Anselmi & Padovano
[2024] FedCFamC1F 62
•15 February 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Anselmi & Padovano [2024] FedCFamC1F 62
File number: MLC 8718 of 2023 Judgment of: HARTNETT J Date of judgment: 15 February 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband seeks that the wife be restrained from continuing to engage her solicitors – Where the husband alleges a conflict of interest –Where the wife was represented by her current solicitors when previous orders were made – Where there is a dispute as to the interpretation of a notation to the previous orders - No evidence as to conflict – Application dismissed – Costs reserved Legislation: Child Support (Assessment) Act 1989 (Cth) ss 24, 152 Cases cited: Billington & Billington (No 2) [2008] FamCA 409
Charisteas & Charisteas (2022) 65 Fam LR 492
Osferatu & Osferatu (2015) FLC 93-666
Naczek & Dowler [2011] FamCAFC 179
Division: Division 1 First Instance Number of paragraphs: 46 Date of hearing: 9 February 2024 Place: Melbourne via videolink Counsel for the Applicant: Mr Wilson Solicitor for the Applicant: Westminster Lawyers Counsel for the Respondent: Ms Vohra SC Solicitor for the Respondent: Kennedy Partners ORDERS
MLC 8718 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS ANSELMI
Applicant
AND: MR PADOVANO
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
15 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The husband’s application that the wife be restrained from continuing to engage Westminster Lawyers in these proceedings is dismissed.
2.The wife’s costs arising from the husband’s application are reserved.
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 the pseudonym Anselmi & Padovano has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
INTRODUCTION
The discrete issue for the Court to consider is an application by the respondent husband (“the husband”) that the applicant wife (“the wife”) “be restrained from continuing to engage Westminster Lawyers in these proceedings by reason of an actual or potential conflict of interest” (“the restraint application”).[1] This application, for the reasons set out hereunder, is dismissed.
[1] Husband’s Response to Initiating Application filed 5 September 2023, p.3.
The substantive proceedings were initiated by the wife on 1 August 2023 by the filing of an Initiating Application wherein she sought orders in relation to: the husband paying the wife further spousal maintenance; a departure from an administrative assessment of child support; and a declaration that “the Husband owes the Wife compensation for the detriment suffered by her arising from the “irrevocable undertaking” by him and noted by this Court under the orders of this Court dated 19 June 2020”.[2] The restraint application forms part of the husband’s Response to Initiating Application filed 5 September 2023, whereby he also seeks orders, relevantly, that the wife’s Initiating Application filed 1 August 2023 be dismissed; and that the wife pay the husband’s costs of and incidental to the application.
[2] Wife’s Initiating Application filed 5 August 2023, p.2.
At the hearing on 9 February 2023, the matter proceeded on the basis that the restraint application was to be considered (and determined) as a preliminary issue and prior to the consideration of the orders sought by the wife in her Initiating Application.
EVIDENCE
The parties did not give evidence at the interim hearing. At this juncture, there are limitations on what findings can be made on untested evidence and I do not make any finding against the husband or the wife. The relevant background set out hereunder is confined to non‑controversial matters.
RELEVANT BACKGROUND
In 1971, the wife was born in Australia. The wife is engaged in home duties and resides in a property that she owns in Suburb B in the State of Victoria.
In 1973, the husband was born in Australia. The husband is unemployed and currently resides in a property he owns with his wife, Ms D in Suburb C in the State of Victoria.
In 2001, the parties married. The parties lived in Region E for the duration of their marriage.
The parties have four children: Mr W born 2003; Ms X born 2005; Y born 2009; and Z born 2011 (collectively “the children”). The elder two children are now adults and not the subject of administrative assessment pursuant to s 24 of the Child Support (Assessment) Act 1989 (Cth).
In or around February 2012, the parties separated.
In late 2012, final parenting orders were made in the District Court of Region E.
In late 2012, the wife and the children departed Region E and took up residence in Australia.
In 2013, the parties obtained a divorce.
