Sayid and Alam (No 2)

[2018] FamCA 986

FAMILY COURT OF AUSTRALIA

SAYID & ALAM (NO. 2) [2018] FamCA 986

FAMILY LAW – ENFORCEMENT AND INJUNCTIONS – Where the husband seeks to set aside previous orders appointing the wife as trustee for sale and restraining him from doing anything to delay the settlement of a sale – Where the husband’s application is dismissed.

Family Law Act 1975 (Cth)

APPLICANT: Mr Sayid

RESPONDENT: Ms Alam

FILE NUMBER: SYC 3215 of 2015

DATE DELIVERED: 20 November 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 18 October 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Lawson

SOLICITOR FOR THE APPLICANT: Cheryl Orr Family Law

COUNSEL FOR THE RESPONDENT: Mr Givney

SOLICITOR FOR THE RESPONDENT: Hills Legal Group

Orders

1. The husband’s Application in a Case filed 27 August 2018 is dismissed.

2. I note that the wife alone has the responsibility for achieving the best settlement that she can with the purchasers in order to bring their claim against the trustee for sale to a conclusion.

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 Sayid & Alam 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 3215 of 2015

Mr Sayid

Applicant

And

Ms Alam

Respondent

REASONS FOR JUDGMENT

1. By way of Application in a Case filed 27 August 2018, the husband seeks the following orders:

   1.    That the court list this matter at short notice.

   2.    That the wife is directed to instruct [Ms Y] of [Z Real Estate] to pay the amount of $50,557.67 into the controlled monies account opened by the ATO with the Commonwealth Bank.

   3.    Order 1 of orders made on the 28 June 2018 appointing the wife [Ms Alam] as “Trustee” is hereby discharged.

   4.    Order 3 of orders made on the 28 June 2018 is hereby discharged.

   5.    That wife [sic] within 24 hours provide to the husband solicitor the following documents:

   (a)     All correspondence between her solicitor [CC Lawyers] and [Z Real Estate] and Hills Legal and [Ms Y] relating to alleged damage to the property at [G Street, Suburb H];

   (b)     All correspondence between [CC Lawyers]and the wife relating to settlement directions relating to [G Street, Suburb H];

   (c)     All correspondence between [CC Lawyers] and [Z Real Estate] and [Mr AA] relating to alleged damage to the property [G Street, Suburb H];

   (d)     Copy of signed cost agreement and estimate of fees and invoices between [CC Lawyers] and the wife;

   (e)     All correspondence between [X Lawyers] and [CC Lawyers] relating to any claim for outstanding fees and paid fees from the proceeds of sale from [G Street, Suburb H];

   (f)     Copy of signed cost agreement and estimate of fees and invoices between X Lawyers and the wife relating to conveyance of G Street, Suburb H;

   (g)     Building report relied on by the purchasers of [G Street, Suburb H] prior to signing the contract; and building report relied on by the purchaser of [G Street] after settlement of the contract;

   (h)     Running trust account statement from [Ms Y] of [Z Real Estate] clearly identifying all monies received and all disbursements costs relating to the sale of [G Street, Suburb H];

   (i)     Copy of all correspondence between [Mr & Ms V] relating to [Mr & Ms V] meeting the wife’s legal costs to [CC Lawyers].

2. Orders 1 and 3 made on 28 June 2018 are in the following terms:

   1.The applicant wife, [Ms Alam], be appointed trustee for the sale of the property situated at [G Street, Suburb H] and being the whole of the land contained in Title reference …79 (“the [Suburb H] property”) with the ordinary power of a trustee to, amongst other things, execute all documents, instruments and contracts and do all acts and things to effect the completion of the sale to [Mr V] and [Ms V].

   3.The husband be restrained from lodging any dealings against the title of the [Suburb H] property or otherwise doing any act or thing that would delay the settlement of the sale of the [Suburb H] property to [Mr V] and [Ms V].

3. The wife filed a Response on 2 October 2018 seeking that the husband’s Application in a Case be dismissed.

4. The husband relied upon an affidavit filed on 27 August 2018; an affidavit filed in court which was sworn on 16 October 2018, and subpoenaed documents from “[Ms Y], [Z Real Estate Suburb BB]” (Exhibit 8) and [CC Lawyers]” (Exhibit 9).

5. The wife relied upon an affidavit of 26 September 2018 and documents tendered from correspondence from Hills Legal Group (Exhibits 2 and 3).

