Sutcliff and Sutcliff (No. 2)

FAMILY COURT OF AUSTRALIA

SUTCLIFF & SUTCLIFF (NO. 2)

[2017] FamCA 1059

FAMILY LAW – ORDERS – enforcement application – where the wife seeks enforcement of orders for the husband to pay her $300,000 – where the husband is in default of previous orders – where the husband has not paid the wife the amount due under previous orders – where the husband seeks an extension of time – where previous orders provide for the sale of the property if the payment was not made to the wife by the due date – orders made to implement the default provisions.

FAMILY LAW – COSTS – order that the husband pay the wife’s costs fixed in the sum of $7,000.

Family Law Act 1975 (Cth) Family Law Rules 2004 (Cth)
APPLICANT:	Ms Sutcliff

RESPONDENT:

Mr Sutcliff

FILE NUMBER:

MLC

3132

2016

DATE DELIVERED:

19 December 2017

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Johns J

HEARING DATE:

12 December 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Hutchins

SOLICITOR FOR THE APPLICANT:

Coulter Roache Lawyers Pty Ltd

COUNSEL FOR THE RESPONDENT:

Mr Whitchurch

SOLICITOR FOR THE RESPONDENT:

Harwood Andrews

Orders

That to facilitate the default sale (“the Sale”) of the real property situate at and known as E Street, D Town in the State of Victoria (“the D Town property”) pursuant to Order 5 of the Final Orders made by consent in the Family Court of Australia at Melbourne dated 5 October 2017:
(a)The husband, at his expense, sign all such documents and do all such things as may be required to give effect to the Sale including but not limited to the following:-
(i)Contract of Sale;
(ii)Verification of Identity; and
(iii)Client Authorisation Form;
(b)The D Town property shall remain listed for private sale with Mr L of F Real Estate (“Mr L”);
(c)The listing price for the D Town property shall be as agreed between the parties and if there is no agreement the listing price shall be as determined by Mr L;
(d)The husband and the wife shall cooperate in any way with Mr L in relation to the Sale, including making the key available, allowing inspection of the D Town property at times requested by Mr L, and ensuring that the D Town property is in a neat and clean condition at the time of inspection by prospective purchasers.
In the event that the D Town property has not been sold by or before a date two (2) months from the date of this order (“the Date”) then the parties shall make all such arrangements and do all such acts and sign all such documents and the husband pay all costs and expenses necessary to procure the Sale of the D Town property by public auction (“the auction”) upon the following terms:-
(a)The auctioneer shall be appointed by Mr L;
(b)The auction shall take place within two (2) months of the Date;
(c)Reserve price be set by Mr L; and
(d)The husband pay and be responsible for payment of the auction expenses payable before the D Town property is auctioned;
(e)In the event that the property fails to sell at the auction the property be listed for sale without a reserve price.
That in order to effect the Sale the husband shall:-
(a)sign all necessary documents as and when requested by the selling agent and/or conveyancing agent; and
(b)follow all lawful directions of the selling agent and/or conveyancing agent.
(c)make the D Town Property available to the wife, the selling agent, the conveyancing agent and/or any prospective purchasers upon request to do so, including but not limited to making the key available and allowing access to the D Town property; and
(d)maintain the D Town property in a neat and clean condition including undertaking regular maintenance to the land and regular cleaning of the home at the D Town property and any works recommended by Mr L.
That the husband follow all recommendations of Mr L as to the required presentation of the D Town property.
That the husband shall, at his sole expense, be responsible for payment of any repairs and/or maintenance that is required on the D Town property.
That the husband shall vacate the D Town property no less than fourteen (14) days prior to the settlement of the Sale.
That in the event that the husband refuses to or neglects to execute a Deed and/or instrument in compliance with the provisions of these orders, the Registrar or Deputy Registrar of the Family Court of Australia at Melbourne 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 husband and do all acts and things to give validity and operation to the deeds and/or instruments.
That there be liberty to apply with respect to the Sale.
That the wife’s application in a Case filed 29 November 2017 and the husband’s response to application in a Case filed 12 December 2017 be dismissed.
That the husband pay the wife’s costs of and incidental to this application fixed in the sum of $7,000.

