McMillan & McMillan
[2016] FamCA 387
•23 May 2016
FAMILY COURT OF AUSTRALIA
| MCMILLAN & MCMILLAN | [2016] FamCA 387 |
FAMILY LAW – PROPERTY – S105 Application for enforcement – application by the wife for enforcement of orders – consideration of the discretionary power of the Court to enforce orders pursuant to section 105 of the Family Law Act (Cth) 1975 – where the equitable bar of laches is not applicable – where delay per se does not readily excite equitable intervention – relevance of equitable defences – limitation periods for enforcement of judgement – limitation periods in relation to recovery of interest.
| Family Law Act 1975 (Cth) ss 80, 84, 105, 105(1) |
| Barrak v Barakat (2005) FLC 93-234 |
| APPLICANT: | Mr McMillan |
| RESPONDENT: | Ms McMillan |
| FILE NUMBER: | CSC | 355 | of | 2015 |
| DATE DELIVERED: | 23 May 2016 |
| PLACE DELIVERED: | Townsville |
| PLACE HEARD: | Cairns |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | 8 February 2016 |
REPRESENTATION
| THE APPLICANT: | In person |
| COUNSEL FOR THE RESPONDENT: | Mr Fellows |
| SOLICITORS FOR THE RESPONDENT: | Williams Graham Carman |
Orders
That further action on the wife’s Enforcement Warrant issued 15 June 2015 be permanently stayed.
That otherwise all extant applications be dismissed and the matter removed from the list of active pending cases.
IT IS NOTED that publication of this judgment by this Court under the pseudonym McMillan & McMillan has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT CAIRNS |
FILE NUMBER: CSC355/2015
| Mr McMillan |
Applicant
And
| Ms McMillan |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
On 15 June 2015, at the request of Ms McMillan (“the wife”) a Registrar of the Family Court issued an Enforcement Warrant pursuant to Part 20.3 of the Family Law Rules authorising the Enforcement Officer to seize and sell the property of Mr McMillan (“the husband”). By Application in a Case filed 14 September 2015 the husband, amongst other relief, sought an order that the Enforcement Warrant be dismissed, struck out or stayed. Additionally he sought some more flamboyant relief most of which, as I shall shortly discuss, was beyond the power of the court to order. By her Response to Application in a Case filed 22 September 2015, the wife sought that the husband’s application be “summarily dismissed” together with an order for costs.
On 9 November 2015, the husband filed a further Application in a Case which again I shall discuss later, insofar as it is relevant to these reasons.
The Enforcement Warrant asserted that the total amount owed to the wife by the husband was $45,850.68. It was principally comprised of, firstly, amounts which were said to be due pursuant to various costs orders which had been made in the wife’s favour against the husband, totalling $18,798.18, and secondly, interest on those sums, said to be in the amount of $26,463.32.
The unusual nature of this case is revealed by a consideration of the vintage of the several orders for costs. They were as follows:
25 September 1998 Barry J $2,337.00
28 June 1999 Bell J $3,000.00
12 July 2001 Nicholson CJ $7,235.40
19 August 2002 Barry J $3,389.99
16 December 2002 Monteith J $1,835.39
23 April 2008 Registrar Victiore $500.00
5 June 2008 Benjamin J $500.00
It will therefore be appreciated that, save for two orders totalling $1,000.00 in 2008 (which amounts had been outstanding for more than 7 years by the time of the issue of the Enforcement Warrant) all of the remaining orders were between 12 and 16 years old by the time the Enforcement Warrant issued.
The father’s applications came on for hearing before me on 8 February 2016. At the outset I raised with the husband that some of the more unusual relief which he sought was beyond my power to grant. For instance, by paragraphs 5 and 6 of his application filed 14 September 2015, he sought orders that the wife and her former lawyer respectively be “tried for perjury in swearing false evidence …” and “tried for deliberately making false statements to the court and knowingly misleading the court.” He also sought a grant of Special Leave to appeal each of the costs orders, and an order that the wife’s solicitors pay all of the costs of all parties to all of the past proceedings between the parties. Likewise by paragraph 2 of his Application in Case filed 9 November 2015, the husband sought orders that the wife’s former solicitors and the wife pay “$250,000.00 in compensation in punitive damages” to the husband “stemming from their joint conspiracy to pervert the course of justice…” Ultimately the husband appeared to accept that indeed such relief was beyond the power of the court to grant.
However during the course of that discussion, it became clear that at the heart of the husband’s discontent with the costs orders was a recurrent allegation that they had all been procured by fraud. Notwithstanding that was his real complaint, none of the relief sought in his two applications was in fact directed towards such a claim, although in fairness to the husband, in his affidavit filed in support of his application, he did raise those allegations, at least in relation to the costs order of Barry J made 19 August 2002.[1]
[1]Paragraphs 29 to 32 of the husband’s affidavit filed 14 September 2015.
