Reid and Reid

[2011] FamCA 725

FAMILY COURT OF AUSTRALIA

REID & REID [2011] FamCA 725

FAMILY LAW – Interim orders – Sale of property in default – Interest in default – Part payment orders

Family Law Act 1975 (Cth)

APPLICANT: Ms Reid

RESPONDENT: Mr Reid

FILE NUMBER: MLC 8990 of 2009

DATE DELIVERED: 5 September 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 5 September 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: In Person

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: In Person

SOLICITOR FOR THE RESPONDENT:

ORDERS

IT IS ORDERED:

1. THAT on or before 1.00 p.m. Friday 16 September 2011 the husband pay by bank cheque to the wife (or otherwise by prior arrangement and by direct debit to her nominated bank account) a sum of $15,000 (without deduction) and with the balance of the judgment sum of $10,346 to be paid in like manner on or before Friday 13 December 2011.

2. THAT all extant applications be otherwise adjourned for case management and directions, or final orders if the parties are in agreement, at 10.00 a.m. on Monday 16 December 2011 before Young J.

3. THAT paragraph 1 of the orders pronounced by the Senior Registrar on 27 September 2010 be varied so as to include a provision for default interest to be paid at a rate of nine per cent per annum as and from the date of that judgment until the whole of the sum of $25,346 and interest is paid in full, such interest to be calculated and to accrue on a quarterly in arrears basis.

4. THAT until the payment of the principal sum of $25,346 and all interest accrued thereon pursuant to these orders the husband is otherwise restrained from borrowing any further monies against the security of the property, or at least his fifty per cent interest therein, at B Street, C Town (“C Town”).

5. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

IT IS NOTED

A.THAT the husband will have and produce documentation by which it is intended that the wife resign as a trustee of the family trust and renounce her beneficial interests therein.  Those documents are to be forthwith produced to the wife along with other documents renouncing any interest in a previous business involvement with another married couple. 

B.THAT the wife, if she so chooses, is to obtain separate legal advice on the issue of her signing those documents.

C.THAT the parties intend that on the 16 December 2011 hearing date they will seek final property orders, including appropriate business, tax and commercial indemnities for the wife and given by the husband in respect of the family trust and any past business(s) and so long as the judgment sum and interest are all paid pursuant to the judgment of the Senior Registrar and this order.

D.THAT otherwise the wife’s application for the sale of the husband’s fifty per cent interest in C Town remains alive and is returnable on 16 December 2011.

E.THAT both parties must attend the Court on that 16 December 2011 hearing date.

F.THAT for the purposes of the injunctive order pronounced in Order 4 herein the husband is in no way restrained from borrowing monies for the specific purpose of paying to the wife the judgment sum or interest thereon.

IT IS NOTED that publication of this judgment under the pseudonym Reid & Reid has approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:  MLC 8990 of 2009

Ms Reid

Applicant

And

Mr Reid

Respondent

REASONS FOR JUDGMENT

1. The matter of Reid was transferred to my hearing list from the Judicial Duty List before Cronin J.  The husband and wife, although divorced from each other, appear in person and they are identified on the court document as husband and wife.  The wife previously had solicitors appearing at the hearing before the Senior Registrar on 27 September 2010 but now represents herself.  The issue is that, by an ex tempore judgment delivered 27 September 2010, the Senior Registrar ordered the husband to pay to the wife $25,346.  Upon payment of that sum the wife was to withdraw or cause to be withdrawn the caveat on the title to the property at B Street, C Town, Victoria (“C Town”). 

2. That property is registered in the names of the husband and his mother each as to 50 per cent. There was no interest payable in default ordered by the Senior Registrar and significantly the orders were not expressed to be final property orders made pursuant to section 79 of the Family Law Act.  The wife has now filed an application in a case on 22 July seeking payment of the principal sum or otherwise the sale of the C Town property.  An affidavit in support was likewise prepared by the wife and filed the same date.  Those documents have only been served upon the husband three days ago, and he comes to Court representing himself somewhat unprepared.

3. The reality of the matter is that no payments have been made in reduction of the judgment debt.  The parties have had some out of court discussions where some offers of an instalment plan have been put but rejected by the wife.  I have heard from both the parties.  The husband asserts he has no money and must borrow from his mother or brother.  He initially proposed an immediate part payment of $8,000, then $12,000 and finally $15,000.  Reluctantly, the wife will accept that provided the part payment is made by bank cheque or direct deposit to the wife’s bank account on or before Friday, 16 September 2011.

4. The husband is agreeable to the order being reasonably rectified to include interest being paid in default from the date of judgment, 27 September 2010, until the whole of the principal sum and interest is paid in full. The applicable rate will be fixed at nine per cent, which is slightly less than the default rate fixed under the Family Law Regulations. That nine per cent default interest will continue to apply from that judgment date until all moneys are paid in full. The husband has additionally raised the question of a section 79 order, that is, a final and binding property division between he and his wife where neither of them can have any further claim as against the other.

5. The husband raised the fact that there is a trust structure and it would seem that the parties are individually joint trustees of the Reid Family Trust.  If so, it is suggested that the wife should resign and renounce any beneficial entitlement.  The converse of that is that the wife must have financial protection for any claim, action or demand brought against her in her role as trustee.  That situation is seemingly accepted by the husband. 

6. Otherwise, there was a business where there is some outstanding paperwork for the parties to sign to conclude past financial dealings and involvement with another couple.  The husband said that documentation is presently in the mail.  The wife must take her own advice and sort out what she is to sign.  But very clearly, the principle upon which both parties should operate is to resolve all past financial dealings and corporate matters and to isolate themselves from the other with financial protection. 

7. I give no advice in that regard but I have indicated to the parties that if all matters can be concluded and if there is no other claim and both parties are satisfied with the sum paid under the judgment debt plus interest and most importantly if the husband has paid all moneys owing on or before 16 December of this year, I will list the matter before me that morning and final orders concluding all property matters can be made.

8. The parties should be aware of section 81 of the Family Law Act and the notation which can be attached to orders and the finality which that can highlight.  That is a matter for the parties to consider and to ask the Court on the adjourned date.  What I therefore will order is the rectification of the Court order to include default interest payable at the rate of nine per cent from the date of the judgment debt and calculated and payable quarterly in arrears.  I will leave it to the parties to do the financial calculation in that regard. 

9. Otherwise, impending payment, the husband cannot continue to borrow moneys against the C Town property, save for the purpose of paying out the wife under the judgment sum.  Otherwise, the balance of moneys, which will be the capital sum of $10,346 and interest which must be calculated from that judgment sum until the date of payment, can be calculated and is payable.

10. I will make the matter returnable before me on Monday, 16 December 2011.  The parties must attend that day.  Unless they are both here, I will not make final property orders.  They need not necessarily be legally represented.  However, that is their choice if they wish so to do. I will have these brief ex tempore reasons transcribed, placed upon the Court file and made available to both parties.  It will also highlight to me the matters canvassed in this brief hearing of this day.

ORDERS DELIVERED

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 5 September 2011.

Associate:     

Date:              5 September 2011