Gannon & Negus
[2024] FedCFamC2F 911
•15 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Gannon & Negus [2024] FedCFamC2F 911
File number(s): BRC 15316 of 2022 Judgment of: JUDGE TAGLIERI Date of judgment: 15 July 2024 Catchwords: FAMILY LAW – contravention – alleged contravention by failure to transfer title to investment property as required by final consent orders – transferee entitled to property not willing to complete transfer unless rental income from date of final orders to date of transfer paid to her – dispute as to obligations created by terms of final orders – contravention not established – application dismissed Legislation: Family Law Act 1975 (Cth) ss 79, 106A, 112AB Cases cited: Grace & Grace [1997] FamCA 59; (1998) FLC 92-792
Hunter & Morrison [2014] FamCA 198
Sand & Sand [2012] FamCAFC 179
Division: Division 2 Family Law Number of paragraphs: 31 Date of hearing: 28 June 2024 Place: Hobart (by MS Teams) Counsel for the Applicant: Ms Eviston Solicitors for the Applicant: APIX Law Group Solicitor for the Respondent: Mr Trafford, Ryan Murdoch O’Regan Lawyers ORDERS
BRC 15316 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS GANNON
Applicant
AND: MR NEGUS
Respondent
ORDER MADE BY:
JUDGE TAGLIERI
DATE OF ORDER:
15 JULY 2024
THE COURT ORDERS THAT:
1.The Contravention Application filed by the Applicant on 19 February 2024 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE TAGLIERI
By Contravention Application filed 19 February 2024, the applicant wife alleges that the respondent husband contravened Order 3(vi) of Final Orders made by consent on 9 August 2023 (“the Final Orders”), adjusting the parties’ property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The Final Orders were to give effect to a 62 per cent and 38 per cent adjustment of the parties net property pool in favour of the applicant. Amongst other things, in order to achieve the adjustment Order 3(vi) provided that:
3. As part of the accounting referred to in Order 1 the Respondent Wife is to retain, and the Applicant Husband is to relinquish any right title and interest in and to the following:
…
vi. The unit located at [Suburb D], more accurately described as [B Street, Suburb D] QLD;
On 24 May 2024 at a case management hearing before me, the respondent through his counsel recorded that he denied the alleged contravention. At the same case management hearing, the Court made preliminary remarks to the applicant about the ambiguity of the Order she alleged had been contravened and invited her to:
(a)Exercise the Court’s power pursuant to s 106A of the Act as provided for in Order 10 of the Final Orders; and
(b)Reconsider prosecuting the application as an Enforcement Application, which was more appropriate if she maintained she had a right to receive a sum of money for rental income relating to the unit particularised in Order 3(vi) of the Final Orders (“the unit”).
The Court then heard the Contravention Application by way of Microsoft Teams on 28 June 2024 and both parties were legally represented.
The only issue for determination by the Court is whether the respondent contravened Order 3(vi) of the Final Orders made 9 August 2023. If satisfied that there has been contravention, the Court may then consider a sanctioning order.
EVIDENCE BEFORE THE COURT
The applicant sought to rely on two affidavits filed in the contravention proceedings, being the affidavits of 19 February 2024 and 10 June 2024. Both affidavits were taken by the Court as read, subject to multiple paragraphs from each being struck out after hearing and determining objections to such being made by the respondent’s representative.[1]
[1] Orders 1 and 2 of the Orders dated 28 June 2024.
The respondent relied on his affidavit of 21 June 2024. The Court marked the affidavit as read, save for [11] after I allowed the objection taken to admissibility of the evidence in that paragraph.[2]
[2] Order 3 of the Orders dated 28 June 2024.
UNDISPUTED FACTS FOUND ON THE EVIDENCE
The evidence contained in the parties’ affidavits demonstrates that there is no contention about the following chronological facts:
·Final Orders were made by the Court by consent of the parties on 9 August 2023.
·The applicant assumed the respondent would initiate the transfer process in respect of the unit.[3]
[3] Applicant’s affidavit filed 19 February 2024 at [7].
·On 15 September 2023, the applicant tried to progress the transfer by contacting her conveyancer and was told that settlement was delayed because there was “an adverse entry on the title” requiring rectification.[4]
[4] Applicant’s affidavit filed 19 February 2024 at [9] and [10].
·On 19 October 2023 the applicant was advised by her conveyancer that the transfer documents had been sent to the respondent’s conveyancers on 16 October 2023 and were expected to be executed and returned by 30 October 2023. Further, that both sides agreed transfer would occur at the earliest opportunity.[5]
[5] Applicant’s affidavit filed 10 June 2024 at [5] and annexure G1.
