Collins & Olsthoorn

[2005] FamCA 138

[2005] FamCA 138

FAMILY LAW ACT 1975

IN THE FULL COURT
OF THE FAMILY COURT OF AUSTRALIA
AT PERTH    Appeal No. WA 23 of 2004

File No. PT 4347 of 1998

IN THE MATTER OF:

MHC

Appellant Wife

- and -

QPO

Respondent Husband

REASONS FOR JUDGMENT

BEFORE:  Finn, Holden & Le Poer Trench JJ
HEARD:  6^th day of July 2004
ORDERS MADE:                 6^th day of July 2004
JUDGMENT:  9^th day of March 2005

APPEALS - from decision of Family Court Judge against a discretionary order – exercise of discretion – whether trial Judge incorrectly refused to enforce a court order where there was an alleged underpayment of the sum owed pursuant to property orders.

1. This was an appeal by the appellant wife against an order made by Thackray AJ made on 17 November 2003.  The order dismissed an application filed by the appellant wife on 25 August 2003 which sought that the Court appoint a Registrar to sign documentation to give effect to an order made by the Court on 24 June 2002 appointing the appellant wife as trustee for the sale of a farm.  We dismissed the appeal on 6 July 2004 indicating that we would deliver reasons for judgment at a later date.  These are our reasons. 

Background

1. The parties have been engaged in unfortunate and protracted proceedings relating to property settlement.  On 19 May 2000 Tolcon J ordered inter alia that the respondent husband pay to the appellant wife the sum of $989,064 by 19 November 2000.

2. The respondent husband successfully appealed against that order and on 26 October 2001 the Full Court made the following orders:

   “3.That Orders 2 and 3 made on 19 May 2000 be set aside and in lieu thereof it be ordered:-

   ‘2.That the husband pay or cause to be paid to the wife the sum of $733,657 on or before 31 December 2001.’

   …

   5.That in the event that the husband sells the farm for the purpose of effecting payment to the wife, the sum payable to the wife pursuant to order 2 of the orders of 19 May 2000 as amended by these orders, be increased or decreased as the case may be by 40% of the amount by which the sale price less costs of sale is more or less than the sum of $2,170,000.00.

   6.That, in the event that the husband fails to make payment to the wife in accordance with order 2 of the orders of 19 May 2000, as amended by these orders, the husband and the wife each do all acts and things and sign all documents necessary to effect a sale of the farm at a price not less than $2,170,000.00 or such other sum as the parties may in writing agree or failing agreement as may be determined by the President for the time being of the Real Estate Institute of Western Australia or his nominee and that the net proceeds of such sale be divided so that the wife receive the sum payable to her pursuant to order 2 of the orders of 19 May 2000, as amended by these orders, increased or decreased, as the case may be by 40% of the amount by which the sale price, less costs of sale is more or less than the sum of $2,170,000.00.”

3. The respondent husband failed to pay by the due date.  A valuation of the farming property was carried out by a Mr Nichols on 27 November 2001.  He valued the property at $1,620,000 if it were sold as one parcel.  He was of the opinion that if the property was sold as individual locations a sum of $1,920,000 would be realised.

4. The respondent husband then argued in a hearing before Penny J on 17 June 2002, inter alia, that he should be given an opportunity to pay to the wife her property settlement based on a value of $1,600,000.  On 24 June 2002, her Honour ordered:

   “1.The husband shall pay to the wife such sum as to effect settlement to the wife of 40% of the net assets of the parties pursuant to the order of the Full Court based on the farm having a value of $1,620,000 within 28 days.

   2.Should the husband fail to make payment pursuant to order 1 hereof, the wife shall be appointed trustee for sale and the farm offered for sale at public auction with a reserve price of $1,620,000 or such other sum as agreed between the parties.

   3.If the farms fails to sell at auction, the wife shall take steps to sell the property as individual lots.”

5. The matter came back before Penny J on 2 August 2002 on an application of the appellant wife that she be paid interest calculated from 23 July 2000.

6. During the course of her reasons for judgment dismissing that application her Honour said:

   “13.     The husband arranged a settlement on 19 July 2002.  There is no evidence of unreasonable delay on the part of the husband.  At settlement the husband was prepared to pay to the wife the sum of $424,050.43.  The wife refused to proceed with the settlement.  There was no dispute by her that the sum offered was not correct.

