Kelso and Aldrin

[2017] FCCA 2219

FEDERAL CIRCUIT COURT OF AUSTRALIA

KELSO & ALDRIN [2017] FCCA 2219

Catchwords:
FAMILY LAW – Competing applications with respect to final consent orders – enforcement application – application to set aside.

Legislation:

Family Law Act 1975, ss.79A, 79A(1)(a), 79A(1)(b), 79A(1)(c)

Federal Circuit Court of Australia Act 1999, s.17A
Federal Circuit Court Rules 2001, r.13.10

Cases cited:
In the Marriage of Gerbert (1990) 14 FamLR 62
Prior v Prior (2002) 30 Fam LR 72
In the Marriage of La Rocca, (1991) 14 Fam LR 715
In the Marriage of Franklin & McLeod (1993) 17 Fam LR 793
Cawthorn & Cawthorn (1998) Fam LR 86
Jacobs & Vale [2008] FMCAfam 641

Applicant: MR KELSO

Respondent: MS ALDRIN

File Number: MLC 6535 of 2014

Judgment of: Judge Harland

Hearing date: 4 September 2017

Date of Last Submission: 4 September 2017

Delivered at: Melbourne

Delivered on: 4 September 2017

REPRESENTATION

The Applicant: In person

Counsel for the Respondent: Ms Brooks

Solicitors for the Respondent: Maharaj Lawyers

ORDERS

1. The husband’s amended initiating application filed 14 August 2017 be dismissed.

2. The Final Orders remain in full force and effect AND for the purposes of enforcing said orders:

   (a)The Registrar of this Court be directed, pursuant to the s.106A appointment in paragraph 7 of the Final Orders, to forthwith execute a transfer of land in registrable form to give effect to paragraph 4 of the Final Orders (namely the orders in relation to the trust transfer and sale by the wife of the property of Property A, Certificate of Title Volume (omitted) Folio (omitted) (“Property A property”) in default of the payment due to the wife pursuant to paragraph 2 of the Final Orders).

   (b)For the purposes of executing the said default sale of the Property A property (“Default Sale”) the Wife be and is hereby unilaterally authorised to forthwith do all acts and things, give all instructions and sign all authorities, contacts and documents as may be required to achieve a completed sale of the Property A property and thereafter apply the sale proceeds in accordance with paragraph 4 of the Final Orders, including but not limited to:

   (i)The wife appointing a selling real estate agent (“Selling agent”) on such terms and conditions as recommended by the selling agent in consultation with the wife;

   (ii)The wife appointing a lawyer and/or conveyancer to handle the sale (“Conveyancer”) on such terms and conditions as recommended by the conveyancer in consultation with the wife;

   (iii)The wife liaising with the selling agent to arrange inspections of the Property A property by prospective purchasers; and

   (iv)The wife signing a contact of sale and doing all acts and sign all documents as may be necessary to achieve a completed sale.

   (c)For the purposes of  the Default Sale the husband must co-operate with all reasonable requests of the selling agent so as to facilitate the marketing of the Property A property for sale, including but not limited to:

   (i)Forthwith providing the agent with a key to the Property A property and allowing access to the agent and/or prospective purchasers upon 24 hours’ notice to the Husband;

   (ii)Maintaining the property in a neat and suitable condition for inspection by prospective purchasers;

   (iii)Removing and/or authorising removal or discharge (at his expense, from the Property A property sale proceeds if necessary) of any encumbrance over the title of the Property A property (including but not limited to a caveat or mortgage) as may be necessary to enable the default sale to occur in a timely manner, including doing all acts and signing all such documents as may be required to discharge and/or authorise the discharge of the mortgage over the Property A property and any other encumbrance AND in default of such obligation (upon 7 days’ written notice from the wife) the Registrar of the Court be and is hereby appointed to sign such document on behalf of the husband.

   (d)In the event the husband does not comply with this order, the Wife have liberty to apply to have the matter re-listed at short notice, for the purpose of seeking further orders and directions in relation to the default sale and enforcement of the Final orders.

3. The Husband provide vacate the Property A property in a clean condition 24 hours prior to the settlement of sale.

4. The wife provide written submissions in support of her application for indemnity costs on or before 11 September 2017.

