Peterson & Davis (No 6)

Case [2024] FedCFamC1F 409

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Peterson & Davis (No 6) [2024] FedCFamC1F 409

File number(s): PAC 1208 of 2016
Judgment of: RIETHMULLER J
Date of judgment: 18 June 2024
Catchwords: FAMILY LAW – ENFORCEMENT – Property – Where a trustee in bankruptcy was appointed as the trustee for sale of a property held by the applicant and trustee in bankruptcy as tenants in common in equal shares – Where the applicant is seeking payment from the respondent trustee of his share of the sale proceeds, in accordance with the trial judge’s orders – Where the respondent seeks to retain costs of effecting the sale beyond those provided for by the trial judge – Issue already determined by trial judge – Further adjustment for costs of sale not appropriate.
Legislation:

Family Law Act 1975 (Cth) s 117

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.17

Cases cited:

Davis & Peterson [2023] FedCFamC1A 13

Matthews & Matthews (2006) FLC 93-304; [2006] FamCA 1250

Peterson & Davis (No 3) [2022] FedCFamC1F 650

Peterson & Davis (No 5) [2023] FedCFamC1F 587

Stewart v Atco Controls Pty Ltd (in liq) (2014) 252 CLR 307; [2014] HCA 15

Division: Division 1 First Instance
Number of paragraphs: 27
Date of hearing: 3 May 2024
Place: Parramatta
Counsel for the Applicant: Mr Alan
Counsel for the Respondent: Mr Cook
Solicitor for the Respondent: HNT Legal

ORDERS

PAC 1208 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR DAVIS

Applicant
AND:

MR CUSSON

Respondent

ORDER MADE BY:

RIETHMULLER J

DATE OF ORDER:

18 JUNE 2024

THE COURT ORDERS THAT:

1.The respondent pay to the applicant the sum of $33,543.34.

2.The respondent pay the applicant’s costs fixed at $2,200.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonym Peterson & Davis (No 6) has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

RIETHMULLER J:

  1. The applicant seeks enforcement of orders made by Campton J on 31 August 2022, which provides for him to receive 42.5 per cent of the proceeds of sale of a property located at Suburb B, NSW. The respondent to the enforcement application is the trustee in bankruptcy for the applicant’s former de facto partner. The respondent seeks payment…

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AGLC
Peterson & Davis (No 6) [2024] FedCFamC1F 409
Case
[2024] FedCFamC1F 409
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, the case of Peterson & Davis (No 6) involved an applicant, Mr. Davis, and a respondent, Mr. Cusson, the trustee in bankruptcy for Mr. Davis’ former de facto partner. The central dispute was over the distribution of the proceeds from the sale of a jointly owned property in Suburb B, NSW. Mr. Davis sought payment of his share of the sale proceeds, as ordered by Justice Campton on 31 August 2022, while Mr. Cusson, the trustee, sought to retain additional costs beyond those stipulated by the trial judge's orders.

The legal issues before the court included whether the trustee in bankruptcy was entitled to claim costs beyond the limits set by the trial judge's orders and whether the terms of the sale as previously determined by the court should be revisited. The court had to consider the authority of the trustee in bankruptcy, which generally includes the right to reasonable costs for selling the property, subject to the specific terms of the appointment. The primary focus was on whether the respondent’s attempt to claim additional costs was permissible under the terms of the previous orders.

The court held that the issue of the respondent’s entitlement to costs had already been addressed by the trial judge. Riethmuller J ruled that further adjustments for costs of sale were not appropriate. The court noted that the terms of the respondent's appointment, as outlined in the previous orders, explicitly limited his remuneration for conducting the sale to a maximum of $10,000. Therefore, the respondent’s attempt to claim additional costs was rejected. The court directed the respondent to pay Mr. Davis the sum of $33,543.34, which represented Mr. Davis' share of the sale proceeds, and to pay Mr. Davis’ costs fixed at $2,200.

