McMillan & McMillan (No 3)
[2016] FamCA 1141
•30 September 2016
FAMILY COURT OF AUSTRALIA
| MCMILLAN & MCMILLAN (NO 3) | [2016] FamCA 1141 |
| FAMILY LAW – ENFORCEMENT WARRANT – Application to stay warrant – Whether the Enforcement Warrant over the husband’s property should be stayed – Whether an injunction should be ordered against the wife for the removal of the writ over the husband’s property – Where the encumbered property is required to borrow funds for the payment of council rates – Where the balance of convenience favours the matter’s determination at trial. |
| Family Law Act 1975 (Cth) ss 34(1) and 114(3), |
| APPLICANT: | Mr McMillan |
| RESPONDENT: | Ms McMillan |
| FILE NUMBER: | CSC | 355 | of | 2015 |
| DATE DELIVERED: | 30 September 2016 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Forrest J |
| HEARING DATE: | 30 September 2016 |
REPRESENTATION
| THE APPLICANT: | In Person |
| SOLICITOR FOR THE RESPONDENT: | Mr Lago Williams Graham Carman Solicitors |
Orders
IT IS ORDERED BY CONSENT
That until further order in these proceedings, the Enforcement Warrant filed on behalf of the wife on 16 June 2016 is stayed.
IT IS FURTHER ORDERED
That paragraph 2 of the orders sought contained within the Application in a Case filed 19 September 2016 is dismissed.
The wife’s costs of and incidental to the hearing of the Application in a Case today are reserved to the Judge who hears and determines the substantive proceedings.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym McMillan & McMillan (No 3) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: CSC 355 of 2015
| Mr McMillan |
Applicant
And
| Ms McMillan |
Respondent
REASONS FOR JUDGMENT
Before me today is an Application in a Case that was filed in extant proceedings in the Cairns Registry of this Court on 19 September 2016. The matter was sought to be listed by the applicant, who I will describe as the husband out of convenience, as urgent and was therefore listed for hearing by me in the registry today here in Brisbane instead of in the Cairns registry. It turns out that the husband, who I understand normally lives in C Town, was in Brisbane for work purposes and has been able to attend in Court personally in the prosecution of this Application in a Case. He has appeared before me in person and is representing himself.
The respondent, who I will describe as the wife, is appearing by telephone represented by her solicitor, Mr Lago. I understand them to be in Mr Lago’s office within the offices that his firm occupies in C Town.
The Application in a Case filed and sought to be urgently determined by the husband contains essentially two separate orders that he is seeking from the Court today. They are worded as follows:
1. That if the Court cannot Dismiss/Strike Out the Enforcement Warrant in the first instance based on the material and the Documented Evidence attached to this application, then The Court effectively “Stay” the Enforcement Warrant pending a Hearing of this matter.
2. That any Writ/Caveat, or financial hold of any kind and in particular, the Writ lodged on 6/7/2016 by [Ms McMillan] over the Title of the Father and Son’s Home at [B Street, C Town], be immediately removed so that Home Equity Funds can be borrowed to Pay outstanding Rates & Charges to the [C Town] City Council. (errors in original)
I consider it necessary just to set out some background to the Application in a Case that is before me today that I understand from the limited material that I have been referred to.
The husband and the wife have, it seems, been involved over a long period of time, or at least they were involved over a long period of time, in litigation before this Court. During that litigation a number of costs orders were made in favour of the wife against the husband. I understand the last of those costs orders to have been made in 2008 with a number of them being made over a number of years before that. The husband says the oldest is 16 years old, so the first one was presumably made around 2000, with the others being made in the years in between. Those costs orders I understand are said to total something around $15,000 or $16,000.
Earlier this year, apparently, accordingly at least to what I heard from the husband, after some years of no action being brought against him by the wife on this file, she, through her solicitors, filed an Enforcement Warrant and registered Writs of Execution over a number of real properties owned and registered in the name of the husband in or around C Town in the North Queensland area. She was seeking enforcement of the principal amount of costs orders owed, but also some amount of money that was even larger than that that she attributed to interest owed on them.
As I understand it, the husband opposed the application and he sought to have the application dismissed or struck out. They were the competing applications that were then heard by Justice Tree and Justice Tree determined that the wife was not entitled to seek to recover the interest that she had sought to recover in the proceedings and he dismissed the enforcement summons that had been filed. However, I understand, and it has fallen from the husband this morning, that at the same time his Honour said, seemingly in written reasons for judgment, that he saw no reason why the wife could not again file another enforcement summons seeking just the amount of money that was owed to her as a principal sum pursuant to the costs orders that she was seeking to enforce, with no interest attached.
