ARLINGTON & BUZZOTTI

[2017] FamCA 228

FAMILY COURT OF AUSTRALIA

ARLINGTON & BUZZOTTI [2017] FamCA 228

FAMILY LAW – ENFORCEMENT – whether the Respondent should be required to pay interest
FAMILY LAW – COSTS – where the Applicant seeks costs in relation to an interim Application.

Family Law Act 1975 (Cth)
Family Law Rules (2004)

Collins & Olsthoorn (2005) FLC 93-216
D & D (Costs) (No 2) (2010) FLC 93-435
Kerr & Kerr (1983) FLC 91-329
Ramsey and Ramsey (1983) FLC 91-301
Ramsey and Ramsey (No.2) (1983) FLC 91-323

APPLICANT: Mr Arlington

RESPONDENT: Ms Buzzotti

FILE NUMBER: BRC 2958 of 2015

DATE DELIVERED: 13 April 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 27 February 2017 and 10 March 2017

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Di Muzio, Thynne & Macartney

SOLICITOR FOR THE RESPONDENT: Mr Richardson, Richardson McGhie

Orders

IT IS ORDERED THAT

1. Pursuant to Rule 20.07(a) of the Family Law Rules (2004), the total amount owing by Ms Buzzotti to Mr Arlington under the Order made on 10 April 2015 is declared to be $19,052.61.

2. Ms Buzzotti pay the amount of $19,052.61 to Mr Arlington in full by 4.00 pm on 30 July 2017.

3. Ms Buzzotti pay Mr Arlington’s costs of and incidental to the Application in a Case filed 24 December 2015 and that:

   (a)such costs to be paid on a party/party basis in an amount as agreed between the parties within twenty-one (21) days of the date of this Order or, failing agreement as to quantum, as assessed on a party/party basis; and

   (b)such costs, in the amount agreed or as assessed, be paid by Ms Buzzotti to Mr Arlington by 4.00 pm on 30 October 2017.

4. Mr Arlington has liberty to apply in relation to the enforcement of this Order on the giving of forty-eight (48) hours’ notice in writing to Ms Buzzotti.

AND IT IS DIRECTED THAT

1. Any further applications relating to the enforcement of this Order be listed before Justice Hogan for determination.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Arlington  & Buzzotti has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 2958 of 2015

Mr Arlington  

Applicant

And

Ms Buzzotti

Respondent

REASONS FOR JUDGMENT

1. On 24 December 2015, Mr Arlington filed an Application in a Case seeking orders to enforce the terms of an Order made by consent in April 2015. Reference to events between the parties is necessary to understand the delay between the filing of this Application and the appearances before me in late February/early March 2017.

Overview

1. Mr Arlington and Ms Buzzotti commenced cohabitation on 1 March 2008 and married in 2011. During their relationship, they acquired real property at B Street, Suburb C (the Suburb C property) and D Street, Suburb E (the Suburb E property) as tenants in common in equal shares.

2. Whilst they disagreed about the date on which they finally separated, it is clear that separation occurred no later than January 2014. They participated in a private mediation on 13 March 2015. They reached agreement in relation to the terms of orders which they agreed would be sought to be made by consent.

3. Consistent with their agreement, an Application for Consent Orders was filed on 8 April 2015.

4. This Application contained the information that, as at 1 April 2015, Ms Buzzotti’s property included funds at bank in the amount of $308,000.00 in total. She also owned real property at F Street, Suburb G (the Suburb G property), which was said to be valued at $184,000.00 and in respect of which there were borrowings from a commercial lender of $184,000.00. Mr Arlington had no interest of any kind in the Suburb G property and was not liable in respect of the loan which related to it.

5. On 10 April 2015, final orders were made by consent by way of alteration of the parties’ property interests pursuant to s 79 of the Family Law Act1975 (Cth). The terms of the April 2015 Order relevantly provide that, within 30 days of its date, Mr Arlington sign all documents, and do all things necessary, to transfer to Ms Buzzotti all of his right, title and interest in the Suburb C property and the Suburb E property and Ms Buzzotti arrange for the release of the existing mortgage secured over these properties, refinance the mortgage debt into her own name solely and indemnify Mr Arlington in respect of all debts associated with the property. In consideration for the transfers referred to, Ms Buzzotti agreed to pay Mr Arlington the sum of $235,000.00 contemporaneously with the same.