Before me the husband self-represented. Indeed it appears as though he has always self-represented in the litigation between himself and the wife, which had commenced at least by September 1998, and appears to have then run for some four years.
After some discussion with the parties, the issues that the husband appeared to wish to raise were distilled as follows:
1.Can a claim to set aside judgment for fraud be litigated in this Court under:
(a) the inherent jurisdiction;
(b) the accrued jurisdiction;
(c) S 79A; or
(d) some other power.
2.If so, were any, and if so which, judgments procured by fraud.
3.If so, should the Court now set aside those judgments.
4.If not, should the Court now stay enforcement of any, and if so which, of those judgments.
The difficulty was, however, that on 9 February 2016, when the husband’s applications were listed before me for hearing, neither party was in a position to then argue issues 1 to 3, but were only prepared to argue issue number 4.
In those circumstances Mr Fellows, who appeared as counsel for the wife, urged that the court should proceed to determine issue number 4 on the assumption that either the court did not have a power to set aside a judgment for fraud, or alternatively, if it did, would not exercise it in the husband’s favour in this case. Mr Fellows argued that if the husband wished to bring such a claim, he may do so, but the immediate issue for my determination was whether or not there should be a stay of the Enforcement Warrant.
For his part, whilst not opposing the court hearing and potentially determining issue number 4, the husband sought a timetable permitting him to institute proceedings seeking to set aside the several judgments for fraud, nominating a period of at least 60 days for such an application to be brought.
BACKGROUND FACTS
The judgments and orders for costs
The material before me did not permit much of an understanding of the probably complicated and highly conflictual history of the litigation between these parties in this court. However it seems that the parties’ initial battleground related to Child Support. It appears as though on 26 February 1998 the wife sought a departure from administrative assessments of Child Support which, in the 1996/97 and 1997/98 financial years had seen the husband’s Child Support assessments at “nil”. The Child Support Review Officer[2] on 17 April 1998 determined that the child support income for the husband for relevant periods should be assessed at $50,000.00. The husband sought a review of that assessment, which was dealt with by Barry J on 21 September 1998. It was unsuccessful. The wife, who was represented by solicitors, then sought an order for costs, which it appears was opposed by the husband. Although it is not clear from the edited ex tempore reasons tendered into evidence before me, precisely what motivated Barry J to make the costs order, it is plain that his Honour did indeed make such an order, and the wife subsequently taxed those costs.
[2]Who by an odd quirk of fate, was Mr Fellows, counsel for the wife.
Although neither party before me tendered into evidence any reasons of Bell J for the orders he made on 28 June 1999, it appears from the later reasons of Nicholson CJ given on 12 July 2001 that is because in fact the substantive matters before Bell J were parenting issues, which settled by consent, including (by paragraph 19 of those orders) the husband consenting to paying the sum of $3,000.00 by way of costs of the application to the wife.
The decision of Nicholson CJ given 12 July 2001 related to what was said to be “two series of contravention applications” brought by the father arising out of the orders of Bell J. From his Honour’s reasons which were tendered into evidence, it appears as though the Chief Justice took a particularly dim view of the husband’s contravention applications. Again it appears as though the wife, who was represented by solicitors, sought an order for costs, and the edited ex tempore reasons of the Chief Justice state:
In the circumstances I consider that this is a case where I really have no option but to award costs having regard to my findings. Costs of course relate only to the issue of the contravention proceedings. I have found that the contravention proceedings were a waste of time and wholly inappropriate, and that in all the circumstances I would not be doing my duty if I did not make an order for costs.
The proceedings before Barry J on 19 August 2002 involved three applications. The first was an application by the husband that “all proceedings currently pending” be adjourned until DNA paternity tests in relation to one of the parties’ children were to hand. The second was a contravention application filed by the father. The third was an application in which the wife was the moving party, seeking that the father provide $25,000.00 by way of security for costs and that the balance of his proceedings be stayed until all outstanding costs orders are paid.
Barry J was highly critical of the husband’s application insofar as it dealt with DNA testing, but whilst his Honour made the order for security for costs, and stayed the husband’s contravention application, he did not appear to specifically dispose of the husband’s application for an adjournment pending the outcome of the DNA tests.
It appears as though the husband successfully appealed against the decision to order security, although the extent of that success is unclear on the material before me.
The proceedings before Monteith J on 16 December 2002 appeared to arise from the husband’s failure to provide an undertaking requested of him by the Children’s Representative, in consequence of which proceedings were necessary before a Federal Magistrate on 20 May 2002. Whilst it is not altogether clear who was the moving party before the Federal Magistrates Court, Monteith J said at [14]:
.. it is clear in this case that the father was wholly unsuccessful in his application before the Federal Magistrate with respect of the undertaking that had been sought by the children’s representative. It would seem that the proceedings were quite unnecessary; were brought only by his unreasonable behaviour; and in the circumstances I think it is clearly just that I make an order as sought by both the applicant mother and the applicant children’s representative.
