BAINE & BAINE
[2014] FamCA 806
•24 September 2014
FAMILY COURT OF AUSTRALIA
| BAINE & BAINE | [2014] FamCA 806 |
| FAMILY LAW – ORDERS – Contravention – where the wife’s application for contravention alleges ten counts of contravention of final orders made by consent – where husband admits balance of the contraventions but submits he had a reasonable excuse – reasonable attempts made by husband to secure finance – husband unable to meet obligations due to financial circumstances – application for contravention dismissed. |
| Evidence Act 1975 (Cth) s 140 Family Law Act 1975 (Cth) s 112AB, 112AC, 112AD |
| Briginshaw v Briginshaw (1938) 60 CLR 336 |
| APPLICANT: | Ms Baine |
| RESPONDENT: | Mr Baine |
| FILE NUMBER: | ADC | 721 | Of | 2012 |
| DATE DELIVERED: | 24 September 2014 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 31 March and 1 April 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wedding |
| SOLICITOR FOR THE APPLICANT: | Adelaide Lawyers |
| COUNSEL FOR THE RESPONDENT: | In Person |
| SOLICITOR FOR THE RESPONDENT: | N/A |
Orders
The wife’s Application for Contravention filed 13 December 2013 is dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Baine & Baine has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 721 of 2012
| Ms Baine |
Applicant
And
| Mr Baine |
Respondent
REASONS FOR JUDGMENT
Introduction
This judgment concerns an Application for Contravention filed by Ms Baine (“the wife”) on 13 December 2013 against Mr Baine (“the husband”). The wife alleges various breaches of the consent orders made on 16 October 2013 (“the orders”). The orders were final orders in the parties’ outstanding property proceedings.
The orders included an order for the transfer of the husband’s interest in the former matrimonial home to the wife on certain conditions namely, free from any encumbrance or with a small mortgage to be serviced wholly by the husband. In return the wife would transfer her interest in a second property (“Property H”) to the husband. Further orders provided for the transfer of a marina berth, payment of school fees and a number of indemnities.
The husband maintains the orders were conditional upon him first obtaining an appropriate level of finance from the ANZ Bank. While this condition appears in a “Heads of Agreement” document signed by the parties it did not form part of the final consent orders. The husband was unable to secure bank finance and consequently was unable to meet his obligations pursuant to the orders. It is the husband’s submission that this provides a reasonable excuse for contravention as the final orders should be interpreted with the assistance of the “Heads of Agreement” document.
The wife alleges the husband has either intentionally failed to comply with the orders or made no reasonable attempt to comply with the orders.
Relevant Background
The parties married in October 1990. The parties separated in June 2011 and a divorce was granted in December 2012.
Following separation the wife remained at Property S while the husband relocated to Property H before eventually moving to rented accommodation in Town C with his current partner and her children.
There are two children of the marriage namely, B and L. They are currently 19 and 16 years of age respectively. B lives with the husband while L lives with the wife. The husband has limited contact with the child L while the mother has limited contact with B.
In 2011 the wife was diagnosed with breast cancer and underwent a bilateral mastectomy, chemotherapy and radiotherapy. She is currently in remission but still suffers from a number of related ailments.
On 24 February 2012 the wife filed an Initiating Application seeking orders not dissimilar to those found in the October 2013 consent orders. The husband filed a Response on 26 March 2012 opposing the orders sought.
Initially both the husband and wife were represented. The husband has appeared unrepresented since September 2012.
In April 2013 the ANZ Bank commenced proceedings in the District Court of South Australia for vacant possession of Property S. Subsequent orders were made in the District Court which required that the wife vacate Property S by 9 May 2014.
The matter was listed for a five day trial before me in October 2013.
The trial commenced on Monday 14 October 2013. The wife was represented by counsel while the husband appeared unrepresented.
On the second day of trial I stood the matter down at the request of both parties to enable further negotiations to take place. When I called the matter on again later that day I was informed that the parties had prepared a “Heads of Agreement” and that a settlement could be reached. I did not view this document at the time as it would have been inappropriate to do so.
At the commencement of the hearing the next day I was presented with Draft Minutes of Order and with the consent of all parties I made orders in terms of the minute signed by me that day.