6. The wife provided a case outline (Exhibit 5) and the husband provided written submissions (Exhibit 6).

7. I also noted during the hearing that I had before me the orders and Reasons for Judgment of 28 June 2018 and the orders made on 18 July 2016.

background

1. On 28 June 2018, the court made orders appointing the wife trustee for the sale of the property situated at G Street, Suburb H (“the property”) and an order restraining the husband from doing anything to delay the settlement of the sale. The factual background leading to the wife’s appointment as trustee for sale is contained in my Reasons for Judgment of 28 June 2018. The husband lodged an appeal against the orders made on that day, but that appeal was withdrawn by him.

2. As at 28 June 2018, contracts for the sale of the property had been exchanged. The purchase price was $4,900,000 and a 10 per cent deposit had been paid to the agent. The husband resisted completing the sale.

3. Subject to one outstanding matter, the settlement of the sale took place in August 2018. The purchasers have occupancy of the property and have paid the whole of the purchase price. The proceeds of the sale have been distributed. The settlement adjustment sheet is found at page 35 of the exhibits to the wife’s affidavit. That sheet indicates that normal rate adjustments were made (the rates appeared to be slightly in arrears), the first mortgage was discharged and a cheque was paid to the Commonwealth Bank of Australia in the sum of $3,367,054.80. Upon settlement, a bank cheque in the sum of $22,714.21 was paid to CC Lawyers (the firm acting for the wife on the conveyancing transaction between 7 May 2018 and  August 2018).

4. The balance of the purchase monies (excluding the deposit monies) in the sum of $1,019,406.73 was paid to the lawyers for the parties and the lawyers for the ATO for the purpose of it being placed into a controlled monies account in compliance with order 23.5 made 18 July 2016.

5. Prior to the settlement taking place in August 2018, two disputes arose between the purchasers Mr & Ms V, and the wife (as trustee for sale), in relation to a claim by the purchasers pursuant to clause 7.2.1 of the contract for sale.

6. Firstly, one of the purchasers indicated that on 21 July 2018 he had inspected the property in the company of the agent and reported that the property had been left in a dirty condition by the husband. He attached some photos of the mess that he said was left. There was also a complaint made about the state of the maintenance of the external part of the property and photographs were enclosed to demonstrate that it was in a somewhat unkempt condition. The husband accepts that he did not clean the property. The purchaser provided a non-exhaustive list of what was the alleged damage to the property, claiming that the property was not in the same condition as it was when contracts were exchanged in November 2017.

7. The purchasers indicated that they wished the price to be reduced by $20,000 in order to complete the settlement. On 21 July 2018, the wife indicated that “I agree for a reduction of $20k from the property overall price”.

8. Secondly, the purchasers then made it clear that the $20,000 was not inclusive of the previous claim that had been made for loss and damage caused by the delay of the finalisation of the contract. On 25 July 2018, the solicitors for the purchasers wrote a letter in which they itemised the claim of the purchaser’s loss arising from the vendor’s delay. This was in the sum of $30,557, and when added to the claim for loss or damage of $20,000, led the purchasers to request that either the purchase price be reduced by that amount, or in the alternative, that a sum of $50,557 be held in trust pending the determination of the dispute. The purchaser asserted that the wife’s email “I agree for a reduction of $20k from the property overall price” was a concluded agreement in relation to his claim for property damage. I do not read the wife’s email in that way, and in any case, I do not have to decide that issue. Ultimately, what was agreed to between the wife as trustee for sale and the purchasers was that the whole of the purchase price was paid by the purchasers with the amount of $50,557 being held by the agent as stakeholder pending resolution of the dispute.

9. The solicitors for the wife on the conveyancing transaction (CC Lawyers) indicated in their communication with the lawyers for the purchasers on 26 July 2018 that they did not believe that the purchasers had any entitlement to make a claim under the contract for the delay of the settlement of the contract.

10. The amount claimed in relation to delay in the sum of $30,557 is itemised in a letter from the purchasers’ solicitors dated 25 July 2018 (page 16 of the exhibits to the wife’s affidavit). The claim for damages is in the sum of $20,000 and is particularised at pages 17 and 18 of the exhibits to the wife’s affidavit but not individually costed. The overall claim is in the sum of $50,557. In order to otherwise complete the finalisation of the conveyancing transaction, the wife as trustee for sale and the purchasers agreed that the amount of $50,557 would be retained from the deposit monies in the trust account of Z Real Estate, the vendors’ agent. They hold those monies as stakeholder pending the outcome of the purchasers’ claim under the contract.

