Richards v Withers

Supreme Court of NSW|2010-10-11

Background Facts 4 The Plaintiff and the Defendant were formerly parties to a domestic relationship within the meaning of that term in the Property (Relationships) Act 1984. The relationship commenced in July 1982 and ended in about May 2005. 5 On 8 August 2006, the parties signed a Termination Agreement and Release for the purposes of the Act. So far as is relevant, that Agreement provided: "4(b) Lyn will execute a transfer whereby she will transfer 50% of the Gannons Creek property to Trish within 28 days of this Agreement provided that Trish shall indemnify Lyn in relation to the mortgage to the Holiday Coast Credit Union which is secured by the Gannons Creek property and warrants that Trish will make all mortgage payments as and when they fall due and pay for any costs in relation to the refinance of the mortgage as required by the mortgagee. (c) Lyn has the right to occupation of the Gannons Creek property rent free for a period of two years from the date of this Agreement except as agreed between the parties provided that, upon the sale of Clifton Beach property, Lyn pays all the running costs of the house including power, gas, telephone, contents insurance and any minor maintenance except for such payments as are attributable to the running costs of the Company Farm.

(d) The parties will equally pay the following amounts as and when they fall due in respect of the Gannons Creek property: Monies payable to any public or statutory authority from time to time including local council and water rates; All insurance premiums with respect to building and public liability insurance; Structural maintenance costs Agreed improvements to the property ……

(l) The parties agree that the Gannons Creek property will not be sold for a period of 2 years from the date of this Agreement, unless otherwise agreed between the parties.

(m) If either of the parties wishes to dispose of their (sic) interest in the Gannons Creek property after 2 years from the date of this agreement:

(i) either party may purchase the one half share of the property from the other party at a price to be agreed between the parties; or

(ii) the property will be sold at market price, and the net proceeds of sale will be divided equally between the parties, except for the HCCU loan referred to in Clause 4(b) which is payable by Trish from her share and is not included in the "net proceeds of sale".

The parties agree that this Agreement constitutes a Termination Agreement for the purposes of the Property (Relationships) Act 1984 (NSW) and that it relates to the whole of the financial matters between them personally and that it is intended to operate in relation to those financial matters in substitution for any rights of either of the parties under Pt 3 of that Act." 6 In about September 2006, the Defendant provided the Transfer to the Plaintiff of the Defendant's interest in the Gannons Creek property, but the Plaintiff did not register it for reasons that are not relevant to the proceedings. The Plaintiff has still not registered the Transfer. 7 In July 2009, the Plaintiff commenced proceedings pursuant to s 20 of the Property (Relationships) Act, in the District Court at Port Macquarie, seeking orders adjusting interests in property, an extension of time to bring the application, and consequential relief in relation to the sale and division of the net proceeds of sale of the Gannons Creek property. 8 The District Court's jurisdiction was invoked by reason of s 134(1)(g) of the District Court Act 1973. That section relevantly gives the court the same jurisdiction and permits the court to exercise all the powers and authority of the Supreme Court, in proceedings under s 9 of the Property (Relationships) Act. 9 The parties were able to reach a compromise of the District Court proceedings and consent orders were made on 6 August 2009. The Orders, generally, provided for the sale of the Gannons Creek property, and if the Defendant did not sign relevant documents, that the Registrar of the District Court at Port Macquarie sign such documents. (The latter order was made pursuant to s 39 of the Property Relationships Act.) There was also an order relating to the manner in which the proceeds of sale should be disbursed. 10 So far as is relevant to the present proceedings, the Orders also provided: "(i) The agent having the conduct of the sale shall be Kevin Debreceny.

