Martin and Martin - [2015] FamCA 260

FAMILY COURT OF AUSTRALIA

MARTIN & MARTIN

[2015] FamCA 260

FAMILY LAW – Property enforcement of interim orders – Husband and wife seek consent orders but then withdraw leaving creditor pursuing repayment – Questions of jurisdiction and power discussed as creditor is the wife’s former solicitor yet orders sought as against the husband – Creditor to be paid.

Bankruptcy Act 1966 (Cth)
Family Law Act 1975 (Cth)

Ascot Investments Pty Ltd v Harper and Harper (1991) FLC 91-000.
Biltof and Biltof [1995] FamCA 45
Chemaisse and Chemaisse; Federal Commissioner of Taxation (1988) FLC 91-915
Collins and Olsthoorn [2005] FamCA 138; (2005) FLC 93-216
Deputy Commission of Taxation and Kliman and Kliman [2002] FamCA 629; (2002) FLC 93-113

Kirkpatrick v Kotis (2004) 62 NSWLR 567

Langford v Coleman [1992] FamCA 68, (1993) FLC 346

Lasic and Lasic [2007] FamCA 837

Martin and Martin [2012] FamCA 869

Rand & Rand (2010) 43 Fam LR 570

In the Marriage of Ramsey (1983) FLC 91-301

Zdravkovic and Zdravkovic (1982) FLC 91-220

APPLICANT:

Ms Martin

RESPONDENT:

Mr Martin

INTERVENOR:

X Firm

FILE NUMBER:

MLC

9829

2007

DATE DELIVERED:

9 April 2015

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

16 March 2015

REPRESENTATION

THE APPLICANT:

Mr Koroneus, Solicitor for the Trustee In Bankruptcy

COUNSEL FOR THE RESPONDENT:

Mr Glick QC with Mr Puckey

SOLICITOR FOR THE RESPONDENT:

Taussig Cherrie Fildes

COUNSEL FOR THE INTERVENOR:

Mr North QC with Dr Ingleby

SOLICITOR FOR THE INTERVENOR:

X Firm

Orders

That pursuant to Rule 17.02 of the Family Law Rules 2004 Order 3(a) of the 12 September 2011 Orders be amended to state as follows:
3(a)Property E in the State of Victoria more particularly described as the whole of the land comprised in Certificate of Title Volume … Folio … and Certificate of Title Volume … Folio … (“E”).
That by way of enforcement of the September 2011 Orders, the husband deposit the sum of $993,022 plus interest at the rate prescribed in Rule 17.03 of the Family Law Rules 2004 to the date of payment, into the trust account of X Firm (“X FIRM”) within seven (7) days or such other time as may be agreed, to be applied by X FIRM as follows:
a.In payment of the Costs Settlement Sum as defined in the annexure to these orders (or part thereof);
b.In payment of the QF Settlement Sum as defined in the annexure to these orders (or part thereof); and
c.In payment of such costs as the Court has already ordered, payable to X FIRM as set out in paragraph 49 of the Affidavit of Ms X filed 22 January 2015 and Order 2 of the Orders made 18 December 2014 (or part thereof); and
d.The balance then to be held on trust in an interest bearing account for the husband and/or X Family Lawyers pending further determination of any outstanding dispute between the parties.
That in default of the deposit referred to in paragraph…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Martin and Martin

Details

AGLC: Martin and Martin [2015] FamCA 260
Case: [2015] FamCA 260
Decision Date: 9 April 2015

CaseChat Overview and Summary

In the matter of *Martin and Martin*, heard before Cronin J, the court was required to make orders concerning the amendment and enforcement of previous property settlement orders. The dispute involved the husband's obligations regarding the sale of a property identified as "E" and the distribution of sale proceeds, as well as the payment of various settlement sums and legal costs. The court's orders detailed the process for amending the original September 2011 orders, specifying how the property E was to be described.

