Shaw & Shaw
[2022] FedCFamC2F 215
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Shaw & Shaw [2022] FedCFamC2F 215
File number(s): ADC 4867 of 2012 Judgment of: JUDGE BROWN Date of judgment: 2 March 2022 Catchwords: FAMILY LAW – property proceedings – long marriage – where proceedings have been on foot for almost a decade – final judgment in relation to property delivered in 2018 – where husband has not complied with final orders – enforcement proceedings – where the wife is seeking the sum of approximately $30,000.00 to be paid as part of her settlement sum. Legislation: Family Law Act 1975 (Cth) ss 75(2), 105, 117.
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) Sch 1, r 4.01.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Chs 11, 12, Div 11.1.3, rr 11.01, 11.04, 11.05, 11.06, 11.07, 11.15, 11.16, 11.18, 11.20.
Division: Division 2 Family Law Number of paragraphs: 90 Date of hearing: 9 December 2021 Place: Adelaide Counsel for the Applicant: Ms O’Connor SC Solicitor for the Applicant: SE Lawyers Counsel for the Applicant: The Respondent appearing in person ORDERS
ADC 4867 of 2012 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR SHAW
Applicant
AND: MS SHAW
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
2 MARCH 2022
UPON NOTING THAT:
A.The respondent, Mr Shaw (hereinafter referred to as “the respondent husband”) has not complied with order (2) of the orders of Judge Heffernan dated 19 December 2018; and
B.There is an unsatisfied judgment debt of the respondent in an amount of thirty three thousand, four hundred and thirteen dollars and forty cents ($33,413.40) from this court (“the judgment debt”).
THE COURT ORDERS THAT:
1.Within thirty (30) days of the date of these orders, the respondent pay to the Trust Account of SE Lawyers the abovementioned judgment debt.
2.Within thirty (30) days of the date of these orders, the applicant wife, Ms Shaw (hereinafter referred to as “the applicant wife”) file an affidavit pursuant to the provisions of rule 11.15(2) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (hereinafter referred to as “the Rules”) in which she provide title details in respect of any real property owned by the respondent husband, together with evidence of any other encumbrances affecting such properties, and how the respondent husband and any other person with an interest in the relevant properties hold such interest, and how they are described.
3.If the respondent fails to comply with order (1) hereof, an enforcement warrant be issued and an enforcement officer be appointed pursuant to Division 11.1.3 of the Rules, to seize and sell any personal or real property in the respondent husband’s name to satisfy the judgment debt.
4.The respondent husband pay the applicant wife’s costs fixed in the sum of two thousand dollars ($2,000.00) within sixty (60) days of the date of these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Shaw & Shaw has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
These reasons for judgment relate to an enforcement application, arising from a final property order, which was made on 19 December 2018 by Judge Heffernan, formerly of this court, following a two day trial. It is a money order pursuant to which the husband, Mr Shaw (hereinafter referred to as “the husband” or “Mr Shaw”) was required to pay the sum of $179,348.00 to the wife Ms Shaw (hereinafter referred to as “the wife” or “Ms Shaw”) within 60 days of the date of the orders concerned.
It is common ground between the parties that this amount has not been paid in full and a balance of $33,413.40 remains outstanding. In these circumstances, the wife seeks that the court take whatever steps are necessary to enforce its earlier order, including, if necessary, selling the husband’s interests, however described, in any property presently owned by him.
The husband, who is appearing on his own behalf, resists this application, contending that it would be fundamentally unfair to him, and more particularly to his son Mr B (hereinafter referred to as “Mr B”), who is not a party to the current proceedings, if the orders sought by the wife are made.
The husband is an aged pensioner, who lives in rented accommodation. The parties’ former matrimonial home, located at C Street, Suburb D (hereinafter referred to as “the C Street Property”), which was jointly owned and was transferred to him as part of the December 2018 orders, has been sold to satisfy the money order made in the wife’s favour, leaving the shortfall referred to above.
