Nokomo and Wing

[2018] FamCA 972

FAMILY COURT OF AUSTRALIA

NOKOMO & WING [2018] FamCA 972

FAMILY LAW – PROPERTY – Interim application – Where the wife has sought an order that she be appointed trustee for the sale of various properties owned by the parties – Where the wife has sought an order that she be entitled to lodge caveats against the titles of those properties – Where the wife asserts that the husband has not complied with previous consent orders in failing to meet half the cost of the valuations for the properties – Where the wife asserts that the husband has not complied with previous consent orders in failing to nominate a forensic accountant from the list of those proposed by her, for the purpose of valuing a trust and the company that administers it – Where the husband asserts that he has not met half of the costs of the property valuations on the basis that those valuations are premature – Where the husband asserts that the wife has not complied with those consent orders in failing to provide cost estimates for those accountants that she has proposed – Where the husband has failed to file a Response to the wife’s Application in a Case – Court orders that the husband comply with previous consent orders for appointment of valuer – Court orders that, if the husband fails to comply within 28 days, the wife be at liberty to appoint a valuer – Court orders that the husband pay the wife’s costs of this application.

Family Law Act 1975 (Cth) ss. 114, 117

Bastion Holdings Ltd, Bardi Limited v Jorril Financial Inc. [2007] UKPC 60
Fitzgerald v Fish and Anor (2005) 33 Fam LR 123
Hadkinson v Hadkinson [1952] 2 All ER 567
Martin & Martin and Ors (2013) 49 Fam LR 606
Philips & Samuels [2017] FamCA 125

APPLICANT: Ms Nokomo

RESPONDENT: Mr Wing

FILE NUMBER: SYC 6304 of 2017

DATE DELIVERED: 23 November 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: McClelland J

HEARING DATE: 12 November 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Johnston

SOLICITOR FOR THE APPLICANT: Ms P Family Law

SOLICITOR FOR THE RESPONDENT: Self-represented

Orders

THE COURT ORDERS THAT:

1. If, within 28 days of the date of these orders, the husband has not complied with order 12 made on 4 June 2018, then the following orders 2 to 4 shall apply.

2. The wife shall be entitled to rely on the maximum value of the range of values identified in a valuation report of Mr M, or such other appropriately qualified valuer as she may choose, to value the following properties:

   (a)       F Street, Suburb G NSW … (Folio …);

   (b)       H Street, Suburb J NSW 3008 (Volume … Folio …); and

   (c)       C Street, Suburb D NSW … (Folio …)

3. For the purpose of order 2 herein, it shall be sufficient for the appointed valuer to conduct a “drive by” inspection and to rely on recent sales of such comparable properties as they consider to be appropriate, for the purpose of valuing and preparing a report in relation to the properties listed in that order.

4. The husband shall not, without leave of the Court, be entitled to call alternative evidence to the valuations relied upon by the wife or to cross examine the appointed valuer(s) in respect to their valuations.

5. The husband shall pay the costs of the wife in respect to this application, within 28 days of those costs being agreed or assessed.

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 Nokomo & Wing 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 SYDNEY

FILE NUMBER: SYC 6304 of 2017

Ms Nokomo

Applicant

And

Mr Wing

Respondent

REASONS FOR JUDGMENT

Introduction

1. In this matter, the wife has filed an Application in a Case of the wife, seeking interim orders that she be appointed trustee of the sale of four properties owned by the parties.  That application is made in circumstances where the husband has failed to comply with previous orders of the Court, made by consent of the parties, in respect to the valuation of those properties.  The wife has also sought an order that she be at liberty to lodge caveats on the titles of those four properties.

2. The husband has failed to file a Response to the wife’s Application in a Case.  At the hearing, he gave evidence from the bar table that his failure to comply with the relevant consent orders was due to a failure by the wife to appropriately set out the costs of the valuers proposed by her and, further, that he considers the relevant valuations to be premature.

Background

1. The wife was born in Country B in 1974.  She is now 44 years of age. 

2. The husband was born in Australia in 1975.  He is now 43 years of age.

3. In 2000, the parties were married.  There are two children of the parties’ relationship, who are aged 12 and 13 years.

4. On 5 April 2017, the parties separated.  The father and the children continue to reside in the former matrimonial home at C Street, Suburb D NSW … (“the Suburb D property”).

