Vlahos & Vlahos

[2020] FamCA 1120

FAMILY COURT OF AUSTRALIA

Vlahos & Vlahos [2020] FamCA 1120

File number(s):

MLC 673 of 2019

Judgment of:

HARTNETT J

Date of judgment:

24 December 2020

Catchwords:

FAMILY LAW – PROPERTY – interim orders – where orders previously made by consent for the sale of real property – where the property is registered in the wife’s sole name and the wife is the registered owner-builder – where the parties are in default of the mortgage and the mortgagee has issued a default notice – application by the husband for the sale of the property on “as is” basis to avoid a mortgagee sale – where the wife opposes the sale of the property “as is” due to a significant water leakage issue which could expose the wife to liability – where the wife alleges she only recently became aware of the water leakage issue – where the wife seeks an adjournment period to seek professional advice about rectification works – matter adjourned – no order for costs.

Legislation:

Building Act 1993 (Vic) s 137B

Family Law Act 1975 (Cth) ss 74, 79

Sale of Land Act 1962 (Vic) s 32

Number of paragraphs:

44

Date of hearing:

15 December 2020

Place:

Melbourne

Counsel for the Applicant:

Mr Hall

Solicitor for the Applicant:

Mills Oakley

Counsel for the Respondent:

Ms Tiernan

Solicitor for the Respondent:

Lander & Rogers

ORDERS

MLC673/2019

BETWEEN:

MR VLAHOS

Applicant

AND:

MS VLAHOS

Respondent

ORDER MADE BY:	HARTNETT J
DATE OF ORDER:	24 DECEMBER 2020

THE COURT ORDERS THAT:

1.Any building surveyor report commissioned by the wife be paid for in the first instance from funds held in the trust account of Mills Oakley on behalf of the husband and wife and the wife be provided with such funds forthwith following a request for same by her solicitors. The proportional allocation of the funds spent as between the husband and wife be a matter for trial and reimbursement by the wife to the husband as to a part, if necessary.  Such report as is obtained by the wife is to be provided to the husband within 3 days of the wife’s receipt of same.

2.All extant applications are listed for mention on 5 February 2021 at 9.30am.

3.There be no order as to costs.

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 Vlahos & Vlahos has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HARTNETT J:

1. This proceeding commenced upon the Applicant wife (‘the wife’) filing an Initiating Application on 22 January 2019. In that application, the wife sought an alteration of the property interests of the parties pursuant to s 79 of the Family Law Act 1975 (Cth) (‘the Act’) together with spousal maintenance to be paid to her by the Respondent husband (‘the husband’) pursuant to s 74 of the Act.

2. The wife sought various interim orders including an order that she receive the sum of $150,000 to be paid into her solicitor’s trust account and applied toward the wife’s legal fees and disbursements, and an order that the husband (by way of partial property settlement) pay to the wife a sum of $2,000,000 within 90 days (some part of that sum being within 30 days) of the making of any order. If the payments as sought by the wife were not made by the husband then the wife sought the sale of the real property situate at and known as B Street Suburb C in the State of Victoria (‘the Suburb C property’). Additionally, the wife sought by way of spousal maintenance or urgent spousal maintenance and until further order that the husband pay her a sum of approximately $2,000, such sum each week to be paid monthly in advance into a bank account nominated by the wife.

3. The husband filed a Response to Initiating Application on 14 March 2019. He sought final property orders which included an order that the wife transfer to the husband her interest in the Suburb C property and upon that transfer the husband would discharge, at his expense, the mortgage debt then secured over the Suburb C property. By way of interim orders sought at that time, the husband sought that he pay into a bank account nominated by the wife, by way of partial property settlement, the sum of $150,000. Those competing interim applications were listed for a first return Court date on 19 March 2019.

