Poulos v Eberstaller

[2013] NSWSC 1849

Supreme Court

New South Wales

Medium Neutral Citation:	Poulos v Eberstaller [2013] NSWSC 1849
Hearing dates:	9 and 10 December 2013
Decision date:	12 December 2013
Jurisdiction:	Equity Division - Expedition List
Before:	Pembroke J
Decision:	See paragraph [44]
Catchwords:	CONSENT ORDERS - nature and effect CONSENT ORDERS - construction and implication CONTRACT - implied term requiring reasonable co-operation CONTRACT - party cannot take advantage of own wrong to enliven contractual entitlement STATUTORY CONSTRUCTION - Section 37A Conveyancing Act - application to matrimonial dispute - meaning of 'creditor' COSTS - appropriate circumstances justifying fixed lump sum costs order
Legislation Cited:	Conveyancing Act, 1919 (NSW) Family Court Act, 1975 (Cth)
Cases Cited:	Athens v Randwick City Council [2005] NSWCA 317 Cadogan v Cadogan [1977] 1 WLR 1041; [1977] 3 All ER 831 Harvey v Phillips [1956] HCA 17; (1956) 95 CLR 235 Insurance Commission v Joyce (1948) 77 CLR 39 Ireland v Retallack (No 2) [2011] NSWSC 1096 Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546 Secured Income Real Estate (Australia) v St Martins Investments Pty Ltd [1979] HCA 51; (1979) CLR 596 Siebe Gorman Ltd v Preupac Ltd [1982] 1 WLR 185 SS Pharmaceutical v Qantas Airways [1991] 1 Lloyd's Rep 288 Sydney Attractions Group Pty Ltd v Schulman [2013] NSWSC 858 TCN Channel 9 Pty Ltd v Hayden Enterprises (1989) 16 NSWLR 130 TFML Ltd v Macarthur Cook Fund Management Ltd [2013] NSWCA 29
Texts Cited:	P. W. Young, The Law of Consent, Law Book Co, (1986), pp182-183
Category:	Principal judgment
Parties:	Lisa Ann Poulos - plaintiff Hans Richard Eberstaller - first defendant Premjit Singh - second defendant
Representation:	Counsel: M W Sneddon with K P Tang - for the plaintiff A Ogborne - for the first defendant J Harding (solicitor) - for the second defendant Solicitors: Allygroup - for the plaintiff Bruce & Stewart Lawyers - for the first defendant Property Law Solutions - for the second defendant
File Number(s):	2013/245442

Judgment

Introduction

1. The plaintiff (wife) and the first defendant (husband) are estranged. For the past four years they have been engaged in constant and unremitting disputation in the Family Court of Australia. On 25 October 2012 they reached a final agreement for the purpose of bringing to an end their financial relationship and avoiding further proceedings between them. Their agreement was embodied in consent orders which the court made on that date.

1. The primary subject matter of the consent orders was the family home in Bellevue Hill. The husband was the sole registered proprietor. Subject to a number of other orders, the husband agreed in effect that, in exchange for the provision by the wife of a bank cheque sufficient to discharge his mortgage on the property, he would 'do all things and sign all documents necessary to transfer to the wife his interest in the Property'.

1. The husband did not transfer his interest in the property to the wife. Instead, on 12 August 2013, at approximately 10 o'clock in the evening, he purported to exchange contracts for the sale of the property to the second defendant, who had never seen or inspected the property and who paid no deposit. At the hearing before me, the second defendant chose not to give evidence before me. The wife contends that the husband entered into the transaction in order to 'hinder, delay or defeat' her rights as a creditor: Section 37A, Conveyancing Act, 1919.

