Simiko & Kellidis (No 3)
[2023] FedCFamC2F 14
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Simiko & Kellidis (No 3) [2023] FedCFamC2F 14
File number(s): CAC 1879 of 2019 Judgment of: JUDGE MANSFIELD Date of judgment: 12 January 2023 Catchwords: FAMILY LAW – Property and Child Support proceedings – Enforcement of final orders – Joinder of third party – Source of power other than Chapter 11 of the Rules – Availability of section 80 – appointment of the applicant as trustee for sale of real property Legislation: Family Law Act 1975 -- ss79, 80, 80(k), 80(e), 114(1)(e).
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 -- rule 11.05
Trustee Act 1925 (ACT) – s 14A
Cases cited: Chernischoff & Chernischoff [1980] FLC 90-848
Kaljo & Kaljo (1978) FLC 90-445
Molier & Van Wyk (1980) FLC 90-911
Ravasini & Ravasini (1982) 8 FamLR 903
Division: Division 2 Family Law Number of paragraphs: 41 Date of last submission/s: 13 December 2022 Date of hearing: 13 December 2022 Place: Canberra Solicitor for the Applicant: Mr Bak of Farrar Gesini Dunn Solicitor for the First Respondent: Self-Represented Litigant Solicitor for the Second Respondent: Self-Represented Litigant ORDERS
CAC 1879 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS SIMIKO
Applicant
AND: MR KELLIDIS
First Respondent
MR M
Second Respondent
order made by:
JUDGE MANSFIELD
DATE OF ORDER:
12 JANUARY 2023
THE COURT ORDERS THAT:
1.The property known as D Street, Suburb E in the Australian Capital Territory (the Suburb E Property) is to be sold.
2.The Applicant be appointed trustee for sale of the Suburb E Property.
3.Within 45 days, the First Respondent and the Second Respondent shall yield up vacant possession of the Suburb E Property leaving it in a good, neat and tidy condition, and thereafter shall stay away from the Suburb E property.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MANSFIELD:
BACKGROUND
These are parenting, child support and property proceedings which commenced on 19 September 2019, were heard over three days concluding on 6 May 2022 and in which final orders were made on 28 July 2022.
The final orders with respect to child support and property proceedings took into account that a residential property in Suburb E, ACT (the Suburb E property) owned by the respondent husband and his brother was to be sold. The three children of the marriage attend private school and proceeds of the sale of the property were to be applied to overdue school fees for 2022, an extant costs order against the respondent and to school fees for 2023 and thereafter.
The respondent and his brother have not sold the Suburb E property and continue to live in it. The applicant wife filed an application in proceedings dated 14 October 2022 seeking orders which included that:
(a)The respondent’s brother be joined as the second respondent;
(b)The Suburb E property be vacated within 30 days; and
(c)The applicant be appointed trustee for sale of the Suburb E property.
The applicant has also filed an application in proceedings dated 24 August 2022 seeking orders for her costs of the proceedings. The orders of 12 January 2023 and these reasons deal with the substance of the October 2022 application only in order to get the property sale process underway as soon as possible. Further orders and reasons will follow in due course dealing with the August 2022 application, costs with respect to the October 2022 application and distribution of the proceeds of sale of the property.
THE HEARING
On 17 October 2022 filing directions were made.
In light of the respondent’s brother not having been served, on 25 October 2022 orders were made for service with conditions and the filing directions were revised such that the respondents were to file and serve any material in response by 22 November 2022.
On 15 November 2022, having been satisfied by affidavit of the applicant’s solicitor as to compliance with the conditions for service of the documents on the second respondent, and there being no appearance of the second respondent, an order was made that the respondent’s brother Mr M be joined as the second respondent in these proceedings.
On 12 December 2022 the respondent filed and served an affidavit in response.
On 13 December 2022 the application in proceedings came before me for hearing. The applicant was legally represented. The respondent was self-represented and there was no appearance by the second respondent.
