Karbines and Karbines and Anor (No. 2)

[2008] FamCA 547

FAMILY COURT OF AUSTRALIA

KARBINES & KARBINES AND ANOR (NO. 2) [2008] FamCA 547

FAMILY LAW – PROPERTY – claim by intervener against husband – intervener claims suffered loss due to husband’s dealings with property in which intervener holds interest –claims for increase in mortgage sum, loss of market value rent, removal of fixtures and unpaid rates in relation to property – claim pursuant to s 588G of Corporations Act 2001 (Cth) – whether “reasonable grounds” for suspecting company insolvent – whether husband liable for increase in mortgage sum – failure to establish quantum of damages caused by removal of fixtures – loss of market value rent – whether actions of husband give rise to equitable estoppel – Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 cited – intervener induced by husband’s assurances and suffered detriment – intervener entitled to payment by husband for loss of rent.

Family Law Act 1975 (Cth)
Corporations Act 2001 (Cth) s 588G & 588S

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387

APPLICANT: Mr Karbines

RESPONDENT: Mrs Karbines

INTERVENER: Mr Willa

FILE NUMBER: MLF 2479 of 2005

DATE DELIVERED: 17 July 2008

PLACE DELIVERED: Adelaide

PLACE HEARD: Mount Gambier

JUDGMENT OF: Dawe J

HEARING DATE: 27 May 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: N/A

SOLICITOR FOR THE APPLICANT: Self-Represented

COUNSEL FOR THE RESPONDENT: Mr A L Jordan

SOLICITOR FOR THE RESPONDENT: Maddens Solicitors

COUNSEL FOR THE INTERVENER: Mr Bersee

SOLICITOR FOR THE INTERVENER: Herman Bersee

Orders

1. That within 28 days from today the husband pay to Mr Willa the sum of TWENTY THREE THOUSAND FOUR HUNDRED AND FORTY SIX DOLLARS [$23,446.00].

2. And it is noted:

   (i)that before any monies from the proceeds of sale of the G properties in the State of South Australia are paid to the husband, the Court will require the husband to provide proof of compliance by him with this order for payment;

   (ii)if payment has not been made the Court will consider ordering such payment directly from any share otherwise payable to the husband.

3. I adjourn any further consideration of the question of costs to a date to be fixed upon application by the solicitor for the Intervener.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: MLF 2479  of 2005

MR KARBINES

Applicant

And

MRS KARBINES

Respondent

And

MR WILLA
Intervener

REASONS FOR JUDGMENT

Introduction

1. One of the interveners, Mr Willa, seeks orders which provide in total for the husband to pay to Mr Willa the sum of $34,596.35 plus costs.  The husband opposes the orders sought.

2. The claim relates to losses Mr Willa claims to have suffered as a result of the husband’s dealings with the property at 558 S in Victoria (the S property).  Mr Willa owned a one-third interest in the property.  The other registered owners were Karbines Management Services Pty Ltd as Trustee for P and S Karbines Family Trust (Mr P Karbines is the brother of the husband) and C Pty Ltd (now in liquidation).

3. For reasons which I gave on the 27 May 2008 I found that I had jurisdiction and it was appropriate to exercise that jurisdiction in relation to the claims made against the husband by Mr Willa.

Hearing

1. I heard the evidence and submissions in this matter on the 27 May 2008 sitting in Mount Gambier.  Mr Willa, the first named second intervener was represented by Mr Bersee.  The husband appeared in person.  The wife was represented by Mr Jordan.

2. I received the affidavits of Mr Willa filed on the 3 December 2007 and the 20 February 2008.  Mr Willa gave oral evidence and was cross-examined.  During his evidence I received the exhibits 41, 42, 43 and 44.

3. Mr Willa relied upon the affidavit evidence of Mr E filed on the 11 February 2008. Mr E calculated the excessive interest component payable on sale of the property.  Mr E was not required for cross-examination.

4. I also received the affidavit of Mr N filed on the 21 May 2008.  He provided his opinion as to the market rental value of the S property as at the 21 June 2007.  Mr N was not required for cross-examination.

5. The husband relied upon his affidavit filed on the 4 April 2008.  He gave oral evidence and was cross-examined by Mr Jordan and Mr Bersee.  He gave brief evidence in re-examination.

