Eastcott and the Estate of Kimball (deceased)

[2020] FamCA 243

FAMILY COURT OF AUSTRALIA

EASTCOTT & THE ESTATE OF KIMBALL (DECEASED) [2020] FamCA 243

FAMILY LAW – ENFORCEMENT OF ORDERS – Application by the wife for the enforcement of property orders – Where the husband died paying the settlement sum to the wife – Where significant time has passed since the making of the orders – Where the wife instituted proceedings for enforcement only after the husband died – Whether interest for default of payment should be paid - Consideration of the Court’s discretionary power to enforce orders pursuant to Family Law Act 1975 (Cth) s 105 – Equitable defence of laches considered – Orders

Family Law Act 1975 (Cth) ss 4(1), 105(3)
Family Law Rules 2004 (Cth) r 17.03
Limitations of Actions Act 1936 (SA) s 34
Trustee Act 1936 (SA) s 29(2)

Kerr & Kerr (1983) FLC 91-329
Ramsey & Ramsey (1983) FLC 91-301

APPLICANT: Ms Eastcott

RESPONDENT: B Limited (as Trustee for the Estate of Mr Kimball)

FILE NUMBER: ADF 4607 of 1984

DATE DELIVERED: 17 April 2020

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 27 February 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Heinrich

SOLICITOR FOR THE APPLICANT: Camatta Lempens Pty Ltd

COUNSEL FOR THE RESPONDENT: Ms Clark

SOLICITOR FOR THE RESPONDENT: Andersons Solicitors

Orders

1. That B Limited (as trustee for the Estate of Mr Kimball) pay to the Trust Account of Camatta Lempens for and on behalf of the wife the sum of SIXTY FOUR THOUSAND THREE HUNDRED AND ONE DOLLARS ($64,301) with such sum to be paid on or before sixty (60) days from the date of this order.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Eastcott & the Estate of Kimball has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 4607 of 1984

Ms Eastcott

Applicant

And

B Limited as Trustee for the Estate of Mr Kimball (Deceased) 

Respondent

REASONS FOR JUDGMENT

INTRODUCTION  

1. Ms Eastcott (formerly “Kimball”) was the applicant wife and Mr Kimball (now deceased) was the respondent husband in proceedings for property settlement filed in 1984.

2. On 30 April 1987 the parties reached agreement and final orders were made by consent.  The orders provided for the husband to pay to the wife a settlement sum of $23,500 on or before 23 July 1987 and that contemporaneously with such payment, the wife transfer to the husband her interest in the jointly owned property situated at C Street, Suburb D (“the Suburb D property”).

3. In default of payment by the husband of the settlement sum, the Suburb D property was to be sold on such conditions as the parties may agree or as may be ordered by the Court and that the wife was to receive the settlement sum plus default interest, calculated at the rate of 15 percent per annum from the date of default to the date of payment.

4. The husband did not pay the settlement sum but the wife transferred her interest in the Suburb D property to him.

5. The husband died between … and … January 2016.  The executors of the husband’s will are B Limited (“the trustee”) who obtained a Grant of Probate on … August 2016.

6. On 17 May 2019 the applicant filed an Application in a Case seeking an order that the trustee pay from the husband’s estate to the applicant the sum of $23,500 plus accrued interest, to be calculated at the rate of 15 percent per annum.

7. The trustee opposes the wife’s application for enforcement but if unsuccessful contends that the wife’s claim should be limited to the settlement sum. If the Court considers that default interest should apply, then it should be based upon the Reserve Bank of Australia Target Cash Rate as opposed to the applicable rate of interest as set out in the Family Law Rules 2004 (“the Rules”). Rule 17.03 prescribes the interest rate for each six months commencing on 1 January and 1 July of each year, being the Reserve Bank of Australia Target Cash Rate last published before 1 January and 1 July and six percent. The trustee does not consider there is any circumstance where the default rate of interest as provided for in the final order should be applied.

BACKGROUND

1. The husband and wife were married on … 1976.  There are two adult children of the relationship.

2. The Suburb D property was purchased on … 1978.  It appears from the documents that remain on the original Court file, that the Suburb D property was likely to be the principal asset of value as between the parties.

3. The settlement recognised that the husband held the Suburb D property as to one equal tenth part in trust for the two children of the relationship.  The wife considers that the settlement sum of $23,500 represented about one half of the equity in the Suburb D property.

4. The parties separated in July 1984.  The wife sets out the circumstances of the separation in her Affidavit filed 17 May 2019.  She alleges that the husband was domestically violent and fearful of his threats and stalking behaviour, she took the children to live in Sydney.