It seems that the wife then did that on 16 June 2016 and has sought an amount of $16,069 be paid to her in that way. She has also apparently registered writs of execution against the title of at least three, if not four, of the husband’s properties as I had previously said she had done in respect of the earlier enforcement summons that was dismissed.
The husband has again taken a position of opposition to the wife’s enforcement summons and has filed material in response, including as I understand it, an application in response at least in which he seeks the substantive order of dismissal of the wife’s enforcement application again.
From what I have heard this morning, he raises a number of issues not the least of which include the length of time that has expired since the wife obtained the costs orders and questions of alleged fraud perpetrated on the Court by the wife and/or her solicitors at the time the costs orders were made.
Though he was successful in the first instance earlier in the year before Justice Tree and had the wife’s enforcement summons filed at that time dismissed, for reasons not clear to me, he has brought an application for Justice Tree to recuse himself from hearing the substantive proceedings that I have just described, namely the determination of the wife’s enforcement warrant or otherwise. As I understand it, Justice Tree set out a timetable for submissions and material to be filed and that is still in train, but Justice Tree has not yet determined the recusal application one way or another.
In the meantime, the husband filed this urgent application. The basis of his urgent application seems to revolve around one particular property, namely the one that is listed in paragraph 2 of the orders he seeks, property at B Street, C Town. I understand from reading his affidavit that he has read in support, an affidavit sworn on 15 September and filed 19 September 2016, that he and his adult son (the son of the wife in the proceedings) live in part of this property and rent out another part of it. It is one of the properties over which a writ is lodged or registered, that the wife seeks to involve in the enforcement process.
At the outset of today’s hearing, I was informed by the solicitor for the wife that indeed the wife had offered to the husband to consent to a stay of the enforcement warrant pending the final determination of the substantive proceedings that may or may not be heard and determined by Justice Tree. The husband conceded that that was correct and that he was informed of that and aware of that. He nevertheless pressed on for the order that he seeks in paragraph 2.
14.His case effectively is, as I understand it, that that property, B Street, C Town, at which he and his son live and part of which they rent out, is a property that is already encumbered but in respect of which he has not paid the rates or the water usage fees to the C Town City Council for what would seem, given the amount of money that has accrued, to be several years. The evidence is that there is about $13,000 or $14,000 worth of rates now outstanding in respect of the property and that there is some $1,300 or $1,500 or thereabouts in respect of water usage fees outstanding. $13,000 or $14,000 worth of rates would accrue, on my basic understanding, over several years.
The husband says, to the extent that it is relevant, that he has not paid those rates and water usage fees as he has been using the money that he would have paid the rates with for other purposes, particularly travelling to Asia and engaging in family law litigation there against a more recent wife than the wife in these proceedings. She is a Asian national, with whom he had a couple of children, who, regrettably for the husband, apparently returned to Asia taking the children with her and who is apparently unwilling to let the husband see the children, at least on terms that he would want to see them on.
Be that as it may, as I have said, there are some $16,000 worth of rates and water fees owing to the C Town City Council. The husband says he would like to go and borrow the money to pay those outstanding rates and fees from the bank which currently has the security over that B Street property, in the form of a mortgage. He says he would like to simply extend the current amount of the liability that he owes to that bank, and get a further advance of $16,000 to pay those rates and the fees.
He says, and he has put evidence before the Court of some email communication with an officer at the bank to confirm it, and I have no doubt that it is right, that the bank says “well, we might consider an application by you to advance you further funds, but not whilst there is a writ over the property as currently registered”. The husband’s case is essentially “whilst this writ is here I can’t borrow money and I can’t pay off the debt to the Council”.
He also puts into evidence an email or letter from the Council in which the Council says to him effectively that they would like to see the monies owing to them paid as soon as he can so that the property is not put into the “at risk” category of being sold by the Council. The husband says that he has other properties in a nearby location in far North Queensland that are unencumbered and worth a sufficient amount of money to cover the debt of the sum of $16,000 that is claimed by the wife in these proceedings.
He submits that the wife is simply acting in a way to cause him financial detriment and stress and inconvenience by seeking to maintain the writ over the B Street property. Effectively, he says, although I did not hear the words fall from his mouth, but I accept that his submissions incorporated this type of submission, that justice and equity would best be served by removing the writ off the property and allowing him to borrow against it to be rid of the debt without the risk of the property being sold.
It is effectively an interim injunction that the husband is seeking, an interim mandatory injunction ordering the wife to do something to take steps to remove security that she has effectively placed over his B Street property by the writ. In the circumstances, the Court’s power emerges from s 34(1) and s 114(3) of the Family Law Act 1975 (Cth). Section 114(3) provides:
A court exercising jurisdiction under this Act … may grant an injunction, by interlocutory order or otherwise …, in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.
