Nye & Randell
[2021] FedCFamC2F 112
•29 September 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)Nye & Randell [2021] FedCFamC2F 112
File number(s): ADC 2131 of 2014 Judgment of: JUDGE BROWN Date of judgment: 29 September 2021 Catchwords: FAMILY LAW – property proceedings – final orders made by consent in 2014 – where there was a variation of the orders in 2017 – where final orders have not been complied with – where the applicant is seeking enforcement of the orders and liquidation of the property pool – where respondent seeks that the orders not be enforced due to not being just and equitable – where there are multiple properties subject to proceedings – where the Court is required to undertake a more detailed assessment of the parties’ situation Legislation: Family Law Act 1975 (Cth) ss 79A, 90SN, 105, 106
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) r 2.01
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Div 11.1.3, rr 11.01, 11.04, 11.05, 11.07, 11.18
Cases cited: In the Marriage of Kerr (1983) 8 Fam LR 1023. Division: Division 2 Family Law Number of paragraphs: 104 Date of hearing: 14 September 2021 Place: Adelaide Solicitor for the Applicant: Clelands Lawyers Adelaide Pty Ltd Counsel for the Applicant: Mr Anderson Counsel for the Respondent: The Respondent appearing In Person ORDERS
ADC 2131 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS NYE
Applicant
AND: MR RANDELL
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
29 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.The matter be listed for hearing on 9 November 2021 at 10:00 am NOTING that a one day hearing has been allocated and is not to be exceeded without leave of the Court.
2.The matter be listed for Directions on 12 October 2021 at 9:30 am to determine the mode of hearing, and whether the parties will be directed to file any further affidavit material in respect of the hearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Nye & Randell has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
Ms Nye (‘the Applicant’)[1] and Mr Randell (‘the Respondent’) began a relationship in 2009 and separated, in South Australia, in 2013. They are the parents of two children, X born in 2010 and Y born in 2013.
[1]Ms Nye commenced proceedings, in this Court, in 2014, seeking ‘a fair and equitable distribution of assets and liabilities’ so far as she and Mr Randell were concerned. At the time, she was living in New Zealand, whilst Mr Randell continued to live in country South Australia.
Ms Nye concedes that she had few assets when the parties commenced their relationship. At the time of her Application, she was in receipt of social security. She deposed, in her initiating Affidavit that she did not have much information about the extent of the property, which was relevant to her Application.
Mr Randell was served with Ms Nye’s Application on 26 June 2014. The first date nominated for the Application was 5 August 2014. On this date, Mr Randell did not appear, nor had he filed any answering documents. In his absence, the case was adjourned until 28 August 2014.
On 21 August 2014, Ms Shelley O’Connell, then Ms Nye’s solicitor, and Mr Randell sent a letter to the Court, which both had signed. The letter read as follows:
Dear Madam Associate,
I refer to the above matter and confirm that I am the solicitor for the Applicant, Ms Nye.
Mr Randell is self-represented. Please see Mr Randell’s signature at the conclusion of this letter.
My instructions are that the parties are negotiating privately and have reached agreement on all financial matters. I am in the process of preparing a Consent Minute of Order in the agreed terms.
As the next Court date in this matter is 28 August 2014, the parties would be grateful for an administrative adjournment of approximately 3 weeks after that date, so as to enable the Orders to be drawn up and signed by both parties (my client is in New Zealand and the respondent is in South Australia).
Please do not hesitate to contact me or Mr Randell if you so require. Mr Randell’s email address if … and his telephone number is ….
On its face, this letter was signed by Mr Randell and given the ostensible indication of common ground between the parties, as requested, the case was adjourned until 16 September 2014. On this occasion, Mr Farmer, solicitor appeared on Ms Nye’s behalf and Mr Randell appeared in person and a typed minute of proposed consent orders was provided to the Court.
Up to this stage, Mr Randell had not formally filed any documents in reply to Ms Nye’s Application. For obvious reasons, given the effluxion of time, I am not in a position to recall precisely what was said by each party on 14 September 2014 but the minute, which was provided to me, was signed by both Ms Nye and Mr Randell and no obvious articulation was made that the consent order, in question, should not be made.
Although parties in de facto property proceedings are encouraged to reach their own arrangements in respect of the division of property, following relationship breakdown, the Court is still obliged to ensure that justice is done between the parties concerned and any consent orders made are just and equitable in their terms, bearing in mind the provisions of Part VIIIAB of the Family Law Act 1975 (Cth) (‘the Act’).
Once again, I am not in a position to recall what was said by the parties concerned, in respect of issues of justice and equity, on 16 September 2014. However, the orders themselves contain a preamble, which provides the background to the agreement concerned and the rationale of the orders which followed. The preamble reads as follows:
A.The parties commenced cohabitation in 2009 and separated on a final basis in 2013.
B.There are two children of the relationship namely X born in 2010 and Y born in 2013. The children live with the applicant full time.
