Parry and Deakin
[2013] FamCAFC 12
FAMILY COURT OF AUSTRALIA
| PARRY & DEAKIN | [2013] FamCAFC 12 |
FAMILY LAW – APPEAL – PROPERTY – Where the husband appealed against orders dismissing his application made after final property orders were made – Where interim property orders had appointed the wife trustee for sale of the parties’ boat – Where subsequent and final property orders provided for the distribution of sale proceeds – Where the husband did not appeal the final orders – Where subsequent to the distribution of the sale proceeds as per the final orders, the husband applied for further orders in relation to possessions said to have been on the boat prior to its sale, or which remained on the boat at the time of sale – Where no provision in respect of the possessions the subject of the subsequent application had been made in earlier interim or final orders – Where the Federal Magistrate heard the application and, without having made an express finding as to the scope of the wife’s duties as trustee, found that she had been negligent in the exercise of her duties, however decided that no remedy was available in the absence of expert or independent evidence as to the value of the missing items – Where the application of the husband before the Federal Magistrate was misconceived – Where the orders made by the Federal Magistrate were clearly final property orders made pursuant to s 79 and the Federal Magistrate’s exercise of power was accordingly limited to enforcement of the existing orders – Appeal dismissed.
| Family Law Act 1975 (Cth) ss 79, 79A, 94AAA(3) |
| Gabel & Yardley (2008) FLC 93-386). |
| APPELLANT: | Mr Parry |
| RESPONDENT: | Ms Deakin |
| FILE NUMBER: | BRC 7391 of 2007 |
| APPEAL NUMBER: | NA 34 of 2012 |
| DATE DELIVERED: | 12 February 2013 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | May J |
| HEARING DATE: | 30 October 2012 |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 4 April 2012 |
| LOWER COURT MNC: | [2012] FMCAfam 580 |
REPRESENTATION
| THE APPELLANT: | In person |
| THE RESPONDENT: | In person |
Orders
The appeal NA 34 of 2012 is dismissed.
There be no order as to costs.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Parry & Deakin has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 34 of 2012
File Number: BRC 7391 of 2007
| Mr Parry |
Appellant
And
| Ms Deakin |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an appeal from orders of Federal Magistrate Howard made on
4 April 2012. The parties, Mr Parry (“the husband”), and Ms Deakin (“the wife”), were involved in property proceedings in the Federal Magistrates Court. During the course of the proceedings on 6 October 2010, the wife was appointed trustee for sale of a boat, which represented the most substantial asset of the property pool.
The boat was later sold by the wife, and on 24 March 2011, the Federal Magistrate made final orders providing for the distribution of proceeds of sale between the parties.
After final orders were made, the husband filed an application on 3 May 2011, in relation to possessions said to have been on the boat prior to its sale, or which remained on the boat at the time of sale. In that application, Mr Parry sought orders for “Return of possessions originally on yacht “[The Z]” ”. The application was heard by the Federal Magistrate on 4 June 2012, with both parties appearing in person. His Honour dismissed the application with ex tempore reasons that day. Written reasons for judgment were later delivered on 15 June 2012. It is from the order dismissing his application that the husband now appeals.
Both parties were self-represented in the appeal. It became apparent at the hearing that the husband sought to prosecute his appeal on two related bases. First, it is asserted that the Federal Magistrate was wrong in finding that independent or expert evidence of the value of the possessions claimed was required in order to grant the husband the orders he was seeking. The husband submitted, with reference to some case law, that the value asserted by him needed only be genuine rather than correct or precise, and that the wife had not taken issue with the value.
Correspondingly, it is said that the Federal Magistrate also erred in considering that the onus of proof was on the husband to prove that the asserted value was genuine or reasonable. Instead, the husband submits, the onus is reversed and lies with the respondent to demonstrate that his asserted value was not reasonable. The orders sought by the husband in the appeal are that the orders be set aside and the wife pay to him $17,000 “compensation”.
