E and E
[2003] FMCAfam 148
•8 May 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| E & E | [2003] FMCAfam 148 |
| FAMILY LAW – Contravention – Consent property orders – Wife’s own caveat prevents her compliance – no reasonable attempt to comply – judgment creditor’s estate or interest in land. Family Law Act 1975 (Cth) ss. 112AB, 112AD Hall v Richards (1961) 108 CLR 84 |
| Applicant: | M E E |
| Respondent: | J P E |
| File No: | LNM 1202 of 2003 |
| Delivered on: | 8 May 2003 |
| Delivered at: | Hobart |
| Hearing date: | 29 April 2003 |
| Judgment of: | Roberts FM |
REPRESENTATION
| Counsel for the Applicant: | Ms Gibson |
| Solicitors for the Applicant: | AT Legal |
| Counsel for the Respondent: | Mr Paterson |
| Solicitors for the Respondent: | Kim Paterson & Associate |
ORDERS
That the Court declares that J P E (“the Wife”) has without reasonable excuse contravened Order No. 1 of the Orders of the Family Court of Australia of 25th November 2002 bearing number HBF10 of 2002 (“the Orders”).
That within seven days the Wife enter into a bond without surety or security to comply with her obligations under the Orders within a further 14 days.
That the Wife forthwith instruct her solicitors to withdraw Caveat No. C429757 within fourteen days to enable the registration of transfers provided by her in relation to the land comprised and described in Certificates of Title Volume 217139 Folio 1 and Volume 60927 Folio 18.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT HOBART |
LNM 1202 of 2003
| M E E |
Applicant
And
| J P E |
Respondent
REASONS FOR JUDGMENT
Introduction and background
Before the Court is a Form 48 Contravention Application filed by M E E (“the Husband”) on 26th March 2003. The Respondent is J P E (“the Wife”).
On 25th November 2002 Orders were made by consent in the Family Court of Australia (“the Orders”) that were intended by the parties to be in full and final settlement of their rights and claims for property settlement.
The first order required the Wife to:
“transfer to the husband all that her right, title and interest”
in one property at Nabowla and two properties at Scottsdale in Tasmania. The Order gave the addresses of each of those properties and the details of each Certificate of Title.
The second order required the Husband to provide the Wife, contemporaneously with those transfers, a discharge of her liabilities pursuant to all mortgages registered over the properties and required him to pay and indemnify her in relation to the payment of all rates, taxes and other outgoings in relation to those three properties.
The third order required the Husband to pay to the Wife’s solicitors:
“for and on behalf the wife the sum of $30,000 as follows:
(a)contemporaneously with the transfers referred to in Order No. 1 hereof:
(i)the sum of $18,800 by bank cheque payable to the said solicitors;
(ii)by delivery to the Wife of:
(1) a duly registrable transfer of the husband’s interest in 800 Telstra shares held jointly with the Wife;
(2) all relevant documents of title appertaining to the aforesaid 800 Telstra shares.
(b)that the balance being $11,200 less the value of the said Telstra shares calculated as at the date of this order, to be paid on or before the 4th October 2003.”
There were other orders relating to the parties’ property, but they are not relevant to the matter currently before the Court.
The Husband’s Application was supported by an affidavit of a solicitor acting for the Husband (“the Husband’s solicitor”) who had been:
“given carriage of this file in order to carry out and finalise the conveyancing steps necessary to ensure compliance with the terms of the Order made in the Family Court of Australia at Hobart on 25th November 2002”.
At the hearing counsel for the Wife indicated that no issue was taken with the facts contained in that affidavit. (However, it does appear that the Husband’s solicitor’s affidavit is inaccurate in one respect. She referred to 1,800 Telstra shares and not 800 as is referred to in the orders. When I drew counsels’ attention to that, both agreed that nothing turned upon it.)
The relevant facts from the affidavit of the Husband’s solicitor are as follows:
a)She and the Wife’s solicitors arranged for a settlement to take place on 20th December 2002 at the ANZ Bank.
b)In compliance with the third order, she provided to a clerk employed by the Wife’s solicitor (“the clerk”) a bank cheque in the sum of $18,800 together with a duly registrable executed transfer of the Husband’s interest in Telstra shares held jointly with the Wife.
c)In compliance with the second order she also provided to the clerk a copy of a Partial Discharge of Mortgage discharging the Wife from all liability pursuant to a mortgage registered over the Titles to the two Scottsdale properties. A copy of that Partial Discharge is annexed to her affidavit.