Received into evidence was:
·(On 15 November 2022) The affidavit of Adam Bak dated 14 November 2022 (unmarked);
·Affidavit of Ms Simiko dated 14 October 2022 (‘Exhibit 1’);
·Wife’s tender bundle (5 pages) (‘Exhibit 2’);
·Affidavit of Mr Kellidis dated 12 December 2022 (‘Exhibit 3’).
Initially this was objected to but the objection was withdrawn during submissions on the objection. Part of the withdrawal of the applicant’s objection was on the understanding that the respondent’s opinion evidence about the value of the Suburb E property is not proof of the value of the Suburb E property and I confirm that it is not.
·Undertaking given by Mr M dated 23 November 2021 (‘Exhibit 4’).
FACTS
On 25 November 2021, the respondent husband and his brother (who has since become the second respondent) agreed to list for sale the property in Suburb E that they own as tenants in common in equal shares. The respondent entered into interim consent orders which included a notation that ‘all reasonable and timely steps are taken to sell the property.’ The second respondent had signed an undertaking on 23 November 2021 which was filed in the proceedings ‘to do all reasonable acts and things to bring about the sale and the settlement of the sale of the property.’
The respondent’s position at final hearing in May 2022 was that the property was still on the market and all reasonable and timely steps were still being taken to sell the property. Excerpts from the final orders made on 28 July 2022 are as follows.
In the Child Support proceedings:
IT IS NOTED THAT:
A.Orders 2-3 of Annexure A of the Orders made 25 November 2021 remain of force and effect; and
B.The following orders are made pursuant to sections 124 and 141 of the Child Support (Assessment) Act 1989 (Cth).
THE COURT FURTHER ORDERS THAT:
…
22.The mother is to pay all of the school fees for the education of the children for the 2022 school year as soon as practicable.
23.The mother is to provide to the father and to the solicitor acting on the sale of the property at [D Street, Suburb E], receipts or proof of payment in compliance with the preceding order.
24.By this order, upon completion of the sale of the property at [D Street, Suburb E], the father is taken to have authorised and directed the solicitor acting on the sale of the property for the vendors to cause a sum equivalent to 50% of the 2022 school fees paid by the mother to be paid from his share of the net sale proceeds (after discharge payment of any secured creditor, costs of sale and usual adjustments on sale) to the solicitors for the mother.
…
26.The father must provide child support for [Z] otherwise than in the form of periodic amounts paid to the mother, namely, by payment to [B School] half of all school fees as and when they fall due for and from the 2023 school year for the education of [Z].
27.The father must provide child support for [X] otherwise than in the form of periodic amounts paid to the mother, namely, by payment to [F School] half of all school fees as and when they fall due for and from the 2023 school year for the education of [X].
28.The father must provide child support for [Y] otherwise than in the form of periodic amounts paid to the mother, namely, by payment to [F School] half of all school fees as and when they fall due for and from the 2023 school year for the education of [Y].
29.The child support provided pursuant to these orders is not to be credited against a liability under any relevant administrative assessment of child support.
30.By way of security for the payment of child support by the father, the father is to pay to the mother, the sum of $150,000 from his share of the proceeds of sale of the property at [D Street, Suburb E], and the mother is to cause such amount to be paid into an interest bearing account in a financial institution of the mother’s choosing, in the name of the mother (“the child support account”).
In the Property proceedings:
36.The husband be, as against the wife, the sole legal and beneficial owner of all of his interest in the property at [D Street, Suburb E] in the Australian Capital Territory [Suburb E];
(a)The parties have liberty to apply, with 7 days’ notice, with respect to the sale of [Suburb E].
Further, at paragraph 197 of the reasons for judgment in the property proceedings:
197 I have also taken into account:
…
(b)The other orders made under the Act in these proceedings affecting the parties and the notations to the Orders made on 25 November 2021;
(c)The child support order made under the Child Support (Assessment) Act 1989 that the father is to provide and is liable to provide in the future for the children of the marriage.
The applicant deposed in Exhibit 1:
5.Order 36(a) of the Final Orders dated 28 July 2022 provided liberty to apply within 7 days' notice with respect to the sale of the [Suburb E] Property. I provided notice on 21 September 2022 by sending a letter to [Mr M] through his solicitors [AN Law Firm] and to [Mr Kellidis] directly. A copy of that letter is annexed and marked "B".
