SCARFE & CAINES

[2020] FamCA 283

FAMILY COURT OF AUSTRALIA

SCARFE & CAINES [2020] FamCA 283

FAMILY LAW – PROPERTY – where final orders were made by consent in July 2016 requiring the Respondent to pay various amounts to the Applicant – totality of the payments not made – enforcement application made to the Court by the Applicant – where the Respondent placed no material before the Court – Respondent acknowledges he owes the Applicant money – Respondent wishes to put off payment until in a better financial position – orders made as sought by the Applicant.

Family Law Act 1975 (Cth) ss 90SN, 106A, 114(2A)(a), 117, 117B
Family Law Rules 2004 (Cth) rr 20.05, 20.08, 20.24

APPLICANT: Ms Scarfe

RESPONDENT: Mr Caines

FILE NUMBER: MLC 1601 of 2015

DATE DELIVERED: 28 April 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Hartnett J

HEARING DATE: 8 April 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Wheeler

SOLICITOR FOR THE APPLICANT: Belbridge Hague

THE RESPONDENT: In Person

Orders Made 8 April 2020

1. Pursuant to r.20.08 of the Family Law Rules 2004 (Cth) (‘the Rules’) the following orders are orders of the kind provided for by r.20.05.

2. The Respondent pay the Applicant $165,576.57.

3. The Respondent pay interest pursuant to s.117B of the Family Law Act 1975 (Cth) (‘the Act’) from the date on which the payments ordered to be paid became due to the date of the payment and such interest is calculated in accordance with the Rules to be 30.62 per day from and including 31/1/2020.

4. In default of payment in full pursuant to orders three and four herein:-

   (a) pursuant to r.20.24 of the Rules, upon non-compliance the Respondent shall execute any deeds, documents or instrument to effect a transfer of the properties situate at and known as H Street, City F (Volume ... Folio ...) and secondly, J Street, City F (Volume ... Folio ...; Volume ... Folio ...; Volume ... Folio ...) to the sole name of the Applicant as Trustee for the sale of the properties within 48 hours of service of such documents;

   (b)       the Respondent deliver up vacant possession of H Street, City F (Volume ... Folio ...) and secondly, J Street, City F (Volume ... Folio ...; Volume ... Folio ...; Volume ... Folio ...) to the Applicant within 48 hours of service of the documents referred to in order 4(a), above; and

   (c) pursuant to s.114(2A)(a) of the Act the Respondent is restrained by injunction from occupying, using or coming within 100 metres of H Street, City F (Volume ... Folio ...) (‘H Street’) and J Street, City F (Volume ... Folio ...; Volume ... Folio ...; Volume ... Folio ...) (‘J Street’).

5. Belbridge Hague prepare and serve the Transfer of Land, and any other Land Use Victoria or State Revenue Office forms and requirements (including any associated online portals or forms) and a copy of these orders upon the Respondent.

6. Within seven days of receipt of the Transfer of Land, and any other Land Use Victoria or State Revenue Office forms and requirements the Respondent shall deliver to the Applicant:-

   (a)       duly executed Transfer of Land, and any other Land Use Victoria or State Revenue Office forms and requirements and electronic forms; and

   (b)       any Certificate of Title or title deeds to the property currently in his possession.

7. Upon transfer to the Applicant, the Applicant forthwith do all such acts and things required to sequentially sell first, H Street, City F (Volume ... Folio ...) and secondly, J Street, City F (Volume ... Folio ...; Volume ... Folio ...; Volume ... Folio ...) and the proceeds be applied as follows:-

   (a)       first to pay the costs commissions and expenses of the sale;

   (b)       second to discharge any encumbrances secured against the property;

   (c)       third such sum to satisfy monies owing to the Applicant pursuant to paragraphs three and four herein; and

   (d)       fourth the balance to the Respondent.

8. In the event that the Respondent should be in default of compliance with these orders or any proportion thereof for a period of seven days:-

   (a)       the Registrar of the Family Court of Australia is hereby appointed to execute all such deeds and documents in the name of either party and do all such acts and things necessary to give validity and operation to all such deeds and documents so as to give effect to these orders should either party neglect and/or refuse to comply with these orders, after a default of seven days and upon the Applicant’s solicitors filing a short affidavit as to the non- compliance;

   (b) the Respondent shall comply with the obligations pursuant to order four herein and thereafter the Applicant shall be entitled to make an application to a Registrar pursuant to s.106A of the Act and any costs incurred by the Applicant shall be payable by the Respondent (including but not limited to legal and lodgement fees) as agreed or otherwise as determined by the Court on application.