C.The applicant resides in New Zealand and the respondent resides in Town B, South Australia.
D.At the commencement of cohabitation the applicant owned a car and some savings.
E.At the commencement of cohabitation the respondent had interests in various properties in South Australia subject to mortgages.
F.During the relationship the parties pooled their resources to purchase various other properties in Town C and Town B areas in South Australia, together increasing the asset pool substantially.
G.Neither party has superannuation of any significance.
H.The parties have divided their motor vehicles, furniture, household effects, plant equipment and tools to their mutual satisfaction.
I.Of the known assets, the division of property settlement represents approximately 27% to the applicant and 73% to the respondent. The parties agree this to be fair and equitable on the basis of the respondent’s greater initial financial contribution and the 75(2) factors affecting the applicant namely the two very young children of the relationship living primarily in her care.
Mr Randell’s signature ostensibly appears beneath these notations, above the handwritten date of 12 September 2014, as does Ms Nye’s signature. Thereafter, both Ms Nye and Mr Randell have signed the seven following pages, which contain eleven discrete orders. It appears to be the case that Mr Randell provided his consent to the orders in question, which were ultimately made.
It is now Mr Randell’s position – as I understand it – that he was subject to some species of duress, when the orders were made and these orders, and others which have preceded them should not be enforced. In addition, again as I understand his case, Mr Randell contends that the terms of the relevant order are neither just nor equitable, so far as he is concerned, and should not therefore be enforced.
In this context, he asserts that he brought in a substantial portfolio of properties, located in region D of South Australia, valued in an amount of approximately $1 million dollars, whilst Ms Nye contributed nothing. This portfolio was subject to various mortgages and tenancies. He asserts that he has done his best to maintain the portfolio, in the absence of any contribution from Ms Nye and this is another factor which militates against enforcement of the orders at so many years removed.
On the other hand, it is Ms Nye’s position that the Court, notwithstanding the passing of the several years which have followed, should enforce the orders in question and proceed, in effect to the liquidation of the property portfolio. She concedes that the parties’ level of asset backing has deteriorated markedly in the approximately seven years since the first property order was made. However, it is her position that this has been solely due to Mr Randell’s obfuscation and resistance.
She refutes any suggestion that Mr Randell was at a disadvantage when the original order in question was made or that its terms were in some way unfair to him. To the contrary, it is her contention that it would constitute a significant injustice to her if the Court did not enforce its orders as she now proposes. It is her case that Mr Randell has subjected the parties’ de facto property estate to waste due to his mismanagement and neglect of it and he should bear the financial consequence of his behaviour.
In reply, again as best I can understand his case, Mr Randell contends that it would be unfair to him if he alone is subject to the wastage of the relevant assets given that Ms Nye has, in effect, sat on her hands for many years. As such, in the language of lawyers, considerations of equity dictate that she should be estopped from pursing her enforcement application, given the effluxion of time.
The only thing on which the parties now agree is that the state of their property affairs is a schmozzle. I agree. At the present time Mr Randell lives in Melbourne, where he is subject to the pandemic lockdown; Ms Nye lives in Queensland. It is only recently that Mr Randell, who is self-represented, has filed any affidavit evidence.
These circumstances dictated that the initial hearing had to take place via an internet video conference. This hearing was not directed towards the taking of any additional oral evidence from the parties concerned or its scrutiny through cross-examination. In addition, as will become evident in due course, much has changed in respect of the portfolio of properties concerned, particularly in terms of the value of individual properties and their level of encumbrance.
It is Ms Nye’s position that documents relating to the resolution of these issues are solely in Mr Randell’s control and he has had exclusive management of the properties concerned and this, of itself, should not pose an impediment to her enforcement application being actioned by the Court without the need for the taking of extensive additional evidence, notwithstanding the various controversies arising between the parties.
As I indicated to the parties, at the conclusion of their respective submissions, I was concerned at the effluxion of time and its possible implications so far as the Court proceeding in a fair and just manner. Accordingly, one possible outcome is that the case should be fixed for a more extensive hearing. However, given what would appear to be the precarious nature of the parties’ financial situation, such an outcome may also be unfair, particularly to Ms Nye.
In addition, in his oral submissions to the Court, Mr Randell indicated that some of the relevant properties were subject to unregistered mortgages held by a company (said by Ms Nye to be de-listed) controlled by Mr Randell’s elderly parents. At this stage, in a formal sense, they have not been put on notice of Ms Nye’s application and given an opportunity to intervene in these proceedings.
It is clear that the Court has a discretion as to whether or not orders should be enforced. This follows from section 105 of the Act which reads as follows:
Subject to this part, to the Regulations and the applicable Rules of Court, all decrees made under this Act may be enforced by any court having jurisdiction under this Act.
In particular, the Court may refuse enforcement if, in the circumstances prevailing at the time of the application, it would be inequitable to do so. [2] These reasons for judgment are directed to resolving these complex issues.
