Belding & Belding
[2020] FamCA 1027
FAMILY COURT OF AUSTRALIA
| BELDING & BELDING | [2020] FamCA 1027 |
| FAMILY LAW – NATIONAL ARBITRATION LIST – s 13K(2)(c) of the Family Law Act – applicant seeking orders varying arbitral award because “in circumstances that have arisen since the award was made, it is impracticable for some or all of it to be carried out” – arbitrator requiring costs to be paid by a date since expired – applicant needing property to be sold in order to raise costs ordered to be paid – husband opposing variation – directions given. |
| Family Law Act 1975 (Cth), ss 13E, 13H, 13K, 80, 117 |
| Guild & Stasiuk [2020] FamCA 348 |
| APPLICANT: | Ms Belding |
| RESPONDENT: | Mr Belding |
| FILE NUMBER: | BRC | 2195 | of | 2020 |
| DATE DELIVERED: | 4 December 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | 26 November 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not applicable |
| SOLICITOR FOR THE APPLICANT: | Natalie Mcdonald Law |
| COUNSEL FOR THE RESPONDENT: | Mr M. Taylor |
| SOLICITOR FOR THE RESPONDENT: | TLG Law |
Orders
The costs award made by Bruce Thiele on 15 October 2020 is varied to allow the applicant wife to pay the sum of $16,847, the sum stipulated in the costs award, from the proceeds of sale of the D Town home.
On or before 4:00pm on 18 December 2020 the parties must file and serve any further affidavit material and submissions as they may be advised to file in relation to the following points –
(a) whether the sale of the D Town property is to be by private treaty or public auction;
(b)in what timeframe any such sale is to occur; and
(c)any other issue raised by Mr Taylor’s written submissions dated 25 November 2020.
The issues raised as aforesaid will be determined on the papers.
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 Belding & Belding 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 MELBOURNE |
FILE NUMBER: BRC 2195 of 2020
| Ms Belding |
Applicant
And
| Mr Belding |
Respondent
REASONS FOR JUDGMENT
Introduction
Following the arbitration of this proceeding before Bruce Thiele, the arbitrator determined that costs were properly payable under s 117(2) of the Family Law Act and Mr Thiele ordered the wife to pay the husband’s costs on a party-party basis in the sum of $16,847. The arbitrator published an award on costs dated 15 October 2020.
The arbitrator’s substantive award on the matters referred for his determination under s 13E of the Family Law Act was dated 24 September 2020. On 16 October 2020, by consent, I made orders under s 13H of the Family Law Act registering both the substantive award as well as the costs award, with the consequence that each took effect as if each was a decree of this court.
The arbitrator required the costs order to be paid within 30 days of 15 October 2020, that is to say, by 15 November 2020.
On 16 October 2020, when the parties sought consent orders for the registration of the arbitrator’s award, Ms Natalie McDonald, solicitor for the applicant wife, informed me that the wife wished to vary aspects of the costs award by reason of a collection of circumstances. With the cooperation of Ms Geysen, the respondent husband’s solicitor, consent orders were made requiring any application to vary the costs award to be filed and served by 4pm on 30 October 2020. Material in response was ordered to be filed and served by 4pm on 13 November 2020 and both parties were ordered to file written submissions one week later on 20 November 2020. I adjourned the hearing of the applicant’s application to vary the arbitral award and costs to 1pm on 26 November 2020. On that last date, a Thursday, I heard viva voce submissions and informed the parties that I would deliver my decision the following week.
These are my reasons.
Synopsis
For the reasons that follow I accede to the applicant’s request to vary the costs award. The arbitrator required the full amount of costs to be paid by 15 November 2020. The applicant has proposed orders permitting her to pay the costs award from the sale proceeds of real estate, that is to say, on a date later than the date ordered by the arbitrator.
The nature of this application
The arbitrator’s award in relation to costs was registered by consent on 16 October 2020. That award, together with the substantive award, once registered, together took effect as a decree of this court.
Under s 13K(1), once an arbitral award is registered the court may make a decree affirming, reversing or varying the award. Section 13K(2) significantly circumscribes the events in which an order affirming, reversing or varying the award may be made. That is evident from the words in s 13K(2) “the court may only make a decree” under subsection (1) if satisfied of one of four things set out in s 13K(2)(a)-(d).
In this case no suggestion was made that the arbitral award in relation to costs was affected in any way by fraud or bias, nor was it suggested that the arbitral award in relation to costs is void, voidable or unenforceable. Instead the applicant seeks orders varying the award in reliance upon s 13K(2)(c), namely that “in circumstances that have arisen since the award was made, it is impracticable for some or all of it to be carried out.”
Section 13K(2)(c) puts in a temporal context the requirement that the relevant impracticable circumstances have arisen “since the award was made.” In that eventuality it is competent for a decree to be made varying the arbitral award in respect of the carrying out of some or all of it.