6. Save for these matters, each party was to retain entirely all property in that party’s possession and all superannuation interests to which each was entitled.

7. Section 117B of the Family Law Act1975 (Cth) provides that, subject to any order made by the Court pursuant to s 117B(2) of the Act, interest is payable at the rate prescribed by the applicable Rules[1] (on so much of the money ordered to be paid as is from time to time unpaid) from the later of the date on which the order is made or the date on which the order for the payment of money takes effect.

   [1] Rule 17.03 Family Law Rules (2004).

8. No order was made by the Court pursuant to s 117B(2) of the Act at the time the April 2015 Order was made.

9. The April 2015 consent Order is silent about what was to happen in the event that Ms Buzzotti was unable to refinance the mortgage/s secured over the Suburb C and Suburb E properties.

10. At the time the April 2015 consent Order was made, Ms Buzzotti lived in the Suburb E property and operated her business from that address. She continues to do so.

11. At the time the April 2015 consent Order was made, the Suburb C property was tenanted. It is not disputed that Ms Buzzotti received the entirety of any rental payments arising from the rental of this property until the settlement of its sale on 7 March 2017. Further, Mr Arlington’s evidence that the rental from the Suburb C property was in an amount greater than the mortgage repayments for the borrowings associated with that property was not the subject of challenge in Ms Buzzotti’s affidavit.

12. Despite the terms of the April 2015 Order, it is uncontentious that Ms Buzzotti did not pay the money owing by her to Mr Arlington within 30 days of the order being made.

What happened between April 2015 and the appearance on 27 February 2017?

1. It seems that the April 2015 Order was received by the parties on 15 April 2015. Given this, they appear to have agreed that a “settlement” event occur on 15 May 2015.

2. In furtherance of this, Mr Arlington’s solicitors forwarded signed transfer documents relating to the Suburb C and Suburb E properties to Ms Buzzotti’s solicitors under cover of letter dated 11 May 2015.

3. By correspondence dated 14 May 2015, Ms Buzzotti’s solicitors informed Mr Arlington’s solicitors that she was still awaiting the finalisation of her refinancing of the existing mortgages over the properties and had been told that settlement could not take place until 26 May 2015.

4. Mr Arlington agreed to extend the time for settlement to this date to enable Ms Buzzotti to finalise her refinancing of the mortgages secured over the two properties. Given this agreement, I am not persuaded that it is appropriate or just and equitable that any interest Ms Buzzotti is ultimately ordered to pay to Mr Arlington be calculated as payable for any period before this date (26 May 2015).

5. On 25 May 2015, Ms Buzzotti’s solicitors told Mr Arlington’s solicitors that Ms Buzzotti was unable to refinance the Suburb C and Suburb E properties. Ms Buzzotti’s evidence is that she was unable to secure the refinancing of the Suburb C and Suburb E properties because of the cross collateralisation of the mortgage over the Suburb G property.

6. By correspondence dated 4 June 2015, Mr Arlington’s solicitors outlined Mr Arlington’s proposal to resolve Ms Buzzotti’s non-compliance with the April 2015 Order: namely, that the parties transfer the Suburb C property to him (with him to be responsible for the existing mortgages secured over the Suburb C property) and the Suburb E property to her (with Ms Buzzotti to refinance the Suburb E property into her name alone). He also proposed that Ms Buzzotti be responsible for the preparation of amended draft orders and for meeting the cost of all transfer documents associated with this proposal.

7. Mr Arlington’s work meant that he was away from Australia for much of 2015. Communication with his solicitors was, on occasion, limited. Time passed.

8. There is nothing in the evidence before me to suggest that Ms Buzzotti accepted Mr Arlington’s June 2015 proposal. It is clear that no money was paid to Mr Arlington.

9. However, by correspondence dated 27 August 2015, Ms Buzzotti’s solicitor informed Mr Arlington’s solicitor that he had been instructed the parties had agreed to permit the Suburb C property to be leased for a further period of approximately six months, after which time it was to be placed on the market and sold; he also advised that it appeared Ms Buzzotti did not have the ability to obtain her release from the existing mortgage liability over that property as it appeared it was cross collateralised with the Suburb E property.