Essentially it is Mr Shaw’s position that he is destitute, and it would inequitable to him, if any further action was taken of an enforcement nature. In addition, he contends that any attempt to realise his interests in properties owned by him, with Mr B, would be unfair to Mr B, particularly given he (Mr B) is not a party to the current enforcement proceedings and he requires the properties to operate the business from which he derives his income.
It has been Mr Shaw’s position (and that of Mr B) in an earlier round of proceedings that he (the husband), although apparently holding legal interests in the properties concerned, has made no actual contributions towards them and the court should make an order declaring that Mr B is their owner.
As will become apparent in due course, this is not a new issue and has been litigated in protracted proceedings, which have occupied the better part of a decade. It also cannot be said that Mr B is unaware of the proceedings, given that he was a party in earlier rounds of proceedings, including an appeal to the Full Court.
As previously indicated there has been a previous trial of the issues between the parties and indeed Mr B. This trial occurred before Judge Simpson, formerly of this court, in July of 2014 and March of 2015, with judgement being delivered on 27 July 2015.
Mr B had been joined as a party to the proceedings in November of 2013. Ultimately he sought a number of property orders to be made in his favour. He was unsuccessful before Judge Simpson, and subsequently appealed the orders of Judge Simpson, as indeed did the husband to the Full Court.
Judge Heffernan summarised the previous involvement of Mr B in the first trial and appeal as follows:
The applicant’s son, [Mr B], was unsuccessful in obtaining orders at trial and his application was dismissed in its entirety. He had sought orders that the parties transfer ownership to him of the properties at [F Street], in [Suburb E]. He had also sought an order that the parties pay him an amount of $55,373.17. He filed a cross-appeal which was also dismissed.
The husband pursued six grounds of appeal, one of which was successful, which related to Judge Simpson’s assessment of contributions. This resulted in the case being remitted back to what was then the Federal Circuit Court for re-hearing.
BACKGROUND
The husband commenced the relevant proceedings on 19 December 2012. Since that date, there have been two final hearings before two different judges of this court and an appeal to the Full Court. In each of these proceedings, the factual and related legal issues were essentially the same. These issues can be summarised as follows:
·What items of property should be contained in the relevant pool of matrimonial property to be subject to the court’s order;
·What contributions had been made by the parties concerned (including those of Mr B) to the acquisition and preservation of those various items of property; and
·What orders should be made altering the parties’ respective proprietary interests in that property, in percentage terms, particularly taking into account the parties’ prospective needs.
The case turns on three separate pieces of real property. The husband and wife’s former family home, the C Street Property and two adjoining industrial properties, located at 1 and 2 F Street, Suburb E (hereinafter referred to as “1 F Street” and “2 F Street” respectively, and collectively as “the F Street Properties”), which are said to be jointly owned by the husband and Mr B.
The controversy at each of the trials, and on appeal, concerned Mr B’s interest in the F Street Properties, and its consequences so far as the wife’s claim for settlement of property were concerned. At various times, during the parties’ marriage, the husband and Mr B operated a construction business from the F Street Properties.
The trial leading to the relevant orders sought to be enforced occurred before Judge Heffernan in June of 2017, with judgment being delivered some eighteen months later on 19 December 2018. The salient features of this judgment and related findings can be summarised as follows:
·The husband was born in H Town in 1944;
·The wife was born in Country G in 1975;
·The husband becomes bankrupt, on his own petition in 1996;
·The parties met in 1998 and married in 2002;
·The finally separated in 2012;
·The parties are the parents of one child, X (“X”) born 2007;
·In September of 2013 final orders were made in respect of parenting arrangements for X, which saw the child living predominantly with her mother but spending five nights per fortnight, during school terms, with her father, as well as half of each school holiday;
·Mr B purchased 1 F Street in 1999 (prior to the relationship) for $32,000.00, but the source of the funds was a lottery win of the husband;
·Judge Heffernan found that the win occurred during the currency of the husband’s bankruptcy and the monies were advanced to Mr B to defeat the claims of his creditors;
·At some time in 2005/06 the husband and Mr B purchased 2 F Street for $90,750.00;
·Both 1 and 2 F Street were subject to a mortgage in an amount of $200,000.00 with both the husband and Mr B being registered as the mortgagors;
·During the marriage, the husband worked with Mr B in the latter’s construction business conducted from 1 F Street;
·In June of 2009, Mr B sold the husband his interest in 1 F Street for $150,000.00;
·In 2010/2011 the parties purchased the former family home, the C Street Property with finance from J Lender. A deposit of $80,000.00 was provided;
·This deposit of $80,000.00 was provided as to $40,000.00 by the husband and $40,000.00 by Mr B but in recognition of the husband’s work in the business;
·At the commencement of the marriage, the wife had no financial backing; and
·At the commencement of the marriage, the husband had savings of $34,000.00 and his interest in 1 F Street.
