Pointer and Pointer

[2009] FamCA 1305

FAMILY COURT OF AUSTRALIA

POINTER & POINTER [2009] FamCA 1305

FAMILY LAW – FINANCIAL – removal of caveat – sale of property – conduct of sale – disposal of proceeds
FAMILY LAW – MAINTENANCE – interim spousal maintenance

Family Law Act1975 (Cth)

APPLICANT: Ms Pointer

RESPONDENT: Mr Pointer

FILE NUMBER: SYC 5887 of 2009

DATE DELIVERED: 2 November 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Judicial Registrar Loughnan

HEARING DATE: 2 November 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr G. Richardson SC

SOLICITOR FOR THE APPLICANT: Paltos & Co

SOLICITOR FOR THE RESPONDENT: Delaney Lawyers

Orders

1. Orders are made in terms of paragraphs 4, 7.2, 8 and 9 of the Amended Application in a Case of the wife filed 2 November 2009 as set out hereunder:

   “4.That within 7 days of the date of these Orders the husband shall do all acts and things and pay all sums of money to cause Caveat […] to be removed from the title of the [C] property.

   7.2That the wife shall be at liberty to proceed forthwith to sell the [C] property and within 7 days of the date of these orders sign all documents and do all acts and things so as to:

   7.2.1Appoint [G Real Estate] for the sale of the [C] property, the costs of and incidental to such an appointment to be borne by the husband in the first instance as and when they fall due.

   7.2.2Instruct Rodney Commins of Patterson Houen & Commins Solicitors of Level 26, 100 Miller Street, North Sydney (“conveyancing solicitor”) to prepare a contract for the sale of the land for the [C] property, the costs of and incidental to such appointment to be borne equally by the parties on completion of the sale;

   7.2.3List the reserve price for the [C] property at such price as the parties shall agree in writing or, where no agreement is reached in writing within3 days prior the date appointed for the auction, at $5,500,000;

   7.2.4Execute all documents requested by the agent and the solicitor for the sale of the [C] property;

   7.2.5Execute all other documents necessary to complete the sale of the [C] property.

   8.In the event that the bidding at the auction does not reach the reserve price, the wife may negotiate with the highest bidder or any other interested person and effect a sale of the [C] property for a price which is not more than 5% below the reserve price.

   9.On settlement of the sale of the [C] property, the proceeds of sale shall be paid in the following manner and priority:

   9.1All costs and expenses incurred on the sale including legal costs and disbursements, agents commission, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties.

   9.2    The amounts required to:

   9.2.1Pay all municipal and water rates outstanding with respect to the [C] property.

   9.2.2 Discharge mortgage registered number […].

   9.3The balance to be held in an interest bearing account in the names of the wife’s solicitor and the husband’s solicitor or in the name of the conveyancing solicitor pending resolution of these proceedings on a final basis or otherwise further order of the Court.”

2. An order is made in terms of paragraph 5 of that Application as set out hereunder, substituting reference to Order 7 and Order 9 for the reference to Orders 1, 2 and 3 in that order:

   “5.Pending compliance of Orders 7 and 9 hereof the husband pay to the wife by way of spouse maintenance the sum of $1,500 per week with the first payment to occur within 7 days of the date of these Orders and thereafter weekly by direct payment to the wife’s bank account with the Commonwealth Bank of Australia BSB […] account number […].”

3. Leave to the parties to apply in relation to the order sought at paragraph 7.1 of the wife’s Amended Application in a Case filed on giving 7 days’ notice to each other and to the Court.

4. No order is made as to costs.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5887 of 2009

MS POINTER

Applicant

And

MR POINTER

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for interim financial orders.  The application I am dealing with is an Amended Application in a Case filed 2 November 2009.  It is in aid of proceedings for settlement of property that were commenced by the wife on 30 September 2009.

