·   ·  664 posts
  •  ·  3859 friends

APPLICANT-HUSBAND SEEKS TO VARY ORDERS TO GIVE HIM AN EXTENSION OF TIME TO EXERCISE HIS OPTION TO PURCHASE THE FORMER MATRIMONIAL HOUSE

Delaney & Delaney & Anor [2020] FCCA 2960 (4 November 2020)

This is an application filed by the husband to vary the orders made by consent so that he could have an extension of time to exercise the option to purchase the matrimonial home. The wife strongly objects the husband’s application.

Facts:

The applicant husband seeks to vary orders made by consent on  May 2019 (“the May orders”).  The effective outcome that he seeks is that he be given an extension of time in which to exercise an option to purchase the former matrimonial home at a price that was denoted in the May orders.

The respondent wife opposes the extension of time.

It is clear that paragraph [9] of the May Orders required the wife to pay the husband $332,628 by 26 April 2020.  That was the sum certain that the parties agreed on as the basis of the bargain that the correspondence between them clearly shows was entered into prior to the May orders being made.  It is clear that the wife did not comply with that order.

Pursuant to order (11), interest was to accrue on the payment and the husband had an option to pay the purchase price of $1.6 million on various terms.  It was an express term that the option be exercised within 21 days of the due date and that within 45 days of the due date he pay the wife $511,557 with minor adjustments for any increase in the mortgage and rates and taxes. By suborder (11)(c) it was envisaged that if the option was not exercised within 22 days the property be sold, the husband receive the payment of $332.628 plus interest and 40% of any increase in the net proceeds of sale of over $1,630,000 with the balance to the wife.

Counsel of the applicant observed that the wife was not contributing to the mortgage, which the husband was paying. There would be difficulties for him in paying stamp duty in the event of purchase and counsel pointed to the fact, correctly of course, that there would be no selling costs if the property was transferred to the husband. Counsel noted that the wife admits that the value of the property has declined from $1.6 million.

Issue: Should the court vary the order?

Law:

  • Family Law Act 1975 s 79A

Analysis:

The net outcome of the application that the husband makes would be to extend his time to exercise his option until September 2020 and he would then have 45 days thereafter in which to pay the relevant amount. Should he fail to do so however the position would then revert to the default sale option in order (11) pursuant to which the husband would have obtained another six month’s worth of default interest. That would be in the circumstances a substantive and not insignificant benefit to him given the rate of interest prescribed by the Family Law Rules.

Having said this, it appears to be common cause that if the property is sold it is likely to achieve less than $1,600,000. Additionally there will be selling costs. These may not be entirely unsubstantial. The net result will be that the wife gets almost certainly substantially less than were she to agree to allow the husband to exercise the option.

When one looks at the inevitable potential outcome of the orders the husband seeks it is apparent that they are alterations to the substantive position of the parties.  Accordingly it is not appropriate to grant the husband the relief he seeks, and the orders should be complied with.

Conclusion: Court orders that husband’s application be dismissed.

Comments (0)
Login or Join to comment.

FLAST

Close