C Pty Ltd (in Liquidation) and Karbines & Ors

[2010] FamCA 612

FAMILY COURT OF AUSTRALIA

C PTY LTD (IN LIQUIDATION) & KARBINES AND ORS [2010] FamCA 612

FAMILY LAW – JURISDICTION – application for the removal of a caveat over a property – whether the Court has jurisdiction to make such an order – held that the Court does have jurisdiction in relation to matters enabling the enforcement of its orders – where the matter has a long history – orders for the removal of the caveat

FAMILY LAW – COSTS – where respondent has been wholly unsuccessful – consideration of the financial circumstances of the parties – orders made that respondent pay for the applicant’s costs

Family Law Act 1975 (Cth) s 79, 90AD, 90AE & 90AF

APPLICANT: C Pty Ltd (in liquidation)

1^ST RESPONDENT: Mr Karbines

2^ND RESPONDENT: Ms Karbines

3^RD RESPONDENT: J Karbines

FILE NUMBER: MLF 2479 of 2005

DATE DELIVERED: 6 July 2010

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 6 July 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Thomas

SOLICITOR FOR THE APPLICANT: Norman Waterhouse

COUNSEL FOR THE 1^ST RESPONDENT: N/A

SOLICITOR FOR THE 1^ST RESPONDENT: Patrick Cash & Associates

COUNSEL FOR THE 2^ND RESPONDENT: N/A

SOLICITOR FOR THE 2^ND RESPONDENT: Maddens Lawyers

COUNSEL FOR THE 3^RD RESPONDENT: Mr Berman

SOLICITOR FOR THE 3^RD RESPONDENT: Patrick Cash & Associates

Orders

1. The caveat dated 30 April 2010 lodged by J Karbines on the property known as the “Queensland property” situated at … in the state of Queensland, Title Reference … be removed forthwith.

2. A Registrar of this Court is appointed to forthwith execute on behalf of J Karbines the necessary instrument to give validity to any documents to give effect to Order 1 hereof.

3. J Karbines is restrained from lodging any caveat on the property or from otherwise interfering with the sale of the Queensland property.

4. The third respondent J Karbines pay the applicant first intervener (C Pty Ltd (in liquidation)) costs of and incidental to these proceedings and that such costs to be agreed or failing agreement within twenty-one [21] days to be taxed.

IT IS NOTED that publication of this judgment under the pseudonym C Pty Ltd (In Liquidation) & Karbines and Ors is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER:  MLF 2479 of 2005

C PTY LTD (IN LIQUIDATION)

Applicant

And

MR KARBINES
MS KARBINES
J KARBINES

Respondents

EX-TEMPORE REASONS FOR JUDGMENT

1. This is a matter which is before me by way of application brought by the intervenor in an application in a case, filed on 16 June 2010.  The affidavit of service before the Court indicates that the proceedings were served on the respondent, Ms J Karbines, on 17 June 2010.  The application is brought by the liquidator of the company, C Pty Ltd (in liquidation), who seeks an order that the Court direct a Registrar of this Court to sign a withdrawal of caveat, which has been lodged over the property at …, in the State of Queensland.

2. That caveat has been lodged by the respondent, Ms J Karbines, who is the mother of the husband in the long running, ongoing property settlement proceedings before the Court.  The history of the matter is substantial.  The Court takes into account that history as set out in the many judgments which have been delivered in this matter, including judgments made by me in relation to the intervenor’s claim in May of 2008 and May 2009 and, specifically, the final orders made by the Court in December 2009 subsequent enforcement orders and subsequent proceedings brought, following the final orders, being the judgments of Justice Strickland and other first instance judges of this Court.

3. The chronology supplied by the counsel for the intervenor is helpful.  It indicates that the proceedings (which were property settlement proceedings between the husband and wife) had been outstanding for some time.  The first day of trial commenced in April 2007 when Ms J Karbines was present. 

4. On 2 May 2008 orders were made in relation to the claim by the intervenor, the liquidator of the company, ordering the payment of $65,301.

5. The orders were:

   “1.It is declared that the husband and wife hold the property at […] (“the [Queensland] property”) on constructive trust for the first intervener [C] Pty Ltd (In Liquidation) ACN […] to the extent of the sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00].

   2.That if the said sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00] has not been paid to the first intervener [C] Pty Ltd (In Liquidation) by the 30^th June 2008 the liquidator shall be entitled to sell the [Queensland] property by public auction or private treaty.

   3.The proceeds of sale are to be paid as follows:

   3.1in payment of the reasonable costs of and incidental to the sale;

   3.2in payment of the mortgage to the Commonwealth Bank of Australia;

   3.3in payment of the sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00] due to the first intervener [C] Pty Ltd (In Liquidation);

   3.4the balance of proceeds of sale to be held in trust by the liquidator in an interest bearing account pending further order of this Honourable Court.

   4.The question of the costs being sought by the first intervener and the wife is adjourned to 10.00 am on 26 May 2008 before the Honourable Justice Dawe sitting in Mt Gambier.