I am determining the appeal as a single judge pursuant to a direction from the Chief Justice under the provisions of subsection 94AAA(3).
Reasons of the Federal Magistrate
Though not expressly stated, it is apparent from the reasons of the Federal Magistrate that his Honour considered the husband’s application on an assumption that the wife, having been appointed as trustee for sale, was also legally responsible as trustee for the possessions contained on the boat.
His Honour began by providing some background to the husband’s application:
1.This is an application brought by [the husband] in long running proceedings between himself and [the wife…]. There were property proceedings in this Court that were conducted in 2010 and judgment was given in that year. An Order was made on 6 October 2010 requiring the yacht known as the “the [Z]” to be sold. For that purpose, the applicant wife in those proceedings […] was appointed as trustee for the sale of the yacht. There was a reserve sale price of $45,000 placed on it.
2.The yacht was eventually sold for about $33,000. [The husband] received about $10,000. [The wife] received about $13,000 after various payments and so on. [The husband] brought this further application because he says that his personal items, which were on the yacht, were not returned to him, or at least, he says many of the items were missing. [The wife], after the proceedings finished towards the end of 2010, travelled to Europe to see her family…
The Federal Magistrate then detailed the evidence of various witnesses about the contents and location of the husband’s missing possessions at various times:
3.The yacht was eventually sold to a Mr [K]. Some time in March or April of 2011, Mr [C], who gave evidence today, assisted Mr [K] in moving some items off the boat and they were placed under the yacht in cartons and plastic milk crates. Mr [K] had earlier moved most of the items to underneath the yacht himself and Mr [C] assisted him with some items. Mr [C] gives evidence that there was a spear gun and a wetsuit and some books, in fact a lot of books. He could not tell if there was an iPod in there, but it may well have been in there. He could not tell if there were navigational charts there.
4.I am referring to those types of items because [the husband], in his Affidavit, has set out what he says was missing when the goods were eventually collected by his friend, Ms [G]. In his Affidavit filed 3 May 2011, [the husband] says there was a computer missing, as well as books, navigation charts, personal notes, personal navigator and a sextant. In fact, 100 books, 1,000 photos, CDs, DVDs and an iPod with 7,000 songs all were missing, according to [the husband]. He also says that there was a scuba suit missing, as well as spear guns, weight belts, et cetera. He said everything of any sentimental value or financial value was “stolen” – was the word that he used. He said:
“Many of these items are of sentimental value and are irreplaceable”.
5.[The wife] says when she went overseas, she was not sure what to do with the items and she had personally, she said, left them on the yacht. It became apparent to the slipway operators, Mr [H] and Ms [P], [they were apparently informed by the new owner] that personal belongings of [the husband] had been placed for collection by [the husband]. They then informed [the husband]. He sent, or asked, Ms [G] to go to collect the items, which she did. Mr [C] gave evidence today, and I accept his evidence, that there were about ten cartons worth of goods placed underneath the yacht when he last saw them. Ms [G] gave evidence, and I accept her evidence, that when she collected the goods, there were about three cartons of goods. That means that approximately seven cartons of goods are missing.
Having made a finding that seven cartons of the husband’s possessions were missing his Honour then proceeded, without having made an express finding as to the scope of the wife’s duties as trustee or otherwise in relation to the legal relationship between the parties in this context, to find that she had been negligent in the exercise of her duties:
6.There are a number of matters for consideration. I accept that [the wife] was suffering under some stress as a result of the long running litigation and I apprehend that is why she travelled to Europe at that point in time. But at the end of the day, she was the trustee for the vessel and I do think that it is possibly the case that she was negligent in not securing the items and delivering them up to the respondent. In fact, my view is that the trustee, [the wife], was negligent in not doing it herself or arranging for someone else to actually carton up and secure all of the items and deliver them up to [the husband].