6. I heard final submissions of Mr Jordan and Mr Bersee and in conclusion the husband.

Background and Chronology

1. The husband and wife have been involved in proceedings for property settlement in the Family Court of Australia since August 2005. 

2. The husband and wife were married in April 1983.

3. C Pty Ltd was incorporated in November 1987.  In December 1987 the Karbines Family Trust was established.

4. From approximately 1991/1992 Mr Willa was employed by C Pty Ltd.  In about January 2007 the husband terminated Mr Willa’s employment with the company.

5. In 1995 the property at S (the S property) was purchased by C Pty Ltd as to one-third, the husband’s brother P’s Family Trust as to one-third and the remaining one-third by the applicant in these proceedings, Mr Willa.  Monies were borrowed from Westpac Bank and secured by way of mortgage over the S Property.

6. A lease was signed which provided that C Pty Ltd would rent the premises from the 1 January 1998 until the 31 December 2002.  Towards the end of this lease rent payments were $4,667 per month.  This agreement was based upon the rent being applied to discharge the loan obligations to Westpac Bank.  The lease also provided that C Pty Ltd could remain in occupation of the premises at the expiration of the lease on a monthly tenancy.

7. Following the separation between the husband and the wife from about the beginning of 2006 the husband resided at the S property. 

8. In July 2006 the husband, purporting to act as a director of C Pty Ltd, allegedly transferred part of the business of C Pty Ltd, the electronic section (its machinery, liquid stock “all existing customers”, stationery and records”) to a Mr O.  At the same time the husband, again in circumstances where he purported to act as a director for C Pty Ltd, transferred to Mr T or a business allegedly operated by him to be called C Australia Pty Ltd “All stock of [the company’s product] and parts thereof;  all machinery for [production of a product] and [a service of the company] with stock;  all existing customers;  all stationary (sic) including the new  server and the invoicing computers showing previous customers”.  This was the business previously operated by C Pty Ltd.

9. A document prepared and signed by the husband (but not signed by Mr T) suggest that this agreement is made “because [C] Pty Ltd is not able to carry on business due to a company dispute”.  The husband admitted in evidence that this was in fact the matrimonial dispute.

10. In February 2007, C Pty Ltd was placed in liquidation by the order of the Supreme Court of South Australia.

11. Since the 1 July 2006 no regular payments to Westpac to reduce the mortgage have been made, save and except in March 2007 and April 2007 when two payments of $4,665 each were paid to Westpac Bank in reduction of the mortgage by DT Pty Ltd (a company incorporated in November 2006 of which the husband is the sole director and secretary).  There is a dispute as to the actual ownership and control of DT Pty Ltd.  This is one of the issues to be determined in the overall property settlement proceedings between the husband and wife.

12. The S property was sold in August 2007.  Settlement took place on the 2 November 2007.  On settlement the mortgage was discharged.  Mr Willa received one-third of the net proceeds of sale.

13. Since early 2007, Mr Willa, personally and through his solicitors, was involved in negotiations with C Pty Ltd and the husband concerning the S property.

14. In February 2008, Mr Willa, through his solicitors, filed the first “Particulars of Claim” which were later amended in May 2008.

Particulars of Claim

1. The solicitors for Mr Willa filed amended Particulars of Claim on the 26 May 2008.  (Document 146).

(a) Claim under Corporations Act

1. In the Amended Particulars of Claim filed on the 26 May 2008 paragraph 11 states:

   “11.In the circumstances where the Husband knew that [C Pty Ltd] could not pay its debts and was insolvent and by allowing [C Pty Ltd] to continue to occupy the [S] Property from about the 1^st July 2006 until the date of its liquidation on or about the 13^th February 2007 the Husband as Director of [C Pty Ltd] was in breach of Section 588G of the Corporations Act as amended and as such is personally liable for the rent and loan default.”

(b)      Increase in Mortgage Sum

1. The first amount claimed by Mr Willa from the husband is the sum of $20,584.27 which is described as “1/3^rd of excess funds required to discharge mortgage over [S] Property”. 

2. The calculation of this sum is confirmed by the accountant, Mr E, who examined the documents in relation to the sale of the S property, the Westpac Business Development Loan and repayments.

