HARRICK & HARRICK
[2019] FamCA 739
•18 October 2019
FAMILY COURT OF AUSTRALIA
| HARRICK & HARRICK | [2019] FamCA 739 |
| FAMILY LAW – ENFORCEMENT OF ORDERS – where the wife seeks enforcement of final property consent orders made in 2011 – where the Court finds the husband is indebted to the wife – orders made for the payment of debt by the husband to the wife plus interest. FAMILY LAW – COSTS – party and party basis costs payable by the husband to the wife as agreed and failing agreement fixed by the Court. |
| Family Law Act 1975 (Cth) ss 105, 117 |
| McMillan & McMillan [2016] FamCA 387 |
| APPLICANT: | Ms Harrick |
| RESPONDENT: | Ms Tasker as Case Guardian for Mr Harrick |
| FILE NUMBER: | TVC | 111 | of | 2011 |
| DATE DELIVERED: | 18 October 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Townsville |
| JUDGMENT OF: | Baumann J |
| HEARING DATE: | 4 October 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr M Fellows |
| SOLICITOR FOR THE APPLICANT: | Giudes & Elliott Solicitors |
| SOLICITOR FOR THE RESPONDENT: | Mr L Brandon Evans Brandon Family Lawyers |
Orders
That the Court declares that the Respondent, MR HARRICK is indebted to the Applicant MS HARRICK in the sum of $47,020.91 payable within thirty (30) days.
That the Respondent shall pay to the Applicant at the rate of 5% per annum on a simple interest calculation as follows:
(a)On the sum of $80,000 from 1 October 2016 to 25 October 2018;
(b)On the sum of $47,020 from 25 October 2018 to repayment of the sum, together with interest and costs, as set out in Order 3.
That the Respondent pay the Applicant’s costs of these enforcement proceedings on a party and party basis calculated under the Family Law Rules 2004 as agreed and failing agreement as fixed by the Court.
That within twenty one (21) days of the date of this Order, the parties shall submit an order in agreed terms that in default of the payment by the Respondent within thirty (30) days of the funds payable under this Order, the Applicant be appointed as Trustee for the purpose of effecting a sale of the property at Lot …, B Street, Town C, more particularly described as Lot 1 on RP .., County of …, Parish of …, Title Reference ….
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 Harrick & Harrick 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 TOWNSVILLE |
FILE NUMBER: TVC 111 of 2011
| Ms Harrick |
Applicant
And
| Ms Tasker as Case Guardian for Mr Harrick |
Respondent
REASONS FOR JUDGMENT
Introduction
On 26 August 2011 the wife Ms Harrick and the Respondent Mr Harrick entered into consent orders (“the said consent orders”) to resolve property adjustment between them after a marital relationship which commenced in 2000 came to an end in or around May 2010. The parties were married in 2006 and are not yet divorced.
As these Reasons record however, although the marriage was over, the parties maintained some sort of relationship and were amicable such that, I am satisfied, the wife continued to provide emotional support to her husband as his mental health was challenged by at least:
a)The breakdown of the marital relationship;
b)The effects on the husband’s financial security from the 2009 Global Financial Crisis where he says he lost “millions of dollars on the stock market”;
c)The extensive damage in 2011 to real estate owned by him in North Queensland by Cyclone Yasi.
These events and subsequent failure to comply with treatment, have resulted in a diagnosis by Psychiatrist Dr P on 12 June 2019, that the husband “has a Major Depressive Disorder and Alcohol Abuse Disorder, and considering his significant loses, remains a chronic suicidal risk”. As a consequence of Dr P’s opinion that the husband is not in a fit state to deal with any legal matters and is not capable of instructing lawyers, the Court appointed his sister Ms Tasker as the husband’s Case Guardian.
The proceedings
The wife commenced enforcement proceedings against the husband on 24 January 2019, claiming that an amount of $77,020.81 was owing to the wife under paragraph 3 of the said consent orders, being:
Principal sum owing
$110,000.00
Less amount received from mortgage of Town E property
$15,839.52
$94,160.48
Less amount received from mortgage of Town G property
$17,139.57
$77,020.91
The husband, through the evidence of his Case Guardian, amassed from a review of banking records, asserts that the husband does not owe $77,020.91 because payments totalling at least $41,457 were made. The evidence of Ms Tasker in her Affidavit filed 21 August 2019 further contends that further payments could have been made to the wife but alleges the wife “has refused to disclose the banks she held accounts with”. Although Ms Tasker says she was arranging for a copy of paid cheques to be produced by H Company, no evidence of any paid cheques was produced to the Court.
At the enforcement hearing before me on 4 October 2019, Mr Fellows of Counsel appeared for the wife and made written and oral submissions. Solicitor advocate Mr Brandon appeared for the husband’s Case Guardian and the only witness subject to cross-examination was the wife. Mr Brandon made written and oral submissions.
Arising from the evidence and submissions, the critical issues for determination were identified to be:
a)How much is owing?
b)Should interest be payable on the sum outstanding, and if so, at what rate and from what date?
c)Costs of the proceedings; and
d)What enforcement orders should be made?
