Shafton and Shafton and Anor (No.2)

[2014] FCCA 2788

FEDERAL CIRCUIT COURT OF AUSTRALIA

SHAFTON & SHAFTON & ANOR (No.2) [2014] FCCA 2788

Catchwords:
FAMILY LAW – Property – enforcement – dispute about the powers of a Trustee for sale.

Shafton & Shafton & Anor [2013] FCCA 958

Applicant: MS SHAFTON

First Respondent: MR SHAFTON

Second Respondent: PROPERTY D PTY LIMITED

Trustee for Sale: MR SANDERS

File Number: NCC 1006 of 2009

Judgment of: Judge Terry

Hearing date: 1 October 2014

Date of Last Submission: 1 October 2014

Delivered at: Newcastle

Delivered on: 28 November 2014

REPRESENTATION

Solicitor Advocate for the Applicant: Mr Carney

Solicitors for the Applicant: Turnbull Hill Lawyers

Counsel for the First Respondent: Mr Harper

Solicitors for the First Respondent: McDonald Johnson

The Second Respondent: No appearance

Solicitor Advocate for the Trustee for Sale: Mr Castaldi

Solicitors for the Trustee for Sale: Laycock Burke Castaldi Lawyers

ORDERS

1. Order 1 of the orders made on 2 August 2013 is varied to delete the words “to implement the sale referred to in Order 12 of the Orders made on 12 September 2012” so as to read:

   Mr Sanders of Mr Sanders Insolvency Practitioners (herein referred to as “the Trustee”) is appointed Trustee for sale of the properties known as Property A being the whole of the land in folio identifier …and Property A being the whole of the land in folio identifier …(“the properties”).

2. The Trustee will:

   (a)Engage an agent;

   (b)Instruct the agent to conduct a well-advertised marketing campaign of not less than 6 weeks from the date of this order;

   (c)Offer the properties for sale by public auction within 10 weeks from the date of this Order; and

   (d)The auction reserve be set at no less than $700,000.00. 

3. Without prejudice to the Trustee’s right to make an application in the future seeking an order fixing his remuneration and reserving the right of the Trustee and the wife to make an application for costs of and incidental to the application in a case filed on 25 July 2014 at some future time the application in a case filed on 25 July 2014 is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Shafton & Shafton & Anor (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT NEWCASTLE

NCC 1006 of 2009

MS SHAFTON

Applicant

And

MR SHAFTON

First Respondent

PROPERTY D PTY LIMITED

Second Respondent

MR SANDERS
Trustee for Sale

REASONS FOR JUDGMENT

Introduction

1. By orders made on 2 August 2013, Mr Sanders was appointed Trustee for sale of two real properties which required to be sold because of a default by Mr Shafton (“the husband”) in making a payment to Ms Shafton (“the wife”) pursuant to property settlement orders.

2. The Trustee would like to list the properties for auction with a reserve price of $700,000.00. The husband has threatened to sue him for damages if he does and while the Trustee believes that the current orders allow him to proceed as he proposes he seeks a variation of the orders to put the matter beyond doubt.

3. The wife supports the Trustee’s application. The husband seeks its dismissal.

The hearing

1. In his application in a case filed on 25 July 2014 the Trustee sought both orders amending the 2 August 2013 orders and orders setting his remuneration. The application in a case was listed for hearing on 1 October 2014 but on that day the Trustee indicated that he was not seeking to have his remuneration determined at this time and only wished to pursue his application to vary the 2 August 2013 orders.

2. The hearing into this issue proceeded by way of submissions.

3. The Trustee relied on his application in a case and two affidavits filed on 25 July 2014 and on the affidavit of Mr P filed on 13 August 2014. Mr Castaldi on behalf of the Trustee filed an outline of argument and a supplementary outline of argument on 1 October 2014.

4. The wife did not file any response documents relevant to the issue which was argued on 1 October 2014. Her solicitor made a brief oral submission in which he confirmed the wife’s consent to the orders sought by the Trustee.

