Danforth & Danforth
[2023] FedCFamC2F 639
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Danforth & Danforth [2023] FedCFamC2F 639
File number: ADC 636 of 2020 Judgment of: JUDGE BROWN Date of judgment: 30 May 2023 Catchwords: FAMILY LAW – Property proceedings – where interim orders were made by consent in October 2020 – applicant seeks to enforce sale of property – application pursuant to section 106A – matters to be considered – respondent seeks to set aside the consent order – where the Court is required to undertake a more detailed assessment of the parties’ situation – consideration of transfer to Division 1 of the Court – case management principles – justice and equity Legislation: Family Law Act 1975 (Cth) ss 75(2), 79A, 105, 106A, 106B
Federal Circuit & Family Court of Australia Act 2021 (Cth) ss 5, 149, 190
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 12.06
Cases cited: Kerr & Kerr (1983) 8 Fam LR 1023
Maddocks & Maddocks (1981) FLC 91-031
Division: Division 2 Family Law Number of paragraphs: 107 Date of hearing: 16 May 2023 Place: Adelaide Counsel for the Applicant: Ms Ewens Solicitor for the Applicant: Ezra Legal Solicitor for the First Respondent: Mr Alexandropoulos, Mellor Olsson Solicitor for the Second, Third and Fourth Respondents: Mr Fowler, Boston Bay Legal ORDERS
ADC 636 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS DANFORTH
Applicant
AND: MR DANFORTH
First Respondent
MS B DANFORTH
Second Respondent
MR HALE (and others named in the Schedule)
Third Respondent
order made by:
JUDGE BROWN
DATE OF ORDER:
30 May 2023
UPON NOTING
A.The Court declines to make an Order pursuant to section 106A of the Family Law Act 1975 (Cth)
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed 7 February 2023 is dismissed.
2.This matter be listed for final hearing before Judge Brown on 11, 12, 13, 14 & 15 December 2023 at 10.00am NOTING 5 days hearing time has been allocated.
3.The applicant file and serve all affidavit evidence she proposes to rely on at trial on or before close of Registry filing on 13 November 2023.
4.The first respondent file and serve all affidavit evidence he proposes to rely on at trial on or before close of Registry filing on 27 November 2023.
5.The second, third and fourth respondents file and serve all affidavit evidence they propose to rely on at trial on or before close of Registry filing on 27 November 2023
6.On or before 27 November 2023 the applicant do pay the setting down fee or file an exemption certificate in respect thereof.
7.The applicant pay such daily hearing fee as required pursuant to the Family Law (Fees) Regulations 2022.
8.Solicitors for the applicant / respondent shall forthwith advise the Associate to Judge Brown at [email protected] on becoming aware that the matter has settled or for any other reason will not be proceeding to full hearing on the days allowed.
9.That no later than 7 days prior to the trial date Counsel for each party shall exchange and provide to the Associate to Judge Brown a Case Outline Document, with such Case Outline Document to include the following (divided under headings):
(a)Those documents to be relied upon;
(b)The specific Orders sought;
(c)A short chronology of significant events;
(d)A summary of the issues in dispute between the parties;
(e)A concise summary of argument (with specific reference to any statutory considerations); and
(f)A list of any relevant authorities, together with submissions as to their relevance.
10.Further consideration of the matter is adjourned to 6 December 2023 at 9:30am for mention NOTING the proceedings will be conducted face to face at Court.
UPON FURTHER NOTING THAT:
A.If in any proceedings there are allegations of family violence and the provisions of section 102NA of the Family Law Act 1975 apply (see attached Family Violence Information Sheet), any unrepresented party will not be permitted to personally cross-examine the other party/parties.
B.Affected unrepresented parties may apply to the Commonwealth Family Violence and Cross-Examination of Parties Scheme (“the Scheme”) for representation but any such application must be made at least 12 weeks prior to the final hearing.
C.Further information about the legislation and the Scheme can be found at Part 4 of the attached Family Violence Information Sheet.
D.If s102NA applies and a party becomes unrepresented after trial directions have been made, that party is required to promptly advise the Court.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Danforth & Danforth has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
The proceedings before the court relate to the settlement of issues of matrimonial property. The items of property to which the proceedings relate are primarily farmland, located on the Region C; and two residential properties at Town D – E Street and F Street.
There can be no doubt that the principal parties to these proceedings, Ms Danforth “the wife”, and Mr Danforth “the husband”, were married, at City G, in South Australia, in 1991.
In addition, the records of the court indicate they were divorced, ostensibly on their joint application, on 4 March 2019. Their joint application indicates that the date of their final separation was 25 January 2000, some 19 years earlier.
The parties are the parents of three children, now all adult. They are Mr H born in 1988; Ms B Danforth born in 1990; and Mr J born in 1992.
Each party has another child, both of whom were born prior to their marriage. In the wife’s case, this child is Mr K born in 1983. In the husband’s case, it is Ms L born in 1981.