[2] See Kerr & Kerr (1983) 8 Fam LR 1023, 1026 (Nygh J).
THE APPLICANT’S CASE IN 2014
As indicated above, it was Ms Nye’s position that she did not know a great deal about the parties’ level of asset backing, at the time of her original Application to the Court. In addition, at this early stage, it was her contention that she feared Mr Randell might dispose of assets to defeat her claim. In this context, she deposed as follows:
I make this application as a matter of urgency and consequently this Affidavit is not as detailed as it perhaps should be. There is also a lot of information about the assets of our relationship that I am not privy to and will not find out until the respondent makes discovery. I therefore reserve my right to file further Affidavit evidence in the future.[3]
[3] See Affidavit of Ms Nye filed 17 June 2014 at [7].
On this basis, she sought an injunction to restrain Mr Randell from selling or disposing of any assets, which he then controlled. She also sought an order that he make formal disclosure of his assets. This interim application was never formally pursued by Ms Nye. I can only assume that this was because the parties themselves, as the letter referred to above indicates, were engaged in a process of active discussions, with one another, about how to resolve their property issues.
In her original Affidavit, Ms Nye conceded that, when she began her relationship with Mr Randell, she had modest savings; a motor vehicle; and a credit card debt. At this stage, it was her understanding that Mr Randell owned several pieces of real estate, either outright or jointly with his former partner. Ms Nye also deposed that during the course of the parties’ relationship, she and Mr Randell purchased several properties, three of which were registered in her sole name, which had been transferred to her from either Mr Randell himself or his ex-partner.
In her Affidavit of 17 June 2014, Ms Nye endeavoured to detail, as best she could, what was the nature of the various properties concerned. She delineated the real properties relevant in the following terms:
Properties at E(1) Street, E(2) Street, Town C – owned by me – combined value of approximately $220,000.00 and subject to liabilities of approximately $158,000.00. These are currently tenanted and bring in combined rent of $480.00 per week. The respondent and I cohabited in the property at E(2) Street, Town C, from around June 2011 until June 2012.
Property at F Street, Town C – owned by me – value of approximately $110,000.00 bus subject to liabilities totalling $115,000.00. This is tenanted and previously brought in income of $300.00 per week, although now I believe the tenants have stopped paying rent.
Property at G Street, Town B – owned by the respondent – capital value of $161,000.00. I believe this is where he resides currently.
Property at H Street, Town B – owned by the respondent – capital value of $25,000.00.
Property at J Street, Town B – owned by the respondent – capital value $135,000.00. I believe this property is currently tenanted at around $250.00 per week. I believe the respondent borrowed $150,000.00 from his parents to fund renovations at this property and the other 2 Town B properties but I am not sure about the details of this arrangement.
Property at E(3) Street, Town C – owned by the respondent – capital value $98,000.00 – subject to mortgage liability of approximately $120,000.00 and tenanted for around $200.00 per week.
Property at H(2) Street, Town F – owned by the respondent – capital value $95,000.00. I understand this property to be tenanted for around $250.00 per week.[4]
[4] Ibid at [15].
No valuations nor mortgage documents or loan agreements have been provided to support the various assertions made above. If they are correct, the seven properties in question were worth $844,000.00, and were subject to liabilities of $543,000.00, leaving equity of $301,000.00. I am not in a position to ascertain the truth or otherwise of these calculations. Mr Randell did not provide any evidence himself in this regard.
In addition, Ms Nye asserted that the parties owned several motor vehicles; a truck; a tractor; trailers; tools; and jewellery; which she estimated to be worth approximately $62,500.00. However, she also asserted that the parties had various debts, particularly in respect of credit cards, in excess of $75,000.00.
In support of her claim for an urgent listing of her Application, Ms Nye asserted that Mr Randell had sold E(3) Street, Town C for approximately $100,000.00 to the tenant. She also alleged that Mr Randell had expropriated rent, to which she was entitled, in respect of the properties located at Town C and Town D, which were registered in her name.
THE ORDERS OF SEPTEMBER 2014
The orders of 16 September 2014 are not unduly complicated. They envisaged Ms Nye transferring to Mr Randell the three properties then registered in her name (namely E(2) Street, Town C; E(1) Street, Town C; and F Street, Town D) in return for the payment to her, from Mr Randell, of a sum of $50,000.00.
In addition, Mr Randell was to pay Ms Nye’s solicitors a further sum of $10,000.00 in respect of Ms Nye’s legal fees and was to pay Revenue SA the sum of $18,741.75, which related to some form of encumbrance lodged against E(2) Street, Town C, in favour of the Government of South Australia.
Concurrently with the payment of the sums due to her, pursuant to these orders, and the transfer of the Town C and Town D properties to Mr Randell, he was to discharge three mortgages secured against these properties, in favour of the Commonwealth Bank. Thereafter, each party was to retain assets, both real and personal, standing in his or her respective name, as of the date of these orders.