How much is owing
I make the following findings on this critical issue:
a)I accept delays in respect of the payments due to the wife occurred because sales of the properties at F Street, Town G (see order 3.1) and D Street, Town E (see order 3.2) were delayed. These delays were contributed to by the need to perform repairs to the property and then, with the husband failing to maintain mortgage repayments, the delays associated with the mortgagee taking possession of the properties and effecting a sale;
b)The husband, I infer, failed to comply with his obligations to pay the mortgage instalments on the Town E property (order 9.1) and the Town G property (order 5.1);
c)The failure of the husband to meet his obligations contributed to the delays and further, although to what extent it is difficult to assess, reduced the nett proceeds of sale from the two properties which were to meet the wife’s entitlements under order 3.1 and 3.2. I say it is “difficult to assess” because no evidence has been provided from the mortgagee in possession. In my view, the husband should have received an accounting from the mortgagee (as required under the Property Law Act 1974) and that evidence ought to have been produced to the Court;
d)Such evidence would not only have clarified the extent of the arrears that the husband’s default had allowed to accumulate, but also:
i)the amount paid to discharge the mortgage to L Bank over the Town C property (see order 5.3); and
ii)the dates of “sale” of the property – the last of those sale dates being the catalyst for any shortfall to be paid by the husband to the wife within 14 days of that date (see order 32). I reject the submission that the description of “last property to be sold”, could refer to the husband’s continuing interest in the Town C property;
e)in the absence of any evidence from the mortgagee as to the date of sale of either the Town G property or Town E property, it is not possible to identify when, under order 32, the demand for the balance could have been first made by the wife. I deal with this issue below;
f)I accept that the wife, when she commenced formal enforcement proceedings, overstated the amount of principal due to her in the following sums which I find should be deducted from the balance demanded of $77,020.91, namely:
i)The sum of $20,000 now conceded as paid in two sums in February 2012. Under cross-examination, the wife swore she had no recollection of receiving those funds, although a document signed by her dated 10 February 2012 confirms her receipt of the funds. Mr Brandon strongly asserted this was a damaging late concession by the wife, that goes to her credit;
ii)The wife says at paragraph 49(a) that she received $5,000 “from insurance monies” on 7 February 2012. Under cross-examination the wife conceded the funds were not from that source and should be regarded as a deduction from the debt. The wife persisted with her assertion that $10,000 received on 23 October 2014 was from “insurance monies” received by the husband. However the only evidence of insurance funds being received by either party is the email from H Company dated 31 July 2019, revealing payments under claim … to the husband and wife some years earlier. Although I am unable to say how funds came into the husband’s account to make the payment to the wife, I am not satisfied it had anything to do with “insurance monies” as the wife alleges. The wife took over the property at J Street, Town K (to which the insurance claim number referred) by at least April 2013, when the husband signed a transfer (see Exhibit 1).
In all these circumstances, I find that the “debt” remaining of $77,020.91 should be reduced by payments of $30,000 – leaving a balance owing of $47,020.91.
In respect of a number of smaller payments referred to in the evidence of Ms Tasker, ranging from $35.00 to $1,500 between 5 December 2011 and 8 September 2015, whilst the wife concedes she received such payments, she says they were not “loan repayments” to her and as she continued to “work” as a bookkeeper for the husband to 31 December 2015, and for a period of over 12 months to May 2017, the husband lived in the wife’s home, I am on balance prepared to accept the wife’s evidence that she received gratuitous payments from the husband – often to pay for his alcohol and groceries etc. The mere fact that their property settlement had been finalised did not, it seems, severe completely their personal relationship in some ways.
I have not regarded the payment made of $2,500 on 24 December 2011 as a debt repayment. If it had been, it would have been mentioned in the signed acknowledgment dated 10 February 2012.
Should interest be payable
Although the discretion to be exercised under s 105 of the Family Law Act 1975 (“the Act”), can extend to how any interest should be applied, the Act prescribes at least, pursuant to s 117B, for interest to flow “at a rate prescribed by the applicable Rules of Court” or at another rate (s 117B(2)(a)).
Mr Brandon, relying on a decision of Tree J in McMillan & McMillan [2016] FamCA 387, adopts a view that to impose interest on the sum outstanding would be “punitive” in character. I disagree. The purpose of sums payable attracting interest in part, is to enable a person owed money to not be disadvantaged by not having the use of funds due to them.
In this case, I find that it is likely, as the husband deposes to in his Affidavit filed 22 May 2019 (see paragraphs 6(a) and 6(b)) that the wife was sympathetic to the inability of the husband to sell the properties and, consistent with their ongoing personal relationship, did not press action by him. However, by October 2016 the wife’s solicitors had, on her instructions, sought a Registrar of the Court to sign listing documents for the sale of F Street, Town G and D Street, Town E.
Whilst I accept by this time the husband had probably fallen into arrears as to loan repayments, rates etc, I regard 1 October 2016 as the appropriate date from which interest on the remaining debt of $47,020.91 (rounded down for interest calculations only to $47,000) should accrue.
In the historically low interest rate environment that has existed in Australia, I am satisfied that interest at a rate of 5% per annum, on a simple interest calculation, is proper and I impose that rate under s 117B(2)(a).
I intend to so order.
Costs
In the circumstances of this case, including the wife’s failure (even up until the Affidavit sworn 6 August 2019) to concede and acknowledge the repayment to her of at least the additional payments of $20,000 made in 2012, whilst being satisfied circumstances exist for the wife to secure an order for costs, I am not satisfied that costs should be assessed on an indemnity basis. I will ask the parties to seek to reach agreement as to costs of the proceedings on a party and party basis, and failing agreement, upon written submissions, I will fix costs.
Orders for enforcement
The husband has consistently indicated he wishes to retain the property at Town C, which is now unencumbered and he believes has a value of around $180,000. Mr Brandon put to the wife in cross-examination whether she was prepared to give the husband 30 days to pay the determined sum to her, and if he was unable or unwilling to do so, then she could be appointed as Trustee of the property and effect sale, with her entitlements being deducted before any residue would be paid to the husband.
The wife, generously perhaps, agreed to such a proposition, as does the Court.
I will give the parties 21 days to submit an order as to enforcement which permits the appointment of the wife as Trustee of the Town C property, with the power to sell.
Otherwise, for the reasons given, at this time I make the orders set out at the commencement of these Reasons.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 18 October 2019.
Associate:
Date: 18 October 2019
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