Gade and Jabbar (No.17)

[2018] FCCA 2492

FEDERAL CIRCUIT COURT OF AUSTRALIA

GADE & JABBAR (No.17) [2018] FCCA 2492

Catchwords:
FAMILY LAW – Property – interim application – enforcement.

Legislation:

Family Law Act 1975 (Cth)

Applicant: MR GADE

Respondent: MS JABBAR

File Number: NCC 2265 of 2015

Judgment of: Judge Terry

Hearing date: 4 September 2018

Date of Last Submission: 4 September 2018

Delivered at: Newcastle

Delivered on: 4 September 2018

REPRESENTATION

Solicitors for the Applicant: NLS Law

The Respondent: In person

ORDERS

1. By 5.00pm on Friday 14 September 2018 the wife shall vacate the property situated at Property A in the State of New South Wales.

2. If the wife fails to vacate the property in accordance with Order 1, pursuant to Rule 25B.62 of the Federal Circuit Court Rules 2001 a warrant for possession shall issue to the Federal Marshal authorising him or her to enter the property at Property A in the State of New South Wales and then to give possession of the property to the husband.

3. The wife shall pay the husband’s costs of and incidental to the application in a case filed on 29 August 2018 fixed in the amount of $2,370.00 with such costs to be paid contemporaneously with the husband paying the wife the amount he is required to pay to the wife in accordance with the Orders made on 11 May 2018.

4. The application in a case filed on 29 August 2018 is otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Gade & Jabbar (No.17) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT NEWCASTLE

NCC 2265 of 2015

MR GADE

Applicant

And

MS JABBAR

Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons for judgment were delivered orally and have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

2. I have before me an application in a case filed by the husband on 29 August 2018 in which he seeks an order that the wife vacate a property in Property A and an order that if she fails to do so that a warrant of possession issue. He also seeks some ancillary orders.

3. I made final property orders on 11 May 2018. They provided that if the husband paid the wife $81,956.82 and refinanced the mortgages secured over properties in Property A and Property B, the wife was to sign over to the husband her interest in those properties.

4. I made an order that the wife could have sole occupancy of the Property A property pending the husband complying with those orders and that she had to pay the mortgage and outgoings for the property.

5. On 21 May 2108 the wife filed a Notice of Appeal in respect of both the property orders and parenting orders which I made on the same day. She applied for expedition of the appeal. Her application was unsuccessful and subsequently she filed an application for a stay of the property orders.

6. By orders made on 2 July 2018 I refused the stay application. My refusal of it centred on the fact that the mortgage and outgoings on the Property A property were not being paid and that the only solution the wife proffered to cure this situation was that the husband make the payments.

7. The husband had until on or about 10 July (I have not calculated it with precision but it would have been about that date) to comply with the orders for payment to the wife and refinancing of the mortgages but he did not comply with that deadline. He explained in the affidavit he filed on 29 August 2018 that he had been unable to do so because although he had pre-approval for a loan, he had been unable to obtain final approval because the bank required a valuation of both the Property A property and the Property B property before approving his application.

8. He said that he had control of the Property B property and had been able to obtain a valuation of that but he had informed Bank 1 that they would need to contact the wife direct to obtain access to the Property A property. He said that on 31 July he was informed by Bank 1 that access to the property had not been facilitated by the wife.

9. The wife alleged today that she had not been contacted by Bank 1 and I have not had a hearing in which I can drill down into that and make any findings about that matter. However it is clear that the husband’s solicitors wrote to the wife (there is no dispute about that, looking at both the husband and the wife’s affidavit) on 3 August 2018 and although I was not provided with a copy of the letter, it did involve the issue of the husband having access to the Property A property, and I know that because the husband said that the letter requested the wife to move out of the property within seven days and sign Transfer forms that had been submitted to her.

10. I have no reason to believe, on the material that I have from both the husband and the wife, that the husband has not made an effort to obtain the refinancing, and it is apparent that he filed an application on 29 August 2018 seeking that the wife vacate the Property A property because the solution he sees to the problem of him being able to refinance is for the wife to vacate the property so that a valuer can have access to the property, he can get his loan approval and then the orders can be carried into effect.

11. That was one of the issues raised in the husband’s affidavit but the other issue he raised was that on 9 July 2018 he received a default notice from Bank 1 stating that the mortgage was $3,756.07 in arrears.

