The Importance of Commencing the Correct Proceedings

It is quite common for Orders involving the transfer or sale of property to include an Order pursuant to section 106A of the FLA permitting a party to approach a Registrar of the Court where the other party has refused to execute a necessary document, quite often the Transfer.  A common form of that Order would be:

RATHER THAN INSERT MY STANDARD ORDER I AM ASSUMING THAT YOU WOULD RATHER USE THAT FROM YOUR PRECEDENTS

The absence of such an Order, however, does not prevent a party from approaching the Court, pursuant to s106A.

In Gannon & Negus [2024] FedCFamC2F 911 the Applicant Wife took a different course.  In this matter the parties had entered into Consent Orders which, inter alia, involved a transfer of real property to the Wife.  The property in question was a rental property, owned solely by the Husband, and the Consent Orders were silent as to what would happen to the rental income between the date of those Orders and the transfer to the Wife being effected.  Those Orders did not contain a s106A Order.

There was some back and forth between conveyancers organising the settlement but ultimately, and interestingly, it was the Wife who was refusing to settle without a provision for her to receive the rental incomes from the date of the Consent Orders to the date of the transfer.  

The Wife then filed a Contravention Application, some five months after the date of the Consent Orders, alleging that the Husband had contravened those Orders in that he was not facilitating the payment of the rental monies to her.  This was an interesting approach given that there was no provision in the Orders for that to occur.  Indeed, at a Case Management Conference the Court opined that the more appropriate course would have been either an Enforcement Application or invoking s106A.  The Wife chose to bat on with her Contravention Application and that application was dismissed after a hearing, where both parties were legally represented, the Wife having also retained Counsel, with Judgment being delivered 11 months after the original Consent Orders.  One wonders whether the rental income would have come anywhere close to covering those legal costs.

The Takeaway

Always ensure that you draft cogent Orders but, just as importantly, if you run into difficulty with those Orders then be sure to commence the correct proceedings.