S and S
[2003] FMCAfam 36
•19 February 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| S & S | [2003] FMCAfam 36 |
| Family Law – Enforcement – Form 46 Enforcement Summons relates to payment of money – discretion to enforce - Court should only enforce a decree if it is just and equitable to do so. Family Law Act 1975 – s.105 Ramsey and Ramsey (No. 2)(1983) FLC 91-232 |
| Applicant: | W C S |
| Respondent: | W D S |
| File No: | LNM 2718 of 2002 |
| Delivered on: | 19 February 2003 |
| Delivered at: | Hobart |
| Hearing date: | 5 December 2002 |
| Judgment of: | Roberts FM |
REPRESENTATION
| Counsel for the Applicant: | Mr. M. Turnbull |
| Solicitors for the Applicant: | Ogilvie Jennings |
| Counsel for the Respondent: | Mr M Trezise |
| Solicitors for the Respondent: | Trezise Lawyers |
ORDERS
That the Form 46 Enforcement Summons issued on behalf of WENDY CAROL SPEAKMAN on 13th September 2002 be and is hereby dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT HOBART |
LNM2718 of 2002
| W C S |
Applicant
And
| W D S |
Respondent
REASONS FOR JUDGMENT
Background
Before the Court is a Form 46 Enforcement Summons issued on behalf of W C S (“the Wife”), which alleges that W D S (“the Husband”) has failed to meet his obligations pursuant to certain Orders of His Honour O’Ryan J made on 22nd December 2000. Briefly, the Enforcement Summons alleges the following:
(i)That the Husband is in default or in arrears in relation to a payment in the sum of $2,764. (However, the Wife’s counsel reduced that amount owing by $300 at the hearing).
(ii)That the Husband is in default or in arrears in relation to interest in the amount of $3,532.13 as at 10th February 2002 and that interest is accruing at a rate of $7 per week.
(iii)That the Husband had not done all things necessary to sell a dinghy to enable the proceeds to be divided on the basis of 60 percent to the Wife and 40 percent to the Husband.
In a detailed Judgment delivered 22nd December 2000, O’Ryan J came to the conclusion that the parties’ net property should be divided on the basis of 60 percent to the Wife and 40 percent to the Husband. He made a total of thirty-seven orders to provide for that division. He also dismissed the Wife’s claim for spousal maintenance.
It is not necessary for me to detail all the Orders made by O’Ryan J. However, Orders No. 10, 11, 14, 15, 29 and 30 are relevant to this decision. They provide as follows:
10.That by 4 pm on 16 February 2001 the husband do all acts and things and execute all documents and writings necessary to transfer to the wife the beneficial ownership of the 1994 BMW motor vehicle in the possession of the wife.
11.That the wife do all acts and things and pay all monies necessary to indemnify and keep indemnified the husband against all claims, actions, suits or demands that may be made against the husband arising out of or in relation to the acquisition and maintenance of the said 1994 BMW motor vehicle including the debt to Esanda Finance Corporation Limited.
14. That by 4 pm on 16 February 2001 the husband pay direct to the wife the sum of $127,764.
15. That in the event that the husband fails to comply with order 14 hereof then the husband also pay to the wife interest on so much of the amount due to the wife pursuant to order 14 hereof as remains unpaid at the rate prescribed in the Family Law Rules.
29. That by or before 16 March 2001 the husband and the wife do all acts and things and execute all such documents and writings as may be required to sell the dinghy which the wife asserts has a value of $3,500 and the husband asserts has a value of $1,400 and by way of consequential arrangement that be made for the purposes of effecting a sale:
29.1The boat be sold by an agent or broker nominated by the solicitor for the wife.
29.2The boat be sold at a price agreed between the parties and if there is no agreement as nominated by the solicitor for the wife.
30.That upon completion of the sale of the dinghy the proceeds of sale be applied as follows:
30.1Firstly to pay all costs, commission and expenses of the sale.
30.2Secondly the balance then remaining be divided in the proportions of sixty per centum thereof to the wife and forty per centum thereof to the husband.
In arriving at his decision in relation to the matter, O’Ryan J determined that the cash adjustment to be made by a payment to the Wife was $127,764. In fact, the parties entered into an agreement, documented in correspondence between their solicitors that resulted in her receiving $125,300 by way of cash adjustment. (Her affidavit refers to a payment of $125,000, but her counsel conceded that she had received $125,300 and that explained the reduction of $300 in the sum claimed to be owing as referred to above).
