Ivanovic & Ivanovic & Ivanovic

[1999] FamCA 2087

FAMILY LAW ACT 1975

IN THE FAMILY COURT
OF AUSTRALIA

AT BRISBANE No. BR10179 OF 1992

IN THE MATTER OF: IVANOVIC
MILAN

Husband

AND: IVANOVIC
JENNIFER JOY

Wife

AND: IVANOVIC
BRINKO

Intervener

BEFORE THE HONOURABLE JUSTICE LINDENMAYER

DATE OF HEARING: 23 APRIL & 21 SEPTEMBER, 1999

DATE OF JUDGMENT: 16 NOVEMBER, 1999

REASONS FOR JUDGMENT

Appearances: Mr G. Page of Senior Counsel appearing pro bono for the Husband

Mr Sayers of Counsel (instructed by Marrinans, Solicitors, Suite 13, Kenmore Medical Centre, 2081 Moggill Road, Kenmore, Q, 4069) for the Wife
The Intervener in person

PROPERTY – Transaction to defeat claims – when a disposition places cash in the hands of a party which is subsequently dissipated, it is the disposition that is examined to determine the likelihood of any order being defeated - Heath and Heath: Westpac Banking Corporation (Intervener) (1983) FLC 91-362 and Heath and Heath (No.2) (1984) FLC 91-517 followed.

WORDS AND PHRASES – “false” under s129(3)(e) Child Support (Assessment) Act has no connotation of wilfulness or fraud - Taylor v Taylor (1979) FLC 90-674 followed.

The wife bought an application to vary a lump sum child support order made by Warnick J in February, 1995, in conjunction with an application under s85 of the Act to set aside a transaction whereby the husband transferred his remainder interest in a particular property to his brother (“the intervener”).

On 4 July, 1990, the husband’s mother executed a will that provided for the husband’s step-father to have a life interest in realty in Lynnegrove Avenue, Corinda, and that upon his death the husband and the intervener were to take the property in equal shares. The husband failed to disclose his remainder interest in the Lynnegrove Avenue property in any material filed prior to February, 1995.

In February, 1995, Warnick J ordered the husband to pay the wife the sum of $20 240 by way of lump sum payment for child support. In facilitating a means pursuant to which this order was to be achieved, his Honour ordered the husband to transfer to the wife 2 particular properties, in Karragarra Island, that the wife would then sell for not less than $14 000 each.

In June, 1997, the wife caused to be issued an enforcement summons against the husband in relation to Warnick J’s orders. In August, 1997, the husband assigned his remainder interest in the Lynnegrove Avenue property to the intervener for a cash payment of $45 000, that the husband has since spent on debts and gambling.

However in June, 1998, when an enforcement summons against the husband in relation to Warnick J’s orders finally came for hearing before Jordan J, his Honour dismissed it. His Honour held that although it now appeared not to be a commercially viable exercise to sell the Karragarra properties to enforce payment of the $20 240, the husband was not in breach of the orders as he had executed transfers of those blocks in favour of the wife. His Honour indicated that an application for variation might be more appropriate.

Section 85 application:
The husband submitted that if any act had defeated or was likely to defeat any order, it was his subsequent dissipation of the proceeds rather than the disposition itself. The husband cited Australia and New Zealand Banking Group Limited v Arthur and Ors (1988) FLC 91-938 to support this submission.

The husband further submitted that one could not conclude that a reasonable disponer, in August, 1997, would have considered the disposition likely to defeat Warnick J’s order, since that order provided its own exclusive method of enforcement through the sale of the Karragarra properties.

The Variation application:

Since Warnick J’s orders for lump sum child support were made under s124 of the Child Support (Assessment) Act 1989 (C.S.A. Act), variation was primarily pursued by the wife under s129(1)(f) of the C.S.A. Act. In support of her application for variation the wife relied on s129(3)(e). This section enables the Court to vary an order if it is satisfied “that material facts were withheld from the court that made the order…or that material evidence previously given before such a court was false.”

Held: In allowing both of the applications:

That at the time of the assignment of his interest in the Lynnegrove Avenue property, the husband intended to defeat any order which might be made in enforcement proceedings. Despite these findings, irrespective of intention, the disposition was likely to defeat an existing or anticipated order.
It was the disposition of the remainder interest in the Lynnegrove Avenue property and not the subsequent dissipation of the proceeds from that disposition, that was likely to defeat any order made in the proceedings. Although the husband’s interest in the Lynnegrove Avenue property was not “the very property” against which the wife was seeking an order at the time of the disposition, it was the only property available to be made subject of a further order to ensure the effectiveness of the existing orders. Therefore, the assignment effectively disposed of the one property that could potentially satisfy the orders and replaced it with cash in the husband’s hands that he could spend, uninhibited by fear of it being traced or recovered. The disposition of the remainder interest could not be viewed as separate from the cash payment which accompanied it and which enabled the disposition to effectively defeat any order which might be anticipated in the proceedings. Australia and New Zealand Banking Group Limited v Arthur and Ors (supra) distinguished. Heath and Heath: Westpac Banking Corporation (Intervener) (1983) FLC 91-362 and Heath and Heath (No.2) (1984) FLC 91-517 followed.
The husband’s submission that a reasonable disponer would not have considered the disposition likely to defeat Warnick J’s order because of the machinery provisions stipulated in relation to the sale of the Karragarra properties rejected. Any reasonable disponer, in the position and with the knowledge of the husband, would have readily foreseen, as at 20 August, 1997, that it was likely that ultimately, (once the wife had knowledge of the husband’s remainder interest), the wife would seek to have resort to this interest to satisfy the order to pay $20,240. The husband could not have reasonably believed, at the time of the disposition of the remainder interest, that the sale of the Karragarra properties would generate sufficient funds to satisfy the obligation to pay $20,240 to the wife.
As the husband failed to disclose his remainder interest in 2 financial statements filed for the proceedings before Warnick J, not only had he withheld a material fact from the Court under s129(3)(e) of the C.S.A. Act, but he also gave material evidence that was false. It was irrelevant, for the purposes of s129(3)(e), whether the evidence previously given was false by virtue of mere innocent oversight, it would still be regarded as false. [Taylor v Taylor (1979) FLC 90-674].

REPORTABLE

INTRODUCTION

This is an application by Jennifer Joy IVANOVIC (“the wife”) to vary a lump sum child support order made by Warnick J on 22 February, 1995 and an application, under s.85 of the Family Law Act 1975 (“the Act”), to set aside a transaction whereby Milan IVANOVIC (“the husband”) transferred his interest in certain property to his brother, Brinko IVANOVIC (“the intervener”).

HISTORICAL BACKGROUND

The husband is aged 50, having been born on 19 July, 1949, whilst the wife is aged 52, having been born on 18 June, 1947. The parties were married on 12 June, 1969 and separated in April, 1992. A decree nisi dissolving the marriage became absolute on 13 August, 1993.

There are three children of the marriage: Allana May Ivanovic, who is currently aged 22, having been born on 25 September, 1977; Dean Ivan Ivanovic, who is currently aged 18, having been born on 10 December, 1980; and Ellice Elizabeth Ivanovic, who is currently aged 16, having been born on 4 September, 1982.

The wife commenced proceedings for child support in 1994 and, on 23 December, 1994, the husband was ordered, by Judicial Registrar Smith, to pay lump sum child support in the sum of $12,495. On 22 February, 1995, Warnick J determined the wife’s application for child support, by way of a review of the Judicial Registrar’s decision, and made the following relevant orders:-

“(1) That the HUSBAND provide child support for the children of the marriage ALLANA MAY IVANOVIC born on 25^th September 1977, DEAN IVAN IVANOVIC born on 11^th December 1980 and ELLICE ELIZABETH IVANOVIC born on 4^th September 1982, by way of lump sum payment of $20,240.00.
(2) That for the purposes of enabling payment in accordance with the preceding Order, the HUSBAND forthwith transfer to the WIFE as trustee for sale, all his right, title and interest in and to the real property situated at Lot 55 Treasure Island Avenue, Karragarra Island, in the State of Queensland and Lot 50 Noise Parade [Lot 60 Noyes Parade], Karragarra Island in the State of Queensland, aforesaid, and whereupon the WIFE shall forthwith present the said property for sale by private treaty at prices not less than $14,000.00 each, and if not sold within 3 months from the date hereof such properties be forthwith presented for sale by public auction at a reserve price as agreed between the parties and in default of agreement as determined by the nominee of the President for the time being of the Real Estate Institute of Queensland.

