Reiner and Reiner - [2011] FMCAfam 1426

FEDERAL MAGISTRATES COURT OF AUSTRALIA

REINER & REINER

[2011] FMCAfam 1426

FAMILY LAW – Enforcement summons – orders sought to be enforced made by consent in June 2010 – orders amended by consent in January 2011 – initial orders require monthly payment to be made to the wife – obligation to pay money – husband seeks to have orders set aside pursuant to provisions of s.79A – and examination of husband in enforcement hearing – should enforcement hearing be stayed pending outcome of s.79A application.

Family Law Act 1975, s.79A
Federal Magistrates Court Rules, Rule 25B

Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (No.1) (1986) 161 CLR 681

Applicant:

MS REINER

Respondent:

MR REINER

File Number:

ADC 117 of 2010

Judgment of:

Brown FM

Hearing dates:

14 October, 16 November & 9 December 2011

Date of Last Submission:

9 December 2011

Delivered at:

Adelaide

Delivered on:

20 December 2011

REPRESENTATION

Counsel for the Applicant:

Mr Berman SC

Solicitors for the Applicant:

Barnes Brinsley Shaw Lawyers

Respondent:

Mr Fowler

Solicitors for the Respondent:

C E Legal Pty Ltd

ORDERS

It is declared that pursuant to the order made on 25 June 2010 and varied by consent on 11 January 2011 the husband is obliged to pay the sum of $30,816.00 to the wife.
The husband in his capacity as a Director of [D] Pty Ltd do all things necessary and sign all such documents as may be required to place on the market for sale the interest of the Reiner Family Trust in a property situated at [B] and referred to in paragraph 1.6 of the Order made on 25 June 2010.
The husband do all such things and sign all such documents in his own right or as a Director of [D] Pty Ltd as may be necessary to assign to the wife trailing commissions to which he would otherwise be entitled or to which the company [D] Pty Ltd would otherwise be entitled, to the value of FOUR THOUSAND FIVE HUNDRED DOLLARS ($4,500.00) per month until such time as all payments due to the wife pursuant to paragraph 1.5.1 of the Order made on 25 June 2010 have been made.
The husband in his capacity as Director of [D] Pty Ltd as trustee for the Reiner Family Trust do all things necessary to warn the caveat lodged over the whole of the land comprised in certificate of Title Volume [omitted] in favour of the caveator namely [name omitted] of Property R, South Australia.
The husband in his capacity as Director of [D] Pty Ltd as trustee for the Reiner Family Trust do all things necessary and sign all documents required to appoint the wife as agent for [D] Pty Ltd to the intent that she shall forthwith market for sale the interest of [D] Pty Ltd in the land comprised in certificate of Title Volume [omitted] upon such terms and conditions as the wife shall determine as equitable in her absolute discretion and that upon a sale the net proceeds will be paid to the trust account of Barnes Brinsley Shaw Lawyers for and on behalf of the parties and applied to the discharge of the husband’s obligations pursuant to the order for property settlement dated 25 June 2010 and this Order.
Further consideration of the matter is adjourned to 24 February 2012 at 9:30am together with the husband’s application pursuant to section 79A.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT ADELAIDE

ADC 117 of 2010

MS REINER

Applicant

And

MR REINER

Respondent

REASONS FOR JUDGMENT

Introduction

These proceedings relate to the enforcement of final matrimonial property orders, which were made by this court on 25 June 2010 and later consensually amended, in the Family Court, on 11 January 2011.
As a consequence of the enforcement proceedings, the husband, who is the respondent to the necessary enforcement summons has applied to this court to set aside these orders pursuant to the provisions of section 79A of the Family Law Act 1975. In order to pursue this application, he seeks the stay of the wife’s enforcement summons.
The parties to these proceedings are Ms Reiner “the wife” and