The central legal issues before the court were the mechanism for enforcing the husband's financial obligations, particularly the deposit of a significant sum of money, and the procedure for the sale of the E property in the event of default. The court also had to determine how the proceeds from the sale of the E property were to be applied, including the payment of legal costs owed to X Firm, a settlement sum owed to QF Pty Ltd, and any outstanding loans secured against the property. Furthermore, the court considered alternative arrangements for payment should the sale of the E property not yield sufficient funds.

Cronin J reasoned that the existing orders required amendment to accurately reflect the property to be sold. To ensure compliance with the financial obligations, the court ordered the husband to deposit a specific sum, plus interest, into a trust account within seven days. In default of this deposit, the court authorised the sale of the E property, with solicitors K & L Gates empowered to manage the sale process, including determining the selling agent, price, and terms. The court also directed the husband to cooperate with the ANZ Bank to identify and discharge loans secured against the property, with specific provisions for the application of sale proceeds, including the payment of sale expenses, the "Payable E Loan," and the aforementioned settlement sums and costs. The court further stipulated that if the sale price was insufficient, the husband would be required to deposit the shortfall. Alternative payment orders were also made in the event of insufficient funds from the sale. The court also authorised a Registrar to execute sale documents in the event of the husband's default.

Orders

Orders of the court

That pursuant to Rule 17.02 of the Family Law Rules 2004 Order 3(a) of the 12 September 2011 Orders be amended to state as follows:

3(a) Property E in the State of Victoria more particularly described as the whole of the land comprised in Certificate of Title Volume … Folio … and Certificate of Title Volume … Folio … (“E”).

That by way of enforcement of the September 2011 Orders, the husband deposit the sum of $993,022 plus interest at the rate prescribed in Rule 17.03 of the Family Law Rules 2004 to the date of payment, into the trust account of X Firm (“X FIRM”) within seven (7) days or such other time as may be agreed, to be applied by X FIRM as follows:

a. In payment of the Costs Settlement Sum as defined in the annexure to these orders (or part thereof);

b. In payment of the QF Settlement Sum as defined in the annexure to these orders (or part thereof); and

c. In payment of such costs as the Court has already ordered, payable to X FIRM as set out in paragraph 49 of the Affidavit of Ms X filed 22 January 2015 and Order 2 of the Orders made 18 December 2014 (or part thereof); and

d. The balance then to be held on trust in an interest bearing account for the husband and/or X Family Lawyers pending further determination of any outstanding dispute between the parties.

That in default of the deposit referred to in paragraph 2 above, the Husband sign all such documents and do all such acts as required to authorise and direct the solicitors for X Firm, K & L Gates, to sell the E property.

That the Husband authorise K & L Gates to communicate with the ANZ Bank to determine which loans secured by mortgage dealing number …, registered against the Title of E, the ANZ bank will require to be repaid from the proceeds of sale of E pursuant to paragraphs 2 and 3 (“the E Loans”).

That the Husband be required to do all such acts and things and sign all documents necessary to ensure that the ANZ Bank will release funds from the sale of E pursuant to paragraphs 2 and 3 in accordance with the August 2011 ANZ letter, including but not limited to paying or causing to be paid to the ANZ Bank such sum as may be necessary to discharge each of the E Loans, save for the Payable E Loan.

That the proceeds of the sale of the E property pursuant to paragraphs 2 and 3 then be applied as follows:

a. Firstly, in payment of the costs and expenses of the sale, including any professional costs reasonably incurred by K&L Gates in complying with paragraph 9(a);

b. Secondly, in payment of the Payable E Loan to the ANZ Bank, after compliance by the Husband with paragraph 5 above;

c. Thirdly, the next $993,022 (or part thereof), plus interest at the rate prescribed in Rule 17.03 of the Rules to the date of payment, to be deposited into X Firm Trust Account, and applied as provided by these orders

That in the event that the E property fails to sell for the sum of $1.56 million or greater, the husband deposit into X Firm Trust Account on the day of settlement of the sale of that property, a sum equivalent to the difference between the actual gross sale price realised and $1.56 million to be applied by X FIRM in accordance with these orders.

