Wolter and Wolter

[2017] FamCA 542

FAMILY COURT OF AUSTRALIA

WOLTER & WOLTER [2017] FamCA 542

FAMILY LAW – PRACTICE AND PROCEDURE – Enforcement of property orders

APPLICANT: Ms Wolter

RESPONDENT: Mr Wolter

INDEPENDENT CHILDREN’S LAWYER: Legal Aid NSW

FILE NUMBER: SYC 5747 of 2009

DATE DELIVERED: 28 July 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 16 December 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Anderson

SOLICITOR FOR THE APPLICANT: Shipton & Associates

FOR THE RESPONDENT: Mr Wolter in person

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Legal Aid NSW

Orders

1. That by way of enforcement and/or machinery order, the husband and the wife do all acts and things and sign all documents necessary to authorise and instruct the wife’s solicitor to disburse the funds held in the Controlled Monies account number #...76 with St George Bank as follows:

   (a)In the event that an assessment has issued from the Australian Taxation Office for a Capital Gains Tax liability of the husband in relation to any of the properties, in payment of such assessment.

   (b)In the event an assessment has not issued from the Australian Taxation Office for a Capital Gains Tax liability in relation to any of the properties, then in payment to the husband of a sum equal to the estimated Capital Gains Tax liability, such estimate being obtained pursuant to these orders.

   (c)In payment to the husband of 61 per cent of the balance thereafter remaining but taking into account Order (5) of the orders of 21 December 2012, from which shall be first deducted and paid to the wife the following sums:

   (i)The sum of $629.44 in respect of the unpaid balance of the costs order made in favour of the wife on 4 November 2015 plus interest calculated from 11 November 2015.

   (ii)The sum of $13,847.60 in respect of the costs order made in favour of the wife on 6 April 2016 plus interest calculated from 13 April 2016.

   (iii)The sum of $1,764.64 being 39 per cent of the amount paid from the Controlled Monies account to the wife pursuant to a Garnishee Order of the Local Court of NSW dated 26 May 2016.

   (iv)The costs incurred by the wife in obtaining a calculation of the Capital Gains Tax liability.

   (d)In payment to the wife of 39 per cent of the balance thereafter remaining, from which she shall pay to the husband the sum of $189,332.

2. That the wife shall obtain a calculation of the Capital Gains Tax liability, which shall be used as the basis of any payments and adjustments herein.

3. That by way of enforcement and/or machinery order, the husband and the wife do all acts and things and sign all documents necessary to authorise and instruct D Lawyers to disburse the balance of the D Lawyers fund (being the net proceeds of sale of the Suburb E property including payment of the Commonwealth Bank mortgage and associated costs, taking into account that the husband is to meet all storage costs arising from his eviction from the Suburb E property) as follows:

   (a)       To the husband, 61 per cent;

   (b)       To the wife, 39 per cent.

4. That in the event that by the date of these orders the balance of the D Lawyers fund has been transferred to the Controlled Monies account, then the husband and the wife do all acts and things and sign all documents  necessary to authorise and instruct the wife’s solicitor to disburse the funds held in the Controlled Monies account which represent the balance of the D Lawyers fund as follows:

   (a)       To the husband, 61 per cent;

   (b)       To the wife, 39 per cent.

5. THE COURT NOTES that the husband has not obtained and provided to the wife a calculation of the Capital Gains Tax liability in accordance with the mechanism set out in Order (5) made on 21 December 2012.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Wolter & Wolter has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5747 of 2009

Ms Wolter

Applicant

And

Mr Wolter

Respondent

REASONS FOR JUDGMENT

1. These are property enforcement proceedings.  The parties are Ms Wolter (“the wife”) and Mr Wolter (“the husband”).

2. On 21 December 2012 Ryan J made final property orders following a lengthy defended trial.  In essence, Order (1) of those orders required the wife to transfer her interest in a property at Suburb F and Order (2) required the husband then to sell that property, as well as a property at Suburb E, a property at Suburb G and a property at Suburb H.  Order (4) provided for the sale proceeds to be paid as follows:

   ·firstly to the selling costs;

   ·rates;

   ·mortgage;

   ·an amount equivalent to the Capital Gains Tax payable by the husband;

   ·61 per cent to the husband from which he was to pay specified amounts (in the vicinity of $35,000); and

   ·the balance was to be paid to the wife from which, in turn, she was to pay the husband $189,332 or such of the adjusting amount as remained outstanding.

3. The wife’s solicitor sent a Transfer to the husband in respect of her interest in the Suburb F property in November 2013.  The husband sent an email to the wife’s solicitors which in my view, was somewhat confrontational and failed to demonstrate a co-operative approach, and raised issues about selling the property, including how to make it ready for sale.