In mid-2013, final orders relating to property, child support and spousal maintenance were made in the District Court of Region E (“the Region E orders”). Relevantly, an order was made by consent that the husband pay the wife the sum of $8,000 per month for the benefit of the children, being $2,000 per child per month, with the payments “to be index linked to any increase in the Australian Consumer Price Index.”.[3] These orders were registered with the Child Support Agency.
[3] Husband’s Response to Initiating Application filed 5 September 2023, p.49.
On 4 February 2014, final orders relating to property, child support and spousal maintenance were made in the Family Court of Australia, as it was then known, now Federal Circuit and Family Court of Australia (Division 1) (“the 2014 orders”). These orders mirrored the orders previously made in the District Court of Region E in mid-2013. Notations D and E of the 2014 orders provided that:
D. The [Region E] orders make provision for the payment of periodic and non‑periodic child support by the husband to the wife, which the parties intend will be registered with Child Support, Australia.
E. The [Region E] orders provide for the husband to provide financial support for the children, which would constitute adult child maintenance pursuant to the Family Law Act and therefore cannot be reflected in these orders, notwithstanding the parties’ agreement in relation to that support.
On 7 August 2017, further parenting orders were made in the then Family Court of Australia, now Federal Circuit and Family Court of Australia (Division 1) in relation to the children’s ongoing care arrangements.
On 18 October 2019, the parties entered into a parenting plan which revised the existing parenting orders relating to the children.
On 28 May 2020, the parties attended a mediation in an attempt by them to reach consensus as to a variation of the then existing spousal maintenance obligations of the husband to the wife, following the husband having made an application to discharge or vary his spousal maintenance obligations pursuant to the Region E orders as mirrored in the 2014 orders. Each party was represented by their solicitor with counsel briefed to appear on their behalf. The mediation was convened by a member of the Victorian Bar experienced in family law. The parties reached an agreement and signed a heads of agreement to this effect.
On 19 June 2020, orders were made in the then Family Court of Australia, now Federal Circuit and Family Court of Australia (Division 1), by consent, which reflected the heads of agreement signed on 28 May 2020 (“the 2020 orders”). Relevantly, the orders varied the husband’s spousal maintenance obligation to the wife as set out in the 2014 orders at Order 35 and 36. These orders were as follows:
35. That the husband pay to the wife by way of periodic spousal maintenance, the sum of $3,250 per month, commencing on 20 May 2013 and thereafter on the 20th day of each succeeding month, by way of direct debit or standing order into the wife’s nominated bank account, until:
35.1 The wife remarries;
35.2 The wife cohabits with the same person for a period in excess of twelve months;
35.3 The wife dies, or
35.4 Further court order,
whichever first occurs.
36. That the periodic spousal maintenance payments required pursuant to paragraph 35 hereof, be indexed with reference to the Australian Consumer Price Index on 1 July 2014 and each year thereafter.
The 2020 orders were, relevantly:
1.That the husband continue to pay spousal maintenance to the wife pursuant to orders 35 and 36 of the orders made in these proceedings on 4 February 2014 until such time as the husband relocates to Australia and becomes a resident of Australia for taxation purposes ("the relevant date").
2.That the husband will give the wife thirty days' notice in writing of him becoming a resident of Australia for taxation purposes and will contemporaneously provide documentation confirming his taxation status (such as a copy of an Australian tax file declaration confirming that the husband is living in Australia and working for an Australian employer).
3.That within fourteen days of the relevant date the husband pay the wife a lump sum of spousal maintenance payment of $200,000 (“the lump sum payment”) which will discharge, and be in full and final satisfaction of, all future obligations of the husband to the wife with respect to spousal maintenance.