The Federal Magistrate then considered what remedy was available. His Honour appears to have considered the absence of an inventory of the items from the husband, and more importantly absence of expert or independent evidence as to the value of the items missing, a bar to a compensation or restitution style remedy:
7.The difficulty which confronts the parties, or at least Mr [Parry] and the Court, now is there is no precise inventory of what is missing and there is no independent expert valuation evidence of what is missing. The Court, as I noted earlier, cannot merely pluck a figure out of the air. The Court cannot attach a value to items in the absence of admissible evidence in relation to such valuation. There are particular rules in relation to expert evidence. They are well known. They have been set out in many cases, including the case of Makita (Australia) Pty Limited & Sprowles [2001] NSWCA 305.
8.In essence, opinion evidence from an expert is admissible but only within particular bounds and provided various conditions are met. That has not occurred here. There is no admissible opinion evidence as to the value of the items. The Court is able to conclude that Mr [C] and the current owner of the yacht, Mr [K], placed about ten cartons worth of goods underneath the yacht when it was up on the slipway. The Court has evidence that when Ms [G] collected the items, there were about three cartons worth of goods there. As I said earlier, seven cartons of goods were missing but the Court is in an impossible position. It cannot possibly value the seven cartons of goods that are missing. There is no precise inventory or any adequate inventory of what was missing but more importantly, there is no valuation evidence about what was missing.
His Honour then mentioned, though did not elaborate on, the possibility of contributory negligence on the part of the husband as a bar to a remedy. Ultimately however, the absence and impossibility of an independent valuation of the missing goods was the reason for his Honour’s decision to dismiss the husband’s application:
9.So even though it is possible to say that the trustee was negligent in not securing those goods, there are a couple of arguments that could flow. The first is, could a Court also say that the applicant in these proceedings, [the husband], was also negligent. That is to say, was there some contributory negligence by not taking steps either by application to the Court or to the police to secure those items at an early time? These are matters that this Court does not in fact need to determine, nor is it appropriate in these proceedings to do so.
10.The fact of the matter is the Court has concluded that there are items missing but there is, unfortunately for [the husband], no remedy available from this Court because of the impossible task which [the husband] essentially has asked the Court to carry out, namely he wants the Court to provide a remedy for material or items or goods that are not capable of independent valuation or, if they are, they have not been independently valued.
The Federal Magistrate concluded correctly, although as will be seen for the wrong reasons, that the Court could not provide the husband with a remedy for the loss of his possessions, and made a number of other suggestions:
11.[The husband] has suggested in his closing submission to the Court the possibility that the new owner of the yacht may still have some items. That is a matter which [the husband] would need to take up with the appropriate authorities, and that is not a matter for this Court. At the end of the day, therefore, this Court is left with no option but to dismiss the application and make an Order that, to the extent that either party has incurred any cost then they will bear their own costs.
12.There is no remedy which this Court can provide in these particular circumstances. If a person such as [the husband] has a complaint which he thinks could or should be made to the relevant police authorities in the [B] area concerning his items of property or certain items of property, that is a matter for him to take up with the relevant authorities to see if they are in any way able to assist. The Order I make today will be a final Order.
The Husband’s Appeal
It appears that certain apparent findings or expressed well-intentioned views by his Honour have led the husband to believe that he has cause of action against the wife for breach of a fiduciary duty owed to him, which ought to result in the appeal being allowed and money ordered to be paid by the wife to the husband.
Further to this, his Honour’s references to “no independent expert valuation” and the rules about expert evidence may have been a source of confusion, which have led the husband to pursue the arguments he has made in the appeal in relation to genuineness rather than correctness of value estimates. The thrust of the husband’s submissions was that having found negligence on the part of the wife, the Court was bound to provide a remedy of restitution or compensation in order to do justice between the parties.
The husband disputed the Federal Magistrate’s application of the principles in relation to evidence of the value of the lost property. While his Honour found that no remedy could flow from the finding of negligence because there was no independent or expert evidence about the value, the husband submitted that such evidence was unnecessary.