5. In … 1987 the wife married her current husband.  In 1992 the family moved to the United States of America (“USA”) in order for the wife to distance herself from the husband and lessen his ability to control and harass her.

6. The husband died in January 2016 leaving a will dated 9 July 1999.  The primary beneficiaries were the son of the parties and a child of the husband from a prior marriage.  The parties’ daughter received $20,000.

7. The Suburb D property was sold in … 2017 for the sum of $368,000.

8. At the time of the negotiations leading up to the settlement and the making of final orders for property settlement, the wife was represented by solicitors.

9. As discussed, the final orders provided for the wife to transfer her interest in the Suburb D property to the husband contemporaneously with the payment of $23,500, being the settlement sum.

10. It is not controversial that the wife did not receive the settlement sum, but did sign a Memorandum of Transfer on … July 1987 which had the effect of transferring her interest in the Suburb D property to the husband.

11. The following appears at [21] of the wife’s affidavit:-

    I have no recollection of instructing [E Lawyers] to hand over the Memorandum to the Deceased.  I recall being harassed by the Deceased to hand it over so that he would be the sole owner of the Property.  At the time I wanted him out of my life and would have done anything to stop him harassing me and trying to take my son.

12. The wife gave evidence and was cross-examined by counsel for the trustee.  She conceded that at a Court hearing, the husband advised her that he did not have enough money to pay the settlement sum and prevailed upon her to transfer her interest in the property.

13. The wife’s recollection of the circumstances of the transfer are incomplete.  She remembers a conversation with the husband that coincided with a Court hearing.  It is likely that the hearing was the occasion of the making of the final orders.  She does not remember the terms and conditions of any agreement between the parties.  She concedes that her solicitors would not have acted without instructions and as such, she accepts that she must have instructed her solicitors to give the husband’s solicitors the Memorandum of Transfer without the requirement for the contemporaneous payment of the settlement sum.

14. The husband is now deceased, the files of the respective solicitors have long been destroyed and the wife’s recollection is poor.

15. Whatever uncertainty may exist as to the nature of the discussion with the husband, she rejects any assertion that she received the settlement sum.

16. The trustee first received notice of the wife’s claim in December 2016, being a Notice of Claim or Potential Claim sent by the wife’s solicitors.

17. On 2 July 2017 the trustee forwarded a Notice of Dispute of Claim to the wife’s solicitors.

18. Given that Probate had been granted on … August 2016, the Notice of Dispute of Claim required the wife to either withdraw the claim or to institute proceedings to enforce the claim within six months of service of the notice.

19. Pursuant to s 29(2) of the Trustee Act 1936 (SA) the trustee sought an order that the wife’s claim against the husband’s estate be barred.

20. Proceedings were issued by the wife in the District Court of South Australia seeking payment of the settlement sum together with default interest.  On 13 September 2018 a Judge of the District Court transferred the proceedings to the Supreme Court of South Australia.  Those proceedings have been adjourned pending a resolution of the wife’s Application in a Case before me.

21. Whilst a determination of the wife’s application will resolve the substantive dispute, the question of each of the parties’ costs arising from the Supreme Court proceedings remains at large.

22. The trustee opposes the wife’s claim on the basis that the normal practice given the provisions of the final order, was that the signed Memorandum of Transfer would not have been provided until and unless the settlement sum was paid.  The extrapolation of the argument is to contend that it is more likely than not that the wife received the settlement sum.

23. The trustee does not have any record as to whether a settlement sum was paid, nor are there any documents remaining which would assist.

Did the wife receive the settlement sum?

1. The wife is categorical in her denial that she received a settlement sum.  She explains that at all material times she was fearful of the husband, taking into account the history of extreme domestic violence.

2. There is no evidence that can corroborate the wife’s assertion that she did not receive the settlement sum and did not seek to hold the husband to strict compliance with the Court orders because of his ability to intimidate her.

3. Even though the wife’s version is not capable of corroboration, she remained resolute in her position that no settlement sum was received.

4. I consider that the wife’s unequivocal position can be considered as more reliable than her recollection of the discussion with the husband at Court and the uncertainty as to the terms and conditions, if any, of when the settlement sum would be paid and if so, at what rate of default interest.

5. I find that on the balance of probabilities, the wife did not receive the settlement sum and taking into account the long history of domestic violence perpetrated by the husband, the wife was persuaded or felt compelled to instruct her solicitors to provide the Memorandum of Transfer of her interest in the Suburb D property to the husband, without the payment of the settlement sum.

