Drake and Bates and Anor

[2014] FamCA 795

FAMILY COURT OF AUSTRALIA

DRAKE & BATES AND ANOR     [2014] FamCA 795

FAMILY LAW – PRACTICE AND PROCEDURE – Where Orders are made in respect of payment to and discharge of the trustee for sale.

Family Law Act 1975 (Cth)

APPLICANT: Mr Drake

FIRST RESPONDENT: Ms Bates

SECOND RESPONDENT: Mr Gage (as trustee for sale)

FILE NUMBER: BRC 5034 of 2011

DATE DELIVERED: 4 August 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 4 August 2014

REPRESENTATION

SOLICITOR FOR THE APPLICANT: In person

FOR THE FIRST RESPONDENT: Mr Wilson
Hopgood Ganim Lawyers

SOLICITOR FOR THE SECOND RESPONDENT: Mr Serong
Serong Legal

Orders

1. Out of the proceeds of sale of the motorhome, registration number … registered in the name of Ms Bates, to the extent that it is necessary, the following be paid:

   (a)the agent’s commission including sale costs and advertising in the sum of $8,000;

   (b)the vehicle expenses of the Trustee’s agent in the sum of $24,006.12;

   (c)to discharge the lien claimed by Bates Superannuation Fund in the amount of $18,789.13;

   (d)to part of the Trustee’s fees and expenses in the sum of $37,204.75.

2. The applicant and respondent pay the Trustee’s costs to the extent that there is a shortfall in those costs from the proceeds of sale of the said motorhome, such costs to be agreed or as might be determined by a Registrar in accordance with the Rules.

1. The Trustee is hereby discharged from any further obligation pursuant to paragraph 6 of the Orders of Federal Magistrate Howard made 15 December 2011.

2. The costs of the applicant and respondent, of and incidental to this application, including any question as to the appropriate bearing of the costs of the Trustee that have been ordered today to be paid by both of them, as between them, are reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Drake & Bates and Anor 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 BRISBANE

FILE NUMBER: BRC 5034 of 2011

Mr Drake

Applicant

And

Ms Bates

First Respondent

And

Mr Gage (as trustee for sale)

Second Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. On 15 December 2011, Federal Magistrate Howard in the Federal Magistrates Court, as it was then described, in Brisbane, made orders as between the applicant and the respondent that provided, in essence, for a trustee to be appointed to sell the remaining assets of the B Group and to ensure that those assets were all sold on a commercial basis with the proceeds of sale to be applied to meet all necessary costs of sale, to meet the trustee’s costs of sale, and in reduction of the liabilities of the B Group as the trustee considered appropriate.

2. The Federal Magistrate, as he then was, further ordered on that occasion that the trustee then undertake an examination of the assets of the B Group and determine what assets may or may not have been sold by the parties up to the date of compliance with paragraph 4, that was an order that ordered the parties to place or cause the remaining assets of the group to be placed in the hands of the trustee and thereafter to provide an account of the proceeds of sale of such assets to this Court.

3. The evidence before me today on an application made by the trustee reveals that the only asset of the B Group that was able to be found by the trustee was a motorhome registered in the name of the respondent, Ms Bates,  registration number … . 

4. The motorhome was, as I understand it, located in the possession of a superannuation fund, namely a self-managed superannuation fund described as Bates Superannuation Fund.  That fund claimed a lien in respect of the vehicle, in respect of repairs that had been undertaken to that vehicle. The discharge of that lien would require the trustee to pay $18,789.13. 

5. The evidence before me establishes to my satisfaction that the trustee satisfied himself in respect of that lien, that it was appropriate to be claimed and therefore appropriate to be discharged.  The trustee engaged agents in the form of a group situated in Victoria to recover the vehicle and to organise for it to be sold.  That process, of course, cost those agents money and they spent, on the evidence, $6,655.49 to recover the vehicle and another $17,350.63 to repair and make ready the vehicle for it to be sold in a safe condition.

6. The trustee satisfied himself, as I am satisfied on the evidence, that the total of $24,006.12 was indeed expense incurred by the agent, and therefore, a legitimate expense to be paid from the proceeds of sale of the vehicle.

7. In  addition, the agent’s commission, 10 per cent of the sale price, in the amount of $8,000, determined by the ultimate sale price of $80,000 was incurred and I am satisfied that that is a reasonable amount of commission in the circumstances of this case.

8. On 8 April 2014, the trustee filed an affidavit in which much of the evidence that I have referred to was set out, and there was a mention, it appears, before Registrar Stoneham of this Court on that day. No actual application in the case was filed, but Registrar Stoneham deemed that affidavit to effectively include and encompass an application in a case for further orders of the court sanctioning the sale of the vehicle on specific terms and for the proceeds of sale of the vehicle to be utilised in a certain way. The Registrar listed that application for hearing, today, 4 August 2014. 