9. The Respondent pay the Applicant’s cost of this application.

10. Until further order the Respondent is restrained from further encumbering or in any way dealing with H Street and J Street save as set out in these orders and the wife by this order is authorised to provide a copy of this order to the ANZ bank.

11. Leave is reserved for the Applicant to bring an application pursuant to s.90SN of the Act.

12. The full name and address for the payer is Mr Caines, H Street, City F, Victoria.

13. The full name and address for the payee is: Ms Scarfe, M Street, City F, Victoria.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1601 of 2015

Ms Scarfe

Applicant

And

Mr Caines

Respondent

REASONS FOR JUDGMENT  

Preliminary

1. Earlier property order proceedings were finalised between these parties in the making of final consent orders on 5 July 2016. Those orders provided, relevantly, for various payments to be made by the Respondent de facto husband (‘the husband’) to the Applicant de facto wife (‘the wife’). The payments were not made in their totality. The wife was required to make further application to the Court by way of the seeking of an enforcement order pursuant to r 20.08 of the Family Law Rules 2004 (Cth). In support of that enforcement application, the wife relied upon an affidavit of evidence sworn by her on 31 July 2019.

2. On 30 August 2019, orders were made for the husband to file a Response and affidavit in support.  The orders contained a notation to the effect that the parties would continue to disclose to the other any relevant documents in relation to the proceeding. The husband did not file his Response and/or affidavit as ordered and did not disclose any relevant documents in the proceeding. 

3. On 11 November 2019, orders were made by consent by Registrar Field.  Order three of the orders made 11 November 2019 provided, relevantly, that:-

   Pursuant to section 79A(1A) of the Family Law Act 1975 paragraph 4 of the order made on 5 July 2016 be varied by substituting the following:

   a) On or before 30 November 2019 the Husband pay to the Wife the sum of $165,576.57; and

   b) or on before 31 January 2020 the Husband pay to the Wife the sum of $165,576.57.

4. Orders four and five of the orders made on 11 November 2019 provided that:-

   4) On or before 30 November 2019 the Husband pay the Wife’s costs fixed in the sum of $20,000.00.

   5) The Wife have liberty to comply [sic] in the event of non-compliance by the Husband with paragraphs 3 and 4 hereof.

5. Order six of the orders made 11 November 2019 provided that if the husband had not complied with paragraphs three and four of the orders made, then he was to file and serve, by 17 February 2020, a Response to the Application in a Case filed 2 August 2019 and an affidavit in support of the orders sought by him.  The Court noted in a notation to the 11 November 2019 orders, that the orders were without prejudice to any application by the parties on the question of costs in the event of non-compliance by the husband. 

6. The matter next proceeded on 26 February 2020, when orders were made by Registrar Mestrovic, being orders that were not by consent and being in circumstances where there was no appearance by or on behalf of the husband. Those orders were as follows:-

   1) The Wife’s costs thrown away this day be fixed in the sum of $4,050.00 (four thousand and fifty dollars only) and be paid by the Husband no later than 4.00 pm on 26 March 2020.

   2) The Wife’s Application in a Case filed 2 August 2019 be adjourned to the Judge’s Duty List on 8 April 2020 at 10.00 am.

   3) The wife make, file and serve a further Affidavit setting out with particularity the non-compliance of the Husband with orders made 11 November 2019 by consent (and any amended application) on or before 11 March 2020.

   4) The Husband make, file and serve any amended Response and Affidavit in response on or before 25 March 2020.

   5) Service of the Husband shall be deemed to be effected by providing the documents by prepaid post to the Husband at H Street City F and/or by email to ..., the Wife having confirmed through her Counsel this day that the Husband’s current email address known to her is ....

7. Following the making of these orders, the wife filed a further Application in a Case on 20 March 2020 wherein she sought substantially the orders which the Court made on 8 April 2020. The alterations made to the orders as sought in the application of 20 March 2020 were set out in a minute of order sought by the wife, which was provided to the Court and the husband before the commencement of the proceeding. The alterations were not contentious, and there was no issue of a failure to afford procedural fairness to the husband.  Proposed order 11 was a restraining order. The husband did not object to the seeking of such order, indicating that his issue was having the necessary funds available to pay to the wife, rather than him seeking to avoid payment to the wife. 

8. The husband continued to place no material before the Court. There was no compliance by him with the various orders made as referred to in the preceding paragraphs. The husband appeared in person on the hearing of the Application in a Case by telephone and made submissions without any evidentiary basis. 