5. On 25 September 2017, the wife commenced these proceedings by way of an Initiating Application, seeking parenting and property orders, filed in the Federal Circuit Court of Australia.  Relevantly, for this application, the orders sought by the wife included an application for her to have exclusive occupancy of the Suburb D property and for there to be an adjustment of the parties’ matrimonial property of 65 per cent in her favour.

6. On 14 February 2018, the proceedings were transferred to this Court.

7. On 4 June 2018, Loughnan J made the following orders, by consent (“the consent orders”):

   1. That the husband do all such things as are required to sell shares in the Commonwealth Bank that are in his sole name (that he asserts he now holds in his Financial Statement filed 1 June 2018), in order to meet the payments to the wife pursuant to Orders 2(a) and (b) below.

   2. That from the proceeds of sale of the shares the husband shall:

   (a) cause to be paid to the solicitor for the wife the sum of $10,000 within 14 days

   (b) cause to be paid to the solicitor for the wife the sum of $115,000 by 31 July 2018

   (c) the husband retain the balance of the Commonwealth Bank shares and be at liberty to sell them and retain the proceeds of sale as he sees fit.

   3. That the husband be at liberty to sell shares in his name with Westpac Bank and [Company E] and retain the proceeds of sale.

   4. That the payments pursuant to Order 2 and 3 be characterised as interim property distributions to the husband and the wife respectively.

   5. Noted that the husband and wife are still at liberty to seek a file further interim property and interim spouse maintenance applications and these Orders are without prejudice to such interim applications should they be so filed.

   6. That the husband shall pay as and when they fall due the mortgage payments, rates, taxes, outgoings and strata levies in relation to the properties listed in Order 7.

   7. That the husband shall be and is hereby restrained from increasing the mortgage liability on, selling, transferring, assigning, or disposing of in any way the following properties and assets other than in accordance with the Orders of this Honourable Court.

   (a) [F Street, Suburb G] NSW Folio …

   (b) [H Street, Suburb J] NSW Folio …

   (c) [K Street, Suburb L] Victoria Volume … Folio …

   (d) [C Street, Suburb D] NSW

   8. That [Mr M] of [N Accountants] be appointed to value the following properties:

   (a) [F Street, Suburb G] NSW Folio …

   (b) [H Street, Suburb J] NSW Folio …

   (c) [K Street, Suburb L] Victoria Volume … Folio …

   (d) [C Street, Suburb D] NSW

   (e) Any real property owned by the [Wing] Family Superannuation Trust or the company that administers that trust being [Wing’s] Family Superannuation Fund Pty Ltd ACN …

   9. Each party shall pay one half of the cost of the valuations.

   10. The solicitor for the wife, shall within seven days of these Orders, provide the solicitor for the husband or the husband if he is self-represented with a list of three qualified forensic accountants to value the husband’s interest in the [Wing] Family Superannuation Trust and the company that administers that trust being [Wing’s] Family Superannuation Fund Pty Ltd ACN ….

   12. The solicitor for the husband or the husband if he is self-represented shall choose one of the forensic accountants from that list to value the husband’s interest in the [Wing] Family Superannuation Trust and the company that administers that trust being the [Wing’s] Family Superannuation Fund Pty Ltd ACN … and shall advise the solicitor the wife of their choice within seven days of receipt of the list of forensic accountants.

   13. Each party shall pay one half of the cost of the valuations.

   14. That in the event either party refuses or neglects to execute any Deed or instrument necessary to give effect to all or any of the Orders made herein, then the Registrar of the Court shall be appointed pursuant to Section 106 (A)(1) of the Family Law Act to execute such Deed or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the said Deed or instrument, upon the Registrar being satisfied of such refusal or failure, verified by way of affidavit.

   15. Each party pay their own costs of this application.

8. It is not disputed that the husband has failed to comply with orders 9, 12 and 13 of the consent orders, in respect to the valuation of various properties, the Wing Family Trust and Superannuation Fund Pty Ltd. 

9. The husband has also failed to file and serve a Financial Questionnaire, pursuant to an order made on 5 June 2018 and to appear at Court events on 23 August 2018 and 24 September 2018.

