Petridis and Petridis
[2019] FamCA 484
•23 July 2019
FAMILY COURT OF AUSTRALIA
PETRIDIS & PETRIDIS [2019] FamCA 484
FAMILY LAW – PROPERTY – Variation to an existing dispute resolution order sought – where the application is wholly unsuccessful – where the enforcement of existing interlocutory orders is just.
Family Law Act 1975 (Cth) s 114
Adam P. Brown Male Fashion Pty Ltd v Philip Morris Inc (1981) 148 CLR 170.
In the Marriage of Farr (1976) FLC 90-133.
Iphostrou & Iphostrou and Ors[2011] FamCA 20.
Jeeves & Jeeves (No 2) [2008] FamCA 1148.
Kelleher & Anderson[2007] FamCA 137.
Mertens & Mertens [2016] FamCAFC 136.
Philips & Samuels [2017] FamCA 125.
Martin & Martin and Ors [2013] FamCA 222.
Tripp & Tripp [2013] FamCA 1107.
Woodgate (Trustee) v Northop Hall Pty Ltd [2016] FCA 370.
APPLICANT: Ms Petridis
RESPONDENT: Mr Petridis
INTERVENOR: Mr Tamson as Trustee in Bankruptcy for Mr Petridis
FILE NUMBER: HBC 133 of 2018
DATE DELIVERED: 23 July 2019
PLACE DELIVERED: Hobart
PLACE HEARD: Hobart
JUDGMENT OF: McClelland DCJ
HEARING DATE: 5 July 2019
REPRESENTATION
SOLICITOR FOR THE APPLICANT: Mr McKenna
THE FIRST RESPONDENT IN PERSON
COUNSEL FOR THE INTERVENOR: Mr Trezise
Orders
The Court declares that the dispute resolution procedures set out in paragraph (d) of the document “Terms of Proposed Sale of Real Estate” annexed to the consent orders made on 3 July 2018 are applicable to the dispute between the parties documented in the Application in a Case by the Fourth Respondent, dated 2 July 2019.
The Fourth Respondents’ Application in a Case dated 2 July 2019 and the wife’s oral application made on 5 July 2019 consistent with that set out in her Affidavit filed on 4 July 2019 in response to the aforementioned Application in a Case are both dismissed.
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 Petridis & Petridis 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 HOBART FILE NUMBER: HBC 133 of 2018
Ms Petridis
Applicant
And
Mr Petridis
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns competing applications by the Fourth Respondent and the Applicant wife, Ms Petridis (‘the wife’) for orders relating to the sale of two properties that are the subject of these proceedings. The Trustee in Bankruptcy for Mr Petridis, the Applicant’s husband, is the Fourth Respondent (‘the trustee’). Mr Petridis (‘the husband’) was given a limited right of appearance for the purpose of today’s hearing. He argued that, for various reasons including fraud, that his bankruptcy is invalid and, accordingly, he contended that previous consent orders for the sale of the properties should be discharged. Issues relating to the bankruptcy of the husband are not before the Court and I have not further considered the husband’s submissions in these proceedings.
The relevant properties are located at;
a)C Street, Suburb E, Tasmania and
b)H Street, Suburb E, Tasmania.
Background
In July 2018, the First and Fourth Respondents, respectively the husband and the trustee, agreed to sell the properties. Their agreement was reflected in consent orders made on 3 July 2018. Relevantly Order 6 of those consent orders provided as follows:
6. Within sixty (60) days of the date of these Orders, the Parties do all acts and things necessary to place the following real property on the market for sale and sell it in accordance with the terms of sale attached to this Order:
a. C Street, Suburb E in Tasmania; and
b. H Street, Suburb E in Tasmania.
The reference to the “terms of sale” in that Order is a reference to the document attached to the order bearing the title “Terms of Proposed Sale of Real Estate”, which states:
(a) The selling agent for the Property shall be such selling agent or agents as the Parties may from time to time agree or in default of agreement as set out below.
