Froth and Froth

[2008] FamCA 583

FAMILY COURT OF AUSTRALIA

FROTH & FROTH [2008] FamCA 583

FAMILY LAW – ORDERS – Enforcement application

Family Law Act 1975 (Cth)

APPLICANT: Ms Froth

RESPONDENT:  Mr Froth

FILE NUMBER: SYF 3354 of 2005

DATE DELIVERED: 30 July 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 7 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd

SOLICITOR FOR THE APPLICANT: Newnhams Solicitors

COUNSEL FOR THE RESPONDENT: Mr Lethbridge, Senior Counsel

SOLICITOR FOR THE RESPONDENT: Everingham Solomons Solicitors

Orders

1. Within 14 days from the date of these orders, the husband pay to the wife an amount of $2,800 on account of dividends received by the husband since 21 February 2008 in respect of shares transferred to the wife pursuant to Order 7 made 21 December 2007.

2. Within 14 days the parties do all things to cause a payment in the sum of $28,037.98 to the husband from the Westpac offset account number …. 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3354 of 2005

MS FROTH

Applicant

And

MR FROTH

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. The wife filed an Application in a Case on 30 May 2008 seeking enforcement orders.

APPLICATION 2.1 – that the husband pay to the wife within 14 days an amount of $32,966.29 together with such further amount as is calculated to be payable up to and including the date of the hearing of the application

1. This is a claim by the wife for interest the husband has saved because monies sat in an account which, as a result of orders altering interest in property, became the property of the wife.  The sum of $32,966.29 is an amount calculated by the wife (see paragraph 2.9 of wife’s affidavit, 30 May 2008) based upon interest rates on deposit, at call in the sum of $832,597.23.

2. On 21 December 2007 I made an order in the following terms:-

   4. Within two months from the date of these orders, the husband and wife do all acts and things as are necessary to transfer to the wife the proceeds of sale of the [G Property] being approximately $809,900 currently contained within a Westpac Offset account in the joint names of the parties together with any interest accumulated on that account.

3. After the deposit of the proceeds of the G property cattle there was $832,597 in the offset account.  Annexure D to the wife’s affidavit sworn 26 May 2008 set out what happened to the monies in the offset account as follows:-

   4.1.The payment to the husband of $24,750 by way of the wife complying with Order 3.5 made 21 December 2007.  That order required that the husband receive the proceeds of sale of the [G property] cattle.  Those proceeds had been put in the offset account and were in the sum of $24,750. 

   4.2.An amount of $9,047 was paid to the [D] Trust pursuant to Order 8 made by me on 21 December 2007. 

   4.3.An amount of $770,762.25 was transferred to the wife as the balance amount from the monies in the offset account in satisfaction of Order 4 made 21 December 2007.

   4.4.An amount of $28,037.98 remained in the offset account in order to satisfy Order 3 made on 13 June 2008.  That amount should be paid to the husband within 14 days. 

4. The amounts in 4.2, 4.3 and 4.4 add on my calculation to $807,847.23 which is near enough to the $809,900 referred to in Order 4 of 21 December 2007.

5. At paragraph 15 of my Reasons of 13 June 2008,  I comment that in relation to the wife’s application for interest from the Westpac offset account “no application was pressed in respect of the interest from the Westpac offset account”. 

6. Senior counsel for the husband did not press a submission that the wife’s application had already been dealt with.  I did not in fact dismiss the application.  I must say that I had assumed at the time that counsel for the parties, who were talking at the bar table, had reached their own arrangement as to how the matter would be dealt with.

7. Senior counsel for the husband, however, assured me that the matter had always been hotly in contention.  During a discussion in court on 12 March 2008 the following discussion took place:

   MR LLOYD:  Your Honour, 1.3 of the order that your Honour made in respect of interest is found, order 4 of your Honour’s orders.  Your Honour might recall that there was a sum of money placed in an offset account and referred to in order 4, which was to be provided to the wife, together with any interest thereon.  We are told by the husband that there was no interest payable on the offset account, which everyone knows, as a matter of commercial reality.  The interest that is payable is, in effect, the interest that is deducted from the account to which it offsets.  In other words, we would contemplate that what your Honour had in mind was that the benefit that was received by the husband, by having those funds in the offset account, in other words reducing the interest payable on the account to which it offset, would be payable to the wife.  If I am wrong in my assumption with that, so be it, but everyone, with respect, knows that offset accounts don’t attract interest, per se, but the interest benefit is deducted from the account to which it offsets.  And we assume, we just need some clarification from your Honour in that regard, that commercially that is what your Honour had in mind.

   HIS HONOUR:  Mr Lethbridge, what is your position in relation to this application.  As I understand it, it is an enforcement application to a large degree.  Sorry, Mr Lethbridge.  Mr Lloyd, are you asking me to make a further order that clarifies an obscure order.  Is that what you are doing?