2. The wife and husband are 58 and 60 years of age respectively.  They started to live together on marriage in 1971 and separated on 6 April 2007.  They have four adult children.  The most substantial piece of marital property identified by the parties is a property at C.  It is held in the name of the wife.  It was put to auction at the end of 2008 and was not sold.  In October 2008 a borrowing was made against the property.  I think the position is that it was arranged by the husband, necessarily entered into by the wife because she is on the title of the property, secured against the C property. That borrowing funded the purchase of a property at B for the wife’s occupation.  The facility secured on the C property was for 12 months providing for interest-only payments and then repayment of the principal.  In circumstances that I do not think are fully detailed in the evidence, there has been an extension of that facility until April next year.

3. The wife seeks, in the alternative, that the property be sold and that there be a distribution of the proceeds - $2,000,000 to the wife, $2,000,000 to the husband with the balance to be held in an account, and the wife specifically requests that she be required to discharge the borrowing achieved for the purposes of the B property.  I suppose that would be paid on sale anyway.  In the alternative the wife seeks that the husband vacate the property and then that she be at liberty to sell the property and pay the required outgoings and then hold the balance in an interest-bearing account.  The wife also seeks that the husband pay $1500 a week and she indicates through her counsel that that is to address the cost of the borrowing.

4. It is the wife’s case that this should be done because there is an avoidable borrowing which costs $6000 a month to service; that it is inherent in the arrangements made in October 2008 that the C property would be sold; that the parties had previously cooperated in it being put to the market; that she has advice from a real estate agent that it is an appropriate time to sell the property; that if the property is to be marketed successfully for this upcoming spring and summer, which is said to be the best time, then things need to be done very quickly to have the property presented to the market before Christmas.  The husband opposes the order on the basis that it was never agreed that the property be sold other than as part of an overall settlement of the parties’ property dispute.  

5. Insofar as the orders call for an exercise of power under section 79 there is no consent to a delegate exercising power and in relation to an order by way of mandatory injunction the argument is that, notwithstanding there is no evidence in the husband’s case about it, it is not proper to ask him to vacate the property in the short term and he should not have to.  Unfortunately there is no evidence in relation to this.  The husband’s affidavit is silent on the question and the annexed report from his Psychiatrist says the opposite - that he is reconciled to a sale program this spring and summer and that he sees the benefit in doing that. One could imagine the type of evidence that might be available on this question but none is adduced.

6. Section 114 gives the court power to grant an injunction.  The court is to grant an injunction that is proper. It is a question of weighing up the competing prejudices.  What is said on behalf of the wife is that, albeit until the court has exercised power under section 79 there is a sense in which all of the property of the parties, belongs to them undivided, the C property is exclusively owned by the wife. The argument in her case is that neither of the parties wants any outcome other than the sale of the C property and in circumstances where there is no assurance on behalf of the husband that he will meet the costs of servicing the outgoings as he did up until September 2009 a sale is appropriate. It is true that although the issue was raised on several occasions, no assurance about that is offered on behalf of the husband.

7. As things stand today the extent of the husband’s agreement is that he will cooperate in an extension of the facility beyond April 2010 if that becomes necessary. I am not told about the terms of the agreement that led to the arrangements in October 2008.  As I put to Mr Delaney during the course of submissions, I can infer that an aspect of that arrangement was an agreement between the parties to sell the C property. That is because that is the basis on which the finance that the husband arranged, was advanced – there was to be a period of payment interest-only and then the full principal was to be repaid.  One concern the husband obviously has is that the wife has a companion living in the property. For my part, the financial incidents of their cohabitation are not satisfactorily revealed. 

8. The evidence is that a Mr V lives in the property.  He pays $230 a week towards expenses.  He pays $230 towards his cost of living in the home.  It does not sound like that is a substantial contribution towards the cost of living in the home. The wife meets fixed expenses of about $2100 or something like that, and she has living expenses of $880 a week. It would seem unlikely that Mr V does not benefit from some of that expenditure.  It is a bit hard to know how to treat the cost of servicing the mortgage because it is a contrivance. The borrowing it something the parties did so they could retain two properties and in that sense it might be seen as something they did as part of their settlement rather than it being a necessary cost of accommodation.  Maybe there is an argument there, but on the face of it, it does not sound as though Mr V is making a proportionate contribution. It would seem unlikely and unusual that two people living together would be able to isolate the cost of food, household supplies, repairs, electricity, and all of the other costs as neatly as has been done here.