5. The husband relied on his response and affidavit filed on 19 September 2014. His counsel filed a summary of argument on 30 September 2014.

6. The husband’s counsel confirmed that the application in a case and supporting affidavits had been served on Property D Pty Limited which is the owner of the properties. He advised that it was a sole director sole shareholder company (the husband being the sole director and shareholder) and that there was no intention that it be separately represented or make separate submissions in the matter.

Objections to evidence

1. In his summary of argument the husband’s counsel said as follows in relation to each of the affidavits of Mr Sanders and to the affidavit of Mr P:

   No objection is taken to the body of the affidavit

   Objection is taken to any annexed document which contains an opinion as to the value of the subject property on the basis of hearsay/opinion.

2. I cannot do anything with this. The husband’s counsel did not seek to take objections to any specific evidence at the commencement of the hearing and the court cannot be expected to examine the filed material while preparing a decision and decide which bits of which documents the husband’s counsel might have been referring to and then rule on objections which have not been specifically been made and supported by argument.

3. This is not the same situation as the one to which I referred in my decision of Shafton & Shafton & Anor (No.2)[1] where there was specific reference during submissions to material particularly objected to (the contents of letters) and reference to the provisions of the Evidence Act (Cth) which allegedly supported the objection.  I did not rule on these objections at the time they were made but dealt with them in my written decision.

   [1] Shafton & Shafton & Anor [2013] FCCA 958

Background

1. The husband is a property developer and the wife a retired public servant. They separated in 2007 after a long marriage and have been attempting to finalise their property matters since December 2008.

2. On 15 April 2009 final orders were made by consent which required the husband to pay the wife a large sum of money by instalments. He did not pay and in 2011 filed a s.79A application seeking to have the orders set aside and new orders made.

3. The s.79A application was listed for hearing on 10, 11 & 12 September 2012 but partway through the hearing the matter settled.

4. On 12 September 2012 final orders were made by consent which required the husband to pay the wife $1.17m as follows:

   ·$200,000.00 by no later than 3 October 2012,

   ·$500,000.00 by no later than 12 November 2012, and

   ·$500,000.00 by no later than 12 May 2013.

5. Order 12 of the orders provided that if the husband defaulted in any payment then Property D and Property A (referred to in the order as “the security properties”) were to be sold.  The properties are owned by Property D Pty Limited, called “Property D” in the orders.

6. The husband paid the first instalment but not the second and as a result Order 12 was triggered. In full it provides as follows:

   In the event that the husband defaults in any payments pursuant to orders 5, 6 and 7 hereof then within seven (7) days of such default the husband and Property D shall do all such acts and things and sign all documents as shall be necessary to list the security properties for sale and sell with an agent agreed between the wife, Property D and the husband and in default of agreement for more than three (3) days with an agent appointed by the president for the time being of the Real Estate Institute of New South Wales at a price agreed between the wife, Property D and the husband and in default of agreement as to listing price and/or sale price for more than three (3) days at a price determined by the licensed commercial valuer nominated by the President for the time being of the Australian Valuers Institute and upon completion of the sale of the security properties the proceeds of sale shall be distributed as follows:

   (i)in payment of costs of sale including legal costs and   agent’s fees including advertising;

   (ii)in discharge of the first mortgage permitted under order 9 hereof;

   (iii)in payment to the wife with such outstanding sums [sic] together with interest thereon as calculated pursuant to the Family Law Rules from the date of default until the date of payment such payment to discharge the second mortgage of the wife;

   (iv)    in payment of the balance to Property D P/L.

7. The husband flagrantly failed to meet his obligations pursuant to Order 12. He failed to list the properties for sale within 7 days (although as I mentioned in an earlier judgment[2] this was probably excusable), unilaterally listed the properties for sale by expressions of interest rather than for a fixed price, instructed the agent which he alone selected not to communicate with the wife and acted as if it was his right alone to determine whether offers were accepted.

   [2] Shafton & Shafton & Anor [2013] FCCA 958

8. The wife gave the husband some leeway but eventually reached the end of her patience and in February 2013 applied for the appointment of a Trustee for sale.

