Peroni and Kappa
[2018] FamCA 450
•16 February 2018
FAMILY COURT OF AUSTRALIA
| PERONI & KAPPA | [2018] FamCA 450 |
| FAMILY LAW – PROPERTY – Interim – Sale of a property – Enforcement of Court orders – Where the husband seeks to substitute a property ordered for sale for a second property – Where the husband alleges the wife obstructed the sale of the property ordered to be sold – Where the property the husband wishes to sell is the property the wife lives in – Whether the property ordered to be sold should be substituted for another property. |
| Family Law Act 1975 (Cth) |
| Dinci & Smith [2012] FamCA 840 Marchant & Marchant [2012] FamCAFC 181 Strahan v Strahan (Interim Property Orders) (2009) 241 FLR 1 |
| APPLICANT: | Mr Peroni |
| RESPONDENT: | Ms Kappa |
| FILE NUMBER: | SYC | 5788 | of | 2015 |
| DATE DELIVERED: | 16 February 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Le Poer Trench J |
| HEARING DATE: | 12, 13 February 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Gardiner |
| SOLICITOR FOR THE APPLICANT: | Taylor & Scott Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Jackson |
| SOLICITOR FOR THE RESPONDENT: | Anne Day & Associates |
Orders
The husband’s Application in a Case filed 19 January 2018 is dismissed.
The wife’s Response to the husband’s Application in a Case, as varied by minute of order sought, filed in court on 13 February 2018 and marked as Exhibit W1 is dismissed.
The husband is appointed as trustee for sale for the property at D Street, Suburb E (hereafter called “the Suburb E property”), for the purpose of achieving a sale of that property and distribution of the sale proceeds as required by the orders made by this Court on 17 August 2017.
The wife is to sign all documents and do all things reasonably required of her by the husband, in his capacity as the Trustee for sale of the Suburb E property, in order to facilitate a prompt sale of the said property.
The husband, as trustee for sale, is to cause the Suburb E property to be listed for sale through a real estate agent or agents of his choice, at an initial sale price which has been recommended by a valuer nominated by the Chair of the Australian Property Institute. The cost of the valuation is to be met initially by the wife, with half of that cost to be reimbursed to the wife upon completion of sale of the Suburb E property, such payment to come from the husband’s portion of the sale proceeds.
For the purpose of exercising the power of sale created by these orders, the husband is empowered and authorised to sign any necessary documents to enable the sale of the Suburb E property in the name and style of the wife.
The husband, as trustee for sale, may, at his discretion, reduce the asking price for the Suburb E property at the conclusion of each six week period during which the property is listed for sale and not sold. The court notes the husband seeks to reduce the sale price by 5 per cent at the conclusion of each six week period, where a sale has not been contracted, and the wife has requested the reduction in price be no more than 2.5 per cent. The husband is on notice that should he reduce the asking price by more than 2.5 per cent at the conclusion of each six week period, the wife may require that he satisfy the court that any additional reduction was appropriate.
The wife is to use her best endeavours to ensure her parents, or any other relative or associate, does not act in a manner which interferes in, disrupts or adversely impacts on the husband efforts to sell the Suburb E property.
The husband has leave to apply for any further orders which may be necessary to implement the sale of the Suburb E property. Each party is on notice that they are at risk as to costs should there be any such listing of this matter in the Court.
The husband is to pay the wife’s costs of attendance at court on 13 February 2018. Such payment to be made from the husband’s entitlement to the funds ordered to the paid to the husband (orders 17 August 2017) following the sale of the Suburb E property.
I request that the Docket Registrar, in the week of 21 May 2018, cause the matter to be reviewed and further directions made to the progress this matter.
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 Peroni & Kappa 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 SYDNEY |
FILE NUMBER: SYC 5788/2015
| Mr Peroni |
Applicant
And
| Ms Kappa |
Respondent
REASONS FOR JUDGMENT
Introduction
Before the court is an application filed by the husband Mr Peroni. He seeks orders to substitute a property owned by the parties at Suburb C for a property at Suburb E which is the subject of a sale order made by the court on 17 August 2017. Alternatively, the husband seeks that he be appointed as trustee for sale of the Suburb E property which stands in the joint names of the parties.