5. The husband provide written submissions in response on or before 25 September 2017.

IT IS NOTED that publication of this judgment under the pseudonym Kelso & Aldrin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 6535 of 2014

MR KELSO

Applicant

And

MS ALDRIN

Respondent

REASONS FOR JUDGMENT

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

2. I have competing applications before me today with respect to final property orders that were made by consent at the end of the conciliation conference on 30 March 2017. 

3. It is clear from the record that the parties signed consent orders that the registrar made at the end of that conference. The orders provide for the husband to pay to the wife the sum of $260,000 on or before 29 June 2017.  Contemporaneously with that payment to her that she is to transfer all her interests in the two properties, one being the property at Property B, and the other being a property at Property A to the husband. The husband is to indemnify her with respect to mortgages, taxes and other outgoings with respect to the properties.

4. The orders at paragraph 3(b) require the husband to be liable for and indemnify the wife with respect to all apportionable rates, taxes, outgoings with respect to real property of whatsoever nature and kind. 

5. The wife raises a concern about a potential gains tax liability crystallising upon the sale of the Property B property, which is a commercial property. It seems that it is addressed in terms of that order in addition as order 8(f) which provides “each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders”

6. The orders clearly set out what the parties were required to do and what the outcomes were.  In the event the husband was unable or unwilling to make the payment as specified in order 2 of those orders, that he was to sign documents to transfer the Property A property to the wife for her to hold it on trust for the purposes of selling the property, and that out of the sale of the property she was to receive the payment owed to her plus 5 per cent interest adjusted from the due date to the date of payment.

7. The orders specify that in the event of there being insufficient equity in the Property A property to satisfy order 2, that the Property B property then be sold.  The order of the sale of the properties is clearly set out in the orders.

8. The wife seeks today that the Court summarily dismisses the husband’s amended initiating application, which seeks that the orders made on 30 March 2017 be stayed, set aside or dismissed.

9. The husband’s primary concern is the order of sale of the properties.  He says that there would be no prejudice to the wife if the commercial property was sold first, that the sale of that property is likely to satisfy the outstanding order for payment to her and which will enable him to keep the Property A property as his home.  It is his case that the wife is unreasonably refusing to agree to vary the orders and that she would suffer no prejudice.

10. The wife says she is entitled to rely on the benefit of the final orders that were made, and she is not obliged to agree to a variation of the orders. She does not accept the proposition that there is no disadvantage to her if the commercial property is sold first. In her material she refers to the concern about capital gains tax and the concern about the current state of the property.

11. The husband appears without the benefit of legal representation and was self-represented at the conciliation conference.  That is not an uncommon situation for litigants before this Court.  The mere fact that a person consents to orders without legal representation is not grounds for setting aside the orders on the basis of some miscarriage of justice, duress, or other reason. See In the Marriage of Gerbert (1990) 14 FamLR 62; Prior v Prior (2002) 30 Fam LR 72.

12. The public policy behind Court orders being final is clear. There is no ambiguity in the orders as to what was required. The husband did not articulate which ground under s.79A he was relying on. From the husband’s submissions it is clear that he is not relying on s.79A (1) (a) of the Family Law Act 1975 (“Family Law Act”), being that there has been a miscarriage of justice.  He does not argue that he should not pay $260,000 to the wife.

13. Section 79A(1)(b) of the Family Law Act provides for orders being set aside in circumstances where there are circumstances that have arisen since the orders were made, making it impractical for the order to be carried out. 

14. The husband says that at the time he entered into the orders he had a verbal agreement with a third party that would enable him to pay out the wife without having to sell the properties. At the time he signed the orders, he did not anticipate having to sell the properties.

15. It may well be that the husband now regrets taking that step but, even on his own version, that is not a circumstance that has arisen since the orders.  That is a risk that the husband took in entering consent orders which clearly stated that in the event he was unable to raise the funds, the first property that was to be sold was the property at Property A. 

16. In the face of the default provisions, the husband cannot successfully argue that it was unforeseeable that he would be unable to pay the wife and that the Property A property would be sold before the investment property.

