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F E Smith
F E Smith, Advocate
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I have a question relating to consent orders, specifically

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I have a question relating to consent orders, specifically those arising out of a divorce.
JA: What steps have you taken? Have you filed any papers in family court?
Customer: No, this is a general question relating to an issue that may or may not arise. I just want to know what my position is.
JA: Family Court normally sits in a local County and Magistrates' Court. Do you know the location of the court? If not, what county do you live in?
Customer: Brighton, but this isn't relevant.
JA: Anything else you want the Lawyer to know before I connect you?
Customer: No
Customer: replied 19 days ago.
There is a consent order in place which states that I have to pay my ex-wife a sum of money "out the proceeds of a house sale" by 31 Dec 2020 (in other words, it links the payment to the sale) and lays down all the requirements in regard to how I conduct the sale such as getting 3 estate agent valuations, taking the average, putting it on the market, paying her within 15 days of completion, etc. I have complied with everything to date. The consent order was compiled on the basis that the house was worth $500,000 (it is in Florida) but this was not specifically covered by the consent order itself. However, due to Covid, I cannot achieve anything like that figure.There is also a clause in the consent order which states that should the payment not be made by 31 Dec 2020 (which it won't because there will be no sale by then, hence no proceeds) the Respondent (my wife) will pay me interest at the rate of 8% per annum. I call this the "compensation clause" because it compensates me should I not be able to sell the house (having complied with everything) for the price advised by the estate agents until the market picks up. I was aware of this at the time of signing the order but suspected that it was, in fact, an error on the part of her solicitor as they had simply altered up an earlier order in which I was the respondent. They just forget to change it and I also suspect that her solicitor and she herself have not realised the error.From June 2020 onwards, despite the presence of the compenation clause, I have tried to negotiate a lower settlement figure so that I can sell the house quicker (at a lower price) and finish this whole ordeal quicker since the consent order seems to allow this to go on and on. She absolutely refused to negotiate.She is now threatening to "enforce the order" but 1. I can't see that there is anything to enforce since I have complied with everything and the order facilitates a late payment after the 31 Dec 2020 and more importantly, 2. Surely it cannot be enforced? There is a potential future 3. which is, if anyone is going to enforce the order it'll be me if she doesn't agree to paying the interest to compensate me (although all that would happen would be that I would sell the house and deduct the interest).

Welcome to Just Answer.

I will be happy to assist with your question today. I need some time to consider this and compose a response. There is NO need to wait online because you will get an email when I respond. Sometimes it will be minutes, sometimes longer.

I apologise for any unavoidable delay, but rest assured I have not forgotten your question.

to clarify -

the property in question is in Florida - how long has it been on market?

and your ex will not negoiate to lower price for sale - is this correct?

and why has she been ordered to pay you 8% interest - interest on what?

Customer: replied 19 days ago.
The house is in Florida but is this relevant? Surely, this is a requirement for me to pay my ex-wife a sum of money by a certain date out of the proceeds of a sale of something, in this case a house.It has been on the market since May which is in line with the consent order.Correct, she will not negotiate a lower amount.The consent order state that should I not pay the amount (it is £55k btw) by 31 Dec 2020, then the Respondent (her) will pay 8% per annum to me based on what I owe her, the £55k. As I say, I don't think she or her solicitor meant this at all but just got "Respondent" and "Applicant" round the wrong way. But this is what it says and I signed it as she did.

Thank you. It’s not a case of whether she can make an application to enforce it, it’s a case of whether the court would uphold that.

If she enforces it, then you need to defend the application on the basis that the market has changed dramatically since the time of the order being drafted and that was totally unforeseeable and therefore, you are asking the court to amend the order.

You need to put forward some evidence as to what the amendment needs to be and why.

A person cannot get blood out of a stone and if the property has been on the market in accordance with the order and there has been no sale, then you can only deduce that the price is too high in the current market.

Tell her to go ahead and make the application to enforce it and you will defend it on the basis of everything I have mentioned and particularly in view of the current pandemic market (which surely she is aware of!!) You will not only ask the court to vary the order you will ALSO ask the court to award costs against her on the grounds of her unreasonable behaviour in the current market.

I am glad to help.

Hopefully, I have answered your query in a way that is simple and easy to understand.

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Thank you.

Best wishes.