On 12 May 2003, the Full Court disposed of the husband’s appeal from the orders of Barry J of 19 August 2002, seemingly wholly or partly allowing it. It ordered that the wife pay the husband’s costs assessed at $1,500.00 and provided that they be offset against any previous costs order.
The material does not afford me any understanding of the 2008 court events which led to two costs orders fixed at $500.00 each being made against the husband.
Husband’s second marriage and separation
At some point which the evidence does not permit me to determine, the husband remarried, seemingly to an Asian national. To this relationship two children were born. However it appears as though that relationship foundered, although the circumstances of its failure and the husband’s separation from his second wife are not clear, save that on 5 October 2000 there appears to have been consent orders made in relation to one child of that relationship, and the respective parties’ property. Those orders saw a property at B Street in C Town transferred to the husband’s second wife, but another property retained by the husband. However it seems probable that in fact the husband and his second wife continued to cohabit after those orders.
Then in 2009 the husband’s second wife removed herself and their children to Asia, where she remains living with them, contrary to extant Federal Magistrates Court orders. It appears as though Federal Magistrate Coker, in consequence of the alleged abduction of the children and the husband’s costs of pursuing legal remedies against his second wife in Asia, together with his costs of travel to Asia to be able to continue some form of relationship with the children, was motivated to order that the B Street property be transferred back to the husband from the second wife. This occurred pursuant to the orders of Coker FM made 23 April 2010.
Negotiations between parties about costs
On 17 September 2008 the husband wrote to the wife’s solicitors in relation to the ongoing litigation. In part, that letter said as follows:
.. As you know the matter is now confined to the accumulation of past costs and as I see it and as I have maintained, much of the past costs incurred by both parties, were attributed to the matters proceeding where false statements and particularly false sworn financial statements were made by your client.
The letter went on to particularise some aspects of the alleged false statements and intimated that the husband had recently referred those matters to relevant investigative authorities. Towards the end of the letter there was a paragraph as follows:
In regard to recent events and other matters I am involved in and in respect to and out of respect for my son [Mr L], I now wish to give your client an opportunity to settle our differences amicably and with a view to my withdrawing all and any of my complaints currently with the Federal Police Fraud Squad, I request your client consent to an adjournment of today’s mention while we enter into and consider a settlement of these matters that are now imminent.
Leaving to one side the question of whether the husband’s offer was lawful or not, nonetheless his unchallenged evidence is that he received no response to that offer. Paragraph 62 of his affidavit continues:
.. and although I received no reply to that offer, I had every reason to expect and believe that the “peace” we have enjoyed since, was due to an unwritten acceptance and a mutual understanding and agreement that the past was best left in the past.
Indeed it does appear as though thereafter there has been no litigation of any kind between the parties, until the wife issued the Enforcement Warrant on 15 June 2015.
Parties’ current circumstances
Although it appears as though the wife was employed in a clerical role during the course of the parties’ relationship, subsequently she has qualified in a profession and now operates her own business in the C Town district.
The husband asserted in his affidavit material – and was not challenged – that the wife “owns several real estate properties outright and has generous superannuation plans and other entitlements and has no financial burden of children or grandchildren in her care or consideration.”
The unchallenged evidence of the husband is that his principal occupation is as a spray painter, but that he suffers from a back condition which, at least for some relatively recent period of time, has seen him qualify for and receive a disability support pension. As to his current financial situation, the unchallenged evidence of the husband is that “it is not very good at present…”[3] It appears as though he presently owns three or four items of real estate, including the B Street property. It does not appear to be in contest that the balance of the properties he owns were all acquired post-separation and likely after the division of matrimonial property between the parties. By paragraph 54 of his affidavit the husband asserts that he has approximately a total of $230,000.00 equity in that real estate.
[3]Paragraph 53 of the husband’s affidavit filed 15 September 2015.
At the time of the hearing before me the husband had returned to work, albeit he said that he only worked in three or four month blocks because of his back and respiratory problems. At paragraph 56 he said:
.. However I may be only able to keep this up for another year or so and I have no superannuation, savings, or health insurance/life insurance etc so hopefully my rental/investment properties will one day return a profit that may suffice as a retirement plan.
RELEVANT STATUTORY PROVISIONS AND LEGAL PRINCIPLES
The discretion to enforce
Part XII of the Family Law Act provides for the enforcement of decrees. Within that Part, section 105(1) provides as follows:
Subject to this Part, the Regulations and to the applicable Rules of Court, all decrees made under this Act may be enforced by any Court having jurisdiction under this Act.