Mr Reiner “the husband”. They were married [in] 1978 and separated in May of 2009. The parties are the parents of four children aged 29, 26, 20 and 18.
The wife is employed as a [omitted]. The husband is a self-employed [omitted]. He is involved with a company called [E] Pty. Ltd (“[E]”). He has other interests, particularly in a company called [O] Pty. Ltd., (“[O]”) which operates a hotel in suburban Adelaide.
At separation, the parties owned several pieces of real property. The most significant were the former family home at Property S; a house at [B]; and two vacant blocks of land at [B]. The Property S property stood in the wife’s sole name.
During their marriage, the parties were beneficiaries of a family trust – the Reiner Family Trust. The trustee was [D] Pty. Ltd. (“[D]”). [D] owns a half interest in another piece of land at [B]. The other half owner of the land is [M] Pty. Ltd. (“[M]”). The controllers of [M] are Mr F and his wife. They are the wife’s brother-in-law and sister respectively.
The wife commenced the initial proceedings seeking settlement of matrimonial property orders on 13 January 2010. She wished to retain the Property S property and proposed the sale of the various [B] properties, including the part interest owned by [D].
The parties refer to the land owned by [D] and [M] as “the development block”. If [D] was to sell its interest in the development block, [M] would be an obvious potential purchaser. This is a controversial issue, so far as the husband is concerned.
When the wife commenced these proceedings, it is common ground between the parties that all of these properties were subject to significant mortgages. The [S] property was valued by the wife at $700,000 and was subject to a mortgage of around $500,000 in favour of AMP. The three [B] properties were subject to a mortgage of $218,000 in favour of Bank West.
The wife valued the half share in the [B] development block, owned by [D] at $250,000, in January of 2010. At that time, she estimated that there was a mortgage on the property amounting to $120,000.
The husband responded to the wife’s application on 6 April 2010. In contrast to the wife, he elected to act on his own behalf. The final orders, which he sought in his response, were not extensive and eluded to the fact that he and the wife had reached some form of agreement in respect of the division of their matrimonial property.
The only orders sought by Mr Reiner related to the development block. In particular, he wished interim orders to be made, which would result in the wife transferring to him her interest in [D]. On a final basis, he wished to resist the sale of the development block, until such time as the outcome of the sale of the other properties at [B] was known.
In her initiating affidavit, the wife alleged that the husband suffered from alcoholism. In these circumstances, she was critical of a number of financial decisions made by the husband, particularly his decision to purchase an interest in the [omitted] Hotel. It is this hotel, which is operated by [O].
The wife alleged that the husband had sold shares held in the parties’ self managed superannuation fund to purchase the hotel interest without consulting her. In his responding affidavit, the husband confirmed that this was so.
He further deposed that he had wished to secure a new source of income for the family, as his income from the [omitted] business had declined significantly, as a result of the global financial crisis, which began in 2007.
In his affidavit of 6 April 2010, the husband deposed that he received “[omitted] commissions” in respect of [occupation omitted]. These commissions were paid to [D] and used to meet his personal and domestic expenses.
In her originating statement of financial circumstances, the wife deposed to an average weekly income of around $1,500. However, she estimated her recurrent weekly expenses as being significantly more than this sum. At the time, the parties’ two youngest children were living with her at the Property S property. Both were students.
However, it was Ms Reiner’s view that the parties’ matrimonial assets were worth significantly more than the parties’ debts. This was not a view shared by the husband.
In his statement of financial circumstances, Mr Reiner estimated his average weekly income as being round $2,300 per week. However, it was his position that the parties’ liabilities exceeded the value of their assets.
The reason for this disparity between the parties is readily explained, given the Property S property is registered in the wife’s sole name. On this basis, Mr Reiner excluded it from his financial statement. He did however include his interest in the [omitted] Hotel, which he valued at $50,000.
This, in brief terms, was the background to the orders of 25 June 2010. These orders envisaged the following:
·the house and two vacant blocks at [B] were to be sold. No reserve price was specified;
·the proceeds of these sales were to be applied to the mortgage secured on them in favour of Bank West and the remaining proceeds were to be utilised to extinguish, in full, the entirety of the mortgage in favour of AMP secured against the Property S property;
·the wife was to retain the Property S property free of any claim on it by the husband;
·pending the discharges of both the AMP mortgage and the mortgage in favour of Bank West, the husband was to pay the sum of $6,000 per month to the wife;
·on the discharge of the Bank West mortgage, this monthly payment was to reduce to $4,500;
·on the discharge of the mortgage to the AMP, the husband’s liability for any monthly payment to the wife was to cease;
·however, in the event the AMP mortgage was not fully discharged by 31 March 2011 the parties were to sell their interest in the development block on terms to be agreed between them and failing agreement as specified by the court;
·the proceeds of sale of the development block were to be assigned in the following sequence –
Ø to discharge the mortgage in favour of the NAB Bank secured against the development block;
Ø to reduce or discharge the AMP mortgage;
Ø to reduce or extinguish the Bank West mortgage;
Ø any funds remaining to be distributed to the husband;
·the husband was to transfer to the wife his interests in three life policies, which the wife was to then surrender and retain a net amount of $50,000 with any amount above this sum to be received by the husband;
·upon the discharge of the mortgage to AMP the wife was to transfer to the husband her interest in [D] and the Reiner Family Trust;
·splitting orders were made in the wife’s favour in a base amount of $100,000, in respect of the parties’ self managed superannuation fund;
·the orders also recognised that the husband had withdrawn funds from this superannuation fund, without the wife’s approval, to purchase shares in [O], which were now to be regarded as part of the husband’s retained interest in the fund.
As previously indicated, these extensive orders were amended by mutual agreement. The parties elected to ratify their agreement through processes available in the Family Court but not the Federal Magistrates Court. These processes involve the completion of a proforma application for consent orders, which come before a Registrar of the Family Court for approval.
The purpose of the necessary form is for the Registrar of the court to be provided with details on oath of the financial circumstances of the parties concerned so that he or she can be satisfied of the justice and equity of the consent orders mutually sought by the parties concerned.
The amending orders of 11 January 2011 were expressed as being made by consent and pursuant to the provisions of section 79A(1A) of the Family Law Act. In a notation to the orders, it was indicated that the husband’s life policies had been surrendered, which had resulted in the receipt of around $39,500. This was obviously a lesser sum than had been envisaged in the earlier orders.
In these circumstances, the parties agreed to a further split, in the wife’s favour, in another superannuation fund standing in the husband’s name, in the sum of $20,000, to compensate her for the shortfall. Allowance was also made in respect of selling costs arising from the sale of the [B] properties.
Both parties purported to execute the necessary application for consent orders. As required, this application listed the parties’ various assets, including the Property S property registered in the wife’s sole name and the other properties at [B].
The husband has recently asserted that he did not read the application for consent orders before executing it. The document indicates that the wife signed it, in the presence of her solicitor Mr Barnes, on 20 December 2010. The document further indicates that Mr Reiner signed it in the presence of a justice of the peace in Adelaide, on the following day.
The date and circumstances of the husband’s execution of the application for consent orders has implications for the husband’s recently filed application pursuant to section 79A. Initially, it was the husband’s assertion that he signed the application for consent orders in the presence of Mr Barnes. He has withdrawn this assertion, which is not borne out by the document in question.

