SRESBODAN & SRESBODAN

[2010] FamCA 494

FAMILY COURT OF AUSTRALIA

SRESBODAN & SRESBODAN [2010] FamCA 494

FAMILY LAW – PROPERTY – interim orders based on the consent of the wife and husband’s trustee in bankruptcy – husband opposes orders being made – sale by auction – wife and trustee appointed trustees for sale – orders aimed at avoiding the provisions of s 66 Property, Stock & Business Agents Act 2002

FAMILY LAW – INJUNCTION – husband required to vacate the matrimonial property

Family Law Act 1975 (Cth) ss 79;  80(1)(k);  81(1)(e)
Property, Stock & Business Agents Act 2002 s 66(1) and (2)
Conveyancing Act (1999) NSW s 66I

M and M [2005] FamCA 1391
Hughes v Egger(No. 2) [2005] NSW SC 323

APPLICANT: Ms Sresbodan

RESPONDENT: Mr Sresbodan

INTERVENOR: Trustee in Bankruptcy

FILE NUMBER: SYC 4345 of 2006

DATE DELIVERED: 7 June 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 7 June 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Adrian Twigg & Co

SOLICITOR FOR THE RESPONDENT: Litigant in person

COUNSEL FOR THE TRUSTEE Mr Livingstone

SOLICITOR FOR THE TRUSTEE Watson & Watson

Orders

PENDING FURTHER ORDER IT IS ORDERED THAT:

1. The husband’s trustee in bankruptcy (“the trustee”) shall pursuant to s 114 Family Law Act and without admission do all acts and things and publish such notices in a timely manner as may be required by law in order to cause the husband’s bankruptcy to be finalized as quickly as possible.

2. The parties have liberty to restore this matter on 7 days notice in order to implement these orders. 

3. The husband do all things and take all such actions as to:

   3.1.Vacate the property at Lot … in DP …, K, New South Wales (“the property”) on or before 24 June 2010.

   3.2.Upon vacation of the property, the husband not re-enter the property or go within 100 metres of the property.

   3.3.Forthwith on his vacation of the property that the husband provide to the trustee keys to all locks, gates, fences, buildings, sheds, outhouses and other buildings and erections on the property secured by way of lock and key. 

   3.4.At the time of the vacation of the property the husband shall remove all his personal property and all motor vehicles which are in working order and all livestock and pets.

4. The applicant wife and trustee shall be appointed as trustees for the sale of the property (“the trustees”) and shall forthwith do all acts and things and sign all necessary documents to effect the sale of the property and by way of consequential arrangements:

   4.1.As soon as is practicable, the property shall be listed for sale by auction with S Realty and C Realty as co-agents (“the co-agents”) with instructions as to sale to be given by the trustees.

   4.2.The Trustee shall in consultation with the wife make all necessary arrangements to remove and clear any junk, rubbish, building material, livestock, structures and improvements contained on the property so as to enable the property to be listed for sale provided that no improvement shall be demolished unless the co-agents of the property jointly advise that the demolition of those improvements will increase the expected sale price of the property. 

   4.3.The cost of compliance with Order 4.1 shall be met either by the trustee in the first instance, or in the event the trustee is unable to comply, by the wife, who shall be responsible for all necessary arrangements and payment.

   4.4.The reserve price at the auction property will be determined by a registered valuer nominated by joint agreement between the co-agents, provided that the reserve price is not to be disclosed to the wife unless she indicates to the co-agents in writing that she does not intend to bid at the auction.  In the event that the wife provides that written indication to the co-agents she shall not bid at the auction and the provisions of order 4.5 shall not apply. 

   4.5.The wife have the right on her own behalf:

   4.5.1.to bid at the auction on an unrestricted basis;

   4.5.2.to not be required to pay a deposit;

   4.5.3.to the setting off of twenty-five (25%) of the purchase price instead of paying same.

   4.6.The husband have the right (if he is legally entitled to) or otherwise some person the husband nominates in writing have the right:

   4.6.1.to bid at the auction on an unrestricted basis;

   4.6.2.to not be required to pay a deposit;

   4.6.3.to the setting off of twenty-five (25%) of the purchase price instead of paying same.