On 28 October 2013 the husband filed an affidavit in which he states he is attempting to obtain bank finance to ensure he is able to comply with the orders but that the current position of the bank, as evidenced by annexed correspondence, is “unsympathetic”.
On 13 December 2013 the wife filed an Application for Contravention and supporting affidavit alleging ten contraventions of the consent orders (the wife also filed an Application in a Case the same day, the contents of which are not relevant for the purposes of this judgment).
The wife’s Application for Contravention came before me on 31 March 2014 and 1 April 2014. Mr Wedding appeared on behalf of the wife. The husband was unrepresented.
The husband and wife were sworn in and each was the subject of cross- examination.
At the conclusion of the husband’s evidence in chief it was revealed that the husband had recently filed a petition for voluntary bankruptcy in March 2014.
I reserved my judgment after hearing submissions from the parties.
Documents Relied Upon
The wife sought to rely on the following documents:
·Application for Contravention filed 13 December 2013
·Affidavit of the wife filed 13 December 2013
·Affidavit of the wife filed 27 March 2014
The husband sought to rely on the following documents:
·Affidavit of the husband filed on 28 October 2013
·Affidavit of the husband filed on 17 March 2014
The Law
Division 1 of Part XIIIA of the Family Law Act 1975 (Cth) (“the Act”) contains provisions concerning applications for contravention orders which do not concern orders relating to children. The following are the most relevant to these proceedings:
SECTION 112AB
Meaning of contravene an order
(1)A person shall be taken for the purposes of this Part to have contravened an order under this Act if, and only if:
(a)where the person is bound by the order--he or she has:
(i)intentionally failed to comply with the order; or
(ii)made no reasonable attempt to comply with the order; or
(b)in any other case--he or she has:
(i) intentionally prevented compliance with the order by a person who is bound by it; or
(ii) aided or abetted a contravention of the order by a person who is bound by it.
The contravention must be intentional rather than casual, accidental or unintentional (Fauna Holdings Pty Ltd & Mitchell (2000) 27 Fam LR 81).
The wife must establish on the balance of probabilities that the husband has contravened the order (In the Marriage of Reilly (1995) 19 Fam LR 213).
That standard is also found in s 140(1) of the Evidence Act 1995 (Cth) and is in effect the legislative equivalent of the rule laid down by the High Court in Briginshaw v Briginshaw (1938) 60 CLR 336.
SECTION 112AC
Meaning of reasonable excuse for contravening an order
(1)The circumstances in which a person may be taken to have had, for the purposes of this Part, a reasonable excuse for contravening an order under this Act include, but are not limited to, the circumstances set out in subsection (2).
(2)A person (in this subsection called the respondent ) shall be taken to have had a reasonable excuse for contravening an order under this Act if:
(a)the respondent contravened the order because, or substantially because, he or she did not, at the time of the contravention, understand the obligations imposed by the order on the person who was bound by it; and
(b)the court is satisfied that the respondent ought to be excused in respect of the contravention.
It is not for the wife to prove on the balance of probabilities that the order was breached without reasonable excuse. The “tactical burden of adducing evidence of the existence of such exculpatory circumstances” rests upon the husband (Sutcliffe & Sutcliffe (1989) FLC 92-004 at [18]).
In Northern Territory of Australia v GPAO and Ors (1999) 196 CLR 553 Gleeson CJ and Gummow J held that for the purposes of Part XIIIA of the Act the circumstances constituting a reasonable excuse for contravening an order include but are not limited to those specified in s 112AC(2).
The sanctions which may be imposed upon the husband are set out in s 112AD and include a bond, imprisonment or fine. The wife did not seek a specific penalty but rather asked that I exercise my discretion under s 112AD(4) and make such order as I consider necessary to ensure compliance with the October orders.
“Heads of Agreement” Document
The husband admits he contravened the orders of 16 October 2013 but maintains he had a reasonable excuse namely, because as he was unable to obtain finance from the ANZ Bank he was released from his obligations under the orders. In support of this argument the husband drew the Court’s attention to the “Heads of Agreement” document.
The husband also alleged that counsel for the wife presented him with proposed orders that were significantly more detailed than the “Heads of Agreement” document the husband had been shown the previous day and that the husband did not obtain independent legal advice before entering into the consent orders.