If the various valuations provided by Ms Nye, in her Affidavit as outlined above, were correct, on my calculations, putting to one side the payment of the debt to the Government of South Australia, the purported cash payment to her, represented around 20% of the net pool of assets, as calculated by reference to the value of the various real properties concerned outlined in her affidavit evidence.
Pending the transfer of the Town C and Town D properties to him, the orders envisaged that Mr Randell would pay all mortgage payments and other outgoings relating to the two properties and would indemnify Ms Nye in respect of such payments.
To sum up, in exchange for the payment to her of the sum of $78,741.75, Ms Nye was to transfer three properties to Mr Randell. It was envisaged, by the orders that these transactions would occur within 30 days of the date of the orders. It is common ground that none of them have, in fact, occurred.
More significantly, it would appear to be Ms Nye’s case that Mr Randell has not paid the required mortgage payments due in respect of these properties and the amount owing now exceeds the diminished value of the three properties concerned to a significant degree. It is also her position that Mr Randell has retained the majority of the rent derived from these properties.
The orders in question incorporated various enforcement provisions. If Mr Randell failed to pay the sums required of him, the orders authorised the sale of the properties at Town C and Town D, in order to secure for Ms Nye the payment of the monies due to her. Thereafter, if any shortfall remained, the orders further authorised the sale of E(3) Street, Town C and H(2) Street, Town F (which remained in Mr Randell’s control) and, once again if the sale of these properties was insufficient to secure the payment due to Ms Nye, the orders authorised the sale of the three remaining properties, registered in Mr Randell’s name, located Town B thereafter also be sold.
In the light of what subsequently transpired, the particular terms of this aspect of the orders is highly relevant. If Mr Randell defaulted in respect of the implementation of the orders, the parties were to have joint conduct of selling any of the properties concerned. No doubt this reflected the fact that Ms Nye was in New Zealand and would be reliant on Mr Randell to attend to the details of any sale required on her behalf.
At this point of some seven or so years removed, it is apparent that any prospect of the parties working jointly to liquidate the property portfolio in order to secure the payment due to Ms Nye, was negligible, if not non-existent. The orders also envisaged the appointment of the Court’s Registrar to execute necessary documents, if one party defaulted. Why no such application was made is a further mystery to me.
Once again, although I cannot remember precisely what was said and no record has ever been produced of it, implicitly I was satisfied that this was a just and equitable outcome given the relatively modest extent of the parties’ pool of property, particularly bearing in mind the high level of gearing existing in respect of their property portfolio; the fact that Mr Randell had brought in the majority of the property, at the commencement of the relationship; but that Ms Nye retained responsibility for the care of the parties’ infant children, on her case, without significant financial assistance from Mr Randell.
EVENTS OCCURING AFTER THE 2014 PROCEEDINGS
On 28 July 2016, almost two years after the original consent order had been made, Ms Nye brought proceedings, in the nature of enforcement. In her Application, Ms Nye sought that she should be authorised to sell the Town C and Town D properties and that thereafter she would be responsible for paying the debt owed to Revenue SA, secured against E(2) Street, Town C; the various mortgages to the Commonwealth Bank; and thereafter any remaining proceeds should be allocated to the payment of the monies due to her, together with interest and her costs, on an indemnity basis.
Ms Nye, who continued to live in New Zealand, deposed a lengthy Affidavit in support of her application for enforcement. In her Affidavit, Ms Nye deposed that none of the obligations contained in the orders of September 2014, had been complied with. Essentially, Ms Nye did not receive her cash settlement of $60,000.00 and the amount owing to Revenue SA, related to E(2) Street, Town C, was not paid.
In her Affidavit of 28 July 2016, Ms Nye deposes that a real estate agent was engaged to attempt to sell F Street, Town D; E(2) Street, Town C; and E(1) Street, Town C (the properties which remained registered in her name) but to no avail. In 2016, the agent concerned valued F Street, Town D at $85,000.00; E(2) Street, Town C at approximately $75,000.00; and E(1) Street, Town C at around $75,000.00.[5]
[5] See Affidavit of Ms Nye filed 28 July 2016 at Annexure 7.
At the time of her Application, it was Ms Nye’s position that Mr Randell had collected rental payments in respect of the properties registered in her name but had failed to maintain the properties concerned or to make adequate arrangements to pay the mortgages secured against the property, which the orders of 16 September 2014 envisaged he would take over.
It appears to be the case that either Mr Randell had been unsuccessful in obtaining mortgage finance to acquire Ms Nye’s interests in the Town C and Town D properties or had been remiss in applying for such finance. In addition, she asserted that Mr Randell had actively attempted to frustrate the sale of F Street, Town D by renting it to a friend of his in a not-at-arms-length transaction.
Finally, Ms Nye deposed that Mr Randell was not maintaining any of the properties concerned properly and she suspected that he was utilising them for some illicit purpose. It was her perspective that she was at a significant disadvantage due to the fact that she was living in New Zealand and relying on Mr Randell to do the right thing by her, which apparently he was not inclined to do.