The major evidentiary controversy between the parties centres on whether this date of separation is actually correct. It has implications in respect of property acquired and disposed of in the period since, which has led to other parties becoming involved in the case before the court.
Those persons are the parties’ daughter Ms B Danforth; her partner Mr Hale; and a company of which Mr Hale is the sole director, M Pty Ltd. Its sole shareholder is the husband. M Pty Ltd is the corporate trustee of the Danforth Family Trust. It owns the land at Region N and F Street, Town D.
The trust was established in 2001 on the sole appointment of the husband. The beneficiaries of the trust are the husband, the wife, Mr H, Ms B Danforth, Mr J and Mr K, but not Ms L.
On 17 February 2020, the wife commenced proceedings, seeking settlement of matrimonial property issues between her and the husband. In her property application, she noted the date of marriage and the date of separation as being June of 1991 and March of 2019 respectively.
However in respect of two of the pro forma questions, on the relevant application, regarding firstly, when the parties began to live together and secondly, the date of their final separation, the solicitors who prepared the application have entered the phrase not applicable.
In this application, the wife sought final orders, which can be summarised as follows:
·The husband transfer to her any interest held by him in the property situated at E Street, Town D;
·The husband transfer to the wife and her children, as joint tenants, 50% of the farmland at Region N. The relevant Certificate of Title being Volume … Folio …; and
·The husband pay to the wife the further sum of $212,000.00.
In her affidavit filed in support of this application, the wife indicated that the relationship, between the parties, finally ended in early 2018, after a number of trial separations and reunions. She deposed that she had acquired E Street in 1989, purchasing the property from her parents.
The husband filed a response to the wife’s application on 6 April 2020. In full and final settlement of the wife’s claim for property settlement, he proposed that he transfer his interest in what he described as the jointly owned property at E Street, Town D to the wife in settlement of her claim for matrimonial property and otherwise she retain all items of property in her name.
In addition, concurrently with this transfer, he sought that the wife renounce the entirety of her interest in the Danforth Family Trust and its trustee company, M Pty Ltd. Implicit in his position is that she has no interest of any kind whatsoever in the Region N farmland or any other of the farm property
There is no controversy that M Pty Ltd purchased the Region N farmland in 2005 for the sum of $165,000.00. In his affidavit, Mr Hale describes the land as consisting of approximately 1,000 acres of native vegetation and re-growth scrubland, which is mainly suitable for livestock. However, about a quarter of the block has been cleared and is now suitable for livestock and cropping for stock feed.[1]
[1] See affidavit of Mr Hale filed 9 December 2021 at [7].
More recently, a portion of the Region N farmland has been rented to a local farmer for agistment and cropping at an annual rent of approximately $15,000.00 per annum. F Street was acquired by M Pty Ltd in 2008 for $154,000.00. It remains subject to a mortgage in favour of the ANZ Bank. The rent received from the Region N farmland is used to defray the mortgage.
It is Mr Hale’s position that he worked with the husband, over many years, from 2005 onwards, improving the Region N farmland and, as a consequence, he and Ms B Danforth have acquired an equitable interest in the land and are entitled to distributions from the Danforth Family Trust, which it controls, as beneficiaries of the trust. Ms B Danforth has deposed that from 2010 onwards, they worked on the Region N farmland up to 4 or 5 days a week.
In the context of the various controversies between the parties and in the light of the fact that proceedings were on foot, which potentially impacted upon the Region N farmland and other assets, on 23 October 2020, the husband and wife each consented to an injunction restraining them both from disposing of or dealing with any assets in their respective possession.
More recently again, on 31 March 2021, M Pty Ltd transferred the Region N farmland to Mr Hale and Ms B Danforth . In conjunction with this transaction, Mr Hale and Ms B Danforth wound up the original trust and established a new one.
Needless to say the wife is no longer a beneficiary to the new Danforth Family Trust. As a consequence of this transfer, the wife sought to join Mr Hale and Ms B Danforth to the proceedings. She also seeks the setting aside of this transaction pursuant to the provisions of section 106B of the Family Law Act 1975 (Cth).[2]
[2] Hereinafter referred to as ‘the Act’.
On 27 April 2021, solicitors acting from Mr Hale wrote to the solicitors for each of the husband and wife advising that Mr Hale, in his capacity as trustee of the Danforth Family Trust… had distributed in specie the Region N farmland to him and Ms B Danforth.
It is the husband’s position that he had no knowledge of the transfer and has never regarded the land as his property. As such, he denies that he breached the 23 October 2020 injunction. The wife does not agree. As a consequence of these events, Mr Hale and Ms B Danforth were joined as parties to the proceedings on 15 December 2021.
In her original affidavit, the wife estimates the net assets of the marriage to be in the vicinity of $1.8m.[3] The husband estimates the assets, in net terms, to be closer to $800,000.00.[4] As well as the controversy as to when the parties finally separated and ended any direct financial relationship, there are other bitter controversies regarding contributions.