The agreement between the parties as detailed in the correspondence, is set out in full in a letter dated 9th May 2001 from the Wife’s solicitor to the Husband’s solicitor. It is important to set out much of that letter in full detail. It states as follows:
“I refer to our previous discussions concerning the settlement of the issue of payment to my client of $127,764 together with interest as required pursuant to paragraphs 14 and 15 of the Orders that Justice O’Ryan made on the 22nd of December 2000.
I confirm that it is now agreed that the issue of the payment of monies pursuant to paragraphs 14 and 15 has been settled as follows:
1.That your client will pay mine an amount of $125,300.
2.That my client will take no further action to recover monies pursuant to paragraphs 14 and 15 of the Orders that Justice O’Ryan made on the 22nd of December 2000.
3.That your client will transfer the registration of the BMW motor vehicle into my client’s name. (I note that I now have the registration papers in my possession).
4.That I will provide my undertaking to pay from the amount of $125,000 the full amount owing to Esanda Limited pursuant to Esanda contract number 730428324 so as to leave the 1993 BMW 318i motor vehicle registration number ABL478 unencumbered by that loan.
5.That in full and final satisfaction of paragraphs 29 and 30 of Justice O’Ryans’s Orders, your client will transfer all of his right, title and interest in the boat to my client in consideration of which my client will release your client from any responsibility to pay to her the outstanding costs orders of Registrar Hay or Justice Joske.”
The letter then continued with a number of machinery provisions that were necessary to put the agreement into effect. Those machinery provisions did not refer to the manner in which the boat was to be provided to the Wife, but I shall refer to that briefly below.
The last two paragraphs of the letter were as follows:
“Could you please confirm in writing the above arrangement reflects the agreement to settle all issues and actions in respect of paragraphs 10, 11, 14, 15, 29 and 30 of His Honour Justice O”Ryan’s Orders.
I note that specifically the agreement as stated in this letter does not prejudice in any way my client’s right or ability to enforce the remainder of Justice O’Ryan’s Orders or any Orders that may be made by the Court in the future inclusive of any Orders that might arise from the outstanding costs decision of Justice O’Ryan”.
On 10th May 2001, the Husband’s solicitor wrote to the Wife’s solicitor stating:
“I write to confirm that we are agreed on the terms outlined in your letter dated 9th May 2001. “
The Wife concedes that she received a sum of $125,300 and that the BMW was transferred to her. She was required to discharge the remaining liability to Esanda Ltd. in relation the BMW and documents put into evidence by consent show that by 29th March 2001 the Husband had reduced that liability to $7,956.89.
The Wife claims not to have received the dinghy or 60 percent of its sale proceeds, so her position is effectively that “all bets are off” and she is free to enforce the Orders of O’Ryan J.
The Law
An Enforcement Summons is issued by the Court at the request of a party pursuant to Order 33 of the Family Law Rules 1984. “Obligation” is defined in Order 33 rule 1 as an obligation to which rule 2 applies. Rule 2 sets out a number of obligations, to which the rule relates and rule 2(5) states that an obligation may be enforced by one or more of the following means:
a)garnishment;
b)seizure and sale of personal property;
c)sequestration of estate;
d)sale of real property.
Order 33 Rule 3(1) states that if a person fails to satisfy an obligation, a person seeking to enforce the obligation may file an affidavit requesting, inter alia, the issue of a summons in accordance with Form 46.
It is clear that the Court has a discretion whether or not to enforce O’Ryan J’s Orders. That can be seen from Section 105(1) of the Family Law Act 1975 which states that all decrees made under the Act may be enforced by any Court having jurisdiction. Clearly, the word “may” shows that the Court’s power is discretionary. Any discretionary power must be exercised judicially.
The cases of Ramsey and Ramsey (No. 2)(1983) FLC 91-232 and Kerr and Kerr (1983) FLC 91-329 illustrate circumstances where the Family Court of Australia has not exercised its power of enforcement. In the latter case Nygh J said as follows:
“The provision dealing with the enforcement of orders in this Court is sec. 105(1) which provides that ''... all decrees made under this Act may be enforced by any court having jurisdiction under this Act''. The use of the word ‘may’ makes it clear that the Court has a discretion. This conclusion is supported by the recent decision of the Full Court in Ramsey and Ramsey (1983) FLC 91-301, in which the Full Court followed the remarks of the English Court of Appeal in the case of Thwaite v. Thwaite (1982) Fam. 1 at p. 9 which suggest that a court may refuse enforcement of orders in matrimonial causes: ‘If in the circumstances prevailing at the time of the application it would be inequitable to do so’' .”