   4.7.The co-agents shall be the auctioneers. 

   4.8.The auction shall take place within a period of three (3) months. 

   4.9.The wife and the trustee each shall pay and be responsible for payment of one half of auction expenses payable before the property is auctioned and in the event the trustee does not have the funds to make that payment, the wife shall make the payment. 

   4.10.In the event that the property is not sold by auction at a figure being an amount equal to or exceeding the reserve price, the trustees will do everything that is necessary to have the property offered again for auction within a further period of five (5) weeks and otherwise the same terms and conditions will apply as the first auction, with the nominated registered valuer reassessing the reserve price.

   4.11.In the event that the property is not subject to an exchange of contracts after the second auction, the trustees shall confer with the highest bidder at the second auction.  In the event that bid is lower than the agreed reserve price the parties can make an application to the court for approval to exchange contracts with the purchaser that is offering a price lower than the reserve price.

5. On completion of the sale of the property the proceeds of sale shall be applied in the following priority:

   5.1.To pay all costs of sale including commission and expenses of sale and pay any Council and water rates and maintenance levies incurred from the date of these Orders to the date of sale, inlcuding any arrears prior to the date of these Orders in respect of the property.

   5.2.To discharge the mortgage and any other encumbrance affecting the property.

   5.3.To the trustee the sum necessary to discharge the husband’s creditors and any fees incurred by the trustee in their capacity as acting for the husband as trustee, including all fees and charges incurred by the trustee in complying with these orders.

   5.4.Payment to the wife of any monies that she has spent in compliance with these Orders.

   5.5.Reimbursement to the wife for any mortgage payments made by her to Suncorp from 4 June 2010 until the date of sale.

   5.6.The balance of the proceeds of the sale to be held by the solicitor for the wife in a controlled monies account in the joint names of the trustee and wife.

6. The trustee will forthwith, upon finalizing the husband’s bankruptcy, inform my associate that that has happened and the matter shall be relisted so that the parties can attend for directions in relation to the outstanding application between them pursuant to s 79 Family Law Act. 

7. If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.

8. As between the trustee and the wife, each party will pay their own costs and incidental of these proceedings.

9. The trustee will pay to the husband an amount of $450 per week, the first payment to be within seven (7) days of 24 June 2010 and make weekly payments to the husband for a period of ten (10) weeks to a total of $4,500, conditional upon the husband complying with order 3.1, 3.2 and 3.3. 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4345 of 2006

MS SRESBODAN

Applicant

And

MR SRESBODAN

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. In this matter Mr Magee, who is the solicitor on the record for the husband has made an oral application for leave to cease act for the husband.  The circumstances which give rise to that application are as follows.  On the 25 May 2010 I made some orders that the parties to these proceedings, which included the husband, do certain things prior to today’s event.  That order was made against a background of this matter having been set for a final hearing over the 17^th to 19^th May 2010.  It extended to the 20 May 2010.  A substantial amount of that time was taken by the parties to attempt to negotiate an overall resolution of the matter.  From things that were said at the bar table during that period it was clear that negotiations were taking place with an aim to create a situation where the husband’s bankruptcy would be annulled and to give options both to the husband and to the wife to have an opportunity to subdivide the matrimonial property at K.  The husband fell ill on the 20 May but he was represented by counsel and the current solicitor throughout.

2. The orders that I made required the wife to provide the counsel for the trustee and the counsel for the husband with their version of the orders that they sought on or before the 27 May 2010.  The husband was to respond to that document within two days, that is by the 31 June 2010.  The husband informs me today that he attended the offices of the solicitor for the husband at 1.30 pm on 31 May.  He had an opportunity, between 1.30 and 4 pm to peruse the document.  He had a further two hours to give instructions on the document to his solicitors.  It was common ground that he failed to complete that task within that period.

3. The following day a letter, written by his solicitors to the solicitors for the other parties, indicated that they were hopeful that they would receive instructions during that day to complete the task, even though late.  Those instructions, however, did not come.  A further meeting was scheduled for 12 pm on 2 June which was the Wednesday.  The husband did not arrive in time for that meeting.  He asserts the meeting was subsequently re-scheduled but he was unable to get to the lawyers’ offices in time, as I understand what he said to me from the bar table and in any event, he made the decision that given that only one hour was available, he would be unable to complete giving instructions to his solicitor to be able to comply with my orders.  The husband said he attempted to give some instructions over the telephone.