The exercise of that discretion conferred on the Court involves weighing up a number of matters. I begin the weighing up process and the determination process with the acknowledgment that the wife already consents to an order that the enforcement warrant is stayed and that she will take no further steps to enforce her enforcement warrant pending the hearing and determination of the husband’s application to have it dismissed. I accept that is a reasonable position for the wife to adopt in the circumstances.
For the wife, Mr Lago makes a number of reasonably concise points. First, he says the husband has put no evidence before the Court and taken the Court to no evidence that really sets out or establishes the full extent of his financial position; he has not filed a financial statement nor has he in his affidavit set out the full extent of his assets, his liabilities and his income or his outgoings, that would be fairly critical in being able to properly assess just how important it is for him to be able to access some equity in the B Street property at all costs, which is effectively what he is asking at the moment.
Mr Lago submits there is no evidence that Mr McMillan does not otherwise have the capacity to pay the outstanding rates and water fees. For example, he does not say that he has not got the money in the bank. He does not say that he cannot otherwise raise it. Mr Lago submits that there is no evidence as to the value of the B Street property and no evidence as to the amount currently owed in respect of the liability already secured by that property, meaning that there is absolutely no evidence before the Court as to how much equity Mr McMillan has in that property. It could be perhaps that there is not even sufficient equity in that property for him to borrow the money to pay out the rates and the water fees.
There just is not any evidence that goes to that issue at all and so the Court just cannot know what the situation is in respect of the B Street property. There is no evidence, Mr Lago submitted, to persuade the Court that if the writ is removed that the husband would actually be successful in an application to the bank for finance. I also observe that despite the annexure of the letter from a Council officer to the husband, there is no really any evidence, even on the reading of that letter, to suggest that the Council is about to act and force the sale of the property in any form, such that would support the urgency of today’s application having been brought on as quickly as it has, or, that would support seriously the need to grant the order urgently that the husband seeks today.
Even more important and fundamental, though, is evidence that the husband himself included in his material and repeatedly referred to and pointed out. He has other properties. These are properties located at a place called D Town. In his oral submissions to me, he pointed out repeatedly that these two properties are unencumbered and worth $50,000, although in his affidavit that he pointed to and that he relied upon there is no evidence as to the actual value of those properties.
However, once that was raised with him, he then referred me to some annexures attached to a previous affidavit that he had filed on 12 September 2016, namely annexure Q which included a number of documents. The ones he took me to were half-yearly rates notices from the Region E Regional Council which is obviously the local authority responsible for these two D Town properties, which include reference to the valuation of these two properties, one of them being $60,000 and one being $39,000. The two figures, at least on the valuations from the Council, do not quite equate to the $50,000 each property is worth as asserted by the husband himself.
There is not any evidence other than the husband’s assertions that those two property are not secured or do not have mortgages already attached to them, but I have no reason to not accept the husband’s assertion that they are unencumbered, and for the purposes of today I do accept that. When the husband was asked a number of times as to why he simply could not use those properties, or one of them at least, as security for further borrowings to pay out the Council, he effectively made two points:
·That to take a new loan facility against one of those properties and to put in place security would be an extra inconvenience and some additional cost, instead of the option of further extending the liability that is secured against the B Street property; and
·He also said he did not believe that he would be able to get the tax deductibility advantages of being able to claim the interest on such a loan secured against the other properties in the same way that he already does to some extent with the B Street property liability because it is an investment property which he says he partly negative gears.
In respect of the first point, there is no evidence as to what it might cost him to take out a further loan other than his assertions from the bar table, which I cannot really place much weight on. There is no evidence that borrowing a further $16,000 against the current property would be less of an expense other than his assertions from the bar table. It may be the case, but I simply cannot accept all those as accurate assertions just because they were asserted from the bar table and, in any event, even if it is right, it is not in itself determinative of the matter today.
As to the second point, again I am not sure his expressed views are correct. I am not a tax expert myself, but I am not sure that the husband’s about that is necessarily correct, and I would suggest that he might find out something different if he talks to the accountant who prepares his tax returns, particularly the tax return that includes the expenditures he sets out in respect of the B Street property that he asserts is an investment property.
In any event, in all the circumstances, I am just simply not persuaded that an injunction should be ordered against the wife for her to remove the writ lodged over B Street. The balance of convenience in the case in my view favours leaving the matter as it is until the final hearing and determination of the enforcement warrant proceedings that are currently at this stage still before Justice Tree and I refuse to make the order that is sought in paragraph 2 of the orders sought.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 30 September 2016.
Associate:
Date: 20 January 2017
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