12. He said that he received a further default notice on 19 July stating that it was $5,639.07 in arrears. He said that on 30 July he received a default notice pursuant to section 57(2) (b) of the Real Property Act and in that notice he was informed that he had until 6 September to remedy the default. Otherwise, enforcement proceedings may commence.

13. The husband’s application was mentioned before me on 30 August 2018. The wife appeared on that day and I ordered that she file a response and affidavit in support by 3 September 2018 and adjourned the matter to today for further consideration. The husband’s application was clearly urgent because of the indication in the default notice that the problem with payment of the mortgage had to be remedied prior to 6 September or further action may follow.

14. The wife filed a response to the application in a case and an affidavit in support on 3 September 2018 as she had been ordered to do. She sought dismissal of the husband’s application. In her affidavit she acknowledged receiving the letter from the husband’s solicitor in early August 2018. She said that she responded on 14 August 2018 with what she called “a few options regarding bank payment”.

15. In effect, the wife said in that letter that her appeal was now likely to be heard in October or November and that the outcome of the appeal might be different to the current orders and she put forward three alternative proposals: first, that the husband pay the bank and (omitted) Water for water usage and that this money be adjusted later out of the $81,000.00 payable to her; second, that the husband provide her with rent receipts for his current accommodation and that this money and water usage for what she called ‘her house’ would be adjusted after the appeal hearing; and third that the husband pay her the $81,000.00 and she would pay the bills associated with Property A until the appeal was finalised.

16. The wife said in her affidavit that the husband did not respond to this letter or to follow-up emails she sent on 17 and 20 August 2018, and that may well be correct.

17. As well as filing her response and affidavit on 3 September, however the wife also made a payment of $5,640.00 to the bank which was the amount referred to in the default notice of 19 July 2018.

18. During discussion about the matter this morning I obtained information from the parties about the current state of the mortgage. Payments in respect of the mortgage are due on the 16^th of each month and the required amount is $1,883.00. I was informed that the payment due for August had not been made.

19. The husband’s solicitor asserted from the bar table that the water rates for the property were also in arrears in the amount of $500-odd. The wife refused to make a concession about this and at this stage became extremely loud and angry and flung a piece of paper at the husband’s solicitor.

20. There is no admissible evidence that the water rates are in arrears and I am not going to take that into account. The letter the wife sent to the husband on 14 August suggests that they may be, given her proposals, but I cannot make a finding about that at present.

21. Following the discussion about the fact that the mortgage was still in arrears, I attempted to have a discussion with the wife about whether she could make the August payment today if need be. She eventually said that she might be able to borrow the money to do that, but that of course leaves the issue of what will happen if the September payment is not made.

22. The wife conceded from the bar table that if the bank took and sold the house it would be a detrimental outcome for the parties and of course this, as well as a transfer to the husband, would result in her losing her home.

23. The husband does not wish to allow the sale of the home by the bank to happen, not only because it is likely to cause financial loss just in itself but because he is, as he has made clear in earlier interim proceedings, anxious to avoid further damage to his credit rating.

24. I finally note that the wife has appealed my refusal of a stay and that this has resulted in the Full Court deciding to expedite the appeal against 11 May 2018 orders, something they had earlier refused to do. The appeal against the stay application has been adjourned to the same day as the substantive appeal and as I have previously indicated it is expected that the appeals will now be heard in October or November 2018.

25. The property orders the wife seeks in her Notice of Appeal in lieu of the orders I made on 11 May are that she retain the Property A property and that the husband be responsible for the mortgage.

26. The wife attached to her affidavit a copy of the reasons for decision handed down by the Full Court on 8 August 2018 in respect of her appeal from my refusal of a stay.

27. It is not clear from those reasons whether the Full Court was aware on 8 August that the Property A property had still not been transferred to the husband and that he still had not made the payment, and whether they had an expectation that nothing further would happen with the property orders pending the appeal. It is not clear from reading the document whether that was the case.

28. I probably have not put that as clearly as I should have. It is not clear, but I rather expect that this may have been their expectation, because with property matters it is common for the subject matter of the litigation to be conserved if an appeal is lodged, and the reason for that is that it is very difficult to reverse things in property matters if orders are carried into effect and then an appeal is successful.

29. So it may well be that the Full Court had some expectation that if the property orders had not been carried into effect as at August they wouldn’t be carried into effect pending the hearing of the appeal, and the thrust of the wife’s argument this morning was that nothing precipitate should be done by me today because the appeal was going to be heard fairly shortly.