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 Sutcliff & Sutcliff (No. 2) 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

FILE NUMBER: MLC 3132 of 2016

Ms Sutcliff

Applicant

And

Mr Sutcliff

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

By Application in a Case filed 29 November 2017 the applicant wife seeks to enforce final orders for property settlement made by consent by Cronin J on 5 October 2017 (“the Orders”).
Paragraph 2 of the Orders provides that the husband pay to the wife the amount of $590,000 as follows:-
2.1$300,000 within 30 days of the date of these orders (“the first payment”);
2.2$290,000 within 90 days of the date of these orders (“the second payment”)
(collectively referred to as “the payments”).
It is common ground between the parties that the first payment payable pursuant to the Orders was due on 4 November 2017. The husband has not made the first payment in accordance with that order.
In the event of a default of the payments, paragraph 5 of the Orders provides as follows:-
5.That in the event that the whole of the payments, or either of them, have not been made by the respective dates for payment then the parties shall sign all documents and do all things necessary to forthwith sell the [D Town] property altogether out of Court (“the default sale”) and by way of consequential arrangements for the purpose of effecting the default sale:
5.1The [D Town] property shall be listed for private sale with [F Real Estate (“Mr L”)];
5.2The listing price for the [D Town] property shall be as agreed between the parties and if there is no agreement the listing price shall be as determined by [Mr L].
5.3In the event that the [D Town] property has not been sold by or before a date two (2) months from the date the payments, or either of them, (“the default sale date”) then the parties shall make all such arrangements and do all such acts and sign all such documents and the Husband pay all costs and expenses necessary to procure a sale of the [D Town] property by public auction (“the auction”) upon the following terms:-
5.3.1the auctioneer shall be appointed by [Mr L];
5.3.2the auction shall take place within two (2) months of the default sale date;
5.3.3reserve price be set by [Mr L]; and
5.3.4the Husband pay and be responsible for payment of the auction expenses payable before the [D Town] property is auctioned.
5.4Both parties shall co-operate in any way with [Mr L] in relation to the default sale, including making the key available, allowing inspection of the [D Town] property at times requested by [Mr L], and ensuring that the [D Town] property is in a neat and clean condition at the time of inspection by prospective purchasers.
5.5In the event that the property fails to sell at the auction the property be listed for sale without a reserve price.
In circumstances where the husband has failed to make any payment in accordance with paragraph 2 of the Orders, the wife seeks to invoke the default provisions and affect a sale of the D Town property in accordance with the provisions of paragraph 5 of the Orders.
The husband opposes that application and in his Response to an Application in a Case filed 12 December 2017 seeks extensions of time for both the first payment and the second payment, it being his position that the first payment be made on 31 January 2018 and the second payment by 28 February 2018.
These are my Reasons for Judgment with respect to the parties’ competing applications.

MATERIAL RELIED UPON

The wife relies upon the following material in support of her application:-
·Application in a Case filed 29 November 2017;
·Affidavit of the wife filed 29 November 2017.
The husband relies upon the following material:-
·Response to an Application in a Case filed 12 December 2017;
·Affidavit of the husband filed 12 December 2017.