3. Neither the husband nor the wife challenged the calculations of Mr E nor the conclusions reached from the documents namely;  that because of the default in payment of the regular mortgage payments when due, the amount required to discharge the loan was $61,752.82 more than that which would have been payable if the mortgage payments had been made on time.  The husband asserts that the payments were due by C Pty Ltd which is now in liquidation.  He opposes any order being made against him personally.

(c)       Loss of Market Value Rent

1. The next amount claimed by Mr Willa is the sum of $9,562.67 which is described as “1/3^rd of loss of rental at market value due to husband’s occupancy of the [S] property from and including July 2006 until and including October 2007”.  This claim is based upon the valuation opinion of Mr N, that as at June 2007 the market rent for the property at S was “approximately $77,500 per anum”.  ($6,458.33 per month).  Mr Willa claims that from the 1 July 2006 until the 31 October 2007 (the latter being approximately the date of settlement of the sale of the S property on the 2 November 2007) the husband resided in the premises and excluded Mr Willa from access to the premises. 

2. Mr Willa alleges that the husband made representations to him that rent would be paid for the premises.

3. It is claimed that these actions by the husband prevented the premises from being rented at their true rental value thus causing a further loss to Mr Willa of one-third of the difference between the amount paid and the market rent as valued.

(d)      Removal of Fixtures

1. The next amount claimed by Mr Willa is the sum of $3,333.33 which is one-third of the value claimed by Mr Willa for the “wrongful removal by the husband of the reception counter and gravity pump on separator” previously situated at the S property.

2. The husband admits removing these items but does not accept the amount claimed by Mr Willa. 

(e)       Unpaid Rates

1. The other two amounts claimed by Mr Willa are “Reimbursement of Council rates, 1/3^rd share” $868.19 and “Reimbursement of water rates, 1/3^rd share” $247.89 being the council rates and water rates payable on sale of the property which Mr Willa asserts should have been paid by the husband because he was occupying the property and preventing the leasing of the property.

2. The husband does not dispute the amounts which were paid and adjusted at the time of settlement of sale of the S property, but disputes the amounts are payable by him to Mr Willa.

Evidence and Findings

1. When giving evidence the husband conceded “that could be right” when asked whether C Pty Ltd stopped paying rent for the S property in June 2006.  The husband also admitted that he had not asked Mr T, (whom he asserts is the sole shareholder in the company DT Pty Ltd) to pay rent, saying that he (the husband) told him (Mr T) “don’t worry” in reference to the rent.  The husband told Mr T that he, the husband, would pay back a “load of rent” at a later time.  He also conceded that he had asked Mr T or DT Pty Ltd to pay some rent, “and he did”.  This is a reference to the two payments for $4,665 paid in reduction of the mortgage by DT Pty Ltd in March and April 2007.

2. During cross-examination the husband admitted that from about mid 2006 C Pty Ltd had stopped trading and that either the husband or “some other company” was running the business.

3. Mr Willa’s affidavit filed on the 20 February 2008 (document 136) says in paragraph 9, 10 and 11:

   “9.In or about June 2006 [C Pty Ltd] stopped making the rent payments.  I became aware of this in about August 2006 when I received a letter demanding payment from Westpac.  As soon as I got the letter I raised it with the Husband and he assured me that by September his divorce including a property settlement would be finalised at which point he would refinance and pay the arrears and continue with the lease.

   10.… and with the threat of foreclosure coming from Westpac the Husband told me in early January 2007 that he was closing everything down, and that he had told the bank “where to go”.  I advised the Husband that it was my building too and that he had no right to tell the bank “where to go”.  He then repeated to me that he was closing the company down and that I no longer worked for him.  I recall telling him that if he wasn’t going to pay the rent he should get out.

   11.On the 25^th January 2007 I drove to Melbourne to discuss the payment of rent with the Husband.  I attended on him at the [S] Property to discuss the outstanding rent and loan default and the imminent bank foreclose.  The Husband told me that he had spoken to [P] his brother and that [P] didn’t think the bank would foreclose.  I then told the Husband to move out of the building so that we could lease it out and he replied that he employed eight people and that he needed the warehouse to employ those people and that he wasn’t going to move out.  He then told me that I should have made an appointment to see him and that he had to go and fit air conditioners and was too busy to talk to me.  The Husband also told me that he was able to refinance but when I asked him for proof he told me that he would send it to me within a week but nothing was forthcoming.”