The enforcement application

The wife filed an application to the court on 5 July 2011. In this application, she sought the following orders:
“1. That the husband in his capacity as a Director of [D] Pty Ltd do all things necessary and sign all such documents as may be required to place on the market for sale the interest of the Reiner Family Trust in a property situated at [B] and referred to in paragraph 1.6 of the Order made on 25 June 2010.
2. That the husband do all such things and sign all such documents in his own right or as a Director of [D] Pty Ltd as may be necessary to assign to the wife trailing commissions to which he would otherwise be entitled or to which the company [D] Pty Ltd would otherwise be entitled, to the value of FOUR THOUSAND FIVE HUNDRED DOLLARS ($4,500.00) per month until such time as all payments due to the wife pursuant to paragraph 1.5.1 of the Order made on 25 June 2010 have been made.
3. That the husband do within twenty-one (21) days advise the wife in writing of the source of and/or payer of all trailing commissions currently received either in his name or by [D] Pty Ltd as Trustee for the Reiner Family Trust.
4. That the husband, in his capacity as a Director of [D] Pty Ltd, and as Appointor of the Reiner Family Trust, be restrained and an injunction be granted restraining him from encumbering, or dealing with the land at [B], owned by the Trust.
5. That such further or other Order be made as this Honourable Court deems just and expedient.
6. That this matter be listed as a matter of urgency.”
This application was supported by an affidavit sworn by the wife’s solicitor, Mr Barnes. He deposed that the three parcels of land owned by the parties at [B] had been sold but for a lesser amount than had originally been anticipated.
As a result, the mortgage in favour of the AMP, secured against the Property S property had not been discharged. Rather, it had been reduced from around $504,000 to around $264,000.
Accordingly, a significant mortgage liability remained outstanding against the Property S property. Pursuant to the orders of 25 June 2010, Mr Reiner remained liable to pay the wife a monthly sum of $4,500 with the development block to be sold to secure the discharge of the remaining mortgage balance due to AMP.
On 19 April 2011, Mr Barnes wrote to Mr Reiner, in cordial terms, proposing the sale of the development block, as his client wished to secure the discharge of the AMP mortgage, as the initial orders envisaged. Inter alia, Mr Barnes wrote as follows:
“Whilst the obvious buyer for the development block may be the co-owner it makes it difficult to negotiate the best possible price. Please advise your proposal now for the sale of the development block … .”
On 27 April 2011, the husband wrote to Mr Barnes in the following terms:
“I plan to approach the court to seek revocation of the orders in regards to the block and ongoing basis of the basis of the inequity thereof and the fact that I am unable to afford anyway.”
Mr Barnes further deposed that Mr Reiner had paid the wife $2,184 in April 2011; nothing in May of 2011; and $1,500 in June of 2011. It is the wife’s position that currently a sum of $30,816 is outstanding to her pursuant to the June 2010 orders.
In addition, the development block remains unsold. Essentially it is the husband’s position that Mr F, on behalf of [M], has made an offer to purchase [D]’s interest in the property, which is not a proper reflection of its value.
Mr Reiner has deposed that the development block is likely to have a significant value to an appropriate purchaser, who has the skills and expertise necessary to obtain planning approval for the construction of retirement accommodation on the land in question. Essentially he asserts the land is potentially worth a great deal of money in the right hands.
In these circumstances, he is apprehensive about the prospect of the land being sold at what he believes is a fraction of its potential value. In addition, he mistrusts the motivation of Mr F. He fears Mr F will be able to purchase [D]’s interest in the development block, if the wife is able to secure its sale through these proceedings, to his personal detriment.
This is the background to the enforcement hearing process, which has taken a significant period of time to conclude. The reasons for this delay follow.
At the wife’s request, her application was listed expeditiously. On its first return date, 25 July 2011, the parties agreed to orders which indicated that Mr Reiner was in the process of selling the development block to Mr F, as a director of [M].
In these circumstances, it was anticipated that the proceedings would resolve shortly. Accordingly, the wife’s application was adjourned until 22 August 2011, although the husband was directed to file answering documents within 21 days.
The husband failed to appear at court on the adjourned date. On this day, it became apparent that the anticipated sale to [M] was unlikely to eventuate, certainly not with the husband’s acquiescence. In addition, the husband had still not filed any answering affidavit material.
On 9 September 2011, Mr Reiner filed a response and affidavit in support, in brief terms, which were not acceptable to the wife. In those circumstances, on 16 September 2011, it was directed that the husband provide a more comprehensive affidavit, which more particularly set out the current extent of the trailing commissions which he was then receiving as a consequence of previous mortgage loans negotiated by him.
Ultimately, I determined that the most expeditious way of dealing with the matter was through the process of an enforcement summons, which would encompass whatever oral examination of Mr Reiner was sought by those advising the wife. This process would also entail Mr Reiner providing to the wife and the court relevant financial documentation relating to himself, [D], [E] and [O].
In her enforcement summons, filed 7 October 2011, the wife sought payment of $24,816.00 which was the sum she claimed was outstanding to her under the June 2010 orders. She also wishes the husband to produce a wide suit of documents. These include the following:
·his credit card statements;
·personal bank statements;
·financial statements for [O];
·minutes of directors’ meetings of [O];
·a copy of any loan agreement between the husband and Dr K;
·a copy of any charge made by the husband in respect of his interest in [D], [E] or [O] in favour of Dr K; and
·copies of financial statements for [E], particularly documentation in respect of commissions advanced by it to the husband.