9. The Registrar’s order included an order that was made by consent.  It is recorded that the trustee sell the motorhome for a price of not less than $70,000 and that from the sale, the trustee pay from the agent’s commission on the sale plus sales costs and advertising.  The trustee was ordered to hold the remainder of the proceeds of sale in trust pending court order or agreement in writing by the parties and the trustee.

10. The Registrar further ordered, most importantly in respect of today’s proceedings, that within 21 days, the applicant and respondent each file and serve a response to the application in the case and a supporting affidavit. So, by the end of April or around the beginning of May, any such application and supporting affidavit was to be filed.  As I said, the matter was listed for hearing before me today, and when the matter came before me, the trustee, as I said, relied on the evidence that was already filed in the court. In that evidence there were many copies of primary material, namely invoices and letters between the agent and the trustee, that certainly established the basis for the amounts that were claimed as being legitimate expenses to be paid by the trustee.

11. Each of the applicant and respondent acknowledged today that they had been provided with that information, even before they received the affidavit that was filed on 8 April 2014. 

12. When the matter came before me today, the trustee was represented by a solicitor who had filed a written outline of argument.  The respondent, Ms Bates, was represented by solicitors, and the applicant, Mr Drake appeared unrepresented.  At the outset, I pointed out to Mr Drake that he had no material before the court and I pointed out to him during the course of argument that Registrar Stoneham had given him 21 days within which to file a response and supporting affidavit and that time had run long before.  No material had been filed by the applicant, Mr Drake.

13. Mr Drake endeavoured to tell me that there were good reasons why he was unable to file within that 21 days and then went on to assert that he had been led to believe by the solicitor’s acting for the respondent, Ms Bates, that he was not able to file any material outside of that time.  It seems that he was informed by those solicitors that they would object to him relying on any material that was filed over that time. With respect to Mr Drake, that is not an uncommon thing for opposing parties in Family Court proceedings to say, but it does not necessarily lead to an ultimate determination by a judge that such material that has been filed, notwithstanding advice of objection being taken, will ultimately be excluded.

14. I pointed out to Mr Drake that with respect to him, the lack of legal representation is, of course, a misfortune not a privilege and that I would not, in the circumstances, simply be able to excuse him for not filing a response or an application and supporting affidavit material setting out his position.

15. Mr Drake effectively, though, orally asserted to the court a number of matters revolving around his unhappiness and disagreement with, as it seems to me, the reasonableness of the expenses sought to be paid by the trustee.  However, with respect to Mr Drake and his position, without any form of sworn evidence going to that issue, I simply was not in the position to make any determination that the satisfaction arrived at by the trustee in determining that those expenses were reasonable and appropriate to be paid was indeed wrongly or unreasonably reached.

16. In the circumstances with the application of the trustee being supported by the respondent, Ms Bates, I was satisfied that the orders that I made were appropriate ones to make.

17. The trustee, on the evidence that was before me, has nevertheless been left about $25,000 out-of-pocket in respect of the expenses, including legal fees, paid in the matter and sought a further order that the parties pay those costs.  Although that was opposed by the respondent, Ms Bates, it was not opposed by the applicant, Mr Drake, and in the circumstances, I consider it appropriate – although I have been told by both the applicant and respondent, Mr Drake and Ms Bates, that they will not be in a position to pay the orders – I consider it appropriate in the circumstances for the order to be made. It is, in my view, far from just and equitable for a trustee appointed by the court to be left out-of-pocket if at any point in time, there is some prospect that the parties – or either of them – might be able to contribute to or pay those costs.

18. Mr Wilson for the respondent, Ms Bates, then sought an order that the question of his client’s costs, or the parties’ costs, be reserved, including the question of how any of those outstanding costs of the trustee that might be paid in future, be borne as between the parties. I considered that an appropriate and just and equitable order to make in the circumstances.

19. I also ordered that the trustee be excluded or excused from doing any further work as required pursuant to paragraph 6 of 15 of the 15^th of December 2011, and I did that because that order required the trustee to undertake an examination of the assets of the B Group and determine what company assets may or may not have been sold by the parties up to the date of compliance with paragraph 4 of this order, and then provide an account of the proceeds of the sale of such assets to this Court.

20. Mr Serong, solicitor for the trustee, submitted to me that the trustee is already out-of-pocket some $25,000. There does not look to be – and it seems conceded by at least one of the parties – Ms Bates – that there are no further funds available for the trustee to be satisfied, (a)  that he is going to be paid what he is already owed, and (b) that he might be paid for any further work that he does in future.  Although Mr Drake says there are other assets and that the trustee should not be excused from that task, I do not consider it appropriate, just or equitable for an independent trustee to be ordered to continue doing work when he is already owed $25,000 that he may never receive and where there is absolutely no certainty or probability that he is likely to be paid for any further work in the future.

21. As I pointed out to Mr Drake during the course of argument, he will be perfectly entitled, of course, if he is able to satisfy the court with appropriate evidence, to review that matter further by appropriate applications at some point in the future.

I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 4 August 2014.

Associate: 

Date:  22 September 2014