9. The husband opposed the application and a hearing was conducted on 11 June 2013.

10. Further information about the husband’s conduct emerged during the hearing as follows:

    [The husband] instructed Mr T [his agent of choice] not to communicate with the wife and he would not reveal until the matter was re-listed in court that he was negotiating with a prospective purchaser. He had the effrontery  to announce in his trial affidavit that:

    a contract of sale has been issued at a price of $2.2m and annexed and marked with the letter “J” is a true copy of a letter dated 15 May 2013 which I caused my solicitors to send to Greg Levick who I know to act for the wife in this matter. Attached to this letter is a copy of the contract which has issued. [my emphasis]

    The husband not only failed to consult the wife about the selling price, he wants to push through a sale subject to a condition about the obtaining of development approval which will leave the wife without any certainty about when she might receive her money except that it will not be within the next 12 months. [3]

    [3] Shafton & Shafton & Anor [2013] FCCA 958 paragraphs 117, 118

11. I was more than satisfied that it was essential to take the sale out of the husband’s hands and by orders made on 2 August 2013, I appointed Mr Sanders Trustee for sale of the properties. In my decision I said as follows:

    The husband has made no reasonable attempt to comply with his obligations pursuant to Order 12 and shows no sign of being willing to do so in the future. He sent unpleasant bullying threatening letters in April and May 2013 the wife, her adult children and her sister asserting that it is the wife who is in default of the orders and asking her to agree to yet another change to the settlement overall or else face financial ruin.

    It is imperative that the sale is taken out of the husband’s hands so that it proceeds in an orderly fashion. [4]

    [4] Shafton & Shafton [2013] (supra) paragraphs 124, 125

The Trustee’s efforts to sell the properties

1. The Trustee gave evidence of the steps he had taken to try and achieve a sale. Importantly, for the purposes of this decision in December 2013, he asked …Property Group to provide a marketing proposal and on 22 January 2014 engaged …Property Group as agents for sale of the properties.

2. The properties were listed for auction on 29 March 2014 but the auction was postponed after the Trustee received correspondence from the husband’s solicitors taking issue with the Trustee’s understanding of his powers and threatening to sue for damages if the auction proceeded.

3. The auction was re-scheduled for 12 April 2014.

4. Mr P, a Licensed Real Estate Agent and Auctioneer who is the managing director of …Real Estate, formed the view that an appropriate reserve for the auction was $600,000.00. However, as a result of correspondence from the husband’s solicitors, the Trustee instructed …Real Estate to set the reserve for the re-scheduled auction at $1.5m. The highest bid received at the auction was $600,000.00 and the properties were passed in.

5. On 7 May 2014, the Trustee consulted Mr P about an appropriate method to further market the properties. Mr P was of the opinion that a second public auction, rather than sale by private treaty or expressions of interest or tender was the best option. In his affidavit he fully and convincingly explained why he came to that decision. He said as follows:

   I am of the opinion that any alternative method would result in conditional purchase proposals, almost all of which would involve the need for approval of development applications from Region 1 Council. In my experience, Region 1 Council is slow with processing and assessment of development applications. This site is regarded as a gateway site location in Town 2 by the Council and in those circumstances there can be no time guarantees for development approval. It is quite possible that a conditional proposal will result in:

   a.    The parties still waiting for approval after 12 months;

   b.An approval which does not meet the purchasers requirements; or

   c.    Refusal of development application.

   In my experience, any of those outcomes would result in a conditional sale not proceeding.   

6. Mr P expressed the opinion that to protect the integrity of the sale should there be no competition on the day of auction, it would be prudent to set a minimum reserve price rather than let the properties be sold unreserved. He said that in his opinion the reserve should be set at the price at which the properties were passed in at the last auction.

7. The Trustee tentatively scheduled another auction for 6 July 2014 but in light of correspondence from the husband’s solicitors, decided not to proceed and on 25 July 2014 filed his application in a case.