It is well established by binding authority that the use of the word “may” in s 105 establishes a judicial discretion to enforce or refuse to enforce the relevant order: see Ramsey & Ramsey (1983) FLC 91-301 and, for instance, In the Marriage of Kerr (1983) 8 FamLR 1023 at 1026 per Nygh J, and Yilmaz & Yilmaz [2014] FamCA 663 at [183] per Le Poer Trench J. However it is less clear what is required to be established in order to justify the exercise of that discretion, as I shall discuss shortly.
Chapter 20 of the Family Law Rules deals with the enforcement of financial orders and obligations. By Rule 20.01(2)(f) an obligation to pay money includes an order for costs. Rule 20.05 provides that an obligation to pay money may be enforced by, amongst other things, an order for seizure and sale or real property under an Enforcement Warrant. Rule 20.07 provides that “the court may make an order … (c) for enforcement (see Rule 20.05)” which might suggest that an Enforcement Warrant would only issue after an application for an enforcement order has been made and granted. However, somewhat curiously, Part 20.3 of the Rules, which deals with Enforcement Warrants, provides by Rule 20.16(1):
A payee may, without notice to the payer, ask a Family Court to issue an Enforcement Warrant by filing:
(a)An affidavit; and
(b)The Enforcement Warrant sought and a copy of it for service.
That, at least to my mind, makes it plain that an Enforcement Warrant may issue without a formal application for enforcement needing to be filed, and an order for the issue of an Enforcement Warrant made. I am fortified in that construction by a comparison of, on the one hand, rule 20.32(1), which deals with third party debt notices in a similar manner to rule 20.16 with, on the other hand, rule 20.42(1) which in the context of sequestration order, specifically provides that “a payee may apply to the court for an Enforcement Order appointing a sequestrator of the property of a payer by filing an Application in a Case …” together with rule 20.46(1), which employs like language in relation to the appointment of a receiver, and rule 20.53 which provides similarly in the context of other enforcement mechanisms.
Whilst there is no specific power in Part 20.3 of the Rules for a payer to seek a stay of an Enforcement Warrant, there is a power to stay the operation of an enforcement order contained in rule 20.09(1), accepting that the language in that rule is “discharge suspend or vary the order.” However Mr Fellows, who appeared as counsel for the wife, did not seek to argue that any distinction should be drawn based upon the fact that the husband was the moving party to his stay application, as distinct from the wife being the moving party to an application for enforcement, and accepted that the principles applicable to the exercise of a discretion under s 105 applied equally to whether or not to grant a stay as sought by the husband.
The following statements of general principle applicable to the exercise of the discretion under s 105 may be drawn from the authorities.
Firstly, it is only facts or circumstances arising since the date of the orders sought to be enforced that will inform the discretion under s 105.[4]
[4] In the Marriage of Spry and Roet (1977) 29 FLR 425 at 428, 430; Watson & Watson [2006] FMCAfam 293 at [32].
Secondly, the question for the court’s consideration is whether in all the circumstances it is inequitable to enforce the order. However it is not immediately clear in what sense the word “inequitable” is used, and particularly whether it is by reference to equitable doctrine, or only general notions of fairness.
A convenient starting point to review the relevant authorities is the Full Court decision of Ramsey & Ramsey [1983] FLC 91-301. That was a case where, after orders awarding the former matrimonial home to the wife had been made, the parties resumed their relationship, cohabited in that home, and jointly effected improvements to it over several years. Presumably given the reconciliation, the husband never transferred his interest in the home to the wife as required under the orders. Upon their final separation, the wife then sought enforcement of the original orders; the husband opposed it on, amongst other grounds, that the wife was estopped from seeking to enforce the orders. In doing however, he relied not upon s 105, but s 84 of the Family Law Act, although the Full Court held that the correct source of power was s 80.
The appeal was argued and allowed on the narrow point of whether the trial judge erred by not allowing the father to cross-examine by reference to his estoppel argument. However in the course of its discussion of the husband’s estoppel argument, the Full Court referred, seemingly with approval, to the earlier English Court of Appeal decision of Thwaite & Thwaite [1981] 2 All ER 789.
Thwaite was a case where the parties had, by consent, submitted to orders that the wife return with the parties’ children to the United Kingdom, and within 28 days of her doing so, the husband would transfer his interest in the former matrimonial home to the wife. Whilst the wife did return from abroad, she left again with the children prior to the transfer having been effected. She nonetheless sought enforcement of the transfer to her. Initially a Registrar so ordered, but an appeal therefrom to a single Judge was allowed on the grounds that, given the wife’s conduct “it would be unjust to compel the husband to transfer his interest in the house to her.” The wife’s appeal from the primary Judge’s decision was dismissed by the Court of Appeal. In the course of doing so, the court observed at 794:
Where the order is still executory, as in the present case, and one of the parties applies to the court to enforce the order, the court may refuse if, in the circumstances prevailing at the time of the application, it would be inequitable to do so: Mullins v Howell (1879) 11 Ch D 763 and Purcell v F C Trigell Ltd [1970] 3 All ER 671 at 676-677, [1971] 1 QB 358 at 367-368. Where the consent order derives its legal effect from the contract, this is equivalent to refusing a decree of specific performance; where the legal effect derives from the order itself the court has jurisdiction over its own orders: per Jessell MR in Mullins v Howell (1879) 11 Ch D 763 at 766.