In all these circumstances, she deposed as follows:
I say that Mr Randell has defaulted in carrying out his obligations imposed upon him by the Consent Order and his behaviour since the making of the Consent Order indicated he is no longer willing to comply and therefore the orders should be varied so as to allow me to make the decisions regarding the sale of the properties I own and those properties owned by the respondent so that all liabilities can be paid and I receive the money I am entitled to.[6]
[6] Ibid at [59].
Ms Nye’s Application was listed before the Court, for its first directions hearing, on 26 September 2016. Mr Randell arrived at Court after the matter had been called. In his absence, the case was adjourned until 4 October 2016.
On this latter date, a solicitor appeared for Mr Randell. As a consequence, the case was adjourned to 1 November 2016 and Mr Randell was directed to file a Response and Affidavit in response to Ms Nye’s Application.
On 7 October 2016, a solicitor filed a Notice of Address for Service on behalf of Mr Randell. However, no other documents were formally filed on Mr Randell’s behalf and the solicitor in question withdrew from acting for Mr Randell on 25 November 2016.
On 1 November 2016, Ms Nye’s Application was listed for determination on 31 January 2017. She filed an Affidavit, in support of her Application, on 26 January 2017. In it, she alluded to An Affidavit, prepared by Mr Randell’s former solicitor, which had been provided to her and her legal advisors but had not been filed with the Court.
I have never been provided with a copy of this Affidavit, which has never been filed, either by Mr Randell himself or by any lawyer acting on his behalf. However, it would appear to be the import of this document that Mr Randell contends that he excuted the consent order of 16 September 2014 under duress. In this Affidavit, he apparently alleged, as he has done in the recent hearing before me, that Ms Nye intimated to him that, if he did not execute the consent order in question, he “would never see his children again”.
In this context, neither Mr Randell personally nor any lawyer acting on his behalf has made any Application to have the orders made in September 2014 set aside. In addition, he has not paid any of the monies due to Ms Nye to her.
Against this background, on 31 January 2017, the case returned to Court. For obvious reasons, Ms Nye was frustrated at the lack of progress and her perception that Mr Randell had no intention of complying with any of the Court’s orders.
When the case returned to Court on 31 January 2017, Ms Nye’s Application in a Case, which had the characteristic of an enforcement proceeding, had been outstanding for approximately 6 months. During that period, Mr Randell had not filed any Affidavit material in a formal sense nor made any Application to the Court.
At this hearing, it was Ms Nye’s position that the Court should make orders amending the earlier orders to enable her alone:
·To sell the Town C and Town D properties, in order to secure the monies due to her;
·Thereafter, if there was any part of such sum still outstanding to her, authorising her to sell the properties registered in the Respondent’s name located at E(3) Street, Town C and H(2) Street, Town F; in order to secure the same outcome;
·In the event that the proceeds of the sale of these properties was insufficient to secure the payment required that the properties located at G Street, Town B; H Street, Town B; and J Street, Town B; be similarly sold; and
·In addition, Ms Nye sought reimbursement of monies received by Mr Randell in respect of the properties which still remained registered in her name.
Essentially, Ms Nye sought orders with the same effect as that envisaged in the September 2014 orders, namely that there be a stepped sale of properties, starting with the properties registered in her name, until such time as she had been paid the settlement sum due to her but that she should control the sale process rather than it being managed jointly.
In all the circumstances of the case, particularly given the absence of any answering material from Mr Randell or any challenge from him to the probity of the September 2014 order, which had been made with his ostensible consent, I made the orders sought by Ms Nye on 31 January 2021.
THE CURRENT PROCEEDINGS
Ms Nye commenced the current round of proceedings on 26 May 2021. In summary, she seeks the variation of the orders of September 2014 and January 2017 and in lieu thereof the following orders be made:
·The husband transfer to her of the properties situated at G Street, Town B and H Street, Town B, which are registered in Mr Randell’s name;
·That she retain the properties situated at E(3) Street, Town C; E(1) Street, Town C; and F Street, Town D;
·Each party otherwise retain the property controlled by them; and
·Costs.
Axiomatically, each of these outcomes would be significantly different to the orders made in 2014. In lieu of receipt of a cash sum she would retain the properties still registered in her name and would receive two other properties which were originally envisaged to be retained by Mr Randell.
Although the parties have never been married, the application was posited on the basis of sections 79A(1)(b) and (c) of the Family Law Act. The equivalent provisions, so far as de facto partners are concerned are section 90SN(1)(b) and (c) of the Act. The provisions authorise the Court to vary or set aside an earlier made property order if it is satisfied that either:
·Circumstances have arisen which render it impracticable for the relevant order to be carried out; or
·A person has defaulted in carrying out an obligation imposed upon him/her, and as a consequence of that default, it is just and equitable for the order to be varied or set aside.
