Bowling v Bowling (No 3) [2012] NSWSC 1069

Supreme Court New South Wales

Medium Neutral Citation: Bowling v Bowling (No 3) [2012] NSWSC 1069 Hearing dates: 10 August 2012; 13 August 2012 Decision date: 13 August 2012 Jurisdiction: Equity Division Before: Rein J Decision: Defendant's application granted. Catchwords: PROCEDURE - judgments and orders - enforcement of judgments and orders - where order has been made for property to be sold by court-appointed real estate agent under instruction of the co-owners - where property has not been put on the market more than seven months after judgment date - where one co-owner wishes to buy the property - where property market is a falling market - where relationship between the co-owners has disintegrated - where new sales agreement with real estate agent needs to be signed - trustees should be appointed for sale of the property Legislation Cited: Property (Relationships) Act 1984 Trustee Act 1925 Cases Cited: Bowling v Bowling [2011] NSWSC 1168 Category: Consequential orders Parties: Judith Dianne Bowling (Plaintiff) Darryl Richard Bowling (Defendant) Representation: Counsel: R D Wilson (Defendant) Solicitors: Friend & Co Lawyers (Plaintiff) Paltos Briggs Family Lawyers (Defendant) File Number(s): SC 2010/267244

ex tempore Judgment 1The plaintiff, who now goes by the name Ms Judith Anne Odlum, and the defendant, Mr Darryl Richard Bowling, lived together in a de facto relationship and at the termination of that relationship the plaintiff sought an adjustment of the parties' property interests pursuant to s 20 of the Property (Relationships) Act 1984. His Honour Macready AsJ handed down reasons for judgment on 7 December 2011 in Bowling v Bowling [2011] NSWSC 1168 and at [145] are set out the orders. 2The orders included an order that the property in which the parties had lived (and in which the plaintiff was living at the time of the judgment) at McMasters Beach ("the Property") be sold with an apportionment of the net proceeds to be 65 per cent to the plaintiff and 35 per cent to the defendant and ancillary orders were made to ensure that the sale was effected. A reserve price was fixed in the absence of agreement between the parties at $1.25 M. At [142] of the judgment His Honour noted: "The plaintiff wishes to purchase Darryl's share of the property and I will, in my orders, allow her 21 days in which to come to an agreement to purchase the defendant's share in the McMasters Beach property and discharge the liability to Norma Odlum. Failing that, that the property will be sold." 3The reference to Norma Odlum is a reference to the mother of the plaintiff, who, it is clear from the orders, had in place a caveat over the property. 4By the orders, his Honour said that within 21 days of the date of the judgment the parties were to do all acts and things and sign all necessary documents to list the property for sale by private treaty. For that purpose they were to appoint Raine and Horne, Avoca as the real estate agent and Ms Catherine Davies as a conveyancer to list the property. They were to execute all documents requested by the real estate agent and the conveyancer for the sale and secure all documents necessary to complete the sale. They were to cooperate with the real estate agent and very specific items were set out as to what they needed to do in regard to that co-operation. This included doing all things necessary for preparing the property for sale, such as cleaning the internal and external areas of the home, engaging a gardener to tidy the gardens, reconnecting electrical power to the shed and carrying out any necessary repairs and maintenance. They were also to maintain the property, including the gardens and surrounding landscape, in a clean and tidy condition. His Honour reserved liberty for the parties to apply for orders for the auction of the property if the property was not sold within three months. There were specific orders about what was to be paid out of the settlement proceeds and other orders about specific items of personal property. 5The property has not been sold notwithstanding the passage of more than seven months since the date of his Honour's orders and the plaintiff continues to reside in the property. The defendant, by his motion filed on 5 June 2012, seeks orders that trustees be appointed for sale pursuant to s 138(g) of the Property (Relationships) Act and s 70 of the Trustee Act 1925, including an order that the plaintiff vacate the premises within 21 days. Affidavits of willingness to act as trustees has been filed by the proposed trustees, Mr Timothy Paul Heesh and Mr Stephen Wesley Hathway, and there has also been filed an affidavit as to suitability by Mr Terry Van Der Velde. The plaintiff resists these steps on the basis that: (1)they will involve the parties in additional expenses; (2)she will have to move out of the property before she has obtained the funds from the settlement which will enable her to buy another property; and (3)the matters inhibiting the sale have now all been attended to and the sale can go forward. She claims she has done nothing to impede the sale process. 