Clayton v Clayton [2015] QDC 203

DISTRICT COURT OF QUEENSLAND CITATION: Clayton v Clayton [2015] QDC 203 PARTIES: NICHOLAS DEAN CLAYTON (applicant) v GEMMA CLAYTON (respondent) FILE NO/S: 2756/15 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 5 August 2015 ex tempore DELIVERED AT: Brisbane HEARING DATE: 5 August 2015 JUDGE: Samios DCJ ORDER: 1. Adjourn application to Tuesday 25 August 2015 at 09:15am before Samios DCJ. 2. If necessary, His Honour gives leave to the applicant to join Linda Carol Clark as a second respondent and to amend the originating application accordingly. 3. Costs reserved. CATCHWORDS: FAMILY LAW – JURISDICTION – MAINTENANCE AND PROPERTY – where the applicant and the respondent owned a piece of real property together – where the applicant and the respondent divorced – where the applicant sought to have his name removed from the line of credit shared with the respondent – where the applicant applied under section 38 of the Property Law Act 1974 (Qld) to appoint a statutory trustee for the sale of the property – where the respondent, the respondent’s children and the respondent’s mother continued to reside at the property – where the respondent submitted that the matter should be dealt with in the Family Court as opposed to the District Court due to aspects of family law – whether the respondent’s mother should be joined as a second respondent to the application – whether the District Court has jurisdiction to hear the application – whether the application -- 1 of 12 -- 2 should be granted Legislation Family Law Act 1975 (Cth) Property Law Act 1974 (Qld) s 38 Cases Kerr v Short [2014] QSC 199 COUNSEL: Mr M Campbell for the applicant Ms G Clayton (self-represented) for the respondent SOLICITORS: Affinity Lawyers for the applicant The respondent was not represented by solicitors [1] HIS HONOUR: I have before me an application pursuant to section 38 of the Property Law Act 1974 for a trustee to be appointed for the sale of a property at Riverhills in the State of Queensland. Basically, the order that is sought is that the trustee sell the property, either by auction or private treaty. Provision is made in the proposed orders for either the applicant or the respondent to offer to purchase the property. The applicant and the respondent were previously married. That occurred in 2009, but they separated on or about October 2011 and divorced on 23 April 2013. They have two young children, one who is six years of age and one who is four years of age. [2] Obviously, because there is an application before me, they have not been able to agree on what to do about the property. The applicant’s affidavit shows – and this is not in dispute – the property is subject to a registered mortgage/line of credit with Westpac. Both the applicant and the respondent are liable as borrowers. There is no dispute the respondent resides in the property. Her mother also resides there from time to time. The applicant says the property is worth an estimated value of $460,000 with the -- 2 of 12 -- 3 Westpac line of credit being $219,999.80 with $2434.41 in an offset account. He says the parties have only ever paid interest on this amount. The applicant says that prior to the filing of this application, he has made repeated demands that the respondent consent to the sale of the property by public auction, which would discharge the mortgage, which the respondent has refused without reasonable excuse. He says the Westpac registered mortgage over the property is curtailing his financial freedom and is preventing him from obtaining a loan to purchase other properties. [3] However, historically, it seems the parties purchased a property in Holland Park for $420,000 before purchasing the subject property. They obtained their line of credit from Westpac in joint names for $220,000 for that Holland Park property. The applicant accepts that his former mother-in-law also contributed $200,000 to the purchase of the Holland Park property on the condition that the money be repaid upon the sale of the Holland Park property and she would have a right to reside at the Holland Park property. He says she did reside at the Holland Park property on a regular basis without paying any rent or electricity or other outgoings. [4] He says in or about 2010, the respondent and he then sold the Holland Park property and purchased the Riverhills property for the sum of $430,000. He says upon settlement of the property, they paid the respondent’s mother $13,000. He says the mother continued to reside in the Riverhills property at least four days a week without paying or contributing towards the outgoings for the property. He says during the relationship, the respondent and he primarily were both studying. He says at the time of separation, they cleared their mutual credit card debts and they only had nominal superannuation and primarily, the only real property of any value is the Riverhills -- 3 of 12 -- 4 property, which they owed Westpac $215,000. He says at the time of separation, they had nominal assets, superannuation and liabilities aside from the Riverhills property situation. [5] He says neither he nor the respondent had the financial resources to see a lawyer and they were not eligible for legal aid. At the time, he attempted to negotiate with the respondent to arrange the sale of the property or transfer the property and mortgage into the respondent’s name. He says since the separation, the respondent has resided at the property and paid the interest on the Westpac line of credit. He says she, he believes, is receiving a benefit from renting