1. These factual matters were not challenged during cross-examination.  I accept Mr Willa’s evidence in this regard. 

2. By letter of the 6 March 2007 the husband wrote to Mr Willa’s solicitors.  Part of that letter reads:

   “The current situation for the [S] warehouse is as follows:-

   1.        The new tenant is [DT] Pty Ltd.

   2.        As of March 2007 [DT] Pty Ltd will pay the rent.

   3.[DT] Pty Ltd has already arranged building insurance as of 22^nd  February 2007.

   4.The insurance is with AAMI and the policy number is SM[…].

   5.        The new lease is done and ready to sign.”

1. At March 2007 C Pty Ltd was in liquidation, having been placed in liquidation in February 2007.

2. The husband also sent a letter to Westpac Bank on the 6 March 2007:

   “Dear Sir

   Re:Westpac Loan for property at [S]

   Sorry for the delay in finding a new tenant for [S property].

   We felt as this loan could not be paid by [C] Pty Ltd due to the divorce court proceedings which have made it very unfair and embarrassing for the Company.  However it is now being leased out to [DT] Pty Ltd.

   [DT] Pty Ltd will continue paying the rent from March 2007 and the arrears for the rent will be caught up after the property settlement of April 27^th by [C] Pty Ltd.

   [DT] Pty Ltd has insured the buildings as from 22/2/07 with AAMI and the Policy number is SM[…].

   Please see copy of attached lease.

   Yours sincerely

   [the husband]”

1. I find that from about June 2006 until shortly before the sale of the S property in August 2007 the husband occupied the premises on a personal basis.

2. From August 2006 until January 2007 Mr Willa did not take action to recover possession of the premises or enforce payment of rent due from C Pty Ltd or the husband because he relied upon the husband’s assurance that he, the husband, would pay the arrears and rent.

3. From early March 2007 the husband purported or alleged that he, the husband, had rented the property to DT Pty Ltd.  He said that henceforth DT Pty Ltd would pay rent.

Discussion
(a) Claim under Corporations Act

1. Part of the claim by Mr Willa is based on an assertion that the husband knew that the company C Pty Ltd could not pay its debts from about the 1 July 2006 until its liquidation on the 13 February 2007. 

2. Section 588G of the Corporations Act 2001 states:

   “(1)This section applies if:

   (a)a person is a director of a company at the time when the company incurs a debt;  and

   (b)the company is insolvent at that time, or becomes insolvent by incurring that debt, or by incurring at that time debts including that debt;  and

   (c)at that time, there are reasonable grounds for suspecting that the company is insolvent or would so become insolvent, as the case may be;  and

   (d)that time is at or after the commencement of this Act.”

1. Section 588G (1) (c) requires the establishment of “reasonable grounds for suspecting that the company is insolvent, or would so become insolvent”.  The company was placed into liquidation in February 2007, on the application of an unrelated creditor of the company.  I am not satisfied that Mr Willa has established on the necessary balance of probabilities that as and from the 1 July 2006 or at the relevant times thereafter there were reasonable grounds for suspecting that the company was insolvent.

2. It is therefore not necessary to consider the application of Section 588S and other provisions of the Corporations Act 2001 which require notice to be given to the liquidator.

(b)      Increase in Mortgage Sum

1. Although the company C Pty Ltd was a tenant of the S property, C Pty Ltd was also one of the three owners of the property.  All three owners of the property mortgaged the S property to the Westpac Bank.  They each had an obligation therefore to make payments of the mortgage when due.  An arrangement was initially put in place to provide for the tenant to make payments directly to the bank, this payment being categorised as rent.  However the three owners could have paid the mortgage on time, thus avoiding the penalties payable under the mortgage.  I am not satisfied that it has been established that there is therefore a direct causal link between the failure of the tenant to pay rent and the penalty charges incurred by the owners when mortgage payments were not made on time.

2. I therefore find that the husband is not liable to Mr Willa for the share of the excess funds required to discharge the mortgage over the S property.