11. The deposit paid by the purchasers was $490,000. On 7 August 2018, a sum of $10,567 was paid to X Lawyers from the balance of the deposit monies in respect of outstanding conveyancing fees which were incurred jointly by the parties when that firm earlier acted on the conveyancing transaction. I infer the balance of the deposit, after the vendor’s agent has taken their commission, has found its way into the controlled monies account.

12. In correspondence between the solicitors for the parties, there was a dispute as to whether or not Order 1 (and I infer order 3) made 28 June 2018, was extinguished upon payment of the purchase price by the purchasers on 2 August 2018.

13. It was the husband’s case that the conveyancing transaction had been completed and that the wife had only been appointed as trustee to ensure the property proceeded to be sold at $4.9 million and did not extend to the wife being appointed as trustee to resolve and/or compromise claims for damages and losses as a result of delay or damage to the property.

14. Counsel for the husband referred to the fact that the solicitors charged with the conduct of the conveyance had “closed their file”.

15. I do not accept the husband’s assertion that the conveyancing transaction has been finalised. It plainly has not. The claim made by the purchasers was made prior to the purchasers paying the full purchase price and taking occupancy of the property. That claim was made pursuant to clause 7.2.1 of the contract for sale that the husband, the wife and the purchasers entered into on 25 November 2017. Settlement under the contract only proceeded (so far as it did) on the basis that the amount claimed by the purchasers was held by the vendors’ agent as stakeholder pending the outcome of the resolution of that dispute. The obligations under the contract have not yet been completed and the order that was made on 28 June 2018 appointing the wife as trustee for sale of the property “with the ordinary power of a trustee to, amongst other things, execute all documents, instruments and contracts and do all acts and things to effect the completion of the sale to [Mr V & Ms V]” has not been extinguished given that the wife, as the trustee for sale, still has not done everything to effect the completion of the sale. The order for the appointment of the wife as trustee for sale requires her to do what is necessary to reach agreement with the purchasers in respect of their claim and thereby finalise the conveyancing transaction. Accordingly, orders 1 and 3 made 28 June 2018 are still operative.

16. In the alternative, the husband sought that Orders 1 and 3 made 28 June 2018, be discharged.

17. In submissions, the husband said he accepted that the former matrimonial home has been irreversibly sold to the purchasers. He asserted that his current application does not seek to disturb that. Nonetheless, he sought to discharge the order appointing the wife as trustee for sale in order to enable him to fully participate with the wife in the purchasers’ claim for damages and loss. The history of this matter since I made the orders appointing the wife as trustee for sale has only continued to underscore the inescapable conclusion that it would be totally counter-productive to have the husband and wife attempt jointly to negotiate with the purchasers. As discussed during submissions, some of the exchanges in writing between the lawyers for the parties have been regrettable.

18. Both parties seem to accept that, if the husband’s application to discharge Orders 1 and 3 made 28 June 2018 was successful, it would be necessary to select either the husband or wife alone to deal with the claim by the purchasers. This would leave the other the opportunity to prosecute, in the application for a property settlement order pursuant to s 79 of the Act, any assertion that the other party had inappropriately compromised the claim made by the purchasers.

19. It is the husband’s assertion that he is uniquely placed (by which expression he meant better placed than the wife) to deal with the purchasers’ claim.

20. The husband says that there are a number of reasons why he should be able to deal with the purchasers.

21. Firstly, the husband submits that the wife cannot appropriately answer matters on behalf of the husband who is being accused of damaging the property.

22. Secondly, the husband submits that he has no confidence that the wife will make appropriate decisions when engaging with the purchasers in relation to their claim for loss and damage. His lack of confidence is said to be based on the fact that the wife’s legal fees have been paid by the purchasers. The husband is concerned about the wife’s ability to withstand pressure placed upon her by the purchasers. In that regard, counsel for the husband emphasises a note in subpoenaed material whereby Mr V seemed to have had an expectation that the wife would accept the purchasers’ claim for damages given that they had paid her legal fees. I note that even if Mr V had that expectation, the wife has thus far withstood any pressure from Mr V to settle by paying him $50,557.

