E and E
[2000] FMCAfam 15
•21 August 2000
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| E & E | [2000] FMCA fam 15 |
| ENFORCEMENT SUMMONS – Section 105 FLA |
| Applicant: | D M J E |
| Respondent: | U E |
| File No: | ZB2489 of 2000 |
| Delivered on: | 21 August 2000 |
| Delivered at: | Brisbane |
| Hearing Date: | 17 August 2000 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Luca |
| The Respondent in person |
ORDERS
That the respondent pay to the applicant (or as directed in writing by him) by 21 November 2000 the following sums:
(a)$5,600 for principal;
(b)$6,003.34 for interest;
(c)An amount calculated at a rate of $1.47 per day from 21 August 2000 to the date of payment;
(d)$1,500 for the applicant’s costs.
In exchange for the payment by bank cheque of the moneys calculated under Clause 1, the applicant shall deliver a withdrawal of Caveats W946622 and W946623, in registrable form.
This matter is adjourned until 9.30 am on 24 November 2000.
If the moneys so ordered are not paid then it is the intention of the Court to order a sale of the respondent’s property at 64 G Street, N, in the State of New South Wales.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
ZB 2489 of 2000
| D M J E |
Applicant
And
| U E |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a matter of an enforcement summons initially issued out of the Holland Park Magistrates Court on 20 March 2000, transferred to the Family Court, (it would appear as a result of an objection to jurisdiction by the respondent), and subsequently transferred to this Court by Registrar Spelleken. When asked, the respondent confirmed she did not object to this Court exercising jurisdiction.
History
The matter appears to have had long history. Suffice it to say, that the relevant events appear to be that:
a)The parties married on 19 September 1970 and there were two children of the marriage N N E (born 7 January 1971) and R H E (born 10 June 1981).
b)An order was made in the Family Court of Australia at Sydney on 26 February 1987 (“the said order”) in respect of property matters. It appears the orders were made by consent, both parties being legally represented. A decree nisi of dissolution of marriage was also ordered that day.
c)The relevant parts of the said orders provided that:
“6(b)The remaining reduced balance of $5,600 of the principal sum shall be paid by the wife to the husband on or before the 1 June 1989”;
and
“7.In the event of any moneys not being paid within the times specified in these orders, interest shall be added to the amount outstanding at the rate of seventeen (17%) per annum from the due date to the date of payment, such interest to be compounded with the amount outstanding on the expiry of each six months after the due date and interest to be calculated on such amount outstanding together with accumulated interest thereon”
and
“9.The husband shall be entitled to register a Caveat on the real estate known as 64 G Street, N in the State of New South Wales being the whole of the land comprised in Certificate of Title Volume 5124 Folio 213 to secure the repayment of the principal sum and interest thereon”.
d)The house was transferred to the respondent (although she says with some delay) and she paid the initial payment of $22,000. After a credit for child maintenance (permitted by paragraph 6(a) of the said order), the balance payable by the respondent was $5,600.
e)The payment of $5,600 due on 1 June 1989 was not paid by the respondent.
f)Sometime in 1991, the youngest child R, began living with the mother.
g)Some proceedings under s112AD were commenced by the respondent alleging breaches of a joint guardianship order. Apparently the respondent alleged the applicant father had failed to inform the respondent mother of the whereabouts of the child R. The matter was originally heard by Jordan J on 8 April 1998; appealed successfully by the respondent to the Full Court on
10 March 1999 and re-heard by Judicial Registrar Smith on
19 July 1999. Judicial Registrar Smith found that the applicant father had without reasonable excuse contravened the order as alleged by the mother, but imposed no penalty on the father. Those proceedings and the underlying distress caused to the mother were still evident in many of the remarks made by the mother in these proceedings.h)Subsequently, these proceedings were brought by the applicant as detailed in the introduction and after an initial adjournment on 19 June 2000, were heard by me on 17 August 2000.
i)The 19 June 2000 date is also important as it was on that day that Bell J dismissed an application filed by the wife on 22 May 2000 (and amended in part by application filed 15 June 2000) to seek to vary the said order. No further application under s79A or otherwise is pending.
Evidence of the respondent
The respondent represented herself and was cross-examined by the solicitor for the applicant. Further questions were directed to the witness by me for clarification, as a result of which the evidence of the respondent, on the relevant issues was that she:
a)Is currently unemployed receiving $228/fortnight benefit and rent from the N property of $230/week. She lives alone and has no dependants;
b)Makes mortgage payments of $200 per month to the Commonwealth Bank of Australia mortgage, which has a current outstanding balance of approximately $26,000.00;
c)Regarded questions as to the value of her N home as “none of your business”. She made no admissions when she read the curb-side appraisals attached to the applicant’s affidavit filed by leave, and was reluctant to answer any questions relating to her equity in the property. She did confirm that her estimate of value of the property in 1987 was between $80,000 to $85,000 and that the New South Wales Valuer General’s unimproved value of the land in 1991 was $55,000;
d)Admitted receiving letters from the then solicitors for the applicant (Messrs Delaney and Delaney) in 1991 and 1995 about the outstanding balance payable. Interestingly, the letter of August 1995 (being Exhibit B to the applicant’s affidavit filed 19 June 2000), merely gives details of their calculation but does not demand payment;
e)Denied the alleged verbal demands claimed to be made by the applicant in 1988 and 1989 (paragraphs 11 and 12 of his affidavit filed 19 June 2000). If they were made, they appear (or at least one does) to be premature as the funds were not payable before 1 June 1989;
f)Admitted she approached her bank in 1996 to extend her loan to clear the debt to her former husband. She said she would have offered to pay him “between $10,000 and $12,000”, but the loan was refused because of her lack of income;
g)Confirmed the subject home is rented unfurnished and she needs all the income to live on;
h)Has a bank account with a balance of approximately $200 but owns no:
i)Furniture, TV or stereo;
ii)Significant jewellery;
iii)Motor vehicle;
iv)Shares or investments;
v)Life insurance;
vi)Superannuation;
vii)Claims to any inheritance, trust or personal injury claims.
