FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)Balian & Balian [2021] FedCFamC1F 163
File number(s): MLC10819/2019 Judgment of: HARTNETT J Date of judgment: 29 October 2021 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application for Review of a Registrar’s decision – Application granted – hearing de novo – Application in a Case – commercial litigation in the Supreme Court of Tasmania – interim Orders made March 2021 – proceeds of sale of real property distributions – March 2021 Orders provide for payments in respect of Tasmanian Litigation – Orders made setting aside the Registrar’s decision. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Division: Division 1 First Instance Number of paragraphs: 32 Date of last submission/s: 14 October 2021 Date of hearing: 14 October 2021 Place: Melbourne Queen’s Counsel for the Applicant: Mr Dickson Solicitor for the Applicant: Coote Family Lawyers Senior Counsel for the Respondent: Ms Smallwood Solicitor for the Respondent: Taussig Cherrie Fildes ORDERS
MLC 10819 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BALIAN
Applicant
AND: MR BALIAN
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
29 OCTOBER 2021
THE COURT ORDERS THAT:
1.The Application for Review filed 27 September 2021 be allowed.
2.The Orders of a Registrar made on 15 September 2021 be set aside.
3.The monies held on behalf of the parties in the trust account of Taussig Cherrie Fildes (“TCF”) being the balance of proceeds of the sale of B Street, Suburb D in the State of Victoria be dispersed in accordance with Order 4 of the Orders made on 23 March 2021 (as amended pursuant to r. 17.02(1)(h) of the Family Law Rules 2004 (Cth)).
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 Balian & Balian is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J:
INTRODUCTION
On 27 September 2021 an Application for Review of a decision of a Registrar was filed by the Respondent husband (“the husband”). The Orders made by the Registrar were made on 15 September 2021 which are as follows:
That the monies held in the TCF [Taussig Cherrie Fildes] trust account pursuant to the orders made on 14 January 2021 and 23 March 2021 be disbursed by…
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- Balian & Balian [2021] FedCFamC1F 163
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- [2021] FedCFamC1F 163
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CaseChat Overview and Summary
The legal issues before the court included the interpretation and application of the existing orders regarding the sale proceeds, the characterisation of the costs related to the ongoing litigation, and the implications of a Calderbank offer in the Tasmanian Litigation. Specifically, the court had to decide whether the funds from the sale of the property could be used to meet the costs of the Tasmanian Litigation and if the rejection of the Calderbank offer would result in the parties incurring additional costs.
The court found that the proceeds of the sale of the U Street property were to be held in the trust account pending further agreement between the parties. It noted that the settlement range provided by G Lawyers for the Tasmanian Litigation was within the funds available from the sale. The court emphasised that the costs of litigation should be borne by the parties proportionally, based on their respective interests in the litigation. Regarding the Calderbank offer, the court held that the rejection of the offer could result in the parties being liable for the Plaintiff's costs on an indemnity basis. The court decided that the funds from the sale could be used to meet the costs of the Tasmanian Litigation, subject to the parties’ agreement and the terms of the Calderbank offer.
The court ordered that the proceeds of the sale of the U Street property be used to meet the costs of the Tasmanian Litigation, subject to the parties’ agreement. The court further held that the rejection of the Calderbank offer could result in the parties incurring additional costs. The decision underscored the importance of adhering to the terms of litigation offers and the potential financial implications of their rejection.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
It is the evidence of the husband that on 28 July 2021, in order to generate further necessary funds to settle the parties’ current and contingent liabilities, the husband sought to sell the U Street property, his former residence. The husband expects the U Street property to sell for $2,000,000-$2,200,000[3] and there are two loans secured against this property in the sum of approximately $716,090 (loan account …30) and approximately $346,402 (loan account …44). The husband proposed to the wife that upon settlement, the parties each receive, $250,000 by way of a part property settlement and that the balance of proceeds be held in the TCF solicitor’s trust account pending further agreement. He also proposed that he have sole conduct of the sale. The parties appear to have agreed as to these matters. [3] Affidavit of the husband filed 14 September 2021 at paragraph 138. CONSIDERATION The settlement of the sale of B Street occurred on 26 July 2021. The proceeds of sale were applied in accordance with Order 4(a) and (b) of the March Orders. There were no outstanding amounts payable under Order 2(b) to (d) of the March Orders and therefore Order 4(c) of the March Orders did not apply. The net proceeds of approximately $416,962.13, prior to disbursement in accordance with Order 4(d) of the March Orders, were then deposited into the TCF solicitor’s trust account to be held on trust for the parties. Order 4(d) was then partially executed by the parties to meet two cost payments, the first of $57,000 and the second in a sum not described in the evidence payable to G Lawyers. Relevant to this particular application, is the commercial litigation in the Supreme Court of Tasmania between Ms C (“the Plaintiff”), and a former employee of K Pty Ltd, and K Pty Ltd, a company of which the husband is the sole director, as the First Defendant, and the parties as the Second and Third Defendants (“the Tasmanian Litigation”). The parties have engaged G Lawyers in respect of the conduct of this litigation. Such litigation is being conducted jointly on behalf of the company and the parties by Mr F of G Lawyers. On 13 August 2021, G Lawyers provided to the parties the likely settlement range for this dispute and indicated that “a starting settlement range of $300k-$500k would be appropriate.”[4] [4] Affidavit of the husband filed 14 September 2021 at “Annexure B-1”. The Tasmanian Litigation is listed for final hearing on 22 March 2022. The expectation of the parties is that the future costs of going to trial is approximately $170,000. The parties and the Plaintiff have negotiated with each other in an effort to resolve the matter. The Plaintiff had earlier advised that she was willing to settle the claim for a sum of $380,000. The parties had made a counter-offer to settle the claim for $250,000. No time frame for payment had been put in those negotiations. Following the hearing of the Application for Review on 21 October 2021, the parties received a revised offer from the Plaintiff as conveyed by her solicitors, V Lawyers, in the following terms:[5]We refer to the above matter and confirm our instructions that our client would be willing to accept $315,000 on an 'all-in' basis in full and final settlement thereof. This offer is open for fourteen days from the date of this letter and is subject to the parties entering into a deed of settlement and release on the usual terms. We confirm that this offer is a Calderbank offer and that, if the offer is rejected or is not accepted within the stipulated timeframe, and your clients fail to obtain a judgment more favourable than it, this letter shall be relied upon in support of an application that your clients pay our client's costs on an indemnity basis from the date of this letter and costs prior to that on a standard basis. Such application will be made pursuant to the principles enunciated in Calderbank v Calderbank [1975] 3 WLR 586 [“Calderbank”] and discussed in O’Pray v Olbrich [2012] TASSC 3 (and other cases referred to therein).(Emphasis in original)[5] Affidavit of the husband filed 26 October 2021 at “Annexure B-1”.