   MR LLOYD:  Effectively, your Honour, yes.  Because everyone knows, and everyone knew at the trial - - -

   HIS HONOUR:  But aren’t I functus I mean, how can I do that.

   MR LLOYD:  Your Honour is not functus in terms of upholding the integrity of your Honour’s own orders if a debate arises between the parties - - -

   HIS HONOUR:  About what it means?

   MR LLOYD:  About what it means.  With respect, we come back to your Honour and if your Honour says “I had nothing of that kind of order in my mind” which, with respect, would seem odd if your Honour was ordering that interest on it go to my client, then an indication from your Honour about that would solve it.  We are not talking hundreds of thousands of dollars.  But the matter bogs down, as it were, on an interpretation which we say is inappropriate, by the husband.  If your Honour feels that we should be formally filing an application by way of enforcement, in those circumstances, we would, but it seems, with respect, practical to invite your Honour to let us know what your Honour meant.

   HIS HONOUR:  What I had in mind, Mr Lethbridge do you mind me saying?

   MR LETHBRIDGE:  I am sorry, your Honour?

   HIS HONOUR:  Do you mind me saying what I had in my mind?

   MR LETHBRIDGE:  No.

   HIS HONOUR:  What I had in my mind was that this money was in an account.  And I had in my mind that it would therefore probably be bearing interest and I didn’t want there to be an argument about who got the interest, so I gave it to the person who got the asset.  That is what I had in my mind.  I did not turn my mind to it being an offset account.  In as much as somebody got advantage of interest saved, it follows that that should go to the person who got the assets.  If I had turned my mind to it, which I did not, I would adopt Mr Lloyd’s position.

   MR LLOYD:  Thank you, your Honour.  That would be most helpful.  We could stop there, I suppose.  Unless there is some argument put forward by my friend.

   HIS HONOUR:  Of course there might be a difference between interest saved and interest that would have ordinarily been earned had that money been invested as an investment, which is what I did have in my mind was happening.  So there may be some area of compromise between the two of you in relation to the amount.

8. Picking up on my comment, counsel for the wife submitted in these proceedings and in communication written to the bank (see Exhibit AAA), that the words “together with any interest accumulated on that account” meant the amount of any benefit the husband received by saving interest on other loans because he had money in the offset account.

9. Senior counsel for the husband said that the matter had not been argued on 12 March 2008.  He submitted that the order meant simply what it said.

10. It was not a matter of dispute that no interest had actually accumulated on the offset account.  This is clear from correspondence received from Westpac (annexure E to the husband’s affidavit sworn 3 July 2008).

11. Exhibit AAA makes it clear that the husband instructed the bank not to give the wife information to enable her to do an exact interest calculation in respect of interest saved by him by having the money in the offset account.

12. I accept counsel for the husband’s submission that if any calculation was to be done it would be done on the figure of $770,762.25 (being the balance to which the wife was entitled from the offset account after the three orders referred to elsewhere, in respect of which the husband had advantage, were taken into account.

13. There is sufficient material in the wife’s affidavit in respect of interest rates to be able to do a calculation either on the basis of the probable interest for the husband was saved from actually paying on the probable interest that the husband would have received had he invested the sum of $770,762 over the period in respect of which the wife claims interest.

14. Counsel for the husband submitted that the evidence discloses that the monies were put into the offset account as a result of an interim consent order made prior to the final determination of the property applications.  The wife therefore is taken to have known the nature of the account in which these monies were held.  Counsel for the husband says that given that the wife did not at any time prior to the final orders being made make a submission that there should be some adjustment in her favour arising from the fact that monies were in the offset account and the husband was receiving benefit as a result of the monies being there, she cannot now after final orders are made seek what is in effect a variation of the final orders as opposed to an enforcement of the final orders.

15. It might be that the wife has grounds to make an application for a variation to Order 4 on the basis that as a machinery order the order could be varied so that it covers not only any interest accumulated in the Westpac offset account but any interest saved by the husband as a result of monies being included in the Westpac offset account.  Comments made by Mr Lloyd on 12 March 2008 indicate that that is what he might have had in mind but an application in that form was not made before me on 7 July 2008 and consequently I have not had the opportunity of hearing any argument in relation to any such application. 

Conclusion

1. As the order currently stands, the order refers only to any interest accumulated on the account.  That account is the Westpac offset account and no other account.  I accept that to make an order that the husband pay the wife an amount equivalent to interest saved on other accounts would require a variation of that order.  What is sought is enforcement of the order in its present terms and for that reason the application of the wife (notwithstanding the comments I made when invited to discuss the matter on 12 March 2008) fails. 

