Vinicombe and Vinicombe

[2017] FamCA 860

FAMILY COURT OF AUSTRALIA

VINICOMBE & VINICOMBE [2017] FamCA 860

FAMILY LAW – PROPERTY – Where failure to comply with orders for transfer – variation of orders pursuant to s 79A(1)

In the Marriage of Simpson & Hamlin (1984) FLC ¶91-576
Pendleton & Pendleton [2017] FamCAFC 108

Family Law Act 1975 (Cth) ss 79, 79(1), 79(2), 79A and 79A(1)

APPLICANT: Mr Vinicombe

RESPONDENT: Ms Vinicombe

FILE NUMBER: CAC 970 of 2016

DATE DELIVERED: 27 October 2017

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 25 October 2017

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Yeend & Associates

SOLICITOR FOR THE RESPONDENT: Self-representing

Orders

Pursuant to s 79A of the Family Law Act 1975 Orders 1-7 of the consent Orders of 19 December 2016 are varied and replaced by the following orders:

Transfer of the H Street Property

1. By close of business on 25 October 2018 the Applicant Husband (‘the Transferor”) will transfer to the Respondent Wife (‘the transferee’) all of the Applicant Husband’s right, title and interest in the property situated at H Street, Suburb P in the Australian Capital Territory, more particularly described in Certificate of Title as Block …, Section … in the Division of … in the Australian Capital Territory (“the H Street Property”) and for that purpose the following shall apply:

   (a)The transfer documentation shall be prepared by the transferee’s solicitor and delivered to the transferor’s solicitor for signature

   (b)The transfer documentation must be signed by the transferor no later than 14 days prior to the settlement date

   (c)If the transferee requires the return of the transfer for stamping purposes then:

   i.The transferee’s solicitor will advise the transferor of this requirement at the time the transfer documentation is delivered.

   ii.Subject to the transferee’s solicitor giving an undertaking to use the transfer for stamping purposes only but to otherwise hold the transfer in escrow pending settlement, the transferor must sign and deliver the transfer to the transferee’s solicitor no later than 14 days prior to the settlement date.

   (d)If the property has a Certificate of Title, and that Certificate is held by someone other than the transferor or transferee or mortgagee, then subject to the transferee’s solicitor providing an undertaking to hold the Certificate of Title in escrow pending settlement, the parties must sign an irrevocable authorisation and direction (such document to be prepared by the transferee’s solicitor) to release the Certificate of Title to the transferee’s solicitor and deliver the authorisation document to the transferee’s solicitor no later than 10 days prior to the settlement date.

   (e)On or before the settlement date, the transferor must:

   i.Hand to the transferee’s solicitor any Certificate of Title for the property.

   ii.Hand to the transferee’s solicitor all such documents as are necessary to transfer and assign all of the transferor’s right title and interest in the building insurance policy to the transferee.

   iii.Hand to the transferee’s solicitor all transfer documents duly signed.

   iv.Hand to the transferee or the transferee’s solicitor all keys, codes or devices in the possession or control of the transferor for all locks, gates, doors and security systems on the property.

   v.Vacate the property if the transferor is in occupation of the property.

   vi.Provide the transferee with vacant possession.

   vii.Hand to the transferee’s solicitor all documents necessary to transfer the rental bond to the transferee.

   viii.Hand to the transferee’s solicitor any lease agreement for the property and an assignment of the transferor’s interest in the same to the transferee, signed by the transferor, prepared by the transferee’s solicitor.

   ix.Hand to the transferee’s solicitor all records and documents relating to the purchase of the property together with any improvements carried out on the property since that acquisition such documents being necessary to be retained for the calculation of the index cost base of the property to assess any future capital gains tax liability.

Discharge and release of mortgage over the H Street Property

1. That simultaneously with Order 1 herein, the Respondent Wife shall obtain at her sole expense, a complete discharge of the mortgage in favour of St George Bank secured against the H Street Property and shall indemnify the Applicant Husband in relation to such mortgage.

