A, WM v S, J (No 2)

[2014] SADC 81

DISTRICT COURT OF SOUTH AUSTRALIA

(Civil)

A, WM v S, J (No 2)

[2014] SADC 81

Judgment of His Honour Judge Tilmouth

16 May 2014

FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS

Following a judgment in favour of the Plaintiff for the payment of a lump sum, by way of property adjustment orders, discussion as to the power and appropriateness of ordering payment by installment, the application of interest thereon and the appropriate orders as to costs.

Domestic Partners Property Act 1996 (SA) s 9(1), 10; Property Law Act 1958 (Vic) s 291(1)(d), (e); De Facto Relationships Act 1984 (NSW) s 38(1)(b), (d), (f); De Facto Relationships Act 1991 (NT) s 37(d), (e), (f); Domestic Relationships Act 1994 (ACT) s 25(d), (e), (f); Family Law Act 1975 (Cth) s 90SS (1) (a), (b), & (d); Enforcement of Judgments Act 1991 (SA) s 5(3)(c); District Court Civil Rules 2006 (SA) s 261(3); District Court Act 1991 (SA) s 42, referred to.
A, W M v S, J [2014] SADC 41; D v McA (1986) 11 Fam LR 214; Dyer v Kaljo (1987) 11 Fam LR 785, (1992) 27 NSWLR 738; Roy v Sturgeon (1986) 11 NSWLR 454; Scott v Briggs (1991) 14 Fam LR 661; Street v Bell (1993) 114 FLR 167; M, DA v P, M (No 2) [2008] SADC 180; Latoudis v Casey (1990) 170 CLR 534, considered.

A, WM v S, J (No 2)
[2014] SADC 81

The issues

1. In a judgment delivered on 7 April this year, the court made certain findings of fact and proposed to enter judgment in favour of the plaintiff for the payment to him by the defendant of $20,000, by way of a property adjustment order under the Domestic Partners Property Act 1996 (SA).[1]

   [1]    A, WM v S, J [2014] SADC 41.

2. The court gave liberty to the parties to make further submissions as to whether it was open or appropriate to make orders for payment by instalments, or postponed to a future time, and on questions of costs.  This judgment deals with those remaining issues on the basis of written submissions subsequently filed by both parties.

   Payment by instalment?

3. The plaintiff seeks an order for the payment of the $20,000, with interest, from the date of issuing his Summons on 5 September 2012.  The defendant’s submission is that payment over time is preferable, otherwise:

   serious injustice and hardship … would follow from an eviction of the family from their home for the purpose of selling the weatherboard house to make a lump sum available to the plaintiff.

4. The power to make a property adjustment order is conferred by s 9(1) of the Domestic Partners Property Act. Section 10 thereof further confers the power to make orders for division of property as follows:

   10—Power to make orders for division of property

   (1)     On an application for the division of property after the end of a domestic partnership, the court may make such orders as it considers necessary to divide between the domestic partners the property of either or both partners in a way that is just and equitable.

   (2)     For example, the court may make orders for—

   (a)     the transfer of property from one domestic partner to the other; or

   (b)     the sale of property and the division of the net proceeds between the domestic partners in proportions decided by the court; or

   (c)     the payment by one domestic partner of a lump sum to the other.

   It can be seen that there is nothing express in the terms of s 10 relating to the capacity to order periodic payments in satisfaction of a property adjustment order.

5. The power to make orders for the payment of lump sums as a component of a property division order can be found in the De Facto Relationships Act 1984 (NSW) s 38(1)(d), the Property Law Act 1958 (Vic) s 291(1)(d), the De Facto Relationships Act 1991 (NT) s 37(d) the Domestic Relationships Act 1994 (ACT) s 25(d) and the Family Law Act 1975 (Cth) s 90SS (1)(a). It appears to have been the practice of some courts to order sums be made within a specified period of time, but these were cases in which the statutory power to do so was express: D v McA,[2] Dyer v Kaljo,[3] Roy v Sturgeon,[4] Scott v Briggs[5] and Street v Bell.[6]

   [2] (1986) 11 Fam LR 214.

   [3] (1987) 11 Fam LR 785 and on appeal (1992) 27 NSWLR 728.

   [4] (1986) 11 NSWLR 454.

   [5] (1991) 14 Fam LR 661.

   [6] (1993) 114 FLR 167.

6. Express jurisdiction is conferred for orders for the payment of money to be security by way of a charge over specified property in some jurisdictions.  However, similar powers are not conferred, at least expressly, under the Domestic Partners Property Act of this State: see De Facto Relationships Act 1984 (NSW) s 38(1)(f), Property Law Act 1958 (Vic) s 291(1)(e), De Facto Relationships Act 1991 (NT) s 37(f), Domestic Relationships Act 1994 (ACT) s 25(f) and the Family Law Act 1975 (Cth) s 90SS (1)(d). Likewise, although legislation within some other jurisdictions authorise the payment of periodic funds, such a power is not, once again, conferred expressly by the South Australia legislation: see De Facto Relationships Act 1984 (NSW) s 38(1)(b), De Facto Relationships Act 1991 (NT) s 37(e) and Domestic Relationships Act 1994 (ACT) s 25(e), and the Family Law Act s 90SS (1)(a) and (b).

