Tartar and Liquidator, Tartar Pty Ltd

[2010] FamCA 851

FAMILY COURT OF AUSTRALIA

TARTAR & LIQUIDATOR, TARTAR PTY LTD [2010] FamCA 851

FAMILY LAW – ORDERS – Interpretation of orders – Caveats

APPLICANT: Mrs Tartar

RESPONDENT: Mr HS as Liquidator of Tartar Pty Ltd (in liquidation)

FILE NUMBER: NCF 1781 of 2001

DATE DELIVERED: 9 September 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Hon. Justice Cohen

HEARING DATE: 9 September 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Mr Foley,

Foleys Solicitors

COUNSEL FOR THE RESPONDENT: Mr Chee

SOLICITOR FOR THE RESPONDENT: Catalyst Legal

Orders

1. That the Application in a Case of the wife filed 12 August 2010 is hereby dismissed.

2. That leave is granted to the wife to file and serve:

   a)an Application in a Case to extend the 90 day period provided for in order 1. of the Short Minutes of Consent dated 12 April 2010; and,

   b)any affidavit in addition to those filed the wife wishes to rely upon for the said application

   within 14 days.

3. That at the time of filing, the application of the wife for extension of time shall be listed for directions before Justice Cohen no longer than 28 days from today.

4. That Order 5. of the Short Minutes of Consent dated 12 April 2010 is stayed retrospectively until such time as any application by the wife to extend time is dealt with.

5. That costs are reserved pending the outcome of the wife’s extension of time application with leave granted to have the said costs issue:

   a)listed before Justice Cohen; or

   b)reserved to another judge in the event that Justice Cohen is no longer sitting.

6. That the Contravention Application of the wife filed 12 August 2010 is hereby dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  NCF 1781 of 2001

MRS TARTAR

Applicant

And

MR HS AS LIQUIDATOR OF TARTAR PTY LTD (IN LIQUIDATION)

Respondent

REASONS FOR JUDGMENT

1. This is an application by the wife which was filed on 12 August 2010 for a nominated person, pursuant to section 106A of the Family Law Act, to sign a withdrawal of caveats in relation to two blocks of land and to prevent the respondent to the application, who is the liquidator of a company which is related to the wife in that it was a company which the wife’s ex-husband controlled, from taking enforcement proceedings so that the liquidator can sell  one of these properties which the liquidator claims to have an interest in. 

2. On 12 April 2010, consent orders were made by Rose J.  These orders were between the liquidator, the wife and others who have an interest in the property.  Those consent orders provided a method by which the wife could obtain from the liquidator, or from whoever else was claiming title to the property, and were also parties to the orders, clear title to the property.  The orders allowed this by giving the wife 90 days to pay $400,000 to the liquidator.  The payment of the $400,000 was in return for the liquidator accepting it in full satisfaction of all claims for liquidation, costs and proofs of debt, interest on debts by the creditors of the company.  The Court declared that upon payment of the $400,000, the wife would become the sole and beneficial owner of the two properties. 

3. A fourth provision of the minutes is that the liquidator shall remove his caveats over the properties to enable the wife to comply with the first order I referred to; that is, the payment of the $400,000 to the liquidator within 90 days.  Further provisions of the short minutes provided for the event of default in payment of the capital sum. Those orders make the liquidator trustee for sale of one of the two properties and, on sale, after payment of sale costs, payment of the capital sum referred to; that is, the $400,000 plus interest to the liquidator and the balance of the receipts to the wife. 

4. What has happened is that the wife attempted to borrow money.  She discovered that it was not easy to borrow money because of the nature of the land and formed the opinion that the caveats which were on the title were an impediment to the borrowing.  She requested the liquidator to remove the caveats so it would be easy to borrow money on the security of both properties and pay out the $400,000.  When she made this request, the liquidator, on 29 April, forwarded to the wife’s solicitor two withdrawal of caveat forms. 

5. The 90 days within which the money was to be paid expired on 11 July, but nevertheless, the wife did nothing to remove the caveats until after that, although it was not long after that.  When the solicitor for the wife attempted to remove the caveats, he had no difficulty in removing those two caveats but discovered there was another caveat lodged by the liquidator over the properties in circumstances where the liquidator had not forwarded any documents which would allow the caveat to be withdrawn.  On being requested to provide a withdrawal of that caveat, he has failed to do so, and the parties are now before the Court arguing over the construction of the original short minutes of consent orders which were made on 12 April 2010. 

6. Quite some argument has been placed before the Court about how one interprets orders of the Court, it being suggested that one ought to look to the surrounding circumstances to do so.  That submission was made on behalf of the liquidator.  The wife’s submission is that I should take into account the intention of the parties in interpreting what paragraph 4 really means. 