ENFORCEMENT OF THE DECREE

1. Section 105 of the Family Law Act 1975 (Cth) (“the Act”) provides:-

   105      Enforcement generally

   …

   (3) Where a person bound by a decree made under this Act has died, the decree may, by leave of:

   (a)the court by which it was made; or

   (b)any court in which the decree has been registered in accordance with the regulations (where the decree was registered before or after the death of the person);

   and on such terms and conditions as the court considers appropriate, be enforced, in respect of liabilities that arose under the decree before the death of that person, against the estate of that person.

2. “Decree” is defined in s 4(1) of the Act as “decree, judgment or order …”

3. The terms and conditions of the final order is enforceable under Pt 13 of the Act.

4. Section 105(3) of the Act only has application in respect of the enforcement of an order against the estate of a person, if the order was made prior to that person’s death.

5. In the current circumstances, it is accepted that the order for settlement of property was final and is therefore capable of enforcement should the Court determine the discretion should be exercised.

6. In Ramsey & Ramsey (1983) FLC 91-301 the Full Court was asked to consider whether the enforcement of a property order was mandatory or whether a Court has discretion to decline to enforce its own order. At 78,061 the Full Court made the following remarks:-

   One of the authorities which was cited to the trial Judge and was also relied on before us was Harvey v Hall (1873) 16 L.R. Eq. 324.  That authority suggests that if the Court makes an order and the parties conduct themselves inconsistently with its terms the Court has a discretion to refuse to enforce the order.  Another authority which was cited to us but not to his Honour was Gilbert v Gilbert (1955) Q.S.R. 245.  That case was concerned with a matrimonial cause and in it Townley J. expressed the view that the parties may by agreement so vary the terms or effect of an order that a Court would decline to enforce it according to its original tenor.  In that case the Court refused to enforce an order by writ of attachment on the basis that the wife had waived her right to enforce an order by subsequent agreement.  Our attention was specifically drawn to p. 252 of that report where it was held that the onus was on the husband to show that it was not equitable to enforce the order and counsel for the appellant complains that the learned trial Judge refused the husband the opportunity to discharge that onus.

7. At 78,061 their Honours also referred to, with approval, a decision of the Court of Appeal in Thwaite v Thwaite (1981) 2 All. E.R. 789 at p 794:-

   Where the order is still executory, as in the present case, and one of the parties applies to the Court to enforce the order, the Court may refuse if, in the circumstances prevailing at the time of the application, it would be so inequitable to do so …

8. An example of the exercise of the Court’s discretion not to enforce an order is apparent in the decision of Kerr & Kerr (1983) FLC 91-329. The parties agreed to the sale of the former matrimonial home with the net proceeds of sale to be divided equally between them. The parties later agreed to a different arrangement, namely that the husband would purchase the wife’s interest for $12,000. The transfer occurred, however, the settlement sum was not paid. The wife then tried to enforce the original order. Nygh J considered whether the wife was not estopped from doing so in the following passage at 78,250:-

   I have come to the conclusion that the wife is estopped from asserting that the orders made on 25 March 1977 are still enforceable, by reason of her conduct since that date and that furthermore, even if she were not so estopped it would be, in the circumstances of the case by reason of her conduct and her delay in seeking such enforcement, inequitable to exercise my discretion to enforce the orders.

9. Counsel for the trustee concedes that delay by itself is not a bar to enforcement, however, the equitable defence of laches may be a relevant consideration in that the Court could consider the exercise of discretion by reference to State limitation periods, which by reference to s 34 of the Limitations of Actions Act 1936 (SA) would be 15 years from the date of default.

10. The overarching consideration is whether taking into account all of the circumstances it is inequitable to enforce the order.  The onus falls on the trustee to establish the inequity.

11. The defence of laches requires the trustee to show that the wife has either acquiesced to the husband’s conduct or has altered her position such that the husband was entitled to rely upon the wife’s conduct.

12. I bring to account the factors set out in [33] of the Outline of Argument as prepared by counsel for the trustee.

13. It is not controversial that the wife remarried in 1987, moved to Sydney and then relocated permanently to the USA.

14. The wife took no steps to enforce the order until 2016, after the husband’s death.

15. Whether the wife deliberately held off or took no action until she became aware of the husband’s death is a matter of some contention.

16. No documents exist either in the possession of the wife, the husband via his estate or by any third party, institution or organisation that could lend corroboration to the wife’s claim that her actions were in part a reaction to the allegation that the husband was the perpetrator of family violence.

