Peabody and Peabody - [2011] FMCAfam 835

FEDERAL MAGISTRATES COURT OF AUSTRALIA

PEABODY & PEABODY

[2011] FMCAfam 835

FAMILY LAW – Enforcement – whether statute barred – whether doctrine of laches applies – significant delay and inaction over protracted periods.

Judiciary Act 1903 (Cth), ss.2, 79
Limitation Act 1974 (Tas), ss.2, 4
Federal Magistrates Court Rules 2001 (Cth), rr.13.10, 25B.05
Family Law Rules 1984 (Cth), Order 33

B & B (2005) FLC 93-234
Dennehy v Reasonable Endeavours Pty Ltd [2003] FCAFC 158; (2003) 130 FCR 494
Jay v Johnstone [1893] 1 QB 189
Lowsley and Another v Forbes [1999] 1 AC 329; [1998] 3 WLR 501; [1998] 1 All ER 897
WT Lamb & Sons v Rider [1948] 2 KB 331

Applicant:

MR PEABODY

Respondent:

MS PEABODY

File Number:

LNC 174 of 2011

Judgment of:

Roberts FM

Hearing date:

20 June 2011

Date of Last Submission:

20 June 2011

Delivered at:

Launceston

Delivered on:

18 August 2011

REPRESENTATION

Counsel for the Applicant:

Ms J Sacino

Solicitors for the Applicant:

HFM Legal

Counsel for the Respondent:

Mr L Edwards

Solicitors for the Respondent:

Friend & Edwards Lawyers

ORDERS

That the Enforcement Summons issued on 25 March 2011 is dismissed.
That the Direction contained in paragraph 3 of the Orders of this Court of 28 March 2011 is discharged.

IT IS NOTED that publication of this judgment under the pseudonym Peabody & Peabody is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT BURNIE

LNC 174 of 2011

MR PEABODY

Applicant

And

MS PEABODY

Respondent

REASONS FOR JUDGMENT

On 25 March 2011 a Registrar of this Court issued an Enforcement Summons on behalf of MS PEABODY (“the second enforcement summons”). She is seeking to enforce payment of a sum of money, said in the second enforcement summons to be $12,000,[1] owing to her by her former husband MR PEABODY pursuant to an order made by the Family Court of Australia (“the Family Court”) on 24 July 1995. She is also seeking the payment of interest.
[1] It appears that the capital sum unpaid is $12,459.29, but nothing turns upon that factual discrepancy at this stage.
Although the parties have long since been divorced, they were once married, so for convenience I shall refer to them as “the husband” and “the wife” in these Reasons.
On 31 March 2011 I set this matter down for hearing in Launceston on 16 June 2011.[2] I also made a direction (“the Direction”) that the husband’s solicitors are to notify the wife’s solicitors if there is to be any payment to the husband from funds held in trust in relation to current proceedings in the Family Court of Western Australia in which the husband is involved. Those proceedings do not involve the “wife” from these proceedings.
[2] Unfortunately, a volcanic ash cloud from Chile prevented me from being in Launceston on 16 June 2011, so arrangements were made for the application to be heard in Burnie on 20 June 2011.
The husband filed an Application in a Case on 27 May 2011 (“the application”) seeking orders to discharge the Direction and dismiss the second enforcement summons. I am only dealing with that application at this time, and that is why the husband is named as the applicant in these Reasons.
On 20 June 2011 the application was heard on the basis of submissions on the papers only, with the husband’s lawyer appearing by telephone. I reserved my decision at the end of that hearing.