(3)       That the HUSBAND be responsible for all the costs of and incidental to the transfer of the aforesaid properties to the WIFE in accordance with these orders and that such costs be deemed to be included in “costs of sale” in respect of such properties.
(4)       That upon the sale of either or both the aforesaid properties the sale proceeds (after costs of sale) be applied firstly in satisfaction of the amount payable pursuant to paragraph (1) hereof; secondly in satisfaction of the Orders for costs in paragraph (8) hereof; and thirdly the balance to the HUSBAND.
(5)       That each party have liberty to apply on the giving of 7 days notice in writing to the other in respect of the terms and conditions of sale and trust aforesaid.
(6)       That the HUSBAND execute all documents and do all acts and things necessary to give validity and operation to these orders and upon any refusal or neglect on his part so to do, such default continuing for a period of 7 days, the Registrar or Deputy Registrar of this Court at Brisbane, is appointed to execute such documents in the HUSBAND’s name and to do all such acts and things as aforesaid.
(7) That pursuant to Section 125(2) of the Child Support (Assessment) Act 1989, no part of the sum ordered to be paid in paragraph (1) hereof of these orders is to be credited against the HUSBAND’s liability for child support under any relevant assessment.
(8)       That the HUSBAND pay the WIFE’s costs of and incidental to the application filed herein on 16^th May 1994, the amended application filed herein on 5^th December 1994 and the HUSBAND’s application for review filed herein on 20^th January 1995, to be taxed.”

The husband is the registered owner of land situated at 7 Noyes Parade, Karragarra Island (Lot 60 on Registered Plan 130218) and 85 Treasure Island Avenue, Karragarra Island (Lot 55 on Registered Plan 130218). Karragarra Island is in Moreton Bay and is within the Redland Shire. The wife deposes that the husband has not paid rates on those blocks of land since January, 1995. As at 4 December, 1998, the outstanding rates for the two blocks totalled $8,734.16.

In his Statement of Financial Circumstances, filed on 4 May, 1994, the husband deposed that Lots 55 and 60 on Karragarra Island had estimated values of $16,000 and $14,000 respectively, and that, in addition to two motor vehicles valued at $26,000, he also had an interest, as joint owned, in real estate at Agnes Waters, valued at approximately $34,000.

On 4 July, 1990, the husband’s mother, Elisabeth Milenkovic, executed a will the terms of which provided that the husband’s stepfather, Adam Milenkovic, was to have a life interest in realty at 91 Lynnegrove Avenue, Corinda, Brisbane, and that upon his death, the husband and the intervener were to take the property in equal shares. Elisabeth Milenkovic died on 16 April, 1993. The husband did not disclose his remainder interest in the Lynnegrove Avenue property in any of his material filed prior to 22 February, 1995.

In early 1995, the wife listed the Karragarra Island blocks for sale with Macleay Island First National Real Estate, at $14,000 each. No offers were forthcoming at any time as a result of that listing.

On 22 March, 1995, the husband filed a Notice of Appeal to the Full Court of the Family Court from Warnick J’s orders of 22 February, 1995, and sought an undertaking from the wife not to deal with the Karragarra blocks pending the outcome of the appeal. The wife gave that undertaking, and while the husband’s appeal was dismissed on 23 May, 1996, the undertaking continued when the husband subsequently applied to the High Court of Australia for special leave to appeal. That application for Special Leave to Appeal was filed on 13 June, 1996, and dismissed on 2 December, 1996. In the meantime, on 19 June, 1996, the husband transferred his interest in the Agnes Waters property to his then joint owner, for a stated consideration of $17,500. The wife says that the former joint owner (a Mr Potts) is a friend of the husband, and that has not been denied by the husband. During the time the appeals were pending the wife neither proceeded with the auction of the Karragarra blocks, nor took them off the market. The wife deposes that as at 15 September, 1998, she had not taken any further steps to transfer the blocks of land to herself, as the rates owing to the Redland Shire Council would immediately become payable by her.

In her affidavit filed on 21 September, 1998, the wife deposes to her belief that the figure of $14,000 adopted by Warnick J (as the value of each of the Karragarra blocks) was based on the estimated valued contained in the husband’s Financial Statement file on 13 February, 1995, despite the fact that the husband provided no expert evidence to that effect. In reports attached to an affidavit filed on 21 September, 1998, the wife’s valuer, Janelle Patricia Stubberfield, assessed the value of the blocks at $6,000 and $1,000, respectively, while Esther Relph, a real estate agent on Macleay Island, in her affidavit filed on 4 November, 1998, valued one lot at $7,000 and regarded the other as unsaleable.

On 2 June, 1997, the wife caused to be issued an enforcement summons against the husband in relation to Warnick J’s orders. On 5 June, 1997, Registrar McGrath made an order for substituted service of that summons on the husband by delivering it to his step-father, Adam Milenkovic, at 91 “Lynngrove” Avenue, Corinda, and adjourned the summons to 14 July, 1997. It was subsequently further adjourned to 6 August, 1997, on which date an order was made for a warrant to issue to arrest the husband and bring him before the Court to show cause why he should not be dealt with for contempt of court arising from his failure to appear on 6 August, 1997.

On 15 August, 1997, the wife caused a subpoena to be issued and served upon Adam Milenkovic, the husband’s step-father, requiring his attendance at court to give evidence on 20 August, 1997. Presumably, the intention was to seek to obtain evidence from Mr Milenkovic about the husband’s whereabouts at that time. Mr Milenkovic did not attend court on that day, but the intervener attended on his behalf and produced medical certificates explaining Mr Milenkovic’s absence.

On the same day (20 August, 1997) the husband and the intervener entered into a Deed of Assignment in relation to the husband’s remainder interest in the Lynnegrove Avenue property. That deed records the husband’s assignment, to the intervener, of his half share of the estate in remainder in that property created by the will of Elisabeth Milenkovic, in consideration of the sum of $45,000 “now paid by the Assignee [the intervener] to the Assignor [the husband] (the receipt of which monies the Assignor hereby acknowledges)”. In his affidavit filed on 23 November, 1998, the husband swears that the $45,000 was paid to him by his brother “in cash” and was at no time “banked” by him, and that the entire sum was “spent on the payment of debts and living expenses and some gambling”. Later in the same affidavit he accounts for the expenditure of $10,000 of that sum in payment of legal costs and expenses and the repayment of debts, and as to the balance of $35,000 he says it was “used by me in general living expenses including gambling and drinking over the period from August, 1997 to the present time”. The wife was unaware of this assignment until 25 November, 1998, when she was served with a copy of the husband’s affidavit filed on 23 November, 1998, to which a copy of the deed is annexed.

On 7 June, 1998, the husband was, at last, arrested pursuant to the warrant issued by the Court on 6 August, 1997. He was brought before the Court in accordance with that warrant, on 9 June, 1998. The intervener also attended court on that date and gave a surety, in the sum of $10,000, for the husband’s appearance before the court on 12 June, 1998, to which date the enforcement summons was then adjourned.

When the summon eventually came on for hearing, before Jordan J, on 12 June, 1998, his Honour dismissed it. He held that although it now appeared not to be a commercially viable exercise to sell the Karragarra blocks in order to enforce payment of the $20,240 payable under Warnick J’s orders, the husband was not, strictly, in breach of those orders, having by then executed transfers of those blocks in favour of the wife. His Honour took the view that the effect of Warnick J’s orders was to require the husband to provide child support “by way of a lump sum payment of $20,240” to be provided “by transferring his two properties to the wife”, with “certain machinery orders facilitating the sale of those properties and the distribution of the proceeds to give effect to those orders”. He expressed the view that if, as now seemed clear, those two properties would not realize anything like enough to satisfy the order for payment of $20,240, “it may be that the orders of [Warnick J] need to be revisited”. He considered that what the wife was “really seeking” was “a variation of the terms of the order of this court so as to persuade the court to make some other orders from which the provision for lump sum child support might be met” which, he held, was “not an enforcement application”.

There having been no appeal by the wife from Jordan J’s dismissal of her enforcement summons, she is bound by his determination of the issues raised for determination in those proceedings. It is therefore not open to her to contend further in these proceedings that the husband had, at that time, failed to comply with Warnick J’s orders, or that in order to seek to have recourse to the husband’s interest in the Lynnegrove Avenue property for the purpose of satisfying the obligation of the husband to pay lump sum child support of $20,240, whilst the Karragarra blocks remained unsold, she must first obtain a variation of Warnick J’s orders to include that property within the purview of the orders.

On 21 September, 1998, the wife filed a Form 7 application in which she sought orders varying Warnick J’s orders of 22 February, 1995, by adding a number of further orders as follows:-

That the husband be restrained from encumbering or assigning his remainder interest in the property at Lynnegrove Avenue, Corinda, referred to in paragraph 7 hereof;
That upon the death of the life tenant of that property (Adam Milenkovic) the husband’s interest in it be charged with payment to the wife of the amount of lump sum child support payable under the order plus interest and costs; and

That the wife be declared to have a caveatable interest in that property or, alternatively, that the husband caveat his interest in it in her favour.