the property to tenants. Although he is employed as a cook, he is engaged to be married, the Westpac line of credit is hindering his ability to start a life with his fiancée and further, to purchase other property. He does not believe the respondent has the financial capacity to purchase the Riverhills property and the respondent has also advised that the respondent’s mother does not have the financial capacity unless she sells her other residential property. [6] He says he is informed that the respondent’s mother believes that she is entitled to the repayment and interest on the money that she contributed to the Holland Park property, which he disputes on the basis of inter alia of the benefit that she has received by residing at the property without further financial contributions. In any event, in his view, that dispute would not prevent the sale of the Riverhills property. He refers to the Westpac line of credit still being in the sum of about $219,000. He says prior to filing this application, he did make formal demand for sale of the -- 4 of 12 -- 5 property, which the respondent had refused. In support of his application, the applicant also relies on an affidavit of Malcolm Ian Chalmers, a solicitor. [7] Unfortunately, the affidavit of Mr Chalmers does not depose to Mr Chalmers having no conflict of interest with the applicant. That could be rectified by either a short adjournment to allow a further affidavit to be prepared or alternatively, the court could receive a fax from Mr Chalmers stating that if it is the fact. That would not be a reason for my adjourning this application or dismissing this application today. The respondent appears today unrepresented. She has filed an affidavit. She says that on 10th September 2014, she received an email from the applicant requesting she organise the removal of his name from the title of the Riverhills property as soon as possible. She says this was his first request since 2012. [8] She says her mother promptly organised finance approval and gained legal representation, signed and posted the applicant an unconditional contract for the purchase of the Riverhills property for $430,000 on 25th November 2014. She says another contract was emailed to the applicant by her mother’s lawyer in early December 2014. Then on 5th March 2015, she signed and returned the deed of agreement drafted by the applicant’s lawyer. She says the applicant refused to sign any and all of these documents. If this is correct, and it seems there is no good ground to say what she says is incorrect, then the applicant’s concern of having his name removed from the title so he can get on with his life would be met. It seems to me that on the basis of the respondent’s affidavit, there is an argument here that the applicant would not on the sale of this property receive anything tangible in terms of money. What might be tangible is the removal, of course, of his name. -- 5 of 12 -- 6 [9] If it is the case that the applicant is seeking some monetary result in his favour – that is, in actual dollars in his hands – then I would be concerned on the state of the evidence before me that is a credible result. In addition, the respondent’s affidavit shows that she is residing in the house and that this is the residence not only for herself but for two young children. The respondent has made submissions to me this morning. One of those submissions is that the application should be dismissed because the matter should be in the Family Court. I am concerned that the Family Court may have a jurisdiction, although it does seem that there can be jurisdiction in the District Court under section 38 of the Property Law Act, where the parties have not engaged the Family Court jurisdiction. [10] From what I have been able to find out from my researches so far, which have not been extensive, both the applicant and the respondent could have approached the Family Court within a year of the divorce becoming final. I am concerned to make comparisons of the applicant and the respondent to a de facto couple because they were not a de facto couple in the sense that they married and they divorced. I have been referred by Mr Campbell, who appears for the applicant today, to the decision of her Honour Justice Atkinson in Kerr v Short [2014] QSC 199. Her Honour there seems to have been dealing with a de facto couple. Her Honour noted, though, they had not engaged the Family Court jurisdiction. [11] Therefore, her Honour was satisfied she could proceed and make an order under section 38 of the Property Law Act (Qld), a State Act. I still retain a doubt about it. The other matter that concerns me is that the applicant’s former mother-in-law may have an interest in the proceeds of sale. While the applicant has frankly told me in his -- 6 of 12 -- 7 affidavit that his former mother-in-law contributed $200,000 to the purchase of the Holland Park property, it seems from other parts in his affidavit that he may dispute her entitlement in whole or in part. She at least should be made a party to this application. I would not proceed to make any order without hearing from her. She has not been made a party so far. [12] Just returning to the Family Law Act, it does concern me because it might be that the Family Court might determine that the applicant’s name on the property remain as a borrower because it provides his children with a roof over their head, so to speak. I have not made any final determination about any of these issues. I simply point out the arguments that I am confronted with this morning that I have detected from the applicant