9. The husband agreed with the sum that the wife sought to be declared by the Court as owing to her, acknowledging it remained unpaid by him.

10. The wife otherwise relied upon an affidavit affirmed by her solicitor, Ms Paige Rolfe, on 7 April 2020, which went to service upon the husband of the evidence before the Court. By a List of Documents Sought filed on 11 March 2020 the wife required the husband to produce, for the purposes of the hearing, relevant documents. The husband produced no documents to the Court nor the wife as requested.

11. During the course of his submissions, the husband agreed with the submissions made by counsel for the wife, which had as their basis the affidavit evidence of the wife, that the husband had, in the preceding 12 months, purchased a large boat, which is currently moored at Suburb L in the State of Victoria, which he described as having been purchased for approximately $165,000 but in relation to which he claimed the purchase funds were borrowed funds. Further, the husband conceded that he had purchased, in 2018, a Motor Vehicle 1 for the sum of $150,000 and again claimed that those monies used to effect the purchase were all borrowed funds.  He provided no evidence to substantiate his assertions as to his further borrowings.

Background

1. The wife was born in 1971, and she is aged 48 years.  The husband was born in 1970, and he is aged 50 years. 

2. The parties commenced a relationship and cohabitation in 1996 and separated in March 2013, after a period of some 17 years of cohabitation.

3. There are three children of the parties’ relationship, namely Mr B born in 1997, Mr D born in 1999 and Mr C born in 2001. The children of the relationship are adult children.  The child Mr C lives with the wife. The child Mr B has moved out of the wife’s home. The child Mr D lives in Western Australia but lived full time with the wife until he moved to Western Australia in February 2019.  The husband did not, make payments of child support to the wife. 

4. The wife filed her enforcement application on 2 August 2019. Her application, affidavit and other material was served upon the husband by post on 6 August 2019. 

Consideration

1. Since the final orders of 5 July 2016, the husband has defaulted in part in his repayment obligations. Below is a history of that defaulting.

2. Order 14 of the final orders of 5 July 2016 provided as follows:-

   The Husband be solely responsible for and indemnify the Wife against any and all liability, debt, action, suit or demand of whatsoever nature and kind in relation to the Caines entities or the Wife personally arising from her involvement in any capacity with the Caines entities including but not limited to any taxation for which the Wife is or may become liable. 

3. The “Caines entities” were defined in order eight of the final orders, relevantly, as follows:-

   …

   (a) P Pty Ltd;

   (b) Q Pty Ltd;

   (c) R Pty Ltd; and

   (d) any other company, trust or partnership in which the Wife holds any office or shares or entitlements which is controlled by the Husband, his family members, servants or agents. 

4. Order eight of the final orders provided that the wife was to do all acts and things necessary and sign all such documents as were necessary to resign as a director and/or officeholder and transfer all her interest in the Caines entities to the husband. The wife complied with that order on 7 July 2016. 

5. On or about 5 July 2017, the wife received two Director’s Penalty Notices in respect of one of the Caines entities.  The first such notice related to unpaid PAYG withholding amounts and was in the sum of $23,354.  The second notice related to PAYG withholding amounts and was in the sum of $27,471. 

6. On 8 August 2017, the Australian Taxation Office (‘ATO’) garnisheed the wife’s personal bank accounts in the amount of $7,539.77, relating to the directors penalty notices referred to in the preceding paragraph. 

7. Order two of the final orders provided:-

   The Husband pay or cause to be paid to the Wife the sum of $200,000 as follows:

   (a) On or before 19 July 2016, the sum of $20,000;

   (b) On or before 5 September 2016, the sum of $130,000; and

   (c) On or before 5 January 2017, the sum of $50,000.

8. In respect of order 2(a), the husband paid the wife $10,000 on 6 July 2016 and another $10,000 on 15 July 2016. 

9. In respect of order 2(b), the husband paid the wife $60,000 on 5 September 2016 and $70,000 on 8 September 2016 (being three days late). 

10. In respect of order 2(c), the husband paid the wife $3,284 on 5 January 2017; $45,034 on 23 January 2017 (being 18 days late); $1,682 on 25 January 2017 (being 20 days late). In respect of each and all of these late payments, the husband paid no interest as was due, and at a rate of 7.5 per cent per annum, to the wife.

11. Order 3(c) of the final orders provided, relevantly, as follows:-

    The parties forthwith do all such acts and things and sign all such documents necessary to sell the property situated at and known as K Street, Suburb L being the whole of the land more particularly described in Certificate of Title Volume ... Folio ... (“Suburb L”) and upon completion of the sale the proceeds of sale be applied:

    …

    (c) thirdly, the balance to the Wife.

