NIXON & NIXON

[2013] FamCA 147

FAMILY COURT OF AUSTRALIA

NIXON & NIXON [2013] FamCA 147

FAMILY LAW – ENFORCEMENT OF ORDERS

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

APPLICANT: Ms Nixon

RESPONDENT: Mr Nixon

FILE NUMBER: MLC 2061 of 2009

DATE DELIVERED: 29 January 2013

PLACE DELIVERED: Melbourne

PLACE HEARD:

JUDGMENT OF: Dessau J

HEARING DATE: 29 January 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Vadarlis

SOLICITOR FOR THE APPLICANT: Vadarlis & Associates

COUNSEL FOR THE RESPONDENT: In person

SOLICITOR FOR THE RESPONDENT:

Orders

K Capital Pty Ltd

1. That on the oral application by Mr Styring of counsel made before me this day, K Capital Pty Ltd … shall be given leave to intervene in this proceeding.

2. That the intervener be granted leave to file the affidavit of Rachael Jane Gibbs sworn 25 January 2013.

B Street Sale

1. That the words “the [B Street] property and” and paragraph (c) of Order 9 of the Orders made by the Honourable Justice Dessau on 19 October 2012 (“the orders”) are hereby deleted.

2. That the words “That for the purposes of paragraph 9 of these orders” appearing in paragraph 10 of the Orders are hereby deleted.

3. That the husband shall be and is hereby restrained by himself, his servants or agents from using, encumbering, selling, borrowing against or in any way dealing with or diminishing his interest in Take and Use Licence numbered … issued under the Water Act 1989 or any other similar water or bore licence or rights that relates to or affects the B Street property.

4. That the intervener shall keep the applicant wife and respondent husband reasonably informed as to the progress of the sale.

5. That the solicitors for the wife, Vadarlis & Associates:

   (a)Forthwith serve a copy of this order upon the Victorian Sheriff and the Marshal of the Family Court of Australia; and

   (b)By 4.00pm on 5 February 2013 lodge with the Victorian Registrar of Titles a Withdrawal of the Warrant of Seizure and Sale numbered … lodged by the wife over the B Street Certificate of Title on 24 October 2012.

Chattels

1. That by 4.00pm on 8 February 2013 the husband shall deliver to BB Auctioneers at …, the following artefacts:

   (a)Artefact CC

   (b)Artefact DD

   (c)Artefact EE

   (d)Artefact FF

   (e)Artefact GG

   (f)Artefact HH

   (g)Artefact JJ

   (h)Artefact KK

   (i)Artefact LL

   (j)Artefact MM

   (k)Artefact NN

2. That the Victorian Sheriff is directed that the artefacts and chattels referred to in paragraph 8 of the Orders be sold via BB Auctioneers, …, in their next scheduled auctions on … 2013 (for the Type 1 art) and … 2013 (for the Type 2 art).

3. That the husband shall be and is hereby restrained by himself, his servants and agents from attending the BB Auctioneers viewings and auctions of the artefacts and chattels referred to in paragraph 8 of the Orders.

Liberty to Apply

1. That liberty to apply shall be granted to the parties and the enforcement officer in respect to any matters arising from these orders, and to the wife and the intervener specifically in relation to the Licences and rights referred to in paragraph 5 of these orders, on short notice.

2. That the husband shall pay the wife’s costs of this application on an indemnity basis, such costs to be agreed within 21 days and failing agreement to be taxed.

3. That otherwise all outstanding applications in a case shall be dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Nixon & Nixon 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 MELBOURNE

FILE NUMBER: MLC 2061 of 2009

Ms Nixon

Applicant

And

Mr Nixon

Respondent

REASONS FOR JUDGMENT

1. On 19 October 2012, I made enforcement orders that included a warrant for the sale of a property registered in the husband’s name – a property paid for since the final property orders, and while he was in default of those property orders.  The enforcement orders followed a very extensive oral examination of the husband conducted over some days. 

2. In my reasons for judgment on those enforcement proceedings, I set out in detail what was an ugly history of Mr Nixon’s non-compliance with orders, and findings adverse to his credibility on his claims of a total incapacity to meet court orders.

3. Mr Nixon filed a Notice of Appeal against the enforcement orders, and sought a stay of the orders.  His stay application was refused.  When Mr Nixon failed to file a draft appeal index by 29 November 2012, his appeal was deemed abandoned. 

4. Today, I have Ms Nixon’s Application in a Case, filed on 19 December 2012.  It’s supported by her affidavit filed the same day.  She seeks that outstanding works of art, also the subject of the warrant for sale in the 19 October 2012 orders, be delivered by Mr Nixon to the Victorian Sheriff, who has the powers of an enforcement officer, delegated by the Marshal of the Family Court of Australia, and that she be able to arrange the sale of all artworks the subject of the previous enforcement order through BB Auctioneers rather than OO Auctioneers who the Sheriff proposes to use.

5. Mr Nixon resists both applications in his Response seeking that the 19 October 2012 orders be discharged, that the enforcement warrant issued under the orders be revoked, and that the wife’s application be dismissed with costs. 