As already noted in paragraph 13 hereof, the wife became aware, for the first time, on 25 November, 1998, that the husband had assigned his remainder interest in the Lynnegrove Avenue property to his brother, the intervener, by deed dated 20 August, 1997. Upon becoming so aware, the wife filed a Form 8 application seeking leave to amend her Form 7 application of 21 September, 1998 to add an application for an order that that assignment be set aside, pursuant to s.85 of the Act. That application for leave to amend was granted by Jerrard J on 9 December, 1998, and the wife’s amended Form 7, including her application under s.85, was filed by leave of his Honour on that day. His Honour then adjourned all applications to 22 April, 1999, and gave directions for the filing and service of further material by all parties.

On 8 March, 1999, the wife filed a Form 8 application directed to the intervener, as respondent, seeking an injunction restraining him from dealing with his interest in the Lynnegrove Avenue property. Although not specifically stated, that injunction was clearly sought pending the determination of the wife’s s.85 application. That application was withdrawn at the end of the hearing before me, on 22 April, 1999, when the intervener gave a suitable undertaking.

At the end of the hearing on 22 April, 1999, I reserved my decision. Before I had completed the preparation of my judgment, a Form 8 application was filed by the wife on 3 August, 1999, in which she sought leave to re-open her case to adduce further evidence. The further evidence which she sought to adduce was evidence which, if admitted and accepted, would establish that Mr Adam Milenkovic, the life tenant of the Lynnegrove Avenue property, died on 23 June, 1999. I heard that application on 21 September, 1999, at which time I gave the wife leave to re-open her case for a limited purpose. Accordingly, I admitted the evidence of Mr Milenkovic’s death, the result of which is that the intervener’s estate in fee simple in the Lynnegrove Avenue property, which he holds in part as a result of the will of his late mother and in part as a result of the assignment from his brother previously referred to, is now vested in possession, as well as in interest.

THE HEARING ON 22 APRIL, 1999

At the hearing on 22 April, 1999, the wife was represented by Mr Sayers of Counsel and the husband by Mr Page of Senior Counsel (who appeared pro bono on the direct instructions of the husband), whilst the intervener appeared in person and unrepresented. At the outset of the hearing, in the course of counsel’s opening submissions, the question arose as to the availability of s.85 of the Act as a source of jurisdiction in these proceedings, given that the substantive orders of Warnick J were made, not under the Act, but under s.124 of the Child Support (Assessment) Act 1989 (“the C.S.A. Act”). However, it was conceded by Mr Page, SC, that he had argued that issue before Jerrard J on 9 December, 1998, in the course of submitting that the application should be summarily dismissed, and that his Honour had decided that issue adversely to his client (and to the intervener, who was then represented by a solicitor) and had therefore refused to make the order of dismissal which he had sought. Accordingly, there having been no appeal, nor any application for leave to appeal, by either the husband or the intervener from his Honour’s refusal to make that order (which refusal constitutes a “decree” as defined in s.4(1) of the Act) it was conceded that it is not now open to either of those parties to contend before me that the jurisdiction conferred on this Court by s.85 of the Act is not available to the wife in these proceedings. I am therefore not required to nor have I considered that question.

The submissions that were made at the hearing went to the merits of the wife’s s.85 application and of her application to vary Warnick J’s orders of 22 February, 1995. It was common ground that if the s.85 application should fail, then the variation application would be pointless and should also be dismissed. However, counsel for the husband argued that even if the s.85 application should, prima facie, be granted, the other application should fail for independent reasons. In that event, I should need to consider whether the s.85 application could or should still be granted, notwithstanding its prima facie merit.

THE S.85 APPLICATION

Before identifying and dealing with the submissions which were made to me in relation to the merits of that application, it is appropriate to set out the terms of the section, which provides:-

“(1)     In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
(2)       The court may order that any money or real or personal property dealt with by any such instrument or disposition may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of a sale shall be paid into court to abide its order.
(3)       The court shall have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other person interested.
(4)       A party or a person acting in collusion with a party may be ordered to pay the costs of any other party or of a bona fide purchaser or other person interested of and incidental to any such instrument or disposition and the setting aside or restraining of the instrument or disposition.
(5)       In this section, ‘disposition’ includes a sale and a gift.”

There is no issue that the husband’s assignment to the intervener of his remainder interest in the Lynnegrove Avenue property was a “disposition”, within the meaning of that expression as used in that section. The issue is whether that disposition was “made to defeat” or, irrespective of intention, was “likely to defeat” an “existing or anticipated order” in the proceedings between the husband and wife in relation to the payment of child support by the former to the latter. For the reasons outlined in paragraph 21, above, there is no issue that the proceedings are “proceedings under this Act”, within the meaning of that section.

There is also no issue that, in determining whether a particular disposition is one which was “likely to defeat” an order (whether existing or anticipated) in the relevant proceedings, the Court must consider whether in the circumstances which existed, or could reasonably be foreseen, at the date of the disposition, there was more than a 50% chance that the order would be defeated by the disposition, and that for an order to be “anticipated” it must be one which a reasonable disponor would, objectively, have foreseen as likely or reasonably probable at the time of the disposition: see Pflugradt & Pflugradt (1981) FLC 91-052; 7 FamLR 181; D & D (1984) FLC 91-593; 10 FamLR 73; and Bassola & Bassola (No.1) (1985) FLC 91-623; 10 FamLR 413.

Mr Page, SC, made, essentially, five submissions challenging the merits of the s.85 application. Those submissions may be summarised, as follows:-
There was no evidence of any intention on the part of either the husband or the intervener, at the time of the disposition, to defeat the existing order of Warnick J of 22 February, 1995.
There was no evidence of any intention on the part of either the husband or the intervener, at the time of the disposition, to defeat any anticipated order in the proceedings.
On the evidence, the disposition, at the time it was made, was not “likely to defeat” the existing order of Warnick J of 22 February, 1995.
On the evidence, the disposition, at the time it was made, was not “likely” to defeat any “anticipated” order in the proceedings.
On the evidence, the disposition had not defeated, nor was it ever likely to defeat, either the existing order of Warnick J or any anticipated order in the proceedings, because, if any act had defeated or was likely to defeat such an order it was the husband’s dissipation of the proceeds of the disposition rather than the disposition itself [and in support of this submission, reliance was placed upon Australia and New Zealand Banking Group Limited v. Arthur & Ors (1988) FLC 91-938].

In reply to those submissions, Mr Sayers, of counsel, for the wife, submitted, firstly that there is evidence from which it is open to the Court to infer that at the time of the disposition the husband and/or the intervener intended that disposition to defeat either the existing order or Warnick J of 22 February, 1995, or an anticipated order in the proceedings (being an order the effect of which would be to render the husband’s interest in the Lynnegrove Avenue property available as a source of satisfaction of order (1) of Warnick J’s orders). And, in reliance upon the decision of Nicholson CJ in Halabi v. Artillaga & Ors (1994) FLC 92-470 at 80,885, he submitted that if such an intention were found it would not matter that (if it be the case) objectively, the disposition, at that time, was not “likely” to defeat either order.

Secondly, Mr Sayer submitted that if I am unprepared to draw an inference of intention, then it is open to me to conclude, on all the evidence, that irrespective of intention the disposition was, at the time, “likely to defeat” either the existing order of Warnick J or an anticipated order in the proceedings.

Thirdly, Mr Sayers submitted that, for the purpose of considering whether the disposition had defeated or was likely to defeat the existing or anticipated order, the husband’s dissipation of the funds allegedly paid to him by the intervener should be seen as part and parcel of the disposition, rather than as a supervening event or separate transaction. In support of this submission he pointed to the fact that the consideration for the transfer was allegedly provided by the intervener to the husband in cash, and that the intervener gave evidence (in his affidavit filed on 23 March, 1999) that the money was paid to his brother “at his request to ease his financial affairs”. The submission, as I understand it, was that this evidence indicates that it was contemplated by both parties to the transaction at the time of the payment that the moneys would be dissipated “to ease [the husband’s] financial affairs”.