The process of oral examination took much longer than I had anticipated. Mr Reiner was examined by Mr Berman SC on 14 October; 16 November; and 9 December 2011. Mr Berman has been critical of Mr Reiner for not being fully cooperative with the examination process, particularly in terms of the provision of relevant documents.
The vast majority of this time was taken up by Mr Berman examining Mr Reiner about his relationship with two of his business associates, Dr K, a retired and apparently wealthy neurosurgeon and Mr S, who is a director of [E].
It is Mr Reiner’s evidence that Dr K advanced him a loan of $304,000, a significant portion of which he (Mr Reiner) has invested in [O], in which Mr S also has an interest.
Mr Reiner alleges he is required to pay back Dr K $2,533.33 per quarter. In order to satisfy this requirement, Mr Reiner asserts that he has assigned to Dr K, through the agency of Mr S, all the income which he receives from [E].
As a consequence of the financial relationship between the husband and Dr K, the latter has apparently caused a caveat to be lodged on the development block.[1] This caveat was lodged on 26 July 2011.

Mr Reiner denies that he is in any way directly involved with the lodgement of this caveat. It is his position that Dr K has no legal basis on which to claim an interest in the development block.
[1] See exhibit D
Neither Dr K nor Mr S gave evidence in these proceedings or sought to be heard in respect of any order which Ms Reiner sought to be made. I accept that Mr Barnes, the wife’s solicitor notified both Dr K and Mr S of his client’s position in the proceedings. In addition, Mr Reiner himself confirmed that he had had some discussions with each gentleman about the current proceedings, albeit in cursory terms.
It is Ms Reiner’s position that the purported transaction between