FES

Customer: replied 19 days ago.
Thank you but I fear, based on my layman's level of knowledge, that we have gone off on a bit of a tangent here.I don't wish to vary the order. In fact, I would like to stay exactly as it is. The order states that I must pay her £55k by 31 Dec 2020 "out of the proceeds of the sale", thereby linking the payment to her to me selling the house. If I don't sell the house even though I have abided by all the guidelines she has set, then there will be no proceeds and no payment to her.But the date is still there, the 31 Dec 2020. But, the order has a facility for what happens if it DOESN'T get paid by then, that is that SHE pays ME interest thereby compensating me for not being able sell the house for the price that was determined by following their guidelines.So, surely it is all good for me? I don't understand why I would have to prove the effects of covid on the housing market because the order already deals with the eventuality that I can't pay her by the 31 Dec 2020 having abided by all the other requirements of the order. Surely the order is already self enforcing. What is there to enforce?

I appreciate what’s in the order. You have to pay GBP55,000 by 31 December out of the proceeds.

But you haven’t sold the house.

That’s what she’s trying to enforce but the courts cannot enforce an impossibility.

She seems to be wanting to vary the order to make you pay the money anyway regardless of the sale of the house because she will not reduce the sale price.

She is asking the court to order an impossibility and it simply cannot and will not do that.

Customer: replied 18 days ago.
Ok, thank you. So, just to finish this (sorry for the delay but I live in Dubai with a 4 hour time difference), would the following be a good ploy?1. Firstly, do nothing.2. Wait until she files for enforcement (although I don't know what she can enforce so maybe she won't)3. Defend it on the basis that;
- The consent order is clear that my obligation to pay her on 31.12.20 is contingent on me selling the house.
- I complied with everything that was asked of me to determine the price for which the house was marketed.
- I haven't been able to sell it at that price (I can mention covid in mitigation, etc, but the overriding fact is
that I haven't sold it for whatever reason).
- Therefore, there is no sale and no proceeds.
- Therefore I can't pay her on 31.12.20
- Furthermore, the order has a facility to deal with a situation where I cannot make the payment if I can't sell
the house based on the guidelines set out in the order; a compensation mechanism whereby she pays me
interest!
- It appears that she is asking the court to order the impossible.What do you think?Regards,John

No right or wrong way of dealing with this. My personal view is that I would wait for her to take the initiative and then defend it and ask for the order to be varied to take into account the pandemic problems.

As you say, she is asking you and the court for the impossible unless she is expecting you to pull 55 grand out of midair!

Customer: replied 18 days ago.
Thank you. ***** don't understand why I would want to vary the order. What part of it would be varied? It seems to be already dealing with the situation that will arise on 31 Dec 20 which is essentially just me not being able to pay her on that date. I could go for 10 years and not sell it and she would just then owe me a ton of interest to the point I would owe her nothing. In fact, after 11 1/2 years, she would begin to owe me money!
Customer: replied 18 days ago.
Don't worry, I won't keep this going after your next response. It's just that the way I see it is that I need do nothing and then, if and when she DOES apply to enforce (how and what she would be enforcing, I don't know), I just defend it as laid out in my previous message.

You have an order which is impossible and therefore, you need to vary it to a possibility even if it means extending the date or whatever.

It could indeed go in for 10 years and not be sold in which case the price needs to be reduced and I think the price needs to be reduced now because it’s not selling.

Customer: replied 18 days ago.
But the order is not impossible. It works perfectly fine (for me). There are criteria set out to determine the market price which I have followed by the book. If it doesn't sell for that price and hence I am not able to pay her, there is a facility for dealing with that.
Maybe it would be better if I just send you the single page of the order that relates to all this.

I think it would please

Customer: replied 18 days ago.
Ok, it will have to be tomorrow now.

No problem. In your own time.

Customer: replied 18 days ago.
I have to do it tomorrow as my laptop is in the office but I am not sure how to do it on here. Could I email it to you?

The pages I see are different than yours.

You can attach it using either the paperclip or the up arrow. It varies depending on which page you are on.

Customer: replied 17 days ago.
Here it is. If there were no stipulations as to how I ascertain the price for which I market the house, then I would have a problem in that it would then be my responsibility to reduce the price so that it sold. However, there ARE stipulations which I have followed exactly and the house will not sell at that price. This is because the consent order pre-dates the covid-19 crisis. I therefore asked her to accept a lower figure than the 55k which she has refused to do. Yes, there is the compensation clause (9) but her accepting a lower figure now would bring the matter to a close much earlier as I could then sell the house at a lower price and not lose out.My view is that I defend any attempt at "enforcing" and then sit pretty. I don't want to have the order varied. It works very nicely for me I think.John

That document appears to be a draft, not a sealed order so I don’t know what the date it is.

