Fowler and Fowler

[2010] FamCA 137

FAMILY COURT OF AUSTRALIA

FOWLER & FOWLER [2010] FamCA 137

FAMILY LAW – ORDERS – Enforcement – Costs

APPLICANT: Ms Fowler

RESPONDENT: Mr Fowler

FILE NUMBER: MLC 6706 of 2008

DATE DELIVERED: 18 February 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Dessau J

HEARING DATE: 18 February 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Crofts

SOLICITOR FOR THE APPLICANT: Clancy & Triado

COUNSEL FOR THE RESPONDENT: Mr Robinson

SOLICITOR FOR THE RESPONDENT: Robinson Gill

Orders

1. That forthwith upon settlement of the sale of the business the husband shall notify the wife’s solicitors in writing of such settlement and that he has complied with his obligations as set out in paragraph 3(a) – (f) of the Final Property Orders made by consent on 25 November 2009, and provide evidence of such compliance.

2. That in the event that there is any change to the anticipated settlement date of 1 April 2010 on the sale of the business, the husband’s solicitors shall forthwith advise the wife’s solicitors of the change and the reasons for it.

3. That for the purposes of paragraph 3(d) and 3(e) and 4(f) of the Orders of 24 November 2009 the parties agree that in the event that T Street is due to settle and the business has not yet settled, then the sums to be paid pursuant to paragraphs 3(d) and 3(e) shall be met from the husband’s share of the sale proceeds of T Street and in the event that his share is insufficient to meet such payments, it is understood that he retains the obligation to make such payments from the proceeds of sale of the business.

4. That the husband shall pay the wife’s costs of this application at a sum agreed within 14 days and failing agreement to be taxed.

5. That a transcript of my reasons given this day shall be prepared and retained on the court file.

6. That the preparation of these orders shall be expedited.

IT IS NOTED

1. That the orders agreed today are subject to the understanding between the parties today upon the advice of Mr L of National Australia Bank:

   A.That on the settlement of the sale of the property known as and situate at T Street, the National Australia Bank will:

   (a)    Seek repayment of only sufficient funds to discharge the loan to the husband and the wife currently estimated to be $1.2 million; and

   (b)        On receipt of the amounts at (a) above, provide a discharge of any and all security registered or otherwise held by National Australia Bank over T Street;

   B.That in the event there is any documentation entitling the National Australia Bank to proceed against the wife for any other sum advanced to the husband or any business or entity in which he has an interest, the National Australia Bank shall not exercise the same and the letter received from National Australia Bank may be pleaded in complete bar to any such action.

IT IS NOTED that publication of this judgment under the pseudonym Fowler & Fowler is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:   MLC 6707 of 2008

MS FOWLER

Applicant

and

MR FOWLER

Respondent

REASONS FOR JUDGMENT

1. I made final consent orders in this case on 24 November last year.  I have before me today the wife’s application in a case filed yesterday in relation to the enforcement.  Following extensive discussions and negotiations this morning, there are consent orders to deal with an approach to give effect to the orders.  The question remains as to costs.  Each party has sought costs. 

2. Costs under s 117 of the Family Law Act are a discretionary matter.  In this case the conduct of the parties surrounding this application is the most pertinent consideration, and it has been the focus of the submissions made by legal representatives for each party.

3. A great deal centres around the application of paragraph 4(f) of the 24 November consent orders.  The orders were somewhat complicated.  They involved the sale of a business and the sale of a property, and it was clear on the face of the orders that the understanding was that both the business debt and the debt in relation to the residential property was secured over that residential property.  The orders state as much. 

4. It is also clear on the face of the orders that the parties were trying to achieve settlement of both the sale of the business and the sale of the real estate, so that various debts could be met in an orderly way, with the balance then distributed in an orderly way in accordance with the provisions of the orders that I need not repeat here.

5. Paragraph 4(f) of those orders provided as follows:

   The terms of settlement [of the property] shall be on not more than 30 or 60 days, unless otherwise agreed in writing by the husband and the wife, provided that such settlement is not to take place prior to completion of the business sale.

6. Those words, “provided that such settlement is not to take place prior to completion of the business sale,” are central to the issue that has arisen today. 

7. It is clear that, despite what the legal representative for the husband had said, and ultimately he needed to make concessions to this effect, there had been correspondence from the wife’s solicitor to the husband’s solicitor, suggesting a way forward to deal with that particular provision.  Her proposal was that there would need to be a clause in the contract of sale between the vendor and any purchasers, to the effect that settlement was not to take place prior to the completion of the business sale.  There is no argument that it would have potentially had an adverse effect on the sale of the property, and that there were all sorts of difficulties with it, but it was the wife’s proposal to ensure the implementation of paragraph 4(f) of the orders.

8. There was no response to the proposals made by the wife as early as at the start of December 2009, and repeated since on a number of occasions.  Even when the wife’s solicitor wrote to the court and to the husband’s solicitor on 15 February, just a few days ago, indicating that this application would be issued, there was no response.  There was only a response late yesterday, in the course of the afternoon, when the husband’s solicitor forwarded an email or a letter, to the wife’s solicitor, offering what was an obvious solution, in the sense of an assurance from the bank that only the loan relating to the property would be secured by the property, and the business debt would not be deducted from the property’s sale proceeds.

9. That was a very significant letter, going as far as it did, in the sense that it completely altered the understanding that the wife so obviously had on the face of these orders.  It was possibly the understanding of the husband as well.  I am not privy to that, because he was the one clearly dealing with the bank.  But, clearly, the wife’s understanding from the orders was that both personal and business debt was secured over the real estate, and that has been one of the heightened areas of sensitivity to her, when it came to how these two settlements would unfold.

10. This is against a backdrop where the wife has not previously had any notice from the bank along these lines, but she has also had a concern that the husband has not provided the settlement of the business within the dates provided in the orders.  The dates have slid, and she has been notified of them, but she has not been given any understanding as to why there has been a change, and certainly not given any reassurance, considering that the date for settlement in the orders would have passed by the time of the proposed settlement.

11. The husband, through his legal representative, has been critical of the wife today for not simply accepting the assurance in the bank letter late yesterday.  He says that if she had done so, it would have precluded the need to come to court today.  However, I observe that the bank letter was received very late in the piece.  Secondly, there simply was not the opportunity for the wife to receive the proper and thorough assurances from the bank, required to give her comfort that there was a way of dealing with the provisions of paragraph 4(f) short of putting this provision in the contract that she had been seeking.  That is obvious, because it has only been in the course of discussion today that a different solution has been arrived at with added assurances to the wife as to the bank’s attitude, and the steps that the husband will be able to take to extract that assurance.  It has been played out graphically in front of me today.  When the wife’s solicitor rang the bank, she was not able to obtain the assurances.  When the husband’s solicitor or husband (I am not sure which), contacted the bank, they were given a far higher level of assurance.

12. So there was nothing that the wife should have or could have reasonably done to bring about a settlement of this case.  I am satisfied that she was put in a position where she was making every effort to work out a proper enforcement of paragraph 4(f), and met no response by the husband until far too late in the piece.  I am satisfied that on the basis of that conduct, that she should be successful in obtaining costs in relation to this application.

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau

Associate: 

Date:  15 February 2010