The husband was unable to point to any evidence before his Honour of a precise or even vague inventory of the missing items and indeed confirmed that none existed. He submitted however, that all that was required was a genuine estimate from him, which he expressed orally at the hearing before his Honour as approximately $17,000. The estimate was said to be based on a calculation using “the average price of a book or CD”.
According to the husband the onus of proof was on the wife, if she disagreed with the value, to present evidence as to its non-genuine or unreasonable nature. He referred to the transcript and suggested that at no point did the wife challenge the $17,000 figure. The transcript reveals that the wife complained to the Federal Magistrate that there was no inventory of items, and that some of the items spoken of by the husband she had never seen before on the boat. Clearly then, while the wife did not present specific evidence against the husband’s estimate, there was a real dispute about the existence, identity and value of the property.
For her part, the wife submitted that she had fulfilled her duties as trustee for sale of the boat. She emphasised that the husband should have applied for orders in relation to the handling of the personal possessions on the boat on
6 October 2010 when orders appointing her trustee were made. The wife explained that the boat was put on a dry dock in late 2009, and that the husband had had ample opportunity to address the situation earlier.
Discussion
Unfortunately, the application of the husband and this appeal are misconceived. The first difficulty with the husband’s application before the Federal Magistrate is that final orders had been made so that it was not possible for further orders to be made. Once an order has been made pursuant to s 79, the power of the Court to make any further property order is spent, unless s 79A applies (see Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, paragraphs 44-48, and also Gabel & Yardley (2008) FLC 93-386).
It is clear from paragraph 48 of Hickey and Hickey that even if some items of property are not dealt with specifically in the orders, “the single exercise of power prevents a further application in relation to both specified and non specified items of property except pursuant to the provisions of s. 79A”.
In addition, in this case, the husband is not appealing the substantive property orders.
The property proceedings between the parties having been finalised, the Federal Magistrate was limited to enforcement of orders already made between the parties. That exercise required a determination of the rights and responsibilities of the parties as established by the earlier orders.
It is necessary to set out in full the final property orders made on
24 March 2011:
THE COURT ORDERS ON A FINAL BASIS (in relation to Property)
1.That pursuant to the sale of the vessel “[The Z]” all moneys, being $33,000, held by [Slipway Operator B] be distributed on the following basis:
(a) that [Slipway Operator B] be paid the sum of $6,016.0 inclusive of all costs including advertising, GST, Brokerage crane and slipway fees;
(b)that the amount of $1,172.50 be paid directly to Mr Kelvin Pearson, solicitor. Such payment shall thereby satisfy a costs Order made against the Respondent husband by the Federal Magistrates Court of Australia sitting at [B] on
14 September 2010;(c)that the amount of $1,887 be paid directly to Pearson Law. Such payment shall thereby satisfy the costs Order made against the Respondent husband by the Federal Magistrates Court of Australia at Brisbane on 24 March 2011;
(d)that the parties share the Conveyancing costs associated with the sale of the vessel in the sum of $770.00 and to that end to the sum of $770 shall be paid to Pearson Law;
(e)that the Respondent husband receives the sum of $10,000.00; and
(f)that the Applicant wife receive the sum of $13,154.50.
2.Sales Proceeds for Distribution $33,000
[Slipway Operator B] $6,016.00
Distribution to Husband $10,000.00
Distribution to Wife $13,154.50
K.Pearson
(Re Cost Order of 14 September 2010) $1,172.50
Pearson Law (Re Wife’s cost order of 24 March 2011
of $1,887.00 & shared Conveyancing
costs of $770.00 $2,657,00
BALANCE$0.00
3.That all other Applications in relation to property be dismissed.
It can immediately be seen that these orders were final, nor interim or by way of partial property settlement.
