), as to the level of buoyancy or otherwise of the current state of the real estate market or in particular the subject property.

4. It is not in dispute that without recourse to the husband obtaining money from his parents, the entire property portfolio of the parties would be at significant risk.  The arrears of outgoings in respect of the F Town property are the subject of significant increase each month in circumstances where the parties are not able to meet them.

5. It is a relevant issue that all of the properties, including the F Town property, appear to remain without insurance protection.  Whatever is determined to be the ultimate status of the husband’s parents’ purported loan, the parties could ill afford significant loss as may be occasioned by damage or loss to the F Town property without insurance.

6. The wife relies on the history of the matter culminating in the parties entering into a recent residential sales agency agreement for the sale of the property at a fixed sum.  She contends that nothing further is required.

7. The husband draws a point of difference by reference to the agency agreement which specified a settlement date of 30 days, as opposed to the contract for the sale of the F Town property with a settlement date being 21 July 2021.

8. The husband does not set out a marketing plan should the property be sold by way of auction nor any evidence that would suggest the intuition of the parties in February and March 2021 that the sale price at $2,600,000 was inappropriate.

9. The delay in the parties’ preparedness to comply with previous orders and the significant risk to the rapidly diminishing net equity in the investment properties of the parties generally, but the F Town property in particular, provides sufficient basis for the Court to determine that there is a risk of the wife’s claim being prejudiced.

10. I propose to make orders that the husband do all things necessary to accept and sign the contract for the sale of the F Town property within 48 hours of these orders or in the alternative that a Registrar of this Court execute the contract for sale on behalf of the husband, upon proof by affidavit of the husband’s refusal to do so.

11. It is premature and unnecessary at this stage to determine the manner in which the proceeds of sale of the F Town property are to be disbursed.

12. I make orders as appear at the commencement of these reasons.

I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman.

Associate:

Dated:       29 April 2021