(c)       Loss of Market Value Rent

1. In the High Court decision of Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 the concepts of modern equitable estoppel were discussed. Mason CJ and Wilson J defined equitable estoppel at page 404:

   “…the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has "played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it": per Dixon J. in Grundt, at p 675; see also Thompson, at p 547. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption.”

2. Deane J at page 451 said:

   “…Finally, once it is recognized that the doctrine of estoppel is one of substantive law and equity, there is no reason why that doctrine cannot be applied as effectively in relation to a representation or assumption of a future state of affairs as to one of an existing state of affairs.”

1. The necessary elements to establish estoppel were discussed by Brennan J in Waltons Stores (Supra) at page 428:

   “ In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.”

1. Mr Willa must therefore establish that there has been action by the husband (not C Pty Ltd or on behalf of C Pty Ltd) or assurances from the husband which created an assumption upon which it was reasonable for Mr Willa to rely, and upon having so relied, suffered detriment.

2. Such an equitable estoppel would provide Mr Willa with a cause of action against the husband.

3. In about August 2006 the husband assured Mr Willa that after the divorce proceedings were concluded he would pay the arrears of rent and continue with the lease.

4. In March 2007 the husband had no authority to act on behalf of C Pty Ltd (In Liquidation).  In March 2007 he did not have permission of Mr Willa (one of the owners of the property) to rent the property to DT Pty Ltd.

5. The husband has acted without authority purporting to lease the premises to DT Pty Ltd.  It is not necessary for this part of the proceedings to determine whether or not DT Pty Ltd is a “sham company” or merely an entity being used to disguise the husband’s actions.

6. As a result of these assurances by the husband, Mr Willa continued to allow the husband to occupy the premises at S and did not take action to protect his situation.  Acting upon these assurances Mr Willa did not take any action until early January 2007.

7. In early January 2007 the husband informed Mr Willa that he was “closing the company down” and terminated Mr Willa’s employment.  In early February 2007, Mr Willa’s solicitors wrote to C Pty Ltd seeking payment of the outstanding rent and indicating in default “my client will take steps towards the possession of the premises and will proceed against [C] Pty Ltd for loss sustained …”.  (See Exhibit WLW1 to the affidavit of Mr Willa filed on the 20 February 2008).

8. This indicates that from early February 2007, Mr Willa ceased to rely upon the husband’s earlier assurances that the husband would pay the arrears of rent.  However, by then Mr Willa had suffered loss because he had relied upon the husband’s assurance.

9. From August 2006 to the end of January 2007 (six months) Mr Willa acted upon assurances given by the husband as a result of which he has suffered loss.  The loss incurred by Mr Willa is his share of the rent previously agreed namely, one-third of $4,667.00 per month, (1/3 or $4,667.00, = $1,556.00 per month multiplied by 6 months = $9,334.00).

10. In early March 2007 the husband wrote to Mr Willa’s solicitors clearly asserting that “as of March 2007 [DT] Pty Ltd will pay the rent”. 

11. The actions of the husband prevented Mr Willa from making any arrangements to rent the premises at an appropriate rental. 

12. These actions were taken by the husband in his personal role and not as a director of or on behalf of C Pty Ltd which from February 2007 was in liquidation.  The husband continued to occupy the S property and alleged that he had leased the S property to DT Pty Ltd.  These actions and assurances given by the husband to Mr Willa (and the bank) that rent would be paid have resulted in Mr Willa suffering the loss of his share of the true rental value of the property from the beginning of March 2007 until the settlement of the sale of the property in late October, early November 2007.

13. The rental value has been established as at June 2007, on the evidence of Mr N, at $6,458.33 per month.

14. Eight months rent at $6,458.33 is $51,667.00, one-third of which is $17,222.00.  From this amount should be deducted one-third of the two payments actually made by DT Pty Ltd namely, $4,665.00 x 2 = $9,330.00 divided by 3 = $3,110.00.

15. Therefore the loss suffered is $17,222.00 minus $3,110.00 = $14,112.00.

16. In summary therefore the husband occupied the S property in his own right.  He gave assurances to Mr Willa that he, the husband, would pay the rent.  He also gave assurances to Mr Willa that DT Pty Ltd would pay the rent.  The husband occupied the property and prevented Mr Willa from making arrangements to otherwise lease the property.  By his actions the husband has induced Mr Willa to assume and expect until January 2007 that the rent previously agreed would be paid.  After the beginning of March 2007 the assurances and the actions of the husband created an expectation that a fair market rental would be paid.