Orders

Orders of the court

PAC 1208 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR DAVIS

Applicant

AND:

MR CUSSON

Respondent

ORDER MADE BY:

RIETHMULLER J

DATE OF ORDER:

18 JUNE 2024

THE COURT ORDERS THAT:

1. The respondent pay to the applicant the sum of $33,543.34.

2. The respondent pay the applicant’s costs fixed at $2,200.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

The applicant seeks enforcement of orders made by Campton J on 31 August 2022, which provides for him to receive 42.5 per cent of the proceeds of sale of a property located at Suburb B, NSW. The respondent to the enforcement application is the trustee in bankruptcy for the applicant’s former de facto partner. The respondent seeks payment of his expenses in effecting the sale of the property in priority to the payment to the applicant.BACKGROUND The claim arises out of property settlement proceedings between the applicant and his former de facto partner. In the property settlement proceedings, the applicant’s former de facto partner had sought property settlement orders against him, her trustee in bankruptcy (the respondent to this application), and the applicant’s parents: see Peterson & Davis (No 3) [2022] FedCFamC1F 650. Justice Campton made final orders on 31 August 2022 following a trial. The orders provided that:[Suburb B] proceeds of sale6. The [applicant] and the [respondent] shall do all acts and things as are necessary within 28 days from the date of these orders to cause the balance of the proceeds of sale of the property known as [C Street Suburb B], NSW (“the Suburb B proceeds”) to be applied as to:(a) 50 per cent to the [the respondent];(b) 7.5 per cent to the [the applicant’s former de facto partner]; and(c) 42.5 per cent to the [applicant]. The Suburb B property was the jointly owned home of the applicant and his former de facto partner, who were the registered proprietors as joint tenants. Upon his former de facto partner being made bankrupt, the joint tenancy was severed, becoming a tenancy in common, with her half share vesting in the respondent as part of the bankrupt estate. By the time the property settlement trial was heard, the former de facto partner had been discharged from bankruptcy. In the property settlement proceedings, Campton J was required to determine whether the applicant or his former de facto partner could recover any moneys from the bankruptcy estate and whether there ought to be any property settlement orders as between the applicant and his former de facto partner. After the interest in the Suburb B property vested in the respondent as the trustee in bankruptcy, he sought orders to enable him to realise the interest in the property. Whilst, as a general principle, a trustee for sale would be entitled to payment of their reasonable costs of bringing in the asset in priority to other claims (see Stewart v Atco Controls Pty Ltd (in liq) (2014) 252 CLR 307), the respondent conceded that this entitlement is subject to the particular terms of the appointment. The respondent accepted that the terms of his appointment for the purpose of selling the property was governed by the terms of the orders made by Foster J on 11 August 2020, authorising the respondent to sell the former home in the following terms:1. The [Suburb B property] be sold.2.The [respondent] be authorised and directed to sell the [Suburb B] Property.3.The [respondent]’s powers for the purposes of the sale of the [Suburb B] Property are as follows:…(c)The power to engage a sales agent for the purposes of the sale of the [Suburb B] Property.(d)The power to engage a solicitor to act on the conveyance of the [Suburb B] Property and, if necessary, to obtain vacant possession of it.(e)The power to remove and store chattels contained on or in the [Suburb B] Property.(f)The power to affect any necessary repairs to present the [Suburb B] Property for sale.(g)The power to obtain an updated valuation of the [Suburb B] Property, if necessary.(h)The power to set the sale price and a reserve price for auction if necessary, having regard to the valuation he holds.4.In regards to any chattels removed from the [Suburb B] Property by the [respondent], the [respondent] shall be authorised to place those chattels in commercial storage for six (6) months, such storage fees to be paid from the proceeds of sale. 5.The [respondent] shall provide access to the Parties or any other person asserting ownership of those chattels for the purpose of inspecting the same and shall be authorised to release claimed chattels on reasonable proof of ownership, and otherwise shall be authorised to dispose of the remaining chattels after six (6) months.6.The sale of the [Suburb B] Property by the [respondent] may be carried out by auction or private treaty as the [respondent] sees fit.7.The proceeds of the sale of the [Suburb B] Property are to be paid as follows.(a) To adjustments for rates and land tax.(b) Sales agent’s commission and the cost of conveyance.(c) The amount required to discharge the first registered mortgage.(d)The legal costs, if any, involved in taking possession of the [Suburb B] Property.(e)The cost of chattel storage for up to six (6) months and disposal of the chattels.(f)The remuneration of the [respondent] for conducting the sale charged at his usual rates limited, until further order, to a maximum amount of $10,000.(g)The balance to be held by the [respondent] in his trust account until further order.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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