10. Mr Arlington does not agree that he and Ms Buzzotti in fact reached the agreement spoken of in the 27 August 2015 correspondence. His evidence is that Ms Buzzotti simply acted unilaterally in her management of the Suburb C property.

11. In any event, more time passed. Ms Buzzotti paid nothing to Mr Arlington.

12. By correspondence dated 5 November 2015, Mr Arlington’s solicitors advised Ms Buzzotti’s solicitors that, notwithstanding her continuing breach of the April 2015 Order, they held Mr Arlington’s instructions to agree to the sale of the Suburb C property (as proposed by Ms Buzzotti) on the basis that:

    a)the property be listed for sale within seven days of the date of the letter at such price as agreed or recommended by the selling agent (Mr Arlington suggested a listing price in the vicinity of $800,000.00); and

    b)within seven days, Ms Buzzotti pay him the sum of $100,000.00; and

    c)at settlement of the sale, Ms Buzzotti ensure he was released from all liability in respect of the mortgages over both the Suburb C and Suburb E properties; and

    d)at settlement of the sale, he receive the balance of the full amount previously agreed; and

    e)Ms Buzzotti’s solicitors prepare an Amended Application for Consent Orders and amended draft orders to reflect the amended agreement for the parties to sign; and

    f)this signed agreement be filed with the Court.

13. There is no evidence to suggest that Ms Buzzotti accepted Mr Arlington’s 5 November 2015 offer of settlement. In fact, there is no evidence to suggest that there was any response at all to the 5 November 2015 correspondence. Given this, I am not persuaded that the parties in fact agreed to depart from the terms of the April 2015 Order in the manner proposed by Mr Arlington and both remained obligated to comply with the same.

14. More time passed without Ms Buzzotti paying to Mr Arlington any of the money she had agreed (pursuant to the April 2015 Order) to pay.

15. On 24 December 2015, Mr Arlington filed the Application in a Case by which he sought an order that the Suburb C and Suburb E properties be transferred to him as trustee for the sale of both properties. He proposed that orders be made permitting him, in his capacity as trustee for sale, to sell both properties and, from the sale proceeds, pay the costs associated with the sale, those funds required to discharge all mortgages secured on the title to each property and, then, to pay himself the $235,000.00 owed to him by Ms Buzzotti, together with interest on such amount pursuant to s 117B(1) of the Act. The balance remaining after the payment out of these amounts was to be paid to Ms Buzzotti.

16. The terms of the orders Mr Arlington sought make it abundantly clear that he had not then waived his entitlement to interest on the $235,000.00 owing to him by Ms Buzzotti.

17. Mr Arlington’s Application in a Case was listed for hearing to 29 March 2016.

18. After Mr Arlington’s Application in a Case was served on Ms Buzzotti’s solicitors, Mr Arlington received a text message from Ms Buzzotti. In it, she told him to “take 50,000 or go to jail, you probably don’t remember, your always to drunk”.

19. There is nothing in the evidence before me to suggest that Mr Arlington accepted Ms Buzzotti’s offer to receive $50,000.00 instead of the $235,000.00 it had previously been agreed he would be paid in consideration for the transfer of the Suburb C and Suburb E properties to her and his release from the obligations imposed by the mortgage/s secured over those properties. I am not, therefore, persuaded that the parties agreed to vary the terms of the operative April 2015 Order in such a manner.

20. It seems that, on about 27 January 2016, Ms Buzzotti had instructed the relevant real estate agent that the Suburb C property was to be listed at “offers over $875,000.00” – about $75,000.00 more than the price suggested by Mr Arlington in the correspondence dated 5 November 2015.

21. On 12 February 2016, Mr Arlington’s solicitors wrote to Ms Buzzotti’s solicitors. Reference to that correspondence makes it clear that Mr Arlington and Ms Buzzotti were not agreed about the listing price/minimum selling price which had been nominated by Ms Buzzotti for the Suburb C property.  In it, Mr Arlington’s solicitor also noted that the Suburb C property had been valued at $565,000.00 in January 2015. She outlined Mr Arlington’s position that, in nominating a minimum selling price of $875,000.00, Ms Buzzotti was being unrealistic. It was asserted, in essence, that Ms Buzzotti was delaying meeting her obligation to pay Mr Arlington the sum she had agreed to pay him pursuant to the April 2015 consent Order.