1. On 13 August 2013, the wife made an urgent application to this court and obtained an interlocutory injunction which restrained the husband from proceeding with the sale to the second defendant. On 15, 19 and 20 August 2013, Robb J conducted a lengthy interlocutory hearing. There was no cross-examination. His Honour's subsequent careful and extensive judgment contained many interlocutory findings that were adverse to the husband. Those findings included, among others, preliminary conclusions that the husband had decided to be obstructive and that the outcome which ensued was entirely his fault because he failed to co-operate with the wife to enable her to pay out the mortgage.

1. I have had the added benefit of observing and listening to the husband in the witness box over an extended period. That additional opportunity has enabled me to reach firm conclusions about the matters on which Robb J made preliminary findings. I have concluded that the adverse findings of Robb J were amply justified. For the reasons that follow, I have regrettably formed the view that the husband has acted towards the wife in a manner that was unfair to the point of being vindictive. His conduct was unco-operative, unreasonable and unjustified; his behaviour was obdurate and obstinate.

The Family Court Orders

1. The starting point is the orders of the Family Court made on 25 October 2012. The most important orders are 3, 4, 6, 10 and 11 as follows:

3. That immediately upon the Wife providing a bank cheque issued by an Australian bank sufficient to discharge the Mortgage in full, the Husband shall contemporaneously with the discharge of the Mortgage in full, do all things and sign all documents necessary to transfer to the Wife his interest in the Property subject to the Mortgage to the Wife including giving a direction to the Bank to release the title to the Property directly to the Wife. As from the discharge of the Mortgage, the following paragraphs 4, 5, 6, 7, 8 and 11 will cease to have effect except to the extent of any rights or liabilities arising prior to the date of discharge of the Mortgage.

4. That until such time that the Wife discharges the Mortgage under paragraph 3 and subject to paragraph 5 below, the Wife shall make minimum monthly payments of $3,000 per month into the Mortgage for the first annual period after the date of these Orders and thereafter minimum monthly payments of $4,000 per month with such monies to be first applied towards interest and thereafter to a reduction of principal outstanding.

6. The Wife shall be at liberty to draw upon the Mortgage any funds to meet minimum monthly payments arising under paragraph 5* up to the Facility Limit but for no other purpose.

10. That the Wife is responsible for all costs of or relating to the Property or its transfer, including but not limited to real estate agency commissions, council and water rates and applicable land taxes whensoever arising, any capital gains tax or income tax payable by the Husband as a result of these Orders or transfer and the Wife shall within 5 days indemnify the Husband in the event any such cost, taxes or amount is paid by the Husband. The Husband shall do such lawful things reasonably requested by the Wife which lawfully minimise or avoid the imposition of such costs, taxes or amounts. Any expenses arising from such requests are to be paid by the Wife.

11. That if the Mortgage is in default and not remedied within 30 days of the default, both parties agree [to] do all things and sign all documents necessary to sell the Property and provide all necessary instructions and authorities to cause the net proceeds of sale to be applied in the following order and priority:

a. Repayment of the sum required to discharge the Mortgage secured on the Property.

b. Payment of all legal costs associated with the sale of the Property;

c. Payment of all Real Estate Agent's commission and selling costs;

d. Payment to the Husband of $80,000 if payment is required by paragraph 9 above.

e. In payment of the balance to the Wife.

* This is an obvious mistake and should read '4'.

1. Those orders constituted an agreement between husband and wife and should be construed in the same manner as any written contract would be. There is a well recognised difference between orders such as these which are 'by consent' because the parties are the source of the orders which express their consensus and agreement, and orders which are 'by consent' simply in order to signify that neither party objects to the court making the orders: Siebe Gorman Ltd v Preupac Ltd [1982] 1 WLR 185 at 189 (Lord Denning MR); P. W. Young, The Law of Consent, Law Book Co, (1986), pp182-183. It is equally well recognised that in the former category of consent orders, the orders may be impeached on any ground which would invalidate the agreement expressed in the orders: Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235 at 243-244. See also Athens v Randwick City Council [2005] NSWCA 317 at [29].