(b) The listed sale price and method of sale and manner of advertising for sale of the Property shall be as agreed by the Parties or in default of agreement as set out below.
(c) The terms and conditions of sale of the Property, including the acceptance or rejection of any offer to purchase the Property, shall be as agreed between the Parties and or in default of agreement as set out below.
(d) In default of agreement between the Parties in respect of any of the matters referred to in sub-paragraphs (a) to (c) above:
(i) Either Party may request the President for the time being of the Real Estate Institute of Tasmania or his nominee (hereinafter called “the Arbitrator”) to determine the matter in dispute.
(ii) The cost of the Arbitrator’s determination shall be borne equally between the Parties.
(e) In the event that the Property is offered for sale by way of auction the Parties shall each pay and be responsible for payment of one-half of auction expenses payable before the Property is auctioned.
(f) Both parties shall co-operate in every way with the selling agent in relation to the sale of the Property, including allowing inspection of the Property at times reasonably requested by the selling agent and ensure that the Property is in a neat and clean condition at the time of inspection by the prospective purchasers.
As will be discussed, the most relevant paragraphs, for the purpose of this decision, are paragraphs (c) and (d) of the “Terms of Proposed Sale of Real Estate” document.
Subsequent to the consent orders of 3 July 2018, the parties commenced steps to market the properties. Their agreement to do so was reflected in Orders 1 and 2 of Exhibit 1 to consent orders made on 6 February 2019. Those orders were as follows:
1. Within two (2) days of the date of these Orders, the Parties do all acts and things necessary to instruct Mr F of B Company to sell the following properties in accordance with the Orders dated 3 July 2018 (“the July Orders”):
a. C Street, Suburb E in Tasmania; and
b. H Street, Suburb E in Tasmania,
(jointly referred to as “the Properties”)
2. Within seven (7) days of the date of these Orders, the Parties agree and settle the final terms of an ‘Expression of Interest’ document to be used with the sale of the Properties.
Applications
The orders sought by the trustee are as follows:
1. Within twenty-four (24) hours of the making of this Order, the Wife must do all acts and things and sign all such documents, including in her capacity as director of the Second and/or Third Respondents, as are necessary to accept the extant and unconditional offer for the purchase of the properties known as C Street and H Street, Suburb E in Tasmania ("the Properties"), in accordance with the sale provisions contained in the Order of this Court dated 3 July 2018, for $2,100,000.00.
2. The Wife must thereafter promptly do all acts and things and sign and all such documents, including in her capacity as director of the Second and/or Third Respondents, as are necessary to complete the conveyancing of the sale of the Properties in to the name of the purchaser or his/its nominee.
3. The costs of obtaining the second valuation in the amount of $4,400.00 be paid from the sale of the Properties in the same proportion as the first valuation.
4. In the event that the extant and unconditional offer of $2,100,000.00 for the purchase of the Properties is withdrawn or fails to proceed to contract and settlement the Parties must re-market the Properties with a price indicator ceiling no greater than $2,420,000 and that the best unconditional offer above $1,665,000.00 be accepted.
5. Upon receipt of advice in writing from the legal practitioners for the Trustee that the Wife has defaulted in compliance under Paragraphs 1 and/or 2 and/or paragraph 4 above, the Registrar of the Hobart Registrar of this Court is appointed under Section 106A of the Family Law Act 1975 to execute any document in the name of the Wife for the purposes of this Order and do all acts and things necessary to give validity and operation to that document.
6. The Wife must pay the Trustee's legal costs and disbursements of and incidental to this Application.
7. Such further or other Orders and directions as the Court considers appropriate.
The orders sought by the wife are expressed in first person as follows:
52. I seek an Order to re-market the Properties for a period of 90 days, indicating a selling range of over $3 million.
53. In the alternative to my proposal in the previous paragraph, the sale of the Properties can be split. H Street, Suburb E has vested with the Trustee and C Street, Suburb E is an asset of a company to which I am the sole director.