·On 19 October 2023 documents that had been sent to the applicant for execution were also waiting to be returned to her conveyancer.
·On 27 November 2023, the respondent’s conveyancer advised the applicant’s conveyancer that the statutory charge and mortgage had been removed from the title and the transfer could proceed.[6]
[6] Respondent’s affidavit filed 21 June 2024 at annexure N-1.
·On 27 November 2023, the applicant’s conveyancer raised the issue regarding the payment of liabilities such as rates and utilities, and asserted rental income was owed to his client.[7]
[7] Respondent’s affidavit filed 21 June 2024 at annexure N-2.
·On 5 December 2023, the applicant’s conveyancer forwarded documents to the applicant that required her instructions to settle the transfer of the unit.[8]
·The title issue was rectified and settlement scheduled for 8 December 2023.[9]
·There was dispute about the interpretation of the Final Orders and whether the applicant was to receive rental income from the unit from the date of the Orders. Communications then ensued about that dispute.[10]
·Settlement did not occur on 8 December 2023.
·On 11 December 2023, the respondent’s representative advised the applicant’s conveyancer that despite settlement of the transfer not proceeding on 8 December 2023, the respondent remained “willing and able” to settle.[11]
·On 13 December 2023, the respondent’s conveyancer again communicated that the respondent was ready and willing to settle.[12]
·On 19 December 2023, the applicant’s representative wrote to the respondent’s conveyancer stating the applicant was ready, willing and able to settle but ultimately was unable to do so because of the dispute about her entitlement to rental income from the date of the Final Orders.[13]
·On 11 January 2024 the applicant herself wrote to the respondent’s solicitor asserting a right to rental income from the unit “with the date of effect being the date of Consent Orders.”[14]
·On 18 January 2024, the applicant again herself wrote to the respondent’s solicitor and this time alleged contravention of the Final Orders.[15]
·On 19 February 2024 the contravention application was filed.
[8] Applicant’s affidavit filed 10 June 2024 at annexure G3.
[9] Applicant’s affidavit filed 19 February 2024 at [12].
[10] See applicant’s affidavit filed 10 June 2024 at annexure G3; and respondent’s affidavit filed 21 June 2024 at annexures N-2, N-3 and N-4.
[11] Respondent’s affidavit filed 21 June 2024 at [8] and annexure N-5.
[12] Respondent’s affidavit filed 21 June 2024 at [9] and annexure N-6.
[13] Respondent’s affidavit filed 21 June 2024 at [10] and annexure N-7.
[14] Applicant’s affidavit filed 19 February 2024 at [15].
[15] Applicant’s affidavit filed 10 June 2024 at annexure G5.
DEFENCE TO ALLEGED CONTAVENTION
In summary, the respondent maintains that the evidence relied upon by the applicant fails to establish that Order 3(vi) of the Final Orders has been contravened. In simple terms he states that on 27 November 2023, his conveyancer communicated to the applicant’s conveyancer that transfer of the property could proceed but the transfer has not since been effected because the applicant has declined to settle and receive transfer of the unit without also receiving a sum of money for rental income, which she says is due to her from the date of, and pursuant to, the Final Orders.
LEGAL PRINCIPLES
Part XIIIA of the Act provides for circumstances where an order of the Court relating to a non-child-related proceeding is alleged not to have been complied with or has been contravened. Section 112AB expressly provides a meaning for “contravene an order”. Relevant to the factual context of this matter, the statutory meaning of “contravene an order” is:
(1) A person shall be taken for the purposes of this Part to have contravened an order under this Act if, and only if:
(a) where the person is bound by the order—he or she has:
(i) intentionally failed to comply with the order; or
(ii) made no reasonable attempt to comply with the order.
It is perhaps trite but necessary to observe that whether a person has contravened an order is a question of mixed fact and law, depending on both factual findings and the construction of the statutory meaning of “contravene an order”.
Necessarily, findings are required about:
(a)The terms of the order contravened and what they required a party to do;
(b)Whether what is done or said or not done or said by the alleged contravener demonstrates non-compliance with the terms of the order; and
(c)If satisfied that there is non-compliance, whether it was:
(i)Intentional on the part of the alleged contravener within the meaning of that term in law; or
(ii)Because no reasonable attempt was made to comply with the order, where reasonable must, in my view, contemplate an objective rather than subjective test.
EVALUATION AND FINDINGS
It is an undisputed fact that the unit was registered solely in the respondent’s name at the time Final Orders were made and was a rental property generating rental income.
The Order which is alleged to have been contravened is set out at [2] of these reasons. I find that the terms of the Order by their plain and ordinary meaning simply required the respondent to relinquish his right, title and interest in the unit.