[3] See affidavit of Ms Danforth filed 17 February 2020 at [37].
[4] See affidavit of Mr Danforth filed 6 April 2020 at [47].
In simple terms, the husband asserts that the wife’s contributions, prior to 2000, were minimal. In addition, he asserts that he brought into the marriage the most significant items of property which support him and the family prior to separation, namely a farm at Town O, which he refers to as the Home Farm. It was purchased from his parents, who had acquired it in 1960, on favourable terms, in 1987, whilst gifting him its plant and equipment, so it could be kept in the family. He later took out a mortgage to purchase the farm.
It is common ground between the parties that the husband was involved in a serious motor cycle accident in 1984 and subsequently received a compensation payment of $183,000.00, which he asserts he used to pay towards what he owed to his parents for the Home Farm.
E Street was purchased in 1989. The parties disagree about the surrounding circumstances. The wife asserts she borrowed $10,000.00 from the husband to acquire it in her own right and further that she has repaid the loan. The husband asserts that the property was funded from his compensation payment and registered in the wife’s sole name for taxation reasons.
The husband asserts that he used his equity in the Home Farm, in addition to a further mortgage to purchase the Region N farmland in 2005, which was a significant period after the parties finally separated. The Home Farm was sold by him in 2012. He refutes any suggestion that the wife played any role in building up any farming enterprise, in which he was involved with Mr Hale and Ms B Danforth.
In contrast, the wife asserts that she played an integral role, in the marriage, over many years, caring for the parties’ children. In addition, it is her position that she also worked in the farming enterprise, keeping its books, as well as working on the farm itself, tending livestock and as a roustabout. In this context, she asserts that she was involved with the foundation of the Danforth Family Trust and, in this context, points to the fact that she is a beneficiary of it.
However, in this context, she characterises the husband as a coercive and controlling person, who has, and continues to, exclude her from a proper level of access to joint matrimonial finances and who also subjected her to direct physical abuse and assault.
The husband denies these allegations, asserting that it is the wife who subjected him to stalking and abuse. He asserts that after 2000, she came and went from Town D, as she pleased, using the E Street property as her home from time to time.
Prior to her formal joinder as a party to the proceedings, Ms B Danforth filed her own affidavit in support of her father.[5] She has an extremely negative view of her mother asserting that she was abandoned by her, when she was a baby. Ms B Danforth characterises her mother as an unpredictable, volatile and violent person, who has been incarcerated on numerous occasions.
[5] See affidavit of Ms B Danforth filed 7 April 2020.
Ms B Danforth asserts that the wife has generally neglected the E Street property and let it fall into ruin. It is agreed by the wife that it has no utilities connected to it. Ms B Danforth asserts it is uninhabitable. She further asserts that she and Mr Hale have paid the outgoings related to it in recent years.
Ms B Danforth, prior to her joinder as a party, provided the following explanation as to how Mr Hale became the sole director of M Pty Ltd:
After the [E Street] property became uninhabitable, I was prepared to try and fix it up and either live in it or rent it. By then [Mr Hale] and I had taken over paying most of the expenses for the [E Street] property anyway because dad could no longer afford to. However, at the last minute, after the transfer document had been signed and I had paid the funds into a solicitor’s trust account for the purchase price, my mother changed her mind and refused to proceed with the transfer.
Due to [Mr Hale] and I paying many expenses for the [E Street] property and our physical and financial contributions in managing the farm leases and farming at [the [Region N] farmland], the plant and equipment of the trust was transferred to us as payment. [Mr Hale] is not the sole director and secretary of the company.[6]
[6] See affidavit of Ms B Danforth filed 7 April 2020 at [49] – [50].
The wife was born in 1966. The husband was born in 1959. It is the wife’s position that she suffers ill-health, as a consequence of clinical depression and, as a result, she has been granted a disability pension.
In her originating affidavit and in subsequent ones, she has indicated that she has no fixed address. In a more recent affidavit, she deposes to living in her car and, at other times, in the words of her counsel, Ms Ewens, couch surfing.
In addition, given her parents originally owned the E Street property, it is her position that the property has great sentimental value for her and she wishes to retain it. As I will detail in more detail, in due course, the disposition of this property is at the centre of the interlocutory controversy to which these proceedings are directed. Ancillary to the resolution of this issue is how the proceedings, which have now been on foot for over three years can be brought to a conclusion and what is the appropriate forum for that to occur.
In his responding documents, the husband indicates his occupation as being a retired farmer. However, it appears to be the case that he too is in receipt of a disability pension. He also has re-partnered, having married his current wife in 2019. They live together at F Street.
More recently the husband has deposed to being in extremely poor health, still suffering the physical sequelae of his motor cycle accident and more recently having contracted a serious medical condition. As a consequence, he deposes that he is constantly sick and sore.
In general terms, the parties agree that they began to live together at some time in 1988. They vehemently dispute the date of their final separation, with the husband asserting that the date provided in their joint divorce application, is the correct one.