30. One way I could approach the matter, because I have reflected at considerable length on what I should do, which would have the effect the wife wanted but also ensure a valuation was carried out so that the orders could be speedily carried into effect if the appeal was unsuccessful, would be to make an order that the wife permit a valuer access to the property and make a self-executing order that if she failed to do so a warrant of possession issue.

31. This would be procedurally fair to the wife, in case there is any merit in her claim that Bank 1 has not been in touch with her, and it would give her the opportunity to make the home available to a valuer to inspect and to avoid having to vacate the home, so at no cost to the wife she would then be able to avoid having to vacate the home, and I reflected on whether I should do that and effectively do nothing further pending the hearing of the wife’s appeal.

32. However the complicating factor is the wife’s ongoing failure to pay the mortgage and outgoings which is creating a situation where either the husband will be forced, by dint of circumstances, to make the mortgage payments or the home will be lost to the wife and to the husband because the bank will take it, and the parties are likely to incur financial loss as a result.

33. The wife’s ongoing failure to pay the mortgage and outgoings is a complicating factor and it is a problem of long standing in this matter.

34. Orders were made by consent on 9 December 2015, at a time when the wife was represented, that she have sole occupancy of the Property A property and that she pay the monthly payments to Bank 1 and all other outgoings to the property including rates, utilities and property damage insurance as and when they fell due.

35. On 20 December 2016 after an application to the court about the property matter an order was made in similar terms except that on this occasion it was made by the court. The wife was given sole occupancy of the property and was ordered to pay the mortgage as it fell due and the council and water rates and to keep the property insured.

36. The issue of non-payment of the mortgage was raised in court again on 23 March 2017 and when it was raised the husband was ordered to file an application in a case about the issue if he wished to do so.

37. He did wish to do so and he filed an application in a case on 27 March 2017 in which he sought an order that the wife pay the mortgage arrears and that if she failed to do so she vacate the property.

38. On 20 April 2017 I ordered that the wife pay the mortgage arrears and thereafter make the mortgage payments as they fell due and ordered that if she did not comply within 14 days she must vacate the property. So I made the orders on 20 December 2016 about the wife paying the mortgage. It very quickly fell into arrears. The husband had to file an application about it and I made some further orders on 20 April 2017 that the wife pay the arrears and thereafter make the mortgage payments as they fell due and if she did not comply that she must vacate the property.

39. The property proceedings and the parenting proceedings was heard on a final basis commencing in August 2017. I was told at the hearing, and I say this because it is recorded in my judgment, that the husband’s wages had been garnisheed in the sum of $2,059.10 for unpaid council rates after the council had obtained a judgment against the husband and I was later told that on 31 October 2017 the council had issued a further statement of claim for unpaid rates and costs in the sum of $1,396.16. I was also told that the husband was being pursued by (omitted) Water for unpaid water rates of $386.27.

40. On 24 January 2018, while judgment was still pending in relation to that final hearing, the husband filed another application in a case because of the mortgage not being paid. On 19 March 2018 I ordered that the wife pay $5,852.07 to Bank 1 by 5 pm on 26 March 2018 and I again ordered that if she failed to do so she would have to vacate the property.

41. Presumably the wife paid because no attempt was made to enforce an order that she vacate. She was ordered at this stage to pay the husband’s costs fixed in the sum of $5,324.56.

42. I referred to this further default in my 11 May 2018 judgment after informing the parties on 19 March that I would be taking it into account and giving them a chance to make submissions about it.

43. In the decision that I handed down in the property matter I did not make any dollar adjustment in the husband’s favour for all those amounts that the wife had failed to pay despite court order but I took them into account in assessing the overall outcome as to what was just and equitable.

44. When I heard the wife’s stay application on 2 July 2018 I received evidence that the mortgage was again in arrears and I took this into account in determining not to grant a stay of the property orders.

45. As outlined earlier and as is evident from the default notices from the bank attached to the husband’s affidavit, the wife’s default in paying the mortgage continued. She did not do anything about paying any of the arrears until 3 September, after the husband had filed yet another application in a case, at which stage she paid the amount due under the default notice issued in July, but she did not make the August mortgage payment which was by then also overdue.

