Rutherford and Rutherford

[2011] FamCA 867

FAMILY COURT OF AUSTRALIA

RUTHERFORD & RUTHERFORD [2011] FamCA 867

FAMILY LAW – ENFORCEMENT – No serious proposal supported by evidence – Wife waited 5 years for payment and periodic payment over 1 year late – Costs – Indemnity basis where wife had to enforce orders

Family Law Act 1975 (Cth)

APPLICANT: Ms Rutherford

RESPONDENT: Mr Rutherford

FILE NUMBER: DGC 4724 of 2007

DATE DELIVERED: 9 November 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 31 October 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Salamanca

SOLICITOR FOR THE APPLICANT: Pryles & Co

COUNSEL FOR THE RESPONDENT: In Person

SOLICITOR FOR THE RESPONDENT:

Orders

1. THAT the husband pay the following sums to the solicitors for the wife on or before 13 January 2011 (“the date”):

   (a)       the sum of $992,525;

   (b)the sum of $205 per day from 1 November 2011 to the date of payment of $992,525;

   (c)the costs of and incidental to the wife’s Application filed 18 March 2011 fixed in the sum of $20,000.

2. THAT the husband instruct the Westpac Bank to speak with the solicitors for the wife about the details of the progress of the loan that the husband has had approved in principle.

IT IS NOTED that publication of this judgment under the pseudonym Rutherford & Rutherford has been 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: DGC 4724 of 2007

Ms Rutherford

Applicant

And

Mr Rutherford

Respondent

REASONS FOR JUDGMENT

1. This is a dispute about the enforcement of orders made in 2006. 

2. On 11 October 2011, the wife filed an Application in a Case seeking to have orders made on 26 October 2006 enforced.  In support of that Application, the wife filed an affidavit on the same date but she had earlier filed and also relied upon, an affidavit that she filed on 18 March 2011 and a subsequent affidavit sworn by her solicitor Mr Pryles which was filed on 13 May 2011.

3. In the hearing in the Duty List on 31 October 2011, the wife was represented by Mr Salamanca of Counsel.  The husband appeared in person without representation and had not filed any documents.

4. Two things need to be said about the process.  Although the Application to which I have referred was filed in October, it had initially been filed in March.  When the matter came on before Registrar Mestrovic, orders were made in the presence of both parties that the wife file an Amended Application setting out with precision what orders she was seeking.  The Registrar also provided that the husband file material by 25 October 2011.  The husband did not file any material nor did he attend with any material.  The second point to be made is that the husband complained that he had been inappropriately served with the documents earlier mentioned.  He said that he had an agreement that all correspondence would be sent to a Mr B whom he described as his solicitor and that he would otherwise not have any direct dealings with the solicitor for the wife.  Counsel for the wife responded by saying that difficulties had been caused to the wife in endeavouring to arrange service and Mr B had apparently not accepted service on behalf of the husband.  All of that became irrelevant when I pointed out to the husband that he had filed a Notice of Address for Service which he confirmed was in his handwriting.  Whatever issue there may be about the way in which service occurred, there could be no dispute that the husband was at the court when the orders of Registrar Mestrovic were made and he attended the hearing on 31 October.

5. The husband is an emotional man.  He said from the Bar Table that no-one was going to make him sell the farm property at C Town.  He used emotive words of criticism of the wife’s lawyers.  He articulately put that he had worked seven days a week and extremely hard to achieve what he had.  The bottom line however was that he said that he was going to do the best he could to make the payment.

6. The evidence upon which I am deciding this case however is that which the wife provided.  It was not challenged seriously by the husband.  In addition, he provided no evidence himself although he may think otherwise.

7. On 26 October 2006, orders were made that the husband was to pay to the wife a very significant sum of money.  He paid some of that.  For my purposes, that order provided that he pay $1m by September 2010.  It also provided that interest accrue on the capital sum at a flat but not compound rate which was to be determined by a bank rate plus 2 per cent. 

8. The husband did not make the payment of $1m by 1 September 2010. 

9. After the wife issued her proceedings in March, the husband made a payment of $100,000 in April. 

10. The wife’s evidence showed that the husband had offered to sell a property at Urana in New South Wales but the wife’s response to that was that it was leasehold property.  She also gave evidence about other property and for which there was no guarantee of a positive sale that would satisfy the orders.  What was unashamedly clear was that the property at C Town had been valued at $2m to $2.3m even though the husband seemed to dispute that fact.

11. The wife said that she had waited four years and that she could not negotiate with the husband because of his aggressive behaviour.  In the courtroom, the husband’s approach vacillated between aggression and tears.  As I earlier pointed out, he is an emotive man.

12. The difficulty I have is that there is a court order which was explicit in its terms.  Enforcement of court orders is a discretionary matter.  A refusal to order compliance is open to the court but it does not obviate the obligation continuing.  Here unfortunately, the husband provided no clear answer other than what now follows.