The Question of Intention

The circumstances which Mr Sayers pointed to as supporting an inference of intention to defeat either the existing order or an anticipated order, were:-

The fact that in the period of about eighteen months following Warnick J’s orders, and while the husband was pursuing his avenues of appeal from those orders, he divested himself of his interest in the Agnes Waters property, which was the only significant asset disclosed by him in the course of the proceedings to that date, apart from the Karragarra blocks;
The fact that, on 20 August, 1997, while enforcement proceedings were pending in relation to Warnick J’s orders, and on the very day on which his step-father was supposed to attend this court in answer to a subpoena to give evidence in those enforcement proceedings, and on which the intervener attended on the step-father’s behalf to explain his absence and produce medical certificates, the husband divested himself, by transfer in favour of the intervener, of his only remaining (previously undisclosed) asset, namely his remainder interest in the Lynnegrove Avenue property;
The fact that consideration for that transfer, in the sum of $45,000, was allegedly paid in cash, which could therefore neither be traced nor effectively verified or challenged in any way;
The fact that the husband and the intervener are brothers, both of whom are directors and shareholders of a company (Agnis Air-conditioning Pty Ltd) and that the address of the husband shown in the records of that company held by the Australian Securities and Investment Commission is the residential address of the intervener (see wife’s affidavit filed 9 December, 1998 paragraph 3) [to which I would add the fact that in his affidavit filed in these proceedings on 23 November, 1998, the husband gave, as his address, the address which is shown as that of the intervener in all documents filed by the latter];
The fact that Warnick J found, in his reasons for judgment of 22 February, 1995 (at p.4 thereof) that the husband was:-
“... highly motivated to avoid any payment for private school fees, if not maintenance generally, and this causes me concern that he may have shaped his evidence to suit his ends”,
and (at p.9 thereof) that:-
“... the probabilities are that had the husband not deliberately reduced his income he could have earned sufficient to maintain himself, make contribution to periodic child support and towards private school fees”;
The fact that in his evidence in the proceedings before Warnick J the husband breached his duty of disclosure to the Court by failing to disclose his remainder interest in the Lynnegrove Avenue property; and
The fact that in his Financial Statement apparently sworn on 10 February, 1993 and filed on 13 February, 1995, which was part of his evidence in the proceedings before Warnick J, the husband asserted (not just as an estimate, but as a fact) that each of the two Karragarra blocks was worth $14,000, when, having regard to the valuation report of Ms Stubberfield, the probabilities are that neither block had a value even approaching that figure at that time.

In paragraph 7 of his affidavit filed on 23 November, 1998, the husband explained his decision to “sell” his remainder interest in the Lynnegrove Avenue property to his brother, the intervener, as follows:-

“At the time of my decision to sell my remainderman interest to my brother I had considerable debts owing to people who had provided funds to me many of which were associated with legal fees relating to the proceedings before Justice Warnick and before the full Court and prior to that. At the time I had insufficient income on which to live. I was aware that following my mothers death there would be considerable expenditure needed in the maintenance of the property at Lynne Grove [sic.] Avenue and I had no ability to provide for that maintenance. I did not have a good relationship with my step father the life tenant, and as a result had determined that I would not go to the property. I lost interest in maintaining any proprietorship in it. I knew that my brother had the capacity to carry out repairs and maintenance that were needed. He had a considerable interest in maintaining the property and was prepared to pay me to take my interest and to relieve me of some financial burdens. Accordingly following advice from our solicitor J A Sherwood it was agreed that one third of the improved value of the property was a proper market value for the remainderman interest which I possessed.”

In paragraph 4 of the same affidavit the husband deposed to the fact that, for the purposes of the assignment of his interest to his brother, a valuation of the property was obtained, from a registered valuer, David Yearly, and a copy of Mr Yearly’s valuation report dated 13 August, 1997, in which he assigns a value of $133,000 to the property, is annexure “C” to that affidavit.

Whilst the husband has thus proffered an explanation for his decision to sell his interest in the property to his brother, he has not offered any explanation for the timing of that sale or for the fact that the consideration was paid to him in cash, rather than by cheque or some other more usual means, having regard to the quantum of the payment. In particular, although he swore that he was aware that following his mother’s death there would be “considerable expenditure needed in the maintenance of the property” which he “had no ability to provide” he did not explain why the sale was not effected until more than four years after his mother’s death.

Importantly, in my view, the husband has not sworn that the sale of his interest and the timing of it was not related to the enforcement proceedings which were then being taken against him by the wife in relation to the orders of Warnick J, which the husband had sought to resist all the way to the High Court. He has not sworn (as he could easily have done) that he did not enter into the transaction with his brother with the intention of defeating either that order or any order which might be made in the enforcement proceedings.

The intervener, in his affidavit filed on 18 March, 1999, apart from confirming that the assignment was entered into at the husband’s request and “to ease his financial affairs”, also deposed that the husband “has shown no interest or involvement in maintaining or retaining the family house”. Significantly, in my view, he too has not sworn that the transaction was not related to the enforcement proceedings, of which he was clearly aware at that time, nor that it was not his intention to save the Lynnegrove Avenue property from the possibility of attachment (to the extent of the husband’s interest in it) to meet the husband’s liability to the wife under Warnick J’s orders, of which he must also be taken to have been aware, given his awareness of the enforcement proceedings.

The other significant feature of the intervener’s affidavit, to my way of thinking, is the absence of any attempt to identify the source of the $45,000 which he allegedly paid to the husband for his interest in the property, or to explain how he came to have available to him such a large sum of money in cash. Whilst neither he nor the husband is under any legal obligation to give such evidence in these proceedings, and the legal onus of establishing the necessary intent (if relied upon) rests always upon the wife, I think there was a forensic or evidentiary onus upon the husband and the intervener to give some explanation for what, on its face, is a highly suspicious and unusual element of the transaction.

As to the significance of the timing of the transaction, Mr Page, SC, submitted that there is no evidence as to the service of the enforcement proceedings upon the husband or that he had any knowledge of those proceedings at the time of the disposition to his brother. Whilst it is true that there is no evidence of service of the enforcement summons on the husband, there is ample evidence from which it is open to me to draw, and from which I do draw, the inference that the husband was aware of those proceedings as at 20 August, 1997, when the disposition was completed.

The evidence from which I draw that inference is the following:-

On 5 June, 1997, an order was made for substituted service of the summons on the husband by delivering it to his step-father at 91 Lynnegrove Avenue, Corinda.
Between 15 and 20 August, 1997, a subpoena was issued and served upon the husband’s step-father requiring his attendance at court on 20 August, 1997, to give evidence in the enforcement proceedings.
On 19 June, 1996, the address of the husband, as disclosed by the documents lodged with the Department of Natural Resources in relation to the sale of his interest in the Agnes Waters land, was 91 Lynnegrove Avenue, Corinda (see annexure “C” to the wife’s affidavit filed on 28 September, 1998).
The address of the husband, shown in the 1998/99 White Pages telephone directory for Brisbane relative to his mobile telephone number is “91 Lynne Grove [sic.] Avenue, Corinda” (see paragraph 27 of and annexure “E” to the wife’s aforesaid affidavit).
As at 17 January, 1997, the address shown for the husband in the records of the Queensland Department of Transport relevant to the registration of his Holden Rodeo motor vehicle was “91 Lynnegrove Avenue, Corinda” (see annexure “B” to the affidavit of Patrick John Marrinan filed on 2 June, 1997).

On 17 January, 1997, Mr Marrinan wrote a letter to the husband addressed to him at 91 Lynnegrove Avenue, Corinda, in response to which he received a telephone call from the husband on 23 January, 1997, and, on 8 April, 1997, Mr Marrinan received a similar response from the husband to a further letter written and addressed to him at the same address on 4 April, 1997 (see paragraphs 4 to 6 of Mr Marrinan’s aforesaid affidavit).
On 20 August, 1997, the husband’s brother, the intervener, attended this court where he spoke to the wife and presented documents to the court on behalf of his step-father to explain the failure of the latter to attend in answer to the subpoena previously referred to (see paragraphs 5 and 6 of the wife’s affidavit filed on 9 December, 1998).
The intervener informed the wife that he attended the husband’s 50^th birthday celebration on 21 June, 1997 (see paragraph 4 of the wife’s last mentioned affidavit).
The husband and the intervener, besides being brothers, are co-directors and co-shareholders of the company Agnis Air-conditioning Pty Ltd.
The husband has not asserted in his affidavit material that at the time of the disposition to his brother he was unaware of the existence of the enforcement proceedings, and if that were the state of his mind at that time one would have expected him to say so.

Having drawn the inference that, at the time of the disposition, the husband knew of the existence of the enforcement proceedings, I also draw the inference, from the facts referred to in paragraph 30 hereof, that at the time of that disposition the husband intended, by that disposition, to defeat any order which might be made in the enforcement proceedings to attach his interest in the Lynnegrove Avenue property to satisfy his obligation under the orders of 22 February, 1995.