46. The wife is obliged, by orders which have not been stayed, to pay the mortgage and outgoings. She has promised me again today that she will catch up on the mortgage arrears and pay the mortgage in the future but given the history of the matter I have outlined it seems inevitable that the matter will be back in court sooner rather than later because she does not do so. She protested against the information given to me this morning about the water rates but provided no assurance that she had paid them, and the husband has already been the subject of debt recovery action in respect of council rates and his wages have been garnisheed because of unpaid council rates, and it is unjust that he should be continually facing this situation while the wife has sole occupation of the home.

47. In my view the appropriate order for me to make today is an order that the wife vacate the home. That will achieve the purpose of the husband being able to have a valuer come in and value the property, but the reason that I am going to order that the wife vacate the home is that she has not complied with a condition on which she has sole occupancy of the property. I made an order on 11 May 2018 that the wife have sole occupancy of the property but I also made an order that she pay the mortgage and outgoings and in my view her right to have sole occupancy is impliedly conditional on her complying with that order to make the payments and she has repeatedly failed to do so.

48. So I do intend to make an order that the wife vacate the property. Once she vacates she will not be subject to any order to pay the mortgage and the outgoings. The husband will then have to deal with whatever comes in relation to that so the wife will be relieved of that obligation and the husband can pursue the valuation and hopefully, the refinancing.

49. This matter is very complex. The wife hopes that she will be able to demonstrate on appeal that there is some error in my property decision, but her grounds of appeal in relation to the property matter are not strong. Her appeal filed on 21 May 2018 is primarily in respect of the parenting matter. Her only ground of appeal relevant to the property matters is this:

    Trial judge failed to use her discretion to consider the mother’s current financial situation and urgent need of an accommodation to sustain in Australia.

50. I cannot see how that is a valid ground of appeal and I further note that the wife has never pointed to any error in respect of the property judgment save that she considers it unreasonable that she should lose the right to occupy the Property A property. I do however acknowledge that she may amend her grounds of appeal and I further acknowledge that if the Full Court considers that there is an error in my property judgment obvious to them they may allow the appeal notwithstanding an inarticulate notice of appeal.

51. I further acknowledge that it may be arguable that if the wife is successful with her parenting appeal and ultimately obtains different orders about the residence of the children, this could impact on her entitlement to a property settlement. However the grounds of appeal in relation to the property matter are not strong, so the wife’s prospects of succeeding on that appeal cannot be rated high, and in contrast, the potential detriment to the parties of her continued failure to pay the mortgage is great.

1. Not only might it result in the bank taking and selling the property causing financial loss to the parties, there is an unacceptably high likelihood that if the wife is allowed to remain in occupation and remains subject to the orders to pay that she won’t pay and that the husband will have to bring yet another application to this court. That costs the husband money but it also costs the wife money. The last time I made a costs order in respect of an application of this kind the costs that I ordered the wife to pay were over $5,000.00.

2. The husband has again sought costs today. I have not determined that application but he may do so yet again if he has to bring another application.

3. The bank has issued default notices more than once in this matter and there is now an unacceptably high risk that if something isn’t done they may not be prepared to keep putting up with this situation.

4. The wife’s solution to the problem, as propounded to the husband’s solicitors in the letter she sent in August, was that the husband should make the mortgage payments or alternatively pay her the $81,000.00 she was entitled to under the orders.

5. It would be unjust to order that the husband make the mortgage payments when he is maintaining the children and a separate household and is also responsible for the Property B property, and I certainly can’t order that he pay $81,000.00 to the wife in the absence of her transferring the property to him. The only other solution the wife had was to promise me yet again that if I gave her another chance she would make the mortgage payments in the future but she has made those promises before and over and over again she has failed to make the payments and the matter has ended up back here in court.

6. The last thing I want to be seen to be doing is to be pitting myself against the Full Court and creating further difficulties for it in having to deal with yet another appeal. However the wife’s continuing failure to pay the mortgage means that I feel I have no option but to order that she vacate the property.

7. It will relieve her of the obligation to pay under the orders although she will still be liable with the husband for the mortgage balance. The husband can have the property valued. He can get his finances in place and I will deal as expeditiously as I can with an application for extension of time to pay, which in my view the husband will be obliged to make. His solicitors have not yet addressed that issue, so he will be obliged to make it, but it is not an application that will face the same hurdle that these applications sometimes face, because I did not make an order on 11 May for the sale of the property if payment was not made.

8. It will give the husband the opportunity to have the orders carried into effect, although in my view he needs to file an application for an extension of time so that the wife can be given an opportunity to make a submission about that. If for any reason the husband can’t get finance approval or doesn’t get an extension of time, then the vacant house can be expeditiously sold and the wife can receive a payment to assist her.