1. Ultimately, there has been an additional oral application today.  K Capital Pty Ltd, the first mortgagee of the real property the subject of the enforcement orders, has brought the oral application, supported by the affidavit of the company’s solicitor, Rachel Jane Gibbs, sworn on 25 January 2013.

2. I have given leave so that the affidavit can be filed.  K Capital Pty Ltd, accepted by Ms Nixon’s solicitor as an entity genuinely at arm’s length from the husband, has essentially sought orders enabling it rather than the Sheriff, again as the delegated enforcement officer, to effect the sale of the real property. 

3. K Capital Pty Ltd’s leave to intervene, and the removal of the real property from the enforcement warrant was agreed.  There was no dispute at all between the parties about that.

4. No issue was taken with the fact that K Capital Pty Ltd issued a combined Default Notice and Demand on 21 November 2012.  There was no dispute that the Notice has since expired without the default being remedied by Mr Nixon.  No issue was taken either with the stated fact that the Sheriff will apparently only sell the real property after the personal property has been sold, and that therefore there would be some likely delay if the Sheriff continued to handle the sale of the real estate pursuant to the warrant.

5. There was no issue either that the mortgagee has an entitlement to sell the property, save that it may be argued to be in conflict with the Sheriff’s duties under the existing orders unless the position is clarified.  And, finally, there was no dispute that, unlike the mortgagee, the Sheriff can only sell the husband’s equity in the property, subject to the mortgage, whereas the mortgagee can sell the property including the equity. 

6. There is no doubt that it is in all the parties’ interests for the property to be sold promptly at the best possible price.  Those interests can best be addressed by the mortgagee controlling the sale, and I propose to make orders to promote as seamless as possible a transaction by removing the property from the ambit of the enforcement warrant, having the Marshal and Sheriff advised of that, retaining the order that Mr Nixon remain out of the property, to make orders that he in no way deal with any water rights that pertain to the property, and giving both Ms Nixon and K Capital Pty Ltd liberty to apply upon short written notice in relation to any water rights issues, given the paucity of material before me on that topic today.

7. Let me turn, then, to the topic of the artworks. 

8. As to those artworks, some were properly provided to the Sheriff, some were not.  Those that were not, were kept at Mr Nixon’s home before he vacated.  That in itself is a point of interest, in that he maintained in the recent enforcement proceedings before me that the artworks were the property of the business, and not his with which to act or deal in any way.  In any event, he swore in his recent affidavit that on the day of the move, he had to leave the packing up process when a coughing fit had him present himself to a hospital emergency department for some hours.  It appears that he was released and not admitted to hospital.

9. He says that in his absence, the works were packed, as it happens, at the back of a container of possessions, and he does not have the funds to pay approximately $2000 now sought by the packing company.  He says his mother initially paid the packing company’s bill on his behalf.  He swears that he is unemployed and homeless.  He swears that he now cannot pay anything towards the support of his own children, that his business is “unfinanceable”, and that he is “unemployed, of no fixed address, and unbankable”.

10. In court, he said he stays at different places, including with his pregnant partner at her mother’s home.  I note, however, that his evidence was scant, and the detail extremely vague when it comes to that question of purported homelessness.  I note my previous recent findings of his lack of honesty as to his capacity to meet orders after the very extensive oral examination that I heard.

11. I note, for example, that he has frequently found funds, when needed, from his mother, including, again, for the recent move, and I note that he said he could find the funds to ensure these artworks were released, but in 30 days’ time.  That was said today in court from the bar table. 

12. I accept the urgency for Ms Nixon to obtain some fruits at least of the litigation and the orders in her favour, in order to house and support herself and the parties’ three children.  If I acceded to Mr Nixon’s request that he not be ordered to deliver these paintings for some further 30-day period, it would be yet another protraction, and would exponentially delay the sale of the works in an upcoming and infrequently held appropriate auction.

13. The maximum time that can be afforded is 10 days for Mr Nixon to deliver these works, so that they can be sold at the appropriate sale.  He has had many months.  Ten days is now of the essence, given the rulings that I will make as to how the sale of the works should be conducted, and I will turn to that. 

14. The Sheriff wants the artwork sold via OO Auctioneers.  Ms Nixon, a consultant employed by BB Auctioneers, wants them sold by her employer.  It is common ground that she largely put together this collection, and that these works are well within her area of expertise.

15. She swears that it is BB Auctioneers rather than OO Auctioneers that has the renown in the relevant Type 1 art field.  She swears that it is BB Auctioneers that has the special and pertinent sale events, the next being scheduled shortly, in … .  She swears that the specialisation of BB Auctioneers can ensure that the works will reap the best possible price at auction.  Moreover, BB Auctioneers will discount the commission to 5%, a much more favourable rate than the 12.5 to 15% that she expects will be charged by other auction houses.