4. In these circumstances, the wife made an application to the registrar for the registrar to sign relevant documents in the name of the husband to permit the marketing and sale of the four properties.  Order (11) provided for the appointment of a registrar to sign documents if a party refused or neglected to sign documents necessary to implement the orders.

5. Unfortunately it took quite some time to achieve the sales of the properties.  The Suburb F sale was completed on 29 January 2014, the sale of Suburb G was completed on 9 April 2014 and the Suburb H sale on 13 October 2015.  There were difficulties with the sale of the Suburb E property.  The husband was residing in the property and refused to vacate.  Ultimately the Commonwealth Bank of Australia, the mortgagee, brought possession proceedings and forced a sale of the property, this being completed on 24 August 2015.

Application

1. The wife now seeks orders of an enforcement or machinery nature.  The actual minute of order is annexed at Annexure A to these reasons for judgment.  In short, the wife seeks:

   ·That the wife obtain a calculation of the Capital Gains Tax liability of the husband in respect of any Capital Gains Tax payable by him in respect of the sale of the various properties.

   ·That the money in the controlled monies account held by Shipton & Associates, solicitors Suburb G with the St George Bank be paid as follows:

   (a)in payment to the husband of a sum equal to the estimated Capital Gains Tax liability;

   (b)in payment to the husband of 61 per cent of the balance after paying to the wife the following sums:

   (i)$629.44 in respect of the unpaid  balance of the costs order made in the wife’s favour on 4 November 2015 plus interest;

   (ii)$13,847.60 in respect of the costs order made in favour of the wife on 6 April 2016 plus interest;

   (iii)$1,764.64 being 39 per cent of the amount paid from the controlled monies account to the wife pursuant to a Garnishee Order of the Local Court of New South Wales dated 26 May 2016;

   (iv)$87,197.76 being 39 per cent of the Suburb E property’s increased mortgage balance and penalties;

   (v)$39,303.46 being 39 per cent of the Suburb F property’s increased mortgage balance;

   (vi)the costs incurred by the wife in obtaining a calculation of the Capital Gains Tax liability; and

   (vii)the costs of these enforcement proceedings.

   (c)In payment to the wife of 39 per cent of the balance from which she shall pay to the husband the sum of $189,332.

2. The wife also seeks an order that she and the husband do all things and sign all documents necessary to cause D Lawyers to disburse the balance of the D Lawyers fund (the net sale proceeds of the Suburb E property being the balance produced after the Commonwealth Bank of Australia was paid to discharge the relevant mortgage), 61 per cent thereof to the husband and 39 per cent thereof to the wife.

3. The husband opposes the application.  He is self-represented and in turn seeks that the Court make various orders which I might describe broadly as by way of compensation for what he asserts is damage caused to him, including by selling the properties, particularly the Suburb G property at what he asserts was a considerable undervalue.  He is seeking payment of $50 million by the wife and various named lawyers, including the solicitor who acted on the various conveyances.  In addition, he is seeking orders that the wife and those various lawyers named by him in his affidavit receive prison sentences.

Discussion

1. In my view, the husband is endeavouring to run a case which is not available to him. 

2. He asserts that the Suburb G property was sold at an under-value.  He puts no evidence before the Court in support of this assertion. What he says is that a property in the same unit block, namely, 1 K Street, Suburb G sold for $1.7 million.  He says that, accordingly, the sale of the Suburb G property at $925,000 was well below its real value.

3. Apart from the evidentiary problem about this matter, in my view, the wife cannot be properly criticised for acting in accordance with the substantive orders of 21 December 2012 to bring about a sale of the Suburb G and other properties.  As indicated above, upon the wife taking the first step in the sale process by sending to the husband the Transfer in respect of her interest in the Suburb F property, this was responded to by a somewhat confrontational email letter from the husband which instead of facilitating the process provided by the orders, put various matters into issue.  This triggered the operation of Order (11) of the orders, that is, that the wife could then approach the registrar to sign documents on the husband’s behalf in order to implement the orders.  There were numerous machinery orders, for example, Orders (3)1. and 2.  The orders are as follows:

   1.list each of the above properties for sale by private treaty or public auction (as agreed between the parties or in the absence of agreement as recommended by the agent), with such agent as the parties agree to appoint and in default of agreement as to agent within 14 days from the date of these orders, with such agent or agents as the President of the Real Estate Institute of New South Wales shall appoint (“the agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when they fall due;

   2.the listing price, selling price or the reserve price (as the case may be) at which each of the above properties shall be listed shall be such sum as may be mutually agreed upon by the parties or in the absence of agreement, shall be the price nominated as the fair market value thereof by a valuer appointed by the President of the NSW Division of the Property Institute of Australia or its equivalent upon the written request of either party (“the valuer”), the costs of and incidental to such valuation to be borne equally by the parties as and when they fall due.