17. The husband by his actions induced Mr Willa not to take further action, as a result of which he has suffered detriment.

18. Notwithstanding that initially the tenant of the property was C Pty Ltd, the subsequent actions of the husband in his own right have made the husband liable for payment to Mr Willa.

(d)      Removal of Fixtures

1. The husband concedes that he removed the front counter and the gravity pump/separator. 

2. The evidence to establish the value of Mr Willa’s share in these items (previously fixtures to the S property) are the exhibits 41, 42 and 44.  Exhibit 41 is a document prepared in December 1999 which indicates that B Cabinets were paid $2,063 in September 1998 for the installation of the counter at the S property.

3. Paragraph 24 of the affidavit of Mr Willa filed on the 20 February 2008 (document 136) says:

   “The cabinet maker’s bill for the reception counter plus a small bench-top for the kitchen was a total of around $6,189.00 and I paid my 1/3^rd share.  The oil separator was installed by the plumber as part of the building when it was constructed.  I don’t know the exact cost of the oil separator but as I recall it was around $4,000.00.”

4. Exhibit 42 is a quotation from a licenced plumber “RE Pty Ltd” for $3781.88 for the provision of a “Vgs Olly Water Separator Stand Mounted” of the same type removed by the husband.

5. Exhibit 44 is a group of documents, including an invoice statement and deposit receipts for the year 2000, being an invoice from “C Plumbing Service” for the installation of the pump separator and confirmation that Mr Willa paid his one-third of that account.

6. I accept these invoices as proof of the facts relating to amounts paid by Mr Willa for his share of these items.  However this does not establish their value when removed, nor does the evidence determine whether the removal of the items in any way reduced the amount the owners received on the sale of the property in August 2007.

7. At paragraph 20 of the said affidavit Mr Willa says:

   “I don’t know how much the [S] property would have realised at auction or some other type of sale if the property had been presented in its best light and without the removal of the front counter and the oil separator.”

8. The facts establish that the husband took possession of items which did not belong to him.  He would thus be liable to compensate the other owners, including Mr Willa, for the loss they have suffered by this illegal removal.  I have information indicating the possible cost or value of the items at the time they were acquired (1998 for the counter and 2000 for the pump/separator).  However, there is no evidence before me which establishes the value of the items when removed by the husband.  Mr Willa has therefore failed to establish the quantum of the damage suffered.  It is not therefore possible to make an order for compensation.

(e)       The Unpaid Rates

1. Mr Willa seeks reimbursement of the arrears of council and water rates.  He asserts that the husband should have paid the rates because he was occupying the property and preventing Mr Willa from leasing the property to someone else who could pay the rates. 

2. The valuation of Mr N fixing the rent value at $77,500 per annum included “the rental assessment assumes a lessee would be responsible for the payment of usual outgoings plus GST”.  There is no specific reference in the term “usual outgoings” to council rates and water rates. 

3. I am not satisfied that there is sufficient evidence before the Court which establishes that the tenant or person occupying the property is required to pay council rates and water rates.  In any event for the period March 2007 until the end of October 2007, Mr Willa is to receive his share of the fair rental market value which would provide monies from which the rates could notionally have been paid.

4. I am not satisfied therefore that the claim for payment of one-third of the council and water rates has been established as an amount payable by the husband to Mr Willa.

Conclusion

1. Mr Willa has established an entitlement to payment from the husband of the two sums referred to in paragraphs 63 and 69.  Mr Willa seeks an order that he be paid any sum due to him from the proceeds of sale of two other properties.  In the other related proceedings orders have been made that the husband and wife’s share of proceeds of sale of the two properties in G be held in trust pending the overall resolution of the proceedings between the husband and wife.

2. It is appropriate for the husband to be given an opportunity to meet payment of the judgment sum within a short time.  If payment is not made within that time then it would also be appropriate for payment to be made to Mr Willa before any sums are distributed to the husband from the proceeds of sale of the other properties.

I certify that the preceding eighty six (86) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe.

Associate: 

Date:  17 July 2008