d)At the settlement the clerk handed to the Husband’s solicitor Memoranda of Transfer in relation to the two Scottsdale properties in exchange for the bank cheque and share transfers. The Husband’s solicitor gave those Memoranda of Transfer to an ANZ Bank representative who was present at the settlement for registration with other title and security documents.
e)The Nabowla property was at all material times registered in the sole name of the Husband. (At the hearing, both counsel agreed that no transfer was necessary in relation to that property pursuant to the Orders).
f)On or about 6th February 2003 the Husband’s solicitor received advice from an ANZ Bank representative that the Bank had been unable to register the two transfers because the Wife had lodged a caveat over the titles to the properties (“the Caveat”). The ANZ Bank representative said that he would telephone the Wife’s solicitors about the matter.
g)There was some further telephone communication between the Husband’s solicitor and the ANZ Bank over the next few weeks.
h)On 3rd March 2003 the Husband’s solicitor caused a search to be undertaken which revealed that the Caveat was signed on the Wife’s behalf by her solicitor on 23rd December 2002 and lodged on 2nd January 2003. The Caveat was lodged against all three properties referred to in the first order.
i)On 7th March 2003 the Husband’s solicitor wrote to the Wife’s solicitor requesting a Withdrawal of Caveat within fourteen days and a Contravention application was foreshadowed if a Withdrawal of Caveat was not forthcoming. She received no response to that letter (a copy of which is annexed to the affidavit).
Issues
It is the Husband’s position, as detailed in his Application and argued by his counsel, that by registering the Caveat, the Wife has:
a)forbidden the registration of any dealing affecting any of the three parcels of land;
b)failed to comply with the order requiring her to transfer the two Scottsdale properties because the registration of the Memoranda of Transfer is prevented;
c)claimed an estate or interest in the land in breach of the first order.
Because the Wife lives in Victoria, she was granted leave not to attend the hearing in person. I accepted that her counsel was able to advise the Court of her plea. It was clear that she did not admit any contraventions of the orders and was defending the application. The Husband’s counsel did not require the Wife to attend the hearing.
It was the Wife’s position, put through her counsel, that Caveat was lodged after “settlement” and that she was entitled to protect her position as a judgment creditor by virtue of the Orders. Further, it was her position that the current situation had only arisen because neither the Husband’s solicitors nor the ANZ Bank had lodged a Priority Notice prior to settlement in order to secure the registration of the transfers.
The Law
Part XIIIA of the Family Law Act 1975 (Cth) deals with sanctions for failure to comply with orders or obligations that do not affect children.
Section 112AB provides that a person who is bound by an order shall be taken to have contravened the Order if, and only if, he or she has:
“intentionally failed to comply with the order” or
“made no reasonable attempt to comply with the order”.
Section 112AD provides that a Court may apply appropriate sanctions if the Court is satisfied that a person has, without reasonable excuse contravened an order under the Act. Subsection (2) sets out the sanctions that range from a bond through to imprisonment. Subsection (4) provides that where a Court makes an order for the imposition of a sanction, the Court may also make such other orders as the Court considers necessary to ensure compliance with the order that was contravened.
The transfer of interests in land in Tasmania is governed by the Land Titles Act 1980 (Tas) (“the Land Titles Act”) and section 3 provides that a “transfer” means the passing of any interest or estate in land under that Act, whether for valuable consideration or otherwise.
It is clear from sections 49 and 58 of the Land Titles Act that a transfer is not:
“effectual to pass any estate or interest in registered land”
unless the instrument of transfer is registered in accordance with the Land Titles Act.
Section 133 of the Land Titles Act deals with caveats lodged by persons who are either a settlor transferring land to a trustee or a person claiming:
“an estate or interest in registered land.”
Section 134 of the Land Titles Act provides that a:
“judgment creditor of a person registered as the proprietor of registered land may lodge a caveat in an approved form.”
That section provides in subsection (3) that:
“The practice, procedure and mode of dealing with a caveat under this section shall in all other respects be the same as if the judgement creditor referred to in subsection (1) claimed an estate or interest in that person’s land within the meaning of section 133”.
Discussion
It is clear to me that, through her solicitors, the Wife has diligently sought to protect her interest in being paid a sum of money that is something less than $11,200. While I have no evidence of the exact value of the transferred Telstra shares (i.e. on 25th November 2002), their value at that date must be deducted from $11,200, and the resulting reduced sum is payable by the Husband to the Wife’s solicitors on or before 4th October 2003.
