Can I insist on the home being sold as part of a property settlement?
In the recent Family Court decision of BOLLEN & BOLLEN [2020] FamCA 605, one aspect of the matter that Justice Macmillan had to consider was whether it was just and equitable to order the sale of one of the real properties.
The matter involved a pool totalling around $34 million. Since separation, the Husband had been residing in the parties’ beach house and the Wife had been occupying the parties’ apartment in the Melbourne CBD. At trial the parties had agreed to a 50/50 split of the pool however there were issues about the mechanics of the Orders. The parties had jointly appointed a single expert valuer who undertook a valuation of the beach property. That valuer valued the property at $11 million but the Wife did not agree with that value, suggesting it was worth more. The Wife obtained a further valuation in which the property was valued at $13.5 million – some difference of $2.5 million. Ultimately the valuers were able to confer and came to an agreed common figure of $12.25 million but the Wife was still not convinced that the value was accurate and submitted that it could be worth significantly more, therefore the Husband could be receiving an unintended windfall and greater share of the pool.
The Wife’s counsel asserted that there had been so much uncertainty about the value of the property, that in order for the Court to actually ascertain the value of the property and ensure the “justice and equity of the orders” the property should be sold.
Her Honour was not persuaded by the Wife’s counsel’s submissions and was not satisfied that justice and equity required that the beach property be sold. Her Honour was satisfied that the value of the property was known (being the common figure of $12.25 million). At paragraph [57] Her Honour remarked “The court must weigh up the justice and equity of the orders proposed as between both the husband and the wife. There would be many cases in which a party has a belief that a property might sell for more than its value. That in my view does not mean that it must be sold to achieve a just and equitable outcome. Nor in my view does the fact that it is a valuable mean that a property should be sold.”
After considering the value of the assets each party was otherwise retaining, the Final Orders provided for the Husband to retain the property and make a payment to the Wife of $4.2 million within 60 days. If the Husband did not make the payment within the time frame, the Orders provided for the property to then be sold.
In the vast majority of cases, if a party seeks to retain a real property, the Court will allow them that opportunity and not immediately require the sale of the home. Sometimes the Court will require evidence about a party’s borrowing capacity. The Orders often provide for the party seeking to retain the property to refinance any associated liabilities and make a payment to the other party within a time frame (for example, within 60 or 90 days). If the party fails to make the payment, the property is then sold and the payment or balance of the payment due to the other party is paid from the proceeds of sale.
If you require any advice about your property settlement you should contact one of our family lawyers on 03 5445 1000 or you can make an online appointment.