That in the event the sums deposited into X Firm Trust Account pursuant to either paragraph 2 or paragraphs 6(c) and 7 are insufficient to pay X Firm the Costs Settlement Sum, the QF Settlement Sum and any costs ordered, or in the alternative to paragraphs 2 to 7:

i. The Husband pay the sum of $993,022, to be deposited into X Firm Trust Account and applied by X Firm according to these orders;

b. Further or in the alternative to paragraph 8(a) and in the alternative to paragraph 8(b), the Husband pay to X Firm the balance of the Costs Settlement Sum, the QF Settlement Sum and any costs the Court has already ordered, payable to X Firm as set out in paragraph 49 of the Affidavit of Ms X filed 22 January 2015 and Order 2 of the Orders made 18 December 2014 payable within 30 days.

That in respect of any sale of the assets pursuant to paragraphs 2 and 3 above:

a. K&L Gates is authorised to make arrangements regarding the following matters:

i. the selling agent to be engaged;

ii. the commission to be paid on the sale;

iii. the listing price or reserve price as the case may be;

iv. the terms of the sale contract;

v. the preparation of the relevant documentation to effect the sale;

vi. any other necessary matter to effect the marketing and sale of the properties; and

vii. to prepare documents in duly executable form, including contracts of sale, land transfers and the like, required to effect the arrangements referred to in paragraphs 9(a)(i) to 9(a)(vi) and to effect the sale of the properties, for execution by the husband on this own behalf and/or on behalf of the entities in which he may have an interest (“Sale Documents”).

b. the Court directs the Husband to execute any Sale Documents when produced to him for that purpose by K&L Gates;

c. in default of the Husband so executing the Sale Documents as required by paragraph 9(b), a Registrar of this Court is authorised pursuant to section 106A of the Family Law Act 1975 (Cth) (“Act”) to execute any such document, and an affidavit from a solicitor from K&L Gates deposing to the existence of the default will constitute sufficient proof thereof;

d. the Husband will do all such acts and things reasonably required of him by the selling agent and/or K&L Gates to sell the property in accordance with paragraph 2 and 3 above.

e. the husband shall vacate the properties no later than 7 days prior to the date fixed for completion of each sale; and

f. That pending the sale of the properties, the registered proprietor of the properties continues to be responsible for the costs of all outgoings (including any mortgage and loan repayments), taxes and rates as and when they fall due.

10.

That all extant applications are otherwise adjourned to a date to be fixed upon application before the Honourable Justice Cronin or if he is unavailable, as the case management judge otherwise directs for determination of such issues arising out the implementation of these orders as the parties so require.

11.

The annexure to these orders is deemed to be a part of these orders.

Notations

The Court notes the following definitions for the purpose of the Orders Sought:

A. “the Relevant Final Orders Applications” means:

I. The Amended Initiating Application filed by the Wife on 23 April 2009;

II. The Amended Response to an Initiating Application filed by the Husband on 29 April 2009;

III. The Application of the Husband and the Wife that orders for settlement of property be made by consent, as referred to in paragraphs 2 and 3 of the Orders of 17 October 2012; and

IV. Any Applications for Final Orders (including any Applications for Final Orders in Response) made by the Husband and/or the Wife that are extant as at the final hearing of this matter.