The husband maintains the “Heads of Agreement” document “clearly stated that the proposed settlement was subject to bank finance in order for [the husband] to be able to effect the settlement with the wife”. A photocopy of the “Heads of Agreement” document is annexed to the husband’s affidavit filed 28 October 2013 and is set out below:
Proposal by [the wife]
1 100% superannuation shares to be transferred to [the wife].
2 Transfer of marina berth.
3[Property S] with a small mortgage up to $200,000 to be surfaced (sic) by [the husband]. Subject to bank finance.
4A car to the value of $30k subject to finance but transferred to [the wife] in 5yrs.
5 [The husband] pays all future and past school feels for [L].
The document bears the signatures of both parties and is dated 15 October 2013.
In Langford & Coleman (1993) FLC 92-346 the Full Court considered whether a prior agreement between two parties would affect the interpretation of consent orders. In that case Nygh J concluded the subjective intention of a party, be it via an agreement or an assumption, was irrelevant to the interpretation of consent orders (see 79,670 - 79,671):
However, in my view, regrettably, there is clear authority for the
proposition that at least in matrimonial causes once any financial
agreement reached between the parties is embodied in consent orders,
it is to these orders alone that the Court must look. The Court
cannot take into account whatever agreement might or might not have
been reached between the parties which led to the making of the
consent orders, and the authority for that proposition is found in
the opinion of the Privy Council on appeal from Hong Kong in de
Lasala v. de Lasala [1980] AC 546 at 560, where Lord Diplock said:-"Financial arrangements that are agreed upon between the
parties for the purpose of receiving the approval and
being made the subject of a consent order by the court,
once they have been made the subject of the court order no
longer depend upon the agreement of the parties as the
source from which their legal effect is derived. Their
legal effect is derived from the court order."That principle was applied by the English Court of Appeal in the
case of Thwaite v. Thwaite [1981] 3 WLR at 96 and I refer
particular to the judgment of Lord Justice Ormrod, as he then was,
at page 101, where his Lordship said:-"The effect of eliminating the contractual basis of these
consent orders should simplify the problems. If their
legal effect is derived from the court order it must
follow, we think, that they must be treated as orders of
the court and dealt with, so far as possible, in the same
way as non-consensual orders."These details, although they relate respectively to the law of Hong
Kong and to the law of England, have been treated as authoritative
in this country and were followed and applied most notably by the
Full Court of this Court in In the Marriage of Robertson and
Wills (1981) 8 Fam LR 131 at 141/2 by Asche J and at 144 by Fogarty
J. Although in those cases, admittedly, the courts were concerned
with the rights of appeal arising from consent orders and stressed
the fact that a consent order can be appealed from, like any other
order, in my view the principle Is wider than that. It follows that
if an order made by consent must be treated like any other
non-consensual court order it must be read and interpreted quite
independently of what the parties subjectively might have intended
thereby. It must be read as standing on its own feet, as it were.This line of authority was recently endorsed by the Full Court in Redmond & Redmond [2014] FamCAFC 155 at 48:
It is not open to doubt that once an order is made by the court, even if made with the consent of the parties, the legal effect upon the parties’ rights derives from the order itself and not from any antecedent agreement of the parties leading to the making of that order.
However, s112AC specifically states that a party will have a reasonable excuse for contravening an order if the respondent is able to establish that they contravened the order because, or substantially because, they did not understand the obligations imposed on them, and the Court is satisfied that they ought to be excused.
Accordingly, the “Heads of Agreement” document may be relevant when considering whether the husband understood the orders were not subject to finance.
Consideration
The wife alleges ten counts of contravention. The husband has either denied or admitted each count but where admitted submits that he had a reasonable excuse for doing so namely, he was unable to obtain finance.
Pursuant to s 112AC(2) the husband must demonstrate that he contravened the order because, or substantially because, he did not at the time of the contravention understand the obligations imposed by the order. Additionally the Court must be satisfied that the husband ought then be excused in respect of the contravention.
At the heart of each alleged contravention is the husband’s apparent failure to obtain finance.
Count One & Two
1. Forthwith upon production by the wife to the husband of a transfer of land in registrable form, the husband transfer to the wife all of his interest in the property situate at [Property S] being the whole of the land described in Certificate of Title Register Book Volume … Folio … .