4. The solicitors for the husband say that by 3 June, despite repeated attempts, they had been unable to obtain instructions from the husband and as a result they would be seeking leave today to cease to act for the husband.

5. On 3 June the solicitors for the husband had written to the husband and that correspondence was sent as was the correspondence on 2 June to the husband by facsimile transmission to a facsimile number that the solicitor for the husband told me today was the number that the husband had given to be contacted upon.  That letter confirms, that despite repeated attempts they were unable to obtain his instructions by the 5pm on 3 June and at that time they told him that they intended to seek leave to withdraw today and they communicated to him Mr Wong (his counsel at the hearing) was no longer prepared to act in the proceedings. 

6. The husband obviously had not attempted to do anything further between 2^nd and the 4^th.  On the 4^th a letter was written to the husband wherein the solicitors confirmed that they would be seeking leave to withdraw as his solicitors today.  And they indicated on 4^th June – which was the Friday of last week – they would cease to do any further work for him.  Nonetheless, they forwarded to him a copy of another document they had received from one of the parties to the proceedings, prepared by counsel for the wife and by the trustee.  That is a document which I will be dealing with later in the proceedings today.

7. Finally, the husband has handed up a document entitled Submissions and Objection which he has prepared, which he, although addressed to Armstrong Legal, has not yet been forwarded to them.  That document, on its face, indicates that the husband still had ongoing issues in relation to the way the agreement or the orders sought by the wife and the trustee had been structured.  He makes complaints about the way the solicitor for the husband has handled the matter in a number of areas alleging, amongst other things, a breach under “the Legal Professions Act”.  He makes other complaints that make it fairly clear to me that it would be reasonable for the husband’s solicitor to conclude that his client had little faith in him in the future.

8. Accordingly, it is appropriate for me to allow the husband’s solicitors to withdraw from the proceedings and I give them leave to do so. 

9. In this matter the wife and the husband’s trustee in bankruptcy have made a joint application that, in effect, an interim property settlement be made.

10. That joint application is made by the husband’s trustee in circumstances where no property is vested in the husband.  The husband has been given a right to be heard, be a party to the proceedings and provide evidence.

11. Currently, however, the main participants in these proceedings are the wife and the trustee. I, of course, have to consider on all the evidence I have, whether their interim proposal under s 79 Family Law Act (“FLA”) is just and equitable, particularly in circumstances where it is opposed by the husband.

12. The agreement reached between the wife and the trustee is that the K property be sold and the moneys be made available to pay out the husband’s creditors, and the balance be frozen for the purposes of being available to await the outcome of a hearing pursuant to s 79 of an alteration of property applications between the wife and the husband (once he is free from his bankruptcy). The trustee has agreed without admission to move to finalise the husband’s bankruptcy as quickly as possible and has agreed that I make an order to that effect.

13. The wife and the trustee have agreed that the matter can come back to me in relation to any problem with the implementation of the orders I am asked to make on either of them giving seven days’ notice.  Both the wife and the trustee have agreed on the sale of K property.  There is a dispute as to the capacity of the wife and/or the husband to attempt to reacquire the K property in the sale process.  It is proposed by the wife that she have the ability to buy on a private treaty basis before the land is actually listed with an agent, on an agreed value between the trustee and herself.  That proposal is opposed by the trustee.  I am not prepared to make that type of order, as it has the potential of doing an injustice to the husband.

14. The trustee, after discussions with me, has agreed that the sale should take place by way of auction. 

15. During discussions with the legal representatives for the wife, the trustee and the husband, I indicated that I would allow both parties as much flexibility as I could to enable them to bid at the proposed auction of the K property.  Counsel for the trustee raised the difficulty arising from s 66 of the Property, Stock & Business Agents Act 2002.  Subsection 66(1) and (2) provide:

    1.A sale by auction of residential property or rural land must be notified in the conditions for sale to be subject to the right by the seller or by any person on behalf of the seller or auctioneer to make one bid (and only one bid). 