6The evidence relied on by the defendant was his own affidavit of 4 June 2012, on which he was not cross-examined, and an affidavit of Mr Garth Hunter, the sales manager and a director of the real estate agent appointed by the Court. Mr Hunter's affidavit of 14 June 2012 was read and he was cross-examined by telephone link on 10 August 2012. An affidavit of Mr John Laing, gardener, was served by the defendant but not read, Mr Laing not being available for cross-examination. The plaintiff relied on her affidavit of 22 June 2012, on which she was cross-examined. Mr R D Wilson of counsel appears for the defendant and Mr S Friend, solicitor, appears for the plaintiff. 7The fact is that the property has not even been listed for sale in the seven months since the Court made its orders, not simply that it has not yet been sold. There are a number of reasons for the delay and there is a dispute about whether or not any of those matters are to be laid at the feet of the plaintiff. On the evidence, and particularly given the absence of any cross-examination of Mr Bowling, I do not think it can be said that any of the delay is his fault, although it was contended in one respect that he had delayed matters by insisting, it was asserted by Mr Friend, that the repairs to the pool be conducted before the property was put to sale. I do not think that that is the evidence and it certainly was not put to him in cross-examination that he has been responsible for delay. He did at some stage say he would like the repairs to be done but I think it is clear that he has been trying to have the pool cleaned over an extensive period. It is only recently that there is now work being done on the pool which will enable it to be cleaned. 8As I have noted, the plaintiff was given an opportunity to buy the defendant out within 21 days of the judgment. She sought, by means of an appendix which she added in late December 2011 to the real estate agent's sales agreement, to obtain for herself the right to purchase the property for sale and buy it herself if a buyer emerged. The agent was not happy with this proposed appendix and the defendant, when shown a copy of it, made it clear he took the same view as the agent and would not agree to it. The agent has not apparently appreciated that, given that the plaintiff has not signed the sales agreement with the appendix removed, its validity is in doubt if she does not sign it and recognise that the appendix has been removed. In any event, that sales agreement - and the agent said nothing about this - expired in March 2012, it having a life of 12 weeks only. The plaintiff was, in my view, very evasive in her evidence about the appendix. It is one of the reasons I do not have any confidence in her veracity. There are some other matters too which appear from the correspondence and the material which is that, although the agent organised a gardener, Mr Laing, to come and do the work at the property in accordance with (a) his Honour's orders and (b) his understanding of what had been agreed by both the plaintiff and the defendant, the plaintiff told him that she did not wish the gardener to attend. It seems that at least the major reason for that was that she did not regard that it would be necessary for that gardener to be employed when she could do the work or most of the work herself. I am satisfied that Mr Laing and his team would have been able to complete the work more promptly than the plaintiff. There is a dispute about whether in fact the plaintiff was given a copy of the quote from Mr Laing. Mr Hunter is adamant that he did provide a copy of it to her but he could not produce that quotation or find it when being cross-examined on the phone. He insisted that, in his discussion with the plaintiff, she had told him that Mr Laing's quote was too expensive. 9Overall, I thought that Mr Hunter came across as a credible witness and I would be inclined to accept his evidence in preference to the plaintiff's wherever it is in conflict, save that, given his inability to now find the email, I am not persuaded that a copy of the quotation was in fact provided to the plaintiff. I am satisfied, however, that he did inform her of how much Mr Laing's gardening work would cost and that she indicated that she was not happy with that money being expended and that she told Mr Laing that he could not proceed with work at the Property. I am also satisfied that the plaintiff has resisted the cleaning of the pool until only recently. The agent had indicated that it was absolutely essential that the pool be cleaned before prospective buyers were shown the property. I do not accept the plaintiff's assertion that Mr Hunter is in any way responsible for the delay - indeed, he appears to me to have done more than could reasonably be expected of him. The evidence concerning the pool is confusing because it seems that the plaintiff wanted the pool rectified before cleaning was done and the defendant wanted the pool cleaned so that it could be marketed in a clean and attractive condition. 10Whether or not the plaintiff is responsible for delay, there are some significant problems in the path of the smooth sale process by private treaty under instructions by the plaintiff and defendant. Firstly, the plaintiff wishes to buy the property and she firmly believes that the real estate market value of the property is $1 M or less, not the $1.25 M agreed to by the valuers in the proceedings before his Honour Macready AsJ and relied on by his Honour to determine the figure in the orders that I have previously referred to. Secondly, the property market is on the Central Coast and it is a falling market, according to Mr Hunter's evidence. It follows from the first and second point that it is very much in the plaintiff's interests to delay sale and even more so since she resides in the property at the moment. 