The parties’ respective positions at the trial before Judge Heffernan
The parties were both represented by experienced counsel at the trial – the wife by senior counsel. The parties were largely in agreement in respect of their level of asset backing, and what was the value of those assets. In this context, Judge Heffernan was able to rely on the respective case outlines that counsel for each party had prepared in anticipation of the trial.
Both parties agreed that the C Street Property was worth $340,000.00 and was subject to a mortgage of $192,234.00. Significantly, there was no controversy that the husband held a half share in both 1 and 2 F Street and there was a consensus that these interests were valued at $167,500.00 and $75,000.00 respectively.
The parties disagreed about whether a number of chattels should be included in the pool and what was the value of those items. These were not significant disputes and Judge Heffernan noted that for some of the items in dispute the evidence of value was unsatisfactory. In net terms the husband calculated the pool to be $380,196.00; whilst the wife put it at $407,766.00.
The one exception to the broadly similar approaches the parties took to the construction of the asset pool concerned the value of the businesses operated by the husband and Mr B at the F Street Properties. No formal valuations had been obtained of either business – the wife asserting that that this was because the husband had not made proper disclosure in respect of these businesses; the husband asserting that they were not his to value as they belonged to Mr B.
Judge Heffernan took a more conservative approach to the asset pool on the basis of his concerns about the uncertainty surrounding chattels, including the wife’s jewellery and an entertainment unit. He also included a number of consumer credit card debts as joint liabilities in reaching his conclusion that the parties’ net asset pool came to a sum of $358,696.00.
Judge Heffernan declined to attribute a value to either business, noting the husband’s age, and his view of the evidence being that it was unlikely that the husband had any ongoing interest in the construction business in particular. Issues relating to the parties prior involvement in each business was considered within the context of Judge Heffernan’s assessment of the parties’ respective financial contributions during their marriage.
The husband sought a division, in percentage terms, of the asset pool in favour of 67.5/32.5%. The rationale for this was his superior initial financial contribution and what he asserted were the contributions of Mr B to the parties’ assets, which he asserted should be attributable to him. He also asserted that his age and his lack of capacity to return to the workforce were factors which favoured him in any assessment of section 75(2) factors.
In practical terms, Mr Shaw proposed that he retain the C Street Property and pay the wife the sum of $116,563.00 and otherwise each party retain the property in his or her respective control. In default of payment of this sum, he proposed the sale of the C Street Property with the wife to receive the settlement sum and he to retain the balance.
The wife initially approached the case on the basis that the pool should be divided 60/40% in her favour. In support of her position, she pointed to the fact that she had primary responsibility for providing care for the parties’ young child in circumstances in which she received only nominal child support. Judge Heffernan was critical that her proposal provided no machinery as to how this outcome was to be achieved.
This led to the wife’s counsel providing a written submission that her client should receive a sum calculated to be 50% of the value of the C Street Property namely $179,000.00 and failing payment the property be sold to secure this sum. Ironically, it seems to me, the parties, at least in mechanical terms, approached the case in similar ways, namely the court should calculate a sum to be paid to the wife, in respect of which the husband was to be granted some time to raise the required sum but, if he failed to pay it, the former family home was to be sold.