2. That contemporaneously with the transfer referred to in Para 1 herein, the Husband do all acts and things necessary to discharge any encumbrance registered on the said property for which he is liable save and except the wife shall consent to a mortgage being registered over the said property, for a period of up to 5 years, payable totally by the husband and for a sum not greater than $200,000. At the conclusion of 5 years the husband shall cause the said mortgage to be discharged as against the said property, the husband shall maintain sufficient life insurance so as to discharge this debt should he decease while this mortgage or any part thereof shall remain outstanding.
It is alleged the husband has contravened paragraph 1of the orders by failing to service the mortgage on Property S thereby making it impractical for the wife to produce a land transfer. By failing to either discharge or service the mortgage it is alleged the husband has contravened paragraph 2.
The husband admits the contravention but submits he has a reasonable excuse.
It is however significant that the wife did not and has not produced to the husband the necessary transfer which would bring into effect the obligations on the husband.
Count Three
4. That as and when they fall due and until the completion of the secondary education of the child [L] born … 1998, the husband pay the following as they fall due:
a. The private school tuition fees and reasonable associated costs of [L] at [School P];
b. Any residual expenses still owing at the private school [College P] on behalf of the education of the child [B] born … 1995
The wife alleges the husband has failed to pay any school fees, either current or outstanding, for either child. In cross examination the husband admitted he had contravened the order but submitted that he had a reasonable excuse in that he simply did not have the financial resources available. The husband gave evidence that it is his intention to comply with the order once he has the funds to do so.
Count Four & Five
10. That pursuant to section 90MT(4) of the Family Law Act 1975 (as amended) allocate to the wife the property of the [Baine] Superannuation Fund (ABN …) (the said fund) that is standing to the account of [the husband], including the Marina Berth … located at [D Marina] held by the said fund be sold or transferred in specie at the discretion of the wife and that the superannuation split and roll over of 100% of the value of the [Bains] Self Managed Superannuation Fund standing to the credit of the husband therein be paid into a Regulated Superannuation Fund of the wife as nominated by her.
11. The husband shall instruct the said fund’s manager ([E Super Fund]) to address this matter within 14 days of these orders being made and shall request [D Marina] to transfer to or sell the said marina berth for the benefit of the wife within 14 days of these orders being made.
Annexure B to the husband’s affidavit filed 17 March 2014 is an email sent by the husband on 25 October 2013 to Mr F, a Client Manager at E Super Fund, advising him that he has “formally consented” to the transfer of all his interests in the superannuation fund being transferred to the wife. He asks Mr F to “please start to prepare and advise what documents [the husband] must fill out to facilitate this action”.
It is the husband’s evidence that he never received a response to that email.
Annexure CB4 to the wife’s affidavit filed 27 March 2014 is an email from Mr F to the wife confirming that the husband had contacted E Super Fund. The email also indicates that the husband was asked to provide financial documents covering earlier financial years to ensure the fund’s accounts are brought up to date. The fund is unable to transfer property until the husband has fulfilled his requirements.
I am satisfied that the husband did instruct E Super Fund “to address this matter”.
Count Six & Seven
13. That the Husband do pay or cause to be paid the costs of the report prepared by [K Accountants] in this matter.
14. That the Husband do pay or cause to be paid the costs associated with the valuations prepared by [Q] Valuers.
The husband admits he has contravened the order by failing to pay the costs of the reports and valuations but again claims he had a reasonable excuse, namely a lack of funds.
Count Eight
15. That the Husband do provide (within 3 months of the making of these orders) to the wife a motor vehicle, the make and model of her choice, and registered in her sole name, to the value of $30,000, such vehicle may be financed by the husband and transferred freehold to the wife within 5 years of the making of these orders.
The husband admits he has failed to provide the wife with a motor vehicle but submits that he had a reasonable excuse namely, that he did not have sufficient funds to do so.
Count Nine
17. That the husband do advise the wife as to the whereabouts of the shipping container formally (sic) held at [I] Street, [Suburb R] and the wife be at liberty to remove and keep for her own use and benefit any furniture contained therein.
The husband denies he has contravened the order. The husband’s affidavit material and his oral evidence indicates that he made repeated attempts to contact an unknown third party who had previously had the care of the shipping container but was unable to obtain a response.
In these unusual circumstances the wife has failed to establish on the balance of probabilities that the husband has made no reasonable attempt to comply with the order.
Count Ten
24. Each party do all such acts and sign all such documents as shall be necessary to give full effect to these terms of order.
The wife alleges the husband has failed to act or sign the necessary documents to give effect to the orders. The husband admits he has contravened the order but again asserts that his failure to obtain finance through the ANZ Bank provides a reasonable excuse.
Paragraph 24 of the orders is a ‘catch all’ provision designed to promote compliance with the entirety of the orders. To find a contravention of this paragraph would effectively punish the husband for a second time.
I am satisfied that the husband should be excused in respect of this contravention.
Conclusion
The contravention of paragraphs 1, 2, 4, 13, 14 and 15 as alleged by the wife are admitted by the husband. The husband maintains that he had a reasonable excuse for contravening the orders. The same purported reasonable excuse applies to each of the above paragraphs and as such I propose to consider the contraventions together.
The husband entered into correspondence with the ANZ Bank in an attempt to secure funds to comply with the order. It seems unlikely that the husband would have embarked upon this exercise without first understanding the obligations imposed by the order. I am satisfied that the husband was at the time of the contraventions aware of his obligations pursuant to the consent orders of 16 October 2013.
Notwithstanding the husband was aware of his obligations, the issue to be determined is whether the wife has established on the balance of probabilities that the husband has either intentionally failed to comply with the order or has made no reasonable attempt to do so. If the wife has met the requisite standard of proof the husband must then show that his financial position at the time of the contraventions constitutes a reasonable excuse.
The wife gave evidence that she believed the husband was, notwithstanding his representations, financial stable and provided the parties with a comfortable lifestyle for the duration of the marriage. The wife alleges he is able to meet his obligations under the orders but has either chosen not to or made no reasonable attempt to do so.
The husband on the other hand describes his financial situation as dire. He says he repeatedly attempted to explain their financial position to the wife but that she never understood the extent of their debts.
There is little evidence before the Court to make an accurate assessment of the husband’s financial position at the time of the orders. Annexed to the husband’s affidavit filed 28 October 2013 is correspondence passing between the ANZ Bank and the husband which indicate the husband owed approximately $2,170,000 to the bank in October 2013. An email dated 18 October 2013, Annexure B, reveals the bank would first require that both Property H and Property S be sold and all proceeds applied to debt reduction, and evidence that the husband could continue to service the approximately $700,000 shortfall, before they would extend their loan facilities to the husband once more. (The husband is now a declared bankrupt but that occurred some six months after the alleged contraventions).
There is also an issue in terms of the alleged contraventions of paragraph 1 and paragraph 2. Notwithstanding the husband has admitted to contravening the orders I note that paragraph 1 of the orders is conditional upon the wife providing the husband with a transfer of land in registrable form. The wife concedes that this has not yet occurred.
The wife has not established that the husband has contravened either Orders 1 or 2 of the consent orders. Counts 1 and 2 of the Contravention Application must therefore be dismissed.
Counts, 3, 6, 7 and 8 all relate to payments to be made by the husband. It is necessary for the wife to establish that the husband intentionally failed to comply or made no reasonable attempt to comply. The husband admitted the contraventions but claimed reasonable excuse based upon his “dire” financial circumstances. I am satisfied on the balance of probabilities that the evidence of the husband has established that he was unable to comply with the orders due to his difficult financial circumstances and that this establishes the necessary reasonable excuse.
Counts 4 and 5 relate to the superannuation orders. The vague wording in the orders only required the husband to “instruct” and “request”. I accept the evidence of the husband that he communicated with the Superannuation Fund.
The wife has not established that the husband failed to comply with these orders.
Count 9 refers to the husband informing the wife about the location of the shipping container.
The husband admits he has not done so.
His reasonable excuse refers to his inability to locate the person who would be able to tell him where the container is located.
This evidence was not significantly challenged. I therefore find that the husband has established his reasonable excuse.
As previously indicated the reasonable excuse also extends to Count 10.
For the above reasons all the contraventions are therefore dismissed.
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 24 September 2014.
Associate:
Date: 24 September 2014
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Appeal
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Remedies
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Procedural Fairness
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