7. Whilst the power to make a lump sum payment is expressed in rather limited terms in our legislation, and whilst the range of powers expressly spelt out in other jurisdictions are somewhat wider, there is no reason to think an order could not be made for payment by instalment, provided of course that such an order was a ‘just and equitable’ one in the circumstances.

8. It is evident from the findings made in the first judgment, and the papers submitted by the parties afterwards, that the three children of the relationship continue to reside with the defendant in the subject property.  Two are adults, who contribute small amounts by way of board, but do not otherwise appear to be in full-time remunerative employment.  The youngest, a girl, is aged 11.  She remains at school, supported by her mother.

9. The defendant works as a cleaner earning a gross annual income of $35,086 per annum.  She has around $600 per week available from which to meet all the outgoings and expenses of maintaining the household and to service the mortgage (of which some $11,800 remains).  She initially expressed the view that she could not raise the funds for a lump sum payment, and that the mortgagor, HomeStart, indicated they were not prepared to refinance.  She has since confirmed that it ‘would not now refuse to re-finance a mortgage to enable a property settlement’.

10. Whilst it remains open to order the judgment sum be satisfied by instalments, it is not appropriate to make such an order in this instance. The defendant retains a substantial equity in the home, speaking in relative terms, so it seems reasonable that she ought to be able to raise the funds using the property by way of security. In any case, payments of just $20.00 per fortnight would take far too long to satisfy the judgment, and very likely be consumed by interest over such a long period of time. Furthermore, the determination of such questions as payment by instalment (should they arise) fall for examination under s 5(3)(c) of the Enforcement of Judgments Act 1991 (SA), by which orders can be framed for the enforcement of a judgment sum ‘so as to ensure that it does not impose unreasonable obligations on the judgment debtor’.

    Interest

11. As mentioned earlier, the plaintiff calls for an order for interest at the rate of 8.5 per cent in his favour pursuant to s 261(3) of the District Court Civil Rules 2006 (SA). Section 42 of the District Court Act 1991 (SA) provides that subject to any direction to the contrary, interest runs in the case of any monetary sums, from the date of the judgment. The preferable course therefore is that amounts for interest should be awarded at the rate of 6.5 per cent (the current RBA cash rate being 2.5 per cent) as and from the day of judgment, for the reasons explained by Beazley DCJ in M, DA v P, M (No 2).[7]

    [7] [2008] SADC 180, [8]-[9], [13].

    Costs

12. The plaintiff seeks an order for costs on the District Court scale on a party/party basis.  As originally expressed, his Statement of Claim sought an order for the sale of the property and a division of the proceeds, half to each domestic partner.  When the matter came to trial, he pursued no such order and simply claimed a lump sum payment of $40,000.  His proof fell short in several respects identified in the original judgment.[8]  In effect he has succeeded in only half of his monetary claim.

    [8] At [46].

13. The definition of ‘court’ contained in s 3(c) of the Domestic Partners Property Act, provides that in applications relating to property valued at $100,000 or less, the appropriate court for institution of the action is the Magistrates Court.  There was an agreed valuation of the property at the time of trial of $125,000.  The court has found that the defendant holds a present equity of roughly $113,000 in the property.  In either event therefore, the applicant had no choice but to bring proceedings within the jurisdiction of the District Court.

14. Section 42 of the District Court Act (1991) (SA) confers a discretion in wide terms to make orders for costs.  Under DCR 6R 264(2), an equally wide discretion to make costs orders is conferred.  As a general rule costs are awarded as between party and party, to follow the event.  It may be accepted as a general principle that a successful party has an expectation of a favourable order for costs: Latoudis v Casey.[9]  The plaintiff’s position is strengthened by the fact that the defendant declined to make any offer of settlement and that she refused to negotiate.

    [9] (1990) 170 CLR 534, 557, 569.

15. As against that the plaintiff himself succeeded in obtaining a limited award.  He consciously elected not to adduce evidence in proof of some aspects of his claim, even though he was offered the opportunity to do so.  The other aspect of the matter is that he was well outside the limitation period before issuing his proceedings.  Even though he acted reasonably in withholding action in the interests of the children, nevertheless pursuant to DCR 6R 263(2)(b) the costs of an application to extend time are to be awarded against him.

16. In the combined circumstances it is appropriate to order the defendant pay 60 per cent of the plaintiff’s costs on a party/party basis on the District Court scale, to be agreed or taxed.  It is not appropriate to order that costs be paid forthwith, or to make an order to enforce the payment thereof, as this issue otherwise better falls for determination under the Enforcement of Judgments Act.  For the same reasons it is entirely inappropriate to order that the judgment be satisfied within 30 days, or that the subject property be sold so as to satisfy the judgment.

    Orders

17. For the above reasons there will be judgment in favour of the plaintiff in the lump sum of $20,000.  That sum is to bear simple interest at the rate of 6.5 per cent from 7 April 2014.  He is entitled to an order for 60 per cent of his party/party costs on the District Court scale to be agreed or taxed.