Inevitably and understandably, the parties themselves had very disparate views as to the quantum of this sum. In evidentiary terms, these disputes rested on the wife’s view that the husband had significant undisclosed financial interests in the businesses ostensibly said to be operated by Mr B and the interests the husband had disclosed in respect of the two F Street properties was both artificial and disingenuous.
Accordingly, underpinning the wife’s position was her contention that the pool of property was likely much greater than she could establish, and therefore any superiority in contributions attributable to the husband, at the commencement of the marriage was more than offset by the current asset pool, which had been minimised, in effect, by the husband’s machinations, in cahoots with Mr B to defeat her claim.
The parties were in sharp disagreement about other aspects of contribution, with each asserting that they had been the principal homemaker and parent. Other controversies existed about the extent to which Mr Shaw had worked with Mr B and how his income had been spent.
What is particularly noteworthy in respect of how Judge Heffernan summarised the evidence in the case is that neither party provided any evidence or proposal as to how the sum each asserted was to be the appropriate sum to be paid to the wife was to be raised other than the C Street Property was to be sold. The parties agreed that the equity in the property was somewhere in the vicinity of $147,766.00 at relevant times.
The husband was in his early 70’s at the date of trial and not in the paid workforce. As far as I can ascertain, no evidence was provided as to the willingness of his then financier to extend the mortgage or whether Mr Shaw had access to other funds. This conundrum was obviously far more pronounced in respect of the wife’s preferred outcome.
Judge Heffernan alluded to this dilemma in the following terms:
The manner in which these proceedings have been conducted leaves open the prospect of orders in favour of the wife which cannot be satisfied from the proceeds of the former matrimonial home and which may result in further proceedings. One of the final orders now promoted by the wife is that within 60 days of the wife transferring her interest in the former matrimonial home to the husband, he contemporaneously discharge the mortgage over it with [J Lender]. There is no evidence as to the husband’s borrowing capacity. There is no evidence that he has savings or income that would enable him to comply with such an order. On the evidence before me, if the husband were to comply with such an order it would be necessary for him to either borrow against or in some way realise his interest in one or both of the [F Street] properties. It is likely to be necessary to make an order that the former matrimonial home be sold.
In assessing the parties’ respective contributions, Judge Heffernan found that the husband’s financial contributions during the parties’ 11 year relationship were superior to those of the wife. He also found that Mr Shaw had performed a significant homemaking and parenting role, although less than the wife, who was to be characterised as the principal carer and homemaker. In these circumstances, Judge Heffernan fixed contributions as favouring Mr Shaw 60/40%.
Judge Heffernan approached issues relating to factors relating to section 75(2) in a global manner. He noted the husband’s age and limited employment capacity. He also noted the fact that the wife spoke English as a second language and would have the ongoing obligation of having to provide the predominant care of X.
As a consequence of his composite consideration of these factors, Judge Heffernan determined to make a further 10% adjustment in the wife’s favour, leading to him reaching the conclusion that she should receive a cash sum of $179,348.00 being half of the value of the relevant pool of property, as he had calculated it, which included the agreed value of the C Street Property and the husband’s conceded interests in 1 and 2 F Street.
Essentially, Judge Heffernan adopted the approach advocated by each of the parties, but favoured the percentage assessment adopted by the wife. The problem arising being that neither of the parties had advanced any proposal as to how their respective proposals should be effected in regards to the properties jointly owned by the husband and Mr B, (although both the husband conceded and the wife accepted that the husband had significant proprietary interests in each of these properties) and Mr B himself had neither been joined to the proceedings nor been given any formal notice of the possibility of orders being made in respect of the properties, in which he undoubtedly held a registered proprietary interest.
In his reasons for judgment, Judge Heffernan alluded to this difficulty. He wrote as follows:
I am satisfied that it is just and equitable to make orders altering the property interests of the parties on the basis of a 50/50 division. Further to my earlier remarks about the failure of the respondent to join the husband’s son to these proceedings because of the implications of the joint ownership of the [F Street] properties, the above distribution of assets may well require the husband to borrow against or realise his interest in those properties. That will be a matter for the husband, and depending on what arrangements he makes, his son to determine.