   5.Leave is given for counsel for the first intervener to appear by telephone link.

   6.Any material to be filed in support of the application for costs is to be filed and served by the 19 May 2008 at 4.00 pm.

   AND IT IS NOTED    The matter is adjourned for the conclusion if possible of the trial of the proceedings between the husband and wife and between the husband and wife and Mr and Mrs [Willa] and the question of costs of the first intervener and the wife of the proceedings concerning the Queensland property to be heard in Mt Gambier in the week commencing 26 May 2008 and the parties are DIRECTED to ensure that all witnesses are available to give evidence in relation to those proceedings concerning the matters arising between Mr and Mrs [Willa] and the parties and between the husband and wife by way of property settlement.

   AND IT IS FURTHER NOTED The first intervener will file an updated report of the Liquidator by annexing it to an affidavit by 4.00 pm on the 19 May 2008.”

6. Further orders have been made in relation to the sale of the property, in order for the liquidator to recover that sum and also making provision for the liquidator to recover the costs which have been ordered.  The total sum payable to the liquidator is now in excess of $130,000. 

7. The specific application which is being sought to be enforced is the order of 19 December 2008, which provided:

   “Upon noting that previous orders of this Court provide for the payment of monies due to the 1^st Intervener, [C] Pty Ltd (In Liquidation) and the option of the liquidator to sell the property at [Queensland] it is further ordered that if the [Queensland] property has by this date not been made the subject of contract for sale then it is further ordered that the [Queensland] property be sold at a price and manner to be agreed between the parties being the husband, wife and 1^st Intervener, [C] Pty Ltd (In Liquidation) provided that the proceeds of sale are to be paid:

   (a)firstly, in discharge of any mortgage secured over the [Queensland] property;

   (b)secondly, in payment of monies due to the 1^st Intervener pursuant to the order of this Court (including any interest accrued in accordance with the Family Law Act and Rules);

   (c)thereafter, any remaining proceeds to stand initially to the credit of the husband in a Trust Account of the solicitors acting for the wife pending any further order of the Court in relation to costs.”

8. That order was made following upon the orders which were made in May of 2008 as set out above.

9. Today counsel for the liquidator seeks to have orders made, pursuant to the provisions of the Family Law Act. 

10. During discussions with counsel the issue of accrued jurisdiction of the Family Court was raised.  Mr Berman appears as counsel for the respondent, J Karbines, opposing any orders being made on the basis of lack of jurisdiction.  He referred to seeking the Court’s indulgence but did not making any formal application for an adjournment. 

11. The question of jurisdiction was the main issue before the Court this morning. 

12. Counsel for the liquidator relies upon the jurisdiction of the Court, both as set out in the specific provisions of the Family Law Act and its inherent jurisdiction. The order sought is of the nature of an injunction or mandatory order, because the liquidator seeks an order that the Registrar sign a document which would remove the caveat over the property which has been lodged by the third respondent.

13. A copy of that caveat appears annexed to the affidavit filed on behalf of the liquidator.  The document which appears to have been signed by Ms J Karbines on 30 April 2010 asserts that she is now claiming that she is a beneficiary:

    “ ...under resulting constructive and implied trusts, arriving [sic] from direct and indirect financial contributions by the caveator to the acquisition, conservation and improvement of the land herein before referred to.”

14. Those issues were raised by the husband in the proceedings before me.  The husband’s mother was present at the commencement of the trial.  On other occasions she has subsequently sought to delay the proceedings and enforcement of the orders of this Court, on various occasions, by foreshadowing that she was proposing to take certain steps, which have not eventuated.

15. It is necessary to consider the whole history of this matter, including the whole history of the steps that have been taken, or have not been taken, by the husband’s mother with full knowledge of the proceedings before this Court and the issues that have been dealt with by this Court.

16. In the reasons for judgment published on 19 December 2008 paragraphs 19 to 23 stated:

    “19.The first two days of the trial were occupied with preliminary matters concerning the admissibility of evidence, clarifying the factual issues which were in dispute between the parties and discussing the procedures to be followed and witnesses called.

    20.On the 2 May 2007 the wife sought certain orders relating inter alia to real property owned by the Family Trust, [Mr and Mrs Willa], the husband’s brother’s Family Trust and [L] Pty Ltd.

    21.The husband also sought orders directing the wife to give approval for refinance of loans secured over some real estate.

    22.I heard submissions from the husband, counsel for the wife, Mr and Mrs [Willa] and the liquidators.  I also heard submissions from the husband’s mother.

    23.The reasons for the orders made are set out in the judgment delivered on the 4 May 2007.”

17. When the liquidator brought further proceedings to enforce the orders in May 2009 the third respondent Mrs J Karbines was served with the proceedings. 

18. The third respondent brought an application for an adjournment of the enforcement proceedings in August 2009 alleging that Section 79A proceedings were about to be instituted.  On 25 August 2009, Justice Strickland dismissed her application.