4. On 19 March 2019, Her Honour Justice Macmillan made a number of orders with respect to the parties’ competing property applications, those orders being by consent. Relevantly, for the purposes of the application before me on 15 December 2020, orders 1 to 6 and 7(a) and (b) were as follows:-

   1. That the real property situate at and known as B Street, Suburb C in the State of Victoria more particularly described as Certificate of Title Volume … Folio … registered in the name of the Wife (Suburb C) be forthwith offered for sale on terms conditions and for a price agreed between the parties, with the parties to have the joint conduct of the sale.

   2. The Estate Agent to conduct the sale of Suburb C be as agreed between the parties but in the absence of agreement within 7 days then;

   (i) the wife provide to the husband in writing the names of three agents that she proposes should sell Suburb C; and

   (ii) from the list provided the husband shall select one name and that Estate Agent shall thereafter become the nominated selling agent.

   3. The Conveyancing Lawyers to conduct the sale of Suburb C be as agreed between the parties but in the absence of agreement within 7 days then:

   (i) the husband provide to the wife in writing the names of three law firms that he proposes should conduct the conveyance; and

   (ii) from the list provided the wife shall select one name and that law firm shall thereafter become the nominated conveyancer.

   4. In the event that the parties are unable to agree on the terms conditions and price at which Suburb C shall be sold then they shall follow the written advice of the nominated selling agent.

   5. On the settlement of the sale of Suburb C the proceeds shall be applied as follows;

   (i) First to pay the costs of and incidental to the sale;

   (ii) Secondly, to discharge the first mortgage registered on the title to Suburb C;

   (iii) Thirdly, the balance be held in an interest bearing account by the solicitors for the parties conducting the conveyance on behalf of the parties, to be held pending further order or the joint written consent of both parties as to the application of same.

   6. That liberty to apply in relation to the sale of the Suburb C property be reserved to both parties.

   7. That until further Order, the Husband pay or cause to be paid the following payments, as and when they fall due (including any arrears):

   (a) all rates, taxes, utility charges and like apportionable outgoings with respect to or associated with the Suburb C property save that for the avoidance of doubt this shall not include unpaid tradesmen or other contractors engaged for the construction of the dwelling on the Suburb C property;

   (b) All home loan repayments in relation to the Suburb C property;

   …

5. Otherwise the orders included that each of the parties receive by way of a partial property settlement the sum of $200,000.

6. The parties were again before the Court on 17 July 2019 where further orders were made by consent which included for the parties to obtain a single expert valuation report in respect of the Suburb C property.

7. Further orders were made on 18 September 2019; 13 November 2019; and on 12 February 2020. Most of those orders went to discovery matters. Orders were also made on 5 December 2019 and 10 December 2019 which related to subpoena objections and on 18 June 2020 which related to the provision of documents by the husband to the wife’s solicitors. The orders made by the Court on 18 September 2019 also address the sale of the Suburb C property issue. They had as a notation to them the following:-

   The Wife acknowledges that unless the Husband/parties’ interest in the entities and trust is valued at or in excess of $4,000,000, she will have no reason to resist compliance with the March 2019 order for immediate marketing and sale of the Suburb C property.

   By virtue of the valuation report of the single expert Mr E of D Accountants, the valuation of the parties’ interests in the entities and trusts the subject of the proceeding is $1,182,839. That valuation results in the wife having no reasonable prospect of retaining the Suburb C property by way of a final adjustment of the parties’ property interests as submitted by the husband and indeed as not challenged by the wife.

8. On 18 June 2020 orders were made by consent in Chambers with those orders including that the case management hearing of the proceeding be adjourned 21 August 2020. The matter was subsequently administratively re-listed to 11 August 2020.