Applications

1. In the circumstances referred to above, the wife seeks the following orders:

   1. That this matter be listed on an urgent basis for hearing ex parte if the Husband fails to appear.

   2. That leave be granted to serve short notice of this Application in a Case and accompanying documents.

   3. That leave be granted to dispense with personal service of this Application in a Case and accompanying documents upon the Husband and service be deemed to be effected upon the Husband by the forwarding of this Application in a Case and accompanying documents by ordinary pre paid post to the Husband at [C Street, Suburb D], NSW …

   4. That the Wife be and is hereby entitled forthwith to lodge caveats on the properties described in order 5 below pending the sale of such properties.

   5. That the Wife is hereby appointed trustee for sale of the properties situated at and being more fully described as:

   i. [F Street, Suburb G] NSW Folio …

   ii. [H Street, Suburb J] NSW Folio …

   iii. [K Street, Suburb L] VIC Volume … Folio …

   iv. [C Street, Suburb D] NSW and for the purposes of this Order:

   6. The said properties shall vest in her as trustee for sale for the purposes of these Orders and she be entitled to exercise all powers to secure the sale of the said properties including but not limited to:-

   i. engaging all necessary real estate agents and being guided by such agents as to the reasonable selling price of the properties including any reserve auction price as referred to in Order 6 below.

   ii. ensuring that [O Lawyers] is appointed as the solicitor acting on the sales, with an agency solicitor as appointed by [Ms P] for the sale of the [Suburb L] property if required

   iii. executing all contracts for sale, transfers, instruments that are required to be registered to facilitate the sales, discharges of mortgage and authorities to sell and settle such sales

   v. do all things necessary to obtain vacant possession of the said properties including arranging for the removal and storage of any chattels or goods [the cost of which is to be paid from the proceeds of sale at first instance pending further orders]

   7. The Wife shall do all things necessary to sell the properties at the best price reasonably obtainable by such method as she may in her discretion determine including auction, as advised by the engaged real estate agent; and the Wife shall apply the net proceeds of sale after selling costs, rate adjustments and discharge of any liability secured over the said property to be held by the Wife's solicitors or by a solicitor nominated by her in an interest bearing account in trust for the Husband and Wife pending further order.

   8. The Husband shall vacate the property at [C Street, Suburb D], NSW by 10 am on the 7th day following the date of the service of these orders, such service to be as ordered by substituted service as described above. The Husband be and is thereafter restrained from returning or entering upon to the said property [or any of them].

   9. The Wife and whoever she shall authorise for the purposes of these orders is granted liberty to enter the property at [C Street, Suburb D] NSW after 10 am on the 7^th day after the making of these orders and change the locks on that property.

   10. The Wife is at liberty to ensure that such persons as are appointed by her for the sale of the properties have full access to the properties to facilitate any sale.

   11. That in the event either party refuses or neglects to execute any Deed or instrument necessary to give effect to all or any of the Orders made herein, then the Registrar of the Court shall be appointed pursuant to Section 106(A)(l) of the Family Law Act, to execute such Deed or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the said Deed or instrument, upon the Registrar being satisfied of such refusal or failure, verified by way of affidavit.

Contentions of the parties

1. The wife contends that:

   a)The orders that she seeks will obviate the necessity of obtaining valuations in circumstances where the husband has failed to comply with orders to ascertain the value of those properties;

   b)She has no way of obtaining internal access to the relevant properties; and

   c)If the matter is to be progressed, it is necessary to ascertain the value of the matrimonial asset pool and, in the absence of valuation evidence, as a result of the husband’s unwillingness to cooperate in that process, the sale of the relevant properties and the realisation of their net proceeds of the sale is the only viable alternative available to the Court.

2. The husband contends that:

   a)He has not complied with order 9 of the consent orders because it is premature to value the properties identified in those orders, at this stage of the proceedings.  This is notwithstanding the fact that the husband consented to orders being made for the valuation of those properties; and

   b)He has not complied with order 12 of the consent orders because the wife has not provided him with an estimate of costs of the three persons she has proposed as appropriately qualified forensic accountants to value the trust and the company that administers it.

The law

1. While the application of the wife seeks compliance with orders that have previously made by consent, it is nonetheless necessary to consider the wife’s application in the context of the relevant law applicable to the sale of property.

2. Although not expressly stated in that application, the proposed order for the sale of the properties enlivens consideration of the Court’s power under s 114 of the Family Law Act 1975 (Cth) (“the Act”) to make such order or grant such injunction as it considers proper, in relation to the property of the parties: Philips & Samuels [2017] FamCA 125 at [65].