There can be little doubt that there has been a significant change of circumstances since the September 2014 orders were made. In an affidavit filed on 24 May of this year, Ms Nye outlined these various matters, which can be summarised as follows:
·She continued to be the registered proprietor of E(1) Street, Town C; E(2) Street, Town C; and F Street, Town D;
·These properties had an estimated value of $200,000.00[7] ($130,000.00 less than her estimate in 2014);
·These properties were subject to mortgages in favour of the Commonwealth Bank of Australia in an amount of $303,645.00;
·E(2) Street continued to be subject to a charge in favour of Revenue SA but the amount owed was now $21,888.00;
·Council rates owing in respect of the three properties amounted to $16,850.00;
·Water rates owing in respect of the three properties amounted to $22,236.00.
[7] These figures are based on valuations obtained by Ms Nye in October 2020. See Affidavit of Ms Nye filed 24 May 2020 at Annexure 2.
Accordingly, given that situation, the properties had no capacity to provide her with the sums to which she was entitled pursuant to the September 2014 orders. In this context, it was her position, which appears axiomatic, that Mr Randell had failed to abide by the order which required him to pay the mortgages and other outgoing relating to the properties prior to their transfer to him.
Ms Nye further deposed that the properties, registered in Mr Randell’s sole name in both 2014 and 2017, located at E(3) Street, Town C; H(2) Street, Town F; and J Street, Town B; had been repossessed by each of their respective mortgagees and sold. As indicated above, pursuant to the early orders, these properties were to be sold if the proceeds of sale of her properties was insufficient to pay the amount owed to her.
H(2) Street, Town F was sold in 2017 for the sum of $50,000.00 which was $45,000.00 less than the sum attributed to it by Ms Nye in her original affidavit to the Court. In order to safeguard her position, it seems to be the position that Ms Nye lodged caveats over G Street, Town B and H Street, Town B. On 4 May 2021, she was notified by the Lands Services Department that Mr Randell had applied to have the caveats removed. This was the catalyst for her commencing the current round of proceedings. She believes that Mr Randell took the step of warning her caveats because she had indicated to the tenants of her three properties that she was intending to sell.
It is not currently clear why Ms Nye did not take more proactive steps to action the 2017 orders. In her affidavit material she deposes that she has suffered a post-traumatic stress condition, which she attributes to family violence inflicted upon her by Mr Randell. She consulted a psychologist practicing in Darwin in May of 2021 in respect of these matters.
It would also appear to be the case that during periods of 2017 and 2018, the parties were communicating more effectively with one another and, in this environment, Ms Nye agreed to return to live in Australia with the children so that they could spend time with their father more easily.
At the same time, the market for real property in region D South Australia appears to have deteriorated. Initially, Mr Randell agreed that G Street, Town B should be sold first as this was the property in which he had the most equity. Mr Randell wished the property to be marketed with a reserve price of $240,000.00. It did not sell at this price. It is Ms Nye’s position that Mr Randell declined to reduce the price. It is her view that $160,000.00 is a more realistic value.
If Ms Nye proceeds with the sale of the three properties currently registered in her name, given that there is insufficient equity to discharge the applicable mortgages, she would have to apply for an unsecured loan from the Commonwealth Bank of Australia to do so. She doubts the bank would approve such a loan.
In the course of the recent truncated hearing, which did not involve oral evidence, it was difficult to gauge with precision Ms Nye’s current financial position. She has however filed a statement of her current financial circumstances. She is currently self-employed as an entertainer and allied health worker, earning approximately $1,427.00 per week. She is also apparently currently receiving the rent from her three properties ($425.00 per week) but paying the mortgage payments ($502.00) and outgoings relating thereto ($165.00). The properties thus produce a loss which has not been ameliorated by any increase in capital value.
In all these circumstances, the three properties concerned represent a millstone around her neck. The orders made in her favour in 2014, with Mr Randell’s ostensible consent and in the absence of a scintilla of evidence from him, are effectively entirely lacking in any efficacy, as Mr Randell has ignored them and she herself has not been proactive in enforcing them. She agreed to being divested of the properties concerned. This has not occurred.
In the intervening years, the relevant portfolio of property, much of it heavily geared, has deteriorated in value and the parties’ modest net worth in 2014 significantly eroded. In short, over the past seven years, the parties have haemorrhaged money, which they can ill afford to do. In summary, Ms Nye is stuck in a mire of debt in respect of properties she does not want but cannot afford to sell.
More recently, she has deposed that she remain indebted to her current solicitor in an amount of approximately $12,000.00. The interest foregone by her in respect of the settlement sums due to her pursuant to the orders of September 2014 would total around $25,000.00. I am concerned that this sad story represents a travesty of the legal process. Certainly, it must do so from Ms Nye’s perspective.
Currently, Ms Nye believes that G Street, Town B property is worth around $160,000.00 and H Street, Town B property is worth $33,000.00. In 2014, it was her understanding that the properties were unencumbered. As indicated above, Mr Randell does not accept that this is the case.