9. But we come back to it.  On the evidence the parties agreed to the property being sold; they tried to sell it; they have had advice that it would be good to sell it; and on the face of it, the husband has told someone that it would be a good idea to sell it now.  The price of not selling the property is $6000 a month.  The husband has not agreed to continue an arrangement, which was obviously a collateral arrangement to the initial raising of finance, to subsidise the wife’s expenses in terms of the mortgage instalments.  That leaves the wife in a position whereby, from her own income she would need to find $6000 a month.  She receives $1595 a month. It cannot be done.

10. The husband does not propose to live in the property indefinitely.  It is apparent from the wife’s application that an amount of money in excess of the amount that the parties applied to the purchase of the wife’s property at B is on offer to the husband. If there was no offer, the court could make orders in relation to such a fund. Lest it be said that the husband’s position is bolstered by his poor health, and there is some evidence about his health, this issue is not part of his case. The health issue is serious. The husband has a Bipolar Affective Disorder and suffers from Depression.  He has been treated for that and he has been on some medication. 

11. In any event, one cannot do any better than the evidence and here there is no evidence, for example, that it is important that he stay in the property. Thus it seems to me that the balance of convenience in those circumstances favours the wife’s application.

12. The other aspect of the case, not that she has sought to do this, is that if the wife stopped making the payments, the mortgagee would cause the property to be sold with attendant losses on a mortgagee sale. At the end of the day, in the absence of assurances from the husband in the terms previously given by him, the property must be sold in any event. Indeed that is the agreed position in these proceedings on a final basis.

13. As to the maintenance application, I have said what I know about the wife’s position.  The husband has an average weekly income of $3,229 largely made up of an income protection policy payment of $2,500 a week, some interest on money in the bank, and payments in relation to work done, as I understand it, on a consultancy basis for the enterprise, that he established and which works in the financial services area.  He has been making substantial payments.  He declares in his Financial Statement a payment of $1270 a week and the wife is seeking $1500.  So by inference, to the extent that his Financial Statement shows a shortfall, he has been managing that shortfall in some way and been making a payment of the order of the payment that is being sought here. 

14. As at the end of October the parties had a Commonwealth Bank term deposit of $270,000, moneys in the St George Bank; a small amount in the Commonwealth Bank.  There is no requirement that interim maintenance payments be paid out of income.  They can be paid out of capital or borrowings.  The real issue is the question of the characterisation of those payments on the day the parties’ financial arrangements are settled.

15. On the face of it the husband has been able to make those payments notwithstanding he shows an apparent shortfall of income over outgoings.  One can see a source of funds from which that shortfall has been addressed and the ultimate question is the extent to which capital was legitimately depleted in making a payment like this.  There is a place in the property proceedings for that argument in terms of contributions or in terms of an adjustment made between the parties. For those reasons I propose to make the orders sought on behalf of the wife.  There is a caveat on the property and that will have to be removed to facilitate the orders. 

ORDERS DELIVERED

1. There is an application for costs.  Generally parties bear their own costs and the court has power to make an order and in doing so is to take into account the financial circumstances of the parties and I have said what I know about that.  There is no legal aid. There has been no breach of court orders. There is nothing about the conduct of the proceedings save a late filed amended application, that comes to attention.  The parties have cooperated and filed their documents and so on.  Neither party has been wholly unsuccessful.  I am not told of any offers of settlement under section 117C or otherwise in writing.  It seems to me that at the end of the day that this is an unusual application.  On the one hand the wife would say that she was just carrying through an agreed course of action and the husband has reneged on a tacit arrangement or a literal arrangement for the sale of a property and so she just wants that dealt with. On the other hand she is asking for a substantial change to the property of the parties in terms of crystallising an asset and she has brought the matter to court for that purpose. I cannot get to the bottom of that because I do not know what has been said between the parties or what has passed between their solicitors.  I do not know. 

2. It is relatively unusual to have significant interlocutory action in relation to property settlement. The ideal is that decisions about property are made once and only upon all of the information being known.  It seems to me that the wife is asking for something unusual to be done. She has been successful. It was not an unremarkable thing and on that basis there should be no order as to costs.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan

Associate: 

Date: 7 December 2009