In his affidavit material, he asserts that the parties separated, on many occasions, prior to their final separation in 2000. As a consequence, it is his case that the longest period the parties ever lived together, without a separation, was approximately 3 months. In these circumstances, he deposes as follows:
The length of cohabitation between the wife and me was accordingly about 11 years 2 months but with countless separations in between.[7]
[7] See affidavit of Mr Danforth filed 6 April 2020 at [10].
The husband characterises the wife as having made few, if any, contributions of any significance during this period, either in financial terms or as a parent or homemaker. He asserts that she had a significant alcohol problem and led an itinerant life.
In these circumstances, it is his position that he attempted, on many occasions, to negotiate a property settlement with the wife but, in his own words, she was too difficult to deal with so I stopped trying.[8]Essentially, it is his position that over the past twenty years or so, he has gone about his financial affairs, buying and selling several farming properties, including the Home Farm and the Region N farmland; working the land with Mr Hale; whilst the wife has led a totally independent and somewhat irregular life.
[8] See affidavit of Mr Danforth filed 6 April 2020 at [43].
As this brief introduction shows, the issues arising in this case are legally complex; emotionally fraught; the evidence is bitterly conflicted and the relevant events have occurred over many years. As indicated above, the parties are each in poor health and in receipt of government benefits related to disability.
In addition, I suspect that neither is particular proficient at retaining financial records or of being an adept historian of past events. It would also appear to be the case that the recounting of such events, given their vehemence of their controversy and their familial context, will be deeply distressing for all concerned.
In all these circumstances, in my view, there is a potent risk – indeed one which may have already coalesced – that the parties’ respective exposure to costs will outweigh the possible benefits to be derived from the pursuit of these proceedings to their ultimate conclusion in trial.
The parties do indeed have a legally interesting case, which is replete with controversies, multiple parties and complicated issues of equity and trust. For reasons which I will outline shortly, the progress of the litigation has been far from smooth and the estimate provided for any trial required is one of five days. Ordinarily, such an estimate of time would require the transfer of the matter to Division One of the Court for hearing.
In their respective statements of financial circumstances, the wife has given her weekly income as $458.60; whilst the husband has provided $334.00. The wife’s only current legal asset of significant worth is the E Street property, which she values at $60,000.00.
As indicated above, Mr Danforth estimates his asset backing, largely constituted by assets owned by the Trust (which he no-longer ostensibly controls) to be around $800,000.00, the most significant of which is the F Street property, which he values at $250,000.00. He asserts that he relies on Mr Hale and Ms B Danforth to pay the expenses related to this property and his motor vehicle expenses.
Accordingly, at first blush, neither party can afford these proceedings. As required by the Court’s rules, each party has been provided with an account of fees incurred to date and an estimate of on-going fees.[9] As at 16 May 2023, the husband had paid around $23,000.00 to his solicitor and had unbilled cost of around $31,000.00. A trial was estimated to cost him between $70,000.00 and $100,000.00.
[9] See Federal Circuit and Family Court of Australia (Family Law) Rules 2021, r 12.06.
The wife’s solicitor have been recalcitrant in respect of providing up to date evidence in respect of costs. On 14 December 2021, she was advised that her costs and disbursements, up to that stage, were estimated to be $55,000.00, with a further $17,500.00 required to take the matter to the end of trial. This seems to me to be a very conservative estimate and one likely to be significantly outdated.
In these circumstances, at an earlier stage of proceedings, on 13 August 2020, the wife made an application for litigation funding, from the husband, in an amount of $60,000.00, which the husband opposed. He deposed that Mr Hale and Ms B Danforth were paying his legal fees and he had no liquid assets to pay the wife the sum sought. He further deposed that the monies generated by agisting the Region N farmlands, received by the Danforth Family Trust, were modest.
The wife’s application came on for interim hearing on 23 October 2020, with each party being legally represented. At this stage, the parties agreed that E Street would be sold at a reserve price of $95,000.00; with each party receiving $30,000.00 to defray legal expenses.
The relevant consent order anticipated that the sale would take place in the ensuing six months, after which application could be made to the court. In addition, it was envisaged that the wife could occupy the property pending sale. In this context, it was agreed that there would be a settlement conference convened between the parties.
The sale has not taken place, which has triggered the current round of proceedings. On 7 February 2023 the husband filed an interlocutory application seeking the appointment of the Court’s Registrar to execute the necessary sales documents, on the wife’s behalf, pursuant to the provisions of section 106A of the Act and for associated orders requiring the wife to comply with earlier made orders to facilitate the sale of the property.
On 2 May 2023, the wife responded to this application formally seeking a stay in execution of the relevant portions of the consent order of 23 October 2020. However, Ms Ewens also indicated that if this application was not granted, her client would apply to the court to have the order set aside pursuant to one of the criteria provided by section 79A.
The factual basis for this apparent change in direction by the wife being that, although she had long wished to retain E Street, she had decided to abandon this aspiration because of her fear of the husband, who was also a resident of Town D. In these circumstances, she considered that the sale of the property was the lesser of two evils.