1. It also follows, in my view, that the orders should be construed having regard to conventional principles of implication and construction. Orders of the court that embody the agreement of the parties do not stand in isolation, immune from the ordinary processes by which the court ascertains the extent of the parties' obligations.

1. In this case, two well-known principles of law are brought into play. First, each party must do all things reasonably necessary on his part to ensure that the other receives the benefit of their agreement: Secured Income Real Estate (Australia) v St Martins Investments Pty Ltd [1979] HCA 51; (1979) CLR 596; TFML Ltd v Macarthur Cook Fund Management Ltd [2013] NSWCA 29 at [50]. Second, a party cannot take advantage of his own wrong. A party's contractual entitlement that arises upon a particular event will not be enlivened if the event came about through that party's own wrongful conduct: TCN Channel 9 Pty Ltd v Hayden Enterprises (1989) 16 NSWLR 130; Sydney Attractions Group Pty Ltd v Schulman [2013] NSWSC 858 at [188] - [191].

The Husband's Behaviour

1. In the witness box, the husband was quarrelling and defensive. Often he was not responsive. Frequently he made unwarranted comments. This same belligerent and unreasonable behaviour is apparent from the sequence of events that is revealed by the correspondence from November 2012 to August 2013. He constantly emphasised that, in effect, he was doing no more than insisting on the strict and literal application of the terms of the orders.

1. In reality, it was a pretence. He was putting one obstacle after another in the way of his wife's entitlement to have the property transferred to her name. Although he pointed to individual emails and communications which, taken in isolation, might have suggested that he was willing to perform his obligations, I think the reality was different. I formed the view that, as time passed after 25 October 2012, he became increasingly unable to bring himself to transfer the property to his wife. It was as if he regretted having originally agreed to do so. He was resiling, inexorably, and more and more blatantly, from his legal obligations.

1. The process of transferring the property to the wife was never complicated. Its implementation called for no more than a little understanding and co-operation; no more than could be expected from an ordinary, rational and reasonable person. Unfortunately, the husband's behaviour did not conform to that standard.

The Sequence of Events

1. The wife first prompted the husband about the transfer on 13 November 2012. She enquired 'How will we go about doing the transfer?' He avoided the issue and his response on the same date ignored her enquiry. His next step, a few weeks later, was to provide to his wife a draft of his application pursuant to Section 79A of the Family Court Act, together with some advice from his lawyers. Despite the court orders of 25 October 2012 having been consensual, he sought to have Order 3 (providing for the transfer of the property) stayed until the hearing of his application to vary certain of the orders and to add others. It was obvious that he could not, or would not, accept the result. In evidence, he insisted somewhat disingenuously that the Section 79A application did not affect his obligation, or his willingness, to do what was required, as long as his wife performed her obligations pursuant to Order 3.

1. The Section 79A application was not filed until 24 January 2013. The wife told her solicitor that she was so stressed that she did not know what to do. The solicitor (Mr Ferguson) told her, percipiently, that it is likely that the husband will delay signing the transfer until the application was dealt with. In due course, it was dealt with and on 24 May 2013, the unmeritorious Section 79A application was summarily dismissed - from which decision the husband has predictably appealed.

1. In the meantime, some attempts were made to progress the transfer. On 20 November 2012, the wife asked the husband 'Can you please send me a copy of the transfer for the house please'. His wholly unhelpful and antagonistic response was threefold. He said the buyer prepared the transfer. Then he attached a rate notice showing substantial arrears going back to 2008 which he had not paid and said 'Suggest you get on to them asap and pay'. Then he asked her if she had resolved the CGT issue and said 'Otherwise I will need security for the liability'. The wife's understandable response to the rates issue was to say that she was not going to pay the arrears relating to the period when the husband owned the house but was of course happy to pay the rates when she owned the house.