19. After further proceedings a Writ of Possession was finally executed in February 2010.

20. The submissions by Mr Berman that the Court does not have jurisdiction is based on an assertion that there are now no section 79 proceedings on foot before this Court.  It is correct to say that the actual proceedings between the husband and wife under section 79 have been the subject of final orders.  However, this Court continues to have jurisdiction in relation to matters to enable it to bring about enforcement of its orders.  This Court is a superior Court of record and has jurisdiction by way of inherent jurisdiction to ensure that its orders are obeyed.  It can enforce its orders.  It has inherent power to ensure that steps are not taken by any person to bring about a situation where its orders are deemed to be meaningless or ineffectual. 

21. Taking into account the history of the proceedings in this matter and the legitimate orders made in favour of the liquidator made on several occasions under the appropriate jurisdiction of this Court, I am satisfied that this Court does have jurisdiction to make the order which would enforce its previous orders.

22. The claim apparently made in the caveat by the husband’s mother, is a claim which may in the future be the subject of proceedings between herself, her son, and her former daughter-in-law in another Court of civil jurisdiction in Queensland or may form part of a claim for payment of monies by her son (who we are told is now bankrupt), and possibly against her former daughter in law.

23. However, the issues which were raised by that claim were specifically the subject of consideration before this Court.  The husband’s mother chose not to participate in those proceedings.  All she has done is to file a caveat, which has the effect of preventing the liquidator recovering the sums due to it, pursuant to orders of this Court.  The fact that she has that possible claim, however, does not reduce the capacity of this Court to continue to enforce the orders of this Court, which clearly establish the right of the liquidator to sell that property and to recover the funds in accordance with the Court order.

24. The other factor to be taken into account is also the question of whether the history of the matter suggests that the caveat lodged by the husband’s mother is simply a delaying tactic and is not a genuine process.  I make no finding in that regard but take into account the history of the proceedings so far as determining whether it is appropriate and, indeed, just and equitable to make an order that would direct the immediate removal of the caveat.  The removal of the caveat would not distinguish any claim the husband’s mother has against her bankrupt son or former daughter-in-law.  It would simply remove the security that she currently has in relation to the real estate in Queensland.

25. In considering, therefore, the jurisdiction of the Court, I take into account the provisions of Part VIII of the Family Law Act and in particular, Part VIIIAA, which relates to property settlement proceedings and the enforcement of property settlement proceedings;  the extension of the meaning of matrimonial clause in section 90AD, the provisions of section 90AE and 90AF.  I also rely on the inherent jurisdiction of this Court to enforce its Court orders, the Court orders having been appropriately made under section 79 and in accordance with existing accrued jurisdiction of the Court to make the orders in favour of the liquidator. 

26. I also take into account that the husband’s mother, the respondent in these proceedings, has again not filed any documents notwithstanding the documents having been served on her on 17 June 2010.  The submissions on behalf of the liquidator indicate that the contract for sale of the Queensland property has a settlement date now of 16 July 2010 and the consequences of delaying the matter further could be significant.

27. There is nothing before the Court which would indicate that the mother of the bankrupt husband has any funds available to her which would provide security for the payment of the judgment sum and costs now incurred by the liquidator, which would protect the liquidator from any damage that might be suffered, or caused, by any ongoing delay. 

28. Weighing up all of the factors, I am satisfied the Court has jurisdiction to make the orders under the provisions of the Act and under the inherent jurisdiction of this Court and that the orders sought by the liquidator are both appropriate and necessary.

29. I am also satisfied that the respondent, J Karbines, has been given sufficient notice of the proceedings and, by her failure to take further steps, has reduced any merit in her claims for any delay. 

30. The order that the liquidator now seeks is set out in paragraph 2 of the application in a case.  It is now requested that the Registrar sign the withdrawal of caveat on behalf of Ms J Karbines, taking into account the history of this matter and the substantial delay caused in these proceedings by the third respondent, Ms J Karbines. I am also satisfied that such an order is appropriate.

Costs

1. I am taking into account the fact that the proceedings before the Court, the respondent, J Karbines, has been wholly unsuccessful in her opposition to the removal of the caveat and the proceedings before the Court.  That is a significant factor to be taken into account.  Whether the sum of $4000 for costs is an amount which is one that should require me to refuse to make an order for costs because of the financial circumstances of the parties is, however a factor to be considered.

2. The Statement of Financial Circumstances of the respondent, Ms J Karbines, on file is not completely up to date.  However, in relation to the financial circumstances of the parties, the liquidator’s funds and resources are one factor to also be taken into account. 

3. The financial circumstances, however, are not the sole factor to be considered when making an order for costs.  In this matter, the order for costs is clearly indicated because of the unsuccessful opposition of the respondent to the orders that I have made in favour of the liquidator.

4. I regret that it is necessary, but the Court is not in a position, at this stage, to resolve the issue of the quantum of the costs.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe

Associate: 

Date:  20 July 2010