7. I have no doubt that the law is that, in circumstances where there is no dispute about the meaning of the words themselves in orders of the Court, the Court can look at surrounding circumstances to understand the full extent of that meaning.  I do not accept that the law permits the Court to look at the intention of the parties.  The intention of the parties is submerged in the orders themselves.  Therefore, the contractual aspect of consent orders is submerged.  On looking at the surrounding circumstances, one only need to appreciate that the liquidator needed to be protected at all times and would have considered he is protected at all times from any person obtaining an interest in the properties prior to his by the caveats.  If the caveat was lifted at a time when a third party could then obtain an interest, he could easily lose his priority and therefore his security.  His interest in the property would be subservient to the interests of an outsider. 

8. What paragraph 4. and 1. read together really say is that the applicant shall remove his caveats over the above properties to enable the wife to pay the applicant liquidator $400,000 within 90 days.  It seems to me that nothing could be clearer.  The surrounding circumstances that the Court can look at is what happens when the proprietor of land wishes to borrow money in order to pay out a person claiming an interest in that land who has lodged a caveat.  On my understanding, the common practice, and it is very common, is that a settlement date is appointed once the loan has been arranged.  The caveator attends the settlement with a withdrawal of caveat form.  The lender attends the settlement with a bank cheque, and the person who is seeking to borrow the money attends the settlement for the purpose at the same time as receiving the cheque from the lender, handing the cheque to the caveator who provides the withdrawal of caveat to the person seeking its withdrawal.  That, in my understanding, fits in every way with the meaning that I have attributed to paragraph 4. when read with paragraph 1. of the short minutes and therefore makes it clear that there really is no ambiguity. 

9. I reject Mr Foley’s submission that paragraph 4. is to enable what was intended; to have the caveat removed earlier so it would be easier for the wife in her endeavours to borrow money because, for some reason which I cannot understand, he claims that because of the nature of the caveat and the nature of the land, it would otherwise have been difficult for the wife to borrow the money, even though the clear intention of the short minutes would be to give the wife clear title to the land once the wife was in a position to pay for it.  I simply cannot accept that there is ambiguity or that paragraph 4 could apply, as Mr Foley says, to require, as he asks, the caveator to remove the caveat early. 

10. In any event, it is too late. His application for removal of the caveat, pursuant to section 106A of the Act, was filed after the 90 days expired. Once the 90 days expired, on the failure of the payment of the wife to pay the $400,000, the short minutes simply do not permit the Court to force the liquidator to remove the caveats. What Mr Foley, on behalf of the wife, has done, in my view, is make the wrong application. What he should have done is apply to extend the time; that is, the 90 days for compliance. At the heel of the hunt, so to speak, at about 4 o’clock today, after this hearing had been going for some time, he made that application.

11. I was informed by Mr Chee, who appears for the liquidator, that he would need time to obtain instructions to answer such an oral application. In any event, it seems to me that the evidence before me is not sufficient and that Mr Foley would need to file further evidence, to support his oral application to extend time. I am not in a position to hear the matter today, and neither is Mr Chee in a position to defend the application, nor Mr Foley in a position to actually make the application.  In all the circumstances, what I ought do is dismiss the application that Mr Foley did make but grant him leave on behalf of the wife to apply to extend time by filing another application in the case, together with any further affidavits upon which he relies.  I think that two weeks is sufficient.

12. There is a problem that the short minutes of consent order provide that on default, and there has been default, the liquidator is appointed trustee for sale of one of the two properties.  It is my view that that order should be stayed retrospectively until such time as any application by the wife to extend time is dealt with. I shall grant a stay.  Then there is an application for contravention which the wife has brought.  In my view, for the same reasons as I have already referred to, there is no basis for that application.  It cannot succeed and should be dismissed. I shall dismiss it.  These are the orders I shall make.  I shall reserve costs. I am going to reserve the costs pending the outcome of the wife’s further application, and I will grant leave to have the matter listed before me once that application has been determined, and in the event that I am no longer sitting, order that the costs application be reserved to another judge.  I will order the matter be listed on a convenient date after 28 days from today before me for directions.  I will give the wife an extra seven days to file and serve any affidavits upon which she relies.

13. I will not make an order at this stage for the liquidator to file affidavits until the directions hearing.  I will reserve the issue of the filing by the liquidator of any evidence in response to the wife’s application to extend time to the directions hearing.  You can approach my associate to get a date that is convenient to both of you for those directions.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen delivered on 9 September 2010.

Associate:     

Date:              24 September 2010