The formal orders made by Judge Heffernan can be summarised as follows:
·Within 60 days, the wife transfer her interest in the C Street Property to the husband;
·Contemporaneously with the transfer, the husband pay her the settlement sum of $179,348.00, and discharge the jointly held mortgage;
·Contemporaneously with the transfer, the wife withdraw caveats lodged by her on the titles of 1 and 2 F Street;
·In default of the payment of the settlement sum for one month, the C Street Property be sold and after payment of the mortgage, the wife receive the settlement sum with any balance to go to the husband;
·In the event that there were insufficient funds to pay the settlement sum from the sale of the C Street Property, the husband pay the shortfall to the wife’s solicitors within 60 days (no indication is provided as to the calculation of when this period concludes);
·Liberty to apply in respect of consequential orders.
It is not my function to look behind the equity and probity of these orders, or for me to conduct some form of rehearing or reassessment of the evidence led before Judge Heffernan, or the conclusions which he reached regarding the pool of property or how he assessed the parties’ respective contributions in percentage terms.
There has been no appeal lodged by either party in respect of the December 2018 orders. As a consequence His Honour’s orders stand. Courts have an obligation to enforce the orders which they make. There are important public policy considerations behind these obligations.
It is in the interests of the public, who utilise courts such as this one, to resolve irreconcilable disputes arising between them, regarding financial arrangements following marital breakdown, according to the law, pursuant to the provisions of the Family Law Act 1975 (Cth) (hereinafter referred to as “the Act”). The resulting court determination must be meaningful, in the sense that the results of the court’s deliberation have the consequences, which the court intends and which each of the parties concerned understand that they mean.
Otherwise, the court’s processes fall into disrepute. This undermines the public’s confidence in the rule of law, which is fundamental to how civil life functions in Australia. If the court makes an adjudication, it is incumbent that the intention of such an adjudication be carried out, and not be subject to some sort of informal revision, at the instigation of one of the parties to it only.
In this matter, it was the court’s intention that Ms Shaw should receive a cash sum calculated to be one half of the value of the court’s calculation of the parties’ net marital assets. The calculation of those assets cannot be categorised as being arbitrary in nature, as it was based largely on what each of the parties said those assets were, including those jointly owned by the husband and Mr B.
In addition, the husband always acknowledged that he should pay the wife a sum of money to be calculated by reference to those assets, including those which he accepted were jointly owned by him and Mr B.
The husband did not pay any of the sum awarded to the wife. In these circumstances, she filed an Application in a Case in February of 2020 seeking the sale of the C Street Property, as Judge Heffernan’s order envisaged. This application was granted by Judge Heffernan and the property was sold in 2020 for the sum of $345,000.00, leaving a shortfall due to the wife of $33,413.00.
By necessary implication, Mr Shaw is disinclined to discuss with Mr B any mechanisms by which the sum due to the wife can be paid. In these circumstances, the wife makes application to the court to enforce its order.
THE CURRENT PROCEEDINGS
Ms Shaw filed her application for enforcement on 25 November 2021. She sought orders to the following effect:
•Pursuant to the final property Order dated 19 December 2018 as amended on 5 April 2019, the Applicant seeks that the Respondent pay to the Trust Account of SE Lawyers within 30 days the sum of $33,413.40.
•That within 30 days the Respondent pay to the Trust Account of SE Lawyers costs of and incidental to this application.
•Such further or other Order as this Honourable Court deems fit.
Significantly, in this application the wife does not provide any specific details as to how this obligation, resting with the husband, is to be discharged by him. She has provided no mechanics as to how the sum is to be realised.
The husband vigorously contests the application. Despite the unchallenged findings of Judge Heffernan, and his own concessions at the trial made in the submissions of his counsel, the husband deposes that he has no interest in either of the F Street Properties, and has never undertaken paid work for Mr B’s business. He asserts that he has no assets or savings and his only income is the aged pension.