2AThe Respondent Wife shall indemnify the applicant husband in relation to all liabilities associated with the H Street Property. 

2BIn the event that the Respondent Wife is unable to or fails to obtain finance for the H Street Property such as to permit compliance with Order 2 above, then Order 2D has immediate operation. 

2CIn the event that the wife defaults on the mortgage obligations for the H Street Property then Order 2D has immediate operation.

2DOn this order becoming operative, forthwith the Applicant Husband and the Respondent Wife shall do all acts and things and sign all necessary documents to effect the sale of the property situated at H Street, Suburb P in the Australian Capital Territory more particularly described as, Block …, Section … (“H Street Property) and for that purpose the following shall apply:

(a)The Property shall be listed for sale by private treaty with such real estate agent as is agreed between the parties and failing agreement within 14 days, the real estate agent will be as nominated by the President of the Real Estate Institute of the Australian Capital Territory at the request of the parties or either of them.

(b)The list price of the property shall be such amount as is agreed between the parties and failing agreement within 14 days the list price will be as nominated by the real estate agent. 

(c)The sale price of the property shall be such amount as is agreed between the parties and failing agreement any offer to buy the property that is at least 80 per cent of the list price shall be accepted by the parties as the sale price.

(d)The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.

(e)That upon agreement being reached for sale of the property the parties shall execute the contract of sale and all other documents necessary to complete the sale of the property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor.

(f)The contract of sale shall provide for completion within 30 days after the date of the contract.

(g)The proceeds of sale of the property shall be paid in the following manner and priority:

i.Complete discharge of the mortgage secured over the H Street Property.

ii.Payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;

iii.Payment of the legal costs and outlays relating to the sale;

iv.Payment of any other outstanding liabilities in relation to the Holt property; and

v.The remaining balance be distributed to the Respondent Wife.

(h)In the event that the property is not sold by private treaty pursuant to the clause above on or before six months then the Applicant Husband and the Respondent Wife shall do all acts and sign all documents as are necessary to sell the property by auction and the following shall apply:

i.The property shall be listed with the agent appointed by the President of the Real Estate Institute of Australia (hereinafter called “the Auctioneer”) for sale by auction within a further 3 months.

ii.The parties shall execute all documents requested by the auctioneer for sale of the property by auction.

iii.The reserve price of the property shall be such amount as is agreed between the parties and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer.

iv.The Respondent Wife will be solely responsible and shall pay to the auctioneer any sums requested for advertising or auction expenses.

v.The parties shall give such instructions as are necessary to a solicitor to prepare a contract of sale and provide it to the auctioneer prior to the auction no later than the date sought by the auctioneer.

vi.The parties agree to co-operate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the property at all times reasonably requested by the auctioneer and ensuring that the property is clean, neat and in good order at the time of any inspection and on the day of auction.

vii.That the parties attend at the auction and negotiate with the highest bidder in the event of the reserve price not being reached.

viii.The sale price of the property shall be any amount in excess of the reserve price but in the event of the reserve price not being reached the sale price of the property shall be such amount as is agreed between the parties or failing agreement any offer received after the auction to buy the property at a price that is at least 80 per cent of the reserve price shall be accepted by the parties.

ix.That the parties attend at the auction and negotiate with the highest bidder or any other interested party in the event that the reserve price is not reached, for the purpose of reaching agreement.

x.That upon agreement being reached for the sale of the property, the proceeds of sale of the property shall be paid in the following manner and priority:

i.Complete discharge of the mortgage secured over the H Street Property.

ii.Payment of the agent’s commission and advertising or other expenses, if any, payable on the sale;

iii.Payment of the legal costs and outlays relating to the sale;

iv.Payment of any other outstanding liabilities in relation to the H Street Property; and

v.The remaining balance be distributed to the Respondent Wife.

(i)In the event that the property is not sold at the auction pursuant to the clause above within 14 days after the date of the auction by further negotiation, then the parties shall cause a further auction of the property to be held within 4 months after the date of the first auction and for that purpose the provisions above shall apply.