B. “X Firm” means X Firm.

C. “the Act” means the Family Law Act 1975.

D. “the Rules” means the Family Law Rules 2004.

E. “Reserved Costs Orders” means the following Orders:

I. Paragraph 21 of the Orders of 12 September 2011;

II. Paragraph 1 of the Orders of 6 December 2012;

III. Paragraph 5 of the Orders of 3 May 2012; and

IV. Any subsequent Orders reserving X Firm’s costs from 30 August 2013 until the date of the Final Orders.

F. “the Costs Settlement sum” means the sum of $450,000, which is the amount payable by the Wife to X FIRM by way of agreed outstanding legal costs pursuant to Terms of Settlement executed 6 August 2013, together with interest thereon at the rate prescribed in Rule 17.03 of the Family Law Rules 2004 from 7 August 2012, or such other date as the Court deems appropriate, to the date of payment.

G. “the QF Settlement sum” means the sum of $399,241.94, payable by the Wife to X Firm in satisfaction of the debt owing by the Wife to QF Pty Ltd, which has been assigned to X Firm pursuant to a Deed of Assignment dated 7 June 2013, together with interest thereon at the rate prescribed in Rule 17.03 of the Rules from 7 June 2013, or such other date as the Court deems appropriate, to the date of payment.

H. “the E property” means the property situate at and known as Property E, being the whole of the land described in Certificate of Title Volume … Folio … and the whole of the land described in Certificate of Title … Folio...

“the E Security” means the security granted to X Firm over the E Property by way of:

I. Orders 3, 8(g) and Notation A of the Orders dated 12 September 2011; and

II. Deed of Charge entered into by the Wife dated 10 January 2012 (supported by Caveat lodged 13 January 2012).

J. “the September 2011 Orders” means the Consent Orders made by the Family Court of Australia on 12 September 2011 between the Husband, the Wife, X Firm and QF Pty Ltd which deals with, inter alia, the application of the proceeds of the sale of the E property.

K. “the August 2011 ANZ letter” means the letter from the ANZ to Martin Pty Ltd dated 19 August 2011, which was annexed to the September 2011 Orders, which sets out, inter alia, the loans to be discharged from the sale of E.

L. “the Payable E Loan” means the loan referred to as “ANZ Business Loan facility in the name of Martin Pty Ltd for the amount of principle being $532,000 plus any interest and fees accrued” in the August 2011 ANZ letter.

M. “the Y Interest” means the Wife’s 1/6th interest in the property situate at and known as 188-192 Y Street, Geelong, being the whole of the land described in Certificate of Title Volume 8301 Folio 286.

N. “the Y Security” means the security granted to X Firm by way of Deed of Charge entered into by the Wife dated 22 July 2010 (supported by Caveat lodged 13 August 2010).

O. “the Z Partnership Interest” means the Wife’s 10 per cent interest, in her capacity as appointor and apparent Trustee of the Ms Martin Trust, in Stage 2 of the Z Partnership Development.

P. “T Street” means the property situate at and known as T Street, Q Town being the whole of the land described in Certificate of Title Volume … Folio ….

Q. “L Street” means the property situate at and known as L Street, Suburb N, being the whole of the land described in Certificate of Title Volume … Folio ….

R. “the S Street property” means the property situate at and known as S Street, Q Town, being the whole of the land described in Certificate of Title Volume … Folio ….

S. “the AA Property” means the property situate at and known as AA Street, BB Town, being the whole of the land described in Certificate of Title Volume … Folio ...

T. “the CC Deed of Assignment” means the Deed of Assignment between the Wife and X Firm dated 28 November 2011, pursuant to which the Wife assigned to X Firm “For securing to (X Firm) the payment of all monies which are by the (Legal Services Agreement between X Firm and the Wife) to become due and payable by the (Wife) to (X Firm)…all of her right title and interest in any monies which are resolved to be paid, or which are, paid to her by the Trustee (of the Ms Martin Trust) pursuant to the Order (of 4 November 2010), or otherwise”.

U. “the Handwritten Contract” means the handwritten contract signed by the Husband and Wife and dated 16 August 2012.

“the Wife’s Z Payment” means the payment intended to be made to the Wife pursuant the Handwritten Contract of the “Net Proceeds of Z Stage 2”.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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