It is also clear that the solicitors acting for the Wife wasted no time in lodging the Caveat. The settlement date of 20th December 2002 was the Friday before Christmas 2002 and the date on which the Wife’s solicitor signed the Caveat on the Wife’s behalf was the Monday before Christmas 2002. That Caveat was lodged on the first working day after New Years Day 2003.
The Wife’s counsel argued that the failure to register the relevant transfers arose out of a lack of diligence or prudence on the part of the Husband’s solicitors or the ANZ Bank because the Caveat was lodged after the transfers had been provided. In my view, that does not take account of commercial reality because it is well known that banks and solicitors are particularly busy in relation to conveyancing matters over the Christmas period. Consequently, the lodgement of the Caveat so soon after the settlement, and particularly taking the holiday period into account, was almost certain to defeat the very purpose of providing the Memoranda of Transfer. The defence of the Wife appears to be that it was the responsibility of the ANZ Bank or the Husband’s solicitors to lodge a Priority Notice to protect the Bank’s or the Husband’s interests. However, it is equally clear that the Wife could have lodged a Priority Notice to protect her interest in the money that she was still owed.
Instead, what has happened is that the Caveat has prevented the Wife from fully complying with the first order which required her to:
“transfer to the Husband all that her right, title and interest”
in the properties. Because sections 49 and 58 of the Land Titles Act require registration before any effective transfer is made, it is clear that she has not complied with the first order.
As I have no evidence to the contrary, I must assume that the Wife’s solicitor was acting upon instructions from his client when the Caveat was lodged. I must therefore assume that it is because of the Wife’s instructions to lodge the Caveat that she has prevented herself from being able to comply with the first order of 25th November 2002.
As referred to above, section 112AB of the Family Law Act provides that the Wife shall be taken to have contravened an order if, and only if she has “intentionally failed to comply” with the order or she has “made no reasonable attempt to comply” with the order.
It is reasonable to assume that by instructing her solicitor to lodge the Caveat, the Wife did not intend to contravene any order of the Court. She was only seeking to protect her remaining interest under the Orders.
However, it is also clear that her non-compliance with the Orders was brought to the attention of her solicitor by the letter that was sent to him on 7th March 2003. It is agreed that her solicitor did not respond to that letter, which concludes with the sentence:
“If we do not receive such a Withdrawal of Caveat and registration fee within fourteen (14) days of the date of this letter, I will seek instructions to issue contravention proceedings.”
I must assume that the Wife was at all times kept fully informed by her solicitor, so I must assume that the Wife was put on notice that she had not complied with the first order and that contravention proceedings were contemplated.
In my view it is a relatively simple process for the Wife to undo what she has done in relation to the Caveat by the lodgement of a Priority Notice which provides for the withdrawal of that caveat, the registration of the relevant transfers and other security documents (including the Partial Discharge of Mortgage) and a subsequent caveat. However, the Wife has done none of that.
While the Husband and his legal advisers may see the lodgment of a caveat over three parcels of land to protect a judgment debt of less than $11,200 as “overkill”, it is clear that the Wife has an entitlement to do that under the Land Titles Act. Consequently, she cannot be criticised for lodging a caveat as a judgment creditor. However, she can be criticised for failing to do anything when she was put on notice that her purported transfer of the land was ineffectual and therefore not in compliance with the Orders of 25th November 2002.
Conclusions
In my view, the Wife has made no reasonable attempt to comply with the Orders, so she has contravened Order No. 1 of the Orders for the purpose of section 112AB of the Family Law Act. I am also satisfied that she has not had a reasonable excuse for her failure to make any reasonable attempt to comply.
As stated above, the Husband is of the view that the Wife, by lodging the Caveat, has claimed an estate or interest in the land that is in breach of the first order. In my view, the Caveat incorrectly states that the Wife is “claiming an estate or interest” in the land as a judgment creditor. Section 134 of the Land Titles Act clearly suggests that a judgment creditor does not have any “estate or interest” in the land of the judgment debtor simply by virtue of the judgment debt. Instead, that section creates a right to lodge a caveat:
“as if the judgement creditor …… claimed an estate or interest”. See also Hall v Richards (1961) 108 CLR 84.
However, in view of my conclusion in paragraph 30 above that the Wife has not made a reasonable attempt to comply with the Orders, I do not see the need to rule upon whether or not her alleged claim of an estate or interest in the land is a contravention of the Orders.
It was clear from the submissions that were put to me that the Husband was not seeking any sanction other than a bond requiring the Wife to comply with the Orders of 25th November 2002. He was also seeking an order that the Caveat be withdrawn. Section 112AD of the Family Law Act enables me to make such orders, so I shall do so.
I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date:
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