Bauer & Nolan (No 6)
[2024] FedCFamC1F 376
•3 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bauer & Nolan (No 6) [2024] FedCFamC1F 376
File number: WOC 1022 of 2019 Judgment of: CHRISTIE J Date of judgment: 3 June 2024 Catchwords: FAMILY LAW – PROPERTY – Enforcement – Where the applicant seeks to enforce a costs order made in her favour subsequent to final property orders – Undefended – Where the respondent has not participated in the enforcement proceedings – Third Party Debt Notice to issue – Applicant appointed as trustee for sale of real property should the respondent not satisfy the costs order – Orders for the respondent to pay the applicant’s costs of the enforcement application. Legislation: Family Law Act 1975 (Cth) ss 90SM, 90SN, 90XT
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Div 11.1.3, r 11.01
Cases cited: Bauer & Nolan (No 4) [2023] FedCFamC1F 598
Bauer & Nolan (No 5) [2024] FedCFamC1F 68
Division: Division 1 First Instance Number of paragraphs: 31 Date of hearing: Determined in chambers on the papers Place: Sydney Counsel for the Applicant: Mr Havenstein Solicitor for the Applicant: Williams Family Law The Respondent: Did not participate ORDERS
WOC 1022 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BAUER
Applicant
AND: MS NOLAN
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
3 JUNE 2024
THE COURT ORDERS THAT:
1.Upon the applicant filing a Third Party Debt Notice addressed to Ms AD and ANZ Bank, the Registrar is requested to issue such Third Party Debt Notices.
2.The respondent pay the applicant’s costs of this application in the sum of $3,050.
3.If the applicant has not received $215,661 from the respondent (or from funds to which the respondent has an entitlement) in satisfaction of the orders of 15 February 2024 within 28 days of the date of this order then a warrant shall issue for the respondent to provide vacant possession of P Street, Suburb Q.
4.If a warrant issues in accordance with order 3 then the applicant is appointed trustee for sale of P Street, Suburb Q.
5.Upon settlement of sale of P Street, Suburb Q by the trustee pursuant to order 4 the proceeds shall be applied as follows:
(a)Payment of the commission owing to the agent, and legal fees arising from the conveyance;
(b)Payment of any and all outstanding Council and Water rates, upon settlement;
(c)Payment of the sum of $215,661 or such part as remains outstanding owing to the applicant for enforcement;
(d)The sum of $3,050 to the applicant pursuant to order 2 if same is outstanding; and
(e)The balance to be paid to the respondent to an account nominated by her, in writing.
6.A copy of these orders and reasons for judgment may be provided by the applicant to ANZ, Ms AD and the solicitors for the estate of the respondent’s mother.
7.The applicant serve the respondent with a copy of these orders and reasons by registered post within 7 days.
8.The applicant have liberty to apply in respect of implementation.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Bauer & Nolan has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
This is an application filed by Ms Bauer (the applicant) to enforce orders for costs made on 15 February 2024. The applicant seeks to enforce the costs order by a variety of means including the making of orders to facilitate the possession and sale of the respondent’s real property and, in the alternative, by orders that vary the final property orders pursuant to s 90SN of the Family Law Act 1975 (Cth) (“the Act”) to include a splitting order of the respondent’s superannuation in the applicant’s favour in a sum that meets the costs order.
The Application – Enforcement was filed on 1 May 2024 and came before me for case management on 10 May 2024. The applicant appeared represented by counsel. There was no appearance from the respondent but before me was an affidavit sworn by a process server detailing three attempts of service at the respondent’s home at P Street, Suburb Q (“the Suburb Q property”). On 10 May 2024 I made the following orders:
1. A copy of this Order be served by 5:00 pm today on the respondent by:
a.emailing it to [the respondent’s email address 1] and [the respondent’s email address 2].
b.posting it to [the respondent’s address].
2.The applicant is directed to file and serve a further affidavit of service in respect of compliance with Order 1.
3.The respondent is directed to file and serve a response and affidavit within 14 days.
4.Absent objection the matter will be dealt with on the papers, each party has liberty to relist in the event of an objection.
5.If the respondent fails to comply with order 3 the matter will be determined on an undefended basis.
Upon the filing of the affidavit of service by the applicant I proceeded to consider the matter as foreshadowed, confident that the application has been brought to the attention of the respondent.
No response from the respondent was received.
No objection to the matter being dealt with on the papers was received.
Accordingly, I am to proceed hearing the matter undefended as against the respondent and on the papers.
The applicant relied on the following material:
(a)Application – Enforcement filed 1 May 2024;
(b)Affidavit of Ms Bauer filed 1 May 2024;
(c)Affidavit of Ms ZZ, solicitor, filed 1 May 2024; and
(d)Affidavit of Ms ZZ, solicitor, filed 29 May 2024.
I was not in receipt of any submissions from the applicant in support of the application, though I note that the orders neither provided for nor prevented the filing of submissions.
BACKGROUND
On 15 February 2024 I made the following orders in chambers on the papers:
1. Within sixty days:
(a)The respondent pay the applicant’s costs of the proceedings from 9 September 2019 to 14 February 2022 on an indemnity basis in the fixed sum of $122,000;
(b)The respondent pay the applicant’s costs of the proceedings from 18 November 2022 to July 2023 in the fixed sum of $83,000;
(c)The respondent pay the applicant’s costs of this application in the fixed sum of $10,000.
Together those amounts total $215,000.
I note the applicant has calculated the interest payable until the date of filing in the sum of $661 and I will order its payment accordingly.
The reasons for making the above orders are contained in Bauer & Nolan (No 5) [2024] FedCFamC1F 68 and, in the determination of this enforcement application, regard should be had to the background set out therein.