and the respondent. I, of course, encouraged the applicant and the respondent to talk about the matter and certainly I’m not suggesting they were resistant to it. On the contrary, some discussions did take place. If the matter has to go to the Family Court, so be it, if that is the decision I ultimately make. I need more time to look at this. Certainly, Kerr v Short is persuasive that, in a de facto relationship situation where the Family Law Act was not engaged by the parties, that jurisdiction remained in the court to make an order under section 38 of the Property Law Act, State – Queensland, State. [13] While both parties would have to seek leave from the Family Court, as more than a year has transpired since the divorce became final, I’m not sure that leave would necessarily be difficult to obtain. The parties, it seem, from what they’ve put before me today, do not have the means to engage lawyers and it might be more expensive to try and, first of all, seek leave, and then have a hearing about the matter. And -- 7 of 12 -- 8 particularly, when an additional consideration will be the applicant’s former mother- in-law’s interest. So while I recognise the argument that the applicant has an interest in having his name taken off the list so far as he is – off the property – so far as he is concerned, it may be that on reflection it’s not such a simple matter. [14] I should note, of course, that the respondent denies having received rental income. Her position would seem to be not a very favourable one financially. It may be that the discretion would be exercised against the applicant in this case on a full consideration of all issues. One of the factors that might influence a refusal of the applicant’s application is the fact that the sale of the property could destabilise the household, which includes the two small boys – as the respondent contends. Without wanting the parties to incur more cost, I have decided, without coming to any concluded view about anything that has been agitated here today, to adjourn the application to Tuesday the 25th of August 2015 at 9.15 am before me. [15] I do that because I have become seized of this application and I’m familiar with it now to this extent that I have indicated in these reasons. I also order, if necessary, that I give the applicant leave to join Linda Carol Clark as a second respondent and to amend the originating application accordingly, and I reserve the question of costs. They’re the orders I’m prepared to make this morning. If the parties resolve the matter before that return date then, of course, they can simply send a letter to my Associate or phone my Associate and something will be sorted out to delist the hearing. But I encourage you both to try and find a solution to it. But I don’t want anyone to think they’re locked out or locked in to anything. I’ve merely given reasons for where I found myself today, concerned about whether it should go to the Family -- 8 of 12 -- 9 Court, concerned whether I’d even make an order - or alternatively, I should add, that I might make the order, because if the only way to find a resolution to the problem is to order the property to be sold. [16] But if the parties can find some way to solve the problem, they should do so. You can file further material between now and the return date and – that is, further affidavits if you want to. Ms Clayton, you can file affidavits or your mother can file a further affidavit. Mr Campbell, your client can file further affidavits. I’ll just run with it as best as I can, if it comes to that. But if you can find a solution, I encourage you to do. Anything else either of you want to say? [17] MR CAMPBELL: I’m instructed to ask if your Associate could provide my side with a copy of Gemma’s affidavit. We haven’t - - - [18] HIS HONOUR: Yes. All right. I’ll have my Associate make a copy of that affidavit. [19] MR CAMPBELL: And we’ll wait outside the court. [20] HIS HONOUR: Yes. [21] MR CAMPBELL: Thank you, your Honour. [22] HIS HONOUR: Yes. All right. -- 9 of 12 -- 10 [23] RESPONDENT: I was just going to ask a question about applying to Family Court. Do I put - - - [24] HIS HONOUR: Well, that’s - - - [25] RESPONDENT: - - - all of that on hold now until - - - [26] HIS HONOUR: No. That’s a matter for you. [27] RESPONDENT: Okay. So I could still proceed - - - [28] HIS HONOUR: That’s up to you. [29] RESPONDENT: - - - with that? [30] HIS HONOUR: If you want to go and do that, that’s your business. [31] RESPONDENT: Okay. [32] HIS HONOUR: And you can file an affidavit, saying, look Judge, I’ve actually now filed an application - - - [33] RESPONDENT: When I finally get round to it. [34] HIS HONOUR: - - - in the Family Court. -- 10 of 12 -- 11 [35] RESPONDENT: Yep. [36] HIS HONOUR: And I have to decide about it then. I might have to say, well, look, even though you filed an application, I’ve looked up the law since then. And - - - [37] RESPONDENT: Yep. [38] HIS HONOUR: And I don’t think I’m bound by the Family Court. [39] RESPONDENT: Okay. [40] HIS HONOUR: I don’t know if I’ll say that. [41] RESPONDENT: Yep. That’s okay. [42] HIS HONOUR: All right. [43] RESPONDENT: Well, thank you. [44] HIS HONOUR: Yes. Anyway, look, take my advice, though. Stay out of – stay out of any court. Don’t voluntarily go into any court. [45] RESPONDENT: Yep. [46] HIS HONOUR: But if you have to, well, you have to. -- 11 of 12 -- 12 [47] RESPONDENT: Thank you. [48] HIS HONOUR: All right. Mr Campbell, thank you. [49] MR CAMPBELL: Thank you, your Honour. [50] HIS HONOUR: Thank you, Ms Clayton. [51] RESPONDENT: Thank you. -- 12 of 12 --