6.To date no response has been received on behalf of either [Mr Kellidis] or [Mr M].
8(b). ….. The girls' education for 2023 is in jeopardy.
11.I understand [F School] is still owed $93,586.85 by [Mr Kellidis].
24.The listing agent is [Ms AO] of [AP Property Services]. My solicitors have asked [Ms AO] to keep them updated as to the status of the sale.
28. On 4 March 2022, my solicitors said to [Ms AO]:
Could you please tell me how much the written offers were for?
29. On 4 March 2022, {Ms AO] said to my solicitors:
High $2,000,000's. Need to get into the $4,000,000's + or high $3,000,000's as the brother [Mr M] wants a high price.
30.The [Suburb E] Property has now been on the market since at least 7 December 2021.
31. The [Suburb E] Property was valued at $2,800,000 on 2 May 2022.
The respondent deposed in Exhibit 3:
8. I am seeking that [Ms Simiko] not be made trustee for the sale of the property known as [D Street, Suburb E]. The above mentioned property is for sale via expressions of interest and I would appreciate it if it were kept for sale until we find a buyer who is prepared to pay a price that myself and my brother [Mr M] would agree on. I fear if [Ms Simiko] were awarded trustee of the above mentioned property, the property will be sold at a price much less expected from myself and my brother, monies would be withheld, and expenses for preparing the house for sale would be at her discretion and therefore more expenses would be accumulated against the property and I would achieve a far less net proceed.
12.The property known as [D Street, Suburb E] is for sale, around twenty parties have come for an inspection since it has been listed, we have had approximately 8 to 9 offers, the highest offer, which fell through, was for $3.8 million. The home is for sale on a 60 to 90 day settlement. The settlement time was agreed by myself my brother and the real estate agent to give us time to vacate my furnishings my brother [Mr M] property and some property still held […].
15. I do not accept the [Suburb E] property valuation of $2.8 million.
On these facts, I comfortably find that:
(a)The respondent has failed to comply with his promise to take all reasonable and timely steps to sell the property.
(b)The second respondent has failed to comply with his undertaking to do all reasonable acts and things to bring about the sale and the settlement of the sale of the property.
(c)The respondent and the second respondent are not likely to comply with their respective promise and undertaking.
(d)Consequently, the applicant (and the children) will be denied that to which she is entitled after relying on the promise and undertaking of the respondents.
(e)The sale of the Suburb E property ought to be taken out of the respondents’ hands to ensure that the final orders are carried into effect.
(f)The substantive rights of the respondents have not been impinged upon.
POWER TO APPOINT A TRUSTEE
The Application of 24 October 2022 does not specify under what legislation or power the order for the appointment of the applicant as trustee is able to be made. Counsel for the applicant submitted that it was an enforcement application pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”), or in the alternative pursuant to the Court’s inherent powers. During submissions, counsel for the applicant recognised that the power under s 80 of the Family Law Act 1975 (“the Act”) would still be available.
The application has all the characteristics of an enforcement application but there are some problems in dealing with it as such under Chapter 11 of the Rules.
There is no extant order providing for the sale of the Suburb E property. Rather, the enforceable obligations are an obligation to pay money under orders made under the Act and the Child Support (Assessment) Act 1989. The types of enforcement orders available under Rule 11.05 and Divisions 11.1.3-6 do not provide for the appointment of a trustee, nor have the procedures under these divisions been followed. Not for the first time is this court left in the position of finding the provisions for enforcement unsatisfactory and I do not proceed pursuant to Chapter 11 of the Rules (see for example Chernischoff & Chernischoff [1980] FLC 90-848).
An Order pursuant to s 79A of the Act, specifically para (c) of sub-s (1) may have been possible but it ostensibly runs into the problem that there is no extant order specifically providing for the sale of the Suburb E property to vary or set aside or substitute.
Section 80 of the Act relevantly provides:
1.The court, in exercising its powers under this Part, may do any or all of the following:
(e) appoint or remove trustees;
(k)make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice.
