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White v Spithas (No 4) [2016] DCSA 14

Mar 31, 2016

IN THE DISTRICT COURT                                                     Decision No 14 of 2015

OF SOUTH AUSTRALIA

ACTION NO 1094 of 2005

 

ALISON MARIE WHITE

 

-and-

 

WILLIAM SHANE SPITHAS

 

 

 

REASONS FOR DECISION (NO 4) OF DISTRICT COURT MASTER 

 TO PARTIES ON 31 MARCH 2016


 

1           This is an application by the plaintiff dated 17 March 2015 (FDN 122) for an order that the defendant make weekly payments of the judgment sum awarded to her by Judge Soulio on 19 April 2013. Since that time the defendant has become bankrupt. The application was opposed and came on for argument before me on 11 August 2015 when Mr G Finlayson of counsel appeared for the plaintiff and Mr S White of counsel appeared for the defendant.

2           An issue then arose relating to the interpretation of the Bankruptcy Act 1966 and I published reasons on this issue (FDN 129) on 27 October 2015. I have subsequently heard further submissions at hearings on 1 December 2015 and on 16 February 2016.

The proceedings

3           The proceedings were instituted by the plaintiff on 11 July 2005 pursuant to s 9 of the De Facto Relationships Act 1996 seeking a division of property. The parties had commenced a relationship in about March 1987 which lasted some 17 years although they lived apart during two periods. They had a child. They each brought some limited property to the relationship and acquired various items of real and personal property during its course.

4           Section 9 of the De Facto Relationships Act was, at the time of separation, the relevant legislation seeking a division of property but that Act became the Domestic Partners Property Act 1996 as and from 1 June 2007. Transitional provisions applied.

5           In her amended statement of claim the plaintiff had sought by way of adjustment of property interests a declaration that in consideration of the transfer of her interest in the parties’ Athelstone property to the defendant, she would be entitled to a payment by him for her financial and non-financial contribution to the acquisition of this property and for the cost of its subsequent renovation and improvement and the increase in its value.

6           In the alternative, she sought an order that the property be sold and that the net proceeds of sale be divided in proportion to the parties’ financial and non‑financial contributions.

7           She also sought orders that the defendant pay to her a lump sum in relation to other assets including a business and company, an account in respect of profits derived from the parties’ interest in the business and their shareholding in the company since separation, an occupational rent equivalent to one half of the net rental value of the Athelstone property since the date of separation, and for costs.

8           The defendant filed a counterclaim seeking orders as to division of property but on different terms.

The trial

9           The action came on for trial before Judge Soulio on 26 May 2011, 27 May 2011 and 11 July 2011. The plaintiff appeared in person. The defendant did not attend.

10        At the trial evidence was called from an accountant, Ms Burnett, as to the valuation of the parties’ business and of other property. Reports of a Mr Holmes, the defendant’s accountant, and Mr Wood, a jointly retained valuer, were also received into evidence.

11        On 13 March 2013 Judge Soulio published his reasons.  He found that at the time of separation the parties were in a de facto relationship and that the court accordingly had jurisdiction.

12        In his reasons His Honour noted the requirements of ss 10 and 11 of the Act and observed that its focus was on an adjustment of property interests between the parties having regard to their contributions as identified in s 11(1). He also had regard to the provisions of s 14.  He observed that it was apparent that there had to be an order for the division of property between the parties pursuant to s 10(2)(c) which provided for the payment of a lump sum by one domestic partner to the other. In the circumstances of the case, he found, this meant that there had to be a payment of a lump sum by the defendant to the plaintiff. He wrote that he took into account the discretionary factors referred to by Smith DCJ in F v R [2012] SADC 84 at [15] and also had regard to Hogg v Roberts (2003) 87 SASR 248 at [15].

13        At [31] and following of his reasons Judge Soulio described the relationship between the parties, referring to the plaintiff’s employment in a pharmacy and in an aromatherapy business prior to the birth of her child. The defendant had worked in the retail, food and liquor industries including a take‑away food shop with the exception of a period when he had worked as a builder’s labourer. From late 1996 onwards he had worked for the parties’ business, a chicken shop at Erindale, until its sale in 2011.

14        In January 2002 the parties had purchased the house at Athelstone. They contributed to the purchase price from their joint savings and they had borrowed the balance of monies from St George Bank secured by mortgage.

