Staley & Birch (No. 3)

[2020] FamCA 1058

FAMILY COURT OF AUSTRALIA

Staley & Birch (No. 3) [2020] FamCA 1058

File number(s):

CAC 1456 of 2017

Judgment of:

GILL J

Date of judgment:

10 December 2020

Catchwords:

FAMILY LAW – PROPERTY –sale of former matrimonial home – where interim consent orders are in place which provide for the sale of the property – where the respondent now seeks the stay of the sale orders and wishes to retain the property – powers to grant injunctive property relief – where the respondent has no capacity to make mortgage payments – where delay in sale would prejudice both parties

Legislation:

Family Law Act 1975 (Cth) s 114

Cases cited:

Davis & Davis (1976) FLC 90–062

G & T (2004) FLC 93–176

Mullen & De Bry (2006) FLC 93–293

Number of paragraphs:

27

Date of hearing:

9 December 2020

Place:

Canberra

Counsel for the Applicant:

Ms Warwick

Solicitor for the Applicant:

Pyrmont Legal

Solicitor for the Respondent:

Neilan Stramandinoli Family Law

ORDERS

CAC 1456 of 2017

BETWEEN:

MR STALEY

Applicant

AND:

MS BIRCH

Respondent

ORDER MADE BY:	GILL J
DATE OF ORDER:	10 DECEMBER 2020

THE COURT ORDERS THAT:

1.Order 9 of the Orders of 27 March 2019 is discharged and it is directed that Ms Birch vacate the property owned by the parties at M Street, Town G being the land contained in Certificate of Title Folio Identifier … ("the Town G property") within seven (7) days of the date of this Order.

2.The applicant, Mr Staley, is to have sole occupation of the property at M Street, Town G from a period of (7) days of the date of this Order.

3.The applicant is authorised and directed to prepare the Town G Property for immediate sale including providing instructions to the solicitors retained by the parties in 2019 to prepare a new contract and instructing the Real Estate Agent, Mr N of N Real Estate, to list the property for sale including for sale by auction if that is the applicant's determination of the best way for the property to be marketed and sold.

4.The listing or reserve price on the sale of the Town G property shall be determined in accordance with Order 4 of the orders made 27 March 2019 which is in these terms:

(a)The listing or reserve price on such a sale shall be as agreed between the parties in writing and failing agreement shall be the price determined by a valuer appointed by the President of the Institute of Valuers or his nominee the costs of such valuation to be borne equally by the parties.

5.The applicant is authorised to enter into a contract for the sale of the Town G Property and to execute same on behalf of the applicant and the respondent, provided that, unless agreed in writing between the parties, the sale price is at least equal to the price established by the valuer in accordance with Order 4 of the orders of 27 March 2019.

6.The applicant is authorised to execute any discharge authority or direction required by the mortgagee, the Commonwealth Bank of Australia, to enable the Bank to prepare the discharge documents and attend on the settlement of the sale of the property discharging the existing mortgage.

7.The applicant is authorised to pay the solicitors the amount outstanding for the initial contract prepared by those solicitors and that any amount so paid by the applicant will be repaid from the proceeds of sale to the applicant.

8.In the event that the respondent refuses or neglects to execute a deed and/or instrument in compliance with the provisions of the Orders of 27 March 2019 or these Orders, the Registrar or Deputy Registrar of the Family Court of Australia at Canberra is hereby appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute all deeds and/or instruments in the name of the respondent and do all acts and things to give validity and operation to the deeds and/ or instruments.

9.The Application in a Case filed 6 November 2020 and Response to an Application in a Case filed 27 November 2020 are otherwise dismissed.

Note:   The form of the order is subject to the entry in the Court’s records.

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 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Staley & Birch has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

GILL J:

1. These proceedings concern the sale of the former matrimonial home at M Street, Town G.

2. This is a matter that was dealt with by the parties in consent orders entered into in the Federal Circuit Court on 27 March 2019.  Those orders provided mechanisms for the sale of the property, requiring, at first instance, cooperation between the parties and, failing such, provided fall back provisions to effect the sale.