The wife opposed the order sought by the husband when the matter was before me in a duty list on Monday 12 February last. I listed the matter for hearing the next day. When the matter was called on 13 February 2018 the wife tendered a minute of order which she was seeking as a compromise of the dispute. The husband pressed his application notwithstanding.
It should be noted that no appeal was filed by either party against the orders made by Justice Rees on 17 August 2017.
BACKGROUND
The evidence relied upon by the husband is as follows:
·Affidavit affirmed by the husband on 19 January 2018.
·Financial Statement affirmed by the husband on 13 March 2017.
·Judgment of Rees J dated 17 August 2017.
In his affidavit the husband set out what he had done to try and implement the orders of the court made 17 August 2017. In his submissions the husband said the property at D Street, Suburb E had become impossible to sell. There was no buyer interest in the property at all and this had been caused by the wife’s family and the actions/inactions of the wife.
It is trite to say that if the husband wished to establish the subject property at Suburb E was “unsellable” he would need to have expert evidence to satisfy the court that was the case. No such expert evidence was tendered.
The husband’s complaints about the adverse impact upon his endeavours to see the Suburb E property sold, as required by the courts orders, can be summarised as follows:
·The marketing of the property was to commence on or after 8 September 2017, the day upon which the time for the wife to be able to pay the husband $100,000 under the court order, expired. No such payment was received by that date.
·The Suburb E property is situated next door to a property owned by the wife’s parents and in which they reside.
·The husband had it reported to him by the selling agent that when the agent was attempting to conduct inspection of the subject property by prospective purchasers the wife’s mother entered the property and informed the agent and persons inspecting that the property it was not for sale.
·The husband said there was dispute between the parties about the identity of the conveyancer to act for them on the sale.
·Once agreement had been reached about the identity of the conveyancer to be engaged, the wife delayed providing information to the conveyancer to enable the preparation of relevant documents.
·A real estate agent was appointed by the parties to act on the sale. The agent recommended a listing price of $900,000 to $950,000.
·The estate agent recommended an auction on 25 November 2017. The wife did not want the property put to auction until January 2018. The wife did agree to a November 25 auction, however, she did not provide that agreement until 2 November 2017.
·The wife did not agree to a For Sale sign being placed on the property. No sign has been erected on the site at the time of the husband’s affidavit.
·An open house inspection took place on 11 November 2017. On that occasion the wife’s mother attended and told prospective purchasers the property was not being sold.
·The wife did not accept the advice of the agent as to a suggested reserve price for the sale. She proposed a valuer be appointed to set the reserve price.
·The day before the auction was scheduled the wife informed the husband she was setting a reserve price of $1,010,000.
·There were 4 registered bidders at the auction on 25 November 2017. The highest bid was $800,000. After the auction the bidder increased the offer to $910,000. The husband said he would accept that offer. The wife said she would accept a minimum of $1,000,000.
·Since 25 November 2017, despite three further open house inspections, no offer has been presented to the husband.
The husband’s case is that because of the failure to sell the Suburb E property, the order of the court should be changed to require the Suburb C property to be sold.
The Suburb C property is occupied by the wife and the now adult children. The wife seeks to retain the Suburb C property as part of a final property order.
The husband’s case is that any informed objective assessment of the parties property dispute must conclude that as the wife has no capacity to borrow any funds (a fact said to have been conceded by the wife as she could not borrow the $100,000 necessary to avoid the sale of the Suburb E property) it is appropriate for the court to order the sale of that property and distribution of sale funds as require by the current court order.
Law
It has been established in this Court that the process for determining whether an interim property order should be made is to apply a two-step test.
The first step is that it must be established that s 80(1)(h) Family Law Act 1975 (Cth) (“FLA”) was enlivened to allow an interim property settlement under s 79 FLA. In relation to how this test is to be applied, the Full Court in Strahan v Strahan (Interim Property Orders) (2009) 241 FLR 1 (Boland, Thackray and O'Ryan JJ) set out at [132] of the reasons (overturning Harris and Harris (1993) FLC 92-378 in relation to “compelling circumstances”):
In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power.