I have considered whether it is open to me to draw the latter inference against the husband in the absence of any cross-examination of him, which was not sought to be carried out by the wife’s counsel, and in particular without it being specifically put to him that that was his intention. However, in the circumstances of this case I consider that there is no procedural unfairness to the husband in drawing that inference, given that he has not sworn directly to the contrary of that inference, in circumstances in which one would have expected him to do so in his affidavit of evidence-in-chief.

If I am correct in drawing that inference of intention against the husband then, in accordance with the decision of the Chief Justice in Halabi v. Artillaga & Ors (supra), with which I agree, it is unnecessary to consider whether, objectively speaking, the disposition was likely to defeat either the existing order of Warnick J or any anticipated order in the enforcement proceedings. Similarly, it would be unnecessary to consider, for the purpose of deciding whether the necessary pre-requisites to the making of an order under s.85 have been made out, whether the disposition in fact defeated either the existing order or any anticipated order in the proceedings, although the answer to that question would be most relevant to the exercise of discretion under the section. However, in case I am in error in drawing that inference against the husband, it is appropriate that I consider the alternative hypothesis for the application of the section, namely whether the disposition, irrespective of the intention of the parties to it, was likely, at the time, to defeat either the existing order of Warnick J or any anticipated order in the enforcement proceedings.

Whether the Disposition was likely to defeat an existing or anticipated order

Mr Page, SC, for the husband, submitted that, in light of Jordan J’s determination, on 12 June, 1998, as to the meaning and effect of Warnick J’s order, it is impossible to conclude that a reasonable disponor, in August, 1997, would have foreseen any further order being made for the enforcement of the husband’s child support obligation beyond the provision already contained in Warnick J’s order for the sale of the Karragarra blocks. Similarly, he submitted, it would be impossible to conclude that a reasonable disponor, in August, 1997, would have objectively considered that the disposition of the husband’s interest in the Lynnegrove Avenue property would defeat Warnick J’s order, since that order provided its own exclusive method of enforcement through the Karragarra blocks.

Although that submission has a certain appeal to logic, it is not one which I accept. I accept that it is not open to me to depart from Jordan J’s determination that for the wife to have resort to the husband’s interest in the Lynnegrove Avenue property as a means of satisfying his obligation to provide lump sum child support, whilst the Karragarra blocks remain unsold, it is first necessary for her to obtain a variation of Warnick J’s orders. I am not, however, bound by all of his Honour’s reasons for coming to that conclusion. In particular, I am not bound by his opinion that those orders require the husband to provide a lump sum payment “by transferring his two (Karragarra Island) properties to the wife” or, as he later put it, that they “required [the husband] to transfer property to the wife from which a provision of lump sum maintenance would be met”. (My emphasis.)

In my respectful opinion, it is clear from Warnick J’s orders that the husband’s primary obligation, flowing from order (1), is to provide lump sum child support of $20,240 to the wife, and that the provision, in order (2), for the transfer to her of the Karragarra blocks is, as stated therein, “for the purposes of enabling payment in accordance with” order (1). I agree that once the husband complied with his obligation to transfer those lands to the wife, until they were sold and the net sale proceeds fell short of satisfying his primary obligation under order (1), and his secondary obligation for costs under order (8), he could not be said to have failed to comply with the orders (provided he otherwise complied with his obligations under them). However, none of that could detract from the husband’s primary obligation to provide lump sum child support of $20,240, and his further obligation to pay the wife’s costs of the proceedings culminating in the orders of 22 December, 1995, and in the event that the Karragarra blocks should ultimately prove inadequate for those purposes, I have no doubt that any and all other property of the husband would become liable to attachment, through the enforcement processes available under the Act and the Family Law Rules, to make up any short-fall.

In my judgment, any reasonable disponor in the position of the husband, and with his knowledge, would have readily foreseen, as at 20 August, 1997, that it was likely that the wife would eventually seek to have resort to his interest in the Lynnegrove Avenue property (once she became aware of its existence) to satisfy his obligations to pay child support of $20,240 and costs to her under Warnick J’s orders, and that it was likely that this Court would make an order of some kind attaching that interest for that purpose. In my opinion, as at 20 August, 1997, the husband could not reasonably have believed (if, indeed, he ever did believe) that the sale of the Karragarra blocks would produce enough funds to satisfy his primary obligation to pay $20,240 to the wife under order (1) of 22 February, 1995, as well as his further obligation (under order (8)) to pay her costs of the proceedings culminating in those orders which, by order (4), were to be paid from the sale proceeds after satisfaction therefrom of order (1) and before the distribution of any surplus to the husband.

As at 20 August, 1997, the husband would have been aware that he had not paid rates on that land since January, 1995 [see the wife’s affidavit filed 21 September, 1998, paragraph 7, and annexure “A” thereto, penultimate paragraph]. As at 30 June, 1997, there were unpaid rates totalling $4,930.28 in respect of the two blocks [see annexure “A” to the wife’s affidavit of 21 September, 1998], and by 20 August, 1997, those arrears would have grown to about $5,200. There is no evidence before me to establish that those two parcels of land ever had a value even approaching the $14,000 assigned to each of them by the husband in his Financial Statement filed on 13 February, 1995. He does not claim to have had a valuation to support that figure, and on the evidence of the wife’s valuer (Ms Stubberfield) and the Estate Agent (Ms Relph) it is difficult to conceive that any reasonably informed owner could have honestly believed that they could possibly achieve such a price.

In any event, even supposing that the husband could have reasonably held such a belief, by August, 1997, a sale of them even at that price could not reasonably have been thought likely to produce sufficient net proceeds to satisfy the husband’s obligations (including his costs obligation) under the orders of 22 February, 1995. From the notional gross proceeds of $28,000, there would have had to be deducted the outstanding rates of about $5,200, real estate agent’s commission on sale of about $700 per block (total $1,400), and legal and other sundry expenses (including advertising, clean-up and the like) of, say, $600 per block (total $1,200), which would notionally leave barely the $20,240 payable under order (1), without any provision for the costs payable under orders (8) and (4).

Having regard to all of those matters I am of the opinion that if, contrary to my earlier findings, the husband cannot be held to have made the disposition of his interests in the Lynnegrove Avenue property to his brother “to defeat” (i.e. intending to defeat) Warnick J’s orders of 22 February, 1995, and/or an “anticipated” further order in the proceedings, then that disposition was one which, at the time, was “likely” to defeat (in substantial part at least) both the orders of 22 February, 1995 and an “anticipated” further order in the proceedings, being one seeking to attach that interest to satisfy the husband’s obligations under the earlier orders to pay $20,240 lump sum child support and costs to the wife.

I draw some support for the conclusion expressed in the immediately proceeding paragraph from some dicta of Elliott J in Pflugradt & Pflugradt (supra) at 76,430.

The facts of that case were that in 1976, following the separation of the parties, the wife obtained an order against the husband for the maintenance of herself and the child of the marriage. The husband paid nothing under that order and, by the date of the hearing of the proceedings before Elliott J, there were accrued arrears of maintenance of some $10,000. In the meantime, in March, 1978, the husband and his father disposed of their interests, as joint tenants, in the former matrimonial home of the parties, by declaring that they held it in trust for the child of the marriage. In December, 1978, the wife instituted proceedings for property settlement, in the course of which, in May, 1979, she made an application under s.85 of the Act to set aside the disposition to the trust of the home, the husband’s interest in which was his only asset at the time of the disposition.

In ordering that the disposition be set aside under s.85, Elliott J held that at the time of the trust declaration an application by the wife at some time for a property settlement, with a consequent order, was objectively to be foreseen by the husband as being likely or reasonably probable. More relevantly, for present purposes, he also held that it was equally foreseeable to the husband at the time that the home, which was his only asset, would be resorted to by the wife for enforcement of the existing maintenance order. He then went on (at 76,430) to say this:-

“In my view, the very existence of an order which has not been complied with raises the reasonable expectation that some proceedings might be taken – and some further order made – for its enforcement at some stage. As the only property of the husband was his interest in the home, this would be the foreseeable ‘target’ against which any enforcement proceedings would be taken.”

In this case there were, as at 20 August, 1997, unsatisfied orders that the husband pay to the wife lump sum child support of $20,240 plus costs which (although not quantified in the evidence before me) would clearly have been quite substantial. Although his interest in the Lynnegrove Avenue property was not the husband’s only asset at that time, his only other asset (viz. the Karragarra blocks) was, objectively speaking, unlikely to provide sufficient funds for the satisfaction of those orders. Accordingly, like Elliott J in that case, I consider the very existence of those unsatisfied orders (not to mention an unsatisfied order of the Full Court of 31 October, 1986 that the husband pay the wife's costs of the appeal to that Court in the sum of $4,907.19: see annexure “C” to and paragraph 5 of Mr Marrinan’s affidavit filed on 2 June, 1997) raised a reasonable expectation that some further proceedings might be taken, and some further order made, at some stage, for the enforcement of those unsatisfied orders.