3. In Martin & Martin and Ors (2013) 49 Fam LR 606 at [15],Cronin J said:

   Section 114 of the Family Law Act 1975 (Cth) (“the Act”) enables the Court to provide a discretionary remedy. The fundamental principle is that an order should only be made if it is proper.

Consideration

1. In terms of this application, the question for determination is whether it is proper for the Court to make orders for the sale of the relevant properties at this interim stage, in order to prevent a party from thwarting the processes of the Court process, in this case, by failing to comply with orders to obtain valuations of those properties.

2. During the course of the proceedings, I raised with Counsel for the wife as to whether the orders as sought by his client amounted to an overreach.  That is, whether the orders sought went beyond that which is reasonably necessary to ensure that the processes of the Court are complied with.  In response, Counsel for the wife contended that, in circumstances where the husband has failed to engage in the litigation, there was no realistic alternative.

3. I have considerable sympathy for the position of the wife.  During the course of the proceedings, the husband maintained his refusal to comply with the consent orders for the reasons that I have outlined above.  There is, however, in my view, an appropriate alternative to the orders sought by the wife.

4. In Bastion Holdings Ltd, Bardi Limited v Jorril Financial Inc. [2007] UKPC 60, the Privy Council held that the trial judge had acted appropriately in refusing to hear submissions from a party, in circumstances where they were in contempt of the processes of the Court, by refusing to submit to cross examination. In doing so, at [44], the Privy Council quoted the decision of Denning LJ (as he then was) in Hadkinson v Hadkinson [1952] 2 All ER 567 at 297, as follows:

   “. . . if a party was in contempt for disobeying an order, and his disobedience impeded the course of justice in the suit, the court might in its discretion refuse to allow him to take active proceedings in the suit until the impediment was removed.”

   He said that “. . . the same rule has been applied in the bankruptcy courts . . .” and continued at 298:

   “Those cases seem to me to point the way to the modern rule. It is a strong thing for a court to refuse to hear a party to a cause and it is only to be justified by grave considerations of public policy. It is a step which a court will only take when the contempt itself impedes the course of justice and there is no other means of securing his compliance.”

   and, at 298, that:

   “. . . if his disobedience . . . impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth . . . then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed.”

5. In this case, the husband’s failure to comply with the consent orders is impeding the course of justice by making it more difficult for the Court to ascertain the value of the relevant properties, and as such, the balance of the matrimonial asset pool.  In those circumstances, it is appropriate to limit the extent to which the husband is able to question valuations obtained by the wife.  I will, therefore, order that, in the event of the husband failing to comply with the consent orders within a further 28 days, the wife shall be entitled to appoint an appropriately qualified valuer of her choice.  In those circumstances, the husband will not be entitled to call alternative evidence to those valuations or to cross examine the valuer/s appointed by the wife, in respect to their valuations.

6. In making those orders, I note that at the hearing, neither of the parties had the opportunity to address the specific terms of the procedural orders that I have made.  However, those orders will not take effect for 28 days and the parties are entitled to make such application as they see fit, within that time.  Alternatively, the husband can, within 28 days, comply with the consent orders that have previously been made.

Costs

1. The wife seeks that the husband pay the costs of her application.  

1. Section 117(2) of the Act provides that, if the Court is of the opinion that there are circumstances justifying it in doing so, the Court may make such order as to costs as it considers just.

2. The considerations relevant to a determination of what order, if any, should be made for costs are set out in s 117(2A) of the Act, as follows:

   (2A)  In considering what order (if any) should be made under subsection (2), the court shall have regard to:

   (a)  the financial circumstances of each of the parties to the proceedings;

   (b)  whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c)  the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d)  whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e)  whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)  whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g)  such other matters as the court considers relevant.

3. While I have considered all of the matters set out in s 117(2A) of the Act, the authorities are clear that, in making an order for costs, the Court does not need to be satisfied of each and every matter referred to those paragraphs: Fitzgerald v Fish and Anor (2005) 33 Fam LR 123 at [41]). 

4. The most relevant issue, in this matter, is the husband’s failure to comply with the consent orders, which he agreed to on 4 June 2018.  Had he done so, these proceedings would have been unnecessary.

5. I will, therefore, require the husband to pay the wife’s costs of this application, within 28 days of those costs being agreed or assessed.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 23 November 2018.

Associate: 

Date:              23 November 2018