Vega & Vega
[2025] FedCFamC1F 266
•31 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Vega & Vega [2025] FedCFamC1F 266
File number(s): NCC 3355 of 2023 Judgment of: SMITH J Date of judgment: 31 March 2025 Catchwords: FAMILY LAW – PROPERTY – Interim application for sale of a property – where prior sale orders made by consent – where sale has not yet been executed due to a dispute about what the ‘best arm’s length price’ obtainable means –– orders for the property to be sold at auction Legislation: Family Law Act 1975 (Cth) Cases cited: Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh 1953 SC 34
Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305
Division: Division 1 First Instance Number of paragraphs: 35 Date of hearing: 31 March 2025 Place: Newcastle Counsel for the Applicant: Mr Tregilgas Solicitor for the Applicant: Graham & Shah Solicitor Counsel for the Respondent: Ms Ticehurst Solicitor for the Respondent: Mullane & Lindsay ORDERS
NCC 3355 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR VEGA
Applicant
AND: MS VEGA
Respondent
ORDER MADE BY:
SMITH J
DATE OF ORDER:
31 MARCH 2025
THE COURT ORDERS THAT:
1.The Husband and Wife each in their capacities as Directors of B Pty Ltd must, by no later than 11 April 2025, do all acts and sign all documents necessary to cause the property at C Street, City D QLD (“the City D property”) to be listed for sale by public auction in such manner as agreed in writing between the parties and where there is no agreement, in the following manner:
a)List the City D property for sale by public auction with such auctioneer as nominated by the selling agent, the costs of and incidental to the appointment of the auctioneer to be borne equally by the parties, and to be paid out of the net proceeds after payment of the mortgage and any debts running with the land, and prior to any payments to either party.
b)The auction shall take place on a date nominated by the agent, but no later than Saturday 10 May 2025.
c)The reserve price shall be as agreed between the parties in writing, or otherwise be set at $1,650,000.
d)The parties must consent to a sale at a price equal to or in excess of the reserve price, but in the event of the reserve price not being reached at auction, the parties must accept an offer received within 28 days of the auction that is at least 95% of the reserve price, being $1,567,500.
e)In the event that Contracts for the sale of the City D property have not exchanged within 14 days of the auction at Order 1 herein, the parties must immediately cause the City D property to be listed for such further auction or auctions as required to cause the sale of the City D property, with the second auction to be held within 8 weeks of the date of the first auction, and each 8 weeks thereafter, at such reserve price as agreed between the parties in writing, and failing agreement the reserve price will decrease by 2.5% at each subsequent auction, and the parties must consent to the sale at a price equal to or greater then the reserve price at that auction determined in accordance with these orders.
f)Despite these orders the parties may at any time agree in writing to accept any offer.
2.A copy of these orders may be provided to the selling agent, the auctioneer, and / or the conveying solicitor or conveyancer nominated to convey the property.
3.The wife’s costs of and incidental to the Application in a Proceeding filed 6 March 2025, including the costs of the contested Interim Defended Hearing on 31 March 2025 be reserved.
THE COURT NOTES THAT:
A.Section 114Q of the Family Law Act 1975 (Cth) provides that it is an offence punishable by imprisonment for up to one year to publish or disseminate to the public or a section of the public any account of family law proceedings which identifies the parties, witnesses or other people concerned with the proceedings, unless specifically authorised by the Court.
B.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 (Cth) apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
C.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such application must be made at least 12 weeks prior to the final hearing.
D.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Vega & Vega has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
SMITH J:
These are oral reasons for decision in relation to an Application in a Proceeding filed by the wife on 6 March 2025 in property proceedings.
Principally, the Application seeks orders to give effect to or enforce existing consent orders for the sale of the property at C Street, City D, Queensland, which I will refer to as the City D property. The property is owned by a company, B Pty Ltd (“B Pty Ltd”), of which the parties are directors. B Pty Ltd acts as trustee for the E Trust. The wife also seeks certain other orders which I will consider briefly in due course.
The husband, by his Response filed 21 March 2025, seeks the dismissal of the wife's Application and certain other orders, which I will also consider in due course.
The wife relied upon her:
(1)Application in a Proceeding filed 6 March 2025
(2)Affidavit in support filed 6 March 2025
(3)Financial statement filed 11 October 2024.
(4)Outline of case filed 28 March 2025, which contained an Amended Minute of Order.
The wife also tendered certain emails relating to, principally, the property.