15        They had maintained both separate and joint bank accounts.

16        Judge Soulio noted that at the time of the separation the major assets of the relationship were the house at Athelstone, formerly shared by the parties, the business, various motor vehicles, and separate superannuation accounts. As at the separation date the plaintiff had retained certain furniture and effects, her superannuation entitlements, her personal items and effects and a Holden Commodore motor vehicle.

17        The defendant had retained certain furniture and effects (although there was a dispute as to the extent), his superannuation entitlements, his personal items and effects, and various motor vehicles together with the shareholding of the company.

18        Judge Soulio considered the value of the Athelstone house. It had been sold in March 2006. The defendant had lived in it and had enjoyed the benefits until its sale. The plaintiff had been required to rent alternative accommodation where she and her daughter had lived.

19        Judge Soulio noted that the plaintiff had sought an order that the defendant pay an occupational rent to her in relation to his sole use of the house. He found that he should make allowance for this because of the defendant’s sole occupation after the plaintiff’s departure.

20        Judge Soulio also discussed the business. He referred to the evidence as to its value and to the experts’ reports. He noted that it had been sold in May 2011. He regarded the sale price as indicative of its value. He found that the net asset being the property of the relationship in the business was $55,000 (being, in round figures, one half of the net sale price).  He addressed the need to account for the profits of the business until its sale and found that the defendant had derived from it an average of $10,000 per year by way of distribution of profits. These profits came from property of the relationship, he found, so that this income should be taken into account in adjusting the division of property.

21        He also looked at other assets but disregarded the vehicles retained by the parties, which were approximately of similar value, and the furniture and effects which could not be valued. He also disregarded the superannuation accounts.

22        Judge Soulio found that the assets of the relationship were the Athelstone house $106,813.53; the half share of the business $55,000; and the American cars $30,000; totalling $191,813.53.

23        He then at [85]-[89] considered the division of property. He found that the starting point was one of an equal entitlement to the assets. He noted however that as the plaintiff had effectively ceased work to care for their child, and had subsequently been essentially unemployed, but the defendant had continued to draw a wage, these matters had to be taken into account – H v G [2005] SASC 344 at [127]. He made a further adjustment to take into account an allowance for an occupational fee in respect of the house between July 2004 and its sale in early 2006, and a share of the profits derived from the business by the defendant between July 2004 and its sale in early 2011.

24        He considered that a just and equitable division of the property resulted in the plaintiff being entitled to 70% of the calculated value of the identified assets, namely the sum of $134,269.47.

25        He accordingly ordered that the defendant pay a lump sum in that amount to the plaintiff. He dismissed the defendant’s counterclaim.

26        His reasons are published at W v S [2013] SADC 29.

27        Judgment was awarded in the following terms:

  1. Judgment for the plaintiff in the sum of $114,269.47 (offer allowance for $20,000 paid out of sale proceeds).
  2. Funds held in the Suitors Fund and ANZ Account 909368288 (administered by Gladys Lewis Solicitors) (“the ANZ Account”) not exceeding the judgment sum are declared the property of the plaintiff. (Subject to any lien which may exist in favour of the plaintiff’s current or previous solicitors).
  3. Payment out of the Suitors Fund or ANZ Account to be paid by agreement of the plaintiff and her previous solicitors or in default of agreement to abide the outcome of DCSA matter 2424 of 2011.
  4. Defendant pay the plaintiff’s costs of the action subject to any previous costs orders.

28        The expression “offer allowance” in paragraph 1 is ambiguous but counsel for the parties have agreed that it should read “after allowance” (Transcript of 1 December 2015, page 19).

Holding of monies from the sale of the house

29        As has been noted, during the course of the proceedings the house at Athelstone was sold. Following payment out of the mortgage, the remaining funds were held in the trust account of Gladys and Lewis, the then solicitors for the plaintiff. On 8 March 2011 Master Rice made an order that these proceeds were to be paid into the Suitors Fund. As at 11 March 2011 the sum of $68,321.30 was held in an interest bearing account at Port Adelaide on behalf of both parties.

30        At the hearing on 11 August 2015 Mr White tabled a letter written on 8 May 2013 by a Mr Ericson, a solicitor representing Mr Lewis of Gladys and Lewis, to the plaintiff’s then solicitor, Mr Finlayson, advising that Mr Lewis had closed the ANZ bank account (which had previously held the proceeds of sale of the parties’ property).  He had drawn out two cheques; one to himself in the amount of $52,160.92 for his fees, and one to the plaintiff’s trust account in the sum of $21,586.90. Mr Ericson had suggested that Mr Finlayson prepare a consent order for payment out to his trust account of all monies held in the Suitors Fund. He said that Mr Lewis would consent to this payment. Attached to this letter were copies of cheques from ANZ to Mr Lewis of $52,160.92 and to Mr Finlayson’s trust account of $21,586.90.