9. By further orders made by consent in Chambers on 12 August 2020 the further listing of the matter was put over to a mention on 10 November 2020. That is, the parties were not seeking to progress the matter to trial between June 2020 and November 2020. Otherwise, in respect of the Suburb C property, the parties had not acted in accordance with the orders made 19 March 2019 to which each had consented. They re-visited those orders in part on 12 August 2020 and by consent had made the following orders:-

   (5) The real property situate at and known as B Street, Suburb C in the State of Victoria more particularly described as Certificate of Title Volume … Folio … registered in the name of the wife (‘the Suburb C property’) be forthwith offered for sale for a price agreed between the parties, with the parties to have the joint conduct of the sale, on the following terms and conditions:-

   (a) Mr F of G Real Estate be appointed as the agent for the sale (‘the agent’);

   (b) the sale be by way of expression of interest campaign in the first instance, and if the Suburb C property is not sold at the conclusion of that campaign then as advised by the agent;

   (c) the parties are to not be present at the Suburb C property whilst any prospective buyers are being taken through it by the agent;

   (d) each party disclose to the other whether any person or entity who makes an offer on the Suburb C property is known to that party, is a family member (including extended family member) or otherwise has an association with them, immediately upon such an offer being made;

   (e) the agent provide recommendations in writing in relation to what maintenance, repairs or other works should be done to the Suburb C property to prepare it for sale (‘the proposed works’);

   (f) following the agent providing those recommendations, the wife be at liberty to attend upon and inspect the Suburb C property in the presence of a solicitor of Lander & Rogers and on the basis that she be provided full access to the property, following which the parties are at liberty to provide feedback to the agent in relation to the proposed works and the agent then provide further written recommendations in relation to same (‘the further recommendations’);

   (g) the parties do all things to implement the further recommendations of the agent as they agree upon and that the costs associated with preparing the Suburb C property for sale, including the costs of recommended and agreed works, be paid for from the funds held in the trust account of Mills Oakley on behalf of both parties;

   (h) the marketing of the sale does not commence until:-

   (i) the conclusion of the stage four covid-19 restrictions in metropolitan Melbourne; and

   (ii) the parties agree that the further recommendations of the agent as agreed have been completed; and

   (iii) the agent has confirmed that the property is in a neat, tidy and maintained state; and

   (i) liberty to apply in relation to the sale of the Suburb C property, including in relation to the proposed works, and the funding of same, be reserved to both parties.

   (6) Orders 3, 4, 5 and 6 of the orders made 19 March 2019 in relation to the sale of the Suburb C property remain in full force and effect.

10. I note that order 7 of the orders made 19 March 2019 was not discharged. The husband had ceased to meet his obligations pursuant to that order prior to the hearing before me in December 2020.

11. On 26 November 2020 Registrar Sudholz dealt with further subpoena issues, and on 1 December 2020 the matter was again before the Court for a further mention. At that stage a further Application in a Case had been filed which the parties sought the Court determine with some degree of urgency. The matter proceeded before me on 15 December 2020, its subject the timing of a sale of the Suburb C property which, despite the earlier orders of the Court made by consent, had not occurred. The dispute was what works and enquiries, if any, should occur before the Suburb C property was placed on the market.

12. The wife in her Response to the Application in a Case sought an adjournment of the husband’s Application in a Case filed on 2 December 2020 for a period of not less than two months. The husband, in his Application in a Case, had sought an immediate sale of the Suburb C property “as is”. Each party sought that the other party pay their costs of and incidental to the application.

13. On the hearing of the matter, the husband provided to the Court and the other party a minute of orders as proposed by him which he sought the Court make. Those orders were relevantly as follows:-

    1. That both parties forthwith do all necessary acts and things and execute all documents necessary to cause the real property at B Street, Suburb C, Victoria (“the Suburb C property”) to be listed for immediate sale by G Real Estate (“the selling agent”) on an “as is” basis (save for the completion of those cleaning and gardening works that have already been recommended by the selling agent), by acceptance of expressions of interest (“the sale”) at the earliest practicable date.

    2. For the avoidance of doubt, in furtherance of Order 1 herein, the steps required to be undertaken by both parties to cause the Suburb C property to be sold shall include but not be limited to:

    2.1 the provision of all necessary instructions and authorities to the Conveyancers, H Lawyers, and all other documents required to complete the sale, including supplying the Conveyancers with the s137B building inspection report of J Company dated 30 November 2020, execution of Section 32 vendor’s statement and contract of sale, provision of “Verification of identity” forms, PEXA authorities, Transfer of Land and any other matters required by the Conveyancers to effect the sale of the Suburb C property.