The husband relied upon his:
(1)Response to an Application in a Proceeding filed on 21 March 2025
(2)Affidavit filed 21 March 2025
(3)Son's affidavit filed 21 March 2025
(4)Outline of case, which contained an Amended Minute of Order
I note the husband also provided a tender bundle, which contained a single expert property valuation dated 22 February 2025 in respect of an inspection on 12 February 2025. The father also provided an affidavit of Dr F filed 20 February 2025 which was read, but that goes to expedition, which is not being dealt with at the moment.
I will deal with the principal issue, being the Application for the sale of the property.
On 10 October 2024, the wife filed a prior Application in a Proceeding seeking the sale of real property to provide funds for litigation and living expenses. I note that the parties own a substantial property portfolio, but they also have substantial mortgages and debts over those properties, and there appear to be cashflow issues.
When that application came before the Court, the issue was settled between the parties. The parties consented to an order for the sale of the property on 31 October 2024. That agreement was entered as an order of the Court on that date:
1.The parties, as directors of [B Pty Ltd] as trustee for [E Trust], immediately do all acts and sign all documents necessary to cause the real property known as and situate at [C Street, City D] in the state of Queensland, being the whole of the land contained in certificate of the title folio identifier […] (“the [City D] property”) to be sold for the best arm’s length reasonably obtainable price.
a. Agent as agreed, failing agreement [Mr G] of [J Real Estate];
b.Conveyancer as agreed, failing agreement [Ms H] of [K Law Firm], [City D], QLD.
The parties agreed at consent Order two as to how the moneys were to be distributed, and at consent Order three that in the event that the property sale was insufficient to satisfy the bank in relation to their obligations, noting the cross-collateralisation of loans over various other properties, what should occur in terms of property sales.
I note, of course, that a consent order is an order of the Court, and indeed, in some ways it is harder to appeal from or overcome, because, not having been imposed by a judge and having been agreed to by the parties, there is very rarely any basis upon which the parties can seek to set it aside. Nor, as I understand it, is it being sought to be set aside, there being no fraud or other improper action.
The property has been on the market for more than three months, having been listed in December 2024. The parties had an offer of $1.6 million on 16 December 2024, and a subsequent offer of $1.65 million on 30 December 2024. It is common ground that the parties had agreed to sell for $1.5 million, but the husband, at paragraph 2 of his affidavit, says he "thought about the matter further" and decided the appropriate price would be $1.8 million. I note that there is evidence from the agent to the wife (see her affidavit at [10]) that the agent said at one point that they considered $1.65 million "strong in the current market".
In the context of the dispute about the appropriate sale price, the matter came before a judge of Division 2, where the matter then was, and the parties agreed to obtain a valuation. The matter was subsequently transferred to Division 1.
On 12 February 2025, the single expert viewed the property and the valuation was issued on 22 February 2025. The expert used the standard definition of "market valuation", which is as defined by the International Value Standards Committee and adopted by the API, which is:[1]
The estimated amount for which an asset or liability should exchange on a valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing, and where the parties had each acted knowledgeably, prudently and without compulsion.
[1] Exhibit 1.
It was not suggested to me that the three and a half months the property had been on the market was anything other than a proper marketing campaign. Indeed, it is long, I would think, based upon the many, many properties one sees sold in this court.
While a single expert report must be given due consideration, even in the context of a contested final hearing, I note that a single expert's opinion is not binding. I note the decisions in Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305.[2]
[2] See also Davie v Lord Provost, Magistrates and Councillors of the City of Edinburgh 1953 SC 34.
I note that, in an interim matter, the report can only be given a certain amount of weight, but in particular, ultimately the test of the market value of a property is, as defined by the expert, what the market will pay for the property, assuming a proper marketing campaign, which in this case has occurred for over three months. The fact that the highest price that has been offered after almost three and a half months is $1.65 million is strong evidence that the market value of the property is $1.65 million. That matter is, of course, complicated by the fact that there is an expert report.
The wife, in her Amended Minute of Order, firstly sought an order that the parties execute the contract for $1.65 million if it was still on offer, or otherwise list the property for public auction with $1.65 million as a reserve, unless the parties agree otherwise, with cascading auctions if the property does not sell. She also seeks appointment as trustee for sale.