Examination summons

31        On 17 June 2013 (FDN 108) the plaintiff issued an examination summons referring to the judgment debt. She had difficulty effecting service of this summons but on 13 February 2014 I ordered that it could be served on the defendant by presumptive service at 2 Cavern Terrace, Clovelly Park.

32        On 28 January 2015 the examination summons came on for hearing before me.

33        Mr Finlayson represented the plaintiff and Mr White represented the defendant.

34        Mr White noted the judgment sum and made submissions in relation to the amount outstanding on the judgment. He said that when the chicken shop business had been sold, the net proceeds which were in the order of $22,000 had been paid into court. The plaintiff, he said, had subsequently received this part of the money which went to reduce the judgment sum owing by the defendant. He also referred to the sale of the house. The parties had agreed that each would receive $20,000 as part payment to assist with their legal fees. He said the plaintiff had had the benefit of the amount held in the trust account of her lawyer which was in the order of $73,000. Although a specific figure was not discussed, Mr White contended that the amount actually outstanding might be as low as $70,000.

35        Mr Spithas was then examined. He gave evidence that he was employed in Melbourne in a business, Fitzroy Shop Fitting and Building, and had worked there for approximately 18 months. He was clearing $1,012 per week after tax. He did not have a house or business or car and had no assets other than a small amount of furniture and about $1,300 in the Bank of Melbourne. He had no interest in any companies or trusts. He was living in a two bedroom unit with his daughter who was still at school in Year 11. He had not then lodged his 2013/2014 tax return. He gave evidence as to his weekly expenses and a list was tendered as Exhibit P3.

36        At the conclusion of the examination summons Mr Finlayson sought, and I ordered, that the defendant was to produce to the court and the plaintiff within 28 days after preparation, a copy of his 2013/14 tax return, together with financial statements of the Spithas Family Trust from 2013 to 11 February 2015.

37        On 17 March 2015 the plaintiff issued the present application applied (FDN 122) pursuant to the liberty to apply given at the examination summons hearing, to have the matter brought back on, and seeking orders relating to a garnishee order (not now pursued) and for payments of $500 per week by the defendant until further order on an outstanding figure of $130,445.40.

38        In support of this application, the plaintiff filed the second affidavit of Mr Finlayson sworn on 17 March 2015 (FDN 121).   He testified that the plaintiff had informed him that on or about 21 October 2014 she had received the sum of $2,542.98 by way of a garnishee of the defendant’s interest in the Australian Scholarships Group Friendly Society Limited Scholarship and had applied this sum to the outstanding principal of the judgment sum, reducing the outstanding judgment sum to $111,726.49. He contended that it was impermissible for the defendant to go behind the court’s order and to seek to re‑agitate an apportionment of property. He exhibited as “GJF2” a calculation of the outstanding amounts due and payable by the defendant to the plaintiff. He had performed this calculation by setting off the repayment against the principal and calculating the interest accruing daily on the outstanding principal only, in accordance with r 261(3). This calculation took into account the RBA cash rates over the relevant period.  He also referred to and exhibited as “GJF4” the 2014 tax return of the defendant which indicated that apart from salary and wages, payments of allowances had accrued from time to time from Fitzroy Shop Fitting and Building Pty Ltd to him. He testified that the defendant currently received around $1,012 after tax which had increased over time, and that the taxation returns showed that he had a gross income of $101,253 less tax of $21,180 resulting in a net income of $1,539 per week. Based on the figures in the taxation returns, Mr Finlayson testified, the defendant had a surplus of around $527 per week after tax.

The defendant’s bankruptcy

39        The application came on for hearing on 14 April 2015 but because neither party then attended I fixed a further hearing on 4 May 2015. That hearing did not proceed, either, because advice had been received that in the meantime the defendant had filed for bankruptcy.

40        At a further hearing on 25 May 2015, Mr Finlayson confirmed the bankruptcy of the defendant but advised the court that his client nevertheless pursued a claim for interest and a claim for costs. I fixed a timetable for the filing of further affidavits and an argument date for 1 June 2015.