Background

Earlier Court files reveal that the parties were married [in] 1990. However, they had lived together prior to that, and their daughter had been born in 1985.
The wife commenced proceedings for a property settlement in the Family Court in June 1994. An order was made by Butler J on 10 April 1995 which provided for the husband to pay the sum of $17,000 to the wife. (However, that order incorrectly referred to Section 87 of the Family Law Act 1975 and failed to specify a time limit for payment.) An order for costs was also made against the husband.
On 24 July 1995 Hannon J varied the order of 10 April 1995 to provide for the sum of $17,000 to be paid within 28 days. The varied order reads:
That by way of property settlement pursuant to Section 79 of the Family Law Act, the respondent husband pay to the applicant wife the sum of $17,000 within 28 days and that the applicant wife retain as sole and absolute owner all items of furniture, furnishings and chattels, whether they be of domestic use and ornament or otherwise and which are presently in her possession of control.
The husband was represented by counsel on 24 July 1995 and he consented to the making of that order.
On 28 July 1995 a Deputy Registrar of the Family Court taxed the costs payable by the husband at $3,572.74.
At the request of the wife, an earlier Enforcement Summons was issued by a Registrar of the Family Court on the 11 September 1995 (“the first enforcement summons”).
The parties were divorced in early 1996.
On 19 February 1996 Butler J heard an application for a garnishment order against the husband’s then employer. The husband was not represented by a lawyer at that hearing but he attended by telephone from Western Australia. A garnishment order for $50 per week was made, but it appears to be common ground that no money was ever paid to the wife pursuant to that order.
The wife continued with the first enforcement summons, and on
22 April 1996 Butler J made an order that the husband take all necessary steps to obtain a release of his preserved superannuation benefits to the wife. However, the terms of the orders were not settled at that time, and the orders were not finally made until 9 September 1996. At that time both parties were represented by lawyers and the orders read as follows:
1.   That the husband forthwith take all reasonable steps to obtain the consent or permission of the Insurance and Superannuation Commission for the release of any preserved superannuation entitlement to which he is a beneficiary including but not limited to the [C] Limited Policy No. [omitted] of which policy he is the beneficiary, and any superannuation entitlements accruing to the husband as a consequence of his employment with [R].
2.   That in the event that the Insurance and Superannuation Commission approves the release of the husband's preserved superannuation benefits, that upon release the husband shall pay the said sum to the wife or her solicitors.
3.   That on or before the 30th day of September, 1996 the husband sign an irrevocable authority directing the trustees under the [C] Limited policy [omitted] and the trustees under any fund of which he is a member as a consequence of his employment with [R] to pay any preserved entitlement release pursuant to the authority to the wife.
The husband complied with those Orders and the wife received $4,540.71 from [C] in late August 1997. (Hence, the wife’s counsel’s agreed at the hearing before me that the unpaid capital sum is $12,459.29, and not $12,000 as stated in the second enforcement summons.)
The wife then took no further Court action to recover any funds owing to her until she sought the issue of the second enforcement summons in late March 2011.
The only apparent attempt by the wife to recover any unpaid funds from the husband between August 1997 and early 2011 was when her then solicitors wrote to the husband in 2002. Their letter of 23 May 2002 requested that the husband provide them with certain financial information. That letter ended with a warning in the following terms:
Unless such information is received from you or your legal representative within fourteen (14) days, we advise that our instructions are to institute an enforcement application against you. In the event that we are forced to adopt that course we advise that additional costs will be incurred by you and by our client in instituting those proceedings. Should we be forced to adopt that course, we advise that this letter will be used in support of a costs application that you meet any and all costs incurred by our client in pursuing what is rightfully hers pursuant to the Court order.
The husband acknowledges that he received that letter, which was sent to him at his correct address. However, he says that he did not respond to it because he “understood that the matter had been finalised in 1996”.
The wife says that because she was unable to locate the husband to serve him with enforcement proceedings, her solicitors were unable to obtain a grant of legal aid to represent her, and consequently, she discontinued her efforts to locate him. Not surprisingly, the husband says that he does not know why the wife would say that she could not locate him to serve documents, because she clearly knew where he was at that time.
The parties’ daughter maintained a relationship with the husband even though he lived in Western Australia. In her affidavit, she said that she had visited her father on a few occasions and had met his second wife.
The wife says that her daughter informed her in late 2010 that the husband and his second wife had separated and that their home was to be sold. She then contacted the husband’s second wife via “Facebook”. She was subsequently told by the husband's second wife that “their home … had been sold and was due to settle in March 2011 with the proceeds of the sale to be held in trust pending resolution of their property settlement”.
The wife lodged a caveat over the title to the property owned by the husband and his second wife. However, she withdrew that caveat after legal action was threatened by the husband’s lawyer. She then commenced these proceedings on 25 March 2011 as mentioned at paragraph 1 above.

The issues

On behalf of the husband, Ms Sacino, argued that the second enforcement summons should be dismissed because of one or a combination of the following:
·the action is statute barred by subsection 4(4) of the Tasmanian Limitation Act1974 because the wife has not taken “an action” for more than 12 years: or
·the Court could have regard to the doctrine of laches; or
·the enforcement action in 1996 was intended to finalise the matter.
On behalf of the wife, Mr Edwards argued against those contentions.