Lease over H Street Property

1. That the Respondent Wife shall indemnify and keep indemnified the Applicant Husband against any claims arising from the Lease on the title of the H Street Property.

2. That pursuant to these Orders the Respondent Wife solely liable for and indemnify the Applicant Husband against the following outgoings in and about the H Street Property:

   (a)Instalments and money due under the Lease;

   (b)Rates and water;

   (c)Body corporate expenses;

   (d)Any land tax assessed;

   (e)The cost of all reasonably necessary repairs and maintenance to the structures and or buildings located on the real property;

   (f)The premiums for the continuation of current insurance policies on the house and contents located on the real property; and

   (g)Utility expenses including but not limited to gas, electricity and telephone usage.

Transfer of M Street Property

1. That forthwith, the Respondent Wife (‘the Transferor”) will transfer to the Applicant Husband (“the Transferee”) all of the Respondent Wife’s right, title and interest in the property situated at M Street, Suburb T in the Australian Capital Territory, more particularly described in Unit …, UP No. …, Block …, Section … in the Division … in the Australian Capital Territory  (“the M Street Property”) and for that purpose the following shall apply:

   (a)The Applicant Husband use the Transfer document executed by the parties and filed with the ACT Revenue Office on 11 January 2017 and currently held on escrow by the Solicitors for the Applicant Husband.     

Discharge and release of mortgage over the M Street Property

1. That simultaneously with Order 5 herein, the Applicant Husband obtain at his sole expense, a complete discharge of the mortgage in favour of St George Bank secured against the M Street Property and shall thereafter indemnify the Respondent Wife in relation to the mortgage.

Interim care for the H Street and M Street Properties

1. That pending the transfer of the H Street and M Street Properties pursuant to these Orders:

   (a) The parties hold their respective interest in the Properties upon trust pursuant to these Orders;

   (b) Both parties are restrained by injunction from encumbering the Properties without the prior written consent of the other;

   (c)Both parties are restrained by injunction from giving any notice or seeking or consenting to any order that affects the Properties;

   (d)Both parties are restrained by injunction from making any agreement affecting the Properties which binds the transferee to perform;

   (e)Any notice, proceeding or other order that affects the Properties or requires work on the Properties which is received by either of the Applicant Wife or the Respondent Husband must be given to the other promptly; and

   (f)Each party will cause to be repaired at their own expense, any damage to the Properties caused by them or persons attending or occupying the property with their knowledge, consent or invitation.

Registrar to sign if default

7AThat the parties execute all deeds or instruments and do all acts and things necessary to give validity and operation to the deed or instrument to give effect to these Orders.

7BThat if either party refuses, fails or neglects to execute any document necessary to put these Orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by Affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Family Court at Canberra be and is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to execute such document in the name of such party.

7CIf either the Applicant Husband or Respondent Wife is required, as a consequence of a breach of the above order to make an Application to the Family Court, then the defaulting party will be liable for the costs of the Application.

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 Vinicombe & Vinicombe 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 CANBERRA

FILE NUMBER: CAC 970 of 2016

Mr Vinicombe

Applicant

And

Ms Vinicombe

Respondent

REASONS FOR JUDGMENT

1. On 19 December 2016 the parties entered into final Consent Orders for the division of the property of the marriage pursuant to s 79 of the Family Law Act 1975.  In general terms the orders provided for the husband to transfer to the wife his interest in a property they held at H Street, Suburb P in the Australian Capital Territory (ACT), with the wife to simultaneously discharge the mortgage over that property and indemnify the husband.  At the same time the husband was to take sole ownership of the parties’ property at M Street, Suburb T in the ACT, with the wife transferring her interest to him and simultaneously the husband discharging the mortgage on that property and indemnifying the wife.  Pending the performance of those orders the parties were each to hold the other party’s interest upon trust, were restrained from further encumbering the properties without consent and were responsible for the maintenance of the properties.  The orders otherwise provided for the division of proceeds from the sale of another property, transfer of shares, the allocation of proceeds in bank accounts and debts related to credit cards, the retention of chattels and a splitting of superannuation. 