(iii) The property shall be listed for sale by private treaty for a period of three months. (iv) The listing price at which the property is offered for sale shall be as agreed upon by the parties or failing agreement as determined by the agent. (v) The parties shall accept any offer to purchase the property within ten percent of the listing price. (vi) In the event that the property has not sold by private treaty within the three month period referred to above, the parties shall do all acts and sign all documents necessary to list the property for sale by way of auction. (viii) The reserve price at the auction shall be as agreed upon by the parties or failing agreement as determined by the Auctioneer. (ix) The Auctioneer shall be Kevin Debreceny unless otherwise agreed upon by the parties. (x) The first auction shall take place within three months of the expiration of the three-month period during which the property was listed for sale by private treaty. (xi) In the event the property does not sell at the first auction the parties shall do all acts and sign all documents necessary to list the property for sale by future auctions at three monthly intervals with the reserve price at each auction to be reduced by ten percent from the previous auction until the property is sold. The conditions for each auction shall be the same as those for the first auction as set out above unless the parties otherwise agree." 11 Between the date of the making of the orders in the District Court and the commencement of these proceedings, I find the following events occurred: (a) Between September and December 2009, Mr Debreceny marketed the Gannons Creek property; (b) Some problems occurred, including difficulties arranging inspection times, difficulties obtaining access to parts of the property, and animals being at the property and inside the premises during inspections (on at least three inspections); (c) During the period between July and October 2009, the Gannons Creek property was marketed by private treaty; (d) In January 2010, the Defendant offered to purchase the Plaintiff's interest in the Gannons Creek property for $500,000; although the Plaintiff accepted the offer, the Defendant was unable to obtain the necessary finance and the sale did not proceed; (e) In March 2010, an auction date of 8 May 2010 was set; (f) On 7 May 2010, Mr Debreceny suggested that the reserve price of between $1.0 million and $1.050 million should be set, which suggestion the Plaintiff accepted; the Defendant informed him, in writing, at the auction, that she believed that a reserve of $1.5 million should be set; (g) Mr Debreceny, as auctioneer, did not determine the reserve price at the auction, but whilst "somewhat shocked", accepted that it should be $1.5 million, (h) The Plaintiff had advised Mr Debreceny, in writing, of Clause 1(viii) of the District Court Orders; (i) There were no bids made at the auction; (j) In August 2010, Mr Debreceny expressed the opinion to the parties that a realistic sale price of the Gannons Creek property was $1 million; (k) The Defendant has remained in exclusive occupation of the Gannons Creek property, although, on occasions, the Plaintiff has "visited" her there. (l) The Defendant has paid no occupation fee, or rent, to the Plaintiff; the Plaintiff has made no demand for an occupation fee, or rent; (m) The Plaintiff threatened to commence proceedings for an order that the Defendant vacate the Gannons Creek property pending its sale; she also threatened to seek the appointment of trustees for sale. 12 At the hearing, there was evidence read, without objection, of consent by two persons to act as trustees for sale, and evidence regarding the fitness of each to act in that capacity. The Parties' Competing Submissions 13 The Plaintiff submits that, as matters now stand, the orders of the District Court concerning sale of the Gannons Creek property cannot be implemented. It is submitted that the mechanism has broken down and that it is unworkable and impracticable and that, for this reason, trustees for sale should be appointed. 14 The Defendant submits that there is no evidence that the mechanism prescribed by the orders of the District Court is either impracticable or unworkable. It is said that the procedure was simply not followed, and, in the circumstances, this Court cannot conclude that an alternative mechanism, being the appointment of trustees for sale, should be substituted. 15 I have received written submissions from counsel for each of the parties, which submissions I have read and which I shall leave with the court papers. Areas upon which Agreement was reached 16 During the course of the hearing, the areas of dispute between the parties narrowed considerably. This occurred when it became clear that it was not intended to cross-examine any of the deponents of affidavits read in the proceedings and when I was specifically requested to not express any view on the conduct of either party, except where the evidence was not the subject of any dispute. 