The Limitation Act

Section 79 of the Judiciary Act 1903 (Cth) reads in part as follows:
(1) The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
(2) A provision of this Act does not prevent a law of a State or Territory covered by subsection (3) from binding a court under this section in connection with a suit relating to the recovery of an amount paid in connection with a tax that a law of a State or Territory invalidly purported to impose.
(3) This subsection covers a law of a State or Territory that would be applicable to the suit if it did not involve federal jurisdiction, including, for example, a law doing any of the following:
(a) limiting the period for bringing the suit to recover the amount; ……
In section 2 of that Act, “suit” is defined:
“Suit” includes any action or original proceeding between parties.
Sub-section 4(4) of the Limitation Act 1974 (Tas) states:
(4) An action shall not be brought upon a judgment after the expiration of 12 years from the date on which the judgment became enforceable.
Section 2 of the Limitation Act states that “action” includes any proceeding in a court of law.
At first blush, it would appear to be the case that the wife is caught by sub-section 4(4) of the Limitation Act 1974, because the second enforcement summons was not issued within 12 years of the order of 24 July 1995. However, as Ms Sacino pointed out quite properly in her thorough and detailed written submissions, Courts in Australia and elsewhere have at times drawn a distinction between an action brought upon a judgment and the enforcement of a judgment. [3]
[3] See Jay v Johnstone [1893] 1 QB 189, WT Lamb & Sons v Rider [1948] 2 KB 331, Lowsley and Another v Forbes [1999] 1 AC 329; [1998] 3 WLR 501; [1998] 1 All ER 897, Dennehy v Reasonable Endeavours Pty Ltd [2003] FCAFC 158; (2003) 130 FCR 494, B & B (2005) FLC 93-234.
In my view, it is likely that the second enforcement summons would be found to be “not a new cause of action, but was an application for orders providing additional machinery provisions for the implementation of the [1995 order]”[4] and would therefore not be caught by sub-section 4(4) of the Limitation Act 1974.
[4] See paragraph 55 of B & B
I also conclude that the dismissal of the first enforcement summons did not necessarily finalise matters, and the wife would have been able to pursue further enforcement action, provided that she had otherwise been reasonably diligent in pursuit of what she was owed. However, it is her almost total lack of diligence that causes me concern, and I am of the view that, even if the letter of the Limitation Act does not apply, the spirit of that Act should be borne in mind when considering whether the Court should exercise its discretion to allow the wife to proceed with the second enforcement summons.

The effect of delay

In her written submissions, Ms Sacino said:
It is submitted that the court could dismiss the application in the exercise of its discretion and possibly on the basis of the doctrine of laches and delay in terms of the Wife's failure to take any steps to enforce payment of the judgment notwithstanding the whereabouts of the husband, was or could relatively easily have been ascertained by the Wife.
Laches is a doctrine whereby a party can lose the right to insist on performance of an obligation due to unreasonable delay or negligence. By delaying the institution or prosecution of proceedings, a party can be seen to acquiesce in the conduct of the party at fault, or cause the party at fault to alter his or her position by relying on the other party’s apparent acceptance of the status quo.
In her oral submissions on 20 June 2011, Ms Sacino said that the wife had done almost nothing in 15 years. In my view, that is a slight exaggeration but it is clear that the wife has done very little since late 1997 to enforce an order made in 1995.
The wife says that, by a letter dated 18 November 1997, the husband’s former solicitors in Tasmania advised that the husband had ceased instructing them. On the evidence available to me, the wife then took no action in the matter until 2002, being a period of more than four years.
Although there was no cross-examination, it appears that the wife’s solicitors were able to write to the husband in mid-2002 at his correct address at that time. It therefore appears that the wife’s evidence was not correct when she said that she was “unable to locate [the husband] to serve him with enforcement proceedings”. [5]
[5] See paragraph 18 of her affidavit.
Certainly, the wife knew that she could pursue enforcement action against the husband at that time, because her solicitors threatened him with that in their letter of 23 May 2002. See paragraph 16 above.
The husband’s whereabouts were known to the wife’s solicitors in mid-2002 [6] and his whereabouts continued to be known to the parties’ daughter after that. While one can understand the wife’s reluctance to involve her daughter in her parents’ dispute, it is clear that the wife knew that he was still in Western Australia.[7] However, the wife does not even say whether she conducted any non-costly enquiries, such a simple telephone directory check to ascertain his whereabouts. I note that Australian telephone directory searches were certainly available on the internet in 2002.
[6] They wrote to him at his correct address.
[7] See paragraph 19 of her affidavit.
The husband says he paid Child Support up until December 2003. The wife must have been aware of that too. However, she provides no evidence of any enquiries that she made to locate the husband.
I am of the view that if the wife had really been serious about enforcing her entitlement, she would have done significantly more than she did during the period exceeding eight years between mid-2002 and late-2010.
In this case, after more than four years of inaction, the wife threatened legal action in 2002 at a time when she and her solicitors knew where the husband was living. She then did nothing at all to follow through with that threat during a further period of more than eight years until late 2010.

Conclusion

The second enforcement summons was issued in accordance with the procedure provided by Rule 25B.05 of the Federal Magistrates Court Rules 2001 (“the Rules”).[8] Schedule 5 to the Rules reproduced Order 33 of the now superseded Family Law Rules 1984. It is quite clear that any relief under that procedure involves an exercise of judicial discretion.
[8] That procedure is no longer available but the second enforcement summons was issued prior to that change in procedure taking effect on 11 July 2011.
Given the significant delay and inaction on the part of the wife over protracted periods, which is not well explained by her, I am of the view that the court would be very likely to apply the doctrine of laches and exercise its discretion not to allow the wife to proceed with the second enforcement summons.
Rule 13.10 of the Rules provides that the Court may order that a proceeding be dismissed generally if the Court is satisfied that “the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim”. In this matter, I conclude that the applicant does not have a reasonable prospect of successfully prosecuting the second enforcement summons for the reasons that are set out above
In those circumstances, the second enforcement summons will be dismissed and the husband’s solicitors will be released from their obligation under the Direction.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Roberts FM

Date: