Bamber and Mara - [2012] FMCAfam 357

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BAMBER & MARA

[2012] FMCAfam 357

FAMILY LAW – Property settlement – application to set aside orders in part and substitute fresh orders to effect payment – criminal act by one party in destroying or seriously damaging the property to be sold – consideration of whether that constitutes a change in circumstances subsequent to the making of the orders – so determining and accordingly varying existing orders.

Family Law Act 1975 (Cth), s.79A(1)(b) and (c)

Cawthorn & Cawthorn (1998) FLC 92-805
La Rocca & La Rocca (1991) FLC 92-222

Applicant:

MR BAMBER

Respondent:

MS MARA

File Number:

BRC 2125 of 2009

Judgment of:

Coker FM

Hearing date:

19 March 2012

Date of Last Submission:

19 March 2012

Delivered at:

Brisbane

Delivered on:

20 March 2012

REPRESENTATION

Counsel for the Applicant:

Ms Brasch

Solicitors for the Applicant:

MTM Lawyers

Respondent:

Self-represented

ORDERS

That the appointment of Mr S as trustee for sale of the real property pursuant to Order 2 of the Orders made by this Honourable Court on 05 February 2010 is hereby discharged.
That Orders 2, 3 and 4 of the Orders made by this Honourable Court on 05 February 2010 are hereby discharged.
That the following parcels of real property:
(a)Property W, Queensland more particularly described as Lot (omitted) (hereinafter referred to as “the Property W property”);
(b)Property M, Queensland more particularly described as Lot (omitted) (hereinafter referred to as “Property M Property”);
shall vest in the husband Mr Bamber for sale.
That upon the sale of the Property W property and the Property W Property, irrespective of the order in which those properties are sold, the sale proceeds shall be applied in the following manner and priority:
(a)In payment of real estate agent’s commission and the legal costs of sale;
(b)To discharge in full the ANZ mortgage secured over the Property M property;
(c)In payment of all outstanding rates and other statutory charges in respect of each of the subject properties;
(d)In payment to the Applicant Husband by payment to the Trust Account of (omitted) of the sum of $250,000.00 plus interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 on such sum as is unpaid from the date (60 days) from the date hereof until such time as the said sum is fully paid (“the Principal Payment”);
(e)In further payment to the Applicant Husband of the sum of $1,320.00 being the amount of his costs ordered by the Court on 05 May 2009 to be paid by the Wife plus the interest calculated in accordance with the Family Law Act 1975 and Family Law Rules 2004 on such sum from 20 May 2009 until such time as the said sum is fully paid (“the Costs Order for 05 May 2009”);
(f)In further payment to the Applicant Husband of the sum of $13,000.00 for his costs for these proceedings plus interest calculated in accordance with the Family Law Act 1975 and Family Law Rules 2004 on such sum as is unpaid sixty (60) days from the date hereof until such time as the said sum is fully paid (“the Costs of the proceedings”);
(g)Provided that in the event that there are insufficient funds realised by the sale of both the Property M property and the Property W property to satisfy the payments referred to in Orders 4(d), (e) and (f) above, then such funds as are available to be paid to the Husband shall be paid to him in the matter provided for above and shall be treated as an offset against the funds owed by the Wife to the Husband pursuant to Orders 4(d), (e) and (f) above.
(h)In the event that there are sufficient funds realised by the sale of the Property M property and the Property W property to make payment to the Husband in full of all funds owed to him pursuant to Orders 4(e), (f) and (g) above, then the balance, if any, shall be paid to the Respondent Wife.
That should the Applicant seek costs in this matter, such Application shall be made by way of short submissions and is to be filed and served by no later than 4:00pm on 10 April 2012 and any reply should be filed and served by no later than 4:00pm on 01 May 2012.

IT IS NOTED that publication of this judgment under the pseudonym Bamber & Mara is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BRISBANE

BRC 2125 of 2009

MR BAMBER

Applicant

And

MS MARA

Respondent

REASONS FOR JUDGMENT

On 5 February 2010 orders were made by consent in relation to a property settlement to be effected between Mr Bamber, whom I shall refer to as the applicant, and Ms Mara, whom I shall refer to as the respondent.
That order provided in part, particularly for a payment of a sum of $250,000 within 60 days of 5 February 2010.
The payment was to be made by the wife to the husband, and in addition there were certain other sums, $1,320 for costs, which had been ordered to be paid by the wife to the husband on 5 May 2010, as well as $13,000 for costs thrown away by the husband in other proceedings, as well as one half of the costs of various valuations that had been attended to.
The orders went on to provide specifically for a manner by which funds could be raised in the event of the respondent wife not being in a position to or refusing to pay the moneys that were required to be paid by her, to the husband. Those arrangements were detailed in orders (2) through (4) of the orders of 5 February 2010, and basically provided for the appointment of a solicitor, Mr S as trustee of the sale of property situated at Property M and then went on to detail specifically the arrangements with regard to the payments to be effected, including payment of real estate agent’s commission and legal costs, discharge of mortgage, payment of rates and other statutory charges, payments of the trustee’s fees and payment to the husband of the amounts required to be paid pursuant to the orders, as well as providing specifically for arrangements in relation to interest that might be payable in the event of the moneys not being paid.
Unfortunately, circumstances moved on and in part, included, particularly, a concern that the property at Property M which was to be sold was not, it was believed, sufficiently valuable to facilitate the payment of all such amounts that were required to be paid, particularly as there were in place concerns that had arisen as a result of mortgage payments to the ANZ Bank not being effected.
That particular concern has certainly come to fruition, in that on 21 February 2012 summary judgment was obtained on the part of the ANZ Bank against both the trustee, Mr S, and, more particularly, the respondent wife in these proceedings, Ms M for an amount of at least $233,000, though it may, in fact, be the case that it is as much as $248,000 inclusive of interest and costs. In any event, whichever figure is accurate, after that amount is deducted from the expected value of the property, somewhere between $485,000 and $500,000, there would not be sufficient funds to effect the payment to the husband of the amounts that were required to be met pursuant to order (1) of the orders of 5 February 2010.
It should be noted that the property originally had a value significantly greater than $485,000 to $500,000, but certain events have intervened. In particular, the residence that was situate upon that property has been the subject of serious fire damage. It is not exactly clear to me whether the property has been wholly destroyed or is only partially damaged as a result of the fire. But, whatever is the case, that particular incident has seriously reduced the value of the property in total.
More particularly, the wife has been charged with arson in relation to that property, and in fact, convicted of the offence of arson. As I understand the material, it is the case that she is awaiting sentencing in relation to that matter. The wife, appearing yesterday, indicated that she intended to appeal the decision, and that is, of course, understandable.
But, it does not in any way, reduce the concerns that must currently exist in relation to this matter, because at least at the present time, she has been found guilty, pursuant to our normal criminal system, of the serious offence of arson and there is, obviously, a significant concern that must therefore arise with regard to her capacity to meet the payments required, in relation to this matter and, of course, when one considers as one must, equitable principles that arise in relation to proceedings, there is a real concern that she does not come before this Court with “clean hands”.
I make that particular reference because, firstly, the wife sought an adjournment of the proceedings and I have previously given reasons as to why that application was refused. More particular, however, the wife would appear to indicate that she wishes to re-open or reconsider the issue of property settlement, but nothing has been done by her in that regard. The only proceedings that are before the Court are those which were brought by the applicant husband on 30 November 2011, when he sought orders which, it was said, were necessary as a result of the circumstances which I have just outlined.
The orders that were sought by the applicant husband were detailed in the application, orders (1) through (5), and were in these terms:
1.That the appointment of Mr S as trustee for sale of the real property pursuant to Order 2 of the Orders made by this Honourable Court on 05 February 2010 is hereby discharged.
2.That Orders 2, 3 and 4 of the Orders made by this Honourable Court on 05 February 2010 are hereby discharged.
3.That the following parcels of real property:
(a)Property W more particularly described as Lot (omitted) (hereinafter referred to as “the Property W property”);
(b)Property M Queensland more particularly described as Lot (omitted) (hereinafter referred to as “the Property M Property”);
shall vest in the husband Mr Bamber for sale.
4.That upon the sale of the Property W property and the Property M Property, irrespective of the order in which those properties are sold, the sale proceeds shall be applied in the following manner and priority:
(a)In payment of real estate agent’s commission and the legal costs of sale;
(b)To discharge in full the ANZ mortgage secured over the Property M property;
(c)In payment of all outstanding rates and other statutory charges in respect of each of the subject properties;
(d)In payment to the Applicant Husband by payment to the Trust Account of (omitted) of the sum of $250,000.00 plus interest calculated in accordance with the Family Law Act 1975 and the Family Law Rules 2004 on such sum as is unpaid from the date (60 days) from the date hereof until such time as the said sum is fully paid (“the Principal Payment”);
(e)In further payment to the Applicant Husband of the sum of $1,320.00 being the amount of his costs ordered by the Court on 05 May 2009 to be paid by the Wife plus the interest calculated in accordance with the Family Law Act 1975 and Family Law Rules 2004 on such sum from 20 May 2009 until such time as the said sum is fully paid (“the Costs Order for 05 May 2009”);
(f)In further payment to the Applicant Husband of the sum of $13,000.00 for his costs for these proceedings plus interest calculated in accordance with the Family Law Act 1975 and Family Law Rules 2004 on such sum as is unpaid sixty (60) days from the date hereof until such time as the said sum is fully paid (“the Costs of the proceedings”);
(g)Provided that in the event that there are insufficient funds realised by the sale of both the Property M property and the Property W property to satisfy the payments referred to in Orders 4(d), (e) and (f) above, then such funds as are available to be paid to the Husband shall be paid to him in the matter provided for above and shall be treated as an offset against the funds owed by the Wife to the Husband pursuant to Orders 4(d), (e) and (f) above.
5. In the event that there are sufficient funds realised by the sale of the Property M property and the Property W property to make payment to the Husband in full of all funds owed to him pursuant to Orders 4(e), (f) and (g) above, then the balance, if any, shall be paid to the Respondent Wife.
The argument that is put in relation to the matter is one that arises, if you like, primarily as a result of the provisions of section 79A of the Family Law Act. In particular, the applicant through counsel, and counsel has provided most helpful submissions in relation to this matter, indicated that it was suggested that the only appropriate or proper course to following in relation to the matter was pursuant to section 79A of the Family Law Act, to set aside the orders which had previously been made altering a property interests.
It was submitted that that could and should properly be done pursuant, firstly, it was said, to the provisions of section 79A(1)(b) and, if necessary, for there to be consideration given to the provisions of section 79A(1)(c). Relevant, in relation to these proceedings, are section 79A(1)(b) and (c), and they are in these terms:
79A(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
…
(b)in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c )a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
…
The first submission, and I would think the main thrust of submissions in relation to the matter, is that pursuant to section 79A(1)(b), circumstances have arisen since the order was made which make it clearly impracticable for the order to be carried out, or impracticable for part of the order to be carried out. I could not agree more. The orders specifically envisaged an arrangement where moneys were to be paid by the wife to the husband, and in default of payment, specific arrangements were made with regard to the sale of the Property M property so as to facilitate the payment out to the husband of his entitlements pursuant to the orders of 5 February 2010.
Most significantly, the failure by the wife to make the payment has led to a significant increase in the amount that is required to be paid to the husband because of the interest component that has arisen in relation to the matter. Quite clearly, the indications given are that the interest now totals somewhere in the vicinity of $67,500 and that, on top of the sum of $250,000, means that in excess of $300,000 is required to be paid from any equity that is retained in the property.
That does not even, of course, take into consideration the additional amounts of $13,000 and $1,320, and the interest that has accrued in relation to the non-payment of those sums as well as the first call that is made upon any moneys that might be received from the sale which would fall in payment of the agent’s commission, sale costs and, most significantly, the amount now outstanding to the ANZ Bank in relation to the summary judgment which it has obtained.