As the unit was registered in the name of the respondent, I find by inference that the Order required the respondent to execute a transfer document to effect transfer of the title of the unit to the applicant. However, the Order did not state this expressly or state a timeframe within which the transfer should be executed and provided to the applicant. It was undesirable for the terms of the Order to be vague.
Given the vagueness of the Order but because both parties were either being advised by a lawyer or conveyancer, it is reasonable to infer, and I find that the Order required the executed documents to effect the transfer ought to have been provided within a reasonable time.
What constituted a reasonable time is informed by the terms of the other Orders and the very nature of the Court’s jurisdiction to make property adjustment orders under s 79 of the Act.
It is relevant that Order 5 of the Final Orders stipulates that the respondent was to be liable for and was to indemnify and keep indemnified the applicant wife against “any liability currently owing and incurred up until the date of settlement (transfer) of the unit” including, but not limited to, council rates, utilities and management fees.
As the Court only has jurisdiction pursuant to s 79 of the Act in respect of property existing at the time of making final orders, it is simply the case that the Final Orders could not have provided for either party to receive rental income which did not exist at the date those Orders were made.
While rental income received to the date of Final Orders would have constituted property subject to adjustments between the parties, there is no order in respect of the same.
It is unsurprising that the Final Orders did not refer to the rights of the parties in respect of future rental income as those rights crystallised upon the transfer of title to the unit which was provided for in Order 3(vi) of the Final Orders but which did not specify when the transfer was required to be effected.
The uncontroversial factual chronology set out at [8] of these reasons establishes that throughout September to late November 2023, the respondent’s representative was taking action to arrange payment of liabilities and outgoings on the unit and removing charges affecting it in preparation to transfer title to the applicant. During part of this time, documents had also been sent to the applicant for execution, which I infer were also required to effect transfer of title in the unit.
Subsequent to 27 November 2023, the uncontentious facts demonstrate that the applicant refused to arrange a time for completion and exchange of transfer documentation and did not respond to invitations to effect completion. It is abundantly clear that she was unwilling to instruct her conveyancer to attend completion because she sought to recover rental income from the date of the Court’s Final Orders until the date of completion of transfer of title.
Consequently, the uncontentious facts and findings at [22] and [23] of these reasons lead me to find that the respondent did not intentionally fail to comply with Order 3(vi) of the Final Orders. He was essentially ready and willing to transfer title from at least 27 November 2023.
The Final Orders could not be construed or interpreted to give the applicant the right to receive rental income into the future unconnected to the transfer of title. The future rental income was not property of the parties in possession or reversion or something which the Court had jurisdiction when the Final Orders were made. The right to future rental income is properly categorised as a future financial resource. This conclusion is entirely consistent with all the authorities discussed in Sand & Sand [2012] FamCAFC 179 at [41] onwards.[16]
[16] Especially at [47] referring to Grace & Grace [1997] FamCA 59.
Receipt of the rental income may well be an inchoate right as submitted by counsel for the applicant. However, the right is connected to title to the property and only vested upon transfer of title to the applicant, which has not yet occurred due to the applicant’s insistence on receiving rental income, which in my view she is not entitled to receive pursuant to the Final Orders.
I find that the only obligations created by the relevant Final Orders in relation to the unit were for the respondent to transfer title to the applicant at an unspecified date but within a reasonable time from the making of the Final Orders.
Despite the above reasoning, it is also necessary to consider if the respondent failed to make reasonable attempts to comply with the Final Orders. I raised this during the hearing and observed that there was no evidence before the Court about the specific acts or signatures required by the respondent to affect the transfer of title. In these circumstances and where counsel for the applicant did not argue expressly that the respondent’s contravention related to the meaning of s 112AB(1)(ii) of the Act, it is not possible to be satisfied to the requisite standard that the respondent contravened the relevant order.[17]
[17] Hunter & Morrison [2014] FamCA 198, in particular at [10] to [15].
CONCLUSION
The applicant has failed to establish the alleged contravention. Her insistence in arguing an interpretation of the Final Orders that was not reasonably open has largely caused the delays in the transfer of title to her.
Although the respondent was not offering to complete the transfer until November 2023, the delay of approximately three months after the making of the Final Orders was not unreasonable in view of:
(a)The need to attend to the discharge of liabilities pursuant to Order 5 of the Final Orders;
(b)The need for both parties to compete and sign documents for the purpose of completion of transfer; and
(c)The applicant erroneously insisting on a right to rental income from the unit from the date of the Final Orders.
The Contravention Application filed 19 February 2024 is dismissed.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Taglieri. Associate:
Dated: 15 July 2024
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