12. Suburb L was security for one mortgage in the amount of $420,029, having account number …36 (‘Suburb L loan’).  If Suburb L was security for any other loan, that fact was not disclosed by the husband to the wife.

13. On … October 2016, Suburb L was sold for the sum of $618,000, with settlement taking place on … February 2017.  At settlement of the sale, Westpac Bank took $597,564.74 and applied those funds as follows:-

    a)to unknown costs of sale;

    b)to the Suburb L loan in the sum of $415,355.38;

    c)to the City Council, Water Authority and the State Revenue Office in the sum of $4,401.72 (in total);

    d)to a Westpac Bank personal loan in the husband’s name in the sum of $66,027.45; and

    e)to the mortgage secured over the property situate at J Street City F in the State of Victoria, being a property that the husband was to retain pursuant to order five of the final orders (save that such property was one of two that were the subject of a default provision in order 12 of the final orders) in the sum of approximately $115,781.91. 

14. The wife did not receive from the husband any of the proceeds of sale of Suburb L. 

15. After payment of an estimated $115,791.91, the loan secured over the property known as and situated at J Street being (‘J Street’) Westpac Bank loan ending in 25 (‘J Street loan’), was reduced from approximately $1,055,892 to $922,421. 

16. Order four of the final orders provided:-

    The Husband pay or cause to be paid to the Wife a further sum being $600,000 less the amount received by the Wife pursuant to paragraph 3(c) of these Orders, in nine equal instalments, with each instalment to be paid on or before the following dates:

    (a) 5 July 2017;

    (b) 5 January 2018;

    (c) 5 July 2018;

    (d) 5 January 2019;

    (e) 5 July 2019;

    (f) 5 January 2020;

    (g) 5 July 2020;

    (h) 5 January 2021; and

    (i) 5 July 2021.

17. As the wife had not received any surplus monies from the sale of Suburb L, the entire sum of $600,000 was due in nine equal instalments of $66,666.66. 

18. The wife received $1,682 on:-

    a)16 March 2017;

    b)30 March 2017; and

    c)27 April 2017. 

19. Thereafter the wife received the following amounts:-

    a)$5,046 on 5 July 2017;

    b)$3,364 on 17 July 2017;

    c)$1,682 on 27 July 2017;

    d)$20,000 on 1 August 2017;

    e)$9,113 on 11 August 2017;

    f)$9,113 on 10 October 2017;

    g)$10,046 on 1 November 2017;

    h)$50,000 on 27 June 2018;

    i)$50,000 on 12 November 2018; and

    j)$65,592.68 on 4 July 2019.

20. The total of the payments received by the wife was $229,002.68. No interest that was due and owing in respect of the late payments was paid by the husband to the wife.

21. Order 11 of the final orders provided:-

    In the event any payment owing by the Husband pursuant to paragraphs 2 and/or 4 of these Orders is not paid by the due date(s) in accordance with these Orders:

    (a) The Wife be at liberty to forthwith lodge, at her election, either a caveat or second or subsequent mortgage on the title to H Street and/or J Street; and

    (b) Interest shall accrue on the overdue payment from the due date in accordance with the Family Law Rules and Regulations, calculated monthly and applicable on a daily basis.

22. On 5 February 2018, the wife lodged a caveat over each of H Street and J Street.

23. Order 13 of the final orders provided:-

    That pending the payments to the Wife being paid in full pursuant to orders 2 and 4 herein, the Husband keep the Wife informed in relation to all of his dealings with the titles to H Street and J Street.

24. The husband has not informed the wife of any dealings with the titles to H Street or J Street.

25. At the time the final orders were made in 2016, the debt secured over H Street was around $220,000, and the property had a value of approximately $2,000,000. The wife estimates that H Street would now have a value of between $2,000,000 to $2,300,000.  At the time of the making of the final orders, the debt secured over J Street was around $1,005,892, and the wife estimates that the property had a value in excess of $2,000,000. The value of J Street was valued by S Company in August 2010 at $2,085,000. 

1. Order 12 of the final orders provided:-

   In the event any payment owing by the Husband pursuant to paragraphs 2 and/or 4 of these Orders is not paid by the due date(s) in accordance with these Orders, and such default continues for a further period of 60 days, the parties do all such acts and things required to sequentially sell first, H Street and secondly, J Street (if required), and the proceeds be applied as follows:

   (a) firstly, to pay the costs commissions and expenses of the sale;

   (b) secondly, to discharge an [sic] encumbrances secured against the property;

   (c) thirdly, such sum to satisfy monies owing to the Wife pursuant to paragraphs 2 and/or 4 of these orders in full (together with interest on such overdue payment in accordance with the Family Law Rules and Regulations calculated monthly); and

   (d) fourthly, the balance to the Husband.