11The relationship between the plaintiff and the defendant, has, it is clear, totally disintegrated. Indeed, there was an apprehended violence order against the plaintiff in respect of the defendant, there is evidence that the plaintiff sought an apprehended violence order against the defendant, which application was dismissed, and there is evidence that she has prevented the defendant from attending at the property: see pars 29, 41, 45 and 49 of the plaintiff's affidavit. There have been difficulties, outlined in the defendant's affidavit, of the defendant obtaining personal property that he was by the Court's order entitled to receive and there are some items of property identified which he still has not received and in respect of which the plaintiff has offered no evidence or explanation for her failure to hand over. 12There are a number of matters which will need attention as part of the sales campaign, most of which were identified by Mr Hunter; namely, determination of the asking price, agreement on the market process, including photographs and advertising material, access to the property, instructions and feedback, instructions in respect of offers received and, in the absence of a buyer by private treaty, how the property is to be auctioned. The wording for the sales contract in relation to the work to be carried out on the pool by the insurer or insurer's nominee has not yet been finally determined either. There will need to be attention given also to the removal of the caveat placed by the plaintiff's mother. In addition, there will need to be a new sales agreement signed for the two reasons I have previously indicated. 13I formed a negative view about the plaintiff's credibility. She on a number of occasions failed to answer questions asked of her and she was combative. Her evidence about the agent's input to the wording of the appendix was not credible. She gave inconsistent answers, saying for example that she did not tell the gardener that she did not want him doing work on the Property but then saying that she did not recall and that she quite probably did say that. She denied that she had known for four years that the defendant wanted to sell the property but shortly after agreed she did, asserting that she sometimes lacks understanding. She said in answer to my question that she had no confidence in Mr Hunter but then modified her answer to quite different effect. 14In my view the defendant has a legitimate concern that the plaintiff does not genuinely wish to see the property sold for the best price and that there can be no confidence that she will do all that is necessary to achieve the best price, in part because it is in the plaintiff's natural commercial interest to see the sale delayed in a falling market so that she can effectively acquire the defendant's interest at a price for less than the value the Court accepted in December last year. For so long as the plaintiff retains an interest in buying the property at a lower price, her interests and the defendant's interests are in a course of a collision and this is a difficulty which even of its own might be sufficient to point to the need for appointment of trustees. Indeed, in her affidavit, the plaintiff says, and it is repeated in the orders that she seeks, that there should be an auction of the property. This is something to which at the moment the defendant is not agreeable, given his point that to date there has been no marketing campaign based on a sale by private treaty. When one couples those concerns with the fact that we know the property has not yet been put on the market seven months after the Court's orders for sale of the Property and that there is a problem in relation to delay which is very much to the detriment of the defendant, I think that the appropriate course is for trustees to be appointed. 15I have raised with both Mr Wilson and Mr Friend whether the appropriate order should be framed in a way that grants to the trustees the power to make decisions about all matters to do with the sale of the property, including whether or not the plaintiff should be required to vacate the premises, the benefits and disadvantages of which being a matter on which Mr Hunter gave evidence. Subject to an agreed floor of $1 M, I think that there should be liberty granted to the trustees to determine what price the property should be marketed at, either by private treaty or by auction. In other words, I think in the circumstances where there has been an irretrievable breakdown in the relationship between the co-owners, the only safe and appropriate course is to appoint people who can bring an independent mind (unimpaired by the fog of emotion and bitterness) to decisions about how the property could best be marketed and sold. That is what I propose to do. 16The parties should bring in orders that reflect this outcome and also to take into account the adjustment to orders made in December 2011 in respect of the $23,016 payment by the defendant, which should be in the form of an adjustment out of his net share of the proceeds.