Stierznow-Almer and Almer (No. 3)

[2009] FamCA 728

FAMILY COURT OF AUSTRALIA

STIERZNOW-ALMER & ALMER (NO. 3) [2009] FamCA 728

FAMILY LAW – PROPERTY – whether mandatory injunction should be granted – use of matrimonial home as collateral security to enable purchase of another property – whether “proper” to grant injunction

Family Law Act 1975 (Cth) s114(1)

APPLICANT: Ms Stierznow-Almer

RESPONDENT: Mr Almer

FILE NUMBER: PAC 777 of 2009

DATE DELIVERED: 4 August 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rose J

HEARING DATE: 4 August 2009

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Whitby

THE RESPONDENT: In person

Orders

1. That the Application in a Case of the husband filed 1 June 2009 is dismissed.

Notation:

A.That the substantive proceedings have been expedited by a Judicial Registrar and directions made to ensure that these proceedings are set down for trial as soon as possible in the event that the Conciliation Conference fixed for 20 August 2009 is unsuccessful.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: PAC 777 of 2009

MS STIERZNOW-ALMER

And

MR ALMER

REASONS FOR JUDGMENT

Introduction

1. By his Application in a Case filed 1 June 2009, the husband sought a number of orders relating to the purchase by him of a property in Tasmania and the encumbering of the former matrimonial home at S by way of security for a proposed loan from the Commonwealth Bank of Australia.  The application is opposed.

2. I was informed today by the husband, who appears in person, that the security which is sought by way of an encumbrance over the former matrimonial home is a mortgage to the Commonwealth Bank for the whole of the funds which it may otherwise lend to the husband, namely, $207,000.  He further informs me that the bank would take security both over the former matrimonial home and the Tasmanian property, as security for the whole of the loan to which I have referred.  Consequently, the amount which may be the subject of a mortgage over the former matrimonial home greatly exceeds the amount referred to in paragraph 4 of the husband’s application, which was described as “not more than $80,000”.

3. I have read the affidavits which the husband relies upon.  I have also read Exhibit 11, being a copy of a letter dated 3 August 2009 from Butler McIntyre Lawyers, Tasmania to the husband’s solicitor in Sydney.

4. The proceedings were first listed before me on 9 June 2009 in a duty list.  On that occasion, the husband was legally represented.  His solicitor has filed a notice of address for service. Notwithstanding that the husband informed me today that he can no longer afford for that solicitor to appear for him, nonetheless it is disappointing, to say the least, that the solicitor who is also an officer of the Court, remains on the record and therefore has an obligation to appear, given that a notice of ceasing to act has not been filed.

5. On 9 June 2009, the proceedings were adjourned by me, part-heard, to enable the husband through his solicitor to obtain further documentation.  This included a letter from the proposed lender, Commonwealth Bank of Australia, setting out precisely the amount sought to be secured over the former matrimonial home for the purposes to which I have already referred and a letter from the husband’s Tasmanian solicitor providing details of an extension of time granted to the husband to complete the purchase of the Tasmanian property, as well as a detailed opinion as to whether or not the husband was able to rescind the contract for the purchase of the Tasmanian property.

6. In that regard, I noted that the husband’s solicitor informed me that his instructions were that the husband had been granted a three-week extension of time to complete the purchase of the Tasmanian property expiring on 29 June 2009.  In addition, he was in default of only one payment pursuant to the mortgage over the former matrimonial home and, that such default would be remedied within the next two weeks.  Consequently, I adjourned the matter to 12 June 2009 so that the application could be determined as expeditiously as possible.

7. On 12 June 2009, on the application of the husband, the application was stood over, part heard, for hearing at 10.00am on 4 August 2009.  It was anticipated that an independent legal opinion as to the husband’s rights and liabilities, pursuant to the contract which he exchanged for the purchase of the Tasmanian property, would be able to be obtained in the interim.  I further ordered that the husband pay the wife’s costs of and incidental to the appearances on 9 and 12 June 2009.

8. The only further material relied upon by the husband in support of his case are affidavits sworn by him on 23 June 2009 and 21 July 2009 which I have read.  I note that since the matter was last before me, the husband’s application for interim property settlement filed 24 June 2009 was dismissed by Cohen J on 28 July 2009.

Conclusion

1. I have concluded that the husband’s application before me will be dismissed for the following reasons. 

2. On the affidavit material before me, which the husband has stressed, he quite clearly is in difficult financial circumstances and he appears to have opportunities to resurrect his business in Tasmania. The financial circumstances of the parties overall is strained, notwithstanding that currently they continue to own the former matrimonial home which may have considerable equity.

3. The real issue which has brought about the husband’s financial predicament is that he entered into a binding contract for the purchase of the Tasmanian property, without first having secured his finance to enable him to complete the purchase.  He stressed to me that he had “hopes” that the former matrimonial home would be sold and that he would have a portion of the proceeds of sale which would enable him to purchase the Tasmanian property.  Unfortunately, circumstances such as failure to secure finance before making an unqualified commitment to purchase real estate by the exchange of the contracts for sale have led to financial difficulties for other purchasers over the years, which have a certain notoriety in the legal profession.

4. It is a fundamental matter, which one would assume that a person who had commercial experience such as the husband would have appreciated, that even by taking a calculated risk as to having the finance to enable him to complete the purchase, was a risk that he could not afford to take, especially in the downturn in his financial position, which has been the subject of the affidavit evidence.  Nonetheless, he took that risk, no doubt with the best of intentions, and having aspirations for finance which, from a layman’s viewpoint, one can understand existed.  Nonetheless, the sad situation is that he decided of his own free will to bind himself to an unconditional contract for the purchase of the Tasmanian property without having secured, on a reliable basis, finance to enable him to complete the purchase.

5. The financial position of the parties has suffered a severe downturn in recent times.  There is no evidence before me to demonstrate that a feasibility study has been carried out of the husband’s proposed business activities in Tasmania which sets out on a reliable, detailed and objective basis, the prospects of the financial success of those business activities in Tasmania, which would make it reasonable for the wife to be ordered to join in a proposed mortgage to the Commonwealth Bank of Australia as security for $207,000, notwithstanding that the Tasmanian property may also be part of that security.

6. The unfortunate position is that should there be a default under such proposed security, then on the material that has been furnished to me and as part of the submissions made by the husband’s solicitor on a previous occasion, the bank would have the right to exercise its power of sale of the former matrimonial home, in priority over the Tasmanian property.  Consequently, the equity that exists at the time being in the former matrimonial home would be severely eroded.

7. Having regard to the matters which I have outlined, it is for those reasons that I have concluded that the application of the husband in a case filed 1 June 2009 will be dismissed.  I am concerned that the ongoing litigation may well erode further finances that the parties have, which is a situation that they can ill afford.  Consequently, I propose to hear submissions regarding expedition of the pending substantive proceedings and the directions that will be necessary to ensure that the issues are defined and the appropriate affidavits filed and served, so that an assessment can be made of the hearing time that will be needed and dates for hearing fixed.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose.

Associate: 

Date:  12 August 2009