However, more recently – in fact at a judicial settlement conference – she had realised that Mr Danforth was a frail and infirm person, which had caused her previous fear of him to evaporate. The husband greets this assertion with incredulity. From his perspective, the order is the order, to which the wife agreed.
From the wife’s perspective, given the husband, on her case, controls all the assets of the marriage, it would be patently unfair to deprive her of accessing the property to which she has a significant historical connection and which, in legal terms, she owns.
In addition, she points to her present endemic homelessness as a further factor which should tip the court towards granting her the indulgence which she seeks. Underpinning her case is the assumption that, given the length of the marriage, notwithstanding the controversy between the parties, it appears probable that she will receive at the very least property to the value of the E Street property.
In order to resolve this dispute and more importantly determine how the case can be brought to a conclusion, it is necessary to set out the procedural history of the litigation.
PROCEDURAL HISTORY OF THE LITIGATION
As previously indicated, the wife commenced the proceedings in mid-February of 2020. On the first mention of the case, it was referred to a conciliation conference, with a registrar of the court, which occurred on 16 June 2020. This conference did not assist the parties to resolve the various issues between them.
The case returned to court in mid-August 2020, in the context of the wife’s application for litigation funding, which as previously indicated, was adjourned until 23 October 2020, when it was resolved in the manner already described.
The case returned to court in mid-December 2020, when it was referred to a call over of cases to be allocated a final hearing. As I recall, this period coincided with the pandemic emergency, which limited the capacity of the court to deal with person to person final hearings.
On 31 May 2021, the case was fixed for hearing on 9 February 2022, with 3 hearing days allocated. Trial directions were made at this stage. Prior to the trial coming on for hearing, again as previously indicated, the circumstances surrounding the transfer of the Region N farmland came to the attention of both the wife and the husband, ostensibly at least, in the case of the husband, as a consequence of the letter from Mr Hale and Ms B Danforth’s solicitor.
This in turn led to the wife filing her application in a case, on 18 October 2021, seeking the joinder of Mr Hale and Ms B Danforth to the proceedings, along with M Pty Ltd. It was at this stage, she made an interim application to set aside the transfer of the Region N farmland to M Pty Ltd.
The husband responded to this application on 25 November 2021 and it was allocated a hearing date of 15 December 2021. Mr Hale and Ms B Danforth filed affidavits, in respect of the competing applications, on 9 December 2021. As far as I can glean, the wife’s only notice regarding her legal fees was produced in conjunction with this hearing.
On 15 December 2021, the parties were able to agree on a compromise of their various applications. This was sensible given the trial was only a few weeks off. As previously indicated, it was at this stage that Mr Hale, Ms B Danforth and M Pty Ltd were joined as respondents to the proceedings.
The trial of 9 February 2022 did not proceed. At this stage the parties all agreed that the case was not ready to proceed due to the recent addition of the further respondents to the proceedings. In addition, it was agreed that it would be appropriate for the parties to seek to have the issues arising between them mediated by an external mediator. In these circumstances, by consent, it was agreed that the case should be adjourned until 21 April 2022 and the trial vacated.
Unfortunately, both the prospect of this mediation and the April 2022 mention were derailed by unexpected events. On 14 April 2022, the court was advised by joint letter that the husband had been seriously assaulted by his son, leading him to sustain significant head injuries, which required hospitalisation. In these circumstances, the case was administratively adjourned until 4 July 2022.
As had been agreed, the wife filed her amended application, in light of the significantly changed circumstances, on 7 March 2022. On a final basis, she sought the setting aside of the transfer of the Region N farmland and the payment to her of the sum of $600,000.00. Her application did not seek to upset the sale of the E Street property.
Due to his injuries, the husband was not in a position to file his amended response. In these circumstances, with the acquiescence of all concerned, the case was adjourned administratively, until 26 September 2022, when it was ordered that the husband file his amended response by 4 October 2022, with Mr Hale, Ms B Danforth and M Pty Ltd to file their various responses on or before 25 October 2022. At this stage, the parties also agreed to circulate proposals regarding a suitable mediator and, more particularly, how the expense of such a mediation should be apportioned between them.
Ultimately, Mr Danforth has filed his amended response, which he did on 6 October 2022. In this amended response, he sought the following orders:
·The orders dealing with the sale of E Street, Town D be enforced with each parties’ solicitor receiving the sum of $30,000, as had previously been agreed, with any remaining balance to be paid to the wife;
·The wife renounce any interests held by her in the Danforth Family Trust and its trustee, M Pty Ltd;
·Mr Hale and Ms B Danforth be declared the sole beneficiary owners of the Region N farmland.
The second, third and fourth respondents filed their response on 11 November 2022. They simply seek the dismissal of the wife’s application in respect of setting aside the transfer of the Region N farmland to them, which was made on 30 March 2021.