Let me deal with clause 9, the interest first. I did think it was extremely unusual, when you mentioned it, that she was supposed to pay you interest when you are the one who had the property and had not sold it.

I can’t see why for one moment she would be paying you interest. If I were advising her, I would be asking the court to clarify that. It doesn’t fit in with 8F

I’m sorry, but your compensation argument doesn’t hold water.

In my opinion, the order is not so much defective as missing something.

It doesn’t mention the sale price. It doesn’t mention what happens if the property is not sold before the end of December.

Clearly says that the property is to be marketed although for some reason 8b, says that it’s going to be marketed after when it says the money is going to be paid! Usually the order is done in chronological order.

If the property in Florida has not sold, (there is no price is specified) it is too expensive. Simple commercial logic.

As it is, you can hang on as long as you like with the price as high as you like because the interest provision is defective and there is no penalty for not actually paying the money before the end of December because it saves this it has to be paid from the proceeds of the sale.

This is one where either you make an application to have the issue determined or what I would probably does is wait for her to make her application which would ordinarily be for the court to set the sale price and then what happens in default of sale and in this case to amend the interest clause.

You would then have to oppose whatever she’s proposing.

Customer: replied 17 days ago.
It was an earlier draft but it is exactly the same as the final one.Clause 8f describes what happens if I sell the property and then not pay her, a completely different situation. Clause 9 compensates me should I not sell the property despite complying with all of the criteria for ascertaining the sale price. I think though that I would have to keep the house on the market until it DID sell at the asking price for me to take advantage of this.There are clauses that surely prevent this being changed by her. If it was possible for her to get the order varied, I will just say that I signed it on the understanding that it was intended to compensate me.Granted, it doesn't say what happens if the property is not sold by the end of December but it DOES say what happens if I don't pay her by the end of December - she pays me interest. But, surely by virtue of 8a this is one in the same(?).8b says that the property should be marketed if I haven't had a provisional offer by April 2020 (at the date of the consent order I did have someone who was interested in buying it). 8a states that I have to pay her by 31 Dec 2020 so I am not sure what you mean when you say that I have market the house after the date I have to pay her.Yes, if the house hasn't sold at that price, I agree that the price is too high. You should know that I don't want to sell it! I get your point that there is no interest to pay if I don't pay by the end of Dec 2020 because it says that I have to pay her out of the proceeds of the sale. So, no sale, no proceeds. That means that I would sell the house in 2023 and still only owe here the £55k with no interest.The question is though....can I demand interest from her in accordance with clause 9. Maybe that will fall away as you have suggested but it would still mean that I wouldn't have to pay any interest(?).Your last 2 paras concern me. This would require the order to be varied. As I understood it, an order can only be varied by either mutual consent of the parties or by the court in extremely exceptional circumstances (Barder, etc). Lump sums cannot be altered but instalments can (which this isn't, so irrelevant). Also, clause 14 states that the parties can only apply to the court concerning the implementation and timing of the terms. Having clause 9 reversed and/or having a sale price determined by the court and hence ditching clauses 8a, 8b and 8c is hardly this.Regards,John

Why should you get compensated for not selling the property? That doesn’t make sense.

You can argue it but it doesn’t necessarily mean it’s going to succeed.

As the order as currently worded, you could put the property up for GBP100 million, it wouldn’t sell ever, you couldn’t pay her, and she has to pay you compensation for the property which you continue to own and pay you money by way of interest and money which he has not received. It just doesn’t make sense.

I agree what you are saying but altering the interest clause is not an alteration of the terms it’s correcting an error and that’s a different thing altogether.

You don’t have to take my word for it.

F E Smith and other Law Specialists are ready to help you
Customer: replied 17 days ago.
If I am unable to sell the property for the amount ascertained by following all of the stipulations in the consent order, things that had to happen prior to covid taking effect, then it means by extension that the asking price now is too high. Under the order, I am under no obligation to lower the price because the order told me how to ascertain it. So, if I decide to lower the price at some later date in order to sell the house, it will be my decision. But, I would then have suffered the whole loss, which would not be equitable or fair, hence the compensation.Alternatively, she could just agree a lower amount now and close the matter.I do agree though that this isn't as clear cut as I first thought and your hypothetical analysis shows that at the end of the day, this wouldn't work.It will cost her a lot to try to enforce this especially when I start muddying the waters and I think that the best way forward for me would be for me to sit and wait for her to take some action (probably the first thing that will happen is I will receive a letter from her solicitor) and at that point I start the mud slinging. Then, I can use this as a negotiation tool with regard to the price by which time I would bought another year of time in as well.I will say good bye now. Thank you for your input.John