16. The Sheriff seeks to use OO Auctioneers to avoid any conflict of interest.  Mr Nixon argues strongly, but somewhat incomprehensibly, in favour of the Sheriff’s position.  He says he is concerned by a lack of accountability and transparency.  When I pointed out that the Sheriff would still be involved, and that the sales would still be by public auction, he raised a concern with the wife’s paperwork and the provenance of the work to the effect that if the provenance could not be properly proven, the works would be devalued.

17. When I pointed out that Ms Nixon had no motivation to devalue the works, she is, after all, in genuine urgent need of as much as she can realise from the works, Mr Nixon’s concern shifted to one whereby she could defraud the public and somehow damage his reputation.  It was nonsense.  All things being equal, the Sheriff’s stance would be a reasonable one.  In this case, not all things are equal.

18. Ms Nixon has undisputed expertise, and is largely the author of this collection.  She is also the main one who will suffer if this collection does not realise its potential.  It is amongst only a few truly negotiable parts of the property in the wash-up of the marriage, and the funds are now urgently needed to meet what are disgracefully longstanding unsatisfied orders.  BB Auctioneers can sell upon favourable terms.  It is the appropriate specialist auction house, with a timely specialist option upcoming.  It is, in these circumstances, the auction house that should handle the sale.

19. I am satisfied that I can direct the Sheriff, as the enforcement officer, as to the method of sale. There is no rule which specifically allows or prohibits the court from interfering with an enforcement officer’s responsibility under r. 20 of the Family Law Rules.

20. However, the court’s general enforcement powers are set out in rule 20.07.  Rule 20.07(d) states that the court may make an order “in aid of the enforcement of an obligation”.  The court’s general enforcement powers under that rule are very broad, and I am satisfied that specifying a mode of sale falls within the ambit of aiding the enforcement of an obligation. 

21. Further, rule 20.07(m) states that the court may make an order “varying, suspending or discharging an enforcement order”.  The Court can therefore vary the terms of the enforcement warrant once it has already been made. 

22. Rule 20.19 provides that an enforcement officer may seek procedural orders from the court to assist in carrying out its functions.  Although that is not what has occurred in this case, it also supports the notion that the court can make orders directing an enforcement officer to act in a certain way such as when it comes to the specific mode of sale.

23. That leaves the question of costs.  Mr Vadarlis seeks party/party costs on behalf of Ms Nixon.  Mr Nixon did not pursue the costs application that he set out in his response, but instead argued that each party should bear their own costs.  There would have been no basis in any event for a costs order in favour of Mr Nixon. 

24. Although it was the Sheriff who had insisted on the use of OO Auctioneers, for Mr Nixon to argue now that therefore costs should not rest at all on his shoulders is disingenuous.  He has argued vehemently against OO Auctioneers being used, when he could have told the Sheriff if he agreed to BB Auctioneers conducting the sale.  His reasons against it were without solid foundation.  Moreover, his failure to have all the paintings in the Sheriff’s possession by now, and the fact that he personally held a significant number of works, contrary to his evidence before me upon the oral examination, also counts against him.  Had it become known that he held those works, then the orders would have and could have been framed quite differently and specifically to ensure that he delivered them, rather than being made in terms of the Sheriff’s seizure, which it was thought would occur at the business premises.

25. I have dealt previously with the s 117 provisions in the consideration for party/party costs as recently as in my last reasons for judgment in this case on 19 October 2012.  I set out the principles there, and it is really for the same reasons that I now exercise my discretion that Mr Nixon pay the wife’s indemnity costs of these proceedings today, given the orders that will be made reflecting his role in failing to ensure that the artworks were where they should have been, and his failure to agree that, in the circumstances of this case, BB Auctioneers are so obviously the appropriate company to be handling the sale of the artworks.

RECORDED : NOT TRANSCRIBED

1. The oral application is now made to have Mr Nixon excluded from the auction process.  I do not accept that this is only a matter of grandstanding.  The basis for the application is not only the history of the matter, but the concern that Mr Nixon is today raising issues of provenance about these paintings.  I described what he raised rather harshly in my reasons given today.  I said that the argument was “nonsense”.  Such “nonsense” about the provenance does raise in my mind a very genuine concern that, if such issues were raised in the forum of a public auction, it could greatly diminish the value of these paintings.  His assertions are made without any material or foundation.  He admits that it is the wife who has the expertise with this art.  He admits that it is the wife who put together this collection of art, and it stands out, as I have said numerous times today, that she is the one who stands to lose most if for any reason the art is sold without the proper proof of its provenance, a provenance I can only infer, was not otherwise an issue or concern surrounding its original purchase.

RECORDED : NOT TRANSCRIBED

1. That the husband be and is hereby restrained by himself, his servants and agents from attending the BB Auctioneers viewings and auctions of the artefacts and chattels referred to in paragraph 9 of the orders.

RECORDED : NOT TRANSCRIBED

1. That the husband shall pay the wife’s costs of this application on an indemnity basis, such costs to be agreed within 21 days, and failing agreement, to be taxed.

RECORDED : NOT TRANSCRIBED

1. So it will be that otherwise all outstanding applications in a case shall be dismissed.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau delivered on 29 January 2013.

Associate: 

Date:  29 January 2013