22. Mr Arlington’s solicitor also conveyed his instructions that, whilst he accepted there may have been an increase in the value of the Suburb C property over the last 12 months, an increase of almost 55 per cent was not “believable”. Rather, he contended that the Suburb C property had a value of approximately $650,000.00 and he nominated an amount in the vicinity of that figure to be a more appropriate list price.

23. The 12 February 2016 correspondence also put Ms Buzzotti on notice that Mr Arlington would not be kept waiting unreasonably if she was not prepared to sell the Suburb C property at a considerably lower price than her minimum figure of $875,000.00 and advised that, if she genuinely believed it had increased in value by more than $300,000.00, he required that she provide proof of the current value.

24. Mr Arlington’s solicitor also sent “without prejudice save as to costs” correspondence to Ms Buzzotti’s solicitors. In this correspondence, she conveyed Mr Arlington’s instructions to resolve the proceedings he had recently commenced (the Application in a Case filed on 24 December 2015) on the basis that, within seven days of the date of the correspondence, the Suburb C property be listed for sale at an agreed price or as recommended by the selling agent. He suggested that the house had a value of $650,000.00. He also sought that Ms Buzzotti pay him $100,000.00 within seven days and, at settlement of the sale of the property, she pay him any outstanding funds and ensure that he was released from all liability in respect of the mortgages over that property.

25. On 15 February 2016, Mr Arlington was notified by a real estate agent that the Suburb C property was listed seeking “offers over $849,000.00”.

26. In correspondence dated 23 February 2016, Ms Buzzotti’s solicitor referred to a telephone conversation between the legal representatives on 17 February 2016. He outlined that Ms Buzzotti “is now exploring the possibility of paying to your client the full amount owed to him pursuant to the Court Order dated 10 April 2015”. It was said that such payment would be on the basis that she would not be charged any default interest and, therefore, Mr Arlington would be paid $235,000.00. The ‘offer’ (which was, in reality nothing more than an offer to comply with the agreed terms of the April 2015 consent Order and have Mr Arlington agree to waive his entitlement to interest under the Act) was said to be based on the fact that Mr Arlington had provided signed transfers with respect to both the Suburb C and Suburb E properties. That is, it was clearly acknowledged that he had done what was required of him by the Order.

27. The 23 February 2016 correspondence also proposed that Ms Buzzotti intended to sell the Suburb C property forthwith, ‘but without any participation from’ Mr Arlington.

28. Mr Arlington returned to work overseas, with the attendant communication difficulties that travelling entailed.

29. By correspondence dated 7 March 2016, Mr Arlington’s solicitor informed that he had returned from overseas and had instructed that he did not accept Ms Buzzotti’s proposal, which would have resulted in him not having any control over the timing of the sale of the jointly owned property and no input into the listing or contract price for the same. Further, Ms Buzzotti’s solicitors were told that, if Mr Arlington signed the releases sought in exchange for the payment (due to him under the April 2015 Order), his liabilities under the mortgage would continue until she sold the properties and, therefore, it could be a number of months or years before he was released from the same. It was also conveyed that this would mean he would face difficulty if he attempted to borrow funds to purchase his own property.

30. Given the contents of this correspondence, I am not remotely persuaded that Mr Arlington accepted Ms Buzzotti’s offer that he waive his legal entitlement to interest on the $235,000.00 which she was obliged to pay him after the April 2015 Order was made nor that the parties then agreed to vary the terms of the binding and operative April 2015 Order in such a manner.

31. Whilst rejecting Ms Buzzotti’s offer, Mr Arlington’s solicitor confirmed (in this 7 March 2016 correspondence) that he remained prepared to proceed on the basis that he receive $100,000.00 then and the balance owing to him on the sale of the Suburb C property (and, if necessary, the sale of the Suburb E property). Part of his offer included that the Suburb C property ‘would have to stay on the market until sold’ and that Mr Arlington ‘remain involved in’ its sale.