    2.At a sale by auction of residential property or rural land:

    (a)The seller and any person on behalf of the seller or auctioneer must not bid unless the right to bid has been notified in the conditions of sale, and

    (b)The seller or any person on behalf of the seller or auctioneer must not make more than one bid and must not make any bid if one of them has already bid, and

    (c)The auctioneer must not take from the seller or any person on behalf of the seller or auctioneer any bid knowing that the bid is in contravention of this section, and

    (d)Where the auctioneer takes a bid from the seller or any person on behalf of the seller or auctioneer, the auctioneer, must, as soon as the bid is taken, clearly state that the bid is a bid by the seller or a person on behalf of the seller or auctioneer. 

16. The difficulty that arises is that the parties, if bound by that section, can only make one bid and the auctioneer is bound to only take one bid from them and immediately announce that he has done so at the auction. 

17. As I observed in M & M [2005] FamCA 1391 the provisions of s 66 of the Property, Stock & Business Agents Act 2002 can be avoided if a court appoints a trustee for sale (see Hughes v Egger(No. 2) [2005] NSW SC 323). Section 81(1)(e) FLA gives this court general power to appoint trustees when making an order under s 79. I intend to appoint the wife and the husband’s trustee in bankruptcy as the trustees for sale of the K property.

18. Section 66I of the Conveyancing Act (1999) NSW also recognises that a State court may allow co-owners of a property to purchase a property either at auction, or otherwise, on such terms as to non payment of deposit, or as to selling off or accounting of any purchase monies or any part thereof as would seem reasonable.  As was stated in Hughes v Egger (No. 2), there is nothing in the Property, Stock & Business Agents Act which indicates an intention to interfere with those rights.  As I observed in M & M, this court has similar powers under s 80(1)(k) FLA. I intend to make orders to allow the husband (as long as there is no legal impediment in him doing so) and wife to bid at the auction on the basis that neither are required to pay a deposit and each of them is to be able to set off 25 percent of the purchase price instead of paying it upon the completion of a sale.

19. The husband will need to take his own legal advice as to what his position is, currently as an undischarged bankrupt, but shortly to be discharged upon the completion of the sale, to bid at the auction.  The order that I make will enable him to have some other person he nominates in writing have the same rights that he would otherwise have, if his advice is that his bankruptcy precludes him from personally bidding at the auction. 

20. Having considered the draft orders proposed by the wife and the trustee, I am of the view that the orders proposed are just and equitable. 

21. This litigation has been dragging on for a very long time.  The cause of the substantial delay in the finalisation of this matter arises from:

    21.1.complications arising from the husband’s bankruptcy;

    21.2.the fact that the husband has continued to occupy the K property;

    21.3.the fact that the husband, sees himself as a property developer, and despite his long procrastination, wishes to have an opportunity to be able to obtain a development application on the K property and to subdivide and develop the land. 

22. I have not shut either party out of the possibility that they might end up with the K property. One way or the other however the K property has to be disposed of so that the husband’s creditors can be satisfied. It is a just and equitable outcome, on an interim basis, to make orders that require the K property to be sold, for the husband's creditors to be discharged and for the remaining funds and any equity one of the parties might acquire in the K property, to await the outcome of any final determination of the interests of the husband and the wife pursuant to s 79 FLA.

1. There is an issue as to whether or not the husband should vacate the property forthwith to enable the trustee and the wife to prepare it for sale.  They anticipate difficulties if the husband is still in the property, and there is sufficient material in the affidavits to indicate that on an interim basis, I would accept that those fears of difficulties are not without some foundation.  The trustee, in the circumstances, has offered to pay an amount of $4500 to the husband by weekly instalments of $450 to assist the husband to relocate.

2. That will give the husband 10 weeks to organise himself and to organise new accommodation that he is able to afford, in the short term, on his pension. 

3. Once the sale is completed, it is open to either party to make an interim application to me for an amount to be paid to them each by way of interim lump sum payment so that they are not destitute whilst they await the dates that will need to be given for the hearing of the outstanding s 79 application between the husband and wife, if they are otherwise unable to resolve their differences.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts

Associate: 

Date:  17 June 2010