In order to understand that passage, and particularly its reference to “inequitable to do so”, it is necessary to consider in greater detail the two cases which the Court of Appeal referred to.
Purcell (supra) involved an action for damages for personal injury. The defendants were very tardy in answering interrogatories. Ultimately the plaintiff and defendants agreed to an order that in the event the answers to the interrogatories were not delivered within a certain timeframe, the plaintiff would be entitled to enter judgment against both defendants. Indeed the answers were not delivered within time, and accordingly a Registrar entered judgment. An appeal to a Judge from the Registrar failed. However the defendants then sought leave to extend the time for appealing from the original consent order which had facilitated the entry of judgment. The time was extended and the appeal allowed. From that decision the plaintiff appealed.
The first two points argued by the appellant plaintiff have no bearing on the issue I am presently considering. However in relation to the third aspect of the appeal, Lord Denning MR said:
Thirdly: the defendants asked the court to exercise its discretion so as not to enforce this consent order. Counsel for the defendants pointed out, with force, that the failure to answer these interrogatories was a mere oversight – an oversight by the lawyers – and the defendants ought not to be made to suffer for it. Certainly not the first defendants, who answered their interrogatories satisfactorily. They ought not to suffer for the mistakes of the second defendant. I would be much in favour of this submission, if the defendants had behaved properly in the earlier stages of this litigation. But, having regard to the history of the case, I do not think that any mercy should be shown to the defendants or either of them. Their conduct has been deplorable. The plaintiff has acted properly throughout, but he has been subjected to intolerable and inexcusable delays by the defendants or their solicitors at every turn. This delay has been such as to prejudice the plaintiff in his case. The defendants are not in a position to ask for any discretion to be exercised in their favour.
It is a little difficult to understand how this third point arose on the limited history of the proceedings contained in the Court of Appeal judgment. It might be that, as part of the appeal arose from the consent order, there was some ground relating to discretionary enforcement raised; the alternative which seems more probable, is that in conjunction with the appeal there was also, in effect, an order sought to stay enforcement of the consent order. Assuming the latter to be the case, the point which can be drawn from Purcell therefore, at least from the reasons of Lord Denning MR, is that poor conduct of the defendant and prejudice to the plaintiff was sufficient basis for the court to decline to exercise its discretion not to enforce the consent order. Importantly however, none of that was characterised by Lord Denning MR in equitable terms, but rather in terms consistent with general notions of fairness.
It does not appear as though either of the other two Court of Appeal Judges dealt with this aspect of the appeal in their separate reasons, and appeared to agree with Lord Denning MR in relation to it.
The Court of Appeal in Purcell also referred to Mullins v Howell (supra), albeit in the context of whether an appeal lies from a consent order.
Mullins v Howell involved the making of a unilateral mistake, in that the defendant gave an undertaking in wider terms than he had intended. The undertaking was part of the final settlement of the proceedings. Upon the undertaking not being complied with, the plaintiff sought to attach the defendant by sending him to prison. The court declined. Lord Jessel MR said:
I do not think that the rules which have been laid down as the rules under which the court will enforce agreements apply to enforcing orders of the court because the court has jurisdiction over its own orders and there is a larger discretion as to orders made on interlocutory applications than as to those which are final judgments.
Here there is not only an undertaking but an agreement to which the Rules of Equity would apply, so being satisfied that the Defendant made a mistake, I should not follow the Rule in Equity, enforce the agreement as against him, and a fortiori, I should not enforce the undertaking against him.
I do not read his Lordship’s reasons in the second paragraph as suggesting that there needs to be an equitable remedy or basis underpinning a court declining to enforce its orders. Rather his Lordship appeared to be saying that because there was an agreement which underpinned the orders, being an agreement which equity would not enforce, that informed the exercise of the exercise of the discretion to enforce the resultant orders.
Against that background review of both Mullins and Purcell, it seems plain that when the subsequent Court of Appeal in Thwaite used the words “inequitable to do so” it was not invoking equitable doctrine, or restricting the exercise of the inherent discretion to enforce the Court’s orders to strict equitable doctrine. If it were intending to do so, then it is curious that it referred to cases, and particularly Purcell, which appear to be authorities to the contrary. Thus the citing of Thwaite with approval by the Full Court of this court in Ramsey (supra) should not be construed as restricting the exercise of the statutory discretion under either s 80 or s 84 only to circumstances where a court of equity would intervene.