However, s 80 itself specifies that the powers in s 80 can only be exercised in the course of making orders under Part VIII of the Act. The Full Court in Kaljo & Kaljo (1978) FLC 90-445 provides authority for the proposition that the power to modify the machinery provisions of an order can be brought into play under the liberty to apply though the actual orders would be made under s 80. The case of Molier & Van Wyk (1980) FLC 90-911 is an authority that s 80 may be called in aid when additional orders are required to enforce an order made under s 79 of the Act. Having regard to these authorities and the excerpts from the Final Orders and reasons of 28 July 2022 set out at paragraphs 13-15 above, I am satisfied that orders pursuant to s 80 of the Act are available on this application.
Further, Molier & Van Wyk (1980) FLC 90-911 also provides authority for the proposition that the Court has an implied power to make its orders effective. Also, in Ravasini & Ravasini (1982) 8 FamLR 903 the Full Court said:
The court has the power to enforce the order and to modify the machinery provisions of the order to effect enforcement provided that by doing so it does not affect the substantive rights of the parties. That power can also be used to spell out the effect of the order where that is not clear.
If it were necessary as an alternative, I am satisfied that this court, like the Family Court (as it then was), has an implied power to make its orders effective.
Pursuant to s 80(k) of the Act, Order 1 is that the Suburb E property be sold.
Pursuant to s 80(e) of the Act, Order 2 is made in the terms sought by the applicant.
The wife as trustee
The respondent, understandably, is concerned by the wife being appointed as trustee.
Page 5 of Exhibit 2 is a print out of s 14A of the Trustee Act 1925 (ACT) titled duties of trustee in relation to powers of investment. Counsel for the applicant submitted that the wife would be bound by that Act to exercise the care, diligence and skill that a prudent person would exercise in managing the affairs of the other person.
That is not a matter that requires determination or even consideration for the purposes of this application. The fact is that no other trustee has been proposed by either party and neither party has proposed orders for procedural matters concerning the exercise of the trustee’s powers. It is not for the Court to embark on a roving enquiry otherwise.
It is a matter for the parties to take other steps in this Court in the event procedural orders concerning the exercise of the trustee’s powers are required. Taking into account, as with all proceedings, any costs implications. It is for the respondents or either of them to take steps, in this Court or another court, if they seek a remedy to any alleged breach of duty by the wife as trustee.
POWER TO ORDER TO VACATE
For the same reasons set out above with respect to the order appointing a trustee, the order requiring the respondents to vacate the Suburb E is made pursuant to s 80(k) of the Act.
If it were necessary, I am satisfied that s 114(1)(e) is an alternative source of power to make the order.
Time in which to vacate
The applicant seeks an order that provides the respondents with 30 days to vacate. The respondent in his affidavit states:
14.It would be impossible for me to vacate the premises within 30 days, considering the state of my [health]. I fear that if left the house within 30 days this empty house would attract squatters and then I would be billed for the makegood and removal of them.
The respondent conceded that the present contract for sale of the property provides for a 60 to 90 day settlement period such that if an offer were made and accepted, the respondents know they would be required to yield up vacant possession of the property within that time period.
In no uncertain terms, I indicated to the parties at the hearing of the application on 13 December 2022 that orders requiring the respondents to vacate the property were likely. I also indicated to the parties that if the anticipated orders were to issue that day, that 30 days would be inadequate particularly at that time of year and that 60 to 90 days seemed a more reasonable amount of time. That was 30 days ago.
Balancing the respondent’s concerns with the pressing consequences for the respondent and the children, the order from today is 45 days – being 75 days since the respondents were effectively put on notice.
It is noted that the order appointing the wife as trustee is not likewise delayed and the wife may well be able to take steps towards effecting the sale prior to the respondents’ vacating the property.
For greater clarity and certainty, the requirement to ‘vacate the property’ in the order sought has been substituted with the requirement to ‘yield up vacant possession of the property.’
Pursuant to s 80(k) of the Act, Order 3 is otherwise made in the terms sought by the applicant.
I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansfield. Associate:
Dated: 12 January 2023
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