Mr Reiner and Dr K is a sham designed to frustrate her entitlements pursuant to the June 2010 order. She is highly dubious about the husband’s evidence regarding his interest in [O], particularly that the hotel which it operates is in a state of terminal financial decline.
Finally, it is the wife’s position that the husband and Dr K are in league with one another in respect of the lodgement of the caveat on the development block. In the alternative, she believes that it is highly improbable that Dr K has acted independently of the husband in the lodgement of the caveat.
In all these circumstances, the wife now seeks the following orders in addition to those set out in her original application:
“That the husband in his capacity as Director of [D] Pty Ltd as trustee for the Reiner Family Trust do all things necessary to warn the caveat lodged over the whole of the land comprised in certificate of Title Volume [omitted] in favour of the caveator namely [name omitted] of Property R, South Australia.
That the husband in his capacity as Director of [D] Pty Ltd as trustee for the Reiner Family Trust do all things necessary and sign all documents required to appoint the wife as agent for [D] Pty Ltd to the intent that she shall forthwith market for sale the interest of [D] Pty Ltd in the land comprised in certificate of Title Volume [omitted] upon such terms and conditions as the wife shall determine as equitable in her absolute discretion and that upon a sale the net proceeds will be paid to the trust account of Barnes Brinsley Shaw Lawyers for and on behalf of the parties and applied to the discharge of the husband’s obligations pursuant to the order for property settlement dated 25 June 2010 and this Order.”
The wife also seeks to be paid the sum of $30,816.00, the amount currently owing to her pursuant to the June 2010 orders, as the AMP mortgage remains outstanding, together with the payment of her costs, which amount to approximately $20,000.00.
Notwithstanding the husband’s indication to Mr Barnes of April 2011 that he intended to apply to revisit the consent orders of June 2010, it was only on 8 December 2011 that Mr Reiner formally applied to the court pursuant to section 79A to set aside these orders. This was shortly prior to the conclusion of the oral examination process.
As previously indicated, it is Mr Reiner’s position that no action should be taken in respect of the wife’s enforcement proceedings until such time as his application pursuant to section 79A has been dealt with by the court. In particular, Mr Reiner is anxious to avoid the sale of the development block on terms which are not of his making.

The husband’s evidence

It is now necessary to summarise the husband’s evidence, as best I can, regarding his current financial circumstances. Mr Reiner is an experienced business man, who has previously been a director of a number of privately owned companies.
In addition, he holds tertiary qualifications and has held [positions omitted]. He holds a [omitted] licence.
Throughout these proceedings, my impression of Mr Reiner is that he has been at some pains to present himself as an honourable person, who has fallen into financial difficulties through no fault of his own. This may be the case but I am gravely concerned that he has not been fully frank about his circumstances, either to the court or his former wife.
Regrettably, much of Mr Reiner’s evidence about his current financial circumstances, particularly his relationship with the other persons involved in the management of both [O] and [E], particularly Dr K and Mr S, appeared to me to be completely far fetched and certainly contrary to what an experienced business man, such as Mr Reiner, would contemplate, let alone put into effect.
Mr Reiner’s evidence is that he has no formal business interests with Dr K. Mr S however is Dr K’s business advisor. Mr S is also a director of [E] with Mr Reiner and another person, Mr E. As a consequence of Dr K’s relationship with Mr S, Dr K is at the premises of [E] on an almost daily basis.
Mr S holds shares, on trust, in [O], on behalf of Dr K. Five other people have apparently put money into the hotel. It is Mr Reiner’s evidence that the hotel is currently trading in a parlous state.
Mr Reiner’s evidence is that he is a director of [O]. However, he has never attended any directors meetings of the company and no longer visits the hotel. Mr Reiner said that he now “wants to know nothing about the hotel [and he has] a mental state about it.”
In these circumstances, it is Mr Reiner’s evidence that he knows nothing about the management of the hotel, other than it is doing very poorly. He apparently regards his investment in the hotel as a financial disaster, in respect of which he currently lacks the mental strength to deal with.
He is unclear whether there are any formal proposals to sell the hotel or retrieve its finances. He does not view the company’s accounts and has not provided any of them to the wife. It is his evidence he has never seen any such documentation. The implication of his evidence was that he is in a complete state of emotional and financial denial about the hotel.
Notwithstanding this state of affairs, he allegedly has lent a significant amount of money to the hotel to keep it afloat financially. The source of this money was Dr K. The only formal documentary proof of this alleged loan is a one page document headed “Investment Authority.”[2] This document specifies that the loan is for a term of six months.
[2] See exhibit D
No form of security is expressed in the document, but under the heading “Security address” is specified the following: “transfer of shares – [D] Pty Ltd (1 of 2); [O] Pty Ltd (22 of 200); [E] Pty Ltd (2 of 6).” Mr Reiner was questioned about whether any formal share transfer forms had been executed by him in respect of any of these companies. His evidence was evasive and unsatisfactory. It seems unlikely that Dr K has any formal security in respect of these shares.
The Investment Authority seems to me to be a very unusual document, particularly for an experienced business person such as Mr Reiner to sign. It was Mr Reiner’s evidence that he, Dr K and Mr S never had extensive discussions with one another about business matters because each implicitly trusted the other. As such, it was unnecessary for any formal documents to be prepared in respect of their various dealings with one another. I find this evidence implausible.
Mr Reiner acknowledged that, until fairly recently, his major source of income was in the form of commissions received in respect of home loans written by him. These commissions include “up front” ones and “trailing” commissions. Mr Reiner deposed that he had not written a loan for a period of at least three months. He attributed this apparent lack of business to the global financial crisis.
Mr Reiner was pressed by Mr Berman for documentary evidence in respect of these various commissions. Mr Reiner deposed that he had very little to do with such documentation, which was overseen by