3. The respondent seeks to stay the sale orders.  She now says that she wishes to retain the property in the ultimate settlement.

4. The applicant seeks to progress the sale by the amendment of the mechanisms for sale, in particular, to end the respondent’s continued occupation of the property.  The applicant also seeks to be the sole determinant of issues such as the sale price.

5. The respondent resists the amendments sought by the applicant. 

   Interim property

6. These orders draw upon the injunctive powers of the Court, applied in aid of the powers for the division of property.  Each party pursues their orders on the general basis that such orders are for the preservation of the pool of property to be available at final hearing.

7. The Court has broad powers to grant injunctive relief including for the purpose of preserving the property of the parties and otherwise regulating the conduct of the parties pending final hearing (G & T (2004) FLC 93–176 at 78,989–78,990, at [53]–[54]).

8. Pursuant to s 114(3) of the Family Law Act 1975 (Cth) (‘the Act’), the Court must be satisfied that it is just or convenient to grant such an injunction or make an interlocutory order (Mullen & De Bry (2006) FLC 93–293 at 80,999).

9. Here, a central part of the contest is as to the occupation and sale of the property.

10. In Davis & Davis (1976) FLC 90–062, the Full Court considered the circumstances in which the Court could exercise the power to determine whether a party should have exclusive use and occupation of a matrimonial home, stating that:

    The criteria for the exercise of the power under sec. 114(1) are simply that the court may make such order as it thinks proper. The matters which should be considered include the means and needs of the parties, the needs of the children, hardship to either party or to the children and, where relevant, conduct of one party which may justify the other party in leaving the home or in asking for the expulsion from the home of the first party.

11. The applicant seeking an injunctive order bears the onus of satisfying the Court that the circumstances justify the making of that order.

    Relevant chronology

12. It is useful to set out what are reasonably non-contentious aspects of the steps taken, or not taken in relation to the disposal of the property.

    (1)February 2018 – the applicant vacated the premises

    (2)May 2018 – the respondent commenced living at the premises again

    (3)27 March 2019 – consent orders entered for the sale of the property

    (4)The respondent and the Commonwealth Bank of Australia (CBA) are involved in a dispute over arrears that resolves in a moratorium on payments.  The applicant is not included in either the dispute or its resolution.

    (5)30 April 2019 – the date by which listing for sale was to occur pursuant to the orders

    (6)9 May 2019 – the applicant executes the agency agreement

    (7)May 2019 – the respondent commences treatment for an aggressive form of cancer

    (8)24 June 2019 – the agent executes the agency agreement

    (9)27 June 2019 – a law firm advises that they have received instruction from the agent to act on the sale

    (10)8 July 2019 – the agent nominates a listing price of $1.25 million

    (11)21 July 2019 – the respondent corresponds with the applicant’s solicitors, raising issues of rubbish and the applicant’s belongings at the property and querying whether the applicant accepts the sale price nominated by the agent

    (12)31 July 2019 – the applicant advises that he accepts the nominated list price of $1.25 million

    (13)21 September 2019 – the respondent executes the agency agreement, and asserts that the agent agreed that she would not pay her share of the marketing fee until she had prepared the property for sale

    (14)16 December 2019 – the property was damaged by fire.  The respondent asserts that the fire was deliberately lit by a neighbour

    (15)12 February 2020 – the applicant’s solicitor presses the respondent to progress the sale within seven days and the respondent queries whether the orders for sale are still applicable

    (16)13 March 2020 – the applicant’s solicitor writes to the respondent regarding a number of matters associated with the sale of the property and advises that the applicant will pay the respondent’s share of the marketing fee (the orders provided that if the respondent could not pay then the applicant would)

    (17)The respondent confirms that she has not paid the marketing fee and purports to instruct the agent not to accept the payment of her share from the applicant

    (18)27 July 2020 – the respondent’s employment is terminated.

