Shafton and Shafton (No.2)
[2012] FMCAfam 369
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SHAFTON & SHAFTON (No.2) | [2012] FMCAfam 369 |
| FAMILY LAW – Property - Application by wife for summary dismissal of the husband’s application to vary final property orders. |
| Family Law Act, s.79A Federal Magistrates Act, s.17A Federal Magistrates Court Rules r.13 |
| Cawthorn & Cawthorn (1998) FLC92-805 Shafton & Shafton [2011] FMCAfam46 Vivid Entertainment and Digital Sinema Pty Ltd [2007] FMCA 157 |
| Applicant: | MS SHAFTON |
| Respondent: | MR SHAFTON |
| File Number: | NCC 1006 of 2009 |
| Judgment of: | Terry FM |
| Hearing date: | 30 November 2011 |
| Date of Last Submission: | 30 November 2011 |
| Delivered at: | Newcastle |
| Delivered on: | 30 April 2012 |
REPRESENTATION
| Solicitor Advocate for the Applicant: | Mr Gilbertson |
| Solicitors for the Applicant: | Turnbull Hill Lawyers |
| Counsel for the Respondent: | Mr Jackson |
| Solicitors for the Respondent: | McDonald Johnson Lawyers |
ORDERS
That the wife’s application for summary dismissal of the husband’s application filed on 4 November 2011 is dismissed.
That the husband’s application is listed at 9.30am on 2 May 2012 for further consideration.
IT IS NOTED that publication of this judgment under the pseudonym Shafton & Shafton (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1006 of 2009
| MS SHAFTON |
Applicant
And
| MR SHAFTON |
Respondent
REASONS FOR JUDGMENT
Introduction
On 28 April 2009 final property orders were made by consent in proceedings between MR SHAFTON (“the husband”) and MS SHAFTON (“the wife”).
The orders are complex, but among other things they provide for the husband to pay the wife $1,166,000.00 on or before 19 January 2011 and $1,000,000.00 on or before 19 January 2012.
The husband failed to make the payment due by 19 January 2011, and in October 2011 after being served with a Bankruptcy Notice he filed an application seeking to have the final orders varied or set aside. He amended this application on 4 November 2011.
In her response filed on 7 November 2011 the wife sought a final order that the husband’s application be dismissed, and an interim order that it be summarily dismissed.
The wife’s summary dismissal application was heard on 30 November 2011.
For a time earlier this year it appeared that there might be some prospect of the matter resolving, and the preparation of this decision was deferred. The matter has not resolved however and a decision about the summary dismissal application is now required.
The payment due on 19 January 2011 remains outstanding and the 19 January 2012 payment is now also overdue.
The Evidence
The husband relied on his amended initiating application and affidavit filed on 4 November 2011.
The wife relied on her response filed on 7 November 2011 and her affidavit filed on 26 October 2011.
The parties filed Case Outline documents and the hearing proceeded by way of submissions.
Background
The husband (an (occupation omitted)) is 58 and the wife (a retired (occupation omitted)) is 57. They commenced cohabitation in about 1978, married on (omitted) 1984 and separated on 10 April 2007.
In early 2009 they took part in a collaborative law process with a view to resolving their property matters.
The property available for division included:
i)Three real properties in joint names Property S, Property G, and Property B, the former matrimonial home).
ii)The husband’s quarter interest in another real property.
iii)Various chattels and motor vehicles.
iv)Superannuation.
In addition, the parties had an interest, through trusts and companies, in a number of properties in (omitted). Some of the properties were owned by (omitted) Pty Ltd as trustee for the (omitted) Unit Trust and some by (omitted) Pty Ltd as trustee for the (omitted) Unit Trust. Plans were underway to develop these properties by constructing commercial units and residential apartments on them.
The former matrimonial home (in which the wife was living) was mortgaged not only as a security for home loans but as security for borrowings connected with the development projects.
The 28 April 2009 consent orders
On 23 April 2009 the parties signed Terms of Settlement, and on 28 April 2009 final orders were made by consent in the Family Court at Newcastle.