8. On 31 July 2014, Company A Pty Limited, which had been permitted to register a first mortgage over the properties pursuant to the 12 September 2012 orders, went into possession of the properties and instructed Mr P to sell the properties on its behalf.

9. An auction for this purpose was scheduled for 6 September 2014 but it did not proceed as the properties were withdrawn from sale after Company B Pty Limited, another company under the control of the husband, bought out the mortgage.

10. The Trustee then asked the court to deal with his application in a case and the application was listed for hearing on 1 October 2014.

The variation sought by the Trustee

1. Order 1 of the 2 August 2013 orders is as follows:

   Mr Sanders of Mr Sanders Isolvency Practitioners (herein referred to as “the Trustee”) is appointed Trustee for sale of the properties known as Property A being the whole of the land in folio identifier …and Property D being the whole of the land in folio identifier …(“the properties”) to implement the sale referred to in Order 12 of the Orders made on 12 September 2012.

2. In his Application in a Case the Trustee sought the deletion of the words “to implement the sale referred to in Order 12 of the orders made on 12 September 2012.”  He also seeks an order that the Trustee will:

   Engage an agent;

   Instruct the agent to conduct a well-advertised  marketing campaign of not less than 6 weeks from the date of this order;

   Offer the properties for sale by public auction within 10   weeks from the date of this order; and

   The auction reserve be set at no less than $700,000.00.

3. Although for reasons referred to later, the Trustee still seeks these variations his solicitor submitted on 1 October 2014 that the variations were not in fact necessary to enable the Trustee to sell the properties as he proposed including by setting the reserve price he proposed.

4. He submitted that the fact that Order 1 stated that the Trustee was appointed “to implement the sale referred to in Order 12 of the orders of 12 September 2012” did not mean that he was slavishly required to follow any of the procedures set out in Order 12 and in particular did not mean that he was required to obtain a valuation from a valuer nominated by the President of the Australian Institute of Valuers before fixing a reserve price.

5. He submitted that:

   The Trustee has all the usual duties, fiduciary and otherwise, that ordinarily circumscribes a Trustee sale and provides adequate protection for the parties. That, with respect, is the purpose of appointing a Trustee in circumstances such as these. Were the Trustee to sell the Properties inappropriately or at an under value then the parties would have substantive rights against the Trustee and would be compensated.

6. The Trustee’s solicitor submitted that the evidence supported a finding that the Trustee was acting entirely reasonably in proposing to set a reserve price of $700,000.00.

7. The Trustee accepted that the husband had obtained a valuation from Mr V in February 2013 (not a joint valuation and not a valuation obtained from a valuer nominated by the President of the Australian Institute of Valuers but a valuation from a qualified valuer nevertheless) and that Mr V had valued the properties at $1.85m. He accepted that during cross-examination at the June 2013 hearing, Mr V said that the value he had placed on the properties was market value as is ie without development approval.

8. However, Mr T sought expressions of interest in 2013 and obtained only two written proposals, one for $500,000.00 as is and one for $1.55m conditional on development approval being obtained. He said that a third verbal offer of $600,000.00 unconditional was also received.

9. Mr T said at the hearing in June 2013 that there was now a purchaser willing to pay $2.2m for the properties conditional on being given 12 months to obtain development approval. I noted that:

   Mr T agreed that he could sell the properties by going to the market and selling them as is but that his instructions from the husband were to obtain the best possible price and that the best price would only be achieved if a prospective purchaser was given the opportunity to obtain a development approval.  In his words:

   My job is to get the highest price I can, and if the owner chooses to go the long route and allow a purchaser to get development approval to achieve more money, then I’m in for the long haul too.