Indeed, the preponderance of cases since Ramsey appear to have so construed its purport. For instance, in Kerr & Kerr (1983) FLC 91-329, Nygh J was dealing with an application to enforce an order for the sale of the former matrimonial home, and for the net proceeds of sale to be equally divided between the husband and wife. Subsequently the husband proposed to the wife that he in fact buy her interest in the matrimonial home for $12,000.00, which he ultimately did. However he withheld from the payment some monies which he believed should be offset pursuant to the orders made by the trial Judge. The wife then sought enforcement of the original orders for the sale of the home. The husband argued that the wife was estopped from so doing.
At 78,250 Nygh J said:
I have come to the conclusion that the wife is estopped from asserting that the orders made on 25 March 1977 are still enforceable, by reason of her conduct since that date and that furthermore, even if she were not so estopped it would be, in the circumstances of the case by reason of her conduct and her delay in seeking such enforcement, inequitable to exercise my discretion to enforce the orders…
The point which I distil from that is that whilst Nygh J recognised that in the event that there were an enforceable equity, that would inform the exercise of his discretion, even absent that equity being established, the discretion would be exercised by notions of general fairness.
To like effect are two decisions of the then Federal Magistrates Court, of Watson & Watson [2006] FMCAfam 293 and Peabody & Peabody [2011] FMCAfam 835, and a recent first instance decision of Le Poer Trench J in Yilmaz & Yilmaz [2014] FamCA 663 at [183].
I should say that although on one view, the judgment of Brereton J in Prismex Technologies Pty Ltd v Taggert [2013] NSWSC 292 might support a different interpretation of the word “inequitable” – see for example paragraphs [49] and [63] – in any event, there his Honour was dealing with the inherent jurisdiction of the New South Wales Supreme Court, and not a statutory discretion, such as afforded by s 105.
Finally I should advert to Collins & Olsthoorn (2005) FLC 93-216. At [14] the Full Court said “It is well settled that the Court has the discretion to refuse to enforce one of its own orders (see Ramsey & Ramsey (1983) FLC 91-301).” The Full Court refused to disturb the exercise of the discretion to refuse the enforcement sought, being the appointment of the appellant wife as trustee for sale of certain property owned by the husband, although it is difficult to identify any specific equity which the primary judge relied upon in refusing to enforce the judgment. Rather it appears as though the primary judge was troubled that the default in payment of the full sum payable by the husband in that case was, in the overall scheme of things, a very small amount, some $500.00 short of what the court required him to pay.
It therefore appears that there is no decision of the Full Court which specifically restricts the exercise of the s 105 discretion only to circumstances where an equitable remedy or discretionary bar to relief arises.
Thirdly, the onus upon showing that it is not equitable to enforce the order is upon the party so contending.[5]
[5] Yilmaz & Yilmaz [2014] FamCA 663, [2042]; In the Marriage of Ramsey & Ramsey (1983) FLC 91-301, at 78,061.
Fourthly, delay in the nature of laches is a relevant consideration. In this context, also relevant will be the absence of any Commonwealth limitation period for enforcement, and the existence of any relevant State limitation period for the enforcement of judgments.[6]
[6] Watson & Watson [2006] FMCAfam 293 at [32].
Limitation issues relating to enforcement of judgments
Whilst it is correct to say that there is no limitation period for enforcement of money judgments in this court, the Full Court in Barrak & Barakat (2005) FLC 93-234 followed the earlier decision of the Full Court of the Federal Court in Dennehy v Reasonable Endeavours Pty Ltd (2003) 130 FCR 494, to the effect that by virtue of s 79 of the Judiciary Act (1903) (Cth) provisions of the relevant State limitation statutes are potentially relevant to such judgments. However both Full courts drew a distinction between actions upon a judgment on the one hand, and actions to enforce a judgment on the other. In Dennehy the Full Court was concerned with s 5(4) of the Limitations of Action Act (Vic) which provided:
An action shall not be brought upon any judgment after the expiration of 15 years from the date on which the judgment became enforceable.
In Barrak the Court was concerned with s 17 of the Limitation Act (NSW), which by sub-section (1) provided:
An action on a cause of action on a judgment is not maintainable if brought after the expiration of a limitation period of 12 years running from the date from which the judgment first becomes enforceable by the plaintiff.
In both cases the Full Courts preferred a narrow construction of the relevant provisions, such that enforcement of a judgment was not an action brought upon a judgment, and hence the limitation period applicable under those provisions did not bar the relevant proceedings.[7]
[7]Interestingly, neither court appears to have considered the statutory provisions dealing with time bars on “actions” to recover interest on, inter alia, judgments. It is unnecessary for me to consider the correctness of both decisions, as I am plainly bound by Barrak, although I have some reservation as to its correctness.