Mr S. Mr Reiner’s position can be summarised that, as he trusted Mr S, he did not need to see any such records.
As previously indicated, formal orders were made requiring Mr Reiner to provide accounting documents in respect of payments received by him from [E]. He provided two documents in this regard, both dated 31 August 2011, which indicated that he had received two trailing commissions totalling $2,800.00.
I did not find Mr Reiner’s evidence about his level of income from [E] to be particularly plausible. I find it incredible that he is not able to provide a more detailed accounting of how commissions in the business are dealt with and more importantly distributed. It is also

Mr Reiner’s evidence that his personal income tax returns for the past two financial years remain outstanding.
In any event, regardless of the level of income produced by [E], it is Mr Reiner’s evidence that he has assigned his interest in the company to Dr K. As a consequence of this arrangement, which is apparently only documented by means of the one page investment authority, all Mr Reiner’s commissions are paid directly to Dr K.
This arrangement is apparently overseen by Mr S. He does not provide any account of it to Mr Reiner. As a consequence, Mr Reiner does not know how much money is advanced to Dr K each month, other than he assumes it is less than the amount, which he asserts Dr K is owed by him pursuant to the investment authority.
It is Mr Reiner’s position that, because of this arrangement involving Dr K and Mr S, he is unable to comply with the June of 2010 orders, to which he consented. It seems to me to be highly implausible that

Mr Reiner is unable to specify with more accuracy the sums of money which are purportedly forwarded on to Dr K.
It may well be the case that because of their familiarity amongst one another that Mr Reiner implicitly trusts both Dr K and Mr S. However, I do not accept that no records whatsoever are available to document this significant transaction from Mr Reiner’s perspective, particularly given its potential implications so far as his obligations to his former wife are concerned. It beggers belief that Mr Reiner would assign his only apparent source of income to a person, whose agent does not account to him in any way.
Mr Reiner is living with Ms G. She is described by Mr Reiner as being variously his “landlady” and “girlfriend”. Mr Reiner asserts that he pays Ms G $100.00 rent per week.
More significantly, it is his evidence that Ms G has lent him a sum of around $50,000.00 to pay out the “balloon” payment in respect of a motor vehicle which he uses but was previously subject to a finance agreement. It is Mr Reiner’s evidence that, in effect, the vehicle is

Ms G’s property, although he is repaying her the moneys advanced at the rate of $16.00 per week.
Although he acknowledges that he is a person of quite significant financial experience, it is Mr Reiner’s evidence that he does not routinely keep bank statements. It is his evidence that the moneys advanced to him by Dr K were deposited into an account, in his name, with the St George Bank. However, he has not retained any documentary proof to support this assertion.
Mr Reiner’s evidence is that he pays many of his recurrent living expenses by means of a credit card. He repays the moneys so advanced to him each month. It is his evidence that he checks the statement in question, before paying the amount due, then discards the statement. Accordingly, he is not able to produce his credit card statements as requested of him by the wife and accordingly I am not in a position to assess his weekly living expenses with any degree of certainty.
The effect of Mr Reiner’s evidence is that he has no income to speak of. Ms G provides him with some financial support and allows him to drive the car, which Mr Reiner now apparently regards as her (Ms G’s) property. In all these circumstance, an examination of Mr Reiner’s credit card statements would provide an independent record of his monthly living expenses and indicate how regularly they are paid. Yet these records apparently are not kept by Mr Reiner and he has taken no steps to obtain duplicates of them. The absence of these records and the explanation of their absence did not assist me in my assessments of Mr Reiner’s credit.
It is Mr Reiner’s evidence that he has had nothing to do with the lodging of the caveat on the development block by Dr K. It is also his evidence that, although he sees Dr K regularly, he has not discussed the issue of the caveat with him directly. It is Mr Reiner’s personal view that Dr K has no legal status to lodge the caveat but he himself has done nothing about it, or advised Mr F of its existence.
Of the moneys purportedly advanced by Dr K to Mr Reiner, the husband asserts $175,000 has gone into the [omitted] hotel and the probability of him recovering this sum is negligible. The remaining $129,000 was paid into an account, in his name, at the St George Bank, but has been largely utilised, in the main to satisfy his obligations to his former wife as a consequence of the property orders made in June of 2010.
Mr Reiner is disappointed that the three properties at [B] did not sell for a better price. Originally, he anticipated receiving between $800,000 and $850,000 before the discharge of the applicable mortgages, in respect of the three properties concerned. Regrettably, only $520,000 was realised. From his perspective, this is the root cause of his current difficulties and fuels his view that the property orders of June 2010 were essentially unfair to him.
As previously indicated, the orders of June 2010 were amended by order of a Registrar of the Family Court in January of 2011 because of issues relating to the shortfall arising from the surrender of the husband’s life insurance policies.
However, notwithstanding the limited nature of the amendment sought, it was still necessary for the parties to complete a formal application for consent orders. Mr Reiner now complains that he was mislead as to values ascribed to the [B] properties in that document and an increase of $20,000 in the amount secured against the properties by way of mortgage.
However, Mr Reiner’s initial assertion that he was impliedly mislead by Mr Barnes, who presented him with a document which he did not read prior to execution is considerably weakened when the document itself is examined and it appears apparent that Mr Reiner executed it the day after his former wife and in presence of a person other than