10. Mr T said that in his opinion if the properties went to the market for an unconditional sale, the amount received could well be less than $1m and possibly as low as $500,000.00.[5]

    [5] Shafton & Shafton & Anor [2013] FCCA 958

11. The market was tested at auction in 2014 and the highest bid received was $600,000.00. The Trustee’s case was that:

    ….market conditions had proved the valuation provided by Mr V unreliable. Moreover the fact that the properties have been offered for sale both by auction and expressions of interest provides evidence of true market value rather than merely expert opinion.[6]

    [6] Trustee’s outline of argument paragraph 68

12. In his affidavit, the husband gave copious evidence about sales of other properties in the area but it was apparent that he was harking back to the fact that the sale price of the properties would be maximized if they were sold on the basis that the purchaser was given time to obtain development approval. Nothing in his affidavit cast doubt on the validity of Mr P’s view about the appropriate reserve price for the properties if they were to be sold “as is” at auction.

13. Although in his supplementary outline of argument and for the above reasons, the Trustee’s solicitor submitted that the variation to the orders was not in fact required to allow the Trustee to proceed as he proposed he still pressed for the variation to be made so that the Trustee’s right to set this reserve was clear on the face of an order and there could be no argument; he has to date been bombarded with correspondence from and threats made by the husband’s solicitors.

1. The Trustee argued that the 2 August 2013 orders were machinery orders and that he was simply seeking a variation of machinery orders and the court clearly had the power to make such a variation.

The husband’s case

1. In his response the husband originally sought two orders, the second of which was that he be given control of the sale of the properties for 3 months. He set out at considerable length in his affidavit the fact that he was hoping to do a deal with Company C and that in order to do that deal he needed to be able to offer Company C the security properties along with other properties under his control.   

2. However on 1 October 2014, the husband’s counsel advised the court that the husband withdrew this application and that the only order he sought was the dismissal of the Trustee’s application to vary the 2 August 2013 orders.

3. The husband’s counsel submitted that the effect of Order 1 of the 2 August 2013 orders was that “the only basis on which the properties can be sold is in accordance with Order 12 of the orders made on 12 September 2012.” 

4. Interestingly, the husband’s insistence that the procedure in Order 12 be followed did not extend to all parts of Order 12. Arguably Order 12 does not provide for the properties to be auctioned yet the husband does not object to the trustee’s proposal to conduct an auction. The part of Order 12 which the husband wants followed is the part which provides for a listing price or sale price to be determined by a valuer appointed by the President of the Australian Institute of Valuers.

5. This is somewhat ironic given that the husband ignored this part of the order prior to the appointment of the Trustee and obtained a valuation from Mr V off his own bat despite the President of the Institute of Valuers nominating another person when asked to do so and is now trying to insist that Mr V’s valuation should set the benchmark for the sale price of the properties; it is also somewhat ironic given that the Trustee in fact proposed (although for reasons to be given shortly I consider that he did not need to) to obtain a valuation soon after his appointment if the parties contributed to the cost and the husband said that he would not contribute.

6. Not only does the husband now seek to insist that a valuation be obtained before a reserve price is set for an auction; he also seeks to insist that the properties must be valued on the basis of “highest and best use.”

7. The husband’s counsel did not openly acknowledge what flowed from this latter contention, but when it is considered together with the submission that the husband’s substantive rights will be affected if the Trustee is allowed to proceed as he proposes it can only be an attempt to bolster a case by the husband that the land must be marketed on the basis that prospective purchasers be allowed to make an offer conditional on development approval being obtained, with a view to maximizing the sale price if and when it is ever received.

Discussion

1. The problem for the husband is that I share the Trustee’s view that Order 1 of the 2 August 2013 orders does not prevent the Trustee proceeding as he proposes and auctioning the properties with the reserve he considers appropriate.

2. Although Order 1 states that “the Trustee is appointed to implement the sale referred to in Order 12 of the orders made on 12 September 2012”, all that means is that the Trustee is tasked to sell the properties, which is the overarching requirement of Order 12.

3. It does not follow from the words in italics that the Trustee is required to slavishly follow the procedure set out in Order 12, and indeed the husband did not ask that he do so. He selected a part of the Order which he submitted should be followed and a moments reflection makes it clear that it is not possible for the Trustee to follow that part.

4. Order 12 requires the properties to be listed for sale at a price agreed between the husband, the wife and Property D P/L and provides for the listing price and/or sale price to be established by a licensed valuer if these parties cannot reach agreement. It is a mechanism designed to resolve a dispute. The appointment of the Trustee however removed the parties from the equation as far as organizing the sale was concerned. There is no need for them to agree about a listing price or sale price and the mechanism is otiose.  

