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Property – interim order for conditional sale where husband owned only 5% interest in error

In Lin & Ruan [2021] FamCAFC 90 (9 June 2021), the Full Court (Ainslie-Wallace, Watts & Austin JJ) allowed an appeal from a series of interim orders, the first requiring the husband to pay mortgage outgoings for a property he owned with the wife (suburb ‘B’), and subsequent interim orders that in the absence of his rectifying mortgage arrears, another property, (suburb ‘C’) be sold.

The husband owned a 5% interest in the suburb C property; while his mother owned a 95% share. The wife joined the husband’s mother as a party, as she argued that the husband’s mother owned her interest in the property upon trust for the husband.

The Full Court said (from [25]):

“… [S]ince the husband had failed to … comply with the order and the mortgage repayments on the Suburb B property were in arrears, his Honour turned to consider what ‘machinery provisions’ were necessary to ensure the mortgage repayments were met …

[26] … [W]ithout any further … explanation …, the primary judge concluded:

35 … [I]t would be appropriate to make … orders for the sale of the [Suburb C property] to use at least [the husband’s] 5% legal entitlement in that property, to pay the outstanding mortgage costs. ( … )

[28] … [T]he [husband’s mother] bore no separate obligation to financially support the wife … and so, if the orders for the conditional sale of the Suburb C property were only being made to ensure rectification of the husband’s personal default … then no more than his own 5% stake in the Suburb C property should have been the subject of such garnishment. …

[29] Even if the primary judge concluded that the appropriation of the appellant’s property to cover the husband’s individual liability was justified, it was obligatory to identify the source of power to make the orders and to satisfy himself that the pre-conditions for its exercise were fulfilled. That was not done. ( … )”

Craig Nicol and Keleigh Robinson are co-editors of The Family Law Book. Both are Accredited Specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).

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