Given Ms Nye’s current unpalatable situation, on 13 September 2021, she amended her application seeking orders, said to be in the nature of enforcement pursuant to section 105 of the Act, which entailed the transfer of G Street, Town B and H Street, Town B properties” to her so that they can be sold by her after she alone has determined the appropriate sale terms, without any input from Mr Randell.
On the sale of the Town B properties, after payment of the necessary sale costs, she would seek to be paid the sum of $167,802.13 from the proceeds, with any balance going to Mr Randell. This sum is calculated as follows: her original settlement sum ($50,000.00); interest on this sum (425,451.56); costs awarded to her ($10,000.00); interest on costs ($5,108.32); Revenue SA ($18,741.75); rates ($16,850.00); water rates ($22,236.00); indemnity costs calculated by her ($11,114.50); rental income due to her ($8,300.00).
Clearly, if these orders are made it would leave little, if anything, of the parties’ capital, as calculated by Ms Nye in September 2014, for Mr Randell. It is Ms Nye’s position that this baleful state of affairs is due entirely to the dereliction of Mr Randell and she should not be penalised because of it. For his part, Mr Randell asserts that such an outcome would be gravely unfair to him.
Mr Randell responded to the application on 11 August 2021. He has acted on his own behalf and prepared his own documents, which consist of the following:
·An affidavit of himself filed on 9 June 2021;
·A further affidavit of himself filed 11 August 2021;
·A statement of his financial circumstances filed on 8 June 2021.
It is the import of these various documents that it is Ms Nye’s action, rather than anything attributable to him, which have allowed the debts related to the properties in question to increase so dramatically. He does not oppose the September 2014 orders being revisited but only on the basis that each party retain the properties registered in their respective names. Necessarily, given what has occurred since 2014 this would mean Ms Nye would be significantly indebted and he would retain the only real properties subject to equity.
In this context, Mr Randell seeks that there should be a trial of all property issues between the parties. He has also sought to raise parenting issues, particularly in respect of how travel costs arising in respect of the children spending time with him, during school holidays, should be allocated between the parties.
In his statement of financial circumstances, Mr Randell indicates that he is currently unemployed. He estimates the value of the Town B properties at $100,000.00 but asserts the properties are subject to unregistered mortgages in favour of a company entitled Company K.
His major affidavit is highly critical of Ms Nye. Much of the criticisms seem to me to be lacking in relevance. They include the following:
·She has stolen two diamond rings from him;
·She has used the children to extort money from him;
·She has received both child support and a supporting parent benefit;
·Her actions have destroyed “his” property portfolio;
·Company K, a de-registered company controlled by his parents, is owed $200,000.00 in respect of the discharge of mortgages previously registered against the Town B properties;
·The valuations adopted by Ms Nye in respect of possible sales of the properties in 2015 were unrealistic and ensured that no sales would occur. Accordingly, the frustration of the 2014 orders was her fault rather than his;
·These various matters caused him to fall into a deep depression.
As best I can understand, the following paragraphs from his August affidavit encapsulate Mr Randell’s position:
Since 2012 I tried to finish my houses so I could lease them and receive an income as I had no money left. At the same time, I maintained Ms Nye's properties while she was living in New Zealand and had them tenanted before my own under duress so that I could continue to have contact with X and Y as Ms Nye demanded.
Based on my income and tax returns, Ms Nye has received more than she is entitled to in financial support and child support, and I will be asking for this excess money to be paid back in a counter property claim in the future.
The caveats placed on my properties by Ms Nye hindered any chance I had of fulfilling the 2014/2017 orders. This further exacerbated my depression and made caring for Z challenging while being unemployed with no money nor assets.
From 2017 when the new orders were made, Ms Nye had done nothing to adhere to the orders she was given control of. I asked Ms Nye frequently when she would be fulfilling the orders. I feel this has been an ongoing financial abusive arrangement and a deliberate attack on me.[8]
[8] See Mr Randell’s affidavit filed 11 August 2021 at [15] – [18]
Essentially, it is Mr Randell’s view that the prejudice arising from the delay have had a greater impact on him rather than Ms Nye. Necessarily, this is a view with which she vehemently disagrees.
LEGAL PRINCIPLES APPLICABLE
Courts have a fundamental obligation, when called upon, to enforce the orders which they make. Otherwise the orders in question become meaningless as lacking in force and the relevant Court runs the risk of losing the confidence of the community which it serves. The same principles apply to orders made by consent, given the focus the Family Law Courts place on separated partners reaching their own sensible decisions in respect of the division of their property.
For this reason, the Court is provided with a complex arsenal of measures directed towards the enforcement of its orders, particularly those orders which are entitled financial orders and the obligations related to them. Chiefly, they are contained in Part 11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”).