Mr Barnes.
In addition, the document in question appears to reflect the amounts actually received from the sale of the properties in question, which I acknowledge is significantly less than the sums ascribed to them in the wife’s initial statement of financial circumstances. The amount owing on the mortgage has increased but not by an extraordinary amount, given the parties’ other circumstances.
It is Mr Reiner’s view that it is in everybody’s best interests, including his own, if [D] retains its interest in the development block, so as to allow him to sell the entire property for the best possible price. It is his evidence that Dr K, who apparently has experience as a property developer and is a person of means, may have an interest in purchasing the development block. However, apart from the husband’s assertion of this interest, there is no other evidence to support it.
More recently, Mr Reiner asserts that he has approached a potential purchaser for the development block – [omitted]. It is also his position that he has spoken with representatives of the relevant local council, who would be highly supportive of the land in question being used for retirement accommodation.
In all these circumstances, Mr Reiner asserts that the true value of the development block is somewhere in the vicinity of $800,000. Mr F apparently views the land as being worth somewhere in the vicinity of $360,000 and has accordingly offered to buy [D]’s interest in the block for $180,000. After payment of the mortgage secured against it, this would recoup Mr Reiner around $60,000, a prospect which he views as grossly unfair.
The husband confirms that the wife no longer has any interest in [D]. She was previously a shareholder in the company but has apparently transferred her shares and the National Australia Bank has released her from a guarantee relating to the company.

The legal principles applicable

Division 25B.2 of the Federal Magistrates Court Rules provides the applicable regime for the enforcement of financial obligations arising under the Family Law Act.
Pursuant to Rule 25B.07(1), an obligation to pay money is an obligation which may be enforced pursuant to the provisions of this division. An obligation to pay money is defined as including an order made under the Family Law Act requiring a person (the payer) to pay money to another person (the payee).
I am satisfied that the applicable order requiring Mr Reiner to pay a monthly amount of $4,500 to Ms Reiner is an obligation to pay money and so is an enforceable obligation pursuant to the applicable division.
Pursuant to Rule 25B.10 Ms Reiner is a person who is entitled to enforce such an obligation, as she is the payee under the order in question. Rule 25B.13 delineates the general enforcement powers of the court. These include the following:
“(a) an order declaring the total amount owing under an obligation;
(b)    an order that the total amount owing must be paid in full or by instalments and when the amount must be paid;
(c)     an order for enforcement (see rule 25B.11);
(d)    an order in aid of the enforcement of an obligation;
(e)     an order to prevent the dissipation or wasting of property;
(f)     an order for costs;
(g)    an order staying the enforcement of an obligation (including an enforcement order);
(h)    an order requiring the payer to attend an enforcement hearing;
(i) an order requiring a party to give further information or evidence;
(j)     an order that a payer must file a financial statement;
(k)     an order that a payer must produce documents for inspection by the Court;
(l)     an order dismissing an application;
(m)    an order varying, suspending or discharging an enforcement order.”
It is the wife’s case that the orders, which she seeks, are germane to the enforcement of Mr Reiner’s obligation to continue to pay her the sum of $4,500 until such time as the AMP mortgage, secured against the [S]’s property, has been discharged. It also appears to be her position that these orders are relevant to prevent any dissipation of property, particularly so far as the development block is concerned.
Pursuant to Rule 25B.11(b) it is open to the court, when enforcing an obligation to pay money, to attach the earnings of the payer of such an obligation.
I am satisfied that this court has an inherent power to stay proceedings. However, I am also satisfied that this power should only be utilised in extraordinary circumstances, when it is necessary to preserve the subject matter of potential litigation.[3]
[3] See Jennings Construction Limited v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681