41        On 25 May 2015 an affidavit of Mr White (FDN 124) was sworn, testifying that the plaintiff had already received part payment for the judgment sum. He said that she had received $22,000 plus interest, being the proceeds of sale of the chicken shop, that she had also received from her former solicitor’s trust account the sum of $73,700 plus interest being the balance of proceeds of sale of the parties’ house, and by agreement between the parties, the sum of $20,000 paid out during the course of the trial from the proceeds of sale of the house. These payments were in addition to the sum of $2,542.98 referred to in Mr Finlayson’s affidavit. However, Mr White testified, the plaintiff had not accounted to the defendant for these sums, although such accounting had been requested.

42        Mr White also testified that Mr Finlayson’s affidavit had misrepresented the defendant’s income and expenses position, and this had not been calculated correctly based on his tax return. The defendant had lodged a petition for his own bankruptcy on 28 April 2015 and a copy of this petition was exhibited. Mr White testified that it was his belief that the defendant had notified his trustee in bankruptcy of his full financial circumstances, including the plaintiff’s debt, and that the trustee had received a copy of the judgment of Judge Soulio.  His submission was that the plaintiff could not pursue her application further by reason of the provisions of the Bankruptcy Act.

43        The matter came on again before me on 1 June 2015. Mr Finlayson and Mr White notified the court that the parties had consented to a further adjournment. The court was told that the plaintiff had agreed to disclose amounts and dates of payments received by her from the Suitors Fund and the ANZ account and that she was not pursuing the garnishee order. I adjourned the matter to a further hearing on 20 July 2015.

The plaintiff’s claim for interest and costs notwithstanding the defendant’s bankruptcy

44        On 11 August 2015 and again on 12 October 2015 I heard submissions from the parties on the issue of whether, notwithstanding the defendant’s bankruptcy, the plaintiff could recover interest from the defendant on the debt owed to her as at the date of bankruptcy. I also received written submissions on this issue.

45        On 27 October 2015 I published reasons (No 3) finding that on the proper interpretation of the Act such monies could be recovered.

Plaintiff’s submissions

46        I heard submissions on the present issue both in the course of the Bankruptcy Act argument and at subsequent hearings on 1 December 2015 and 16 February 2016.

47        Mr Finlayson addressed the quantum of the sum on which such interest accrued. He submitted that the sum on which interest ran from the date of bankruptcy was $111,726.49. The only appropriate reduction from the judgment debt principal of $114,269.47 owed by the defendant to the plaintiff was half the amount of the garnishee being $2,542.98 on 21 October 2014, leaving at 28 April 2015 – the date of bankruptcy – a principal sum owing of $111,726.49. He contended that there should be a re-writing of the terms of the sealed order to reflect what was an error in the amount of the judgment sum payable by the defendant, if one had regard to the reasons for judgment. Alternatively, the order should be read as if the amount of the judgment sum was not and never was a lump sum amount payable by the defendant to the plaintiff, despite the order plainly saying so and the reasons saying so at [89]. In his contention there was no cogent reason why the defendant ought to be given the benefit of funds which were, by order of the court, declared to be the property of the plaintiff. He said that Judge Soulio’s order had never been challenged or appealed at any time and the defendant had no right to seek or vary that order because that right vested now in the trustee in bankruptcy. There was no ambiguity in the terms of the judgment and the principles in Livingspring Pty Ltd v Ng & Ors [2007] VSC 9 applied to the construction of the orders.  Accordingly, he said, since the bankruptcy the sum of $111,726.49 continued to accrue interest at 8.5% or $26 per day which the plaintiff could persist in recovering. As at 9 October 2015, 164 days had expired since bankruptcy so to that date this amount totalled $4,267.

48        The plaintiff sought an order for payment by the defendant in the sum of $50 per week.  Mr Finlayson  noted that the parties’ daughter, Jayla, was living with the defendant, which he had claimed was adding to his financial commitments, but the fact was that he had no legal obligation to care for her in this regard as the Family Court had ordered that she reside with the plaintiff.

49        In his submissions on 1 December 2015, Mr Finlayson said that the quantum of the amount on which interest would run, notwithstanding the defendant’s bankruptcy, depended entirely upon construction of the judgment of Judge Soulio of 19 April 2013. In interpreting the order he said that there were two considerations.