13. The respondent asserts that the CBA has waived mortgage payments until 24 January 2021, at which time payments will be required to be made over a period of six months.  If such payments do not occur, then a process for sale at the direction of the CBA would commence in June 2021. 

14. The respondent hopes to receive a compensation payment to enable her to pay the mortgage.

    Consideration

15. The process of sale pursuant to the orders has stagnated.  The parties have not agreed on a price for the sale of the property.  No steps have been undertaken to progress the establishing of a sale price using the valuation method prescribed in the orders.

16. It appears that steps to prepare the property for sale have ceased. 

17. While some delay is understandable given the difficult circumstances faced by the respondent, those difficulties do not explain why the sale is not now being progressed.  The respondent does not indicate any intention to progress the sale.

18. The respondent has not been amenable to prompts from the solicitor for the applicant to progress the sale.  It appears that although the respondent has had the occupation of the property for an extended period, she is either unable or unwilling to progress its preparation for the sale. 

19. The respondent says that no further potential buyers have been shown through the property since the execution of the agency agreement.  The respondent, however, has sought to obstruct the preparation of the marketing material and has criticised the agent for showing potential buyers through the property without notice to her and prior to her execution of the agency agreement.

20. The respondent now seeks to retain the property.  However, her financial statement establishes that she has no capacity to make payments on the property.  Without making any payments, she has a significant shortfall in her income relative to her declared expenses.  There is no prospect for her to make payments once the moratorium on payments ends, leading to an inevitable sale compelled by the CBA.  The respondent hopes to receive compensation that may enable her to make payments, but the evidence does not establish any likelihood of such.  The applicant asserts that he has no capacity to make payments.

21. The respondent also seeks delay in sale due to the fire damage to the property.  The property was uninsured, and the respondent asserts that $300 000 damage was done to the property (although she advances no evidence to establish such a figure).  The respondent hopes that, dependent upon the success or otherwise of a criminal prosecution of her neighbour, some form of insurance payment might be recouped.  She does not identify from where this might be available, nor that compensation is dependent upon the parties continuing to own the property.  She hopes that repair of the damage would result in a sale price increase greater than the cost of repair.  Neither party has the capacity to pay for the repairs.

22. The respondent asserts that there is no prejudice to the applicant if sale is delayed.  However, delay moves the parties into a sale mechanism imposed upon them by the CBA, along with increasing debt due to non-payment of the mortgage.

23. It may be seen that moving now to the sale of the property causes some prejudice to the respondent.  She will have no prospect to retain the property if it is sold.  However, the sale appears inevitable, as there is no capacity to fund retention of the property, even in the unlikely event that the respondent was to receive 100 per cent of the pool.  The respondent is also prejudiced in that she does not have the financial capacity to secure accommodation.  However, it should be noted that at other stages of the proceedings she has utilised her parent’s home.  Further, her finances do not permit her to remain in occupation of the former matrimonial home in any event.

24. The continued delay in the sale of the property prejudices both parties, as it threatens the parties’ ability to engage in a timely sale of the property without the force of the CBA compelling the sale.  This is in neither party’s interest.

25. These considerations mean that the orders for the sale of the property should not be stayed.  They also mean that the applicant should have the sole occupation of the property to effect its preparation for sale.  However, whilst the applicant sought that the sale price be at his sole discretion, the mechanism for the resolution of the sale price absent agreement should not be departed from.  It provides appropriate safeguards in what may prove to be complex circumstances for the sale of a fire damaged property.  Although the applicant sought the discharge of the valuation order on the basis that there will be problems in funding such, that does not provide sufficient reason to remove what is a sensible safeguard of the interests of both of the parties.

26. The orders will enable the applicant to effect the sale without the cooperation of the respondent, provided the sale price is not below the value established by Order 4 of the orders of 27 March 2019.

27. Orders will be made accordingly.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill.

Associate:

Dated:       10 December 2020