5. I am conscious of the fact that this view does not sit comfortably with the following passage from my 2013 judgment, and the husband’s counsel made much of this during submissions That passage is as follows:

   The mere appointment of a Trustee for sale will not affect anyone’s substantive rights, because the Trustee’s role will be to sell the properties in the way the husband should have. Order 12 provides for the parties to seek the opinion of a valuer about the selling price if they cannot agree about it and the parties have not yet attempted to make use of that part of the order. It could be that it will be possible to sell the properties using the procedure in Order 12 and if that occurs the husband cannot complain no matter what the outcome in dollar terms that his substantive rights have been impinged upon. 

   If Order 12 does prove unworkable of course then a further application will need to be made to the court and the husband can raise in opposition to any orders sought by the wife any arguments he wants to raise about the possible effect of those proposals on his substantive rights.

6. I would like to think that all that I meant by this passage was that there was no reason why a sale of the property by private treaty for a fixed price and not subject to conditions would be unsuccessful, but I have to concede that the passage is poorly worded and that there is a clear reference to the use of the valuation procedure in Order 12. I obviously did not think the situation through thoroughly in making those comments, which I might add were not central to my decision to appoint the trustee.  

7. I do not consider that anything in this passage must inform my decision about the Trustee’s application but the husband has however again raised the spectre of his substantive rights and I must address that because the husband’s counsel is correct in his contention that I cannot absent a s.79A application make an order which will alter the husband’s substantive rights pursuant to the 2012 orders.

8. There can be no doubt that the price at which the properties are sold will have a financial consequence for the husband.

9. The husband owes the wife $970,000.00 plus interest and costs. If the properties are sold for the $1.85m which was the amount in Mr V’s February 2013 valuation, or even for $1.5m, it is reasonable to suppose that (even allowing for interest and costs of the wife and Trustee) there will be sufficient to pay the wife her entitlement in full, relieve the husband of any further obligation to the wife or at least most of it and even perhaps leave something over for Property D P/L.  

10. If the properties sell for $700,000.00 however, which is the proposed reserve, then the wife will not receive all of her money and will be entitled to pursue the husband for the balance and Property D P/L will receive nothing.

11. I do not accept however that this means that allowing the Trustee to sell the properties for $700,000.00 (or perhaps even a lower amount if the property is passed in and there are negotiations with the highest bidder) impinges on the husband’s substantive rights pursuant to the 2012 orders.

12. The 2012 orders provide for the husband and the wife to each receive certain items by way of property settlement. Various of the orders provide for the wife to be paid a fixed sum by the husband and to keep a named real property and other items and for the husband to keep his interest in companies and trusts and other items subject to his obligation to make a payment to the wife.  

13. Order 12 of the 2012 orders is not one of the primary orders giving either party any particular property. It is an order giving the wife a means to obtain her money if the husband fails to pay her.

14. There is nothing on the face of Order 12 or any of the 2012 orders to suggest that the husband is entitled to protect his own interests in property by insisting on a minimum listing price for the security properties nor is there anything on the face of the orders to suggest that there was a common intention when the orders were drafted that the security properties be sold subject to a condition that the purchaser be given time to obtain development approval.

15. Given the content of the 2009 orders and the history of this matter since those orders were made, I am satisfied beyond reasonable doubt (and I say that advisedly) that if the parties had intended the sale to be subject to such a condition, with all the delay that this was likely to entail and which the parties both well knew it was likely to entail, then this would have been clearly stated on the face of the orders.

16. Insofar as the husband’s counsel, by asserting that only method of valuation the parties could have been contemplating when the orders were drafted was “highest and best use”, is trying to establish that the properties ought to be sold on this basis  and that to do otherwise is to infringe on the husband’s substantive rights I reject that submission.

17. It is important to bear in mind that the 2012 orders were made by consent. They were not imposed on the parties by the court.