50        The first was that there was a judgment for a particular sum of money and this could only be a judgment sum payable by the defendant to the plaintiff. This was for a figure of $114,269.47 which was calculated at 70% of the value of the identified assets, namely $134,269.47 and deducting from it an allowance of $20,000 being paid to the defendant out of the sale proceeds leaving a net figure of $114,269.47.

51        The second was the declaration in Order 2 that funds which were held in other accounts were declared to be the property of the plaintiff. These were the funds held in the Suitors Fund and the ANZ account not exceeding the judgment sum and they were declared to be the property of the plaintiff.

52        Mr Finlayson noted that the defendant had elected not to appeal from these orders, so what was left was what was stated in the judgment, and the appropriate amount on which interest ran from date of bankruptcy was the sum of $114,269.47.

53        The schedule of interest provided by Mr Finlayson in FDN 121 was based on this figure.

54        The only concession made by the plaintiff was that in that schedule the principal sum was expressed to be $111,726.49 because half of the portion of the garnishee had been applied in reduction of the judgment sum, so that the new net figure was $111,726.49.

55        Mr Finlayson acknowledged that everything except forward going interest was wiped out by the bankruptcy but that his client had the ability to pursue that bottom line interest figure on the principal.

56        As at 1 December 2015 this figure was $5,646.014 being an interest sum, and this continued to accrue and payment was being sought by the plaintiff from the defendant at the rate of $50 per week.

57        Mr Finlayson submitted that it made no sense for a judgment sum to be diminished by property not related to the judgment debtor. This was the plaintiff’s property and declared to be so and should not be applied in diminution of the judgment sum.

58        Finally, noting the issue of an unjust enrichment raised by the defendant, he submitted that the plaintiff had not received anything so there was no question of unjust enrichment and it did not affect the construction of the orders.  

Defendant’s submissions

59        Mr White contended that in calculating the claim upon which the interest component was based the plaintiff had failed to take into account some payments she had already received. He said that the outstanding judgment sum was now only about $14,500 taking into account these subsequent payments. It was not possible to accurately calculate the interest until the plaintiff had fully disclosed information about the timing and amounts of payments. Mr White provided detailed submissions on this aspect in paragraphs 5 to 26 of his written outline.

60        He submitted that it had been clearly established by a thorough examination of the defendant’s financial circumstances that he did not have the income to satisfy any order that was allowed to be pursued. At the 1 December 2015 hearing Mr White told the court that although in the 2014/2015 year the defendant had earned higher amounts, his income was now in the order of $1,170 per week. His weekly expenses, based on the exhibit provided to the court, were about $1,165 a week, so he could not afford to pay anything at the present time.

61        Mr White said that the Family Court order had been made in 2011 when Jayla was aged about 12 years but she was now 16 and she had chosen to live with the defendant.

62        He submitted that in considering the plaintiff’s application for weekly payments, it was appropriate that the court look not only to the order made by Judge Soulio but also to the reasons delivered and the background leading to that judgment. He said that Judge Soulio had gone through the history of the relationship, had considered his task of dividing the asset pool of the parties pursuant to the provisions of the Act, had made findings about certain parts of the property, had come to the conclusion that the asset pool consisted of the proceeds of the sale of the parties’ home, the half share in the business having regard to its sale, and the cars which were valued at $15,000, and from the gross sum of the asset pool he had assessed the parties relative contributions towards the acquisition of property and had come to a conclusion about a just and equitable division of those assets.

63        The Judge had found that the appropriate division of the asset pool was 70/30 in favour of the plaintiff and this was how he had arrived at the bottom line in [88] of his reasons, to the effect that the plaintiff was entitled to a payment of $134,269.47.  Mr White submitted said that when the Judge had worked out how the plaintiff was entitled to a 70% share, he had stated in the first paragraph of the order that she had already received $20,000 and this came off the top of the judgment figure. He said this was important because it showed the mindset of the Judge that in making the order the intention was to have the plaintiff’s entitlement taken into account relating to the various monies that she had received.

64        Mr White said that in addition to the receipt of the $20,000 the plaintiff had also received the benefit of a sum of approximately $73,700 plus interest being the balance of proceeds of sale of the parties’ house from her former solicitor’s trust account. He referred in this regard to his client’s affidavit (FDN 124) at paragraph 5.