13. The husband produced a letter from Westpac Bank indicating that on 21 October 2011, it had approved a $1.2m loan to the husband “in principle” but that was subject to valuation and compliance with provision of relevant taxation details.  The valuation issue was that the property had to be worth $1.7m.  The inference I drew from the husband was that there was little doubt that that was the minimal value the property would achieve because he criticised the wife’s valuation of apparently $2m to $2.3m. 

14. Again without being explicitly said by the husband, I drew the inference that he would pay the money to the wife as soon as he was capable of doing so.  It must be obvious that if the lending institution is prepared to provide that sort of money, it is not only satisfied about its security but also the serviceability of the loan. 

15. The wife’s exasperation about not being paid was clear in her affidavit in which she said that she had waited four years and the husband’s own statement in court was that he would do the best he could. 

16. There is no basis in this case not to exercise the discretion in favour of the wife.

17. In the course of the submissions on behalf of the wife, her Counsel said that she was prepared to wait until January 2012 to enable the husband to comply.  His response was that apart from doing the best he could, the bank should be able to provide the money by that particular time.  In those circumstances, the proposed orders of the wife seem not only reasonable but just and equitable as well.

18. Counsel for the wife produced a minute of order indicating that I should capitalise the debt including the relevant interest noting that interest was running at almost $205 per day.

19. There is no power for the court to alter the interest provision because it was part of the entitlement of the wife in the orders made in 2006.  Accordingly, that provision must continue to run until the wife’s debt is satisfied. 

20. I am satisfied that the wife is entitled to the $900,000 plus interest due to today and that the interest should run until payment.  The wife has accepted that payment be made up until 13 January 2012 but if it is not, it will only be on the basis that the bank has not fulfilled its loan offer because of one of the conditions not being met.  If that is the case, the wife will be approaching the sixth year since these orders were made and that in my view is unreasonable.  Notwithstanding the husband said that no-one would touch the C Town property, on the evidence before me, it is the most logical way in which the wife will get paid having regard to the fact that the husband has made no serious alternative offer in any evidentiary form. 

21. I propose to make orders that if the payment is not made by 13 January 2012, the C Town property be sold.

22. In addition to the orders, the wife sought costs.  She sought them on an indemnity basis.  The amount proposed was $20,000.

23. Section 117 of the Family Law Act 1975 provides that each party shall bear their own costs unless there are circumstances justifying a departure from that principle and if the court is contemplating such an order, it must give consideration to the matters set out in section 117(2A).

24. The justifying circumstances in this case are the fact that the wife has endeavoured to recover her just entitlement from the orders in 2006.  Five years is a long time and she has been patient notwithstanding the husband might say that he has done the best he could.  She has again indicated patience.  However, she has had to litigate and return to court to obtain those entitlements.  Nothing I heard from the husband indicated that he would do anything in a proactive way to ensure payment was made.  Again, his mantra of doing the best he could was the best offer made.  In my view, there are justifying circumstances here.

25. I can conclude from the fact that the Westpac Bank was valuing the property at a minimum of $1.7m and the wife was relying on a valuation in excess of $2m, not to mention the fact that the Westpac Bank was prepared to offer the husband $1.2m in finance, that the husband is not impecunious.  I can also take into account that there are no legal aid considerations here.  The husband has been wholly unsuccessful because the order has been made as sought by the wife.  The husband has also not complied with court orders which required enforcement.  There is no justification in this case for the wife not to have her costs.

26. As has been said on a number of occasions, the category of cases in which indemnity costs should be ordered are not closed.  The classic case for an order for indemnity costs is an enforcement particularly where offers are not seriously made to resolve the dilemma.  This is one such case and it is appropriate that the wife have her costs in the form of indemnity costs.

27. For the purposes of the costs order, the wife tendered the agreement between she and her solicitor in addition to the bills that she has had rendered to her.  I am satisfied in the circumstances that the solicitor’s costs together with Counsel’s brief fee were reasonable in all of the circumstances on an indemnity basis and I will order that the husband pay the wife’s costs of $20,000 which sum will be paid in addition to that which he already owes her. 

28. The wife also sought an order under section 106A of the Family Law Act 1975. That provision enables a court to direct that some person other than the husband sign documents in the event that implementation of orders is required. The husband made his position clear about the sale of C Town. I could only conclude he will not co-operate. I must also accept that the order as to the wife’s entitlement has been outstanding for in excess of one year now and she has waited five years to put an end to what was originally intended. In those circumstances, having no confidence that the husband will comply, an order should be made under section 106A of the Act.

29. The wife also sought orally, an order that the husband instruct the Westpac Bank to provide details to her solicitors about the progress of the loan so that the deadline of 13 January 2012 does not pass without her being aware of what was happening particularly having regard to the state of communication between the parties.  When I asked the husband about that, he indicated he had no opposition to that order.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 9 November 2011.

Associate: 

Date:  9 November 2011