2. On 15 June 2018, the husband purchased in joint names with his partner, Ms G, real property situated at N Street, City F in the State of Victoria, for the sum of $550,000.

3. On 27 June 2019, the wife instructed her solicitors to write to the husband requesting that the full amount then outstanding of $423,956.68, plus interest, be paid. In further default of payment, the wife put the husband on notice that she would seek to sell H Street, pursuant to order 12 of the final orders.  On 4 July 2019, a payment of $65,592.68 was made from the husband to the wife. 

4. As at 29 July 2019, the amount owing to the wife pursuant to the $600,000 component of the orders was $370,997.32, together with interest in the amount of $16,066.37. 

5. The wife owed her former solicitor $105,000 for legal fees and disbursements incurred as a result of the previous Court proceedings. 

6. In or about May 2019, the wife had become aware that her former solicitor had issued proceedings in the Magistrates’ Court of Victoria at City F to recover his unpaid legal fees. The wife had not been able to meet the payment due to her former solicitor because of the manner in which the husband had paid her, being irregular, late and often in small amounts that only covered her mortgage repayments and some living expenses that had accumulated over time. 

7. On 9 July 2019, the wife’s former solicitor obtained a judgment debt against her (in the sum of $105,155.20) and a garnishee order against the husband. 

8. On or around 20 August 2019, the husband paid the wife’s former solicitor the sum of $66,666, which was received by the wife.

9. On 30 November 2019, pursuant to order 3(a) of the orders of 11 November 2019 the wife received the sum of $165,576.57, and pursuant to order four of those orders received $20,000.

10. On 31 January 2020, pursuant to order 3(b) of the orders of 11 November 2019, the wife was due to receive a final payment of $165,576.57.  The husband made no payment in that sum or at all. 

11. On 4 February 2020, the wife instructed her solicitors to write to the then-acting solicitors for the husband about the non-payment of the sum of $165,576.57, together with interest.  No response was received from the solicitors then acting on behalf of the husband, and subsequently those solicitors filed and served a Notice of Ceasing to Act on 21 February 2020.  The husband does not dispute that he has failed to pay the amount due and payable to the wife and that he has failed to pay any interest due on such outstanding sum.

Conclusion

1. The husband has failed to comply with various of the final orders made on 5 July 2016 and those subsequent orders that were made by way of variation on 11 November 2019 as described above. This has left the wife in a very difficult financial position and without funds which are owing to her by the husband in the sum of $165,576.57, together with interest. She has again been required to incur legal costs which she cannot afford.

2. The husband has failed to participate in these proceedings by the placing of relevant evidence before the Court.  He has failed to provide a list of documents as sought by the wife or, indeed, any document at all, and in submissions on the hearing of the matter he provided a garbled and inadequate explanation for his non-payment of monies legitimately owing to the wife, and his non-compliance with orders of the Court.

3. Essentially, the husband acknowledges that he owes monies to the wife in the sum claimed.  He acknowledges that interest will flow. He has not expended any money on legal costs himself, and the totality of that burden has been borne by the wife. The husband desires, and has always desired, to put off the payment of monies to the wife until such time as he perceives himself to be in a better financial position.  He claims the recent events in Australia, including bushfires and the current COVID-19 pandemic, interfere with his ability to comply with the orders of the Court.  There is no evidence before the Court that those events have impacted in any way on his ability to pay the wife that which she is owed and his non-compliance in large part pre-dates those events. 

4. The Court shall accede to the application of the wife and make the declaration and orders as sought by her.  There has been an extraordinarily lengthy period in which the husband has failed to comply with the orders of the Court and failed to put evidence before the Court. He has left the wife in a precarious financial position by his non-compliance.  Her position must be restored.

5. The wife seeks a costs order which in the exercise of the Court’s discretion, and in the circumstances described in these reasons, shall be made. It is an obvious case for the award of costs satisfying ss 117(2A)(a), (c), (d) and (e) of the Family Law Act 1975 (Cth). The wife did not seek quantification of those costs or any mechanism for ascertainment of quantum. They should be taxed if not agreed and there is liberty to apply as to this matter if necessary.

I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hartnett delivered on 28 April 2020.

Associate: 

Date:  28 April 2020