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Wife Fails in Claim to keep Matrimonial Home at great Costs

28/01/2020

In 2016 Watson & Watson received instructions to act on behalf of the husband in relation to an Application made by the wife for property division.

In essence the wife occupied the Matrimonial Home following separation.  The wife was not in employment.  The former Matrimonial Home was of considerable value however it was subject to a substantial mortgage. 

The husband was in good employment throughout the marriage and had a reasonable income.  Following separation the husband lived in rental accommodation and continued to pay the mortgage on the Matrimonial Home.

The wife’s claim in an application to the Court (amongst other things) was that the Matrimonial Home be transferred to the wife either subject to the existing mortgage or otherwise.

There were other assets however they were not sufficient if sold to repay the mortgage debt secured by the Matrimonial Home.

It was clear from the outset, that there was no basis that either of the parties could hold onto the Matrimonial Home and pay out the other party’s interest in the Matrimonial Home. This was clear from the financial position of the parties.  The wife’s solicitors made numerous Applications in the case to the Court for example, seeking Orders that the husband advance to the wife’s solicitors significant sums to enable the wife’s solicitors to receive payment for their legal services.

The matter could not settle for numerous reasons however there was no retreat by the wife that she requested the Matrimonial Home to be transferred to her. The case may have been different if the wife produced evidence that there would be another party (or benefactor), who would fund the purchase of the property by way of either a loan or obtaining a part interest in the property.

Clearly there would be no basis for a commercial loan to be advanced to the wife or in this case for the husband to take over the Matrimonial Home subject to the mortgage.  This was simply because there was insufficient income by either the husband or the wife to take over the Matrimonial Home subject to the existing mortgage and to enable either of them to pay out the other party what was going to be, a significant sum for the other party’s equity in the property.

The matter unfortunately could not settle and the matter proceeded to hearing.  At the hearing the wife offered no evidence to the Family Court as to her capacity to retain the Matrimonial Home, in other words, there was no evidence before the Court as to where the money would come from to discharge the mortgage and pay our the husband’s equity (whatever it would be depending on the decision of the Court).

In our view it was clear from the beginning that without such evidence the wife’s application was doomed.

The wife made no realistic offer to resolve the matter.  As expected each party was (as is usual) obliged to pay their own legal fees. 

The husband had paid significant amounts to the solicitors for the wife for the wife’s legal fees.  As is normally the case adjustments are made at the end of the hearing to achieve the outcome on the principle that each party will pay their own costs in this case, namely the wife from her share of the assets from the spilt of the assets as determined appropriate by the Court.  Similarly the husband would have to pay his costs from his split of the assets.

In Family Court matters as part of the hearing process, each party must advise the Court by way of a Costs Notice of the amount of costs that were incurred by that party in the proceedings.  We, as all solicitors involved in Family Court matters, provide such Cost Notice to the Court and we receive a copy of the Cost Notice provided by the other party to the Court.  In this particular case, there was a very significant difference and the costs incurred by our client, the husband was significantly lower than those incurred by the wife.

The Family Court heard and determined the case and determined the wife had a short period in which she could attempt to retain the Matrimonial Home which would require external funding and in default, the Matrimonial Home be sold and the proceeds be divided in the manner determined by the Court.  There is no suggestion at the hearing or otherwise that the wife could fund the liability to enable her to return to the Matrimonial Home.

In our view this was the clear outcome that was to occur.  Sadly the lack of appreciation by the wife of the likely outcome resulted in very significant legal fees being incurred and paid by the parties which could have otherwise been better spent for example, schooling the children at the highest level available.  The unrealistic view can be taken by either party.

At Watson & Watson we provide advice on financial/property settlement matters with a view to achieving the most cost effective and equitable resolution for you which often times, presents with difficult issues to overcome.  Our approach is methodical and we take into consideration all aspects of financial/property settlement, possible outcomes and the ramifications for you. Please contact Richard Watson Senior Family Law Solicitor or his Personal Assistant Shereen Da Gloria to discuss your matter.  When it comes to financial/property settlement, we encourage you to seek advice sooner rather than later. 

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.

 

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