The Orders provide among other things for:
i)The wife to retain the former matrimonial home.
ii)The wife to relinquish her interest in the development projects to the husband.
iii)The husband to pay the wife $2,166,000.00 in two instalments, one of $1,166,000.00 on or before 19 January 2011 and one of $1,000,000.00 on or before 19 January 2012.
iv)The husband to pay, pending the payment of the first instalment, $2,000.00 per month to the wife and $3,000.00 per month to the (bank omitted) in respect of the home loan mortgages.
v)The husband to discharge the mortgage secured over the former matrimonial home in support of borrowings for the development projects and to pay the loan repayments pending that discharge.
vi)The husband to cause a second mortgage to be registered over the (omitted) Pty Ltd properties and a third mortgage over the (omitted) Pty Ltd properties, in favour of the wife.
vii)The wife to do all acts and things required by the first mortgagee of the (omitted) properties and the second mortgagee of the (omitted) properties including discharging the second and third mortgages if required.
viii)The husband to be restrained from borrowing more than 75% of the gross realisable value of the projects as determined by a valuer nominated by the first mortgagee of the said land.
ix)The husband to receive the Property S and Property G properties.
x)The wife to have the right to place a caveat over the former matrimonial home and the Property S property.
The orders are preceded by 34 Notations. Of particular relevance for the purposes of this judgment are notations Z and AB which provide as follows:
Z.The parties have agreed that as part of the property settlement the husband is to pay $2,166,000.00 by 2 payments of $1,166,000.00 and $1,000,000.00 to the wife. The husband is presently unable to borrow sufficient moneys to pay the wife’s entitlement to her.
AB.The Shafton Family Trust is in the process of developing the land that the Unit Trusts own and it is anticipated that the development applications will be approved soon. Once the development applications are approved the Trust will develop, construct and sell residential apartments and commercial units on the land. From the proceeds of sale of the apartments and units the husband will pay the wife the money due to her. To secure the payment to the wife, the husband is to arrange a second mortgage on all of the 2 (omitted) Unit Trust properties and a third mortgage on all of the (omitted) Unit Trust properties.
There is no provision in the orders for the sale of any property should the husband default in making payments. Rather, Orders 44 and 45 provided as follows:
DEFAULT
44.In the event that the husband defaults in payment of any monies due pursuant to these orders, then the husband shall pay interest on so much as may be outstanding at the rate provided by the Family Law Act and Rules from time to time from the date that payment is due to the date of payment of principal and interest.
45.In the event of default by any parties pursuant to any provision of these orders, the parties have liberty to restore the matter on 7 days notice.
Events after the orders were made
During 2009 and 2010 there was a dispute between the parties about the interpretation of the order for monthly payments, which became the subject of court proceedings,[1] and there were ongoing complaints by the wife about the husband’s compliance with the orders, in particular the orders requiring the husband to make monthly payments and to register the second and third mortgages in favour of the wife.
[1] Shafton & Shafton [2011]FMCAfam46
The event which led directly to the current proceedings however was the husband’s failure to pay the instalment of $1,166,000.00 by 19 January 2011.
The husband said that he was unable to pay it because the development projects, which were to be the source of the funds, had not proceeded at the rate envisaged when the orders were made.
He maintained that he had done and was continuing to do all he could to progress the developments, but said that it was unlikely that he would now be able to pay the wife until 2013.
The wife, who has always been concerned about the husband’s lack of compliance with the orders designed to provide her with some security and financial support until the development projects were completed, said that the delay with the projects was not her problem; the order fixed a date for payment and the husband simply had to find a way to comply with it.
On 3 August 2011 the wife filed an enforcement application. She sought an order that the amount of $1,166,000.00, together with other amounts including interest, be paid to her within 14 days, and that in default a Trustee for sale be appointed to effect the sale of sufficient real property to realise the amount outstanding.
However when the wife’s enforcement application was mentioned on 14 September 2011 her solicitor advised that she did not wish to pursue it (notwithstanding that the husband’s default continued) and the application was dismissed.
On 28 September 2011 the wife caused a Bankruptcy Notice to be served on the husband.
On 11 October 2011 the husband filed what was in essence an application pursuant to s.79A of the Family Law Act seeking to set aside or vary the 28 April 2009 orders.