4.That contemporaneously with the husband making the lump sum payment in full to the wife:
4.1.Pursuant to regulation 36 of the Family Law Regulations 1984 and subsection 83 (1) (c) of the Family Law Act 1975, order 1 of the orders made in proceedings between the husband and the wife in the District Court [Region E], in a case known as […], being orders [mid] 2013 and filed in the said [Region E] proceedings [in mid] 2013 (“the 2013 [Region E] orders”), be and are hereby discharged; and
4.2. Pursuant to subsection 83 (1) (c) of the Family Law Act 1975, orders 35 and 36 of the orders made by this Honourable Court in these proceedings on 4 February 2014 be and are hereby discharged.
5.That within 30 days of the date of these orders each of the husband and the wife do all such acts and things and sign all such documents to have orders made in [Region E] which mirror the terms of these orders, change the [Region E] orders to reflect the terms of these orders, and to render these orders enforceable within the jurisdiction of [Region E].
6.That save for the costs of the wife obtaining her own legal advice in [Region E], if any, the husband will pay the costs associated with the process of having the orders made in [Region E] as per order 5 hereof.
7.That the Amended Initiating application of the husband filed on 13 May 2020 and the Response of the wife filed on 1 May 2020 be otherwise dismissed.
8.That each party bear their own costs.
Notation B of the 2020 orders provided that:
B. The husband irrevocably undertakes not to make an application to any court in any jurisdiction to vary or discharge the existing child support orders/arrangements, regardless of where he is living.
Recital H of the 2020 orders provided that:
H. The husband has continued to be resident of [Region E] but is currently physically in Australia and in the process of relocating to Australia. The husband currently remains a taxation resident of [Region E] but anticipates being both physically resident and a taxation resident of Australia later in 2020.
In late 2020, the husband became a resident of Australia.
In February 2021, an administrative child support assessment issued for the children following the husband’s application to Services Australia for a child support assessment, as alleged by the wife. It was the husband’s position he made no application to the agency, but rather as more properly described, provided notification of his return to Australia and updated residency status when he became a resident of Australia for tax purposes. It was submitted by senior counsel for the husband that thereafter, s 152 of the Child Support Assessment Act 1989 (Cth) became operative though I note it requires more than a notification as to residency – it requires the residency in Australia of both parents, and an administrative assessment, for an overseas maintenance liability to cease to have effect at the relevant time. I cannot on the evidence currently make any finding as to how that administrative assessment came about.
I note s 152(2) of the Child Support Assessment Act 1989 (Cth) is as follows:
(2) If:
(a)at any time, an amount of child support for a child becomes payable by a liable parent to another person under an administrative assessment; and
(b)at that time, the liable parent and the other person are both residents of Australia; and
(c)immediately before that time, an overseas maintenance liability had effect under which maintenance for the child was payable by the liable parent to the other person;
the overseas maintenance liability ceases, at that time, to have effect.
MATERIAL RELIED UPON
The wife relied upon the following documents:
(1)Initiating Application filed 1 August 2023;
(2)Outline of Case filed 7 February 2024;
(3)her affidavits filed 1 August 2023 and 20 October 2023; and
(4)Financial Statement filed 1 August 2023.
The husband relied upon the following documents:
(1)Response to Initiating Application filed 5 September 2023;
(2)Outline of Case and written submissions filed 7 February 2024;
(3)Aide Memoire emailed to Chambers on 9 February 2024;
(4)his affidavits filed 3 November 2023 and 14 November 2023; and
(5)Financial Statement filed 3 November 2023.
The husband also relied upon the wife’s affidavit filed 20 October 2023 and the wife’s Financial Statement filed 1 August 2023.
LEGAL PRINCIPLES
Senior counsel for the husband referred the Court to its inherent jurisdiction over its officers and to control its process, as enunciated in Osferatu & Osferatu (2015) FLC 93-666 and which is settled law.