32. By correspondence dated 8 March 2016, Ms Buzzotti’s solicitors advised that she would be prepared to settle the matter on the basis that the Suburb C property be listed forthwith for sale (which was advised had already occurred) and at an agreed price or as recommended by the selling agent, that she draw a bank cheque within seven days for the amount of $100,000.00 payable to Mr Arlington’s solicitors’ trust account and that, on the sale of the Suburb C property, Mr Arlington receive the balance sum of $135,000.00 and be released with respect to the mortgages over both the Suburb C and Suburb E properties. Further, Mr Arlington was advised that if there were insufficient funds from the sale of the Suburb C property to pay the balance of the sum he was owed (as a consequence of the April 2015 content Order), Ms Buzzotti would meet this payment from her own funds.

33. By correspondence dated 8 March 2016, Mr Arlington’s solicitors advised that he accepted the proposals contained in the correspondence referred to in paragraph 45. The correspondence conveyed that, having spoken with the real estate agent, Mr Arlington was prepared to accept his recommendation that the Suburb C property be listed for a figure in the vicinity of $780,000.00. It also conveyed that the Suburb C property ‘must remain on the market until sold’ and that, once the payment of $100,000.00 was received, Mr Arlington agreed to adjourn his enforcement Application to the Registry, pending receipt of final payment.

1. Correspondence from Ms Buzzotti’s solicitors dated 11 March 2016, which accompanied a bank cheque for $100,000.00 and which was received by Mr Arlington’s solicitors on 16 March 2016, sought confirmation that Mr Arlington would adjourn his enforcement Application to the Registry, pending receipt of “final payment of the agreed sum of $235,000.00”. This correspondence confirmed that the Suburb C property would remain on the market until sold so as to enable Ms Buzzotti to pay him what was outstanding and also to secure his release from the mortgage secured over the Suburb E property.

2. I accept, therefore, that Ms Buzzotti partially complied with her obligation under the April 2015 Order to pay Mr Arlington $235,000.00 by paying him the amount of $100,000.00 on 16 March 2016. The calculation of interest should properly reflect this conclusion.

3. Whilst the parties subsequently forwarded a jointly signed Request for Administrative Adjournment of the Application in a Case filed 24 December 2015, I am not persuaded that by doing so Mr Arlington evidenced his agreement to waive his entitlement to interest on the monies owing to him by Ms Buzzotti from time to time.

4. In fact, Mr Arlington and Ms Buzzotti continued to disagree about the appropriate list price. He thought a more realistic list price was “offers around $700,000.00” whilst she refused to reduce the list price or consider a sale price less than $700,000.00 and, instead, set the listing price as “by negotiation”.

5. Mr Arlington was then diagnosed with a serious medical condition. Initially, it was thought he had liver cancer. His health deteriorated throughout April and May 2016 and he was unable to work. As he was eager to get his affairs in order, he instructed his solicitors to ask whether Ms Buzzotti would accept the real estate agent’s advice and reduce the Suburb C property list price to $680,000.00 or, alternatively, pay for the property to be valued by a valuer nominated by the Chief Executive of the REIQ.

6. This position was conveyed in correspondence dated 13 May 2016 from Mr Arlington’s solicitors to Ms Buzzotti’s solicitors. This correspondence outlines that, despite Mr Arlington and the real estate agent agreeing that the likely sale of the Suburb C property would be in the mid $600,000.00s, Ms Buzzotti was not prepared to adjust the list price or consider a sale price under $700,000.00. The correspondence also conveyed Mr Arlington’s request that Ms Buzzotti accept the advice from the real estate agent in relation to the list and likely sale price in the current market. Mr Arlington’s solicitors suggested that Ms Buzzotti’s actions reflected a desire to retain the Suburb C property for as long as possible and to prevent Mr Arlington from receiving the funds it had been agreed he would receive more than 12 months earlier.

7. The 13 May 2016 correspondence also outlined that, if Ms Buzzotti did not resume a ‘more reasonable positon’ regarding the sale of the Suburb C property, Mr Arlington would resume the enforcement proceedings. Ms Buzzotti was asked to advise the real estate agent of a listing price of $680,000.00 within five days or, if there was not agreement about this amount, to accept the list price nominated by a valuer nominated by the Chief Executive of the REIQ and to pay for the same.

