2010/258430 Bruce James Dyson v Tina-Louise Holden
JUDGMENT
1 HIS HONOUR: On 1 December 2009 I made orders, by consent, pursuant to s 20 of the Property (Relationships) Act 1984 (NSW). Those orders compromised a claim brought by the plaintiff under that Act. The orders were in the following terms:
" By consent, and pursuant to s 20 Property (Relationships) Act 1984, the Court orders:
1. Order that, within 56 days of the date hereof and subject to the Plaintiff's compliance with Order 2 hereof, the Defendant:
(a) pay the Plaintiff $35,000;
(b) discharge registered mortgage 9142841 registered on Title to Lot 185 in DP 318167, being real property located at and known as 58 Waratah Crescent, Sanctuary Point, New South Wales ('the real property');
2. Order that, subject to the Defendant's compliance with Order 1 hereof, the Plaintiff withdraw Caveat AB366943 registered on Title to the real property.
3. Order that, in the event that the Defendant does not comply with Order 1 hereof within 56 days from the date hereof, the parties do all acts and things and execute all such documents required:
(a) to sell the real property and to deal with the proceeds as follows:
(i) to discharge registered mortgage 9142841;
(ii) to pay legal and real estate expenses on the sale;
(iii) to pay the Plaintiff the balance.
(b) on the part of the Plaintiff, to withdraw Caveat AB366943 registered on the title to the real property;
(c) if the real property is not sold by private treaty within three months of the date of this Order, to take all steps necessary for the sale of the real property by auction and in particular to:
(i) place the property with auctioneers;
(ii) execute all documents requested by the auctioneers for the sale of the property by auction;
(iii) request the auctioneers to recommend a reserve price to be placed on the property for the purpose of the auction sale and accept such recommended reserve price;
(iv) pay to the auctioneers the sums requested for advertising expenses in relation to the auction;
(v) attend the auction sale of the property and negotiate with the highest bidder in the event that the reserve price is not reached, accept the advice of the auctioneers as to the acceptance of a price less than the reserve price;
(vi) execute a Contract for Sale;
(vii) co-operation in every way with the auctioneers in relation to the auction of the property including making keys available, allowing inspection of the property at the time requested by the auctioneers, ensuring that the property is neat and of tidy presentation and in a clean condition at the time of inspection by prospective purchasers;
(viii) execute all other documents necessary to complete the sale.
4. Order that each party pay his or her own costs.
5. Order that the proceedings otherwise be dismissed.
NOTATION:
A. The Court notes the intention of the parties, in conjunction with these Orders, to enter into a Binding Child Support Agreement in respect of the child of the relationship, Maddison, pursuant to which there be a notional lump sum of $20,000 credited to the Plaintiff and used to satisfy the Plaintiff's current arrears of child support and as a credit against future administrative assessments of child support until the remaining lump sum credit is exhausted. "
2 Order 1 provided that the plaintiff would withdraw a caveat on the Sanctuary Point property and the defendant would pay the plaintiff $35,000 and procure a discharge of the mortgage.
3 The defendant was the registered proprietor of the property. But the plaintiff and the defendant are both liable to make the payments pursuant to the mortgage.
4 In his application for relief under s 20 of the Act the plaintiff had sought orders to the effect that the Sanctuary Point property be sold and that he be paid 93.1 per cent of the net proceeds of sale, which he claimed represented his contribution to the acquisition of the property by the defendant.
5 The effect of order 3 made on 1 December 2009 was that if the defendant failed to comply with order 1 requiring payment of the sum of $35,000 and procuring the discharge of the mortgage within 56 days, the property would be sold and after discharge of the incumbrances and payment of expenses of sale, the plaintiff should receive the whole of the net proceeds.
6 The solicitor for the defendant points out that this outcome gives the plaintiff more than he had sought in his application. Nonetheless the parties compromised the plaintiff's claim on terms which included that he be required to accept payment of $35,000 and discharge of the mortgage. The settlement embodied in the consent orders was arrived at when both parties were legally represented.
7 The period of 56 days referred to in order 1 expired on or about 25 January 2010. Prior to that date there were some inconclusive discussions between the solicitors in relation to payment of the sum of $35,000 and any other moneys that had to be paid. But it does not seem that the defendant was in a position to discharge the mortgage at that time. It is unnecessary to consider the rights and wrongs of the debate then occurring in relation to what cheques should be provided on settlement. The defendant's solicitor, Mr Hodgson, properly accepts that the defendant did not comply with order 1 within 56 days.