65        She had also received part payment of the judgment sum of some $22,000 plus interest in the proceeds of sale of the shop referred to in the judgment and he referred to paragraph 4 of his client’s affidavit. The exact sum was $23,618.34. Accordingly the pool had diminished further from the starting point of $114,269.47 by further tranches of $73,727.82 and $23,618.34 and there was a third tranche, namely a sum of $2,542.98 coming from an insurance policy which was a joint asset.

66        Mr White submitted that the defendant’s position as to the proper calculation of the sum owing to the plaintiff came from a simple, straight-forward and plain interpretation of his Honour’s orders. He said that the figure on which interest should be payable was properly calculated at $14,380.33 (transcript page 28, line 5).

Plaintiff’s submissions in reply

67        I sought submissions from the parties as to the proper approach to be taken as to interpretation of the judgment. In this regard, Mr Finlayson referred to Livingspring Pty Ltd v Ng & Ors [2007] VSC 9, Polyaire Pty Ltd v K-Aire Pty Ltd (No 4) [2007] SASC 36 and Ewing International LP v Ausbulk Ltd (No 2)[2009] SASC 381. He said the court might look to the reasons and whether they could be reconciled with a construction of the order but these should not be used to in effect rewrite the order. He said that Judge Soulio had identified the asset pool and had provided a judgment in the plaintiff’s favour and there was a consistency between the judgment and the reasons of his Honour. The plaintiff’s position was that the approach urged by the defendant was inappropriate because it would require the court to go back, recalculate according to Judge Soulio’s reasons, work out a different judgment sum, and divide it according to the proportion that Judge Soulio had in mind when dividing the property pool in order to ascertain what the appropriate treatment of that sum was. He said that the court could not revisit everything at every stage - at some point it had to accept the orders that had been made and any appeal from those orders, and “just move on”. He did accept, however, that because the garnishee amount was not referred to in the judgment that had to be applied in a legitimate reduction of the judgment sum.

68        Finally, Mr Finlayson sought an order for costs of the argument on the usual basis, to follow the event.

Further submissions

69        At the conclusion of argument I reserved my decision but at the request of the parties I further convened the court on 16 February 2016. Mr Finlayson indicated that he wished to refer the court to a recent decision of the Full Court in Jackson & Anor v Abram & Anor [2015] SASCFC 175. In his reasons in that case, Stanley J, with whom Peek and Lovell JJ agreed, referred to the appropriate principles to be applied in a rehearing involving a review of findings of fact. The judgment referred to Fox v Percy (2003) 214 CLR 118 where Gleeson CJ, Gummow and Kirby JJ wrote that:  

“... On the one hand, the appellate court is obliged to ‘give the judgment which in its opinion ought to have been given in the first instance’.  On the other, it must, of necessity, observe the ‘natural limitations’ that exist in the case of any appellate court proceeding wholly or substantially on the record.  These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the ‘feeling’ of a case which an appellate court, reading the transcript, cannot always fully share. ...”

Principles

70        Livingspring Pty Ltd v Ng & Ors [2007] VSC 9 has been cited. It concerned an application brought by the plaintiff for orders that certain of the defendants be dealt with for contempt of court resulting from breaches of undertakings and interlocutory orders. An issue arose as to the construction on the undertakings which had been proffered. In his reasons, Cavanough J considered whether it was permissible to go beyond the order or undertaking itself in order to aid in its construction. He referred to McNair Anderson Associates Pty Ltd v Hinch & 3AW Broadcasting Co Pty Ltd[1985] VR 309 at 311-312 where Southwell J had referred to Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 where at 503 per Windeyer J wrote:

“… Those who give undertakings to a court are bound by the language they use. If its true meaning, although not immediately plain, can be ascertained according to ordinary rules of construction, then the person giving the undertaking is bound by it in that sense. …”

71        Southwell J had said that it would seldom be permissible in proceedings for contempt to go behind the order and to examine the reasons for judgment as an aid to construction of the order.

72        Cavanough J said that he seriously doubted that he was entitled to have regard to either of two extrinsic matters referred to by counsel ([35]). On the other hand, he noted that there was authority in other jurisdictions to the effect that for the purpose of construing an order or undertaking in contempt proceedings, a court may at least in some cases take into account the factual matrix which was known to both parties. He noted that in one case it had been held that the court could take into account the history of the litigation and the pre-existing contractual relationship between the parties. He referred to S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358.