On 18 October 2011 the husband filed an application in which he sought either to have the Bankruptcy Notice set aside or to have time for compliance with it extended until his s.79A application had been heard and determined.
An interim order was subsequently made extending time for compliance with the Bankruptcy Notice until further order.
On 4 November 2011 the husband filed an amended application in the family law proceedings in which he sought the following orders:
1. A declaration pursuant to section 79A(1)(b) of the Family Law Act 1975 (Cth) (“the Act”) that, in the circumstances that have arisen since orders were made by consent in these proceedings on 28 April 2009 (“the existing orders”) it has become impracticable for a part of the existing orders to be carried out.
2. An order pursuant to section 79A(1) of the Act:
(a)that orders 6, 8, 10 and 14 of the existing orders be set aside and, to the extent that they are set aside, that orders 3-7 be made under section 79 of the Act in substitution for them; or
(b)in the alternative to order 2(a), that orders 6, 8, 10 and 14 of the existing orders be varied so as to:
(i) reduce the amounts payable to them to nil (or such other amounts as determined by the Court); and/or
(ii) make the amounts payable pursuant to them conditional upon the completion of the (omitted) Pty Ltd, or otherwise extend the time for compliance with them to a date or dates to be determined by the Court.
3. [not relevant to the current proceedings]
4. An order that the wife repay to the husband any and all monies received by her from the husband pursuant to orders 6, 8, 10 and 14 of the existing orders.
5. An order that the wife transfer the property known as Property B, in the State of New South Wales (“Property B”) to the husband within 28 days.
6. An order that the husband indemnify the wife, and keep the wife indemnified, with respect to any mortgage payments or other liabilities touching or concerning Property B as and from the date of the transfer referred to in order 5.
7. In the alternative to order 5 and 6, an order that the wife pay to the husband the sum of $400,000.00 within 28 days.
8. An order that the wife pay the husband’s costs of and incidental to this Application.
9. Such further or other orders as the Court deems fit.
It was this application which the wife sought to have summarily dismissed.
The law
The husband has applied to set aside or vary the orders pursuant to s.79A(1) of the Family Law Act which provides as follows:
Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
(e) a proceeds of crime order has been made covering property of the parties to the marriage or either of them, or a proceeds of crime order has been made against a party to the marriage;
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
The husband specifically sought to rely on s.79A(1)(b), and during submissions both parties referred me to La Rocca & La Rocca[2] and Cawthorn & Cawthorn,[3] leading cases on the interpretation of s.79A(1)(b).
[2] La Rocca & La Rocca(1991)FLC92-222
[3] Cawthorn & Cawthorn(1998)FLC92-826
The final property orders in La Rocca & La Rocca required the husband to pay the wife $50,000.00. When the time came for him to pay it however he said that his financial circumstances were precarious and he could not pay. His business, he claimed, was technically insolvent.
The husband applied to vary the final property orders pursuant to s.79A(1)(b), arguing that as a result of circumstances which had occurred since the making of the orders it was impracticable for the order to be carried out. Kay J dismissed his application and said as follows:
Now, in my view, what the appropriate application of s. 79A(1)(b) ought to be is that circumstances that have arisen in which it becomes impracticable to carry out the orders are circumstances that could not reasonably have been contemplated and that in such circumstances, whilst impossibility is not the test and impracticability is, it may then become just and equitable to change the orders.
The potential insolvency of one of the parties in the future is not such a matter, in my view. In every case before the Court property values may change, go up or down, business may flourish or not flourish, the vicissitudes of life may affect one of the parties.
In an appropriate case, such as the extreme circumstances described in Barder and Barder (1987) 2 All E.R. 440 in the House of Lords, where the mother killed herself and the children after the making of the order, then appeal out of time and fresh evidence is the appropriate answer. However the commercial failure of one of the parties post the making of the orders which will lead to the orders not being capable of being fully implemented does not, in my view, amount to a basis on which to set the order aside.