By early December of 2022, it had become apparent to the parties that none of them could afford to fund any mediation of the issues between them. As a consequence, in highly regrettable circumstances, much of 2022 had elapsed with little or any progress having been achieved in progressing the case towards finalisation.
It seems to me that this lack of progress is attributable to a variety of factors, which include the issue surrounding the joinder of Mr Hale, Ms B Danforth and M Pty Ltd; the injuries to the husband, which delayed him filing his amended response; and the funding difficulties surrounding the mediation.
It also seems to me that, as a consequence of the many administrative adjournments of the case, the attention of the court was somewhat deflected from an appropriate level of management of the case. In addition, it seems to me that, during 2022, the potential costs of the case are likely to have exponentially increased, with ruinous implications for all concerned.
In these parlous circumstances, on 5 December 2022, the parties requested the referral of the case to a judicial settlement conference. The court acquiesced to this request and such a conference was appointed for 9 March 2023. It however did not lead to the parties being able to reach any consensual resolution of the complex issues between them.
It is in this context that the case returned to court on 16 May 2023 in respect of the following issues:
·The enforcement of the 23 October 2020 order, as it pertained to E Street; and
·Given the complexity of the case, and its anticipated duration, should the proceedings be referred to Division 1 of the court.
As previously indicated, it is apparent that the view of the wife, as to what is a just and equitable outcome so far as the disposition of the E Street property has radically changed. No doubt the husband sees this change of heart as further evidence of her contrary disposition. From my perspective, the issue has also become analogous to one involving a partial property settlement rather than a simple enforcement of an earlier order. As with everything to do with this case, it is not an issue without its legal niceties.
LEGAL CONSIDERATIONS
As a consequence of the inception of Division 2 of the Federal Circuit and Family Court of Australia, any transfer of the proceedings is to Division 1 of the Court is to be determined by reference to the Federal Circuit & Family Court of Australia Act 2021 (Cth)[10] and the rules made pursuant to it.
[10] Hereinafter referred to as “the FCFCOA Act”.
Pursuant to section 149 of the FCFCOA Act, a judge of Division 2 has a discretion to transfer a family law proceeding to Division 1. This discretion is to be exercised by reference to two major criteria. Firstly, the resources available in each division to hear and determine the proceedings, which, in shorthand terms I take to be a reference to which Division will be able to deal with the matter the more expeditiously. Secondly, the interests of the administration of justice.
In this context, section 190 of the FCFCOA Act is germane. It provides a directive to the court to, in the application of its practice and procedure, to facilitate the just resolution of disputes according to law, as quickly, inexpensively and efficiently as possible. This reflects the objects of the FCFCOA Act as contained in section 5 and is referred to as the court’s overarching purpose.
As I have already observed, I am greatly concerned that the proceedings remain unresolved more than three years after they were instigated, in circumstances in which it is readily apparent that neither the husband nor the wife can readily afford to fund them. I am also concerned that the matter has languished after the February 2022 trial date was vacated on the joint application of the parties.
I have been advised that it is likely to take upwards of a year for a five day case to be listed for final hearing in Division 1 of the Court in Adelaide. In addition, a new judge would have to familiarise themselves with the issues in the case. I am able to come to the matter in December of this year, which necessarily is significantly sooner.
One of the reasons, I have attempted to summarise the salient features of the case, in these reasons for judgment, is so that I have an understanding of it and so can determine the transfer issue within the parameters of the overarching principle and what is the interests of the administration of justice.
In my view, it is likely to lead to more delay and the accumulation of greater costs if the case is transferred. In these circumstances, I will fix the case, notwithstanding the estimate provided to complete the case, it would be contrary to the proper administration if the case is transferred, after it has been in this division of the court for such a lengthy period of time.
A more difficult issue to determine is whether the court should, in effect, compel the sale of the E Street property by directing the registrar to sign any documents, on behalf of the wife, on the basis that she has been derelict in advancing the sale in contravention of the orders of 23 October 2020. The power to be engaged to secure this objective is provided by section 106A of the Act.
Courts have a fundamental obligation, when called upon, to enforce the orders which they make. Otherwise, the orders in question become meaningless as lacking in force, and the relevant court runs the risk of losing the confidence of the community in which it serves.
It is clear that the court has a discretion as to whether or not orders should be enforced. This follows from section 105 of the Act, which reads as follows:
Subject to this part, to the Regulations and the applicable Rules of Court, all decrees made under this Act may be enforced by any court having jurisdiction under this Act.
In particular, the court may refuse enforcement if, in the circumstances prevailing at the time of the application, it would be inequitable to do so.[11] In this context, it is the contention of the wife that it would be inequitable to sell the relevant property, given her desire to retain it. Associated with this concern is its implications so far as the construction of any asset pool following trial, given the effect of the husband’s evidence that he is effectively illiquid, given the fact that he no-longer controls the family trust or M Pty Ltd.
[11] See Kerr & Kerr (1983) 8 Fam LR 1023 at 1026 (Nygh J).