For present purposes, “impracticable” does not mean “impossible.” For a deep examination of the word “impracticable” in the context of s 90 of the Family Law Act, the decision in Guild & Stasiuk[1] is a useful guide. As I surveyed in Guild, the word impracticable involves concepts of something that is not able to be done. I have surveyed the authorities on this issue at length from paragraph [416] to [435] of my reasons. For present purposes, I incorporate those paragraphs into these reasons.
[1] [2020] FamCA 348.
The evidence on which the applicant relies
It is important to point up that the applicant does not resist the phenomenon of a costs order being made against her. To the contrary, she consented to the registration of the costs award (for that matter, both awards). The applicant instead sought orders from me varying the orders made by the arbitrator mainly in respect of the date for payment.
In order to succeed on that application, the applicant was required to demonstrate that “in the circumstances that have arisen since the award was made it was impracticable for some or all of it to be carried out.”
Ms McDonald deposed in her affidavit made 10 November 2020 to the events leading to both arbitral awards. She also deposed to the applicant’s accident on 29 October 2020 and to the injuries the applicant sustained. The applicant was required to file material on 30 October 2020 but was unable to do so by reason of the injuries she sustained in the accident on 29 October 2020. Ms McDonald deposed to the fact that the applicant’s existing medical certificates show that the applicant will be unable to work until 6 December 2020. According to Ms McDonald the applicant’s current medical advice is to the effect that the applicant “may be unable to work for at least the next three (3) months.” That translated to a date in early February 2021.
According to Ms McDonald, the applicant –
a)wishes to sell the D Town property;
b)prior to seeling it, the applicant wishes to repair, paint and maintain the D Town property; and
c)will need to meet expenses for her own medical care and living expenses.
It seems to me that the applicant raised an arguable case that since the making of the award circumstances have arisen making it impracticable for the carrying out of the date by which the costs award is to be paid.
The precise orders sought by the applicant were as follows –
1.That the Wife pay to the husband the amount of $16,847.00, as referred to in the Costs Award dated the 15th October 2020, from settlement funds resulting from the sale of the D Town home as detailed in the Arbitration Award dated the 24th September 2020.
2.That the Husband immediately execute the Release of Caveat for the property as referred in the Arbitration Award dated the 24th September 2020.
The position of the husband
The respondent husband made an affidavit on 16 November 2020. In it he stated that he did not agree to any extension of the date for the payment of the costs order. He also contended that the wife’s conduct had at all times been dishonest and without merit. That was a serious allegation to make. No matter how heartfelt the deponent may have believed in its truth,[2] an allegation of dishonesty must only be made on proper grounds. The respondent also spoke of his ongoing attempts to settle the entire proceeding.
[2] That affidavit did not reveal that it had been prepared by legal representatives who would otherwise have been required to exercise more care when making such allegations.
In paragraph 40 of his affidavit the respondent deposed to what he described as “an amendment to the arbitration award.” On his behalf Mr Taylor of counsel proposed a minute of orders, five paragraphs in length. That proposal was as follows –
1.That the wife pay costs of $16,847 to the husband by 27 November 2020;
2.That in the event the sum of $157,465 is not paid to the husband’s solicitor’s nominated trust account by 16 February 2020, interest in respect of that amount will be payable at the default rate from the date of the default.
3.That the house is to be placed on the market for sale no later than 16 February 2020;
4.That pending the sale/settlement the wife meet the mortgage and all costs associated with the house including but not limited to rates, household insurance.
5.That the husband will execute a release of caveat for the property with in (sic) 30 days as required but that that release be held by the wife’s solicitor on her undertaking as a solicitor to –
a. To hold same to the order of both parties and not register same until any contract for the sale of the D Town property becomes unconditional;
b. To notify the husband's solicitor forthwith upon the contract of sale becoming unconditional;
c. To provide the husband's solicitor with full details of the registration of the release of caveat including the dealing number, lodgement and any requisition issued in respect of same;
d. Have drawn at settlement, to be collected at settlement a bank check sufficient to pay out all of the husband's then entitlements under the order as at the date of settlement.
Mr Taylor also provided written submissions for the hearing on 26 November 2020. It is necessary to go to the detail of those submissions. Mr Taylor argued –
a)the respondent took the opportunity to raise certain deficiencies in the machinery of the award and order pursuant to s 80 of the Family Law Act;
b)the arbitrator’s award required the wife to pay the husband within 60 days the sum of $157,465 so as to effect a 55/45% distribution in favour of the wife;
c)in default of the payment of $157,465 the property known as B Street, D Town was to be sold and the husband’s entitlement paid upon the sale of that property;
d)the arbitral award is silent on the date of sale of the D Town property if sale becomes necessary and the award made no provision for an alternative sale mechanism if the property did not sell after private treaty; and
e)the respondent gained no security from an order requiring him to be paid a sum upon the happening of a certain event yet the date for the event to occur was not specified.