54. I seek an Order that the Trustee and I jointly instruct the agent to disclose the following:
(a) names of people who have enquired about the properties;
(b) an up to date contact list of those who have enquired about the properties;
(c) an outline of what has been communicated to people who have enquired about the property; and
(d) what the agent has said to people who have enquired about the properties.
55. I seek an Order that the Trustee:
(a) provide disclosure to me in relation to [Mr Petridis’s] bankrupt estate and addressing the issue of the caveats that have been secured against the Properties that relate to debts forming part of [Mr [Petridis's] bankruptcy;
(b) meet the costs associated with the G Company valuation; and
(c) pay my costs of and incidental to these proceedings.
Relevant law
Although not expressly stated, the parties’ respective applications seek mandatory injunctions against the other party. That is they require the other party to engage in a course of conduct: in the case of the Fourth Respondent accept an offer to purchase the properties; and, in the case of the wife engage in further steps with a view to inviting additional offers to purchase the properties.
While not specifically stated in either of the parties applications, the applications each enliven consideration of the Court’s power under s 114(c) of the Family Law Act 1975 (Cth) (‘the Act’) to make such order or grant such injunction as it considers proper in relation to the “an injunction in relation to the property of a party to the marriage”: Philips & Samuels [2017] FamCA 125 at 65.
In Martin & Martin and Ors [2013] FamCA 222, Cronin J said at 15:
Section 114 of the Family Law Act 1975 (Cth) (“the Act”) enables the Court to provide a discretionary remedy. The fundamental principle is that an order should only be made if it is proper.
It is clear that s 114 of the Act empowers the Court to make orders in positive, as well as negative terms, as in the case of mandatory injunctions: Mertens & Mertens [2016] FamCAFC 136 at 56. Such an order is discretionary and must be considered proper: Jeeves & Jeeves (No 2) [2008] FamCA 1148 at 29; Tripp & Tripp [2013] FamCA 1107 at 53. The term “proper” means “reasonable and just in [the] circumstances”: In the Marriage of Farr (1976) FLC 90-133.
The party moving for injunctive relief carries the onus of establishing that there is a proper basis for granting the relief as sought in their respective applications: Kelleher & Anderson[2007] FamCA 137 at 195.
Consideration
In this matter, the trustee contends that the orders proposed in his application are necessary because a fair and reasonable offer has been made to purchase the property in accordance with procedures agreed to by the parties. The reasonableness of that offer, it is contended, is confirmed by a recent valuation obtained by the Fourth Respondent. The Fourth Respondent further contends that the wife, in collusion with her former husband, has engaged in a course of conduct to deliberately thwart the sale of the properties.
The wife, on the other hand denies any such conduct on her behalf and, in her Affidavit material refers to the difficult relationship that she has had and continues to have with her former husband. She contends that the trustee and/or the real estate agent entrusted with the sale of the property failed to implement the procedure set out in the “Invitation for Expression of Interest” document in that no further negotiation took place with the prospective purchaser in accordance with clause 3 of that document. That clause relevantly provides:
3.1 Offers are invited from Thursday, … February 2019 and close on … March 2019.
3.2 Following the close of EOI (“EOI Deadline”):
(a) consideration and negotiation will take place within 21 days after the EOI Deadline (“Negotiation”);
(b) acceptance of any offer will occur within 21 days after the close of Negotiation. The contract and standard conditions are attached it us document (“Acceptance and Contract”); and
(c) settlement of the sale will occur on a time to be negotiated and agreed in accordance with the contract.
The difficulties in resolving factual controversies in interim proceedings are well known: Iphostrou & Iphostrou and Ors[2011] FamCA 20 at 44. However, it is unnecessary for me to attempt to adjudicate in respect to the parties competing factual contentions in order to determine this matter. This is because, for reasons which I will explain, neither party has satisfied me that it is proper to make the orders they are respectively seeking in circumstances where they have previously agreed to a mechanism for resolving the dispute that has arisen. That dispute, at its essence, is whether an offer to purchase the properties should be accepted.