BACKGROUND

The parties commenced cohabitation upon their marriage in 1970. They separated in November 2015.
The wife is aged 67 years and is retired.
The husband is aged 66 years and works in the agricultural industry. The husband continues to reside at the D Town property the subject of the wife’s application.
Final orders were made by consent by Cronin J on 5 October 2017. Both parties were represented by the same Counsel who appeared before me in this application when the Orders were made.
The Orders provide that the husband make a payment to the wife in the sum of $590,000. Contemporaneously with the second payment the wife is to do all such acts and things as may be required to transfer the property at D Town to the husband. In default of the payments due to the wife the husband and the wife together are to sell the D Town property on specific terms with the proceeds of sale to be applied to meet the payments outstanding to the wife with interest thereon calculated at the rate of 7.5 per cent per annum with the balance then remaining to be paid to the husband. Further orders were made by consent with respect to the parties’ interests in corporate entities and a partnership.
The chronology of events that followed the making of the Orders is set out in the affidavits sworn and filed by both the husband and the wife.
On 1 November 2017, some three days prior to the due date for the first payment under the Orders, the husband’s lawyers wrote to the wife’s lawyers requesting a “caveat loan” in the amount of $200,000 to be secured over the title to the D Town property to enable him to obtain the finance necessary to make the first payment. To effect that arrangement it was proposed by the husband that the wife provide her consent to the caveat being lodged on the title to the D Town property prior to the release of funds to him.
Annexure HS-2 to the husband’s affidavit filed 12 December 2017 (“the husband’s affidavit”) is correspondence passing from the husband’s lawyer to the wife’s lawyer in response to a telephone conversation between the two lawyers that afternoon. That letter sought to clarify the husband’s proposal that there be a “caveat loan”. The husband proposed that he:-
·make a payment of $100,000 to the wife by 3 November 2017; and
·make a further payment of $490,000 to the wife within 30 days together with a penalty amount of $4,000.
Attached to that correspondence were emails passing between the husband’s mortgage broker and Westpac Bank. The email from Mr G of Westpac to the broker, Mr H sent on 1 November 20127 at 3.10pm states as follows:-
I am currently in processing of assessing and putting together the request for finance for $590k [sic] on behalf of clients.
At this point I anticipate having proposal in front of Westpac’s area by Friday with a formal response by middle of next week.
Once we hold an approval we should be position to settle within 30 days.
It is evident from that email that at the time the husband put his proposal to the wife seeking an extension of time to effect the payments due under the Orders his loan application was still being processed and had not been approved. Not surprisingly, by email dated 2 November 2017 (Annexure HS3 to the husband’s affidavit) the wife rejected the husband’s proposal for variation of the terms of settlement and required strict compliance with the orders.
By letter dated 2 November 2017 (Annexure HS4 to the husband’s affidavit) the husband’s lawyer reiterated the husband’s previous proposals for settlement. Further, it was contended on behalf of the husband that the wife was in breach of paragraph 7.4 of the Orders due to her refusal to agree to the husband’s terms. In particular, it was asserted that her refusal to enable the D Town property to be used as security for loans constituted a breach of paragraph 7.4 of the Orders. It is difficult to understand how that contention could be made in circumstances where the husband had not obtained loan approval at the time that correspondence was sent. This is confirmed in the last paragraph of that correspondence where it is stated:-
We are otherwise informed by our client’s mortgage broker that he anticipates having a formal letter of offer from Westpac Bank by Wednesday next week for our client to borrow the full $590,000…
The reality is that as at 2 November 2017 the husband was not in a position to encumber the D Town property in order to achieve a settlement as there had not yet been loan approval and the terms of any loan offer to be made were unknown to both parties.
The wife’s lawyer responded to that correspondence by letter dated 2 November 2017 (Annexure HS-5 to the husband’s affidavit). That letter sought clarification of the husband’s proposal, particularly whether the husband required a “caveat loan” or a mortgage secured against the D Town property. The husband’s lawyer forwarded an email that afternoon confirming that both a caveat and a first registered mortgage would be the proposed security for a loan (Annexure HS-6 of the husband’s affidavit).