    2.2 The procuring of owner-builder domestic building insurance with Victorian Management and Insurance Authority through N Consultants (the application for which was been sent to the Wife’s solicitor on 3 December 2020).

    3. That in the event that the Wife defaults in the execution of any document or the taking of any step required to be completed or signed or undertaken by her in accordance with Order 3 herein within 72 hours of being requested to do so, pursuant to section 106A of the Family Law Act 1975, a Registrar of the Melbourne Registry of the Court be authorised to sign all such documents required to be signed by the Wife or her authorised representative in order to facilitate and complete the sale.

    4. That the proceedings be set down for final hearing at the earliest date convenient to the court, and the Court make all necessary orders and directions for the filing and service of documents for the purpose of such listing.

14. In respect of order 4 as sought by the husband, the Court allocated a final trial date to the parties of 23 March 2021 at 10.00am.

15. In support of his Application in a Case, the husband relied upon an affidavit of evidence sworn by him on 30 November 2020.

16. In support of her application as contained in her Response to an Application in a Case document the wife relied upon an affidavit of evidence sworn by her on 15 December 2020.

    CONSIDERATION

17. There is clearly no issue that orders were first made by the Court for the sale of the Suburb C property on 19 March 2019, nor is there any issue that further orders were made with respect to the sale of the property on 12 August 2020.

18. Despite the existence of these orders, the property has not been placed on the market for sale. The husband submits that the process for the sale of the Suburb C property has been fraught and plagued by disagreements between he and the wife. He makes complaint about what he asserts to be the wife’s delay. He gave as an example:-[1]

    [the wife] has refused to join with me in effecting a timely sale of the Suburb C property. She has for example objected to the choice of selling agent when the selling agent refused to agree with her opinion as to the estimated value of the property and then insisted on the property being formally valued, resulting in an order made on 17 July 2019 for P Valuers to undertake a single expert valuation report of the property.

    [1] Affidavit of Mr Vlahos sworn 30 November 2020, [7].

19. The Suburb C property is registered in the wife’s sole name and the wife is the registered owner-builder of the partially completed home which has been built on the property. Both the husband and the wife agree that the building is incomplete. It is nevertheless the husband’s application that the property be placed on the market on an “as is” basis.  The evidence of the wife is that she also “very much wish[es] for the property to be sold”.[2] The wife does not, however, consent to the husband’s order sought in his Application in a Case that the Suburb C property be sold “as is”. In essence, the wife sees herself as exposed to a liability, which the husband is not, by virtue of her being the registered proprietor of the Suburb C property and the registered owner-builder.

    [2] Affidavit of Ms Vlahos sworn 15 December 2020, [3].

20. The reason for the husband’s application being deemed by him to be urgent, is that the mortgage repayments to the Australia and New Zealand (‘ANZ’) Bank in respect of ANZ Bank loans to the wife are secured over the Suburb C property. Neither party is currently attending to the mortgage repayments which by earlier order of the Court is a responsibility of the husband. On 6 March 2020, M Lawyers wrote to the husband on behalf of its client, the ANZ Bank, in respect of the husband’s guarantees in respect of the loans. The husband was informed that there was “currently a default under the loan(s) with ANZ” and attached for his information was a copy of a default notice that had been issued on behalf of ANZ to the borrower/s. At the time of the issuing of the default notice, the total amount payable was $15,129.22. As at 6 March 2020, the total amount owing under the credit contract between the wife and ANZ bank was $1,046,931.86. The arrears outstanding on 6 March 2020 had increased to the sum of $44,441.79 by 11 September 2020.

21. The husband’s evidence is that although he continues in occupation of the property, he has not had the capacity to meet the mortgage repayments for several months. He has voluntarily ceased working. His evidence is that it is necessary, in order to placate the ANZ bank, that steps be taken to forthwith list the property on the market for sale as a matter of urgency. This action he asserts will avoid a mortgagee sale when the current moratorium (as a result of the COVID-19 pandemic) on foreclosures lapses in early 2021.