The Full Court further stated:
92. In Zschokke the Full Court at 83,215 identified further matters to be taken into account in relation to an order under s 79 and s 80 (1)(h) of the Act. The Full Court said that “[i]t would seem an essential part of such an order that the advance of funds be a matter which the trial Judge must take into account, or at least have regard to, in the determination of the final property settlement” (emphasis added). At 83,220 the Full Court said: “it must … be an integral part of any order under s 80(1)(h) for an advance of funds from the party in possession of the bulk of the party’s assets [sic] to the other party, that such advance can then be taken into account in the property settlement, that is, it must be capable of satisfying part of the other party’s entitlement” (emphasis added). At 83,221 the Full Court again identified as a matter for consideration “whether [the applicant] will ultimately be entitled to sufficient funds by way of property settlement to meet a requirement … that the amount [under the] order could be taken into account in the eventual property settlement order”.
93. In Zschokke the Full Court at 83,220 was of the view that in that case there were “real uncertainties concerning the outcome of the wife’s property settlement claim” and considered that the order could not be made pursuant to the provisions of s 80(1)(h) of the Act “for the reason that the eventual property settlement entitlement of the wife may well not be large enough to permit the monies advanced under the s.80(1)(h) order to be satisfactorily or justly taken into account in the final settlement”. This of course follows from what, at 83,216, the Full Court had said about a brief consideration of the matters in s 79(4) and that if it seemed that the applicant for the interim order “will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made (cf Wilson and Poletti)”.
…
136. As to the third matter identified at 79,930 by the Full Court in Harris, in discussion before us it was described as the “adjustment issue” or “claw-back issue”. It was submitted by senior counsel for the Wife that it is relevant to consider whether an order would give the applicant “more than they would be indubitably entitled to on a final hearing” or alternatively “would it give them so much that it could not be adjusted on a final hearing?” As we have observed the Full Court in Zschokke at 83,220-221 stressed the importance of consideration of the “adjustment issue” if the power in s 80(1)(h) of the Act is being exercised. We accept the submission and observe that this matter is relevant because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order. As Bryant CJ and Coleman J observed in Gabel v Yardley at [69] and [72] the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. As Finn J said at [126] the interim order must be “capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power”.
The second step (again following the caselaw set out in Harris and later confirmed in Strahan) is to apply the provisions of ss 79(2) and 79(4) FLA as one would in a usual s 79 matter. It is not required that the assessment must be detailed, as the nature of the enquiry is generally imprecise, but there must be some regard to the matters that would be considered in a s 79 application. In Marchant & Marchant [2012] FamCAFC 181 the Full Court (May, Ainslie-Wallace and Kent JJ) considered an appeal against interim property orders. Their Honours set out a summary of the principles arising from Strahan at [24]–[28]:
24. In Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”), the Full Court (Boland, Thackray and O’Ryan JJ) undertook a comprehensive review of the authorities and identified relevant principles and guidelines to be followed in respect of interim property orders pursuant to ss 79 and 80(1)(h) of the Act.
25. It follows from the joint judgment of Boland and O’Ryan JJ in Strahan that there are two stages to the hearing of such an application and that the first question on an application for such an order is whether the Court should exercise its discretion to entertain the application. Whilst it is not necessary for an applicant to establish compelling circumstances for that question to receive an affirmative answer, it is necessary to establish that it would be appropriate for the Court to exercise the power and the, “…overarching consideration…” as to appropriateness is the interests of justice. Recognising that in the context of s 79 proceedings, the interests of justice will usually be best served by one single and final determination of property orders, it will not be appropriate to exercise the power merely because, on such a final determination, the applicant would receive the interim property sought or in excess of that sought.
26. We think it is important to highlight that whilst the discussion of the first question in the joint judgment in Strahan includes examples, including by reference to other cases, where the appropriateness criteria would be met, there was no attempt to define or exhaustively identify those circumstances or categories of cases meeting that criteria. That is understandable, given the discretionary nature of the adjudication involved and the wide range and variety of circumstances presented from case to case, so that any such attempt would likely prove to be futile. Nevertheless, the joint judgment in Strahan emphasised both the importance of the interests of justice normally being served by a single and final determination of s 79 orders and that establishing only that the applicant’s ultimate entitlement would cover or exceed the interim claim was not sufficient, on its own, to establish that the application ought be entertained.