APPLICATION 2.2 – Transfer to the wife further Commonwealth Bank, Lendlease Corp Limited and/or Caltex shares to the value of $1,145.15

1. When this matter was before me on 12 March 2008, the husband at that time had not complied with Order 7 made by me on 21 December 2007.  That order was in the following terms:-

   7.The husband do all acts and things as are necessary to transfer to the wife within two months from the date of these orders shares held by him in publicly listed companies to the value of $90,111, such shares to be selected by the parties agreeing on which shares the wife takes or in default, the husband preparing four lists of shares each totalling $90,111 or more and the wife choosing the shares in one of those lists.

2. There was discussion between counsel for the parties at the bar table.  The husband provided four lists.  The wife selected one of the lists and I noted in paragraph 16 of my Reasons of 13 June 2008, the issue was resolved by the parties implementing the machinery provisions provided in Order 7 made 21 December 2007. 

3. The wife complains in her affidavit at paragraph 3.6 that the market value of the shares that she had been offered by the husband as at 12 March 2008 amounted only to $88,965.85.  When I asked counsel for the wife as to whether or not that was her complaint, I was told that the actual complaint was that as at the date of the transfer of the shares the shares were of that value.  The shares were transferred according to the wife’s affidavit on 17 March 2008.  There is an inconsistency between the evidence given by the wife and the submission put by counsel for the wife, but I accept the submission put by counsel for the wife to be the most recent instructions he has from the wife.

4. Based on those instructions, I accept that as at 12 March 2008 the wife received a portfolio of shares consistent with Order 7 made 21 December 2007.  Any fluctuation of share value after that time, notwithstanding the fact that there was a delay in the transfer of the shares, is not something that would give rise to any further claim by way of enforcement.  It was not part of the wife’s case that she would have traded shares had she immediately received them and she does not say that she suffered damage as a result of not having that opportunity. 

5. Given the submissions by counsel for the wife (which varied what the wife said in her affidavit evidence), I am unable to make an order as the wife seeks in relation to that part of her claim. 

APPLICATION 2.3 – The husband pay to the wife within 14 days an amount of $2,800 representing dividends received by the husband since 21 February 2008

1. The wife claims that she is entitled to dividends that have been received in relation to the shares transferred to the wife since 21 February 2008.  The 21 February 2008 was the date by which shares were to be transferred.

2. The wife in paragraph 3.9 of her affidavit sworn 26 May 2008 gives unchallenged evidence as to the dividends that have been paid since 21 February 2008 on the shares that have been transferred to her. 

3. The wife was entitled to these assets.  The reason she did not get them until 17 March was because the husband had failed to provide proper lists in accordance with the order.  Had he done so she would have been in receipt of the assets and would have received the dividends.  It is appropriate that an enforcement order be made so that dividends received by the husband in respect of these assets be transferred to the wife.  I am satisfied that the appropriate amount is $2,800 ($598 + $429 + $1,773). 

ORAL APPLICATIONS

That the husband pay the sum of $97,595 as ordered pursuant to Order 2.2 made 13 June 2008, together with interest on that amount

1. Senior counsel for the husband indicated that his instructions were that that principle amount had been paid on the date the matter was heard by me, namely 7 July 2008.

2. Counsel for the wife raised the question as to whether or not interest would be payable between 13 June and 7 July in respect of that amount at the rate prescribed by the Family Court Rules.  Counsel for the parties were invited to re-mention the matter before me on 7 July.  I assumed that given that invitation was not taken up that is the end of the matter and that the parties made their own arrangements in relation to any claim for outstanding interest on this sum. 

3. The husband made an oral application that the wife do what was required within 14 days to transfer to the husband the amount of $28,037.98 from the Westpac offset account and the wife seemed to agree to an order that that happen and it would be otherwise appropriate that it happen and I will make an order in those terms.  Senior counsel for the husband indicated that there should be some consideration as to interest to be charged on that account.  However the uncontroverted evidence is that this money is in an offset account and that the husband is obtaining a benefit by way of reduction of interest in other borrowings that he has with Westpac by this money being in that account.  Consequently, I do not think it is appropriate for any consideration to be given to any application that the wife pay to the husband any interest in respect of the sum of $28,037.98. 

COSTS

1. Both parties sought costs if they were substantially successful.  Both parties have been successful in relation to part of the applications and not successful in relation to others. 

2. Given the comment that I made in discussions with counsel on 12 March 2008 in relation to the interest question and the debate that took place on 7 July 2008, even though the wife has not been successful in her argument in relation to interest on the offset account, that argument was not sufficiently unmeritorious to be dismissed out of hand. 

3. Taking into account all matters in s.117(2A) Family Law Act and particularly having regard to the extensive discussion of some of those matters in the Reasons for Judgment published on 13 June 2008, I do not intend to make any further costs order in this matter in favour of either of the parties.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts

Associate: 

Date:  30 July 2008