22. Both parties are clearly aware of the mortgage default. In the context of that knowledge, the parties entered into the consent orders they did with respect to the property on 12 August 2020. The wife signed the G Real Estate sales authority as required pursuant to orders of the Court and each of the parties’ lawyers have had a number of communications with the selling agent, Mr F.

1. Following the parties attending a mediation on 6 November 2020, which did not result in a settlement being achieved, the wife, the parties’ solicitors and the selling agent, Mr F, inspected the Suburb C property to address matters pertaining to the presentation of the property in accordance with order 5(f) of the orders of 12 August 2020. The wife had sought to inspect the property prior to this time as referred to in paragraph 38 hereafter.

2. As a result of the inspection on 9 November 2020, the husband’s solicitor met briefly with Mr F, the wife’s solicitor and the wife to discuss matters pertaining to the presentation of the property to enable it to be listed for sale. As part of those discussions the selling agent indicated that he was confident that the cleaning and gardening tasks that needed attendance would be done so quickly.

3. In order to progress the sale, the husband took responsibility for the engagement of the conveyancers, H Lawyers, to prepare the necessary sale documents and to prepare a building inspection report to be provided by the owner-builder wife to prospective purchasers to ensure compliance with s 137B of the Building Act 1993 (Vic) (‘the Building Act’). In particular, the husband understood that the legislation required a “defects inspection report” to be prepared and provided to prospective purchasers given that construction of the dwelling of the Suburb C property occurred on an owner-builder basis in the name of the wife.

4. The husband said in paragraph 34 of his affidavit sworn 30 November 2020:-

   With [the wife’s] agreement, I arranged for a building inspection report to be prepared by a firm known as “J Company” and I arranged for Mr K of that firm to attend at the Suburb C property on Monday 19 October 2020 for the purposes of carrying out his inspection of the property in order to enable him to prepare the necessary inspection report.

5. J Company subsequently issued what was said by the husband to be a defects inspection report (‘the report’) and provided it to both the husband and the wife. The report, however, had been commissioned by the husband in the wrong format and at the date of swearing his affidavit the husband noted that the process of preparation of the report was being redone to ensure proper compliance with the relevant provisions of the Building Act.

6. Since the inspection of the Suburb C property on 9 November 2020, the wife has not co-operated with the conveyancers, H Lawyers, to enable completion of the contract of sale and a vendor’s statement pursuant to s 32 of the Sale of Land Act 1962 (Vic).

7. On 25 November 2020, the husband’s solicitors wrote to Mr F to set out the husband’s position in relation to the presentation of the property and the commencement of the sales campaign. That letter noted the husband sought to proceed with immediate sale of the Suburb C property in accordance with the orders of 12 August 2020. In that correspondence the husband provided instructions to Mr F to facilitate the engagement of the cleaning and gardening contractors necessary to carry out the agreed works in respect to the preparation of the Suburb C property for sale. The letter also advised Mr F of the steps taken by the husband to engage H Lawyers to prepare the necessary conveyancing documents. That correspondence was copied to the wife’s solicitors.

8. On 25 November 2020, the husband’s solicitors received a letter from the wife’s solicitors dated the same date which amongst other things referred to a significant water leakage problem affecting parts of the dwelling on the Suburb C property. The letter complained, “falsely”, as asserted by the husband, that the wife “only learned during the course of the inspection, that there is significant water leakage from the first level into the ground floor” and complaint was made that the husband had not provided disclosure or transparency about such leakage save for certain insurance documents.

9. The husband takes issue with that which the wife asserts. His evidence is that the wife has been well aware that there have been significant water leakage issues at the Suburb C property since the early stages of the construction of the home. To support that assertion he claims the wife was intimately involved in work that had been done in removing tiles and cement sheets and replacement of same with a new waterproofing material in the early stages. The wife does not dispute that work was carried out at the time, being some two years earlier.  

10. Both parties acknowledge the water leakage issue is now a significant problem as was identified in the last draft of the report. However, such is the magnitude of the current problem, the husband asserts, that neither the husband nor the wife have the necessary funds, nor time available, given the default in respect of the mortgage, to attend to the repair of the water leakage.