Section 10(4) of the Limitations of Actions Act 1974 (Qld) provides:
An action shall not be brought upon a judgment after the expiration of 12 years from the date on which the judgment becomes enforceable.
Its terms are indistinguishable from those under consideration in Dennehy which was expressly followed by Barrak. I am therefore bound by the Full Court in Barrak, to hold that an action for enforcement – including the issue of an Enforcement Warrant – is not an action brought upon a judgment, and hence the limitation period in s 10(4) does not apply in this case.
Limitation issues relating to interest
Some Australian States have limitation periods in relation to the recovery of arrears of interest payable under, amongst other things, judgments – see for instance s 5(7) of the Limitations of Actions Act 1958 (Vic). It is arguable that such a provision would be applicable to Commonwealth proceedings by virtue of s 79(3)(a) of the Judiciary Act 1903 (Cth). However there is no such provision contained within the Queensland Limitations of Actions Act, and therefore it is unnecessary to consider this matter in any greater detail. However it does seem to me that, insofar as the enforcement sought relates to interest arising under a judgment, it is relevant to recognise that in some States, actions to recover arrears of interest are subject to a statutory limitation period, save that again, the word “action” appears in the language of the Victorian provision, and hence the narrow construction of that word preferred in Dennehy and Barrak might again apply.
Delay and laches
Laches is a discretionary bar to relief based on equitable claims. It is not a defence to common law actions, much less an action or activity brought in furtherance of a statutory right. Therefore to the extent that cases such as Peabody (supra) seem to contend that laches may cause a party to “lose the right to insist on the performance of an obligation”[8] I would respectfully disagree. However the analysis of delay, and its consequences, which is undertaken when considering a defence of laches, is nonetheless relevant to the exercise of the discretion under s 105. Particularly, relevant to establishing the equitable bar are the following:
·That the delaying party had full knowledge of the material facts, or knowledge of circumstances from which the relevant facts are a clear inference;[9]
·That the delaying party has acquiesced and assented to the other party’s conduct or position, or alternatively, that the delaying party’s delay has cause the other party to prejudicially change their circumstances.[10]
[8]At [33].
[9]Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2005] QSC 233 at [631].
[10]Streeter v Western Areas Expiration Pty Ltd (No 2) (2011) 278 ALR 291 at [635].
Further, the cases demonstrate that absent acquiescence or prejudice, delay of itself does not readily excite equitable intervention.
EXERCISE OF THE DISCRETION IN THIS CASE
I identify the following points as being in favour of the enforcement of the costs orders:
(a)The orders in question are unequivocal and unsatisfied
All of the orders are simply expressed and require the payment of sums of money. There is no room for ambiguity or interpretation. There is no suggestion that they have been even partly satisfied.
(b)Husband has made no attempt at compliance
Other than by his letter of 17 September 2008 when, lawfully or otherwise, the husband offered to withdraw his complaint to police in exchange for partial or complete surrender of the wife’s entitlement to costs, he has made absolutely no attempt at payment of the sums in question.
(c)Husband has failed to comply with court orders
Either the husband has defied the costs orders, or has adopted a tactic of doing nothing and hoping that the wife would lose interest in pursuing him. A court should be cautious to ensure that it does not encourage non-compliance with its orders by declining to enforce them, except where that is clearly warranted.
(d)The sum in question is not insubstantial
Ultimately Mr Fellows conceded that the sum claimed attributable to the order of Monteith J made 16 December 2002, being $1,835.39 together with interest of $2,317.89, could not be recovered as no certificate of taxation had been issued in respect of it. That therefore sees the total sum in question reduced to $41,697.40 however that is still a substantial sum of money. Whilst I do not have any present indication as to the wife’s financial circumstances other than the husband’s unchallenged assertions as to them, there is no reason to think that that sum of money is not significant to her.
(e)Wife has never abandoned claim
Save for the absence of any response to the husband’s letter of 17 September 2008, there is no evidence that the wife has ever intimated, whether by herself or her solicitors, informally or otherwise, that she was not intending to press for satisfaction of the orders. True it is that since each of the orders (save for those of 2008), there have been ongoing proceedings between the parties which could have included enforcement proceedings but did not, however the wife’s unchallenged evidence was that she was unaware that the process for enforcement required her to instigate action rather than the court doing of its own volition.
(f)The husband does not assert he changed his position in reliance on the absence of enforcement
Nowhere in the husband’s material does he say that he altered his position by doing something, or not doing something, which he otherwise would not have done, or have done, but for his belief, post 2008, that the wife had tacitly accepted his offer not to press on with recovery of her costs. The closest his affidavit goes is in paragraph 62, which I have already relevantly recited earlier at paragraph 26 of these reasons. That falls far short of an assertion of change in position.
