New South Wales Supreme Court CITATION : Stansfield v Richardson [2007] NSWSC 952 HEARING DATE(S) : 24 August 2007 JURISDICTION : Equity Division Expedition List JUDGMENT OF : Brereton J EX TEMPORE JUDGMENT DATE : 24 August 2007 DECISION : Order made for interim sale CATCHWORDS : FAMILY LAW – Defacto relationships – proceedings for adjustment of property interests – interim sale of property LEGISLATION CITED : (NSW) Conveyancing Act 1919 s 66G (NSW) Property (Relationships) Act 1984 s 20 PARTIES : Elliot Boyd Stansfield (plaintiff) Virginia Ellen Richardson (defendant) FILE NUMBER(S) : SC 3790/07 COUNSEL : Mr D Blackah (sol) (plaintiff) Ms E Saunderson (sol) (defendant) SOLICITORS : Watson & Watson Solicitors (plaintiff) Mulally Mylott Lawyers (defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EXPEDITION LIST BRERETON J Friday, 24 August 2007 3790/07 Elliot Boyd Stansfield v Virginia Ellen Richardson JUDGMENT (ex tempore) 1 HIS HONOUR: By Summons filed on 26 July 2007 the plaintiff Elliot Boyd Stansfield seeks an order pursuant to (NSW) Conveyancing Act 1919, s 66G, appointing trustees for sale of the property situate at and known as 207 Penshurst Street, Willoughby in the State of New South Wales, which has until recently been occupied by him and his estranged defacto wife, the defendant Virginia Ellen Richardson, as their home. Mr Stansfield continues to reside there, but has found and secured alternative rental accommodation in anticipation that he will have to leave the home in the not distant future. Ms Richardson left the home, she says under pressure from Mr Stansfield to do so, on 26 April this year: she is occupying rental accommodation with the two children of the parties. 2 Ms Richardson has filed a cross-claim, claiming an adjustment of property interests under (NSW) Property (Relationships) Act 1984, s 20. The relief that she seeks is, in substance, a transfer to her of Penshurst Street, unencumbered, with Mr Stansfield to discharge the mortgage and each party otherwise to retain the property standing in their respective names, possession, or control. 3 The matter comes before me on Mr Stansfield's motion for an expedited hearing. The s 20 cross-claim will have to proceed, after the usual investigations, in due course to a trial, and even with all due expedition that is unlikely to occur before next year. The question is whether, as Mr Stansfield proposes, in the interim, an order should be made substantially to the effect of that sought by Mr Stansfield for the sale of Penshurst Street, with the distribution of the proceeds to abide the outcome of s 20 proceedings, or whether the question of sale should be deferred pending the outcome of the s 20 proceedings. 4 The issue of urgency arises because Mr Stansfield says that he is unable to continue to service the mortgage, that the mortgage is in default with the consequence that penalty interest is now being charged by the mortgagee, and that it can be anticipated that the mortgagee will take possession and sell the property to the financial detriment of the parties. It is in order to avoid that financial detriment that it is suggested that an interim sale is appropriate. Against that, such a sale would defeat Ms Richardson's claim for a transfer of the property. 5 The Court is reluctant to order an interim sale, especially where to do so would defeat a reasonably arguable claim for a transfer of the property to one of the partners. Accordingly it is necessary to consider whether there is a real prospect that an order might ultimately be made for the transfer of the property to Ms Richardson, and to weigh that prospect against the risk of loss that might be occasioned (to both parties) by not ordering a sale. 6 So far as I can tell, on the limited evidence before me at present, the financial position of the parties appears to be broadly as follows. They own Penshurst Street, worth about $760,000, subject to a mortgage of $610,000, leaving equity of $150,000. Mr Stansfield has superannuation of $181,000. He has a motor vehicle; some shares in an unlisted company in the United Kingdom worth perhaps £20,000, say $50,000, and he has a beneficial interest in $12,000 in a managed fund with Wealthtrack. Ms Richardson may have a superannuation interest of approximately $27,000; a motor vehicle worth $12,000; cash or shares derived from her late father's estate of about $9,000; and a one-eighth interest in her late father's home, which interest, at face value, would be worth about $40,000, but is subject to a life interest in favour of her step-mother, which would reduce its present value significantly. Accordingly, the total pool of property, including superannuation, might be in the order of gross $1,080,000 and net $470,000. 7 I cannot, on this application, evaluate closely the respective alleged contributions of the parties. I am quite prepared to accept that it is within the realm of possibility that an order could be made requiring the transfer of Penshurst Street to Ms Richardson subject to the existing mortgage. That would leave Mr Stansfield with his superannuation, shares and investments, totalling $243,000. It does not appear that he would then have sufficient assets presently available to him (as distinct from superannuation, which is not presently available) from which he could contribute to a substantial reduction in the mortgage, and there is a high degree of improbability that an order would be made requiring Mr Stansfield not only to transfer Penshurst Street to Ms Richardson, but to do so unencumbered requiring him discharging the mortgage. While I am not prepared to say on this application that it is impossible that an order might be made requiring him to make some contribution to reduction or servicing of the mortgage, there is a high degree of improbability that he could be required to make a sufficient contribution as would enable Ms Richardson to take a transfer and retain the property as her home. 8 On the other hand, there is a high degree of probability that, before the s 20 proceedings come to trial, the mortgagee will take possession and sell the property. In doing so, it will charge the parties penalty interest until the full debt is repaid, and all the costs of it and its lawyers of bringing about a sale. Mr Stansfield has requested agreement to the release of the $12,000 with Wealthtrack to be applied to the mortgage to enable it to be serviced in the interim, but that request was refused on behalf of Ms Richardson, so that the possibility of keeping the mortgage in order that way, having been explored, does not appear open. 9 On balance, it seems to me that there is a high degree of probability that, by retaining the property, the overall financial position of the parties will be seriously detrimentally affected, and a low degree of probability that any viable claim by Ms Richardson would be jeopardised. The balance of convenience therefore favours an interim sale. Any question of accounting for the various advances that have been made on security of the property can still be explored in the s 20 proceedings, as the net proceeds of sale will be preserved to abide the outcome of those proceedings. 10 Accordingly, I am satisfied that the interests of justice and the balance of convenience favours preserving the assets of the parties by selling what is, in the events which are transpiring, likely to be a wasting asset. 11 There being no affidavit verifying consent, nor any affidavit of fitness of the proposed trustees, I stand the proceedings over to Tuesday 28 August 2007 at 9.30am before me, when, if the formalities have been attended to, I will make an order appointing trustees for sale. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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