That situation leads to a problem with enforcement. It may be that the bankruptcy laws would have to take over, but it is not an appropriate basis for having the orders set aside and fresh orders made at the behest of the party who has suffered the financial embarrassment. There is no provision in the legislation to have matters looked at a second time if one of the parties suddenly becomes wealthy and, in my view, I do not see that the legislation can be appropriately read as applying when one of the parties becomes suddenly poor, in normal business circumstances.
In Cawthorn & Cawthorn the husband was required to pay the wife $105,000.00. He paid her $5,000.00 but said that it was impossible for him to pay the rest because after the orders were made money had been embezzled from his accountancy firm causing a decline in his own financial position. He argued that as a result of his financial circumstances it was impracticable for him to comply with the order.
The Full Court followed La Rocca and dismissed the husband’s application, saying that the decline in the husband’s financial circumstances was a foreseeable future event, and that while it might create an enforcement problem it should not lead to the orders being varied or set aside.
The wife in the case before me argued that the husband was saying exactly the same thing as the unsuccessful husbands in La Rocca & La Rocca and Cawthorn & Cawthorn, and that this should persuade the court that his application pursuant to s.79A(1)(b) had no prospects of success.
The husband argued that his case was different on its facts to those earlier cases and the earlier cases could be distinguished.
The power of this Court to summarily dismiss an application is contained in s.17A of the Federal Magistrates Act and R.13.10 of the Federal Magistrates Court Rules.
S.17A(2), (3) and (4) provide as follows:
(2) The Federal Magistrates Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4)This section does not limit any powers that the Federal Magistrates Court has apart from this section.
R.13.10 provides as follows:
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
a)the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
b)the proceeding or claim for relief is frivolous or vexatious; or
c)the proceeding or claim for relief is an abuse of the process of the Court.
The wife argued that the husband had no reasonable prospects of successfully prosecuting his application.
In Vivid Entertainment and Digital Sinema Pty Ltd (2007) FMCA[4]Driver FM considered the meaning of s.17A of the Federal Magistrates Court Act and referred to a number of Federal Court decisions on s.31A in the Federal Court Act, a section equivalent to s.17A of the Federal Magistrates Court Act. He said as follows:
30.….. in the absence of guidance from the Full Federal Court on the interpretation of s.31A, I will follow the cautious approach of Rares J and Jacobson J. In particular, I agree with and will apply the principles summarised by Jacobson J, in the following slightly amended terms:
·In assessing whether there are reasonable prospects of success on an application or a response, the Court must be cautious not to do an injustice by summary judgment or summary dismissal.
·There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary judgment or summary dismissal is sought to succeed at the final hearing.
·Evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects.
·Unless only one conclusion can be said to be reasonable, the discretion under s.17A cannot be enlivened.
·The Court should have regard to the possibility of amendment and additional evidence in considering whether only one conclusion can be said to be reasonable. In that consideration, the conduct of the parties and the other circumstances of the case may be relevant.
[4] Vivid Entertainment and Digital Sinema Pty Ltd [2007] FMCA 157
I am satisfied that the matters referred to above by Driver FM should guide me in considering the wife’s application for summary dismissal.
I also consider the following passage from the judgment of Justice Kirby in Lindon v The Commonwealth, referred to in the husband’s submissions, is useful, in that it is an eloquently worded expose of why caution needs to be exercised when dealing with a summary dismissal application:
3. An opinion of the court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment.
4. Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts.
5. If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading.
The husband’s case
The husband’s case was that it had always been understood that he would only be able to pay the instalments once money started to flow in from the sale of the apartments and units. This was acknowledged in Notations Z and AB to the orders.
Unfortunately the development projects had not progressed as quickly as originally envisaged, and as a result it had not been possible for him to pay the first instalment by the date in the orders.
The husband said that the delay in progress had been caused or contributed to by the wife. (bank omitted), which had provisionally approved finance for the developments, had refused to give final approval until they received the financials for the companies and trusts for 2008 and 2009. The husband had been seriously delayed in completing them because the wife refused to hand over vital documents.
The husband said that after the orders were made the wife had deliberately withheld documents in an attempt to force additional concessions from him, and had even tried to prevent his accountant using information in the accountant’s possession until her conditions were met.