The husband’s affidavit is a lengthy document, which contains an inchoate complaint that he has been the subject of a grave miscarriage of justice. As previously indicated, I have no authority to conduct a rehearing of the evidence arising in the case in the context of what is to be characterised as an ‘enforcement hearing’.
In summary, the husband asserts that he has no means by which to satisfy the shortfall owing to Ms Shaw. This submission ignores the fact that throughout the earlier proceedings he acknowledged that he had some form of interest in the two properties at F Street with Mr B.
I have not been provided with title searches in respect of either property. Accordingly, I have no formal evidence as to whether Mr Shaw and Mr B are registered as joint tenants, or tenants in common and, if the latter, in what proportions. In this context, in her affidavit filed in support of her application, the wife deposes as follows:
The Respondent and his son [Mr B] are the joint registered proprietors of two commercial properties located at [1 and 2 F Street, Suburb E] (hereinafter referred to as the "[F Street] properties"). I lodged Caveats over the [F Street] properties during the course of these proceedings to protect my legal entitlement.
She further deposed that she continued to safeguard her interest in the F Street Properties by the caveats that had been filed on her behalf prior to the delivery of the judgments of both Judge Simpson and Judge Heffernan. In this context, she indicated that she had been put to significant cost, in respect of a relatively limited asset pool and had been denied her entitlements for a period approaching a decade. She further noted that at the conclusion of the trial proceedings, Mr Shaw had been disbelieved as to the degree of involvement in Mr B’s business, and that his interest in the F Street Properties was anything other than a significant one.
In this context, Ms Shaw deposed as follows:
I say that the Respondent has the capacity to pay the outstanding balance of the Judgment debt through both his 50% interest in the two [F Street] properties and his undeclared income. The Respondent has made no effort to realize his interest in either of the properties or to provide me with any offer to pay me from his income.
Significantly, in my view, Mr Shaw has not specifically refuted the assertion that he is a legal proprietor of the F Street Properties. However, the tenor of Mr Shaw’s evidence, is that the reason he was registered on the Certificate of Title was to assist the wife and him to qualify for a loan. In my view, this is not consistent with his concession that his interest in the two properties were to be included in the parties’ pool of assets in the trial before Judge Heffernan.
In this context, although Mr Shaw asserts that he has no interest in the F Street Properties, as his name appears on the relevant Certificates of Title only because he and the wife needed this to obtain security for their loan, and he agreed to utilise his interest in the C Street Property as some form of cross collateral.
Again, I am not at liberty to make findings in respect of this issue or otherwise look behind the judgment of Judge Heffernan, in the absence of any appeal. It would seem to me that the court has an obligation to both finalise the proceedings and enforce its judgments in an equitable manner.
THE LEGAL PRINCIPLES APPLICABLE
Courts have a fundamental obligation, when called upon, to enforce the orders which they make. Otherwise, the orders in question become meaningless as lacking in force, and the relevant court runs the risk of losing the confidence of the community in which it serves.
It is clear that the court has a discretion as to whether or not orders should be enforced. This follows from section 105 of the Act, which reads as follows:
Subject to this part, to the Regulations and the applicable Rules of Court, all decrees made under this Act may be enforced by any court having jurisdiction under this Act.
In particular, the court may refuse enforcement if, in the circumstances prevailing at the time of the application, it would be inequitable to do so.
Pursuant to the relevant regulations, the court is provided with a complex arsenal of measures directed towards the enforcement of its orders, particularly those orders which are entitled ‘financial orders’ and the obligations related to them. Chiefly, they are contained in Chapter 11 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”).
Rule 11.01(1) of the Rules defines what obligations may be enforced. They are as follows:
•An obligation to pay money;
•An obligation to sign a document;
•An order entitling a person to the possession of real property;
•An order entitling a person to the transfer or delivery of personal property.