2. The timeframe for the performance of these orders was within 42 days from the date of the making of the orders. 

3. By Application in a Case filed 21 September 2017 the husband seeks to vary the orders pursuant to s 79A of the Family Law Act 1975 on the basis that circumstances have arisen since the making of the orders that have meant that it is impracticable for the order to be carried out.  That is, the wife has been unable to secure finance to complete the transaction in respect of the H Street property.  While she believed that she had finance available at the time of executing the orders, it subsequently became apparent that she could not obtain that finance.  The husband seeks a suite of orders that provide for the sale of the H Street property, the immediate transfer of the M Street property to the husband, with the husband discharging the mortgage and indemnifying the wife in respect of that property, with the wife to pay the husband’s costs of the application and with orders relating to the interim care of the H Street and M Street properties. 

4. Although the wife filed no response, she appeared and filed an affidavit and advised that she seeks a variation of the orders such that she be given a period of 12 months, that is to 25 October 2018, to perform her obligations under the orders.  The wife advised that she consents to orders 3 and 4 as outlined in Exhibit H1 being the minute orders sought by the applicant husband.  This will have the effect of securing his immediate entitlement to the M Street property, supporting that by means of a machinery provision for the dealing with the transfer documents. 

5. In support of his application the husband relied upon an affidavit filed 21 September 2017.  The wife relied upon an affidavit filed 19 October 2017.  Exhibit H2 sets out the effects of the orders proposed by the husband.  The wife accepted that the document accurately reflected the effects of the orders sought by the husband. The husband also relied upon a financial statement filed 21 September 2017.

6. The husband through his solicitor indicated that, regardless of what orders I make in respect of the H Street property, he is in a position to refinance in respect of the M Street property to comply with the amended orders sought. 

7. The wife says that she currently pays the mortgage in respect of the H Street property, which she occupies.  The husband asserts that he has had to make some top-up payments so that the mortgage does not default.  She operates a business from that property. 

8. Despite obligations under the orders that would have seen the wife obtaining finance and discharging the mortgage by the end of January 2017, as of August 2017 she advised the husband that, having been operating a business for about one month, she was hoping to apply for finance after another month.  As of September 2017 she had advised the husband that she was unable to get refinancing approval.  Hence at this stage she seeks a further 12 months delay before discharging the mortgage and thereby releasing the husband from his obligations pursuant to that mortgage.  The 12 months is necessary as a condition precedent to obtaining finance.

9. The wife wants orders to enable her to retain the property.  She fears that if the property is sold she may recoup little if any of the proceeds from the sale once the mortgage is paid off, however the evidence that she produces to this effect is second hand and unpersuasive.  I can place little, if any weight upon it.  She will also lose the house from which she operates the business.

1. The husband seeks to end the financial relations between he and the wife.  He is under the added stress that he has been diagnosed and is being treated for cancer.  He is currently in remission from that cancer but he is undertaking chemotherapy.  His employment arrangements are such that he has had to reduce his hours to 12 hours per week.  It was put on his behalf that his continued responsibility for the mortgage at H Street had future implications for his finances, in particular should he need to borrow any further funds.  No particular evidence was directed to his need to borrow funds in the immediate future. 

Section 79A

1. While the husband sought the setting aside of orders 1-7 as made by consent on 19 December 2016, being the orders that deal with the wife receiving the H Street property and the husband receiving the M Street property, the better characterisation of the application by the husband is that it is for a variation of the orders pursuant to s 79A, rather than a setting aside of the orders. The difference between these two characterisations was set out in the Full Court case of Pendleton & Pendleton[1] where the Court stated that distinguishing between variation and setting aside involved an assessment in the light of the magnitude of the adjustment that was sought by the parties.  The Court took as an example  Simpson and Hamlin[2], where the changes sought by the parties constituted:

   [1] [2017] FamCAFC 108.