23. Thirdly, the husband sought to resurrect arguments that were put prior to the wife being appointed as trustee for sale which related to the history of the conveyancing transaction. The husband asserts that the wife was prepared to accept a sale price of the home at $3.8 million rather than the sale price of $4.9 million which was ultimately achieved.

24. Fourthly, he points also to the fact that it was his scrutiny and not the wife’s which resulted in a $61,000 adjustment by the Commonwealth Bank of Australia for the payout figure under the mortgage. The husband says that he is concerned that the wife would not apply the requisite degree of diligence and competence in her dealings in relation to the claim by the purchasers for loss and damage and that in turn will prejudice his interests.

25. Fifthly, the husband seeks to discharge the order appointing the wife as trustee for sale because he has formed the view that the professionals who have acted for the wife have created difficulties for him in obtaining documentation relevant to the conveyancing transaction. The husband has concerns about almost every aspect of the conveyancing transaction and the costs that have been incurred. As articulated in a letter from the husband’s lawyer dated 13 August 2018, the husband wished to put in issue the legal costs charged by CC Lawyers which in that letter was asserted to be over $30,000, but as earlier mentioned, seems to be in the sum of $22,714 (as deducted from the proceeds of the payment by the purchasers of the proceeds of sale). The husband indicates that he believes that these conveyancing fees are prima facie excessive. The itemisation of the actual work done by CC Lawyers is contained in Exhibit 9 and is a document of 11 pages. Although no amount is set against individual items, the overall total for work done is $19,818; disbursements are $833 and there is GST of $2,062.

26. Sixthly, the husband seeks a discharge of Order 3 made 28 June 2018 so he can sue the purchasers. The basis of that claim is not clear to me (see [21] of the husband’s affidavit filed 27 August 2018).

27. The husband’s submissions in support of an application for the discharge of Order 3, started with him again reiterating that he did not seek to somehow reverse the sale of the former matrimonial home. He accepted that the former matrimonial home had been irretrievably sold. What he wanted to do was to have the right to bring whatever legal action he believed arose from any action and/or loss caused by the purchasers and/or the agents responsible for and/or legal practitioners involved in the sale of the home. The husband asserts that that would not form part of the dispute before the Family Court. He submits that these are contractual matters that may be dealt with in either a Local Court, District Court or Supreme Court depending on the quantum of the claim. The husband complains that in effect the purchasers are being allowed to bring a claim against him (indirectly by making a claim against the trustee for sale) but Order 3 prevents him from being afforded the ability to counter claim against the purchasers and pursue other professionals for tortious actions against him.

28. Seventhly, the husband’s general submission is that he would be the stronger negotiator and is better placed than the wife to achieve a better outcome from the purchasers.

29. As is obvious from the above submissions, the husband seeks to revisit arguments which have led to a claim by the purchasers of $30,000 (being loss suffered by delay which was occasioned by the husband’s assertion that he had the ability and the right to terminate the contract with the purchasers).

30. The husband did not appeal the orders of 28 June 2018. The reasons for making Orders 1 and 3 were set out in the Reasons for Judgment of 28 June 2018 and remain unchallenged.

31. The husband also submits that the damage of $20,000 claimed by the purchasers must have been damage allegedly caused by him as an occupant of the property. The husband relies upon the assertion that the wife had agreed to pay for damages to the property prior to obtaining a building inspection report. The assertion is that the wife accepted the amount without having had the building inspection carried out and it was only when the husband raised the issue that she did that. I referred above to the ambiguity in the wife’s email. The more likely interpretation might be that the wife agreed to a reduction of $20,000 from the overall price in order to get the conveyancing transaction finalised but when the purchaser made it clear the claim was $50,000 the wife did not agree to any reduction in the purchase price.     

1. The wife has obtained a building inspection report from DD Pty Ltd. Mr EE has indicated that his estimate for the cost of appropriate repairs is in the sum of $2,590 (SM6 to the exhibits to the wife’s affidavit). It is not obvious from the face of the claim by the purchasers that they have had a building report done and no building report has been provided by the purchasers to the wife.

2. The wife points to the fact that this is at least the third hearing that she has been involved in on an interlocutory basis relating to the sale of the former matrimonial home.