1. There was no email response from the husband until 22 January 2013 when he said that she 'should have been preparing documents' rather than going on a skiing holiday. He also said that 'your answer to the transfer is another breach of the Orders'. This was, I think, a reference to his contention that Order 3 required the wife to pay the rates, without expressly stating when that obligation commenced.

1. On 24 January Mr Ferguson sent a transfer form to the husband and asked him to sign and return it. At first, he ignored the request and responded by stating that the amount outstanding to the National Australia Bank was $691,130 and that the arrears of council rates were $8,614. Later on 24 January, after thinking further about the matter, he sent another email to Mr Ferguson stating that he would 'review the transfer and revert shortly'. He then raised two obstacles. He asked for the provision of a bank cheque in accordance with Order 3 to discharge the NAB mortgage - even though no settlement appointment had been arranged and he was obfuscating over the provision of a signed transfer. And he pointed out that he had now lodged his Section 79A application which, he emphasised, included a request for a stay of Order 3 pending final determination.

1. Over time, there was much prevarication and many excuses put forward by the husband for not acceding to Mr Ferguson's simple request that he sign and return the transfer. Revealingly, in the witness box, he provided an entirely new reason. He said that he could not trust Mr Ferguson and was concerned that, if he handed over the signed transfer, there might be some dishonest dealing in relation to it. This foolish evidence reflected poorly on his credit.

1. There were other instances of unsatisfactory evidence by the husband. In the evening on 24 January, after he had advised his wife that he had filed the Section 79A application seeking, among other things, a stay of Order 3, he sent another email to her saying 'Accordingly I cannot see how the orders cannot be carried out until clarification and enforcement is made by the FCA'. Despite the confusing use of the word 'cannot', the whole of the sentence and the timing and context make clear that he was suggesting that there could be no transfer of the title until his Section 79A application had been determined. In the witness box, he insisted the opposite, denying the obvious purport of his email, suggesting that he was simply saying that there was no reason why the transfer could not go ahead. This also reflected poorly on his credit, as well as revealing his true intention.

1. On 29 January 2013, notwithstanding the indications of the husband's lack of co-operation, Mr Ferguson wrote to the husband proposing a different solution:

In relation to your request for a bank cheque now, the Family Court Orders require you to do all things necessary to transfer your interest in the property to our client at the same time as our client provides you with a bank cheque to discharge the NAB mortgage. As you are aware, our client is financing this settlement and the Property is being used as security for that finance.

It would appear that you are not prepared to loan us the signed Transfer for stamping purposes. Accordingly, we propose a settlement be arranged whereby in exchange for the duly executed Transfer from you and a duly executed discharge of the Mortgage and the Certificate of Title from the NAB a bank cheque to payout the NAB debt be handed to you (or your agent) to hand to the NAB.

Again, we request you please pass on my details to your banker at the NAB and ask him/her to contact me to discuss settlement arrangements.

1. The husband's terse and unresponsive reply was to say that he was able to lodge the transfer for stamping himself. He ignored the request for an exchange. On 30 January, Mr Ferguson informed the husband that his wife's incoming mortgagee was now 'ready to settle the Transfer and discharge of the NAB mortgage'. He added that it was not necessary for the husband to attend the settlement 'as long as the Transfer signed by you is provided to us prior to or on settlement'.

1. The husband rang Mr Ferguson in response to that email and he recorded the conversation. The terms of the conversation reveal his rigidity and his unreasonableness. He insisted on an order of events that he thought was required by Order 3 but which did not reflect ordinary and reasonable practice. It was in truth a pretext for avoiding his obligations. Nonetheless, on 31 January, he told his banker at NAB, Mr Shute, 'please get discharges prepared and title found etc in anticipation of settlement'. He added however that Order 3 had not yet been satisfied (perhaps referring to his contention that his wife was obliged to pay his arrears of rates) and that 'there may be some delay from other proceedings' (referring to his Section 79A application).