Consideration of whether the orders made on 3 July 2018 have been superseded by orders subsequently made on 6 February 2019 and/or by subsequent events.
Counsel for the trustee argued that Orders 1 and 2 of the consent orders made on 6 February 2019 superseded those orders made on 3 July 2018 such that the dispute resolution procedures set out in the “Terms of Proposed Sale of Real Estate” document attached to the orders of 3 July 2018, were no longer applicable to the circumstances in which the parties now find themselves. That is where the parties are in dispute as to whether an offer to purchase the properties for the sum of $2,100,000 should be accepted.
Specifically, it is contended that Orders 1 and 2 of the consent orders made on 6 February 2019 require the parties to “do all acts and things necessary” to instruct B Company commercial to sell the properties in accordance with an agreed “Invitation for Expression of Interest” document. It was common ground that the parties have subsequently agreed to that “Invitation for Expression of Interest” document (marked Exhibit A in these proceedings).
In other words, it was argued that events have moved beyond the situation contemplated in the consent orders made on 3 July 2019.
The orders sought by the trustee therefore, effectively require the wife to agree to accept the offer received by the real estate agency in respect to the issuing of the “Invitation for Expression of Interest” document. That offer is for an amount of $2,100,000.
While it is not essential to the case presented by the trustee, it was contended that the wife and the Court can be confident that the offer is fair and reasonable because it is in accordance with a valuation obtained by the trustee on 28 May 2019 (Annexure B to the Affidavit of the trustee filed on 2 July 2019).
Contrary to the submission of the trustee, I am satisfied that the consent orders made on 3 July 2018 have not been superseded by the consent orders made on 6 February 2019 such that the dispute resolution mechanism set out in the earlier orders applies to the current dispute between the parties.
Specifically, paragraph (c) of the “Terms of Proposed Sale of Real Estate”, document attached to the orders of 3 July 2018 provides that:
The terms and conditions of sale of the property, including the acceptance or rejection of any offer to purchase the property, shall be as agreed between the parties and or in default of agreement as set out below. (Emphasis added)
I am satisfied that mechanism for the sale of the property has been agreed by the parties. That agreement is reflected in the expression of interest procedure set out in the orders of 6 February 2019 and Exhibit A in these proceedings.
Paragraph (c) of the “Terms of Proposed Sale of Real Estate” document to which I have referred, however, makes it clear that the parties contemplated a potential dispute regarding the adequacy of “any offer to purchase the property”. That dispute has, in fact, materialised.
In the event of there being such a dispute Clause C of the “Terms of Proposed Sale of Real Estate” document specifically states that the dispute procedure “set out below”. Immediately below that reference is paragraph (d) of the “Terms of Proposed Sale of Real Estate” document which relevantly provides:
In default of agreement between the Parties in respect of any of the matters referred to in sub-paragraphs (a) to (c) above:
(i)Either Party may request the President for the time being of the Real Estate Institute of Tasmania or his nominee (hereinafter called “the Arbitrator”) to determine the matter in dispute.
(ii)The cost of the Arbitrator’s determination shall be borne equally between the Parties.
That paragraph (d) makes it clear that the dispute between the parties in respect to “the acceptance or rejection of any offer to purchase the property” is, at the request of a party, to be determined by the President for the time being of the Real Estate Institute of Tasmania.
Consideration of whether there should be an order to vary the dispute resolution arrangements previously agreed to by the parties.
The trustee argues that in the event of the Court finding that the dispute resolution arrangements set out in paragraphs (c) and (d) of the “Terms of Proposed Sale of Real Estate” document, which were incorporated into the orders made on 3 July 2018, apply to the dispute currently before the Court then orders should be made varying the orders of 3 July 2018 and, specifically, to vary the dispute resolution mechanism. The variation sought is by way of making the orders sought in the trustee’s Application.
