Booth and Booth

[2013] FamCA 1063

FAMILY COURT OF AUSTRALIA

BOOTH & BOOTH [2013] FamCA 1063

FAMILY LAW – PROPERTY – Application by husband to have orders altered pursuant to s 79A of the Family Law Act 1975 (Cth) – Application successful – proceedings adjourned for a period of ten years – procedural orders

Family Law Act 1975 (Cth) s 79A

La Rocca v La Rocca 1991 FLC 92-222

Cawthorn v Cawthorn (1998) FLC 92-805
Carrington v Carrington(No.2) [2010] FamCA 982

APPLICANT: Mr Booth

RESPONDENT: Ms Booth

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: AYC 468 of 2010

DATE DELIVERED: 16 December 2013

PLACE DELIVERED: Hobart

PLACE HEARD: Hobart

JUDGMENT OF: Benjamin J

HEARING DATE: 16 December 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: In person

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: In person

SOLICITOR FOR THE RESPONDENT:

Orders

1. Pursuant to s 79A(1)(a) the property orders made 22 February 2011 be set aside.

2. Pursuant to s 79A these proceedings be adjourned for ten (10) years from the date of today’s date or such longer or shorter period as is determined by the Court.

3. Each party be given leave to make application to the Court for interim or final orders in relation to that ten (10) year period set out in order 2 above.

IT IS DIRECTED

1. Both parties shall, within fourteen (14) days, provide full details of the husband’s proposed occupation of the property for sale of petrol and for sale of carpets and for operation of his business and request of G Pty Ltd whether that will in any way delay or adversely impact upon the mediation work being carried out on the site.

IT IS FURTHER ORDERED

1. In the event that G Pty Ltd seriously objects to the proposals suggested by the husband under evidence in this court today, leave be given to the parties to request for a direction appointing the wife as receiver to enter into the contract suggested by G Pty Ltd of $50,000 per year and the remediation work.

2. In the event that the husband remains in occupation of the property, by way of interim property order,  the husband shall pay to the wife half the difference of the rent that G Pty Ltd offered and the annual costs of operating the site including ordinary repayments of principle and interest on the mortgage, council rates and insurance.

IT IS FURTHER DIRECTED

1. A copy of the reasons for these orders be taken out and placed on the Court file.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Booth v Booth 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 HOBART

FILE NUMBER: AYC 468 of 2010

Mr Booth

Applicant

And

Ms Booth

Respondent

REASONS FOR JUDGMENT

1. There is an application before me to set aside orders made 21 February 2011 in respect of property. These orders were made by Federal Magistrate Henderson, as she then was, at the request of the parties, each being represented by lawyers at that time. The orders provided for the sale and division of property between the parties as to 60 per cent to the wife and 40 per cent to the husband. The parties’ marriage has been emotionally and financially disastrous for both of these people. They have lost trust with each other as well as their relationship. It has, from what I have been told today, impacted upon them in various difficult ways, in particular with their children. When the matter first became before me, I asked the parties to go away and see if they could find a solution. They have been unable or unwilling to do so. It is an application under s 79A(1)(b) of the Family Law Act 1975 (Cth) (‘the Act’).

2. That section gives me power to either discharge of vary orders.  I intend to discharge part of the orders but not all of the orders.  There is a background to these proceedings.  The husband is age 49.  The wife is age 46.  They married in 1990, and separated under the same roof, according to the wife, in August 2010.  That is a relationship of some 20 years.  They were fortunate enough to have three children: Mr B, aged 20; Ms C, aged 18; and D, aged 15.  In December 2010 an application was made by the wife to the then Federal Magistrates Court for property and parenting orders, and the aspects of those proceedings were, insofar as property was concerned, finalised on 21 February 2011.  The parties have sold or disbursed most of their other property, and all that is left now is property at E Street, F Town, New South Wales.

3. That property is subject to a mortgage and the mortgage repayments total about $28,000 a year, and with council rates and other expenses it totals about $34,000 a year.  It was anticipated that this property would be sold, and the proceeds divided as to 60 per cent to the wife and 40 per cent to the husband. 

4. The property, on the evidence before me, cannot be sold in its current form.  G Pty Ltd has offered to rent the property to enable the husband to continue his business and undertake the remediation work.  They agreed to pay $50,000 a year, which would leave the sum of about $16,000 for division between the husband and the wife, if on a 50 / 50 basis, and somewhat different, if on a 60 / 40 basis.  That is the course that the wife urges me to take.  She complains that the husband undertakes things and does things without her knowledge or consent. 

5. The husband on the other hand, says that he has entered into an arrangement to sell petrol on the site, and that he intends to sell his businesses next year, and that his use of the site, will not impede G Pty Ltd in its remediation tasks at the site, and that if there are any issues they are able to be addressed between he and G Pty Ltd.  He goes on to say that once the remediation work has been completed there will need to be a commercial negotiation between the parties on one part, and G Pty Ltd on the other part, to bring the matter to an end.  There is no reason, presumably, that that negotiation cannot commence now.  Although, if the parties remain as they are, and as I have seen them on two occasions via video link, distrustful and angry at each other, it is unlikely any decent solution can be achieved.