Pursuant to rule 11.01(2), an obligation to pay money includes a provision requiring a payer to pay money under the Act. Clearly, the orders of Judge Heffernan made in December 2018 require Mr Shaw to pay Ms Shaw a sum of money. Pursuant to rule 11.04(a), Ms Shaw has an entitlement to enforce that obligation.
Rule 11.05 details the means by which an obligation to pay money may be enforced. They are as follows:
•An order for seizure and sale of real and personal property;
•An order for attachment of earnings and debts;
•An order for sequestration;
•An order appointing a receiver.
Rule 11.07 provides the court with a raft of general enforcement powers, which include, among other things, the following:
•Declaring the total amount due;
•Stating whether such payment is to be paid in full or by instalments and when the amount is to be paid;
•Requiring a party to provide further information;
•Requiring a person to attend court for the purposes of being examined on oath – an enforcement hearing.
Significantly, in the current matter, provisions contained in Division 11.1.3 of the Rules enable the court to issue what is known as an enforcement warrant. This in turn will lead to the appointment of a person known as an enforcement officer. Such a person, pursuant to rule 11.18, is authorised to seize and sell property. It would appear to be Ms Shaw’s position that an enforcement officer be appointed in respect of the husband’s estate in order to recoup the sum of $33,413.40 to which she is entitled.
Rule 11.15 does not require the person entitled to pay a sum of money pursuant to court order to give notice to the relevant payer that an application is to be made for an enforcement order. However, pursuant to the provisions of rule 11.06, an affidavit must be filed in support of an application for an enforcement order. I accept that Ms Shaw has filed such an affidavit.
However, specific obligations attach to affidavits germane to requests for the issue of an enforcement warrant. Pursuant to the provisions of rule 11.15, in order to comply with the provisions of rule 11.06, the relevant affidavit must contain the following:
·Details and evidence that the payer is the registered owner of the real property concerned;
·Details of any registered encumbrances on the property and of any other person who has an interest in the property, including as a part owner; and
·The location of the property.
In my view, it is significant that the court has not been provided with any title details in respect of the F Street Properties. In my view, this is an omission which needs to be rectified.
Other obligations attach to a person who is seeking an enforcement warrant. Pursuant to rule 11.16, such a person is required to provide an undertaking to pay all reasonable fees relating to the enforcement including if there is a shortfall in respect of any amount ultimately recovered, when the fees are calculated.
Rule 11.18 provides a list of the obligations and powers of an enforcement officer. In particular, enforcement officers are directed to proceed expeditiously and to avoid the incurring unnecessary expense. Significantly, they are obliged to minimise hardship, to the payer and any other person affected by the enforcement process.
CONCLUSIONS
I find that Mr Shaw continues to be indebted to Ms Shaw in the sum of $33,413.40, as a consequence of the unchallenged judgment of Judge Heffernan entered on 19 December 2018. I accept that Mr Shaw is not in paid employment and lives in rented accommodation. As such, he has limited, if any, liquid resources.
Ms Shaw has made an inchoate application for enforcement. The only source of property to which such enforcement can attach is the two properties located at 1 and 2 F Street. Although coy about the nature of his interest in these properties, I accept, subject to the production of contrary evidence, that Mr Shaw has a registered and so legal interest in each property.
I also accept that Mr B has an interest in those properties. In a formal sense, I have not been advised at to what is the legal effect of the husband and Mr B’s interests in the two properties. Prior to the issue of an enforcement warrant I will direct that the wife comply with the requirements of the provisions of rule 11.15(2) and provide title details, evidence of any other encumbrances and how the husband and any other person with an interest in the relevant properties hold such interest and how they are described.
As Judge Heffernan observed, now over three years ago, it was open to the husband to enter into an arrangement with Mr B to realise his interest in the two properties concerned in order to discharge his obligation to the wife. He has not done so, and in these circumstances, the wife has two alternatives – either write off the sum to which the court had calculated she was entitled, or seek the court’s assistance in enforcing the obligation due to her.
Ms Shaw is clearly disinclined to adopt the former course. As previously indicated, the court has obligations to both itself, in terms of the integrity of its processes and to members of the public generally, who rely on those processes to secure the redresses to which they are entitled according to law, to do what is equitable to enforce its orders.