The Full Court in Charisteas & Charisteas (2022) 65 Fam LR 492 at [37] – [39] affirmed the inherent jurisdiction of the Court over its officers and to control the judicial process and specified the test which is to be applied when determining whether a legal practitioner should be restrained from acting on behalf of a party as:
37. The correct test that should have been applied by the primary judge, in determining whether a legal practitioner should be restrained from acting on behalf of a party, is that which is adumbrated by the Full Court of the Federal Court of Australia (Besanko, Lee and Abraham JJ) in Porter v Dyer (2022) 402 ALR 659 who applied, with approval, the following statement of principle by Griffiths J in Mumbin v Northern Territory of Australia (No 1) [2020] FCA 475:
39.The relevant principles which guide the exercise of the Court’s separate discretion are broadly as follows:
(a) The Court has an inherent jurisdiction to ensure the due administration of justice, to protect the integrity of the judicial process and to restrain legal practitioners from acting in a particular case as part of its supervisory jurisdiction (see, for example, Grimwade v Meagher [1995] 1 VR 446 at 452 per Mandie J and Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd [2014] FCA 1065; 228 FCR 252 at [37] per Beach J).
(b) The test to be applied is whether a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires that a solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice (I prefer this formulation of the principle, as opposed to the use of the term “would”: see Timbercorp at [62] per Anderson J and the cases cited therein, as opposed to the different formulation adopted by Beach J in Dealer Support Services at [94], upon which the Jawoyn Claim applicant relied, but I would regard even that higher standard to have been met in the circumstances here).
…
(Emphasis added)
38. Additionally, we refer to and adopt that which was said by Thomas J in a New Zealand case, Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 at 590 where, in commenting on the role of legal practitioners as officers of the Court, his Honour stated:
In such cases, apart altogether from the position of the client, the Court is not receiving the assistance of counsel who are observably independent. Independence is a function of counsel. The Court is entitled to assume that solicitors and counsel appearing before it possess that independence. Solicitors not only owe a duty to their clients to do the best for them but also owe an overriding duty to the Court. The same overriding duty is owed by counsel who have been granted a right of audience to appear in this Court. As part of their professional responsibility, therefore, solicitors and counsel must ensure that they do not appear in a matter in which they have an actual or potential conflict of interest or where, by reason of their relationship with their client, their professional independence can be called in question.
39.Significantly, that conflict of interest can arise where the personal or reputational interest of the legal practitioner is at stake in the proceedings. In that respect, in Mitchell v Burell [2008] NSWSC 772, Brereton J stated that:
20. … [The] line is crossed only when the solicitor has a personal stake in the outcome of the proceedings or in their conduct, beyond the recovery of proper fees for acting, albeit that the relevant stake may not necessarily be financial, but involves the personal or reputational interest of the solicitor, as will be the case if his or her conduct and integrity come under attack and review in the proceedings. The presence of such circumstances will be a strong indication that the interests of justice – which in this field involve clients being represented by independent and objective lawyers unfettered by concerns about their own interests – require the lawyer to be restrained from continuing to act.
The Court is to exercise its discretion cautiously when considering disqualification applications and should be mindful of the “need to give appropriate weight to the public interest in a litigant not being deprived of the lawyer of his or her choice without due course”.[4]
[4] Billington & Billington (No 2) [2008] FamCA 409.
CONSIDERATION
At its core, the issue of the restraint application arises because the wife takes issue with, what she alleges to be, the husband’s application to Services Australia for an administrative assessment of child support which resulted in reduction, by reference to the 2014 orders, of the husband’s child support obligations.
The husband’s assessed child support for the period 13 September 2023 to 29 February 2024 was a monthly rate of $597.67. This assessment was based on the children Y and Z spending no overnight time with the husband although the child Z does spend alternate weekends and school holiday periods with the husband. The husband continues to meet private school fees and private health insurance for the children.
It was the wife’s position the husband’s actions breached ‘the undertaking’ given by him. It was the husband’s position his actions did not breach ‘the undertaking’, as he did not make an application to a Court. It is not necessary for the Court to consider at this stage whether a valid undertaking to the Court exists, and if so whether the husband breached such an undertaking. I note however it is agreed between the parties that during the making of the 2020 orders, the husband did not, personally or through his counsel, provide an undertaking to the Court and there is not an undertaking on the Court file in the terms as set out in ‘the undertaking’ as provided for in the notation to the 2020 orders.
