Tadderdown and Tadderdown (No 3)

[2010] FamCA 580

FAMILY COURT OF AUSTRALIA

TADDERDOWN & TADDERDOWN (NO. 3) [2010] FamCA 580

FAMILY LAW – PROPERTY – Enforcement

Child Support (Registration and Collection) Act 1988 (Cth)
Family Law Act 1975 (Cth)

APPLICANT: Ms Tadderdown

RESPONDENT: Mr Tadderdown

FILE NUMBER: MLC 6719 of 2008

DATE DELIVERED: 21 June 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 21 June 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr S. Fookes

SOLICITOR FOR THE APPLICANT: McKean & Park

THE RESPONDENT: No appearance

Orders

1. That the wife has leave to proceed on an undefended basis in the absence of the husband. 

2. That there be orders in accordance with the minutes of proposed orders marked Exhibit “A” sealed and attached hereto AND IT IS DIRECTED that such minutes remain upon the Court file.

3. That the solicitor for the wife engross the minutes and deliver them by electronic transmission to my Associate within 7 days.

IT IS DIRECTED

1. That all proceedings be otherwise dismissed and removed from the list of cases awaiting a hearing. 

IT IS CERTIFIED

1. That pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel and solicitors appearing as counsel.

IT IS NOTED that publication of this judgment under the pseudonym Tadderdown & Tadderdown is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6719 of 2008

MS TADDERDOWN

Applicant

And

MR TADDERDOWN

Respondent

REASONS FOR JUDGMENT

1. This is an application filed by the wife on 17 June 2010.  It is an amended application.  The matter was before me on 2 June at which time the husband did not appear.  Being satisfied, on that occasion, as to his awareness of the proceedings, I struck out his application and adjourned the proceedings to today, requiring the wife to serve notice on him that the proceedings were listed for final hearing and that, in the event he failed to appear, she had leave to proceed on an undefended basis.  The husband this morning has been called.  He has not appeared.  I am satisfied, on the material that he has been served with the application and is aware of the existence of the proceedings.

2. By way of background, the parties lived together from 1987 until their separation in 2008.  They married in 1993, and there are two children:  an older daughter who is 15, and a younger daughter who is seven.  Both of those children are in school.

3. The application today relates to the enforcement of a financial agreement and a child support agreement. It is difficult to see how I can deal with the child support agreement, having regard to the provisions of s 113A of the Child Support (Registration and Collection) Act 1988, having regard to the fact that the Registrar has not been given notice, albeit that the child support agreement has been registered as is required under the rules.  It probably matters little because of the nature of the other orders that I propose to make.

4. The financial agreement, as with the child support agreement, was executed on 7 November 2008.  Having executed the financial agreement, the proceedings under Part VIII of the Family Law Act 1975 (Cth) (“the Act”) came to an end, because all of the financial obligations as between the parties were encompassed in that agreement. Section 71 of the Act excludes the jurisdiction of the court otherwise than in respect of enforcement proceedings. This is one of those enforcement applications.

5. The obligations under the financial agreement are a little complicated but, in essence, what I have before me today is a request by the wife to enforce obligations such as the payment of outgoings, and alterations and repairs to a property, lump sum moneys due to her together with interest, and an agreement that the husband pay her legal costs. 

6. I am satisfied on all of the evidence I have read and what I have heard from Mr Fookes, of counsel, this morning that the outstanding sum due by the husband to the wife amounts to $105,849.  Interest is still accruing.  The husband is clearly aware of these proceedings because, subsequent to the orders that I made on 2 June, he emailed to the solicitor for the wife an offensive text message;  and I am told that the wife received similar messages herself.

7. There could be no misapprehension about the application.  It unashamedly seeks to sell up a series of properties.  Although the application sought to sell up all of the properties in which the husband had some interest or control, the wife’s application today is only in respect of three properties.

8. The first of the three properties is owned by a company, P Proprietary Limited, which I am told acts as a trustee for the P Trust. 