I also reject Mr Page, SC’s submission, based upon Australian and New Zealand Banking Group Ltd v Harper (supra), to the effect that it is not the disposition to the intervener which defeated or was likely to defeat any order, but the husband’s subsequent dissipation of the proceeds of that disposition.

In my opinion, Australian and New Zealand Banking Group Ltd v. Harper (supra) turned on its own particular facts and is distinguishable from this case, the facts of which are nearer to those in Heath & Heath: Westpac Banking Corporation (Intervener) (1983) FLC 91-362 (Nygh J) and Heath & Heath (No.2) (1984) FLC 91-517 (Full Court – Evatt CJ, Simpson & Fogarty JJ) which was referred to, with apparent approval, but distinguished, by Simpson and Nygh JJ in their joint judgment in Australian and New Zealand Banking Group Ltd v Harper (supra) at 76,782-3.

The facts in Heath’s case were these:

In 1981, the wife instituted proceedings under s.79 of the Act for an order that the husband transfer to her certain property free of encumbrance. While the proceedings were pending the husband gave an undertaking not to sell, mortgage or otherwise encumber the property until further order.
In June, 1982, the parties agreed to settle the proceedings. In the same month the husband applied to the Westpac Bank for a loan, ostensibly for the purpose of paying to the wife the amount agreed under the settlement. The bank was aware that there was litigation pending between the husband and wife in relation to the property, the husband having kept it informed of those proceedings, but without disclosing the undertaking which he had given. The bank approved the loan, and it took a second mortgage over the property as security. The husband received the advance from the bank, but did not apply the funds towards the settlement in favour of the wife (from which he resiled) but dissipated them. The wife applied for an order under s.85 setting aside the bank’s second mortgage.

At first instance, Nygh J held that the mortgage to the bank was a disposition which was likely to defeat an anticipated order in the s.79 proceedings. He also held that although the bank was a “purchaser for valuable consideration” it was not “a bona fide purchaser”, within s.85(3) of the Act, because it had been put on notice by the husband of the wife’s property claim and due search and enquiry would have made it aware that the granting of the mortgage may defeat the wife’s claim. He held, however, that the bank was an “other person interested”, within s.85(3), but that the degree of protection to be provided to such a person is a matter of discretion, and in the circumstances of this case, the second mortgage should be set aside notwithstanding that no protection could be granted to the bank having regard to the quantum of the wife’s entitlement under s.79 relative to the value of the property and the extent of the first mortgage.

In the course of his judgment (at 78,424-5) Nygh J referred to and re-affirmed the view which he had expressed in his earlier judgment in the case of Whittaker & Whittaker (1980) FLC 90-813, to the effect that it is not enough to invoke the power given by s.85 to set aside the disposition “to show that the disposition in effect defeats the order”, but rather that “there has to be some causal connection between the disposition and the eventual defeat”. He added:-

“Thus if the order would have been defeated in any event by some other supervening event, such as the bankruptcy of the husband as in Whittaker’s case, it could not be said that it was the disposition which defeated the orders.”

From that judgment the bank appealed, unsuccessfully, to the Full Court: Heath & Heath (No.2) (supra). In dismissing the appeal the Full Court (Evatt CJ, Simpson and Fogarty JJ) said this (at 79,193-4) with respect to the very point made in the submission of Mr Page, SC, to which I have earlier referred:-

“Counsel for the appellant submitted that his Honour was in error in answering in the affirmative the question that he posed himself, namely, ‘whether the security is likely to defeat any order, irrespective of intention’. It was argued that it was not the mortgage that had the effect of defeating any order in favour of the wife but rather the conduct of the husband in dissipating the amount of the advance made to him by the appellant. It was submitted that at the time the husband entered into the mortgage there was nothing to suggest to the appellant that the husband intended to dissipate the funds paid to him nor, for that matter, that he would be unable to repay the mortgage debt.
In our view that submission is without foundation. The mortgage (the relevant ‘instrument or disposition’) encumbered the husband’s interest in the very property the wife was seeking to have transferred to her. In those circumstances we consider that the execution of the mortgage by the husband was ‘likely to defeat’ any order that might be made in favour of the wife in respect of that property. It is not to the point to say that the husband received valuable consideration in exchange for the encumbrance to which his equity in the unit was subjected. The evidence as to what in fact occurred demonstrates quite clearly the effect of the husband receiving liquid funds which he could dispose of as he thought fit in exchange for the further charge on his property.”

In the instant case, although the husband’s interest in the Lynnegrove Avenue property was not “the very property” against which the wife was seeking an order at the time of the disposition, it was the only property of the husband which was then available to be made the subject of a further order, which would probably be necessary to obtain full satisfaction of the orders of Warnick J of 22 February, 1995 and the Full Court of 31 October, 1996. Thus the disposition by the husband to the intervener of that interest put beyond the reach of the Court (save for the effect of s.85) the one property against which it would ultimately be necessary to have resort in order to obtain that satisfaction, and replaced it with a fund of cash in the husband's hands which he became instantly free to dispose of as he saw fit without fear or prospect of its being traced or recovered. Thus, in my judgment, the disposition of the property interest cannot be separated, or looked at in isolation, from the cash payment which accompanied it and which enabled the disposition to effectively defeat any order which might be anticipated in the proceedings. I therefore hold that the disposition to the intervener was likely to defeat and (but for an exercise of power under s.85) would have the effect of defeating any anticipated order in the proceedings at the time to which I have referred.

For all of the above reasons I reject the submissions for the husband, and hold that the necessary prerequisites for the exercise of the power conferred on the Court by s.85 of the Act had been established.

The Exercise of Discretion

So far as the husband and the wife are concerned, there are no relevant factors which I have been referred to or which I have been able to identify which would call for an exercise of discretion against the setting aside of the disposition in question. Suffice to say that, so far as the merits of those parties are concerned, they are all on the side of the wife. The only possible impediment to an affirmative exercise of the discretion is the position of the intervener, and the requirement of s.85(3), to a consideration of which I now turn.

Protection of the Intervener

I have considerable doubt, on all the evidence before me, that the intervener ever paid the husband $45,000 for the transfer of his interest in the Lynnegrove Avenue property. But even if he did, having regard to the matters which I referred to in paragraphs (i), (ii), (iii) and (iv) of paragraph 30, in paragraphs 35 and 36, and in sub-paragraphs (vii), (viii) and (ix) of paragraph 38 hereof, I am not satisfied that he is a “bona fide purchaser” within the meaning of s.85(3). Applying the test espoused by Nygh J and approved by the Full Court in Heath’s case (supra), in my opinion the intervener either was aware at the time of the disposition, or would have been aware by making due enquiry of his brother, that the disposition was likely to defeat an anticipated order in the proceedings in favour of the wife.

Assuming (without deciding) that the intervener is an “other person interested” within s.85(3) (as to which see the discussion of Nygh J in Heath (supra) at 78,427), it is clear, both from his Honour’s judgment, and that of the Full Court in Heath (No.2) (supra) at 79,196, that the inability of the Court to make any order for the protection of such a person is not an insurmountable obstacle to the making of an order under s.85(1). It is merely a factor to be taken into account in the exercise of discretion under the section, which discretion is wide enough to enable an order to be made notwithstanding the inability to make a protective order under sub-s.(3).

In this case, having regard to all of the circumstances, including the nature of the relationship between the husband and the intervener, and the nature of the transaction (with particular reference to the cash payment involved) I conclude that it would be proper to exercise the discretion in favour of setting aside the relevant disposition even if it were not possible to make any order to protect the intervener.

Fortuitously, however, it is possible to make an order which would provide some measure of protection to the intervener because of the fact that the life tenant of the Lynnegrove Avenue property is now deceased, and the remainder interest under the will of Elisabeth Milenkovic has now vested in possession. If I am to set aside the disposition, I can and should order the husband to repay to the intervener the $45,000 which they both claim was paid by the latter to the former. As the husband will then have a vested interest as joint tenant in the property, which interest will have a value of at least $66,500, and as his indebtedness to the wife under the orders of 22 February, 1995 (including costs) and under the Full Court’s order of 31 October, 1996, is unlikely to exceed, say, $35,000, there should be some further equity in that interest against which the husband’s liability to the intervener can be secured by an appropriate order. That security, however, should rank in priority after the security to be provided to the wife over that interest (provided, of course, that I decide that Warnick J’s order should be varied in the way sought by the wife in her amended application referred to in paragraph 17 hereof).