It is necessary to set out the specific provisions of section 106A(1) of the Act. It reads as follows:
(1) If:
(a)an order under this Act has directed a person to execute a deed or instrument; and
(b)that person has refused or neglected to comply with the direction or, for any other reason, the court considers it necessary to exercise the powers of the court under this subsection;
the court may appoint an officer of the court or other person to execute the deed or instrument in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to the deed or instrument.
Accordingly, to engage the power provided by the section, it is necessary for the applicant concerned to satisfy two conditions – firstly, that the relevant order specifically directs a person to execute a document; secondly, that such a person has refused to comply with a direction of the court requiring the implementation of one of its order.
In Maddocks & Maddocks (‘Maddocks’)[12] Nygh J was dealing with the legislative precursor of section 106A. He held that before the registrar could be directed to execute a deed or other instrument the original order should set out precisely the requirements imposed on the party concerned, asserted to have been disregarded, in substitution of which the registrar could become directed to execute. He said as follows:
I have come to the conclusion that, in a matter which affects closely the property rights of a party, I should interpret strictly the language of the Act and consequently it cannot be said that a person has refused or neglected to comply with a direction unless that obligation of that person has been clearly spelt out. For that reason, I hold that there must be a specific order directing the wife to execute a deed or instrument before sec. 84(1) [the precursor to section 106A] can operate. Once that direction has been given and not complied with, the court may appoint an officer of the court to execute the deed or instrument in question in the name of the person to whom the direction was given and further to do all acts and things necessary to give validity and operation to the deed or instrument. In other words, there is no need to specify the execution of all ancillary documents.
[12] See Maddocks & Maddocks (1981) FLC 91-031 at 76,295.
The relevant order of 23 October 2020 reads as follows:
3That the Applicant and Respondent do all acts and things and sign all necessary documents to effect the sale of the property known as at [E Street Town D] in the State of South Australia being the whole of the land comprised in Certificate of Title Register Book Volume […] Folio […] ('the [E Street] Property') registered in the parties' joint names and for that purpose, the following shall apply:
3.1That, the [E Street] Property shall be listed for sale by private treaty with a registered real estate agent to be agreed in writing by both parties within 30 days of the date of this Order.
3.2The list price of the [E Street] Property shall be such amount as is agreed between the parties and failing agreement as advised by the real estate agent.
3.3The parties agree that the Reserve Price for the sale of the [E Street] Property will be $95,000.00.
3.4The parties are to co-operate in every way with the real estate agent in relation to the marketing of the [E Street] Property for sale including making the property readily available, allowing inspection of the [E Street] Property at all times as may be reasonably requested by the agent. It is noted that if the Applicant wishes to make improvements to the property, that she is at liberty to do so at her sole expense.
3.5That upon agreement being reached for sale of the [E Street] Property the parties shall execute the Contract of Sale and other documents necessary to complete the sale of the [E Street] Property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor.
3.6Within seven days of the execution of the Contract of Sale, the parties are to appoint a conveyancer to effect settlement and such conveyancer to be agreed in writing by both parties.
3.7The contract of sale shall provide for a settlement date 30 days after the date of the contract.
3.8That until settlement of the [E Street] Property, the Applicant agrees to:
3.8.1pay all rates and taxes levied against the [E Street] home until settlement of sale of the [E Street] home;
3.8.2insure the [E Street] home including public liability, contents and all buildings and structures and other improvements against fire, explosion, lighting, storm and civil commotion including vandalism, malicious damage and burglary;
3.8.3maintain the [E Street] home; and
3.8.4allow the Applicant peaceful possession and occupation of the [E Street] home, if applicable, without interruption or disturbance from the Respondent.
3.8.5the proceeds of the sale of the [E Street] Property shall be paid in the following manner and priority:
3.8.6in payment of all costs of and incidental to the sale of the property including the agents fees and conveyancing costs;
3.8.7the sum of thirty thousand dollars to be retained in the trust account of Ezra Legal Pty Ltd;
3.8.8the sum of thirty thousand dollars to be retained in the trust account of Mellor Olsson;
3.8.9balance to remain in the nominated conveyancers trust account until further Order or the written agreement of the parties.
4That in the event the [E Street] property has not been sold or transferred within six months of the date of this Order the parties shall be at liberty to apply to the Court for an Order concerning the listing price or other matters relating to the sale of the property.
In his application filed on 14 February 2023, the husband sets out the orders which he seeks pursuant to section 106A to secure the sale of the E Street property. They are as follows:
1.Pursuant to section 106A of the Family Law Act 1976 a Judicial Registrar of the Federal Circuit and Family Court of Australia be and is hereby appointed to execute all such documents required on behalf of the wife ([Ms Danforth]) to sell [E Street Town D] in the State of South Australia being the whole of the land comprised in Certificate of Title Register Book Volume […] Folio […] (‘the [E Street] Property’) pursuant to order 3 of the orders made on 23 October 2022.