1. On 1 February, the wife's incoming mortgagee, the Commonwealth Bank of Australia, was ready to settle. But the husband went overseas for most of the rest of the month. Despite his email to Mr Shute on 30 January, he then informed the bank that he was holding off signing the discharge of mortgage. Progress stalled. In the meantime, the husband's application in the Family Court trundled on. There were conferences with Registrars and he issued subpoenas to Bell Partners and the CBA.

1. In late April another issue arose, on to which the husband immediately grasped. The NAB loan went into arrears in the amount of $1,260. The husband was not making payments pursuant to his facility. And the wife had not made the monthly payments pursuant to Order 4. She had never expected to. If the transfer to her had occurred reasonably promptly, there would not have been the slightest problem. The unpaid interest would have been capitalised and the whole of the outstanding principal and interest would have been paid out by her in return for a discharge of mortgage. The husband now made this a major issue. He knew exactly what he was doing. He threatened her with the consequences of default. He was preparing the way for the triggering of Order 11. It was an opportunity for him to deny his wife her primary entitlement to the transfer of the family home. The wife did not pay the arrears but the root cause of her predicament was the husband's determination to avoid, hinder or delay the fulfilment of his primary obligations to her.

1. Matters were made more difficult because the husband did not want his banker, Mr Shute, to deal directly with his wife or her solicitor. There was a stalemate in mid-May. The arrears on the NAB loan reached $2,823. The husband continued his threats of default. The wife responded by saying 'why are you holding this up?' The answer was obvious, although I am not sure that the wife could clearly see what is now so apparent. Her understandable position was that she needed the transfer and discharge of mortgage to arrange her re-finance through the CBA. She told her husband that she needed 'the house to be transferred so that I can start making payments'. She requested permission to speak to Mr Shute at the NAB. The husband refused. He simply referred her to Orders 4 and 11. She protested 'How do you expect me to fix this if you will not give me access to him?' She said that if he put the house in her name, the problem of the arrears on his loan would go away. He would not co-operate. He had the temerity to tell her to stop harassing him.

1. On 24 May, when the Family Court dismissed the husband's Section 79A application, his glib and threatening response to his wife was to say 'Oh well - always thought it would have to go to the Full Court on appeal'. The wife ignored him and on the following day, sent an email direct to Mr Shute, saying that she would 'like to proceed in transferring the property ... into my name. I will notify the CBA on Monday morning that we are moving forward'. On 28 May, Mr Ferguson followed up with an email to Mr Shute that stated:

Could you please advise if the NAB is willing to arrange a settlement of the discharge of mortgage?

We are attempting to organise a settlement with the other parties so perhaps if we nominated a date and time next week this might move things along.

We understand the CBA (as incoming) mortgagee is ready to take a booking for settlement.

1. Also on 28 May, Mr Ferguson asked Mr Shute for an indicative payout figure. And the wife separately enquired from him: 'Did Hans give you any indication why he is holding up the transfer of the property? I just need to understand so that we can all move forward'. She said 'I am happy to comply with the orders and pay mortgage, but need to payout so that I can manage the payments'. Mr Shute replied that the husband's 'unwillingness to execute transfer/sign settlement and discharge instructions, is not a matter for the bank'. The wife responded within minutes, saying:

Thanks for this update - as I have mentioned to you, I do NOT want this to go into default - this is not my intention. If the bank can not order the transfer to me, then I will pay the mortgage down to prevent from going into default.

1. A few days later, the wife followed up, saying 'I would so love to solve this issue so the NAB is not in this position ... please remember, I am here to sort this out'. By 7 June, the wife was becoming desperate. She wrote again to Mr Shute as follows:

Andrew Ferguson has notified me that the bank can not move forward with transfer without Hans' consent. Therefore to stop this matter progressing to a situation that is not great for anyone, I will start paying the mortgage. As I do not want to deal with Hans, can you let me know what need to be paid and where I pay it.