4. In any event, as I have said above, upon the husband not acting in a manner so as to bring about a sale of the properties the wife was entirely within her rights under the orders to present relevant documents to the registrar for signature.

5. The husband offers no evidence which would persuade the Court that the wife has acted other than in accordance with the orders to bring about the sale of the properties.  The wife’s evidence is that she has so acted, clearly the registrars have been persuaded apparently on evidence, that the circumstances under which they would be empowered to sign documents on the husband’s behalf to achieve the sale of properties have been evident.

6. In any event, provisions were included in the orders no doubt to provide for the situation where the husband might not act in accordance with Order (2) and the machinery orders which were designed to bring about a sale of the properties and to distribute the proceeds of sale in such a way as would bring about the intention of the Court in determining the financial settlement. 

7. In my view, it is now too late for the husband to come to Court and make the assertion that the wife has acted outside the authority given to her under the orders.  It was clear that the husband had his rights and obligations to sell the properties.  Upon him not acting in accordance with those rights and obligations, in my view, he cannot make any proper complaint about the fact that the properties have been sold and about his dissatisfaction with the sale price.

8. The husband also complains that the scheme of the orders is unfair to him because he had an obligation to pay New Zealand duty on a loan which he obtained from his parents to assist in the purchase of one or perhaps more of the properties.  But I understand that this matter was ventilated before Ryan J in the substantive proceedings.  In these circumstances, in my view, there is no room now for it to be relevant in the enforcement proceedings.

9. The husband further complains that the substantive orders are unfair because shortly after her Honour published her judgment and made orders the husband became ill with prostate cancer.  He says as a consequence, his needs have become far greater than presented at the time that the property proceedings were heard and determined by her Honour.  Again, in my view, this is not a matter which is relevant in the enforcement proceedings.

Increased mortgage balance in respect of Suburb E and Suburb F

1. As indicated above, the wife is seeking payment of two sums of money to her, namely $87,197.76 being 39 per cent of what she says is the increase on the mortgage in respect of the Suburb E property and penalties brought about by the husband not selling the property which then caused delay.  The wife also seeks the sum of $39,303.46 which is 39 per cent of what she says is the increase in the Suburb F mortgage on the same basis.

2. As I informed learned counsel for the wife during the course of submissions, in my view, there is no power for the Court to be able to make such orders.  This is because, in my view, there is no order which required the husband to pay those mortgages and solely bear the consequences in the event that he did not pay.  It was submitted that the wife’s claim in this regard is based on Order (6) of the 21 December 2012 orders which is as follows:

   In relation to the rent that the father receives in respect of [Suburb G], [Suburb E] and [Suburb H] that rent shall be applied by him to meeting the outgoings in relation to those properties.  However for so long as the father is not in receipt of an income whether that be Centrelink, workers compensation or wages he is entitled to apply no more than $500.00 per week for his own expenses.  This order operates from 10 May 2012.  The father shall provide the mother with a monthly statement that identifies rental income and its disposition.

3. It was submitted on behalf of the wife that this order, together with various paragraphs of the judgment make it clear that the husband is to pay all  mortgage repayments as they become due.  I must say I am unable to interpret this order in such a manner.  In my view, all it does is place an obligation on the husband to pay all rents which he received from the three properties towards whatever outgoings there were in respect of the properties subject to him being able to apply $500 per week from the rent for his own expenses on the basis that he was not in receipt of an income as described in the order.  I am unable to interpret this order as in any way imposing an obligation on the husband to pay the entirety of the mortgage repayments as they fall due.  And in my view, it has not been established that the husband did not pay the rent to outgoings as he was required to do pursuant to Order (6).

4. Accordingly, in these circumstances, in my view, there is no basis for the Court to make the orders sought at paragraphs 2(c)(iv) and (v) of the application.