8. Ms Buzzotti’s response, as contained within correspondence from her solicitors to Mr Arlington’s solicitors dated 17 May 2016, was that she had already agreed to reduce the list price to $795,000.00 and did not want to sell below market value.  Appraisals from other real estate agents were said to be enclosed for the asserted purpose of establishing that the Suburb C property had a value ‘well in excess of $700,000.00”.

9. Despite the contents of the correspondence, Mr Arlington contends that he was never provided with the appraisals referred to therein. He says that, in fact, Ms Buzzotti withdrew the Suburb C property from sale without his knowledge or consent and subsequently listed it for sale with another real estate agent at a list price of $748,000.00.

10. Mr Arlington was admitted to hospital in about mid- June 2016. The matter, which was before the Court on 28 June 2016, was adjourned to 23 August 2016.

11. By correspondence dated 5 July 2016, Mr Arlington’s solicitors outlined that he was keen to resolve all matters as soon as possible and, for that reason, proposed that the Suburb C property proceed to auction if it was not sold by 23 August 2016.

12. Mr Arlington was readmitted to hospital in late July 2016.

13. On 19 August 2016, Mr Arlington’s solicitor told him Ms Buzzotti’s solicitor had advised that day that he had received a bank cheque for $135,000.00 from Ms Buzzotti and had been instructed to pay those funds to Mr Arlington to cover the balance of cash payable by Ms Buzzotti to him pursuant to the terms of the April 2015 Order.

14. Having received this information, Mr Arlington agreed to a further adjournment of his Application in a Case.

15. Despite the information referred to above, the trust account cheque from Ms Buzzotti’s solicitors did not in fact arrive at Mr Arlington’s solicitors until 7 September 2016. This payment did not, of course, have the effect of releasing Mr Arlington from his liability to the commercial lender of the funds secured by mortgages over the Suburb C and Suburb E properties but it did mean that he had – finally - been paid all of the money, other than by way of interest, that Ms Buzzotti had agreed to pay him pursuant to the terms of the April 2015 Order.

16. On the morning of the next Court date, Mr Arlington learned that Ms Buzzotti had decided to withdraw the Suburb C property from sale until the tenants moved out in late October 2016. It seems she had unilaterally determined to wait until the property was vacant so she could prepare it for sale.

17. When the parties appeared before a Registrar on 11 October 2016, the issue of  re-listing the Suburb C property for sale was raised by the Registrar.

18. On 18 November 2016, Mr Arlington received a Form 6 Appointment of Property Agent prepared by H Real Estate. The Form contained no list price but details of comparative sales in the range of $650,000.00-$765,000.00. Mr Arlington says that, when he spoke with Mr H from that firm, they agreed that a list price of $680,000.00 would be appropriate.

19. However, on 13 December 2016, Mr Arlington learned that the Suburb C property was being advertised by H Real Estate at “offers over $749,000.00”.

20. Subsequent communication between Mr Arlington and Mr H established that Mr H’s original advice was “offers over $699k” (factoring in the improvements made to the property since the tenant vacated the same) but that Ms Buzzotti had instructed him to “go out at $749k” which he had done. He told Mr Arlington he had advised Ms Buzzotti of his recommendation to reduce the list price.

21. The parties appeared before a Registrar again on 20 December 2016 at which time Mr Arlington’s Application in a Case was re-listed for hearing to 27 February 2017.

22. Ms Arlington’s evidence is that, following the appearance on 20 December 2016,  the list price for the Suburb C property was changed to “offers over $699,000.00”.

What happened in February 2017?

1. When the matter first came before me on 27 February 2017, I was told that the Suburb C property had been sold on 8 February 2017 for $689,000.00 and that settlement was to occur on 7 March 2017.  Given the history of the matter, I adjourned the Application in a Case to 10 March 2017.

What happened on 10 March 2017?

1. When the parties appeared on 10 March 2017, they confirmed that settlement had proceeded.

2. Mr Arlington’s solicitor then made submissions seeking an order for the payment to him of interest on the $235,000.00 payable to him as a consequence of the terms of the April 2015 Order. She provided the Court with a schedule outlining her calculations of the interest in the amount of $19,780.69 (if calculated from 30 days after the April 2015 Order was made) or $7,897.86 (if calculated from the date on which the Application in a Case seeking to enforce the April 2015 Order was filed).