It is clear that the provisions of the orders of 5 February, 2010, therefore are impracticable. I have been most assisted by the written submissions provided in relation to this matter and, in particular, to the assistance that has been given to me by those submissions, particularly with regard to the decision of the Full Court of the Family Court in Cawthorn & Cawthorn (1998) FLC 92-805 where the Full Court cited, with approval, the observations of Kaye J in the case of La Rocca & La Rocca (1991) FLC 92-222. At page 78,538, Kaye J there said:
There are four bases set out in s.79A, three of which are clearly extremely narrow. The first one of miscarriage of justice relates to events at or before trial. The second one as to default by one of the parties in carrying out their obligations enables an innocent party to come along and say, well, he was ordered to transfer to me the motor vehicle; he has burnt the motor vehicle, I now want something else, because it is unjust and unfair to require me to be left with nothing.
It was commented upon, and I agree, that the words of Kaye J over 20 years ago were prescient in relation to this particular matter because, of course, notwithstanding the fact that an appeal might be considered by the wife in relation to proceedings, at the present time she is a convicted arsonist who has destroyed, or at least in part, reduced the value of the asset which was specifically to be utilised for the purposes of the payment of moneys, to which the husband was entitled.
The wife raised a number of passing concerns in relation to this matter but, of course, entirely failed to acknowledge, or to even appreciate that there was an obligation for the payment of a sum certain, in relation to the entitlement of the husband with regard to his property settlement to be effected in relation to this matter.
The wife appeared to be very quick to lay the blame at the feet of her solicitors, the Legal Aid Office, the corrections officers and, I would think perhaps, the Court, in relation to the difficulties that she said that she now experienced, in relation to any payment that might be required to be made. She, of course, entirely omitted any consideration of her own responsibilities arising specifically pursuant to the orders and, at least until such time as an appeal is heard and determined in her favour, the very real effect of her own actions in the destruction or serious diminution in value of the property, which was to be utilised for the purposes of the payment of the entitlements that arose in relation to this matter.
I could not imagine a more obvious case of where it is clear that the circumstances that have arisen subsequent to the making of the orders and, in particular, the actions of the respondent herself in relation to the damage caused to the property to be utilised for the purposes of payment, have rendered impracticable or, to all intents and purposes, impossible, the payment of the moneys that were required to be effected, pursuant to the orders of 5 February 2010.
It is clear that the orders that are sought by the applicant in this matter give rise to at least a possibility, though there is no guarantee, particularly in the current economic circumstances, that sufficient funds will be obtained for the purposes of payment out of what the husband is entitled to pursuant to the orders, in relation to this matter. But the orders that are sought at least give some hope for there to be finality and a conclusion of the financial intertwining of the parties as a result of the marriage and the subsequent breakdown of the relationship. The orders that are sought are in no way a variation of the entitlements that were agreed between the parties with the assistance of their legal representatives more than two years ago. It is simply a re-establishment of a basis upon which the agreement that was reached in relation to the matter can be brought to fruition.
Without hesitation, therefore, I am satisfied that pursuant to the provisions of section 79A(1)(b) this is one of those cases where it is appropriate that there should be a reconsideration of the orders that had previously been made in relation to this matter, and accordingly, I intend to make orders in terms of orders 1, 2, 3 and 4 of the initiating application filed 30 November 2011.

I will direct that my reasons in relation to this matter be published and, of course, be made available to the parties, their legal representatives and a copy held upon the Court file.

RECORDED: NOT TRANSCRIBED

I had anticipated the application, obviously, that you now make in relation to the matter, but being aware of the fact that the wife is not here, I am more inclined to the view that it would be appropriate for me to, perhaps, make an additional order that if there is to be any application for costs on the part of the applicant husband, that written submission, only short I would hope, would be provided within, say 21 days, and that the wife have 21 days from then to file any response. And, unless there is a request in writing for the matter to be further mentioned, that I will deal with the application in chambers. I think that that gives the wife the appropriate opportunity, should she seek to do so, to be heard in relation to the matter, though, for the record, I would think that in light of the findings that I have made, this is one of those cases, pursuant to the provisions of section 117 where, if one looks at the considerations as set out in subsection (2A), that the actions of one of the parties and the fact that the husband has been wholly successful, would be a relevant consideration.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Coker FM

Date: 19 April 2012