8 The plaintiff did not seek to enforce order 3 immediately. On 28 February 2010 the plaintiff's solicitors advised that unless the defendant was ready, able and willing to settle the matter by close of business on 5 March 2010, they expected to receive confirmation that the defendant had put the property on the market and to be given details of the identity of the listing agent approved by the plaintiff.
9 On 4 March 2010 the defendant's solicitor advised that the defendant had applied for a loan and that she and a co-borrower were in the process of satisfying the requirements of an incoming mortgagee. However, no finance was then obtained which would have been necessary to discharge the mortgage and pay the plaintiff $35,000.
10 On 23 April 2010 the defendant's solicitor advised that loan approval had been received from the St George Bank. He advised that the plaintiff's solicitors would be told when a mortgage had been signed and when settlement could occur. The solicitor indicated that a realistic time for the matter to be finalised would be 3 May 2010. However, nothing eventuated on 3 May 2010. The plaintiff's solicitors advised the defendant's solicitor that the plaintiff instructed them to have the property put on the market. The effect of the orders of 1 December was that the plaintiff should receive the entire net proceeds of sale. The plaintiff's solicitors said the plaintiff should have the conduct of the sale. The plaintiff's solicitors asked the defendant to attend the offices of L J Hooker at Sanctuary Point to sign an agency agreement. On the following day the plaintiff's solicitor forwarded a proposed power of attorney to the defendant to sign to give the plaintiff the power to sell the property and to deal with the proceeds of sale. The defendant did not act on those demands.
11 On 12 May 2010 the defendant's solicitor advised that the defendant had raised $35,000 which could be paid to the plaintiff that week. However, the solicitor advised that the mortgage would not be discharged until February 2012. Unsurprisingly that position was not acceptable to the plaintiff. Further correspondence ensued in which the plaintiff's solicitor sought to obtain the defendant's co-operation for the property to be listed for sale. The defendant did not make any positive response.
12 On 4 August 2010 the plaintiff filed the summons in these proceedings. He seeks the following orders:
" 1. That the Defendant specifically perform Clause 3 of Terms of Settlement dated 30 November 2009 in proceedings between the parties in the Supreme Court of NSW, Equity Division suit number 4969 of 2008 in respect of which Orders were made by this Honourable Court on 1 December 2009.
2. That the Defendant, in relation to real property located at and known as 58 Warratah [sic] Crescent Sanctuary Point NSW, being the land comprised in Lot 185 of DP 318167 ('the property'):
a) within 7 days, attend the office of Elders Real Estate 3/16 Paradise Beach Road, Sanctuary Beach and sign all documents necessary to enable the sale of the property;
b) within 7 days, provide to Elders Real Estate, Sanctuary Beach all necessary contact details of the current occupants of the property together with a copy of the current residential tenancy agreement in respect of the property;
c) within 7 days, provide to Elders Real Estate, Sanctuary Beach any keys to the real property that are necessary in order to gain entry to the property and do whatever is necessary to enable Elders Real Estate to conduct an immediate inspection of the real property;
d) within 7 days, provide to Elders Real Estate, Sanctuary Beach ongoing access to the real property for the purposes of enabling them to show the real property to prospective purchasers and to conduct inspections and auction sales as and when they may be necessary.
e) within 7 days, instruct solicitors or licensed conveyancers to prepare a contract for the purpose of the sale of the real property;
f) within 7 days, to accept the professional advice provided by Elders Real Estate, Sanctuary Beach in relation to the value of the property and the proposed price at which the property should be offered for sale;
g) Upon negotiation of a sale of the real property, to sign all such documents as may be required to give effect to any such sale including but not limited to the contract of sale of land, the transfer and the authority to discharge any existing mortgage;
h) Upon completion of the sale of the real property, to authorise and direct that the sale proceeds, following repayment of any mortgage, outstanding rates and taxes, real estate agent's commission and legal expenses on sale, be paid forthwith to the Plaintiff.