On 20 February 2024 the applicant instructed her solicitors to send by email and by post correspondence to the respondent providing details of her solicitor’s trust account for the purpose of payment of the costs order and enclosing the orders of 15 February 2024. Australia Post provided confirmation of delivery to the respondent’s home on 22 February 2024. No response was received.
Payment in accordance with the orders on 15 February 2024 was due on 16 April 2024. It remained outstanding.
On 19 April 2024 the applicant instructed her solicitor to email the respondent advising that they had not received funds into their trust account and giving notice that the applicant will commence enforcement proceedings if funds are not received by 4.00 pm on 22 April 2024.
The applicant filed enforcement proceedings on 1 May 2024.
CONSIDERATION
The applicant is entitled to the fruits of the judgment. I am satisfied that the costs order made 15 February 2024 is enforceable pursuant to r 11.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) as it created an obligation to pay money: see 11.01(2)(f) of the Rules.
The application seeks payment of the funds by one of three methods:
(a)Third Party Debt Notice; and
(b)Sale of property; or
(c)Superanuuation splitting order.
In order to make a superannuation splitting order I would have to make an order under section 90SN of the Act and then an order under s 90SM and s 90XT of the Act.
I am not confident that any of the provisions of s 90SN of the Act are satisfied. While I accept that the respondent is in default of the order which required her to pay the applicant’s costs, she is not, according to the evidence, in default of the original order under s 90SM – and so the provisions of s 90SN(1)(c) are not engaged.
I turn then to the other enforcement mechanisms proposed by the applicant. I made the following findings at trial in Bauer & Nolan (No 4) [2023] FedCFamC1F 598:
81. …a subpoena was caused to be issued to a firm of solicitors who acted in respect of the grant of probate. The parties ultimately agreed that the respondent had an entitlement to $170,988 which the applicant said should be characterised as an asset and the respondent said should be characterised as a financial resource.
82. The High Court in Hall and Hall (2016) FLC 93-709 set out the position as regards financial resources as follows:
The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
(Footnotes omitted)
83. Here the issue seems to be whether or not the monies are within the respondent’s control. If so, then they will properly be regarded as property. As the evidence emerged in cross-examination it may be safely concluded that the respondent not having relinquished her interest in the estate of her late mother is entitled to claim the amount of $170,988 being held in TT Bank account on behalf of the executor of the estate. These funds are properly characterised as being in the control of the respondent albeit she has chosen not to exercise that control. I accept that they are consequently property and not a financial resource and should be included in the balance sheet as such.
It seems sensible that a Third Party Debt Notice issue for the sum of $170,988 or such greater sum as may be held by on behalf of the respondent by the solicitor. The executor of the estate is Ms AD. The applicant should also comply with the requirement in the Rules to serve the Court’s brochure about third party debt notices.
I think it is also appropriate Ms AD and the solicitors for the estate of the respondent’s mother be provided with a copy of these reasons and orders to assist them to understand the role and function of the Third Party Debt Notice.
If the funds held by the Estate are provided to the applicant then the money outstanding will be in the approximate sum of $44,012.
It is also appropriate that a Third Party Debt Notice issue to ANZ Bank. At the trial I found that the respondent held funds with the ANZ in the sum of $78,735 in account number ending in …74.
If the ANZ holds funds on behalf of the respondent in any account sufficient to satisfy the remaining sum then it will be unnecessary to utilise any further enforcement mechanism.
The notice to the ANZ Bank which issues should be in the sum of $44,012 so that the funds recovered do not exceed the funds due. However, the applicant should have liberty to apply in respect of any unforeseen issue.
It is apparent from my findings at trial (and on the application for costs) that the respondent has the capacity to pay such sum without sale of the property (either from the Third Party debt notices or from other funds) and accordingly I will give her a final opportunity to do so after which default orders for the applicant to be appointed trustee for sale will come into force without the need for further application.
The applicant’s enforcement application sought an enforcement warrant (order 2) which was said to be attached. No such warrant was attached. Because I am providing a final opportunity to the respondent to pay the outstanding funds (if same are not covered by the Third Party Debt Notice) a warrant would not have been appropriate at this stage. I accept that if the orders I propose to make appointing the applicant as trustee come into force and an enforcement warrant is necessary then the applicant will (unfortunately) be required to seek same and comply with Div 11.1.3 of the Rules.
The appointment of a trustee for sale is a significant step, as is sale of an asset which my final property adjustment orders permitted the respondent to retain. Unfortunately, the respondent’s failure to engage either personally or through a legal representative with the proceedings has left me with the reasonable assumption that the respondent will not cooperate in implementing these orders and therefore I am with few options. It is not sought, nor do I consider it most appropriate, that there be an independent trustee for sale appointed. The role of the Court is not only to make orders but, when called upon, to enforce them and so in the circumstances of this case it is appropriate that the orders appointing the applicant trustee for sale of the respondent’s property be made.
It is appropriate that I allow 28 days from today’s date before the default order comes into play. I require the applicant to provide the respondent with a copy of these orders and reasons by registered post within 7 days.
The applicant seeks that the respondent pay her costs of this application on an indemnity basis or in the sum of $10,000. Because this application has arisen from the conduct of the respondent, I am satisfied that there are justifying circumstances to depart from the usual rule that each party bear his or her own costs. I am not satisfied that costs on an indemnity basis is warranted and accordingly I will make orders that the respondent pay the applicant’s costs of this application at scale, which in broad terms would entitle the applicant to $3,050. I have provided that those funds be paid from the proceeds of sale in the event that a trustee sale is required. I have not included them in the Third Party Debt Notice since I cannot move to enforcement of this order without providing an opportunity for compliance.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 3 June 2024
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