17 Also, during the opening submissions made on behalf of each party, it became obvious that the parties wanted exactly the same results - namely, the sale of the Gannons Creek property at the best possible price and at the earliest possible time. The area of dispute crystallised to be how each result could be achieved. 18 Initially, the Plaintiff's counsel submitted that the results would be achieved by the Court making orders under s 66G Conveyancing Act, 1919. Later, as a result of a concession made by the Defendant, an alternative approach was suggested. 19 The Defendant's concession was to the effect that the Defendant was prepared to have the District Court orders implemented, upon the basis that any auction that was arranged following the orders made in these proceedings, would be treated as, in effect, the first auction, with Mr Debreceny actually determining the reserve price at such auction. 20 The Defendant also accepted that, at any auction, it was Mr Debreceny who would be required to, and who should, determine the reserve price, no matter what either party thought that the reserve price ought to be. 21 The Plaintiff was content to adopt this approach and indicated that Mr Debreceny could be instructed accordingly. 22 No doubt, the Defendant's concession was made to counter the Plaintiff's submission that if the mechanism prescribed by the District Court orders was implemented, and if the reserve price of $1.5 million, referred to at the auction already held, was treated as having been determined by Mr Debreceny, it would be necessary for there to be four auctions before the true value of the Gannons Creek property was likely to be reached and a sale effected. This lengthy process was said to demonstrate the impracticability of the District Court orders. 23 The Plaintiff, by way of alternative submission, following the Defendant's concession, was prepared to accept that the sale of the Gannons Creek property would be able to be achieved by implementing the orders made in the District Court as had been contemplated. In this way, the reserve price, when actually determined by Mr Debreceny, would be closer to the realistic value of the property. 24 The parties agreed that any auction now arranged should take place within 8 weeks of the making of the orders. 25 The Defendant proposed one variation to the District Court orders relating to the mechanism for sale. The variation was that before the next auction date, two identified conjunction agents should be appointed, with Mr Debreceny, to market the Gannons Creek property. In this way, so it was submitted, more prospective purchasers might be available and the prospects of the auction being successful would increase. 26 The Plaintiff did not object to the variation, but submitted that only one conjunction agent should be appointed, with Mr Debreceny, to market the Gannons Creek property. Areas of Dispute 27 The principal area of dispute was whether the Defendant should remain in occupation of the Gannons Creek property pending the completion of the sale, and, if so, upon what basis. In this regard, shortly after the short adjournment, the Defendant made an open offer to make the interest payments on the mortgage debt secured over the Gannons Creek property, so long as she remains in occupation, by way of rent or occupation fee. The amount offered was $200 per week. This amount is more than one half of the rent, or occupation fee, ($187.50), that the evidence reveals would be payable if the Gannons Creek property were rented. 28 The Plaintiff opposed the Defendant remaining in occupation, it being submitted that she should vacate the property within 3 weeks of the orders of this court. Alternatively, the Plaintiff submitted that if she was allowed to remain in occupation, the Defendant should simply pay an occupation fee, or rent, to the Plaintiff, at the rate of $187.50 per week, as this was one half of the notional rent that the evidence revealed would be charged if the property were rented. 29 In addition, the Plaintiff submitted that pending the sale of the Gannons Creek property, both parties should be able to have access to enable it to be maintained. The Defendant submitted this was unnecessary, particularly if she remained in occupation, as she had been maintaining, and was prepared to continue to maintain, it. 30 The Defendant submitted that if orders were made as had been submitted, the amended summons should be dismissed. The Plaintiff submitted that the fate of the amended summons would depend on the orders made. Power to Make Orders in the Proceedings 31 It is clear that the jurisdiction under s 66G of the Conveyancing Act 1919 is exercisable only by the Supreme Court. It was accepted by the Defendant that the proceedings, as constituted, were not an abuse of process. However, it was asserted that the proceedings should never have been brought. 32 It is important, in the light of orders made in the District Court, and the dispute regarding the way forward, to consider the basis of any relief that should be granted in this court. 33 Section 13 of the Property Relationships Act, provides: "All courts having jurisdiction under this Act shall severally act in aid of and be auxiliary to each other in all matters under this Act."