11. The water leakage issue is also known to Mr F, who has been aware of the issue from the very first time he inspected the Suburb C property. He has not made any recommendation to the parties to repair or rectify the water leakage and damage problems prior to the property being listed for sale by him.

12. The report as required by s 137B of the Building Act is intended to alert prospective purchasers to defects in the house. The defects referred to in the report include all the defects the subject of current concern between the parties. It is the wife’s assertion, as set out in paragraph 6 of her affidavit sworn 15 December 2020, that pursuant to her statutory owner-builder warranty obligations, when the property is sold she will be solely liable for liabilities arising from certain issues with the build of the house for a period of six and a half years from the issue of the certificate of occupancy on 29 June 2018. H Lawyers, in email correspondence sent to the wife dated 9 December 2020, stated relevantly:-

    We confirm that pursuant to the special condition that we have drafted, we are passing the risk in respect of the identified (patent/obvious) defective and or incomplete works to the purchasers in consideration of the purchaser entering into the Contract of Sale.

    We confirm that your liability under your Statutory Owner Builder Warranty continues in respect of the unidentified (latent/hidden) defective and or incomplete works for the remainder of that warranty period.

    (as per original)

13. The wife asserts that the special condition drafted by H Lawyers does not protect her from “any” future claims, and that it is only she who is liable, the husband having no liability in respect of the statutory owner-builder warranty because he is not the owner of the property, or more pertinently, the registered builder.

14. The wife is required to obtain owner-builder insurance. That insurance will not, on her evidence, provide her with any protection from a claim made by a purchaser of the Suburb C property.

15. The wife’s evidence is that she was only able to inspect the Suburb C property for the first time on 9 November 2020, the husband having not provided her with access to the Suburb C property until that time, being some three months after orders were made on 12 August 2020 making provision for such inspection.

16. There was some delay in the inspection being carried out by the wife. Some of that delay was occasioned by the unhelpful position adopted by the husband which is set out in some detail in paragraph 18 of the wife’s affidavit sworn 15 December 2020. The delay was caused by the adoption of various positions of the husband. It had nothing to do with the wife attempting to delay the sale, or inspection, of the Suburb C property.

17. On 9 November 2020, when the wife inspected the Suburb C property, having not attended it since physically separating from the husband in August 2018, she was shocked by the state of the property. The husband, who has lived in the property since interim orders were made on 19 March 2019, has allowed the property to fall into disrepair on the evidence of the wife. The evidence of the wife is further that the husband has provided her with no disclosure as to the ongoing serious water leakage and water damage issue at the Suburb C property. The wife agrees that when the property was originally being built, there was a leak known to her from the first floor’s outdoor balconies through to two rooms on the ground level of the house. That issue, which is described in paragraph 31 herein, was rectified by the husband and the wife.  The wife agreed with the husband that at that time they obtained specialist advice about the problem from a tradesperson. They then engaged that tradesperson to rip up the tiles and cement sheets on the balcony and rebuild the necessary parts of the balcony so that they were built from high quality waterproofing materials. Those rectification works were completed in about May 2018. The wife’s evidence as set out in paragraph 23 of her affidavit sworn 15 December 2020, is that until she inspected the property on 9 November 2020 she believed that those rectification works which had occurred had completely resolved the water leakage and damage issue. The wife’s evidence as to the water leakage issue is as set out thereafter in paragraphs 25 to 28 of her affidavit sworn 15 December 2020, which are as follows:-

    25. On 25 November 2020, Lander & Rogers wrote to Mills Oakley in relation to the water leak issue, requesting disclosure from Mr Vlahos in relation to all aspects of the water leak issue, including details of what enquiries have been made with lawyers, insurance companies, the tradespeople who carried out the works and any other tradespeople who have been consulted in relation to rectifying the works. The letter from Lander & Rogers also stated:

    Having just learnt about this water leakage issue, our client requires disclosure of the building report which has been commissioned as a matter of urgency, so that the parties can make an informed decision about rectifying this issue as soon as possible. Our client is also understandably concerned about the parties' potential liabilities as owner builders if the property was sold in its current state.