18. The husband is an astute and experienced property developer. On his own evidence he had previously proposed to develop seven blocks of land which are adjacent to each other and which include the security properties.[7] He is very familiar with these properties. In agreeing to the orders and to the sale of those particular properties in default of his compliance with orders and with no provision for the properties to be sold for a minimum price or sold subject to the purchaser being given time to obtain development approval, the husband must be taken to have accepted the risk that the properties might not sell for a particular amount and that this would have a financial impact on him.

    [7] Husband’s affidavit filed 19 September 2014 paragraphs , 7, 8 & 9

19. The husband was advised by a competent solicitor and barrister when he signed the orders. He is a businessman. It was an obvious commercial risk and he took it. He cannot now be heard to complain about it.

20. The husband’s rights pursuant to Order 12 are that the properties be sold for a fair price after proper marketing. He is not entitled to have his interests prioritized over the wife’s by the sale being delayed for a lengthy period while the Trustee chases a maximum return for the properties.

Conclusion

1. It is interesting that at no time has the husband made any attempt to explain why he has failed to pay the wife as required by the 2012 orders. He has not suggested that he is financially unable to do so and not only that, he put a proposal to the Trustee in April 2014 that Company B Pty Limited acquire the properties for $970,000.00 on the basis that inter alia the payment would “extinguish all payments required of Mr Shafton under the Family Law proceedings in their entirety.”[8]

   [8] Annexure S-1 p.406 affidavit of Mr Sanders sworn 29 May 2014

2. When this is taken together with the finding I made in my 2013 decision that prior to the hearing in 2013 the husband sent the wife unpleasant bullying threatening letters with a view to getting her to accept a reduction in her entitlement it gives rise to a strong concern about the bona fides of the husband’s opposition to the procedure the Trustee intends to adopt to sell the properties.

3. At best the husband’s relentless attempts to thwart the Trustee’s efforts to sell the properties has a strong flavour of self-interest and at worst suggests that for some reason of his own the husband is determined to do everything in his power to prevent the wife receiving her just entitlement to a property settlement.

4. As the Trustee has pointed out to the husband in correspondence, the obvious way for him to prevent the sale of the properties is to pay the wife the amount she is entitled to pursuant to the 2012 orders, although of course he would have to deal with the substantial costs which have arisen as a result of the litigation since 2013 and the appointment of the Trustee.

5. The wife is entitled to her money; she is entitled to her money whether she is rich or whether she is poor. The husband is an experienced property developer. He offered these two properties as available for sale if he defaulted in payment to the wife. The properties must be sold.

6. The Trustee has a fiduciary duty both to the wife, the husband and Property D P/L. He is acutely aware of this. There is nothing to suggest that he has been behaving in a reckless or negligent way. The safeguard for both the husband and the wife is that the Trustee will not behave in any way which will expose him to the risk of the husband or the wife or Property D P/L being able to successfully sue him for damages.

Orders

1. It could be argued that as I am of the view that the current orders do not preclude the Trustee listing the properties for auction and setting the reserve price as he proposes it is unnecessary to make the orders sought by the Trustee.

2. However I intend to make them so that it is clear on the face of orders that the Trustee is within his rights to proceed as he proposes.

3. The Trustee and the wife both sought costs. I cannot deal with those applications in the absence of information about the amount sought and the basis on which costs are claimed and without giving the husband the opportunity to be heard about the issue.

4. I will make an order reserving the right of the wife and the Trustee to make an application for costs of and incidental to the Trustee’ application in a case. I do not intend to impose a time limit on them making this application. I am satisfied that the Trustee is likely to make it no later than he makes an application for an order setting his remuneration and the wife is likely to make it no later than when she sees the end in sight in respect of her efforts to obtain payment from the husband of her entitlement pursuant to the 2012 orders.

5. For all of the above reasons the orders of the court will be as set out at the beginning of this judgment.

I certify that the preceding eighty-five (85) paragraphs are a true copy of the reasons for judgment of Judge Terry

Date:  28 November 2014