1. In his evidence, the husband made very clear that he was angry and indignant at his wife and her solicitor attempting to deal directly with Mr Shute. Mr Shute now ceased to help. He said that he was 'unable to provide any detail regarding Hans' personal financial matters'. The husband angrily wrote to his wife a few hours later, telling her that 'You have no right to deal directly with my banker'. No progress could be made. Then on 10 June, the husband sent to his wife his draft appeal from the dismissal of his Section 79A application. He added that he was putting her on notice that he would be seeking costs of the appeal. The costs of the Family Court litigation were already vast. He was, in my view, doing everything within his power to frustrate and intimidate her.

1. In the meantime, he had come up with yet another obstacle. He said that the swimming pool at the property did not comply with Council requirements and that those requirements must be met by the wife, at her expense, before any transfer to her. Mr Ferguson informed the husband that a certificate of compliance was not necessary prior to a transfer taking place. The husband hit back, saying 'Please don't provide me any advice as you do not represent me'. He would not accept Mr Ferguson's advice. Then on 3 June he sent an email to his wife saying 'mail had another legal notice'. He added darkly 'Hate to spoil your day'. The swimming pool issue was just another excuse for delaying the fulfilment of his obligations.

1. There was then a temporary cessation in the husband's hostilities until 8 July. School holidays and travel may have intervened. On 8 July he sent an email to his wife saying that he had opened his mail backlog with 'default notices attached arising from your failure to make any payments'. An hour later he wrote again, confirming his appeal from the summary dismissal of his Section 79A application. He attached a letter from the Family Court Registry and stamped cover sheets of his notice of appeal and draft index. The wife was still away on holidays with the children.

1. On 11 July, while on holiday, she contacted Mr Shute again, saying 'Hans has notified me that he has received notices to (sic) default. I have told you that I am willing to pay the loan, but need assurances to move forward'. On the same day she also wrote to her husband, telling him that she would deal with the matter on Monday, 'but you need to transfer the house so I can take over - this is unbelievable that you would put us at risk like this'. She was right and I agree. As usual, his response was unhelpful. He reiterated that she had breached the orders and that there was 'no point talking to Andrew Shute'. I do not think that he wanted his wife to be in a position of paying out his loan and taking a transfer of the property, as had been contemplated and agreed as long ago as 25 October 2012. He had a different agenda.

1. On 19 July the wife pleaded with her husband: 'Can you please provide me with the contact so that I can find out how to move forward on paying the loan. I have made this request three times and have been blocked by your bank'. She repeated her plea on 22 July. His response was unreasonable, unco-operative and disingenuous. Apart from saying that Mr Shute was no longer involved, he questioned her: 'What payments are you proposing and I will pass info on'. She asked: 'I need the account details and what owing exactly'. He would not assist, merely saying, unhelpfully and inaccurately: 'I sent all the default notices to you the other day. Everything is on them.

1. It was now obvious to the wife that her husband was not behaving reasonably or, if I may say so, rationally. She consulted Mr Sneddon, who has appeared for her in this court. On 28 July she sent a letter of demand, which she copied to Mr Sneddon. It required compliance with the original orders. She stated that she was 'ready to comply and repay amounts in full'. In fact she had been in that position since approximately 1 February. She stated that she reserved her position to bring proceedings to enforce the orders, including a claim for contempt of court.

1. The end game was fast approaching. The husband now tried something new. It was just as absurd as some of the other obstructions that he had raised. On 5 August he demanded that his wife provide evidence 'that you are able to settle as required by the orders'. When I questioned him about this, his answers provided no justification for his stance. They reflected poorly on his credibility and were revealing as to his intention. He was stalling.