2.In the event that the wife does not comply with order 3.4 of the orders made on 23 October 2022 in respect to co-operating in every way with the real estate agent in relation to the marketing of the [E Street] Property and upon the husband providing written notice to the wife to vacate have 7 days from the date of such written notice to vacate the [E Street] Property.
3.14 days prior to the settlement of the sale of the [E Street] Property the wife is to vacate the said property.
4.That in the event the Wife fails to vacate the property in accordance with Orders 2 or 3 herein, a Warrant of Execution do issue to facilitate the Wife’s removal from the said property.
5.In the event that the Wife fails to sign any document within 7 days of being requested to do so in writing by the concyancer [sic] instructed to undertake the transfer of the [E Street] Property and any such refusal, failure or neglect is proved by Affidavit filed and served by or on behalf of the party alleging this, a Judicial Registrar of the Federal Circuit and Family Court of Australia be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such documents in the name of the Wife.
6. The wife do pay the costs of and incidental to this application.
Accordingly, in strict terms, the husband seeks compliance, by the wife, with order 3.4, namely that she provide her cooperation to a real estate agent in respect of the marketing of the property. In addition, it is to be noted that as a precondition to the provision of such cooperation, pursuant to order 3.1 the parties are to agree, in writing, to the appointment of a real estate agent to sell the property. In addition, order 3.2 stipulates that the list price is to be one agreed between them or, failing agreement as advised by the estate agent so appointed.
The failure of the parties to agree on the identity of such an agent is governed by the provisions of order 4, which authorises one or other of them to apply to the court for any necessary order regarding the listing price or any other matter relating to the sale of the property.
In his affidavit filed in support of his application, the husband deposes to the following events:
·Between November 2020 and December 2021 correspondence passed between the parties regarding the appointment of a real estate agent;
·On 19 January 2022 the wife’s solicitors apparently sent a sales agency agreement and a proposal to share advertising costs, with the wife’s proportion of the costs to come out of the sale price;
·Between March 2022 and August 2022, the husband was unable to instruct his solicitor due to the injuries sustained by him in the assault; and
·Between August and November of 2022 the parties’ respective solicitors corresponded regarding the sales agreement and the payment of costs. As at November of 2022, the wife had not responded to correspondence dated 10 November 2022.
The wife filed a brief affidavit responding to this affidavit on 2 May 2023. She did not refute any of the contents of the husband’s affidavit. However, as previously indicated, it is her position that she agreed to the sale of the E Street property, in October 2020, because she did not believe she would be able to live in it because of its proximity to the husband’s home and her long standing fear of him.
This view had apparently changed in March of 2023, following the unsuccessful judicial settlement conference, which both parties had attended. At this conference, she had observed for herself how frail Mr Danforth had become and, as a consequence, she had changed her mind about living in the property despite the fact it was essentially uninhabitable.
Clearly, as a combination of factors on both sides, the original agreement to sell the E Street property has been much delayed. In addition, on the evidence available to me, it cannot be said that the wife failed to cooperate with the appointment of a sales agent. But in the absence of such an appointment, there has been no agreement as to a listing price.
In these circumstances, in my view, this state of affairs engaged order 4 granting the parties’ liberty to apply to the Court to seek orders concerning the listing price or other matters relating to the sale of the property. Accordingly, in strict terms, the process envisaged in the orders of October 2020 has not been engaged – no listing price has been agreed and no sales agreement entered.
As a consequence, on the basis of the authority provided by Maddocks, I do not believe that the necessary pre-conditions contained in the relevant order have been engaged so that section 106A has been engaged. More significantly, given the significant effluxion of time, since the orders of October 2020 were made, which has also coincided with a very significant change in the circumstances of both the husband and the wife. Most notably, this has involved the joinder of Ms B Danforth, Mr Hale and M Pty Ltd to the proceedings and the execution of the controversial transfer of the Region N farmland, which occurred in conjunction with changes to the Danforth Family Trust.
The validity of these transactions is under challenge and each will be examined in the context of the final hearing, which is relatively imminent given the time the proceedings have been under foot. These transactions, in turn, will have implications for the size of the matrimonial property pool available for distribution between the husband and wife.
One of the major issues, for the Court, besides the date on which their marriage actually ended, is the respective prospective needs of the parties, which falls for consideration pursuant to the provisions of section 75(2) of the Family Law Act 1975. The evidence available to me indicates that each of them suffers from poor health and has limited income. As previously indicated, it is the wife’s position that she has been effectively homeless for many years.
In these circumstances, I am concerned that the sale of the E Street property, prior to trial, may have the potential to be inequitable to the wife at the final hearing stage. In effect, there will have been an interim distribution of property without any hearing into whether such a distribution, given the extent of other property available, represents a just and equitable outcome. For these reasons, I decline to grant the section 106A application.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and seven (107) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 30 May 2023
SCHEDULE OF PARTIES
ADC 636 of 2020 Respondents
Fourth Respondent:
MR HALE (AS DIRECTOR OF M PTY LTD)
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