Mr Taylor on behalf of the husband proposed a collection of further orders beyond those in the arbitral award. Those proposed new orders included the following –
a)in the event that the default provision (para 8) of the award shall become operative, then the wife shall forthwith, take all steps necessary to effect the sale of the B Street property in accordance with that paragraph, and in any event shall ensure that the property is listed for sale by not later than 26 February 2021;
b)in the event that the property is not the subject of an unconditional contract for the sale within 90 days of the date of listing, the respondent wife shall do all thin (sic) and sign all documents necessary to list the property for sale by public Auction and in such event the reserve price shall be not less than $785,000.00;
c)that the wife will pay interest on any amount payable pursuant to order 8 of the award, from 26 February 2021 until the date of payment, and the Family Law default rate from time to time.
He also proposed a new order about the removal of caveats. It was in the following terms –
1.That the husband will forthwith execute a release of caveat for the property and that release shall be held by the wife’s solicitor on her undertaking as a solicitor –
a) to hold same to the order of both parties and not register same until any contract for the sale of the D Town property becomes unconditional;
b) to notify the husband’s solicitor forthwith upon the contract of sale becoming unconditional;
c) to provide the husband’s solicitor with full details of the registration of the release of caveat including the dealing number, lodgement and any requisition issued in respect of same;
d) to have drawn at settlement, to be collected at settlement a bank check (sic) sufficient to pay out all of the husband’s then entitlements under the order as at the date of settlement.
The husband then proposed a wholesale revamp of orders, after the wife paid him $16,847 by 27 November 2020. Those orders were as follows –
2.That in the event the sum of $157,465 is not paid to the husband’s solicitor’s nominated trust account by 16 February 2020, interest in respect of that amount will be payable at the default rate from the date of the default.
3.That the house is to be placed on the market for sale no later than 16 February 2020.
4.That pending the sale/settlement the wife meet the mortgage and all costs associated with the house including but not limited to rates, household insurance.
5.That pending the sale/settlement neither party shall withdraw any funds against the mortgage.
6.That the husband will execute a release of caveat for the property within 30 days as required but that that release be held by the wife’s solicitor on her undertaking as a solicitor to –
a) to hold same to the order of both parties and not register same until any contract for the sale of the D Town property becomes unconditional;
b) to notify the husband’s solicitor forthwith upon the contract of sale becoming unconditional;
c) to provide the husband’s solicitor with full details of the registration of the release of caveat including the dealing number, lodgement and any requisition issued in respect of same;
d) have drawn at settlement, to be collected at settlement a bank check sufficient to pay out all of the husband’s then entitlements under the order as at the date of settlement.
The parties did not engage to debate the husband’s proposals as were recorded in Mr Taylor’s written submissions.
The costs issue
The first issue that fell for determination was the applicant’s application for a variation of the costs ordered by the arbitrator to be paid by 27 November 2020. The date she sought was not specified. Her proposal linked the payment of costs to the availability of funds derived from the sale of the D Town property “as detailed in the arbitration award dated 24 September 2020.”
That highlighted the circuitous nature of the debate on this application. The husband refused to concede that the applicant’s application for a deferral of the payment of the costs ordered had merit. Yet any consideration of the wife’s application necessarily enlivened the points about which Mr Taylor made complaint, especially about the mechanics associated with the sale of the D Town property and the derivation of sale proceeds. To my mind, Mr Taylor’s points have merit. It seems that either that matter was not ventilated before the arbitrator or it was unimportant because the point was not addressed by the arbitrator yet the arbitral award was otherwise very thorough and comprehensive.
It was apparent enough that the applicant is unable to raise funds from her own resources in order to pay the husband the sum ordered to be paid to him. The property at D Town must be sold. From the net sale proceeds, the applicant will pay the costs ordered to be paid by her.
Paragraph 8(a) of the orders made by the arbitrator suffers from two defects, it seemed to me. The first was that no time limit was stipulated by which the sale was to be effected. The second was for a sale by private treaty. It is arguable that the sale should be by public auction rather than by private treaty. However, before me the parties did not join issue on that point. In its current form, paragraph 8(a) of the arbitrator’s award fails to place an end date by which the sale (currently by private treaty) is to take place. Nor does that paragraph recognise the desirability of and greater practicality associated with a sale by public auction. Commonly, parties may have 90 days within which to prepare a property for sale.
Whatever may be the apparent attraction to such a course, in this application the husband’s proposals as advanced by Mr Taylor seemed to have been ventured late as Ms McDonald did not address them, whether at an evidentiary level or in submissions. It seems that the applicant recognises the wisdom of them as she sought the orders for the payment of costs to be reckoned against the sale of the property.
It would be wrong for me to make orders without giving the parties an opportunity of considering what I have written thus far and putting forward such further affidavit evidence and submissions as they wish. That material should address –
a)whether the sale of the property is to be by private treaty or public auction;
b)in what timeframe any such sale is to occur (whether it be one month or more); and
c)any other issue that is generated by Mr Taylor’s written submissions dated 25 November 2020.
I have in mind that the parties have two further weeks to file and serve any further affidavit material and submissions as they may be advised to file.
In those circumstances, thereafter I propose to determine the remaining matters on the papers.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 4 December 2020.
Associate:
Date: 4 December 2020
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