9. It is clear from the affidavit material that L Proprietary Limited holds the shares.  L Pty Ltd is a company registered in 2003 in which the husband is not only the director and secretary, but he also holds all of the shares.  

10. The trust deed has not been presented to me but the wife’s understanding is that it is used for income distribution and tax minimisation purposes.  According to her evidence, no one else has any interest in the trust, other than the immediate family members. 

11. The K Street property, which is registered to P Proprietary Limited, is valued at about a million dollars, but is encumbered to the extent of $550,000.  There is, therefore, some equity in that property.  However, it is clearly not a property owned by the husband.  It is owned by P Proprietary Limited in a trustee capacity and, as such, the ramifications for its sale may not only be difficult to carry out, but also there may be significant taxation consequences.

12. To ensure that the agreement is enforced, the wife also seeks the sale of two other real properties.  The first is at M Street;  and the second at E Street.  The total equity in those properties is said to be about $400,000.  They are both registered to the husband as sole proprietor, and both are unencumbered.

13. The P Proprietary Limited property in K Street is leased to a restaurant.  Its sale may, in itself, be difficult having regard to the fact that the lease may contain restrictions.  All of those problems will, no doubt, have to be faced and it is sensible, therefore, that I grant the wife liberty to apply for further enforcement mechanisms as they may arise.

14. In addition to the $105,849 that is outstanding, Mr Fookes says that there is approximately a further $30,000 in costs up until when the proceedings were instituted, and a further $4140 to today for counsel’s fees, and a further $5000 for his attendance and also the preparation.  It seems to me, looking at the amount of work that has gone into the enforcement, that those fees are probably quite reasonable.

15. Having said that, s 117 of the Act still governs the question of costs. It requires that each party bear their own costs, unless there are circumstances justifying a court departing from that principle. If a court decides that there are justifying circumstances, it must look at s 117(2A). In this case there is clearly not only a financial agreement, but I have read the extensive correspondence that followed it in which the parties were unable to reach agreement about how the payments due under the agreement would be carried out.

16. The husband, in fact, also brought some proceedings himself and, therefore, one can presume that he was acknowledging that there were problems under the agreement from his perspective. What is noticeable in respect of both his application and the response of the wife is that no one has suggested that the financial agreement was not validly executed. To that extent, I am asked to make a declaration that the agreement be declared a valid agreement under the Act, and I am prepared to do so. Because of that, it seems to me that the husband, not having attended today, the court is justified in concluding that he has not assisted in the resolution of the matter and, to that extent, a departure from s 117 is appropriate.

17. Taking into account the matters in s 117(2A) is relatively simple. The properties seem to be extensive, and there is nothing in the material I have read to suggest that the husband is in any difficult financial circumstance. I do note that the wife is the recipient of taxpayer benefits as a pension recipient and, as such, I am entitled to conclude that her financial circumstances are not as good as those of the husband.

18. Importantly, I am obliged to take into account the conduct of the parties in relation to the proceedings and in this case the husband’s lack of assistance, not to mention his failure to comply with his obligations, justifies me finding that the proceedings have been brought about by his lack of co-operation.

19. In any proceedings costs are designed to compensate the party who has to participate in them, rather than to punish another person.  I see no reason why the wife should not have her costs in this case because otherwise she will end up being further out of pocket.  In the circumstances, the enforcement proceedings require that I make orders in relation to the interests of the husband and, as such, it will be a difficult exercise, I suspect, for the wife to work out what interest he has in the trust.

20. I am not making a finding that the husband owns K Street.  I am simply indicating that the evidence before me suggests that he may have an interest in the trust and, insofar as the wife can take on the power of appointment in the trust deed, it may resettle the trust and that is a problem she will have to face;  and also what will follow from that is that there will be requirements for distributions through the trust which, in themselves, may create tax consequences. 

21. The parties set up these financial arrangements so there is little I can do about that.  In the circumstances, the wife is entitled to her orders.  

I certify that the preceding twenty one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  8 July 2010