She has store accounts totalling approximately $2,500 but no other liabilities save for the bank mortgage and any liability established as owing to the applicant.
i)Confirmed when pressed by my questioning, that:
i)She could seek employment;
ii)If employed she could get a loan;
iii)It would take 3 – 6 months to arrange a loan;
iv)She suffers no disability;
v)Thinks it is unreasonable to have to pay 17% when the applicant, in her view, took no action;
vi)She should be compensated for the distress and suffering she has felt by being denied contact to her daughter.
Relevant findings
That the order of 26 February 1987 is a valid order and that paragraphs 6(b) and 7 are for the benefit of the applicant and enforceable by him (subject to the matters raised below).
That there are no pending proceedings placing the enforceability of the order in question. There is no evidence to support allegations made by the respondent that the order was brought about by duress; lack of competent legal representation or other event capable of constituting a miscarriage of justice.
That the respondent has a substantial equity in the N home. Whilst the appraisals attached to the affidavit of the applicant filed by leave were strictly inadmissible, I can reasonably infer from other evidence that the property has significant value and a relatively small mortgage.
That the said home represents the only significant asset of the respondent.
That the respondent could, if she so desired, and would if the house was at risk of sale, secure an increased loan from her bank or other lender. I believe I could also infer that she could do so at significantly less than a rate of 17 % on 6 monthly rests.
That the applicant has failed to diligently pursue the recovery of the moneys due to him either because, as submitted by his solicitor:
a)He felt protected by the registered caveat; and/or
b)He didn’t wish to distress the wife; and/or
c)He anticipated the wife would have, by now, either sold or sought to refinance meaning he would be paid.
Alternatively, he could have been happy to merely allow the rate of interest to accumulate at of 17 %, which I think I am entitled to say, represents a rate for a secured creditor significantly higher than market rates.
Conclusions
The power to enforce orders made by the Family Court of Australia is vested in this Court pursuant to s105 of the Family Law Act 1995. The power is discretionary as reflected by the terms of s105 which provides, inter alia that:
“all decrees made under this Act may be enforced … ”
The discretionary nature of this power was considered and emphasised by the Full Court in Ramsay and Ramsay (1983) FLC 93-301. In that case, as well as some later authorities (see for example, Kerr and Kerr (1983) FLC 91-329), the conduct of the parties was identified as a relevant consideration.
I see no reason not to enforce the payment of the sum of $5,600 as provided for in paragraph 6(b) of the said order.
In my view, the failure of the applicant to diligently demand and to pursue the sum of $5,600 calls into question the fairness of enforcing strictly the interest penalty imposed by paragraph (7) of the said order. The rate as well as the method of calculation is, in these economic times, so disproportionate to other “default rates” of interest that I intend to exercise my discretion to reduce the rate. The current rate prescribed by the Court under O40R1 is 9.55 %. I intend to adopt that rate, for the duration of the default, calculated on a simple interest formula basis.
My adoption of that rate, I believe, justly balances:
a)The rate the applicant could have expected to receive had he invested the moneys;
b)The rate the respondent would have paid had she borrowed the moneys;
c)An appropriate rate for the default by the respondent, as a penalty;
d)An appropriate discount from the “agreed” default rate for the tardiness of the applicant.
On a simple interest basis the outstanding sum of $5,600 has attracted interest of $6.003.34 at 9.55 %, for the period from 1 June 1989 to 21 August 2000. Interest accrues at a rate of $1.47 per day.
It is in my view reasonable that the respondent pay the applicant’s costs of these proceedings. I note that the question of costs were reserved on 19 June 2000. The applicant could not provide me with an estimate of costs, agreeing to abide the order of the Court. I fix the costs at $1,500.
The only remaining issue, is how should these sums be secured if not paid. The applicant seeks an order for the appointment of a Marshal as trustee for the sale. I intend to give the respondent 3 months from this date to pay the applicant the sum calculated under paragraphs 11, 14 and 15 of these reasons, in default of which, when the matter returns before me, I give adequate warning and notice to the respondent that I intend to order a sale of the property.
Formal orders
(1)That the respondent pay to the applicant (or as directed in writing by him) by 21 November 2000 the following sums:
(a)$5,600 for principal;
(b)$6,003.34 for interest;
(c)
An amount calculated at a rate of $1.47 per day from
21 August 2000 to the date of payment;
(d)$1,500 for the applicant’s costs.
(2)In exchange for the payment by bank cheque of the moneys calculated under Clause 1, the applicant shall deliver a withdrawal of Caveats W946622 and W946623, in registrable form.
(3)This matter is adjourned until 9.30 am on 24 November 2000.
(4)If the moneys so ordered are not paid then it is the intention of the Court to order a sale of the respondent’s property at 64 G Street, N, in the State of New South Wales.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
Date:
0
0
0