In support of this claim the husband annexed to his affidavit copies of emails sent by the wife to the accountant in which she set conditions for the handing over of the documents. He also attached an email sent on 4 November 2009 in which the wife said as follows:
Hi Mr S
I have handed over to Mr M the information for the 2008 financials as agreed.
Mr M has asked for the information for the 2009 financials.
This information can be made available once Mr Shafton has:
-Paid the annual premium for the insurance policy as per clauses 40 and 41 of the terms of settlement.
-Reimbursed me for premiums already paid by myself.
-Reimbursed me for the (credit card omitted) that was agreed would be paid on settlement of (omitted) and which was then withheld.
-Agreed to reimburse me for any solicitor’s fees incurred in the checking/amending of documents relating to the terms of settlement that require my signature.
And in view of Mr Shafton’s failure to meet his monthly financial obligation as per the terms of settlement, that he provide some assurance that he has the financial capacity and the willingness to comply with these monthly payments in the future.
As much of the 2009 information can be accessed from the MYOB files containing the 2008 information, I would ask that the 2009 information not be used for the preparation of the financials or for any other purpose until the above items were observed.
If you would like to discuss any of the points raised, please do not hesitate to contact me.
Regards
MS SHAFTON
The husband went into some detail in his affidavit about why the information allegedly withheld by the wife was crucial and could not be obtained from other sources.
The husband said that in the end (bank omitted) became tired of waiting and withdrew their offer of finance and he then had to seek finance elsewhere.
When he did so he found that as a result of the global financial crisis the lending requirements and lending ratios applied by the banks had changed. He said that he could not obtain finance for the projects as they stood, and he was obliged to completely redesign them and then obtain amended development approval before he could pursue finance. This had been a very lengthy process and the amended development approval for the (omitted) project had been received only in June 2011.
The husband said that he was committed to the projects and had a builder engaged and had made a number of pre-sales, but as a result of the delay in getting the projects off the ground the earliest he was likely to be able to pay the instalments to the wife was mid 2013.
The husband set out in his affidavit the costs he said he had incurred as a result of the need to redesign the projects, and his counsel submitted that there was an arguable case for the wife being held responsible for these costs and an arguable case not just for a variation of the orders by way of the grant of an extension of time for payment but for the revisiting of the wife’s entitlement so that the husband would not end up bearing alone the brunt of those costs thrown away.
The husband’s counsel submitted that this case was distinguishable from La Rocca & La Rocca and Cawthorn & Cawthorn. One difference was that the husband, as recognised in the Notations, and unlike the husbands in those earlier cases, did not have the capacity to pay when the orders were made. A second difference was that the wife had contributed to the husband’s difficulties in creating a fund from which payment to her could be made, whereas the wives in the earlier cases bore no responsibility for their husband’s post separation inability to pay.
The husband’s counsel submitted that if nothing else this was a case in which an argument for extension of time to pay had real prospects of success, but the husband’s claim for a more complete revision of the orders also could not be branded as having no prospects of success.
The wife’s submissions
The wife’s counsel submitted that payment to the wife could have been made conditional on the projects reaching a certain stage, but a deliberate choice had been made not to do that, rather payment was required by a fixed date, and the notations to the orders could not be used to water down the clear effect of the order which required payment by a fixed date.
The wife was entitled to her money now and was entitled to enforce payment in any way she chose.
The fact that enforcement of the orders might result in the husband becoming bankrupt and/or the wife receiving less than her entitlement under the orders was not a basis for holding that it was impracticable for the orders to be carried out. The facts in this case were on all fours with the facts in La Rocca & La Rocca and Cawthorn & Cawthorn.
In any event the husband had provided no evidence about his financial circumstances to convince the court that he could not find some way to pay the instalments now if he was required to do so, perhaps by borrowing or by the sale of some property, and his application had no reasonable prospects of success for that reason alone.
The wife’s counsel submitted that any argument that the wife was responsible for the delay in the projects must fail because there was nothing in the 2009 orders which required the wife to provide any financial documentation to the husband or do anything to assist him to obtain finance for the developments. She could therefore not be held responsible for any delay in the preparation of the financials or for the subsequent withdrawal of the offer of finance.