    We require that your client provide the documents sought, including the building report, as soon as possible so that this issue can urgently be progressed.

    "Defects report" obtained by Mr Vlahos was not disclosed by him in a timely manner impacting my ability to obtain timely advice about my liability as an owner builder 26.

    26. As referred to at paragraph 25 above, with my consent, Mr Vlahos engaged Mr K of "J Company" to prepare a report pursuant to section 137B of the Building Act 1993 (Vic).

    27. J Company prepared their report on 19 October 2020, which was three weeks prior to my inspection of the Suburb C property. Mr Vlahos did not disclose this report to me or even notify me that it had been completed at that time. I only became aware of it being completed when I requested it from H Lawyers on 26 November 2020 (who also did not provide it to me when it was first prepared on 19 October 2020, despite the property being in my name).

    28. Having had the opportunity to review J Company dated 19 October 2020 for the first time on 26 November 2020, I then emailed H Lawyers on 27 November 2020 because the report, as it had been prepared in my opinion, was not in fact done in accordance with the requirements of section 137B of the Building Act 1993 (Vic). My email to H Lawyers stated:

    I am very concerned with the report that has been provided and whether it is sufficient for purpose. Researching on the VBA website it is required that we have an owner builders defects report done to be prepared for sale, not a special purpose report as this report that has been supplied is just that.

    Also the defects report must be carried out by a registered building practitioner or engineer I’m not sure if this Mr K qualifies as he is an architect and he has not supplied any licensing number.

    Below is a link to the VBA website stating the requirements also with a link to a template to a defects report which is nothing like the report that has been provided

    (emphasis as per original heading)

18. Any liability arising from defective works will fall solely on the shoulders of the wife as the owner-builder. Any indemnity that she might seek to be provided by the husband, the wife asserts, would not provide her with any comfort, as she has no confidence that she would be able to obtain money from the husband in the future if she was to be sued as an owner-builder for defects with the property. As one of the matters for her concern, the wife sets out in her evidence, that during the course of the parties’ marriage, she was a stay at home mother who did not work in paid employment. She has not so worked since she was 22 years of age.

19. During the entirety of the parties’ long marriage the husband was a successful businessman working in a full time capacity earning a high salary. Prior to separation his income was over $450,000 per annum. Since September 2018, on the husband’s assertion, he is not working at all. He also asserts he has not received any drawings, wages or other monies whatsoever from his business entities.

20. The wife’s evidence is that having very recently become aware of the water leakage and damage issues she has acted to minimise her potential liabilities in the future as an owner-builder. She wishes to have an adjourned period wherein she can obtain necessary professional advice including the engagement of a building surveyor to inspect the Suburb C property specifically with regards to the water leakage and damage issue, and prepare a building report and scope of works report in relation to rectifying those issues. The wife proposes that the building surveyor report be paid for in the first instance from funds held in Mills Oakley trust account on behalf of the husband and wife. The Court shall make such an order. There are sufficient funds and this is necessary expenditure by the parties. Indeed, such type of expenditure was foreshadowed in the orders made 12 August 2020.

21. The wife seeks to know the rectification costs and time frame and have the time frames quantified so the parties can properly consider their appropriate next steps. Again, given her sole exposure to liability; her alleged prior lack of knowledge; the husband’s failure to comply with order 7 of the orders made 19 March 2019; and the wife’s concerns as to any indemnity provided by the husband, this is reasonable and necessary.

22. There is $124,483.66 held in trust on behalf of the parties which the wife asserts could be applied to the water leakage and damage issues at the Suburb C property once the necessary assessment is made. The Court has listed the matter for trial in March. The parties can seek to vacate that listing if necessary. To that end the matter shall be listed for mention at the beginning of February 2021. Each party shall pay their own costs of this application.

I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett.

Associate:

Dated:       24 December 2020