27. It also follows from Strahan that if the first question is answered affirmatively, and the second or substantive stage is reached, because the jurisdiction under s 79 of the Act is being exercised, the provisions of that section must be considered and applied, but with limitations given that it is not the final hearing ([135]). As their Honours Boland and O’Ryan JJ noted at [136], because the discretion conferred by the power in s 79 is to make such order as the Court considers appropriate, provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order, the interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal, and must be capable of alteration at any time prior to, or as part of, a final exercise of the s 79 power.
28. However, if it is established that it is likely that the applicant would only be receiving what he or she was entitled to receive when the power was exhausted, that would be sufficient to enable the order sought to be made. (emphasis added)
In Dinci & Smith [2012] FamCA 840 Murphy J considered an application for partial property settlement by a party (the husband) pending the determination of final property proceedings. After identifying that the principles to be applied to such applications were outlined in Zschokke and Strahan, his Honour made the following additional comments at [23]–[25]:
23. The exercise of discretion in cases of this type is informed by the need to effect justice between parties to litigation by ensuring, to the extent, that it is possible, “a level playing field”. But, those proceedings, and that aim, are also judged by reference to a principle which indicates that a decision made on an interim basis in respect of the payment of legal costs and expenses, should not usurp the ultimate determination of the court, and, in particular, orders that effect ultimate justice and equality.
24. It is for these reasons, principally, that the question of “reversibility” or “clawback”, as it has been called in the cases, is such an important matter in respect of the exercise of the discretion under consideration.
25. Other important considerations in the exercise of the discretion include whether there is a relative position of financial strength on the part of one party when compared to the other. Secondly, whether there is a capacity on the part of the person from whom the order is sought to meet any such payment, and, thirdly, the impact that any such interim order might have on orders which are ultimately sought by each of the parties at the ultimate trial.
Determination
Having informed the applicant husband that I would not be prepared to make an order for the orders of 17 August 2017 to be varied to provide for the sale of the Suburb C property because I was not satisfied that such an order would be appropriate as an interim property order when the principle above set out was applied to the case the husband presented, the husband elected to address his alternate application for the husband to be appointed as trustee for sale of the Suburb E property.
The husband provided a minute of the order sought by him for the enforcement of the order of 17 August 2017. That document was marked as exhibit H4.
Having considered the orders sought by the husband and also the order sought by the wife in exhibit W1, I drafted some orders and asked whether either party would oppose that order being made. Each agreed to the order being made. I then made orders which are set out at the commencement of these reasons. I also made an order for the husband to pay the wife’s costs of attendance at court to oppose the husband’s application on 13 February 2018.
Costs
Having made the orders set out herein the wife made an application for costs. The wife seeks an order for the payment of her costs of attendance at court on 13 February 2018. She relies upon an open offer of compromise which she made to the husband on 12 February 2018 when the matter was before the court in the duty list. She reduced that offer to writing on that day as evidenced by exhibit W6.
The open offer made by the wife proposed the appointment of a single expert real estate valuer to opine a recommended listing price for the property and that thereafter the husband be appointed as trustee for sale of the property.
The parties financial circumstances have been provided to the court through the Financial Statements each has filed. Further each of the parties legal representatives have tendered cost disclosure documents as required by Rule 19.04 of the Family Law Rules.
Considering the matters specified in s 117(2A) of the Act I am satisfied that given the financial circumstances of the parties and the fact that the husband did not (and could not have) been successful in his primary application to substitute the Suburb C property for the Suburb E property in the orders of 17 August 2017, the husband should have accepted the offer of compromise tendered by the wife.
The reality in this matter is that neither party can afford to litigate in this court at this time (no liquid assets available) and thus it was entirely financially incumbent upon the husband to have avoided the cost of attending court on the 13th February. The matter should have been resolved on 12 February 2018 which would have occurred had the husband accepted the wife’s offer.
The payment of costs cannot be met by the husband until he has available the funds from the sale of the Suburb E property and I will order payment be delayed until that time.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 16 February 2018.
Associate:
Date: 16 February 2018
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