34 Barrett J in Cusick v Savage [2008] NSWSC 212, in relation to this section, said: 16 The relevant concept of acting in aid of, and being auxiliary to, another court has been explored in cases involving like statutory provisions concerning insolvency and matrimonial causes. A provision empowering a court to "act in aid of" another court confers "a jurisdiction to give aid" ( Ayres v Evans (1981) 39 ALR 129 at 133 per Fox J) and "creates new remedies for enforcing existing rights" ( Hall v Woolf [1908] HCA 74; (1908) 7 CLR 207 at CLR 212 per Griffith CJ).

17 This court is a court having jurisdiction under the Property (Relationships) Act (see s 9 of that Act). It may, by virtue of s 13 of the Act, deploy its general jurisdiction in aid of the District Court by exercising such power as s 66G(6) of the Conveyancing Act may create to require application by the trustees for sale of the net proceeds of sale in a way that will cause the District Court orders to be carried into effect. 35 In relation to the claim for the order that the Defendant vacate the Gannons Creek property, reference should also be made to Uniform Civil Procedure Rules 2005, rule 27.1, of which provides:

In proceedings in the Supreme Court in relation to land, other than proceedings in the Common Law Division for possession of land, the Court may, at any stage of the proceedings:

(a) order that the whole or any part of the land be sold, and (b) order that any party in receipt of the rents or profits of the land, or otherwise in possession of the land, deliver possession to such person as the Court may direct.

36 I am also of the view that I may make an order, as sought by the Defendant, varying the orders made in the District Court, if the purpose of doing so is to act in aid of the District Court. In this regard, I note that s 41 of the Property Relationships Act gives power to "a court" (not "the court") to vary the order, or set the order aside. However, the power may only be exercised in three circumstances, namely, where: (a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence, the giving of false evidence, or any other circumstance, (b) in the circumstances that have arisen since the order was made, it is impracticable for the order to be carried out, or impracticable for a part of the order to be carried out, or (c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order. 37 The only relevant circumstance that may apply is sub-section (b). However, the Defendant submitted that the orders made in the District Court were not impracticable, and could be carried out. 38 I am satisfied that the Court has power to make orders that are sought by the Plaintiff and by the Defendant under s 13 of the Property (Relationships) Act. The real question is whether I should do so in the light of the orders made in the District Court and in the light of the areas of agreement that have been reached in the proceedings.

Decision 39 In my view, the matter should proceed, at least initially, upon the basis that the parties and Mr Debreceny will, hereafter, each comply with the District Court orders, with the variation in relation to the appointment of one, or two, conjunction agents. However, I shall leave it to Mr Debreceny to determine whether one, or two, conjunction agents would be of assistance to him in marketing the property. The decision should be left to him, because the parties have agreed that "the agent who is to have the conduct of the sale shall be Kevin Debreceny" (Clause 1(i) of the District Court orders). 40 I shall also grant to Mr Debreceny, in these proceedings, leave to approach the court, by motion, for directions and orders, in the event that he experiences any difficulties caused by either of the parties regarding the marketing, or sale, of the Gannons Creek property, or in the event that he requires the assistance of the court to provide directions as to the way in which the orders should be implemented. 41 In relation to the order that the Defendant vacate the Gannons Creek property, I shall not order her to vacate within 3 weeks as is sought by the Plaintiff. However, I order her to vacate that property no later than 14 days after the auction, although I shall grant leave to either party, and to Mr Debreceny, to approach me, by notice of motion, to seek a variation of this order if that is thought necessary. If agreement is reached by the parties on any variation of the Defendant's period of occupation, I shall make a consent order varying the Defendant's period of occupation in Chambers, so as to avoid the parties incurring additional costs. 42 The last order will allow the Defendant no less than 10 weeks to organise alternative accommodation. It should also avoid any inconvenience to the parties during the marketing period. 43 Furthermore, the Defendant is to pay $200 per week to the Plaintiff, or as she directs in writing, by way of an occupation fee, or rent, until she vacates the Gannons Creek property, the first of such payments to be 7 days from the date judgment is delivered. 44 I shall not dismiss the relevant parts of the Plaintiff's amended Summons, at this time, just in case there are further issues that arise regarding the marketing, or sale, of the Gannons Creek property, or in the event that difficulties arise in the manner of effecting the sale or otherwise implementing the orders of the District Court. I shall simply stand the proceedings over to a date suitable to the parties in, say, 3 months, to enable the proposed auction to take place. There is liberty to apply granted in the event that there are any difficulties in regard to complying with the orders. 45 I direct the parties to bring in short minutes that reflect these reasons. I shall, at that time, hear any submissions on costs of the proceedings to date, unless the parties are able to reach agreement bearing in mind the reasons set out above.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Richards v Withers [2010] NSWSC 1158

Ayres v Evans (1981) 39 ALR 129 CASES CITED : Cusick v Savage [2008] NSWSC 212 Hall v Woolf [1908] HCA 74; (1908) 7 CLR 207

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