9. I acknowledge that either of those options – in other words either a transfer to the husband or a sale of the home – will put it out of the wife’s power to retain the home in the future, but it will not put out of power her right to obtain a just and equitable property settlement in some other form should the Full Court decide that the appeal against the property orders should be upheld.

10. So the orders that I am going to make are that the wife vacate the home, but the husband sought that that occur within 24 hours. I consider that to be harsh. Vacating a property involves not only finding somewhere else to sleep for the night but also removing one’s belongings so I am proposing to make an order that the wife have 10 days to vacate the home.

11. I am then going to make a consequential orders to the effect that if the wife fails to vacate a warrant for possession will issue.

12. I am not going to make an order about the wife paying the costs of cleaning and so on as requested at order 5. The order sought is far too broad and if the necessity arises for an application to be made about those things then the husband is going to have to make another application.

13. I am also not going to make order 6. As I have just pointed out the husband will need in my view to formally apply for an extension of time to pay the wife. The wife will then have an opportunity to respond to that. I say that he will formally need to do it because there is already a 106A order in place but I doubt the Registrar will sign documents in the absence of the husband obtaining an extension of the time limit in the orders

14. I now have to consider an application for costs made by the husband arising out of his application in a case. I have delivered reasons in relation to that matter and I have made some orders and the husband has been successful in his application for an order that the wife vacate the property.

15. I have previously, in other matters involving these parties, considered the matters in s. 117 of the Family Law Act. S. 117(1) provides that in family law matters each party normally bears their own costs. The court can however make a costs order if it considers that there are circumstances justifying it doing so and in order to determine whether it should make a costs order it has to consider the matters in section 117(2A).

16. As I have previously observed in other matters involving these parties the husband earns a very high income. The wife on the evidence available to me at the property hearing was earning something in excess of $20,000.00 per annum from (employer omitted). Do not hold me to what the (employer) may be. I have no current information about her income but on any view of the matter she is not in any way a high-income earner.

17. I must have regard to whether either party is in receipt of Legal Aid but neither is. I must have regard to the conduct of the parties in relation to the proceedings. In my view there are no conduct issues in relation to this discrete application. The husband filed his application, the wife promptly responded to it and I have heard the matter today.

18. I must consider whether the application has been necessitated by the failure of a party to comply with orders and in part it has because it has been necessitated in part by the wife’s failure to pay the mortgage which she is ordered to do pursuant to orders I made on 11 May 2018 and has on other occasions been ordered to do a number of times since December 2015.

19. I must consider whether either party has been wholly unsuccessful. The husband has obtained one of the orders he sought but it is the principal order he sought.

20. I must consider whether there have been any offers of settlement. There have not been as such and I have to consider any other relevant matter.

21. A relevant matter is that this is the second time and possibly the third time (it has been a long day and a long afternoon and I have put a lot of thought into this, so do not hold me to the number I will just say there have been previous applications) about non-payment of the mortgage by the wife. She must have understood that it was a serious matter if she failed to pay the mortgage and that it was likely to attract yet another application to this court and it has. In part that is the reason for the application today.

22. In my view when all the things are taken together – the fact that the application has been partially necessitated by the wife’s failure to pay the mortgage and the fact that it is not the first application of that kind brought to this court the circumstances are there which justify a costs order being made.

23. I am conscious of the fact that the husband is in a far superior financial position but the wife does have an entitlement to a property settlement. I am sad about the fact that her entitlement is going to be diminished yet again by a costs order but the wife has only herself to blame for that situation. I consider it appropriate that I make an order that the wife pay the husband’s costs of and incidental to these proceedings fixed in the amount of $2,370.00.

24. I note that earlier, before hearing submissions about whether I should make a costs order, I discussed with the husband’s solicitor the quantum sought. It was readily apparent that the amount sought was based on the husband’s actual costs of bringing the application but when I consulted the Schedule in the Federal Circuit Court Rules it was also readily apparent that if I had applied the Schedule the amount payable would have been considerably in excess of that amount.

25. In my view it is reasonable to adopt the figure of $2,370.00 and make an order that the wife pay the husband’s costs of and incidental to this application fixed in that amount with payment to be made contemporaneously with the husband making payment to the wife pursuant to the property orders.

I certify that the preceding seventy six (76) paragraphs are a true copy of the reasons for judgment of Judge Terry

Date:         7 September 2018