6. The wife is concerned, and asserts that she was the subject of domestic violence.  The husband denies that assertion.  My task, of course, is not in relation to children.  My task is in relation to the application that is before me.  When the matter first came before me some months ago, I directed the filing of affidavits, and the husband has filed a series of affidavits upon which he relies, namely, those of 12 August 2012, 26 October 2012, 26 July 2013, 12 September 2013, and 2 December 2013.  I have had regard to the material contained in that affidavit, and invited the wife, should she wish to cross-examine the husband.  She finds this very difficult, because of the history to which I have alluded to much earlier.  As such, I directed that each of the parties were sworn at the bar table so that what they told me I could treat as evidence.

7. It is noted that when I use the terms wife and the husband I mean, the former wife and the former husband as I think the marriage was dissolved some years ago.

8. I read out a statement in which the wife made clear her views.  It seems to me that the order cannot stand in its current form.  If a receiver manager were appointed to sell this property and negotiate with G Pty Ltd in the current circumstances, it would, on the evidence before me, lead to the bankruptcy of both parties because a receiver manager would charge tens of thousands of dollars, employ lawyers at tens of thousands of dollars, and would turn a financial disaster into a catastrophe.  I do not intend to take that stage, at this stage. 

THE LAW

1. In these reasons, I note that s 79A(1)(b) provides that the court may set orders aside where circumstances have arisen since the order was made, that has made it impractical to carry out all or part of the order. I note the comments of Kay J La Rocca v La Rocca 1991 FLC 92-222 at page 78,538, where his Honour said:-

   My own view is that the concept of impracticability, as referred to in this section, is akin to the application of the doctrine of frustration in contractual matters.  What the parliament is concerned with and what ought to be concerning the Court, is the happening of events which cannot be reasonably foreseen, which will have the effect of causing injustice to one of the parties, if the happening of event is not given effect to.

2. Kay J went on to say:-

   In standard contractual doctrine,  I think that is as comfortably as anywhere described by Russell  J. in Re Badische Co. Ltd. (1921) 2 Ch. 331 at 379 ,  where his Honour said:

   The doctrine of dissolution of a contract by the frustration of its commercial object rests on an implication arising from the presumed common intention of the parties.  If the supervening events or circumstances are such that it is impossible to hold that reasonable men could have contemplated that event or those circumstances and yet have entered into the bargain expressed in the document, a term should be implied dissolving the contract upon the happening of the event or circumstances. 

   Now, in my view, what the appropriate application of s. 79A(1)(b) ought to be is that circumstances that have arisen in which it becomes impracticable to carry out the orders are circumstances that could not reasonably have been contemplated and that in such circumstances, whilst impossibility is not the test and impracticability is, it may then become just and equitable to change the orders.

3. The Full Court in Cawthorn v Cawthorn (1998) FLC 92-805 observed at page 85,060:-

   We also agree with the views of both Kay and Moss JJ in that the concept of impracticability contained in s79A(1)(b) is quite different from the problems of enforcement which may arise due to a parties insolvency. In such a case, the matter may well have to be dealt with pursuant to the provisions of the Bankruptcy Act. This, however, merely reflects the vicissitudes of life and is in harmony with the clean break principals enshrined in the Act. An application for a further settlement of property is not available in circumstances where one party suddenly becomes immensely rich.

4. The Full Court went onto say:-

   All business activities however are subject to the vicissitudes of commercial life … businesses may always be subject to financial misfortune but not necessary for the purpose of s79A(1)(b) to be able to predict the precise form or nature of the misfortune or manner in which it may arise.

5. As I set out in paragraphs 76, 77 and 78 in my decision in Carrington v Carrington(No.2) [2010] FamCA 982. The orders cannot remain and the contribution of each of the parties from the date the orders were made to the date that the property is eventually sold and they reach an agreement cannot be ascertained at this stage as there has not been, in those circumstances, a property hearing. It may be that the contributions of the husband in money terms may be given some weight, or it may well be that the contributions made by the wife, in maintaining and upbringing the three children of the parties, may be given greater weight. I do not know.

6. What I intend to do is put orders in place, which will enable the parties over the next few years to get this property sorted out and sold.  At that time, this Court can make findings on contribution, and as to whether it ought to be as the former orders that indicated or otherwise.  The other aspect will mean dealing with the management of the property in the meantime.  It is clear that the value of this property is wholly dependent upon G Pty Ltd remediating the site.  They must be given clear access to the site to remediate that work.  If the husband is operating a service station and it does not remediate the work, then there is no reason he cannot occupy the premises, and pay the same amount that G Pty Ltd would otherwise have paid, or at least, half the difference to the wife, so that she gets some return, pending the outcome of the remediation work.

7. If, on the other hand, his occupation of the property interferes with the remediation work and G Pty Ltd is still prepared to pay the $50,000 a year, well, then that course should be adopted.  I will be directing that the husband inform the wife in advance of any agreements that he enters into, and note that any agreement that he enters into without the wife’s consent is beyond his powers.  In addition, I will be adjourning the property proceedings generally with leave for either party to bring it back before this Court on 14 day’s notice, in relation to any final property orders, or in relation to any interim property orders.  What I mean by the latter is this, that if the parties can’t reach an agreement about a particular aspect of how the negotiations should go, or what approaches should be made, or what aspects need to be dealt with, it will come back to this Court, and I will make determinations for them if they are unable to do so themselves.

8. Or if they act outside the scope of the orders it can be brought back to me and I can deal with that.  Hopefully, once G Pty Ltd takes it further it may be that the property can be sold, and then there can be a short hearing in relation to the division of the property and the circumstances, when we know the value of the property or the liabilities of the parties.  I intend to give leave for up to 10 years for these proceedings to be brought back to me. 

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 16 December 2013.

Associate:     

Date:              16 December 2013