3. Whilst Ms Buzzotti’s solicitor opposed the making of an order requiring her to pay interest to Mr Arlington, no challenge was made to the accuracy of the calculations. Despite this, the findings I have made, as enunciated above, have an impact on the calculating of the quantum of interest owing by Ms Buzzotti to Mr Arlington. Rather than the amount of $19,780.69 in total, I have calculated the total interest payable by Ms Buzzotti to Mr Arlington to be in the amount of $19,052.61.[2]

   [2]This has been calculated using the interest rates specified in the Schedule provided by Mr Arlington’s solicitors on 10 March 2017 but with the following changes: for the period from 27 May 2015 rather than 10 May 2015 (which gives $1,915.41 rather than $2,791.03); for the period until 16 March 2016 rather than 11 March 2016 (which gives $13,355.19 rather than $13,098.36) and for the period from 17 March 2016 rather than 12 March 2016 (which gives $2,316.94 rather than $2,426.23).

4. Ms Buzzotti’s solicitor made submissions opposing the making of any such order. In doing so, he relied upon her evidence that, if she is ordered to pay interest (or costs) to Mr Arlington, she will be forced to sell the Suburb E property in which she lives and from which she conducts her business.

Further discussion and conclusions

1. I have concluded that, other than in the manner outlined above, whilst the parties attempted on various occasions to resolve the issue of Ms Buzzotti’s non-compliance with the terms of the April 2015 Order, they either never in fact reached agreement as to terms or Ms Buzzotti unilaterally departed from the same.

2. Having considered the detailed submissions made on behalf of each of the parties, I am not persuaded to exercise the discretion,[3] which reposes in the determination of matters such as this, to absolve Ms Buzzotti from the obligation to pay Mr Arlington interest on the amounts outstanding to him at various times prior to her discharging that obligation in full on 7 September 2016. I am simply not persuaded that, in the circumstances which have arisen since the order was made, it is inequitable to enforce this obligation.

   [3]See, for example: Ramsey and Ramsey (1983) FLC 91-301; Ramsey and Ramsey (No.2) (1983) FLC 91-323; Kerr & Kerr (1983) FLC 91-329; Collins & Olsthoorn (2005) FLC 93-216.

3. In arriving at this conclusion, I have placed particular weight on the fact that, as outlined in the Application for Consent Orders filed with the Court in support of the proposed order, Ms Buzzotti had sufficient cash at bank in April 2015 to enable her to pay Mr Arlington all of the money she had agreed he was to be paid and within the timeframe she had agreed to.

4. I have also taken into account that Ms Buzzotti has had available, for her sole use, all rental payments received from the Suburb C property during the period from no later than when the April 2015 Order was made until its sale in May 2017.

5. Further, whilst the requirement to pay interest in the amount referred to in paragraph 72 may well impact very significantly upon Ms Buzzotti’s current financial circumstances, her failure to pay Mr Arlington that which she had agreed to pay him, in exchange for his interest in the Suburb C and Suburb E properties, deprived him completely of the opportunity to receive those funds in the agreed time-frame. The sum agreed to be paid to Mr Arlington was not insubstantial and Ms Buzzotti’s failure to comply with the terms of the April 2015 Order meant Mr Arlington was held out from these funds for a not insignificant period of time - the delay in payment benefitted only Ms Buzzotti.

6. In my view, it is also relevant to note that, despite the submissions made about the impact on her financial position of the agreed terms of the April 2015 Order, Ms Buzzotti did not apply to set the same aside.

7. In addition, I am not persuaded that, in acting as he did (as summarised above) Mr Arlington delayed in his attempts to seek to enforce Ms Buzzotti’s obligations to pay him both the amount she agreed to pay and the interest payable on that sum by virtue of the terms of s 117B of the Act.

8. I have also placed weight upon the importance of holding parties to the terms of orders which they have sought be made by the Court. I join in the view that a refusal to enforce such terms and orders should be exercised with care, given that such refusal may render decrees of the Court nugatory and/or may indicate to parties that compliance with the terms of orders (including those made by consent) is optional rather than mandatory.