17. It is not a matter for this Court to look behind the orders that were made by the Registrar, sitting as some sort of quasi court of appeal.  There is no appeal on foot.  The orders were made in the usual manner after a conciliation conference. There is no ambiguity in those orders. See In the Marriage of La Rocca (1991) 14 Fam LR 715; In the Marriage of Franklin & McLeod (1993) 17 Fam LR 793.

18. It is then necessary to consider s.79A(1)(c) of the Family Law Act, which refers to setting aside or varying orders where a person has defaulted in carrying out an obligation with respect to those orders.  The husband is the defaulting party and it is the husband who is seeking, in effect, the Court’s indulgence to vary his obligations.  It is not open to him as the defaulting party to do so.

19. I was referred to the case of In the Marriage of La Rocca (1991) 14 Fam LR 715 in that regard, as well as the case of Cawthorn & Cawthorn (1998) Fam LR 86, as authorities for the proposition that the defaulting party cannot rely on s.79A(1)(c).

20. The wife says, having regard to the provisions of s.79A and the evidence before the Court, that the husband’s application to set aside the orders has no reasonable prospects of success, and relies on s.17A of the Federal Circuit Court of Australia Act 1999 (Cth) and r.13.10 of the Federal Circuit Court Rules2001.

21. Those provisions empower the Court to summarily dismiss applications if the Court is satisfied that the party prosecuting the claim has no reasonable prospect of success. This does not equate to being doomed to fail, or that the claim is frivolous or vexatious or that the claim for relief is an abuse of process. The wife relies on the case of Jacobs & Vale [2008] FMCAfam 641 in support of her submissions that the husband’s application should be summarily dismissed.

22. It is clear from the affidavit material and the correspondence between the parties that there was a complete lack of trust between them and that they are not able to cooperate with each other with respect to the implementation of the orders.

23. The husband sees the wife’s actions as being unreasonable and being designed to cause him to be homeless.  The difficulty with the husband’s submissions is that the reality is that this is about enforcement of orders that have already been made by the Court.  That is quite different to proceedings before the Court where final orders have not been made.

24. The wife is entitled to insist on compliance with orders that were made in the regular fashion in this Court.  She is not obliged to agree to a variation of the orders. She does not need to establish that there is a detriment to her if she were to agree to the variation sought. In any event, her position is that there would be a detriment to her.

25. It is not necessary to go into detail to the parties’ different positions with respect to the orders.  What is clear is that the husband has, for some time, been seeking that the wife agree to vary the orders; however, the husband has also been on notice that the wife does not agree to the orders being varied and that she intends to seek that the orders be complied with without variation.

26. In this regard, the letter sent by the wife’s solicitor to the husband, dated 4 August 2017, is important because it puts the husband on notice as to deficiencies in his application and draws his attention to section 79A of the Family Law Act and the terms of the orders.  It also puts him on notice that the wife intended to trigger order 7 of the orders made on 30 March 2017, which enables the wife to seek that the Registrar sign the orders where the husband has refused.  The husband was on notice that the wife intended to do that, and it is clear that he was aware of these issues, as he filed an amended application, seeking to stay the orders after it was pointed out to him by the wife’s lawyer that he had not done so.

27. The husband expresses concerns about the wife having control of the sale of the properties and expresses concerns that there is no incentive for her to ensure that a reasonable price is obtained for the properties.  As I have referred to previously, it is clear that there is great distrust between the parties, but what is also clear from the terms of the orders, which should give some comfort to the husband, is that the wife is to act as trustee on the sale, and that means she has the obligations of someone who is acting on trust for another person.  That requires her to act in a manner that ensures a reasonable price is obtained for that property.  It is not a case of her being able to, at large, deal with the sales of the properties and obtain a fire sale for those properties.

28. It would have been clear to the husband at the time he signed the orders that, if he did not make the payment as required by the orders, that the Property A property would be sold first.  I accept that that is the home that the husband is living in, but it also is apparent that he will receive funds from, if not the sale of that property, the sale of the commercial property, and would be able to purchase another residence.  The Court should not lightly vary orders that have been made properly and that are clear on their face.  I am not satisfied that the husband’s application to vary the orders has any reasonable prospects of success.  I will dismiss the husband’s amended initiating application.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Harland.

Date: 12 September 2017