3. That, in the event that the Defendant fails to comply with any one or more of the orders contained in Orders 2 a. - h. hereof, then the Plaintiff be immediately be [sic] appointed as Trustee for Sale of the real property and that he shall have, by virtue of this Order, all powers necessary to conduct the sale of the real property including but not limited to:
a) The power to enter into an agency Agreement for the sale of the real property;
b) The power to instruct a solicitor or conveyancer to prepare a contract for the sale of the real property;
c) The power to determine the method, manner and ultimate price in respect of the sale of the real property;
d) The power to seek and obtain from the registered mortgagee a discharge of the mortgage registered against the real property;
e) The power to take possession of the real property (subject to any current residential tenancy agreement which might exist) and to stand in the place of the Defendant in relation to seeking vacant possession of the real property;
f) The power to direct any tenant of the property to pay rent to the plaintiff and to otherwise deal with the tenant in relation to the sale.
g) The power to deal with the proceeds of sale upon completion of the sale of the real property.
... "
13 The plaintiff did not immediately press for the enforcement of order 3 made on 1 December 2009. For at least a couple of months the plaintiff was prepared to allow the defendant to comply with the orders by complying with order 1. It is not suggested that the plaintiff is estopped from enforcing order 3 made on 1 December 2009. It is not suggested, nor could it be, that there has been any consensual variation of those orders. Prima facie the plaintiff is entitled to whatever further orders are necessary to enforce the orders made on 1 December 2009.
14 Mr Hodgson for the defendant submitted that the time for compliance with order 1 should be extended to 31 January 2011. On behalf of the defendant he offered terms that the payment of $35,000 under clause 1 would be made with interest. He indicated that if order 1 were extended to 31 January 2011, the defendant would not oppose a self-executing order in the form of order 3 of the summons if order 1 were not complied with by the end of January 2011.
15 Mr Hodgson submitted that the court had a discretion as to whether or not to enforce the orders of 1 December 2009 and also had a discretion under r 36.5 of the Uniform Civil Procedure Rules 2005 to extend the time for compliance with order 1. In support of that application and that submission, oral evidence was called from the defendant as to the arrangements made to obtain loan finance. The defendant said that she has retained a finance broker, a Mr Ed Shulkin, to arrange a loan of $196,000. She said that the amount outstanding under the mortgage to be discharged is $134,000. She first contacted Mr Shulkin about four weeks ago. She said he had made arrangements for a loan to be provided by a wealthy lady living on the north shore of Sydney who was prepared to advance the sum at an interest rate of about 11 per cent. She gave evidence that she had filled out a loan application, paid fees and taken other steps required for the loan to proceed. This includes (for reasons which are not apparent) the formation of a company. It is her intention, or the requirement of the proposed lender, that the property in question be transferred to a company to whom the loan would be made. The existing mortgage would then be discharged. The defendant said that there was a "100% certainty" that the loan would proceed. However, there is no evidence to corroborate that opinion. There is no written confirmation from the finance broker, even as to the prospects of obtaining the loan.
16 As of yesterday, Mr Shulkin advised that the funder needed verification of payments the defendant receives, apparently from a cafe business. He sought the "financials" for the business and said that he needed more details of other payments that the defendant receives. He concluded by saying that the proposed lender needed evidence of sufficient income to service the pending debt. Given the apparent inability of the defendant to raise finance during the whole of 2010, this evidence falls far short of establishing that the defendant would be in a position to pay moneys under order 1 made on 1 December 2009 to discharge the mortgage by the end of January. But even if there were evidence to satisfy me that the defendant would be in a position to do that, the question would still arise as to why the orders of 1 December 2009 should be varied so as to deprive the plaintiff of what may be the benefit of order 3.
17 The agreement that the parties reached to settle the earlier application is that by a specified time the plaintiff would receive $35,000 and the mortgage would be discharged, or if not the property would be sold and he would receive the whole of the net proceeds of sale. It is not obvious to me why it would be equitable for the court to vary such an agreement or to refuse to enforce it in accordance with its terms. Mr Hodgson who has said all that could be said in support of the defendant's application, and done so with considerable skill, submits that the court has a discretion whether or not to enforce the orders, notwithstanding that the orders embody a contract. He referred me to the decision of the Family Court of Australia in In the Marriage of Ramsay (1982) 8 Fam LR 863. Whilst acknowledging that the facts of that case are far removed from the facts of the present case, he submitted that the case does show that the court has a discretion whether or not to enforce the existing orders. In that decision the Full Court of the Family Court referred, with approval, to a passage in the decision of the Court of Appeal in England in Thwaite v Thwaite [1981] 2 All ER 789 (at 794):
" Where the order is still executory, as in the present case, and one of the parties applies to the court to enforce the order, the court may refuse if, in the circumstances prevailing at the time of the application, it would be inequitable to do so. "