73        Counsel has referred to Polyaire Pty Ltd v K-Aire Pty Ltd & Ors (No 4) [2007] SASC 36.  An issue arose as to whether the defendants had complied with orders relating to disclosure, which had in turn been based on orders previously made and on a finding of liability in the plaintiff’s favour. Ultimately the question had to be considered having regard to those orders. The plaintiff’s submission was that the orders were clear and all the court needed to do was to say so and fix new time limits for the filing and serving of affidavits of disclosure. In the alternative, it was submitted, if the orders were ambiguous the court should resolve the ambiguity in its favour and if necessary make a declaration as to the meaning of those orders or in the alternative it should amend the orders.

74        Besanko J considered the principles relevant to the task of construing orders of the court, writing at [35]:

“The proper construction of the orders raises a question as to the material which may be considered in order to determine that question and whether the nature of material which may be considered depends upon whether there is an ambiguity in the orders.”

75        He referred to case law discussing the material which could be considered in determining the proper construction of orders of the court, including Kwikspan Purlin System Pty Ltd v Federal Commissioner of Taxation (1986) 93 FLR 263 where Macrossan J had found that in construing a court order he could have regard not only to the order itself but also to the reasons for judgment which lay behind it and the notice of objection leading to the appeal. In Australian Energy Ltd v Lennard Oil NL (No 2) [1988] 2 Qd R 230 Andrews CJ, with whom Kelly SPJ agreed, considered that it was appropriate to construe the declaration in its context which included the reasons for judgment, and in that case, the agreement to which the declaration related.

76        In Athens v Randwick City Council (2005) 64 NSWLR 58 Santow J observed  that there was a slight but perceptible divergence between two lines of authority in relation to whether recourse could be had to reasons for judgment or indeed any other extrinsic material when construing an order. He found that these two lines of authorities could be described as representing weak and strong variances of the same principle. One trend of authority – the weak variant – was that it was seldom permissible to go behind an order or to examine the reasons for judgment as an aid to its construction, the exception being where it was ambiguous. The other trend of authority – the strong variant – was that the meaning of words in an order should in an appropriate case be considered by reference to the reasons for judgment themselves, finding their context in the overall proceedings.

77        In Polyaire, having considered these authorities,Besanko J wrote at [41]:

“In my opinion, it would be a very rare case in which, in construing orders of the Court, it would not be appropriate to consider at least the reasons for judgment. If on considering the orders in light of the reasons for judgment the meaning of the words is clear then effect must be given to those words. There is an exception to this and that is a class of case where the orders are clear but it is also apparent that they do not represent the intention of the Judge who made them.

In the latter type of case, the orders may be amended by an exercise of the inherent power of the Court. …”

Consideration

78        In line with the above authorities I have considered both the specific orders made by Judge Soulio and also his Honour’s reasons. I have discussed these earlier in my reasons, but repeat these again here.

79        In these, Judge Soulio referred to the relationship between the parties and found that they were at the time of separation in a domestic partnership which was a de facto relationship, so the court had jurisdiction.

80        He referred to the plaintiff’s amended statement of claim wherein an adjustment of property and interest was sought and then considered the evidence called. He referred to the defendant’s interest in the take-away food business and shareholding via a corporate trustee of a family trust which ultimately held the interest in the business on trust for the defendant and the plaintiff. He found that the defendant had at least an interest in that property for which the plaintiff sought to bring into account in the division of property. He referred to the evidence of the accountant as to the valuation of the business and of other property.

81        His Honour then referred to legal principles in relation to a division of property, ss 10, 11 and 14 of the Act. He found that it was appropriate that an order be made for division of property between the parties, pursuant to s 10, by way of a lump sum payment, referring to the reasons of Smith DCJ in F v R [2012] SADC 84 at [15 ].

82        He also referred to Hogg v Roberts (2003) 87 SASR 248 where Doyle CJ, referring to the decision of Young J in Parker v Parker (1993) 16 Fam LR 863, had suggested a four stage approach, namely the identification and valuation of the assets of the parties, a determination whether any and if so what contributions had been made by each partner, a determination whether in the circumstances the contributions of the applicant had already been sufficiently recognised and compensated for, and then the making of the appropriate adjustment.

83        Judge Soulio found that the divisible property in the possession of the parties at the time of the separation had to be identified but in determining the adjustments, the values at the time of hearing were to be considered.