Conclusion as to Discretion

Accordingly, subject to my concluding that the variation sought by the wife of the original orders of 22 February, 1995 should be made, I propose to exercise my discretion to set aside the assignment of 20 August, 1997, whereby the husband disposed of his remainder interest in the Lynnegrove Avenue property to the intervener. On the same contingency, I propose to further order that the husband refund the consideration of $45,000 allegedly paid by him to the intervener for that assignment, with such repayment to be secured against the husband’s interest as joint tenant in the property but subject to and ranking in priority after the charge in the wife’s favour over that interest created by the amended order.

THE VARIATION APPLICATION

In opening his client’s case at the hearing, Mr Sayers referred to s.66S of the Act as the source of the Court’s power to vary the orders of 22 February, 1995. That section, so far as relevant, provides:-

“(1)     This section applies if:
(a)there is in force an order (the first order), for the maintenance of a child (whether or not made under this Act and whether made before or after the commencement of this section):
(i)        made by a court; or
(ii)        registered in a court under the Rules of Court; and
(b)a person (being someone who could apply for a child maintenance order in relation to the child) applies to the court for an order under this section in relation to the first order.

(2) The court may, by order:
........................................................................................................................
(d) subject to subsection (3), vary the order:
(i)so as to increase or decrease any amount ordered to be paid by the order; or

(ii) in any other way.”

Although the power to vary given by s.66S(2)(d) is “subject to subsection (3)”, that subsection applies only where the variation sought is “so as to increase or decrease any amount ordered to be paid”, and as that is not the case here, subsection (3) has no operation in the context of this case.

In his submissions, Mr Page, SC, for the husband argued that s.66S of the Act has no application to this case because there is not, as required by subs.1(a), “in force an order ... for the maintenance of a child”, but rather an order for child support under the C.S.A. Act. He further submitted that, since the orders of 22 February, 1995 were made under s.124 of the C.S.A. Act, the question of variation of that order is governed by s.129 of that Act, which, relevantly, provides:-

“(1) If an order under section 124 is in force in relation to a child (whether or not all things ordered to be done by the order have been done):
(a) the court that made the order; or
(b)another court having jurisdiction under this Act in which the order has been registered;

may under this section, by order:
............................................................................................................................
(f)subject to subsection (3), vary the order (including any statement included in the order under section 125) in any way.

(2) The court must not make an order under subsection (1) in relation to the order under section 124 unless the court is satisfied, having regard in particular to any statement included in the last-mentioned order under section 125, that it would be:
(a)just and equitable as regards the child, the carer entitled to child support and the liable parent concerned; and

(b) otherwise proper;
to make the order.
(3) The court must not, by order under subsection (1), vary an order unless it is also satisfied:
(a)that making the variation is justified because of a change in the circumstances of the child, the carer entitled to child support or a liable parent concerned since the order was made or last varied; or

(b)that the custodian entitled to child support has made an application under section 128 and the order is no longer proper or appropriate; or

(c)that making the variation is justified because of a change in the cost of living since the order was made or last varied; or

(d)in a case where the order was made by consent--that the order is not proper or adequate; or

(e)that material facts were withheld from the court that made the order or from a court that varied the order, or that material evidence previously given before such a court was false.

(4) If the court proposes to vary the order otherwise than by varying any statement included in the order under section 125, the court must consider whether, having regard to the proposed variation, it should also order the variation of any such statement.
(5)       In determining whether it would be just and equitable as regards the child, the carer entitled to child support and a liable parent to make an order under subsection (1), the court must have regard to the matters mentioned in subsections 117(4), (6), (7) and (8).
(6)       In determining whether it would be otherwise proper to make an order under subsection (1), the court must have regard to the matters mentioned in subsection 117(5).
(7)       Subsections (5) and (6) do not limit the matters to which the court may have regard.”

Although Mr Sayers, for the wife, submitted that s.66S of the Act is available as a source of power in this case through the operation of s.100 of the C.S.A. Act (much in the way that Jerrard J determined that s.85 of the Act is available in this case as a source of power to set aside dispositions), he did not ultimately press that submission very strongly (although he did not abandon it). Rather, he took the stance that, even assuming the correctness of Mr Page, SC’s, submission that s.129 of the C.S.A. Act applies, his client’s application should be granted under that section.

Given the position ultimately adopted by Mr Sayers it is not necessary for me to determine, definitively, whether s.66S of the Act is available as a source of power to vary the order of 22 February, 1995. As at present advised, however, my inclination is to hold that it is not. The limits of the scope of the operation of s.100 of the C.S.A. Act (which I find it unnecessary to quote), but which broadly provides that, with a presently irrelevant exception, the provisions of the Family Law Act and the Family Law Rules apply to most proceedings under the C.S.A. Act as if they were proceedings of various kinds under Part VII of the Family Law Act) have not yet been authoritatively determined by the Full Court. However, whatever the scope of that section may be, I doubt very much that it is intended to import into the C.S.A. Act substantive provisions of the Family Law Act, at least in circumstances where there is a substantive provision of the C.S.A. Act itself covering the particular area in question. Since s.129 of the C.S.A. Act sets out, in considerable detail, the circumstances in which a court may vary an order made under s.124 (as the orders of 22 February, 1995 are), I would be very surprised indeed if the legislature, in enacting s.100 of that Act, intended to provide a parallel (but significantly different and in some respects wider) jurisdiction to vary such orders through the side door of the Family Law Act. If one adds to that the necessity to read “an order ... for the maintenance of a child” in s.66S as including an order for lump sum child support made under s.124 of the C.S.A. Act, the obstacles to the applicability of s.66S to this case become even greater.

Accordingly, I propose to approach the variation application of the wife on the basis that it is made pursuant to s.129 of the C.S.A. Act, and must stand or fall upon the application of the provisions of that section to the facts of the case.

In making his submissions in support of the application upon the assumption that s.129 of the C.S.A. Act applies, Mr Sayers relied, firstly, upon s.129(1)(f), which empowers the Court “subject to sub-section (3)” to vary the order “in any way”. With reference to sub-s.(3), which precludes the making of a variation order unless the Court “is satisfied” or certain things, he relied upon paragraph (e) thereof, which enables the Court to exercise that power if it is satisfied “that material facts were withheld from the court that made the order ... or that material evidence previously given before such a court was false.”

Mr Sayers then pointed to the husband’s two financial statements filed prior to and for the purpose of the proceedings before Warnick J on 22 February, 1995, the first of which was filed on 4 May, 1994, and the second on 13 February, 1995. He submitted, quite correctly, that in neither of those documents did the husband disclose his interest in remainder in the Lynnegrove Avenue property, which he clearly had from the date of his mother’s death on 16 April, 1993 and which was clearly a valuable asset (being one which he was able to “sell” to his brother for $45,000 in August, 1997). Mr Sayers submitted, and I accept, that the husband’s ownership of that valuable piece of property was a “material fact” which he thus “withheld” from the Court (Warnick J) that made the order on 22 February, 1995. Such a significant asset was clearly “material” to the proceedings before Warnick J on that date.

Whilst there may possibly have been some excuse for the omission of reference to that asset in the financial statement filed on 13 February, 1995, arising from the fact that, on its face, it appears to have been sworn on 10 February, 1993 (two years before its filing), and at that time Mrs Elisabeth Milenkovic was still alive, the same does not apply to the one filed on 4 May, 1994, which was sworn on 3 May, 1994, more than twelve months after Mrs Milenkovic’s death. Moreover, I think it highly unlikely that the financial statements filed in February, 1995 was in fact sworn in February, 1993 and it is more likely that the swearing date shown contains a typographical error. Alternatively, it is the responsibility of the party who files a document to ensure that it is correct as at the date of filing, whatever may have been the case at the date of swearing.

Not only did the husband thus withhold material facts from the Court that made the orders on 22 February, 1995, he also gave “material evidence” in those proceedings which was “false”, within s.129(3)(e). Each financial statement, which fails to disclose his interest in the Lynnegrove Avenue property, contains the following statements sworn by the husband to be true, but which was clearly false:-

“I have no assets or income or any interest in a superannuation fund or deceased estate or trust present or future other than set out in my statement.”

In my opinion, it matters not, for the purposes of s.129(3)(e) of the C.S.A. Act, whether the evidence previously given was false by mere innocent oversight or deliberately or wilfully false. In Taylor v Taylor (1979) 53 ALJR 629; (1979) FLC 90-674, the High Court (Gibbs, Stephen, Mason, Murphy and Aiken JJ) held, in relation to s.79A of the Family Law Act (which empowers the court to set aside an order made under s.79 where there has been a miscarriage of justice by reason of, inter alia, “the giving of false evidence”) that it was not necessary to establish that the relevant evidence was wilfully false, but only that it was false. It is true that part of the reasons given by Gibbs J (with whose judgment Stephen J agreed) and by Mason J (with whose judgment Aiken J agreed) for coming to that conclusion was the fact that the sub-section also includes specific reference to “fraud” and “the suppression of evidence”, which terms would “comprehend cases of wilfully false evidence” (per Mason J at FLC 78,594). However, both of those learned Judges held that there was no reason to read into the expression “false evidence” a qualification not expressed in the section. For the same reason, and also by analogy, I regard “false” in s.129(30(e) of the C.S.A. Act as having no connotation of wilfulness or fraud.