   14.      The wife failed to comply with paragraph 1 of the orders of 24 June 2002 by failing to proceed with the settlement within the 28 day period.  The wife said at the hearing on 2 August 2002 that her reason for doing so was that she was concerned to protect her position in relation to costs orders, which may be made in the future in her favour, therefore she would not withdraw her caveat nor sign the release because she believed she would have no recourse to the husband’s property.  I have now made orders securing part of the husband’s property to await the outcome of these hearings on costs.  I ordered the settlement should then go ahead.”

7. In fact her Honour ordered, inter alia:

   “1.Upon settlement, the Wife provide to the Husband a withdrawal of caveat signed by her.

   …

   3.The parties each pay half the costs of the valuation of the farm and the aborted settlement costs of Elders.”

8. Settlement was eventually effected on 8 October 2002 when the respondent husband paid to the appellant wife the sum of $421,125.23.  The payment was $500 short of the amount actually required to be paid to comply with the court orders earlier referred to.  The respondent husband paid that amount on or about 2 September 2003. 

9. On 25 August 2003 the appellant wife filed an application seeking that order 2 of 24 June 2002 be implemented so as to require a sale of the farm.  That application was heard and determined by a magistrate who dismissed the application.  The appellant wife appealed against the order dismissing the application.

The judgment of the trial Judge

1. After setting out the history of the matter his Honour made the observation that an appeal from a magistrate proceeds by way of a hearing de novo, and that, therefore, it did not matter whether or not the magistrate might have made an error in the way she arrived at her decision.  His Honour then said:

   “So going back and looking at the matter afresh, the question becomes; should the farm be sold because [the respondent husband] paid an amount to [appellant wife] which, in fact, accurately reconciled the amounts that they owed each other at that time?  I have to say that the answer to that question appears to me to be perfectly clear, and that is that it would not be appropriate to order the sale of the property because he offset one very small obligation against a very large obligation.  What then transpired was that the costs were thereafter soon quantified and those costs should be paid.

   I do not know what has happened in relation to those costs subsequently, but if, in fact, it is the position that as soon as the costs were quantified [the respondent husband] owed money to [appellant wife], then she is entitled to take enforcement proceedings against him.  She has just foreshadowed that she intends to take those proceedings.  If the money is owing, she is perfectly entitled to do so, and in seeking to enforce payment of those costs the Court has a number of options available to it.  One would be an order for the sale of property if there is no other more appropriate way for the money to be paid.

   However, for those reasons, and notwithstanding any sympathy that I might feel for one party over the other, the decision that the Magistrate made was the correct decision and the order of the Court, therefore, is that the form 43 appeal is dismissed.”

Ground of appeal

1. The notice of appeal contained three grounds.  Grounds 2 and 3 were abandoned and leave was granted to amend ground 1 which became:

   “There was an error by the trial judge in his consideration of enforcing the prima facie court orders. 

   Particulars

   (a)The trial Judge failed to take into account the 2 month delay by the husband in paying the wife her financial entitlement following the Orders made by Justice Penny on 2 August 2002.”

2. The orders sought by the appellant wife on this appeal are:

   a)That a registrar of the Court sign the required documentation to effect the sale of the farm in the event the husband fails to do so; or in the alternative

   b)The matter be remitted to the Family Court of Western Australia for further consideration by a judge (other than Acting Judge Thackray).

3. It is well settled that the Court has the discretion to refuse to enforce one of its own orders.  (See Ramsey and Ramsey (1983) FLC 91-301)

4. This is therefore an appeal against a discretionary order.  The principles applying to appeals against a discretionary order are well settled and need not be restated here, see, generally, De Winter and De Winter (1979) FLC 90-605 at 78,092 per Gibbs J; Mallet v Mallet (1984) FLC 91-507 at 79,110; (1984) 156 CLR 605 at 608; Norbis v Norbis (1986) FLC 91-712; (1986) 161 CLR 513. That being so, the limited nature of the appeal process must be recognised, as the numerous authorities in relation to the appellate review of discretionary orders demonstrate: see, for example, House v The King (1936) 55 CLR 499 at 505; Lovell v Lovell (1950) 81 CLR 513 at 519; Gronow v Gronow (1979) FLC 90-716; (1979) 144 CLR 513 and Mallet (supra) at 79,111 and 79,119.