In these circumstances, in order to resolve this long standing deadlock arising between the parties, in my view, subject to the provision by Ms Shaw, of the particulars sought from her, it is appropriate for the court to appoint an enforcement officer to place one or other or both of the F Street Properties on the market for sale.
In practical terms, the issue of such an enforcement warrant creates a registerable interest on any title to which it applies. Such a registration may provide a catalyst for Mr Shaw and Mr B to discuss how a sale could be avoided. After all, the enforcement officer’s obligation is to secure the payment of the sum due to the payee concerned, in this case Ms Shaw.
The husband has consistently asserted that any legal interest which he holds in the F Street Properties is not reflective of any true interest which he holds in these properties. This flies in the face of concessions made by the husband himself and earlier findings of the court itself. It is not consistent with the manner in which legal interests are recorded in the in the land titles register maintained by the South Australian government.
In my view, it would be inequitable for the husband to be able to deflect the enforcement proceedings on the basis of Mr B’s interest in the properties concerned and the possible negative consequences arising from them. These are issues which Mr B may pursue at a later stage, if he wishes.
The Rules recognise that the interests of third parties may be affected by enforcement procedures. Pursuant to Rule 11.20, if the sum due under any relevant order is paid, any property seized pursuant to an enforcement warrant is released. Accordingly, in my view, the use of such a mechanism, by a payee such as Ms Shaw, is a legitimate device, particularly in terms of bringing about the required accommodation between Mr B and the husband foreshadowed by Judge Heffernan in the earlier judgment.
The wife seeks the costs of these enforcement proceedings. Section 117(1) of the Act abolishes, for the purpose of family law proceedings, the general rule that, in civil proceedings, costs follow the event. It provides that each party should bear their own costs in such proceedings.
However, pursuant to section 117(2), if the court is of the opinion that there are circumstances that justify it in doing so, it may, subject to a number of stipulated considerations, make such order as to costs as it considers just.
The relevant considerations are set out in section 117(2A) of the Act and are as follows:
•The financial circumstances of each of the parties to the proceedings;
•Whether any party to the proceedings is in receipt of legal aid;
•The conduct of the parties to the proceedings, including in respect of issues of discovery and production of documents;
•Whether the proceedings were necessitated by the failure of a party to comply with previous orders of the court;
•Whether any party to the proceedings has been wholly unsuccessful in the proceedings;
•Whether any party has made an offer in writing to settle the proceedings and the terms of any such offer;
•Such other matters as the court considers relevant.
I am satisfied that the failure of the husband to abide by the court’s previous order justify the making of a costs order in the wife’s favour. The applicable regulatory regime applicable to costs is contained in the Rules, particularly Chapter 12 which deals with them specifically.
If the court determines to make an order for costs, it has a wide discretion as to the calculation of such costs. Pursuant to Rule 12.17 of the rules, it may order costs in a specific amount or to be assessed on a particular basis,
The court may also direct that costs be calculated pursuant to a methodology prescribed in schedules attached to Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth) (hereinafter referred to as “the Division 2 Rules”), particularly rule 4.01, which provides that in applying Chapter 12, the court may apply the events based cost system detailed in Schedule 1.
In brief, the schedules concerned enable the calculation of costs on either a party/party basis or by reference to fixed court events. The procedure in respect of the latter methodology is clearly designed to allow the ready calculation of costs, by either the parties themselves or the court, which have been incurred following the various procedural stages of litigation from filing to finalisation with judgment.
Schedule 1 to the Division 2 Rules, provides a sum of $997.00 together with whatever is the relevant hearing fee as being costs allow on an enforcement application. A short mention attracts costs of $321.00; a half day hearing $1,178.00.
Given the schedule, I will direct that the husband pay the wife’s costs in respect of the enforcement proceedings in an amount of $2,000.00 to be paid with 60 days of the date of these orders.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 2 March 2022
0
0
0