17. The wife concedes that she had no contact or communication with the husband seeking payment of the settlement sum and that the first notice of her intention to enforce the order was her contact with the estate in March 2016.

18. The beneficiaries of the husband’s estate are his two sons.  They will each receive one half of the net balance of the estate, which principally is comprised of the remainder of the proceeds of the sale of the Suburb D property.

19. I am uncertain as to the sum that remains in the estate but it is at least $200,000.  There is no evidence that the husband acted in reliance on any agreement reached between the parties when the wife transferred her interest in the Suburb D property to the husband and did not insist upon the contemporaneous payment of the settlement sum, nor is there any indication of the husband’s understanding as to the status of the settlement sum.

20. The husband did not dispose of the Suburb D property.  That may be fortuitous for the wife.  It could be argued that there is little or no evidence of any prejudice occasioned to the husband.  He has had the advantage of retaining the house without the disadvantage of having to borrow the settlement sum, or of running the risk of having the property sold pursuant to the default clause in the orders.

21. The same cannot be said for the estate.  It comes to the proceedings with clean hands.  It has been required to meet the wife’s claim brought against the estate in the District Court of South Australia, then the Supreme Court of South Australia consequent upon a transfer and now in this Court in circumstances where the lack of any evidence as a direct consequence of the significant delay of 30 years in the wife bringing her claim, has not enabled the estate to compromise the claim.

22. Whilst the question of the estate’s costs may well be an issue yet to be resolved, I consider that the prejudice caused to the estate referable to the wife’s conduct should be reflected in the rate of applicable interest rather than the wife being estopped from seeking the settlement sum.

23. The orders were made on 30 April 1987 providing for the payment to the wife of the settlement sum on or before 23 July 1987.  The wife married her current husband on … 1987 and moved to Sydney until mid 1992, whereupon the family moved to the USA.

24. There is no evidence that supports the wife’s contention that she remained fearful of the husband from the time of her current marriage to the date of the husband’s death.

25. The wife has not adequately explained why she did not pursue the husband when she left Adelaide and in particular after she had left Australia.  I consider that it would have been open for her to do so.

26. Upon the death of the husband, the wife gave notice of her claim in March 2016.  Whilst I accept the wife’s evidence of various attempts to settle her outstanding claim, the matter did not proceed with formality until June 2018 when she instructed her current solicitors to file a Summons and Statement of Claim in the District Court of South Australia, for payment of the outstanding amount.

27. The wife seeks to explain why following the death of the husband there was still a significant delay before proceedings were finally commenced.  The wife contends that her previous solicitors could have acted with more diligence.

28. The delay cannot be blamed on any conduct by the trustee.

29. Doing the best that I can, I propose to calculate interest at the rate of 15 percent as provided in the default provision of the final orders from 23 July 1987 to 23 January 1990, during which time the wife was in Sydney.  I bring to account the matters raised in the wife’s affidavit as to her ongoing fear of the husband, arising out of his aggressive and continuing harassment of her until her departure.

1. The default interest can be considered against the relevant rate of interest pursuant to r 17.03 of the Rules. For the period 8 May 1987 to 22 January 1990 the rate of interest was 15 percent.

2. Whilst in Sydney and then the USA, I do not consider that any good reason existed for the wife to forebear enforcing the order.  She was significantly removed from the husband and there is no evidence of any adverse conduct by the husband which would justify the wife taking no action.

3. In those circumstances, I do not consider it would be appropriate to apply a rate of interest as set out in the rules, however, it is reasonable to consider the underlying Reserve Bank Target Cash Rate which commenced on 23 January 1990 as an indicator of loss to the wife, but also advantage to the husband in that he did not have to borrow money to pay out the wife.

4. Upon learning of the husband’s death, the wife renewed her interest in enforcing the orders and eventually instructed solicitors and issued proceedings.

5. The wife has provided no satisfactory explanation for her delay in pressing her claim and I consider that in circumstances where the wife contends that her previous solicitors were tardy, no good reason exists for the estate to bear the further impost of default interest for the period following the husband’s death.

CONCLUSION

1. I find that leave should be given to the wife to bring her application for enforcement of the payment of the settlement sum pursuant to the orders made 30 April 1987.