Conclusions

For the reasons outlined above, I did not find much of Mr Reiner’s evidence, provided during the enforcement hearing, to be candid. To the contrary, I found him to be evasive and uncooperative.
An application for a stay of proceedings is essentially an equitable remedy, given that the other party who will be affected by the stay is likely to be either legally entitled to pursue his or her application or to be entitled to the fruits arising from a concluded proceedings.
It is an old saw of equity that a person seeking an equitable remedy must come to the court with clean hands. I am not satisfied that

Mr Reiner has such clean hands, given his conduct in these proceedings and prior to them, which seems to me to be either extraordinary or implausible. He has not been, in my assessment, transparent about his financial circumstances.
The orders of mid-June of 2010 were regularly obtained with the consent of Mr Reiner. They conferred a financial obligation on him to pay Ms Reiner the sum of $4,500 per month, until such time as either the AMP mortgage on the Property S property had been discharged or, in the alternative, the development block had been sold to satisfy this obligation.
In all the circumstances of this case, I am not persuaded that such extraordinary circumstances exist which warrant the stay of the wife’s enforcement proceedings until such time as Mr Reiner’s application pursuant to section 79A is disposed of. To the contrary, I think it would be contrary to the interests of justice for such a stay to be granted.
In reaching this conclusion, I note that it was only very recently indeed that Mr Reiner has formally launched this application. In addition, it comes after he has demonstrated a lack of cooperation in respect of the process of discovery. In addition, I do not think that his behaviour in respect of the enforcement proceedings can be described as either candid or transparent.
In particular, Mr Reiner asserts that he borrowed a significant sum of money, which he invested in [O]. It is his evidence that this money is essentially gone. Yet he, an experienced business person, attends no meetings of its board of directors and purports to have no interest in its management. He has provided no documentary evidence in respect of the company’s financial affairs.
As a result of this alleged loan from Dr K, Mr Reiner has assigned his only apparent source of income to Dr K. Again this transaction is only documented in the most rudimentary of fashions and Mr Reiner himself has no idea of the quantum of the sums transferred by him.
In the past, [E] has provided the husband with a comfortable level of income. I appreciate that the financial world has been convulsed by crisis since the collapse of Lehman Brothers in 2007. However, once again, Mr Reiner has provided scant, if any, documentary evidence about the business’ financial status. He simply asserts it is disastrous.
It is Mr Reiner’s evidence that Dr K is acting independently of him in respect of the lodgement of the caveat on the development block. The basis of the interest claimed by Dr K is said to arise as a result of an equitable mortgage granting a loan over the land in question.[4]
[4] See exhibit D
The evidence of this alleged loan between Dr K and Mr Reiner is, in my view, slight. It is also apparent to me that Mr Reiner is anxious to avoid the forced sale of the [B] property in order to satisfy his obligations to Ms Reiner. In those circumstances, I have grave reservations about the true status of the caveat in question and the purported investment authority between Mr Reiner and Dr K.
In all these circumstances, I am satisfied that it is appropriate for the court to make an order declaring the total amount of monies owed by Mr Reiner to Ms Reiner pursuant to the June 2010 orders [Rule 25.13(a)].
I am also satisfied that it is necessary to make the orders which the wife seeks in respect of warning the caveat lodged over the development block, as well as the orders required to appoint the wife to sell the land necessary both to aid in the enforcement of Mr Reiner’s financial obligations to the wife and in order to prevent the potential dissipation of this property Rule 25.13(d) and (e)].
I am also satisfied that the other orders which Ms Reiner seeks, in respect of the assignment to her of Mr Reiner’s commission entitlements from [D] are open to the court pursuant to Rule 25B.11 of the Federal Magistrates Court Rules, as they are, in effect, an attachment to the husband’s earning.
For these reasons, I propose making the orders as sought by the wife, which are as set out at the commencement of these reasons for judgment. The proceedings will be adjourned until 24 February 2012, the day on which the husband’s application pursuant to section 79A is listed for directions. The issue of the wife’s costs remains outstanding.

I certify that the preceding one hundred and fifteen (115) paragraphs are a true copy of the reasons for judgment of Brown FM

Date: 20 December 2011