Consequently, a Court can refuse to enforce a decree if the circumstances that have arisen since the making of that decree make it unjust to do so. Conversely, a Court should only enforce a decree if the Court is of the opinion that it is just and equitable to do so.
Findings & Conclusions
At the start of this matter, I raised with counsel for the Wife whether an Enforcement Summons was the appropriate “vehicle” for the enforcement of an order requiring the sale of an asset. I pointed out that I considered that Order 33 of the Family Law Rules relates to payments of sums of money and not to orders for sale of property. However, counsel for the Wife argued that because the Orders of O’Ryan J required not only the sale of the boat but also the payment of 60 percent of the proceeds to the Wife, the Orders were in effect orders requiring the payment of money.
I do not agree with that argument. It is my view that a Form 46 Enforcement Summons can only be issued if the relevant order or agreement is one of the types referred to in Order 33 Rule 2 requiring the payment of a sum of money by the Respondent.
Consequently, it is my view that it was not competent for the Registrar in the exercise of his discretion to issue the Enforcement Summons in this matter in relation to the sale of a dinghy as referred to in paragraph 1(iii) above. As a result, paragraph 4 of the Enforcement Summons, which relates to the sale of the dinghy must be struck out.
However, if I am wrong as to that, there are other reasons why it is not appropriate to enforce that obligation and I shall refer to those reasons below.
The striking out of paragraph 4 of the Enforcement Summons still leaves the obligations referred to in paragraphs 1, 2 and 3 of the Enforcement Summons and they are the obligations that are referred to in subparagraphs (i) and (ii) of paragraph 1 above.
Essentially, it is the Wife’s evidence that the Husband did not deliver an aluminium dinghy to her. However, it is the Husband’s evidence that he did deliver the proper dinghy, which was fibreglass and not aluminium, as agreed to the hotel car park at Southport. If she did not collect it, then he does not know what happened to it.
Frankly, I was not particularly impressed by the evidence of either party, but I am not in a position to tell which of them is telling the truth. However, both could be telling the truth, because the Husband says that he delivered a fibreglass dinghy to the hotel car park and the Wife says that she was looking for an aluminium dinghy.
Notwithstanding this, I do not need to determine the dispute between the parties about whether the particular dinghy as aluminium or fibreglass. This is because of the matters set out below.
In his Judgment of 22nd December 2000, O’Ryan J said at paragraph 98 that there was an issue about the value of the dinghy. He said:
“The wife asserts it is valued at $3,500. The Husband asserts it is valued at $1,400. Neither party provided valuation evidence. This item of property will have to be sold.”
In his Orders, O’Ryan J clearly provided that the Wife should receive 60 percent of the value of that dinghy. On her valuation that would have been $2,100 and on the Husband’s valuation it would have been $840. That is clearly set out in paragraph 130 of His Honour’s decision.
However, in paragraph 130, O’Ryan J also refers to the Esanda loan that the Wife would have to pay in relation to the BMW that she was to receive. That loan liability was stated to be $16,753.
The evidence that was tendered to me by consent was that the Husband continued to pay that Esanda liability until the transfer of the BMW was completed and, as a result, the liability was reduced to slightly less than $8,000. Consequently, the Wife received a “windfall” from the Husband of more than $8,000 that was not envisaged by O’Ryan J. If her valuation of the dinghy was correct, she has apparently suffered a loss of $3,500 by not receiving it. However, the net result is that she has gained more than $4,500. (Clearly, if the Husband’s valuation of the dinghy was correct, her gain was even greater,)
Pursuant to Order 14 of the Orders of O’Ryan J, the Wife was to receive $127,764 by 16th February 2001. It is clear that sometime after 9th May 2001 she received the agreed sum of $125,300. That means, that she has received $2,464 less than the sum provided for in Order 14.
However, that is more than offset by the gain of more than $4,500 that is referred to in paragraph 27 above. Clearly, in 2001 the Wife received something in the vicinity of $2,000 more than O’Ryan J calculated was her entitlement, even based upon her higher valuation of the dinghy that she did not receive. It is also clear that the additional equity that she received in the BMW came directly from payments made by the Husband towards the Esanda liability. In short, the Wife has already gained at the expense of the Husband. It would therefore be unjust to enforce any orders that require any further payment from him.
In the circumstances, I shall dismiss the Enforcement Summons.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Roberts FM
Associate:
Date: 19th February 2003
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