Supreme Court New South Wales Medium Neutral Citation: Ryan v Ryan [2011] NSWSC 1685 Hearing dates: 20 December 2011 Decision date: 20 December 2011 Jurisdiction: Equity Division - Duty List Before: Rein J Decision: Auction to proceed as per the Prior Consent Orders but reserve altered and proceeds to be paid into Court rather than to the defendant's solicitor Catchwords: PRIOR CONSENT ORDERS FOR SALE AT AUCTION - Change sought in reserve - Defendant owner opposes change - Issue as to which account proceeds of sale should be paid - Proceeds to be paid into Court Category: Interlocutory applications Parties: Benjamin Keil Ryan (plaintiff) Helen Kay Ryan (defendant) Representation: P Carr (plaintiff) S O'Reilly, Bridge St. Lawyers (plaintiff) Z Mandoh, Mandoh and Associates (defendant) File Number(s): SC 2011/264760 EX TEMPORE Judgment 1In this matter, the plaintiff, who is the executor of an estate of the late Geoffrey David Ryan, seeks orders in relation to the auction of a property which is scheduled to take place tomorrow. The proceedings concern that property which was owned by the late Mr Ryan with the defendant, who is his wife, as joint tenants. On Mr Ryan's death, the property passed to the defendant. 2The defendant has been found guilty of the murder of her late husband in October 2009. She has been convicted and sentenced to a very lengthy period of gaol. I am informed that the defendant has appealed that conviction and that appeal has not yet been determined. 3Proceedings were brought by the estate against the defendant on two bases. One, that there was in effect a resulting trust by reason of the provision of funds by the plaintiff for the purchase of the property. The second basis of claim against the defendant is that because she has been found by a jury to have murdered her husband and convicted of that crime and has, through survivorship under the joint tenancy provisions upon her husband's death, become the sole owner, she should not be permitted to profit by her crime. 4In November this year there was an agreement between the plaintiff and the defendant that the property owned by the defendant should be sold at auction with the dispute as to the entitlement to the proceeds to be determined in due course. This agreement is contained in the Short Minutes of Order signed by the legal representatives of the parties in November, which are found at pages 21 and 22 of the affidavit of Mr Stephen Anthony O'Reilly, the plaintiff's solicitor. It was agreed by those Consent Orders that the property would be sold. Although the word "sale" has been omitted accidentally, it is obvious from paragraph 1 of the Consent Orders that that is what was intended and this was not disputed today. By agreement there was appointed a real estate agent, Mr Graham Evans of Elders Real Estate. 5The Consent Orders contain a reserve price of $1.45 million "or such other reserve as the parties may agree". There was agreement about where the proceeds of sale were to be paid and there was also agreement as to what would happen to the net proceeds of sale after payment of all other expenses, namely that they were to be held in a controlled moneys account in the name of the defendant's then solicitor on behalf of the defendant and not to be disbursed without order of the court. 6Following those orders an agency agreement was entered into by the parties with Mr Evans and Mr Evans has subsequently set about preparing the property for marketing and sale by auction. The auction is fixed for tomorrow. 7In recent times the defendant has indicated that she does not wish the auction to proceed at the moment. Mr Z Mandoh, of Mandoh and Associates, has recently been appointed as her solicitor. Mr Mandoh tells me that a significant concern of the defendant is the proposed change in the reserve. This proposed change in the reserve has come about because the agent believes that times have changed since the original reserve was indicated and the agent believes that that reserve needs to be adjusted. Such an adjustment is opposed by the defendant. 8The defendant would like to see the auction postponed and Mr Mandoh has indicated that he is also concerned about several aspects of the orders including the continuation of the plaintiff's solicitors acting on the conveyance which, I have noted, was previously agreed. Mr Mandoh seeks that his firm be appointed as solicitors to act on the conveyance. 9The plaintiff was previously happy for the then solicitors for the defendant to have the money placed in their account, but they do not consent to Mandoh and Associates being the firm into whose account the moneys representing the net proceeds of sale are paid. Part of that is said to arise from the manner in which the defendant has now sought to resile from the previous agreement for steps for the auction to take place and her unwillingness to agree to a new reserve and, given the time of the day and the fact that the auction is tomorrow, I think that the appropriate course is for the net proceeds of sale to be paid into court. If either party wishes to make some alternative application for the money to be paid into some other account that can be done in the new year without any pressing urgency. 10So far as the reserve is concerned, there is evidence from Mr O'Reilly as to the agent's views. I do not think it is unreasonable for the agent to express a concern. I should point out that this sale takes place in the context of a looming mortgagee sale. There is a mortgagee who is unpaid and has been unpaid for some considerable time and has, I am informed, deferred from taking action to sell the property pending the outcome of the criminal proceedings. There are consent orders, as I understand it, that will permit the bank to proceed to a mortgagee sale on 3 April 2012 if the property does not sell either by auction or private treaty before that date. 11The estate is concerned about the costs which are continually mounting by reason of the continued existence of the mortgage, which is not huge compared to the overall value of the property. The plaintiff is concerned to ensure that the marketing programme which has been put in place for auction be allowed to continue and to realise the best price for the property. 12I should note that I have encouraged the plaintiff to consider some provision in the Short Minutes of Order that will at least make clear that should the sale proceed at a figure less than the $1.45 million reserve, the plaintiff accepts that the defendant's rights are not affected by the making of these orders. Paragraph 4 of the proposed Short Minutes of Order does that. I think it is an appropriate term of the Short Minutes of Order. 13As I say, it is clear the defendant does not accept that there should be a lower reserve than that previously nominated, but I think there are two problems. One is that if no reserve is set the property could sell at a ridiculously low price and, secondly, if an unrealistically high reserve is put then there will be a prospect that the sale will not occur which I do not think is in the interests of the estate. It may well not be in the defendant's interests either, notwithstanding her instructions to Mr Mandoh. 14A principal basis for the defendant's application for a postponement of the auction, as Mr Mandoh put it, was that his firm has only recently been appointed and his firm has not had an opportunity to see all the documents that are involved. It is unfortunate that he has been instructed so late, but I do not think that that can be a basis to imperil the auction which has been put in place previously pursuant to consent orders. I think that the Short Minutes of Order which are proposed by the plaintiff are within the spirit of the Consent Orders made in November and that it is appropriate for them to be made in the circumstances. I do not think that the defendant's unwillingness to set a new reserve should be permitted to derail the auction. 15That leaves the question of costs. I do not think that the defendant has really put forward any proper basis for the application to adjourn the auction and nothing has been proffered as to why the agent's view about a reserve is wrong or incorrect. 16In these circumstances, I think the plaintiff has been put to expense by reason of the defendant's position and had to bring this matter to the Court and, accordingly, it is appropriate that the defendant pay the plaintiff's costs. 17I, therefore, make orders in accordance with the Short Minutes of Order initialled by me, dated with today's date and placed with the papers. 18I note that the matter has been listed for 14 February 2012. If the property does not sell at auction on 21 December, order 6 provides for the relisting on 19 January 2012. 19I direct that these orders be taken out forthwith. ********** 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. Decision last updated: 15 February 2012