Sale of the Property

1. On 5 August, when he asked his wife to provide evidence of her ability to settle, the husband had decided to sell the property - although he was not prepared to let her in on the secret. He had prepared an analysis so as to justify a price for a sale with a delayed settlement. On 6 August, he wrote to the bank, telling Mr Shute that he was 'working on a solution'. He also wrote to his wife, delaying further, and saying, 'I am extremely busy today so will respond tomorrow afternoon.' In evidence he contended that his commercial justification for selling was that his credit was affected. The NAB had issued a Section 57(2)(b) notice on 24 June. And on 7 August, the bank's solicitors issued a letter of demand for $728,792.61. In the usual way, they stated that, if not paid, the bank may commence proceedings for possession. There was however no evidence of precisely how the husband's financial interests might have been actually threatened or realistically damaged by the position being taken by the NAB.

1. More significantly, the threatened outcome was of the husband's own making. The wife had been endeavouring to pay out the totality of the NAB loan since 1 February. She may not have paid the monthly instalments of $3,000 contemplated by Order 4, but that was not the real cause of the current situation. The real and effective cause was the husband's wholly unreasonable lack of co-operation, which was motivated by his unwillingness to perform his obligations under Order 3 and his desire to hinder, delay or prevent his wife having the benefit of that order. He thwarted her and engineered a sale to the second defendant. He preferred to have a sale pursuant to Order 11 rather than to allow his wife to have the former matrimonial home.

1. As I have already mentioned, the second defendant did not give evidence and did not attempt to support the transaction. He did not pay a deposit, did not inspect the property and did not speak to the husband. It is not clear if any consideration at all has been paid. It appears not. The purported exchange of contracts took place at about 10pm on 12 August. The husband wrote to the bank with a copy to his wife earlier that day. This was the first indication to the wife of a proposed sale. Her solicitors had written to the bank's solicitors on 9 August, putting them on notice of her rights as follows:

We are instructed to formally notify the Bank the following:

1. The Property is the former matrimonial home of our client and the Mortgagor.

2. Our client currently resides in the Property together with her children.

3. Pursuant to consent orders of the Family Court dated 25 October 2012 (Orders), the Mortgagor is to transfer the Property to our client, subject to our client discharging the mortgage to the Bank. A copy of the Orders is enclosed for your information.

4. Our client is borrowing funds from the Commonwealth Bank (CBA) to assist with the discharge of the mortgage to the Bank pursuant to the Orders. CBA is taking the Property as security for its loan to our client and unsurprisingly, before any funds are advanced, CBA require a stamped Transfer signed by the Mortgagor, a discharge of the Bank's mortgage and the Certificate of Title for the Property so that it can register its mortgage.

5. Our client has for some time now been attempting to have the Property transferred to her pursuant to the Orders; however, the Mortgagor is, despite a number of requests, refusing to co-operate and comply with the Orders. Specifically, the Mortgagor has refused to sign a Transfer (copy enclosed) and instruct the Bank to prepare a discharge of the Bank's mortgage.

6. Our client is ready, willing and able to attend to the discharge of the Bank's mortgage, subject to the Mortgagor signing the Transfer and instructing the Bank to prepare a discharge of, and provide a payout figure for the loans secured by, the Bank's mortgage, and instructing the Bank to attend a settlement of the discharge.

1. The terms of the contract of sale were self-evidently unusual. I adopt the analysis of those terms set out in the judgment of Robb J at paragraphs [13] and [15] - [17]. The practical effect of the contract was that, not only would the wife lose her right, pursuant to Order 3, to own and continue to reside in the property, but she might only receive her share of the proceeds of sale two years after the date of contract. In the events that have since occurred, this has all become academic. The sale to the second defendant has been restrained and the wife has paid the full amount that was outstanding to the NAB.