In any event the wife denied that she had held up the projects by failing to provide financial information. She went into some detail in her affidavit about the information which she had provided, and about how the husband could have obtained any missing information from other sources.
Finally it was implicit in the wife’s case that the husband’s conduct in respect of compliance with other orders, such as the order requiring monthly payments and the order requiring the registration of mortgages, would persuade the court that the husband did not come to the matter with clean hands and that therefore even if he was successful in establishing that s.79(1A)(b) had application, the court would not in the exercise of its discretion set aside or vary the orders.
Discussion
It is neither necessary nor desirable at this stage of the proceedings for me to attempt an in depth analysis of the husband’s case, or to consider whether an application to vary the orders by way of seeking an extension of time to pay might have better prospects of success than an application to set aside the orders. It is only necessary for me to consider whether the husband has an arguable case for relief of some kind, or to put the matter another way, to consider whether the wife has discharged the onus of proving that the husband has no reasonable prospects of success.
For a number of reasons I do not consider that the wife has discharged that onus.
First, I do not accept that the husband’s case must fail because he did not provide details about his financial circumstances to establish that he could not somehow find the money to pay the wife now if he had to.
This is something the husband may be well advised to address later on, but the existence of the notations linking payment of the instalments to the completion of the projects is in my view sufficient at this stage.
Second, if the husband can establish that the wife bears some responsibility for the delay in the projects this would make the factual situation different to that in La Rocca & La Rocca and Cawthorn & Cawthorn, where the wives bore no responsibility for the husbands’ predicaments.
There is a dispute of fact about whether the wife did fail or refuse to provide documents, a dispute which can only be resolved after a final hearing.
Third, the husband argued his case on the basis of s.79A(1)(b), but an argument based on s.79A(1)(c) may also be open to him.
It is true that the husband is the person in default in carrying out the obligations under the orders, and usually the person in default cannot rely on s.79A(1)(c), but on rare occasions they have been allowed to do so. In Monticone &Monticone[5] for example the husband did not pay a sum of money to the wife by the due date and the wife sought to enforce the default clause in the orders which provided for the sale of a property. The court was satisfied that the husband had made strenuous efforts to comply and had paid the money by the time the enforcement proceedings commenced. The Full Court set aside the default clause.
[5] In the Marriage of Monticone (1989) 13 FamLR 592
In the case before me, even if the wife is ultimately deemed not culpable in any way for the delay in the completion of the projects, it is impossible for me to be certain, especially in the light of the notations, that if the husband could establish that he had worked tirelessly to get the projects off the ground that he might not succeed in at least obtaining an extension of time to pay.
It might also be open to argument that the husband does not need to rely on s.79A at all to obtain an extension of time to pay. There are a number of reported cases in which it has been argued (and apparently accepted) that the court has an inherent power to extend time for compliance with an order for payment of money, on the basis that such an order is a machinery order.
If the orders contained a provision for the sale of property if payment was not made then this would not be an option, because such a provision creates a beneficial entitlement in the other party. In Monticone for example the Full Court held that:
This court cannot pursuant to its general inherent powers extend the period for complying with an order for the payment of a sum of money when that order is followed by an order for the sale of the property and its division between the parties upon default within a stated period of time.
The 28 April 2009 orders however do not make any provision for the sale of property if payment is not made, indeed they rather curiously suggest that the matter should be relisted if that eventuates.
I cannot be comfortably satisfied at this time that the husband has no reasonable prospects of succeeding with his application in some form or another, and the wife’s application for summary dismissal must be dismissed.
It is of course far too early to know whether the husband’s application will ultimately succeed in whole or in part. There are many hurdles for him to overcome, not the least of which is that the court has a discretion as to whether to grant relief under s.79A or to vary a machinery order, and at a hearing of his application the issue of his past compliance with the orders and the risk and detriment to the wife inherent in acceding to his proposals will have be weighed in the balance.
I intend to list the husband’s application on 2 May 2012 at 9.30am for the purposes of fixing a date for the hearing.
I certify that the preceding eighty one (81) paragraphs are a true copy of the reasons for judgment of Terry FM
Date: 30 April 2012
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