The Court cannot, based on the untested evidence, make any findings in relation to whether the husband, as alleged by the wife, applied for a child support assessment. There is no independent evidence before the Court as to the process which triggered the child support assessments by Services Australia. It is likely that information was provided to Services Australia, on which assessments were based.
The husband submitted a form of remedy available to the wife, following the husband’s notification to Services Australia of his residential status, and the consequent assessment which arose from the notification, is as against her solicitors, and not the husband. That is:[5]
…any cause of action regarding the undertaking is not a matter for this Court. If the undertaking is insufficient for the [wife’s] purposes, her cause of action lies against her current solicitors…
[5] Husband’s Outline of Case filed 13 February 2024, p.13.
The husband submitted further that there is a consequential conflict of interest between the wife and her solicitors. Alternatively, it was submitted that a fair-minded, reasonably informed member of the pubic might conclude that the proper administration of justice requires that the wife’s solicitor be prevented from acting in the interests of the protection of the integrity of the judicial process and the appearance of justice.
The onus of proof lies with the husband. Any suggested (by the husband) cause of action open to the wife has not been admitted by her or her solicitors, nor is it proven on the evidence before the Court. There is no evidence to suggest that the wife’s solicitors are prioritising their duty to the wife ahead of their duty to the Court and I am cognisant of the need to regard the jurisdiction as exceptional and to be exercised with caution.[6]
[6] Naczek & Dowler [2011] FamCAFC 179.
In the affidavit material on which the wife relies, the wife makes no complaint of her solicitors nor is there any evidence that she has commenced, or intends to commence, any form of proceeding against her solicitors. Her evidence is primarily concerned with other matters, such as the child Y’s health issues, the parties’ litigation history, the husband’s financial position, and the husband’s payment of spousal maintenance and child support to her.
The wife’s solicitors have not been called upon in this proceeding to defend their actions or advice to the wife, and nor has the wife’s solicitor been called as a witness in this proceeding.
The wife, in her affidavit material, does not waive, or indicate she intends to waive, legal professional privilege in relation to advice she has received from Westminster Lawyers in relation to the making of the 2020 orders, including what advice (if any) the wife received specifically about the undertaking and any relevant legislation. It is a matter for the wife, and she is under no obligation to waive her privilege.
The wife’s counsel submitted the husband’s position was grounded in speculation. That is, that it was speculative for the husband’s senior counsel to submit that the wife, in the husband’s words “would have been or should have been advised by her legal representatives as to the terms of the June 2020 orders, including the notations and undertakings to these, including their legal effect”.[7] I accept that submission. It is not open for the Court to speculate as to the nature of legal advice the wife received prior to the making of the 2020 orders, nor indeed the nature of the instructions given by the wife to her solicitors.
[7] Husband’s affidavit filed 14 November 2023, paragraph 11.
Based on the evidence before the Court, there is no proper basis to assert there is a real or substantial possibility of a conflict between the wife and her solicitors. The mere fact an issue has arisen with respect to the interpretation or enforcement of the 2020 orders is not in and of itself a basis on which there is now an alleged conflict.
The wife remains entitled to her choice of representation and is not deprived of such choice due to the assertion by the husband, without proper evidentiary basis, that she might have a cause of action against her solicitors which creates for her solicitors a conflict with their duty to their client or their duty to the Court.
On the evidence, I am not satisfied that a fair-minded, reasonably informed member of the public might conclude that the proper administration of justice requires that the wife’s solicitor be prevented from acting for her, in the interests of the protection of the integrity of the judicial process and the appearance of justice.
CONCLUSION
For the reasons set out above, the husband’s application is dismissed.
Where the husband has been wholly unsuccessful in pursuing the restraint application, the wife’s costs arising from the application are reserved.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 15 February 2024
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