Interim orders made in the property proceedings on 6 October 2010 had provided:
1.That the Respondent husband be restrained and an injunction be granted, restraining the Respondent from removing the vessel “[The Z]” […] from the [slipway at B].
2.That the Applicant and the Respondent be restrained from encumbering, dealing with or modifying in any way or removing any item from, the vessel “[The Z]” […] from the [slipway at B].
3.That the Applicant wife be appointed Trustee of the Vessel “[the Z]” for the purposes of selling the vessel.
…
5.That the Applicant wife as Trustee use her best endeavours to market and sell the vessel for the prescribed time after which time the vessel be sold by public auction.
…
7.The parties otherwise retain all other property currently in their possession.
There are two important features of these interim orders. First, the wife was appointed trustee of the boat for a specific purpose, that of selling the vessel. The scope of that responsibility was defined: that she use her best endeavours to market the vessel for a given period of time, after which it could be sold by public auction. The second important feature is that the orders did make some reference to the goods contained on the boat. Order 2 restrained both parties from dealing with in any way or removing any item from the boat.
The scope of a trustee for sale’s duties is limited to that which is provided by the orders providing for the appointment.
The well established authority relating to the scope of a trustee for sale’s fiduciary duty was recently canvassed by Davies J in the New South Wales Supreme Court, in relation to executors of an estate who were trustees for sale of shares (Liberty Teal Griffin (by her Tutor Shelley Candice Griffin) v David Raymond Coe (both in his capacity as Executor of the estate of the late Phillip Mark Griffin & in his personal capacity [2012] NSWSC 412). His Honour referred to the decision of Barrett J in Halfhide v Beavan [2003] NSWSC 1207 at:
[44]Fifth, the standard of care to be exercised by an administrator in effecting a sale for purposes of administration may be regarded as the equivalent of that expected of a trustee exercising a power of sale[…]The standard of care includes the exercise of diligence in inviting competition and in pursuing a course of conduct of the kind that an ordinary prudent person would apply in managing his or her own affairs[…]The emphasis is on responsible, methodical and prudent behaviour undertaken according to an informed appreciation of the subject matter and the market environment in which it is to be sold. In In re Cooper & Allen’s Contract for sale to Harlech (1876) 4 ChD 802, Jessel MR said:
“It is the duty of trustees for sale to sell the estate to the best advantage they can, that is the manner most beneficial to the cestuis que trust.”
It is apparent that absent specific provision in orders, it could not be said that the wife had a duty of care in respect of goods contained on the boat. The duty required of the wife was to sell the boat on the conditions outlined in the orders. The standard of care in that exercise was to sell it to the best advantage she could. The disappearance of those goods - personal possessions of the husband - had no impact on the discharge of her duty to sell the property to that standard. Accordingly, the Federal Magistrate should not have found that the wife had been negligent or failed in her capacity as trustee because some of the goods contained on the boat went missing.
As already mentioned, in the absence of a s 79A application, the only remedies available to the husband were enforcement of the orders. In the absence of specific orders in relation to the contents and any evidence to substantiate their existence, it was not possible for the Federal Magistrate to make any order.
It is unnecessary to discuss further the husband’s alleged errors in the application and interpretation of principles relevant to the genuineness of his claim and the burden of proof.
Conclusion
It is unfortunate for the husband that specific orders were not made in relation to the property contained on the boat during the course of the property proceedings. The husband could have made an application at any time in the proceedings that the property be dealt with, rather than waiting until the boat had been sold, changed possession, and the proceedings finalised. Final orders having been made in the proceedings and the wife having no responsibility for those possessions by reason of the orders, there was no remedy available to the husband in the Federal Magistrates Court. Accordingly, there can be no remedy on appeal.
The appeal is dismissed.
Costs
Both parties were self represented and confirmed that no legal costs had been incurred by them in preparation for the appeal. Accordingly, the appropriate order is that there be no order as to costs.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice May delivered on
12 February 2013.
Associate:
Date: 12 February 2013
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