Those changed circumstances were said to be the fact that the property has been successfully marketed in accordance with the “Invitation for Expressions of Interest” document. In that respect, Counsel for the Fourth Respondent referred to paragraphs 14 through to 18 of the Affidavit of the trustee dated 2 July 2019, which are as follows:
14. The marketing of the Properties commenced in early 2019 and included comprehensive internet listings and three quarter-page advertisements in J Newspaper.
15. In February 2019, the Agent was provided by email with a copy of the formal valuation report with the valuation amount, calculations and market sales analysis redacted. The Parties agreed that communication to the Agent of the formal valuation amount may unduly influence the marketing process.
16. Later in February 2019, the Agent advised by email to the Wife and the Trustee that there had been nine (9) enquiries to the first advertisement placed that day, a good indicator of strong interest.
17. In March 2019, the Agent advised by email to the Wife and the Trustee that all marketing activity had been implemented with internet listings, the three (3) J Newspaper advertisements placed, a PR editorial sent to the J Newspaper and an email release to the Agent’s full database. In addition, the Agent advised that there had been 27 enquiries to which an information memorandum had been sent.
18. In March 2019, the expression of interest period closed and the Agent advised by email to the Wife and the Trustee that one offer of $2,100,000 had been received ("the Offer"). The Offer is unconditional and the offeror ("the Offeror"), to my knowledge a significant and experienced Hobart property owner and developer, has advised that he had based the Offer on a valuation. I will seek to tender a copy of that expression of interest as Document C in the documents exhibited to this affidavit.
The wife, on the other hand, contends that the consent orders of 6 February 2019 have not surpassed or replaced the orders of 3 July 2019 such that the dispute resolution procedure set out in the earlier orders still has work to do.
In the absence of the parties consent, the Court should retain control of its interlocutory orders including in circumstances where the orders relate to the management of issues in dispute between the parties pending the final hearing of a matter. In Woodgate (Trustee) v Northop Hall Pty Ltd [2016] FCA 370 at 31-32, Rares J stated:
The court retains control of any interlocutory order that it makes. Ordinarily, a further order will be appropriate when, for example, new facts come existence or are discovered which render the enforcement of an interlocutory order unjust: Adam P. Brown Male Fashion Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178 per Gibbs CJ, Aickin, Wilson and Brennan JJ; see too r 39.05(c).
The relevant passage from the High Court’s decision in Adam P. Brown Male Fashion Pty Ltd v Philip Morris Inc(1981) 148 CLR 170 at 178, was as follows;
Just as an interlocutory injunction continues "until further order", so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust: cf. Woods v. Sheriff of Queensland(1895) QLJ 163, at p 165 ; Hutchinson v. Nominal Defendant(1972) 1 NSWLR 443, at p 447 ; Chanel Ltd. v. F. W. Woolworth &Co. Ltd. (1981) 1 WLR 485, at p 492; (1981) 1 A11 ER 745, at p 751 . Of course, the changed circumstances must be established by evidence: Cutler v. Wandsworth Stadium Ltd. (1945) 1 A11 ER 103.
In this matter, on 3 July 2018 the Court made orders, consented to by the parties that in the event of a dispute arising between the parties regarding the acceptance or rejection of an offer to purchase the property then that dispute would be referred to the President of the Real Estate Institute of Tasmania or his or her nominee. The evidence presented by the Fourth Respondent, who carries the onus on the matter, has failed to satisfy me that there are additional facts or circumstances which now make “the enforcement of [the interlocutory order of 3 July 2018] unjust”.
Specifically, I consider that it is fair and reasonable for the parties to follow the dispute resolution mechanism that they agreed to on 3 July 2018 in order to resolve a dispute that was, at that time, specifically contemplated, namely whether an offer to purchase the properties should or should not be accepted.
Declaration and orders
For all of these reasons I make the declaration and order that are set out at the commencement of these reasons for judgment.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 23 July 2019.
Associate:
Date: 23 July 2019
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