Rule 11.01(1) of the Rules defines what obligations may be enforced. They are as follows:
•An obligation to pay money;
•An obligation to sign a document;
•An order entitling a person to the possession of real property;
•An order entitling a person to the transfer or delivery of personal property.
Pursuant to Rule 11.01(2), an obligation to pay money includes a provision requiring a payer to pay money under the Act. Clearly the September 2014 order requires Mr Randell to pay Ms Nye a sum of money. Pursuant to Rule 11.04(a), Ms Nye has an entitlement to enforce that obligation.
Rule 11.05 details the means by which an obligation to pay money may be enforced. They are as follows:
•An order for seizure and sale of real and personal property;
•An order for attachment of earnings and debts;
•An order for sequestration;
•An order appointing a receiver.
Rule 11.07 provides the Court with a raft of general enforcement powers, which include the authority to examine a payer or provide information or relevant documents. Significantly, in the current matter, provisions contained in Division 11.1.3 of the Rules enable the Court to issue what is known as an enforcement warrant. This in turn will lead to the appointment of a person known as an enforcement officer. Such a person, pursuant to Rule 11.18, is authorised to seize and sell property.
One of the more puzzling aspects of this current matter is the fact that Ms Nye has never moved to the issue of either an enforcement summons or more importantly the appointment of an enforcement officer directed towards the selling of the properties registered in Mr Randell’s name. I suspect that this may be as a consequence of Ms Nye not being able to access appropriate legal advice as to her possible options under the applicable Part of the Rules and her personal inability to take appropriate action in respect of the two sets of orders made in her favour.
In addition the earlier orders authorised Ms Nye to apply to the Court’s Registrar to substitute the Registrar for Mr Randell in respect of the execution of any documents necessary to give effect to those orders. This power is created by section 106 of the Act.Ms Nye has not sought to apply this power to her situation. Rather, in practical terms, she has not sought to apply the remedies available to her to her situation.
Whether this is as a consequence of ignorance, on her part, or a misplaced hope that Mr Randell would ultimate comply and so end the parties’ financial relationship with one another, I am not in a position to say on the basis of the evidence currently available to me.
Coupled with this situation is the complete failure of Mr Randell to comply with any of the obligations, to which he has been subject, pursuant to both the 2014 and 2017 orders. Against this background, the parties’ financial situation, over a period of around seven years, has radically deteriorated, to their mutual detriment.
Ultimately, it may be necessary for the Court to determine if and why Ms Nye has sat upon her hands in respect of execution and what should be the consequences of this. This cannot occur in the consequence of the recently conducted hearing.
In addition, it will be necessary to consider the implications of this delay for Mr Randell, in financial terms and what culpability can be sheeted home to him for it. In my view, these are matters which go to the exercise of the discretion arising under section 105.
Neither of the parties have raised the application of any limitation period to the current situation. No such limitation applies to applications arising under section 79A. Clearly, both Ms Nye and Mr Randell are persons affected by the orders made in September 2014 and so have a standing to bring an application under this section.
Whether it has now become impracticable to carry out the relevant orders in the current circumstances is a matter which I do not believe I can determine in the context of these proceedings. More significantly, I do not believe the Court is in a position to determine where issues of justice and equity fall in respect of Mr Randell’s failure to abide by the earlier orders.
CONCLUSIONS
In my view, Mr Randell has not adequately explained his ostensible consent to the September 2014 orders and thereafter his apparent singular disregard for them. However, the fact remains that a significant period of time has elapsed since the relevant orders were made. During this period, the pool of property initially available to be divided between the parties has dramatically shrunk.
It is this context, this Court must consider the discretion conferred upon it pursuant to section 105. As with all discretions, it is one which must be exercised judicially and fairly. In my view, the effluxion of time is a significant matter both in terms of overall fairness to each of the parties concerned and the marked deterioration of their shared financial situation.
In these circumstances, I do not consider that the present impasse is one which can be easily remedied. Certainly not by making the orders currently sought by Ms Nye, which will result in Mr Randell receiving little, if any, property. I am concerned that she such an outcome has the potential to be gravely unfair to him, particularly given the time which has elapsed, during which Ms Nye has not pursued any remedies to have the orders enforced.
Rather, in my assessment, regrettable though it is, it will be necessary for the Court to undertake a more detailed assessment of the current situation prevailing and this is probably better managed in the context of an application under section 79A rather than one related to execution alone.
How such a hearing can be fairly and expeditiously conducted raises significant logistic issues. During any further delay, the financial position of the parties can only deteriorate. I will allocate one day for this hearing, which I propose be on 9 November 2021 subject to the convenience of the parties and their respective counsel.
For all these reasons, the orders of the Court will be as set out at the commencement of these reasons for judgment
I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 29 September 2021
The applicant now refers to herself as Ms Nye. She has not formally disclosed the basis of this change of name. I mean her no disrespect but, for the sake of convenience, I will refer to her in these reasons for judgment as Ms Nye
Nye.
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