84        He found that at the time of separation, the major assets of the parties were the house at Athelstone, a share in the business, various motor vehicles and separate superannuation accounts. He looked at each of these in turn and came to findings as to their values. His reasons disclose detailed information as to their monetary value and the distribution of these monies as at the time of judgment. He disregarded the Holden and Falcon cars which were a similar value, the furniture and personal effects, of which he had insufficient evidence to value, and the superannuation accounts which were of similar value. He found that the house, the half share of the business and the American cars totalled $191,813.53.

85        He then considered a division of the property and after discussion found that a just and equitable division entitled the plaintiff to 70% of the calculated value, namely a sum of $134,269.47. He concluded:

“I propose to order that the defendant pay a lump sum in that amount to the plaintiff. ...”

86        He dismissed the defendant’s counterclaim and indicated he would hear from the plaintiff and any intervening party as to any consequential orders.

87        Subsequently, formal orders were made as set out earlier in these reasons.

88        It seems to me that on a careful consideration of Judge Soulio’s reasons, they can be reconciled with the construction of the formal order of the court. The process was quite simple: Judge Soulio has heard the evidence, identified the asset pool for distribution and taken relevant matters into account. He then awarded a lump sum figure in favour of the plaintiff set out in paragraph 1. He has also made a further determination, in paragraph 2, declaring what was the property of the plaintiff but subject to any solicitor’s lien.

89        In my view, it is inappropriate to undertake the exercise urged by the defendant of diminishing the lump sum awarded by Judge Soulio by deducting from it tranches of monies referred to in the defendant’s affidavit and outlined by Mr White in his submissions. These matters were decided by the Judge as set out in his reasons.

Determination of the amount which ought to be paid pursuant to the Enforcement of Judgments Act 1991

90        The calculations are set out in the spreadsheet tabled by Mr Finlayson during his submissions. The relevant amount started at the judgment figure, namely $114,269.47. Having regard to the sum of $2,542.98 being the amount recovered by garnishee, the total reduced to $111,726.49. By reason of the defendant’s bankruptcy on 28 April 2015 interest only can be claimed from that date forward.  Such interest as and from that date accumulated to $5,646.01 as at 1 December 2015 and continues as and from that date based on the rate fixed by District Court r 261.

Weekly amount which ought to be paid

91        At the hearing of the examination summons in January 2015, evidence was presented as to the defendant’s ability to make payments and he subsequently provided documents to the court. At the hearing on 17 March 2015, based on a net income of $1,539 per week, the plaintiff’s submission was that the defendant had a surplus of about $527 per week after tax. However, subsequently the defendant’s counsel submitted that although during the 2014/2015 year he earned higher amounts, his income had now reduced to an amount in the order of $1,170 per week, with weekly expenses of $1,165.

92        The list of the defendant’s income and expenses is Exhibit P3. Some of these items relate to expenses incurred in relation to the parties’ daughter, Jayla.

93        Mr Finlayson urged that I disregard these, as there is a custody order in force in favour of his client. However, Jayla has elected to live with the defendant and in my view monies spent on her upkeep and education are reasonable.

94        Mr Finlayson has sought an order that there be payment to his client by the defendant of $50 per week. The appropriate test on an examination summons is not whether there is any surplus of income over expenditure, but what is reasonable in the circumstances.

95        I note that the combined total claimed for the defendant’s entertainment and cigarettes is $150 per week. In my view, an order for payment of $50 per week is reasonable in the circumstances.

96        The final issue relates to costs. There are two aspects. One relates to the discrete issue of post-bankruptcy interest. On this issue, the plaintiff was wholly successful in her contentions. I accordingly award these costs to the plaintiff.

97        The remaining issue is the further costs of and incidental to the examination summons and the associated attendances. Costs of an enforcement of judgment process should be recoverable from the judgment debtor. I also award these costs to the plaintiff.

Summary of orders

1.      On the plaintiff’s application (FDN 122) I find that the sum on which her judgment is recoverable is $5,646.01 together with interest on that sum continuing from 1 December 2015 at the rate fixed by District Court r 261.

2.      Pursuant to the Enforcement of Judgments Act 1991 the defendant is to pay the outstanding sum in payments of $50 per week commencing on 21 April 2016.

3.      I award to the plaintiff the costs of her enforcement proceedings which are to include the costs of the examination summons and the hearings and arguments relating to the proper sum recoverable and the weekly payments to be made. These costs are to be adjudicated if not agreed.

Counsel for the plaintiff:                Mr G Finlayson

Solicitors for the plaintiff:             Diaspora Legal

 

Counsel for the defendant:             Mr S White

Solicitors for the defendant:          White Berman



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