1. I am quite satisfied that the requirements of Section 37A of the Conveyancing Act, 1919 have been met, even assuming that valuable consideration was given and it is necessary to prove that the second defendant knew of the intention to defraud. As Rich J said in Insurance Commission v Joyce (1948) 77 CLR 39 at 49, where an inference is open and the defendant elects not to give evidence 'the court is entitled to be bold'. See also SS Pharmaceutical v Qantas Airways [1991] 1 Lloyd's Rep 288 at 292 (Gleeson CJ and Handley CJ). In this curious case, the very existence of the second defendant, let alone his bona fides, was never established. For all I know, he could be an illusion. His separate representation appears to have been an attempt to demonstrate that he was independent. The hapless young solicitor who purported to represent the second defendant knew nothing and did nothing. He made no submission, tendered no document and asked no question. He merely sought to rely on an affidavit, not from the second defendant, but from someone who was said to be the second defendant's son and an associate of the husband. However, the affidavit said nothing relevant and admissible and I would not allow it.

1. As I have explained, the husband's intention was to 'hinder, delay or defeat' his wife: Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546. His wife was a creditor by reason of Order 3, which gave her an equitable interest in the property. A conveyance to defeat a spouse's claim in matrimonial proceedings is within the section: Cadogan v Cadogan [1977] 1 WLR 1041; [1977] 3 All ER 831 at 842. The husband wanted to prevent his wife having the benefit of that order. Although he had originally agreed to her having that right, he showed no willingness to implement Order 3 except by reference to a construction of it that denied any obligation by him to act reasonably in order to ensure that she have the benefit of the order. His intransigence was a pretext for denying his wife's rights. His belief in his own legal rights was not the dominant factor. His overriding intention was to hinder, delay or defeat. His intention towards his wife was not merely unreasonable, it was dishonest by the standards of ordinary, decent people.

Order 11

1. I have said enough to explain why the husband was not entitled, in the particular circumstances of this case, to seek to trigger a sale in accordance with Order 11. The language of Order 3 must be read subject to the implicit obligation of the husband to act reasonably and co-operatively in order to facilitate his wife's enjoyment of the right granted to her by that order. It is not necessary to contradict the terms of Order 3 to give effect to that implicit obligation. Amplification and qualification is not contradiction. It is only necessary to read and implement the requirements of Order 3 with the degree of reasonableness and common sense that would be expected of any reasonable person acting in good faith. The husband did not demonstrate those qualities. He breached his implied obligation. Despite the wife's failure to pay the monthly instalments pursuant to Order 4, the husband's actions were the dominant reason for the unremedied default on which he relied to trigger Order 11. In those circumstances, he cannot take advantage of his own conduct so as to claim an entitlement to the benefit of Order 11.

Conclusion

1. There is no longer any practical impediment to the implementation of Order 3 of the orders made by the Family Court of Australia on 25 October 2012. The wife has now paid the NAB in full, which has provided to her a discharge of the mortgage. All that remains is that the husband deliver to the wife a duly executed transfer.

1. I therefore make the following orders:

(1)   I set aside the contract for sale of land dated 12 August 2013 between the first defendant as vendor and the second defendant as purchaser;

(2)   I order the first defendant to deliver to the plaintiff's solicitors a duly executed transfer of the property known as 10 Kulgoa Road, Bellevue Hill;

(3)   I order that the first defendant deliver the said transfer to the plaintiff's solicitors by 10am tomorrow, 13 December 2013;

(4)   I order that these orders be entered forthwith.

Costs

1. The first and second defendants should pay the plaintiff's costs. They should be severally liable. If so advised, I will entertain an application by the plaintiff for a special costs order, if there are grounds for doing so. This is an appropriate case for a fixed lump sum costs order: see Ireland v Retallack (No 2) [2011] NSWSC 1096 at [38] - [44]. In the circumstances of this case and given the relationship between husband and wife, and particularly having regard to the conduct of the first defendant which I have explained at length above, including his predilection for disputation, it is not in the interests of justice that the plaintiff be subjected to a lengthy contested costs assessment. I am in a better position than a costs assessor to undertake an assessment. The parties should agree on directions for a time-table for written submissions and any evidence on the amount of an appropriate assessment of the plaintiff's costs of these proceedings.

Decision last updated: 16 December 2013