The husband opposes that course and wishes to wait for some undetermined time, perhaps indefinitely, until there is an offer received at the price he desires, and similarly, if there is to be an auction, he opposes the wife's proposed reserve. He says that he does not believe they have yet achieved the "best arm's length reasonably obtainable price" and opposes a reserve of less than the $1.75 million that the expert has indicated is the market price.
The husband also says he can borrow money from his son, Mr L, who says at paragraph 7 of his affidavit that he is willing to lend the husband $131,000, instead of the parties selling the property, as I understand it. That was a matter for consideration and oral submissions before the court before the entry of consent orders at a contested interim application, which I again note has the same effect as any other order of this court.
Further, as far as I can ascertain, the fact that the husband's son is willing to lend him some money would not adequately address the wife's needs for funds, which was the basis for the Application in a Proceeding to which the consent orders were made, but ultimately, I do not think that is particularly relevant because there are consent orders.
Now, the complicating factor is that the orders for the sale of the property are at "best arm's length reasonably obtainable price" without any time put upon it. That price is, I consider, subject to an implied term there will be a reasonable marketing campaign, as is part of the standard definition of "market value", but also over a reasonable time.
I consider it to be prima facie established by a three-and-a-half-month-long campaign that $1.65 million is probably the market price. However, given that there was some lack of clarity and that there is a small possibility that, if pressure is applied through an auction, the existing bidder may up the bid to obtain the property, and for the avoidance of any doubt about what is the "best arm's length reasonably obtainable price", I think that the only way to determine that without any possibility of doubt or argument is to have an auction.
In this context, where there has been an offer after three and a half months, I propose to set a reserve, which is what the wife asks for, at $1.65 million. If the husband is right, and in fact the expert was right, and it is worth more than $1.65 million, then someone will come to the auction and will pay more than $1.65 million. However, and I say this without criticism, of the expert, given there is always a degree of art in the assessment of a valuation - if someone is not willing to pay that price, then I find that as the wife asks for, the $1.65 million reserve is appropriate.
The wife then seeks an order that if 1.65 million, unfortunately, isn’t obtained that the parties be required to accept any offer received within 28 days of the auction that is at least 95 per cent of the reserve price. I think that’s appropriate to avoid the costs of another auction, if they can. But I also think it’s appropriate, in the usual way, as most standard orders would, to also make orders for cascading auctions.
I will make a series of amendments to the wife’s order. So, it will broadly in line with her proposal and her Amended Minute but clarified to hopefully avoid further issues.
The wife seeks an order that she be appointed trustee for sale. Given the, perhaps, ambiguity in the terms of the order, I don’t think that the husband’s conduct constitutes conduct of the kind which would justify that order at this stage, although I note that if the husband does not comply with the orders I am making, or does not facilitate the auction, or takes any action to interfere with the auction, I would entertain a further application that she be appointed trustee.
The wife had sought orders to amend the consent orders regarding payment out in case the property funds are insufficient but, as I understand it, sensibly, does not press it in circumstances where she seeks enforcement of Order 1 and says, quite properly, there is no basis to set the consent order aside.
The wife sought orders relating to experts and payment for them but there has been no material put before me to justify these orders, and while it would be convenient if the parties were able to agree on these matters, I am not in a position to make orders in respect of which there is no evidence before me.
The husband’s Amended Minute of Order sought the dismissal of the wife’s Application in respect of the sale orders. He also sought a referral pursuant to section 13 of the Family Law Act 1975 (Cth) to Arbitration. That can only occur by consent, for constitutional law reasons.
The parties are entitled to be heard before a court but may choose to go and have an arbitration. Given the assets that are available, if they are able to work out some process of sale to afford an arbitration, they should certainly think about it. It is going to be not only significantly quicker, but probably cheaper in the long run, but I have no power to require the parties to attend an arbitration absent consent.
The husband led some evidence at paragraph 11 of his affidavit that says that in respect of certain payments out of the bank account, he says "I believe that" the wife "has withdrawn transferred funds from the account of [B Pty Ltd]" contrary to orders. The sums involved, as I estimate them, are about $2000. Belief without knowing what the payments are, is not sufficient. The wife, only from the bar table, provides a plausible an explanation.
If the husband says that she has breached the orders, he should be able to work out where those payments have been made to and establish it properly. I am not going to vary orders based upon an allegation of a breach of orders which is not established. In those circumstances, I will not make the husband's additional order.
Those are my reasons.
I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the ex-tempore Reasons for Judgment of the Honourable Justice Smith. Associate:
Dated: 28 April 2025
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