2. In addition to the settlement sum of $23,500, interest has been calculated according to the following schedule:-

Date	Percentage Interest	Total
23.07.87 – 22.01.90	(2 1/2 years) at 15%	$8,812.00
23.01.90 – 14.02.90	(20 days) at 17.5%	$225.00
15.02.90 – 03.04.90	(47 days) at 17%	$514.00
04.04.90 – 02.08.90	(120 days) at 15.5%	$1,197.00
03.08.90 – 14.10.90	(65 days) at 14%	$585.00
15.10.90 – 18.12.90	(64 days) at 13%	$536.00
19.12.90 – 04.04.91	(106 days) at 12%	$819.00
05.04.91 – 15.05.91	(40 days) at 11.5%	$296.00
16.05.91 – 02.09.91	(109 days) at 10.5%	$737.00
03.09.91 – 05.11.91	(63 days) at 9.5%	$385.00
06.11.91 – 07.01.92	(61 days) at 8.5%	$366.00
08.01.92 – 05.05.92	(117 days) at 7.5%	$565.00
06.05.92 – 07.07.92	(62 days) at 6.5%	$259.00
08.07.92 – 23.07.92	(15 days) at 5.75%	$55.00
24.07.92 – 23.03.93	(241 days) at 5.75%	$894.00
24.03.93 – 30.07.93	(128 days) at 5.25%	$432.00
31.07.93 – 17.08.94	(382 days) at 4.75%	$1,168.00
18.08.94 – 24.10.94	(67 days) at 5.5%	$237.00
25.10.94 – 14.12.94	(50 days) at 6.5%	$209.00
15.12.94 – 31.07.96	(229 days) at 7.5%	$1,150.00
01.08.96 – 06.11.96	(98 days) at 7%	$442.00
07.11.96 – 23.05.97	(197 days) at 6%	$761.00
24.05.97 – 30.07.97	(67 days) at 5.5%	$237.00
31.07.97 – 02.12.98	(489 days) at 5%	$1,574.00
03.12.98 – 03.11.99	(335 days) at 4.75%	$1,024.00
04.11.99 – 02.02.2000	(90 days) at 5%	$290.00
03.02.00 – 03.05.01	(60 days) at 5.5%	$212.00
04.05.00 – 07.03.01	(279 days) at 6.25%	$1,167.00
08.02.01 – 07.03.01	(27 days) at 5.75%	$100.00
08.03.01 – 04.04.01	(32 days) at 5.5%	$113.00
05.04.01 – 05.09.01	(153 days) at 5%	$492.00
06.09.01 – 05.12.01	(90 days) at 4.5%	$261.00
06.12.01 – 08.05.02	(153 days) at 4.25%	$419.00
09.05.02 – 05.06.02	(26 days) at 4.5%	$75.00
06.06.02 – 05.11.03	(517 days) at 4.75%	$1,581.00
06.11.03 – 03.03.05	(491 days) at 5.25%	$1,660.00
04.03.05 – 03.05.06	(425 days) at 5.5%	$1,506.00
04.05.06 – 02.08.06	(89 days) at 5.75%	$330.00
03.08.06 – 08.11.06	(97 days) at 6%	$374.00
09.11.06 – 08.08.07	(262 days) at 6.25%	$1,054.00
09.08.07 – 06.02.08	(181 days) at 6.75%	$786.00
07.02.08 – 06.08.08	(182 days) at 7.25%	$850.00
07.08.08 – 03.09.08	(25 days) at 7%	$112.00
04.09.08 – 08.10.08	(44 days) at 6%	$170.00
09.10.08 – 05.11.08	(27 days) at 5.25%	$91.00
06.11.08 – 03.12.08	(27 days) at 4.25%	$74.00
04.12.08 – 04.02.09	(31 days) at 5.25%	$104.00
05.02.09 – 03.03.10	(391 days) at 3.5%	$881.00
04.02.10 – 07.04.10	(62 days) at 4.25%	$170.00
08.04.10 – 02.05.12	(758 days) at 4.5%	$2,196.00
03.05.12 – 08.05.13	(370 days) at 3.25%	$774.00
09.05.13 – 07.08.13	(90 days) at 2.75%	$160.00
08.08.13 – 04.02.15	(534 days) at 2.5%	$860.00
05.02.15 – 25.01.16	(357 days) at 2%	$460.00
$40,801.00
Plus settlement sum as per order	$23,500.00
TOTAL	$64,301.00

1. Accordingly, I propose to make orders that B Ltd (as Trustee for the Estate of Mr Kimball) to pay to the Trust Account of Camatta Lempens for and on behalf of the wife the total sum of $64,301 on or before sixty (60) days from the date of this order.

I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 17 April 2020.

Associate: 

Date:  17 April 2020