3. The wife submits that the husband has shown a significant unwillingness to join with the wife to implement the orders made in 2016 for the sale of the former matrimonial home. It is the wife’s case that from July 2016 until June 2018 the husband’s attitudes and conduct have led to a circumstance where the sale of the property has not been finalised.

4. I accept the submission by counsel for the wife that the husband has shown by his conduct throughout the course of the last few months that he disagrees with a significant number of steps that the wife has taken to give effect to the court order.

5. Having reviewed the material, and being mindful of the assertions made by the husband which suspect impropriety by some professionals, the wife on its face seems to have diligently accepted the advice of professionals and has finalised, subject to the outstanding matters, the conveyancing transaction in a timely and effective manner.

6. One purpose of putting the sale in the hands of the wife was to limit the potential loss that is described particularly at [32.1] and [32.2] of my Reasons for Judgment of 28 June 2018.

7. The wife is appraised to the arguments the husband wishes to raise against the purchasers in relation to the issue of delay. Whether or not she wishes to pursue them is a matter for her. If she does not, and a trial judge at a final hearing finds that she should have or that she has inappropriately compromised the claim made by the purchasers, then that may be a matter for adjustment against her at the final hearing.

8. As I say in [35] of my Reasons for Judgment of 28 June 2018:

   In any event, the husband is not prejudiced between him and the wife given that he will be able to ventilate any grievance he says he has against the purchasers in the final property hearing, and if he is successful in that ventilation, the wife will bear the responsibility for any losses incurred.

9. Clause 7.2.3 of the contract of sale provides that claims must be finalised by an arbitrator appointed by the parties or, if an appointment is not made within one month of completion, by an arbitrator appointed by the President of the Law Society at the request of a party (in the latter case, the parties are bound by the terms of the Conveyancing Arbitration Law approved by the Law Society as at the date of the appointment).

10. By way of notice given by the purchasers’ solicitors dated 17 September 2018, the purchasers sought agreement as to the appointment of a mediator (although the hearing before me was conducted on the basis that that person might also fulfil the role of arbitrator under the contract). The wife as trustee for sale has accepted that offer for mediation (and I understood at the hearing before me accepted that that person could also be an arbitrator under the contract). I infer that it is likely that any arbitration in relation to the claim of $20,000 for repairs by the purchasers will be determined by an arbitrator based on expert evidence. I do not accept the husband is “uniquely” placed compared to the wife to defend/negotiate that part of the claim. The wife shall rely upon the building report she has obtained.

conclusion

1. I conclude that there is no basis to discharge the order appointing the wife as trustee for sale. There is no basis for revisiting the reasoning that led to Order 3 being made on 28 June 2018. There needs to be some overall sense of proportionality. Fundamentally, what is left is an argument with the purchasers about $50,000. The wife seems to have a strong case to put to the purchasers in relation to the repairs. The case may be less strong in relation to the issue of delay that has been caused to the purchasers. The order for the appointment of trustee for sale has at least advanced the conveyancing transaction. It is now time to attempt to bring the transaction to an end. I have a fear that the attitude of the husband may well produce an outcome with an arbitrator that could at worse see a substantial order being made against the parties in favour of the purchasers together with an order for costs of the arbitration. That is the downside risk. The argument by the husband that he is better placed to be the harder negotiator does not attract me.

2. Accordingly, I will make an order dismissing the husband’s Application in a Case filed 27 August 2018.

3. For more abundant caution, I will note that the wife alone has the responsibility for achieving the best settlement that she can with the purchasers in order to bring their claim against the trustee for sale to a conclusion.

order 2 as sought

1. Order 2 was not pressed during submissions. It is an application the wife direct the vendors’ agent to pay the $50,557 into the controlled monies account. The wife, of course, has currently no ability to do so without the consent of the purchasers. The order sought is otiose. That is probably why it was not mentioned during the hearing.

documents

1. The husband also sought in his application that the wife provide him with a list of specific documents. That part of the husband’s claim was not actively pursued or referred to during submissions. I infer that that is because much of this documentation has become available to the husband as a result of the wife filing an affidavit in reply in these proceedings and the husband issuing subpoenas to Z Real Estate Suburb BB and CC Lawyers. There is no obvious need for me to make any specific order that the wife provide the husband with any particular documents. In the context of the overall s 79 proceedings, both parties have an ongoing duty to provide relevant financial documents to the other party from time to time.

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 20 November 2018

Associate: 

Date:  20.11.18