Discussion

1. The appellant wife’s written submissions were brief and were not significantly expanded in oral argument.  Those submissions were:

   “5.     In light of the strict timing for payment specified by the Full Court in its Orders of 26.10.02 … and by Justice Penny on 24.06.02 …, the trial judge should have taken into account the fact that the husband delayed payment to the wife of her entitlement for over two months after Justice Penny’s orders of 02.08.02 … .

   6.      The trial judge sought no explanation from the husband on this matter.  Indeed, his Honour did not ask him to respond at all… .”

2. The order of Penny J of 2 August 2002 simply provided that:  “Upon settlement, the Wife provide to the Husband a withdrawal of caveat signed by her.”  It did not provide any date on or before which settlement was to take place, however, it was conceded by counsel for the appellant that when the matter came before Penny J on 2 August 2002 the evidence was that the respondent husband was ready to settle.

3. He was certainly ready to settle by 7 August 2002 as is evidenced by annexure “I” to the appellant wife’s affidavit sworn 6 November 2003. 

4. The fact that settlement did not take place until 8 October 2002 was at least partially of the appellant wife’s own making as she refused to withdraw her caveat which necessitated the respondent making a further application to have a registrar sign the withdrawal.  We would have thought in passing that this fact alone would have been sufficient to justify his Honour exercising the discretion in the way he did.

5. There was, however, a more fundamental difficulty faced by the appellant wife on this appeal.  There is very good reason why his Honour did not take into account the lapse of time between 2 August 2002 and 8 October 2002 and that is because he was not asked to do so.

6. The sole basis upon which the appellant wife relied to obtain an order that she be appointed trustee for sale which could be said to have even an ounce of merit was that she was to be paid $424,050.53 and the respondent husband only paid her $421,125.53, a difference of $2,925.  We would pause to observe that the appellant wife also made reference to outstanding costs orders which had not yet been taxed which, as his Honour pointed out during the course of the hearing before him, were relevant to the argument being advanced.

7. In her affidavit filed 7 November 2003 the appellant wife stated:

   “23.    On 2^nd August 2002 again before J. Penny further orders were put in place to protect the wife’s interests and the husband was asked to pay the judgement (sic) sum now.  (annexure E and F)

   24.     The wife subsequently received a lesser sum than the judgement (sic) sum on 8^th October 2002 and informed the husband (Annexure G and H)

   25.The husband did not appeal the orders of 24^th June 2002 nor that of 2^nd August 2002.

   26.The husband was well aware that the sum owed to the wife was $424,050.

   27.The husband was well aware of the consequences if the sum was not paid.

   28.The husband chose to pay a lesser sum (Annexure I)”.

8. That this was the sole basis of her application is further confirmed by exhibit K to that affidavit, which is a note from the appellant wife to the respondent husband which read: 

   “Thank you for your fax The settlement sum to be paid was $424,050.43.

   I received a lesser amount from you  I am therefore to proceed to auction”

9. A reading of the transcript of the proceedings before Thackray AJ and the appellant wife’s pre-appeal summary makes it even clearer that it was the alleged underpayment of which she was complaining and not delay.  How this underpayment (which in fact was only $500) came about was explained by his Honour as follows:

   “The position of [the respondent husband], however, was also understandable.  As at the time that he settled up in relation to the farm he knew how much he owed her and he also knew how much she owed him.  The question of the costs had not been quantified.  He then took it upon himself, and there is no doubt that he was not expressly entitled to do so by the terms of the order of the 2^nd of August, to offset one against the other.  That would be fairly standard process to follow in cases of this nature.  At the time it seems he paid $500 short of what the Court order might have required him to pay, but he thereafter paid the $500 pending him making further inquiry as to whether or not the order of the 2^nd of August accurately reflected the Judge’s orders concerning the payment of the Elders costs.”

10. As already mentioned, the respondent husband subsequently paid the $500 shortfall on 2 September 2003. 

11. His Honour asked the rhetorical question: “Should the farm be sold because [the respondent husband] paid an amount to [appellant wife] which, in fact, accurately reconciled the amounts they owed each other at that time?”  He concluded:  “I have to say that the answer to that question appears to me to be perfectly clear, and that is that it would not be appropriate to order the sale of the property because he offset one very small obligation against a very large obligation.”

12. We were firmly of the view that the decision arrived at by his Honour could not be construed in any circumstances otherwise than as a proper exercise of his discretion.  Accordingly, we dismissed the appeal. 

I certify that the preceding 27 paragraphs are a true copy of the reasons for judgment delivered by this Honourable Full Court

Associate