Mr Arlington’s application for costs

1. Mr Arlington also seeks an order that Ms Buzzotti pay his costs of and incidental to the Application in a Case filed on 24 December 2015 by which he sought enforcement of the terms of the April 2015 Order.

2. Section 117(1) of the Family Law Act 1975 (Cth) provides that, subject to ss (2) and other particularised sections of the Family Law Act 1975 (Cth) that are not relevant to the determination of this Application, “each party to proceedings under the Act shall bear their own costs”. Subsection (2) of s 117 provides that, if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to ss (2A) relevantly, and the applicable Rules of Court, make such order as to costs as the Court considers just.

3. Subsection (2A) of s 117 contains a number of considerations to which the Court shall have regard in determining what order, if any, as to costs should be made in any particular circumstance.

4. I accept that neither party’s financial circumstances are particularly strong. I also accept that it seems Ms Buzzotti’s financial position has worsened since the April 2015 Orders were made. However, it could not seriously be suggested that Mr Arlington’s financial position has improved since that time either, especially given his health issues and the fact that he did not receive the funds to which he was entitled under the April 2015 Order in the manner envisaged in the same. Further, whilst Ms Buzzotti remains self-employed, Mr Arlington is not in paid employment, lives with his daughter and has no real ongoing source of income.

5. In any event, as authority makes clear, impecuniosity on the part of a party opposing the making of an order for costs is no bar to an order for costs being made where it is otherwise warranted.[4] That being the case, I am not persuaded that the mere fact of any difference between the parties in terms of their respective financial positions of itself means that it would be unjust to make an order requiring Ms Buzzotti to pay Mr Arlington’s costs of and incidental to the application he brought to ensure he received that which was due to him.

   [4]           See, for example, D & D (Costs) (No 2) (2010) FLC 93-435.

6. Neither party is in receipt of legal aid.

7. There is nothing particularly relevant about the conduct of either party in relation to the proceedings commenced when Mr Arlington filed the Application in a Case in December 2015 seeking orders to enforce Ms Buzzotti’s obligation under the April 2015 Order to pay him $235,000.00.

8. However, I consider that such application was entirely necessitated by Ms Buzzotti’s failure to  comply with her obligation to pay Mr Arlington the sum of $235,000.00 at the time provided for in the April 2015 Order. Whilst Mr Arlington ultimately did not require any particular order to be made to enforce Ms Buzzotti’s obligation to pay him this amount of money, this was only because he was prepared to extend to her the opportunity to pay him the funds she owed him in two separate tranches.

9. There is no relevant offer in writing made by either party to settle these proceedings.

10. It seems to me to be more likely than not that the eventual sale of the Suburb C property – at a price not dissimilar to that suggested much earlier by Mr Arlington as being likely – was only brought about by the fact that Mr Arlington had brought the application to enforce. Given the attitude Ms Buzzotti clearly expressed to Mr Arlington in the text message she sent him after the Application in a Case had been served on her solicitors and her actions in respect of the listing of the Suburb C property, it seems to me to be much more likely than not that she was prepared to defer meeting her obligation to pay him the funds she had agreed to pay him for as long as possible.

11. Given the matters outlined above, I am persuaded that the circumstances justify the making of an order that Ms Buzzotti pay Mr Arlington’s costs of and incidental to the Application in a Case filed 24 December 2015. Such costs should be paid on a party and party basis, in an amount agreed between the parties on that basis or, failing agreement, as assessed on that basis.

12. The time by which Ms Buzzotti will be required under the orders made today to pay Mr Arlington the amount owing by way of costs and the amount owing by way of interest takes into account the fact of Ms Buzzotti’s straightened financial circumstances, but also the fact that she remains in steady employment in her own business.

13. Given that it may be that further orders are required to ensure that Mr Arlington is paid that which the orders made today will require him to be paid and in an attempt to minimise any future costs, I will order that he have liberty to apply in relation to the same on the giving of forty-eight hours’ notice in writing to Ms Buzzotti. I will also direct that any further application relating to the enforcement of the orders made today be listed before me for determination.

I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 13 April 2017.

Associate:     

Date:              13 April 2017