DISCUSSION

During submissions counsel for the husband informed the Court that his client now sought an additional period of one month to enable the husband to exhaust all avenues to secure a loan. It was submitted on behalf of the husband that he made an application for a loan to the J Bank four days prior to the hearing on Friday 8 December 2017. Notwithstanding the fact that the husband swore and filed his affidavit on the day of the hearing on 12 December 2017 (four days after the application to the J Bank is said to have been made), his affidavit is silent with respect to that loan application.
There is no evidence before the Court as to any current pending loan applications made by the husband. Further, save for the communication from Westpac Bank referred to above, the husband has not produced any documents evidencing loan applications made by him to any other financial institution.
It was submitted on behalf of the husband that he could affect payment to the wife of $100,000 within 7 days with the balance of the payments to be made including an additional $20,000 (of which it was conceded that $7,000 would be paid in relation to the wife’s costs of and incidental to her enforcement application) in at least one month.
It was submitted on behalf of the wife that the husband’s proposals for further extensions of time should be rejected in circumstances where the husband has been in default of the Orders since 4 November 2017; the effect of that default is that the husband has had more than one month in addition to that provided under the Orders in order to secure funding to enable a settlement with the wife. It was also submitted that since 4 November 2017, the husband has produced no evidence of any communication by him to a lending institution seeking finance nor is there any evidence from a lending institution acknowledging applications for finance; the husband produces no evidence of a loan pre-approval or a loan approval. I accept that submission.
The wife deposed in her affidavit that she has provided extensions of time to the husband to enable him to rectify the position. At paragraph 18 of her affidavit filed 29 November 2017 she deposes that she provided an extension of time to the husband to 23 November 2017.
The wife now seeks payment from the husband in accordance with the Orders. In correspondence she has also sought from him confirmation that he will execute a contract of sale and vacate the D Town property in the event of its sale. The husband has failed to confirm his willingness to abide by the terms of paragraph 5 of the Orders.
It was submitted on behalf of the wife that the D Town property is a unique rural property and subject to leasehold interests. As such, it is anticipated that it will take some time to sell. In her affidavit the wife deposes that she has been informed by the proposed selling agent of a prospective purchaser willing to offer the sum of $1,310,000. She seeks the opportunity to engage with the prospective purchaser to ensure an expeditious sale of the property in circumstances where the husband is now in default under the orders for a period of more than a month.
At paragraph 28 of her affidavit the wife deposes that she is under financial pressure and requires the payments due to her under the Orders as she has borrowed funds from her son-in-law, Mr K, using his line of credit to enable the purchase by her of a property post separation.
I am satisfied having regard to the matters referred to above that the husband is in default of paragraph 2 of the Orders. There is no appeal against the Orders or any application to set aside or vary the Orders.
I accept that the husband has had a period of more than a month in order to rectify that position. In circumstances where there is no evidence before the Court of any current loan approval which would enable the husband to meet his obligations under the Orders, I am satisfied that it is appropriate that orders be made to implement the default provisions contained at paragraph 5 of the Orders. The wife is entitled to the fruits of the orders made by consent on 5 October 2017. There is no evidence before the Court that the husband either now has or will have in the future the capacity to secure funding to enable him to retain the D Town property. Accordingly I will make orders as sought by the wife to give effect to the default provisions in the Orders.
During the course of submissions it was conceded by the husband that having regard to the circumstances of his default under the Orders it was appropriate that he meet the wife’s costs of and incidental to her enforcement application fixed in the sum of $7,000. Accordingly, in addition to orders relating to the default sale of the D Town property I will make an order that the husband meet the wife’s costs of this application fixed in the sum of $7,000.
The orders I will make, subject to submissions as to form, will be as follows:-
(1)That to facilitate the default sale (“the Sale”) of the real property situate at and known as E Street, D Town in the State of Victoria (“the D Town property”) pursuant to Order 5 of the Final Orders made by consent in the Family Court of Australia at Melbourne dated 5 October 2017:
(a)The husband, at his expense, sign all such documents and do all such things as may be required to give effect to the Sale including but not limited to the following:-
(i)     Contract of Sale;
(ii)    Verification of Identity; and
(iii)   Client Authorisation Form;
(b)The D Town property shall remain listed for private sale with F Real Estate (“Mr L”);
(c)The listing price for the D Town property shall be as agreed between the parties and if there is no agreement the listing price shall be as determined by Mr L;
(d)The husband and the wife shall cooperate in any way with Mr L in relation to the Sale, including making the key available, allowing inspection of the D Town property at times requested by Mr L, and ensuring that the D Town property is in a neat and clean condition at the time of inspection by prospective purchasers.
(2)In the event that the D Town property has not been sold by or before a date two (2) months from the date of this order (“the Date”) then the parties shall make all such arrangements and do all such acts and sign all such documents and the husband pay all costs and expenses necessary to procure the Sale of the D Town property by public auction (“the auction”) upon the following terms:-
(a)The auctioneer shall be appointed by Mr L;
(b)The auction shall take place within two (2) months of the Date;
(c)Reserve price be set by Mr L; and
(d)The husband pay and be responsible for payment of the auction expenses payable before the D Town property is auctioned;
(e)In the event that the property fails to sell at the auction the property be listed for sale without a reserve price.
(3)That in order to effect the Sale the husband shall:-
(a)sign all necessary documents as and when requested by the selling agent and/or conveyancing agent; and
(b)follow all lawful directions of the selling agent and/or conveyancing agent.
(c)make the D Town Property available to the wife, the selling agent, the conveyancing agent and/or any prospective purchasers upon request to do so, including but not limited to making the key available and allowing access to the D Town property; and
(d)maintain the D Town property in a neat and clean condition including undertaking regular maintenance to the land and regular cleaning of the home at the D Town property and any works recommended by Mr L.
(4)That the husband follow all recommendations of Mr L as to the required presentation of the D Town property.
(5)That the husband shall, at his sole expense, be responsible for payment of any repairs and/or maintenance that is required on the D Town property.
(6)That the husband shall vacate the D Town property no less than fourteen (14) days prior to the settlement of the Sale.
(7)That in the event that the husband refuses to or neglects to execute a Deed and/or instrument in compliance with the provisions of these orders, the Registrar or Deputy Registrar of the Family Court of Australia at Melbourne 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 husband and do all acts and things to give validity and operation to the deeds and/or instruments.
(8)That there be liberty to apply with respect to the Sale.
(9)That the wife’s application in a Case filed 29 November 2017 and the husband’s response to application in a Case filed 12 December 2017 be dismissed.
(10)That the husband pay the wife’s costs of and incidental to this application fixed in the sum of $7,000.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 19 December 2017

Associate:

Date: 19 December 2017

[2017] FamCA 1059

19 December 2017

Key Legal Topics

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Family Law

Civil Procedure

Legal Concepts

Costs

Remedies

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Procedural Fairness