   [2] (1984) FLC ¶ 91-576.

   …a perceived realignment of the distribution of property of the parties from one-third to two-thirds respectively to an approximately equal division, it is in our view a matter which goes beyond mere variation and would require the formal setting aside of the order and the making of a new order with all the consequences of that under s 79.[3]

   [3] (1984) FLC ¶ 91-576 at 79,659.

2. In this case each party seeks something quite different to a realignment of the previous division.  Each seeks to preserve the division of the pool but seeks changes in how it is affected, both in the machinery of how it is effected and also as to whether the wife retains title to the H Street property or merely the fruit of that title realised through sale. 

3. If a realignment of the interests was sought, then, depending on the magnitude, the application would involve a setting aside. Such an application, if successful, would also involve a full consideration of the s 79 factors in reassessing the distribution of the property between the parties. Neither party seeks this.

4. In this case the variation as sought by either party is not so significant as to constitute a setting aside of the orders, but is rather properly characterised as a variation pursuant to s 79A(1).

5. In this case, variation is inevitable from either party’s viewpoint. The orders have not been complied with and contain no default mechanism to deal with that situation. The nature of the variation to be given and whether such variation is to be given is within the discretion of the Court pursuant to s 79A(1). The context of the exercise of this discretion is that the jurisdiction for the original orders was governed by the appropriateness of the order pursuant to s 79(1), the appropriateness being subject to the requirement that the order be just and equitable pursuant to s 79(2). That is, in determining the variation, the orders must retain the just and equitable character that they retained before the variation.

The opposing advantages and disadvantages of the positions of each the parties

1. For the wife, a forced sale results in the loss of her home and the loss of her place of business.  She has recently sunk significant efforts and financial resources into improving the premises so that they might be used for her to operate a business.  Her evidence is that her income prospects are significantly improved by the business as opposed to being an employee. 

2. For the husband, given that the wife consents to a variation to the terms allowing the transfer of the M Street property, such that this is able to occur independently from how the H Street property is to be dealt with, there is no loss of that essential part of the orders that relates to him retaining the M Street property.  He conceded through his solicitor that he was able to fund and retain the M Street property regardless of what happened with the H Street property.  However, a disposal of the H Street property would end the financial relations between the parties.  It would mean that the husband was no longer liable for the mortgage which, on occasion, he has topped up due to the necessity to keep the mortgage from default.  He faces difficult personal circumstances in that he is subject to chemotherapy being in remission for cancer.  He is unable to work fully at present.  It may be safely inferred that he is a man facing significant personal stressors. 

3. The orders were entered into in the belief that the wife could finance the H Street property.  There was no default mechanism in the event that she was unable to.  A significant feature of the orders is that each would retain a home.  The wife has undertaken significant work to the home to establish a business there.  While a further delay will occasion for the husband the delay to the ending of financial relations and some financial vulnerability to him.  The essential characteristic of the orders as just and equitable was to be a retention of the properties.  The wife should be given a further opportunity to seek to finance the property.  At this stage it is not known whether or not a bank will, after assessing her income for the next 12 months, finance her purchase.  However, she has stated in her affidavit material that she is due to be eligible for her superannuation in nine months’ time, and that if she is unable to obtain finance then she will use the superannuation.  That is, there is a finite period of time during which this continuing risk to the husband would remain open.  The wife seeks and needs 12 months to seek to secure finances to purchase the property.  She will be given that. 

4. However, the corollary of that is that the husband should be given further safeguards.  Those safeguards should include that the wife will indemnify the husband in relation to the H Street property immediately.  The second is that the sale mechanism will be active 12 months from today in the event that the wife has not transferred the property into her name.  The third is that if there is default on the mortgage (being a matter which is to the prejudice to the husband) a sale provision will become immediately activated. 

5. I will hear the parties in relation to costs.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 27 October 2017.

Associate: 

Date:  27 October 2017