Having thus concluded that s.129(3)(e) is satisfied, I pass to consider the requirements of sub-ss.(2), (4), (5), (6) and (7) of that section.

Sub-section 129(4)

By order (7) of his orders of 22 February, 1995, Warnick J included a statement under s.125 of the C.S.A. Act, as he was obliged by sub-s.(1) to do. In the exercise of his discretion he concluded that it was appropriate that that statement should be that no part of the lump sum child support payable under his order (1) should be credited against the husband’s child support liability under any relevant assessment. He did so because the lump sum order which he made was sought only to cover, and intended only to cover, half the cost of the private school fees for the three children of the marriage from 1993 to 1999 (see his reasons for judgment at p.10). As the only variation to his Honour’s orders proposed by the wife is the addition of a provision which would enable her to obtain access to the husband’s interest in the Lynnegrove Avenue property to satisfy order (1), and no variation of the total amount payable under order (1) is sought, I can see no basis for also making an order varying his Honour’s statement under s.125.

Section 129(2), (5), (6) and (7)

Sub-section (2) prohibits the making of an order under sub-s.(1) unless the Court is satisfied as to the matters set out therein (“just and equitable” and “otherwise proper”). Sub-section (5) then obliges the Court, in considering whether it is “just and equitable” to make the order, to have regard to the matters mentioned in sub-ss.117(4), (6), (7) and (8), whilst sub-s.(6) requires that in deciding whether it is “otherwise proper” to make the order, regard be had to the matters mentioned in sub-s.117(5). Sub-section (7) effectively enables the Court to have regard to any other matters which it considers relevant in deciding whether it is just and equitable or otherwise proper to make the orders.

“Just and Equitable”?

The matters referred to in sub-ss.117(4), (6), (7) and (8), to which attention is directed by sub-s.129(5), are well known, in the context of proceedings for departure from child support assessments under the C.S.A. Act, and need not be quoted at this point in this judgment. Many of those matters are of limited relevance to this case, where the variation being sought is not one which affects the quantum of the husband’s liability to pay lump sum child support, but only the effectiveness of that liability as imposed by the existing orders. Nevertheless, having regard to such of those matters as appear to be relevant to that issue, I have no doubt that it is “just and equitable” as regards the children, the wife and the husband that the variation sought by the wife be made. If it is not made, then, having regard to the evidence now before the Court as to the value and marketability of the Karragarra blocks, it is virtually certain that the object of Warnick J’s orders (namely that the husband provide lump sum child support for his children in respect of their school fees in the sum of $20,240 and that the husband pay the wife’s costs of the proceedings under the C.S.A. Act) will be frustrated. There is nothing whatsoever in the evidence before me which even suggests that such an outcome would be “just and equitable” within the meaning of s.129(2)(a).

“Otherwise Proper”?

Again, the matters referred to in sub-s.117(5), to which attention is directed by sub-s.129(6), are well known in a different context, and need not be quoted here. A failure to make the variation orders sought in this case would effectively enable the husband to avoid his obligation, as assessed by the Court, to pay a proper level of child support for his children. That result would not pay proper regard to the nature of the duty of a parent (viz. the husband) to maintain his children, as stated in s.3 of the C.S.A. Act.

The making of the variation orders sought may have no effect on any entitlement of the wife or children to receive any income tested pension or allowance or benefit, or upon the rate of any such pension, allowance or benefit payable to any of them. If the making of the variation sought has the ultimate effect of enabling the wife to recover what is due to her under the orders of 22 February, 1995, the only possible effect that could have upon the entitlement to or rate of any pension, allowance or benefit to which she or the children may be entitled would be by way of reduction, which would be beneficial to the public purse, and therefore in the interest of the public.

Accordingly, I am satisfied that it is “otherwise proper” to make the variation sought by the wife, as required by sub.-s.129(2)(b) of the C.S.A. Act.

CONCLUSIONS

For all of the foregoing reasons, I conclude that the proper exercise of my discretion under s.129(1) of the C.S.A. Act, is to make the variation of Warnick J’s orders of 22 February, 1995 sought by the wife. As it was common ground that such a variation would be pointless without an order under s.85 of the Family Law Act setting aside the husband’s disposition to the intervener of his remainder interest in the Lynnegrove Avenue property, and as I have previously concluded that I have power to make such an order and that, in the proper exercise of my discretion, I should do so, I shall make that order also.

ORDERS

Subject to any submissions by any of the parties as to the precise form of the orders, I propose to make the following orders, or orders to this effect:-

That the assignment made by the husband to the intervener of his estate and interest in the land at 91 Lynnegrove Avenue, Corinda, Brisbane, being Lot 1 on Registered Plan 62088, in the County of Stanley Parish of Oxley, evidenced by the Deed of Assignment between them dated 20 August, 1997, a copy whereof is annexed to the affidavit of the husband filed herein on 23 November, 1998, be and the same is hereby set aside.
That the husband and the intervener, at their cost, do all things necessary for them to become registered as proprietors of an estate in fee simple as tenants in common in equal shares in the land referred to in order 1 hereof pursuant to the will of Elisabeth Milenkovic deceased, and consequent upon the death of Adam Milenkovic, both late of 91 Lynnegrove Avenue, Corinda aforesaid.
That each of the husband and the intervener, at their cost, do all such acts and things and execute all such documents as may be necessary to give effect to orders 1 and 2 hereof, and in the event that either of them refuses or neglects to do any such act or thing or execute any such document within ten (10) days of the posting, by ordinary prepaid post, to their last known address, of a written request so to do, a Registrar or Deputy Registrar of this Court is hereby appointed to do any such act or thing or execute any such document in the name of the party so refusing or neglecting, and the costs of and incidental to all steps necessarily taken under this order to give effect to orders 1 and 2 hereof shall be paid by the party so refusing or neglecting.
That until further order, each of the husband and the intervener is hereby restrained, and an injunction is hereby granted restraining them, their servants and/or agents from selling, disposing of, encumbering, further encumbering, or otherwise dealing in any way with the property referred to in order 1 hereof, save in accordance with and for the purposes of giving effect to these orders and the orders of The Honourable Justice Warnick of 22 February, 1995 as varied by these orders.
That the said orders of 22 February, 1995, be varied by adding thereto the following further paragraphs:-
“(11)That, without prejudice to orders (2) to (6) hereof, the whole of the husband’s estate and interest in the property situated at 91 Lynnegrove Avenue, Corinda, Brisbane described as Lot 1 on R.P.62088, in the County of Stanley, Parish of Oxley, be and is hereby charged in favour of the wife with payment of the amount referred to in order (1) hereof, and with payment of the costs payable by the husband under order (8) hereof, together with any interest payable upon either amount pursuant to s.117B of the Family Law Act 1975; and
(12)That the husband do all such acts and things and execute all such documents as may be necessary to effect the charge referred to in order (11) hereof (including, if the wife so requests, the provision of a consent caveat over his estate and interest in the said land), and in the event that he refuses or neglects to do any such act or thing or execute any such document, within ten (10) days of the posting, by ordinary prepaid post, to his last known address, of a written request so to do, a Registrar or Deputy Registrar of this Court is hereby appointed to do any such act or thing or execute any such document in the name of the husband, and the costs of and incidental to all steps necessarily taken under this order shall be paid by the husband.”
That upon compliance by the husband and the intervener with orders 1 and 2 hereof, and subject to compliance by the husband with order (12) of the orders of 22 February, 1995, as varied by order 5 hereof, the husband pay to the intervener the sum of $45,000, in repayment of the consideration for the assignment referred to in order 1 hereof.
That payment by the husband to the intervener of the sum of $45,000 pursuant to order 6 hereof, be and is hereby charged against the husband’s estate and interest in the land referred to in order 1 hereof, such charge, however, to rank in priority after the charge in favour of the wife pursuant to order (11) of the orders of 22 February, 1995 as varied by these orders.
That each party have liberty to apply upon two (2) days notice in writing to the other parties.

COSTS

I shall consider any issues of costs of and incidental to these proceedings, which may be raised by the parties, at the time of delivery of this judgment, or alternatively, if the parties prefer, I will make directions for the determination of those issues at some later date.

[1999] FamCA 2087

16 November 1999