5. The Capital Gains Tax issue remains unresolved.  It is clear from Order (5) of the substantive orders that this Court’s requirement was that the husband would resolve the uncertainty in relation to his Capital Gains Tax liability.  This is because Order (5) of the orders provides as follows:

   In relation to Capitals Gains Tax, no less than three (3) weeks prior to settlement of the sale of each property, the father shall give the mother a written calculation by his accountant of the Capital Gains Tax payable by him for that property.  In the event the amount is other than the Capital Gains Tax attributed to that property for this hearing, an adjustment will be payable by the relevant party at settlement.  If the Capital Gains Tax is more than set out in the evidence of [Mr L] (in relation to [Suburb G] as per his affidavit and otherwise exhibit R), a 61 per cent adjustment for the excess is to be made by the mother from the amount she would otherwise be entitled to receive and, if it is less, a 39 per cent adjustment is payable by the father to the mother.

6. Unfortunately the husband has not complied with this order nor done anything to make certain the situation concerning any Capital Gains Tax payable by him in respect of any of the properties.  The property settlement cannot be completed until this matter is resolved.  As indicated above, the wife seeks an order that she be permitted to obtain a calculation of the husband’s Capital Gains Tax liability which can then be used as the basis for adjustments, taking into account Order (5) of the substantive orders.

7. Given the failure of the husband who, after all has at all times been in the best position to be able to act in a manner to resolve this uncertainty, in my view, this part of the wife’s application is clearly appropriate.  Accordingly, I propose to make an order as sought by the wife in respect of the Capital Gains Tax calculation.

Conclusion

1. It is now several years since the substantive property orders were made by this Court and it is well past time that the parties were able to obtain the fruits of their litigation.  True it is that it took considerable time to sell the properties and there has been a certain complexity about the orders and the arrangements to produce the appropriate level of funds for the husband and the wife.  But clearly the objective of the orders must be implemented.  Much of the work required to achieve this has been undertaken and completed in respect of converting the properties into liquid funds.

I certify that the preceding twenty five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 28 July 2017.

Associate:

Date:  28 July 2017

Annexure “A”

Minute of Orders sought by Wife

…

1. ORDER that, by way of enforcement and/or machinery order, the husband and the wife do all acts and things and sign all documents necessary to authorise and instruct the wife’s solicitor to disburse the funds held in the Controlled Monies account as follows:

   (a)In the event that an assessment has issued from the Australian Taxation Office for a CGT liability of the Husband in relation to any of the properties, in payment of such assessment.

   (b)In the event an assessment has not issued from the Australian Taxation Office for a CGT liability of any of the properties, then in payment to the Husband of a sum equal to the estimated CGT liability, such estimate being obtained pursuant to these Orders.

   (c)In payment to the Husband of 61 per cent of the balance thereafter remaining, from which shall be first deducted and paid to the Wife the following sums:

   (i)The sum of $629.44 in respect of the unpaid balance of the costs order made in favour of the Wife on 4 November 2015 plus interest calculated from 11 November 2015.

   (ii)The sum of $13,847.60 in respect of the costs order made in favour of the Wife on 6 April 2016 plus interest pursuant calculated from 13 April 2016.

   (iii)The sum of $1,764.64 being 39 per cent of the amount paid from the Controlled Monies account to the wife pursuant to a Garnishee Order of the Local Court of NSW dated 26 May 2016.

   (iv)The sum of $87,197.76, being 39 per cent of the [Suburb E] Mortgage increased mortgage balance and penalties;

   (v)The sum of $39,303.46, being 39 per cent of the [Suburb F] Mortgage increased mortgage balance.

   (vi)The costs incurred by the wife in obtaining a calculation of the CGT liability.

   (vii)In the event an Order is made that the husband pay to the Wife her costs of and associated with this application, an amount equal to such sum as assessed.

   (d)In payment to the Wife of 39 per cent of the balance thereafter remaining, from which she shall pay to the Husband the sum of $189,332.00.

1. That:

   a)THE COURT NOTES that the husband has not obtained and provided to the wife a calculation of the CGT liability in accordance with the mechanism set out in Order (5) made on 21 December 2012;

   b)THE COURT ORDERS that the wife shall obtain a calculation of the CGT liability, which shall be used as the basis of any payments and adjustments herein.

2. ORDER that, by way of enforcement and/or machinery order, the husband and the wife do all acts and things and sign all documents necessary to authorise and instruct [D Lawyers] to disburse the balance of the [D Lawyers] fund as follows:

   a)To the Husband, 61 per cent;

   b)To the Wife, 39 per cent.

3. ORDER that, in the event that by the date of these Orders the balance of the [D Lawyers] fund has been transferred to the Controlled Monies account, then the husband and the wife do all acts and things and sign all documents necessary to authorise and instruct the wife’s solicitors to disburse the funds held in the Controlled Monies account which represent the balance of the [D Lawyers] fund as follows:

   a)To the Husband, 61 per cent;

   b)To the Wife, 39 per cent.

…