On the other hand I identify the following factors as telling against enforcement:
(a)The wife has not sought enforcement for many years
With the exception of the 2008 orders for a total of $1,000.00, all of the costs orders were made more than 12 years prior to the Enforcement Warrant issuing, and the most elderly is now 17 years old. The wife’s explanation is that she believed that the court would act to recover those sums on her behalf, much as the Child Support Agency does in relation to child support. She was not challenged in relation to this. That said, it appears as though she has never made any inquiry of the court as to the progress in recovery of sums, and indeed when she first became aware of the husband’s not insignificant real estate interests, her inquiry was made of her solicitors rather than the court. There is little doubt that what prompted the wife’s enforcement was the prospect of recovery based upon the husband having assets, some unencumbered.
There must come a point where confidence in the administration of justice is eroded if ancient debts are able to be enforced, even though no action for enforcement has been taken for many years, nor any intimation of an intention to insist upon enforcement.
(b)Husband’s financial position improved
Undoubtedly the husband now has greater assets than he did the time of any of the relevant orders. The husband said from the bar table – but not in his affidavit – that earlier proceedings for enforcement would likely have led to his bankruptcy, from which he would now have been discharged. Inferentially he says he would have the same assets as he now does, save that he would not be still liable for the wife’s costs.
(c)The wife’s position has improved over time
It appears as though the wife has substantially restructured her life post-separation, including most significantly having obtained professional qualifications and commenced to conduct her own business. However I have no direct knowledge of the wife’s financial position other than the husband’s assertion that it is, implicitly, a comfortable one.
(d)Wife has litigated on other matters
I have already observed that there has been ongoing litigation between the parties after most of the orders in question, without them being combined with any recovery proceedings. The wife says that she did not know that recovery was her responsibility.
(e)Wife did not respond to letter of 17 September 2008
The husband’s unchallenged evidence is that he received no response to his letter of 17 September 2008. Further, he was not challenged in his assertion that thereafter he thought the wife had given up on pursuing her costs orders. Given the lack of response to the letter, and complete inactivity thereafter for more than 6 years, his assumption, even if perhaps initially unreasonable, became decreasingly so as each year rolled by.
CONCLUSION
The wife had a mistaken belief that the court would enforce orders for costs against the husband; plainly that view was indeed wholly erroneous. The husband had a decreasingly unreasonable belief that the wife did not intend to pursue recovery of her costs; that view also proved to be incorrect.
Weighing all the factors in the balance, and accepting that it is for the husband to persuade me that it would be inequitable to now enforce the orders, I am not so satisfied. Of particular importance in reaching that conclusion is the husband’s letter of 17 September 2008; it demonstrated that at that point in time – when the first costs order was approaching 10 years since it was made – the husband recognised it as then still a current liability of his, and sought to negotiate its discharge.
Initially it could not have been reasonable to assume the wife’s silence was acceptance of his offer, although as the years wore on, her inaction might have justified an increasing belief, or at least hope, that she did not intend to enforce the debts. But viewed in that light, the most significant delay by the wife is only since September 2008, it then being only something less than seven years until she then sought enforcement. Moreover, I am not satisfied that the wife’s inaction comprised assent or acquiescence to the husband’s assertions in his letter, or that her silence has caused any prejudicial change of circumstance by the husband.
His only change is that he has accumulated assets, which is scarcely prejudicial to him. Rather what his submission implicitly says is that he would have actively taken steps not to acquire assets, or in other words, tried to ensure he evaded his obligations under the various orders. No court should countenance the alleged lost opportunity to frustrate its orders as prejudice.
However it is altogether a different matter in relation to interest. The wife seeks to obtain the benefit of, on one view, punitive interest rates, notwithstanding her complete failure to act to enforce the costs orders. In Yilmaz (supra) at [213] Le Poer Trench J said:
Failure to press for enforcement of a court order is a matter which, in my view, could justify the court in exercising its discretion not to enforce an order requiring interest to be paid on the unpaid portion of the principal sum during the period the order was not actively being pursued. This could be the case notwithstanding the action to “hang off” enforcing was for the most altruistic of reasons.
I accept that his Honour was not there dealing with interest on costs, but there is no reason to distinguish that statement on that ground.
In doing absolutely nothing to enforce her costs orders for many, many years, the wife’s delay should be at her cost, not the husband’s. I therefore decline to allow the enforcement warrant to continue in its present form. There will be orders staying further action upon the Enforcement Warrant issued 15 June 2015. A fresh enforcement warrant for the proper principal sum,[11] and which claims no interest, will need to be filed by the wife.
[11]See paragraph 68(d) of these Reasons.
If the husband wishes to pursue his allegations of fraud, then he will need to bring a further application to stay enforcement, or bring separate proceedings in a court with the necessary jurisdiction.
Otherwise the husband’s applications filed 14 September 2015 and 9 November 2015 should be dismissed.
I certify that the preceding seventy eight (78) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 23 May 2016.
Associate:
Date: 23 May 2016
18
7
6