Beckley and Beckley

[2017] FCCA 737

FEDERAL CIRCUIT COURT OF AUSTRALIA

BECKLEY & BECKLEY [2017] FCCA 737

Catchwords:
FAMILY LAW – Application in a Case by wife’s former solicitors to intervene in property proceedings to seek costs against wife where the wife and husband seek to discontinue the property proceedings – application dismissed.

Legislation:

Family Law Act 1975, s.92

Applicant: MS BECKLEY

Respondent: MR BECKLEY

File Number: PAC 4123 of 2015

Judgment of: Judge Newbrun

Hearing date: 22 March 2017

Date of Last Submission: 22 March 2017

Delivered at: Parramatta

Delivered on: 13 April 2017

REPRESENTATION

Solicitors for the Applicant: Self-represented

Solicitors for the Respondent: Self-represented

ORDERS

1. The Application in a Case filed 7 March 2017 by the wife’s former solicitors is dismissed.

2. The application by the wife’s former solicitors seeking orders referred to in the document entitled “Proposed Short Minute of Order” and being Exhibit A, including orders that leave be granted pursuant to Section 92 of the Family Law Act 1975 for the wife’s former solicitors to intervene in the proceedings as a third-party creditor, is dismissed.

3. The interim consent orders of the Court made 10 March 2016, at the request of the parties, are discharged.

4. The Applicant wife is granted leave to file the Notice of Discontinuance signed by her and dated 17 March 2017 and previously sought to be filed by her on 17 March 2017.

5. The Respondent husband is granted leave to file the Notice of Discontinuance signed by him and dated 17 March 2017, and previously sought to be filed by him on 17 March 2017.

IT IS NOTED that publication of this judgment under the pseudonym Beckley & Beckley is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 4123 of 2015

MS BECKLEY

Applicant

And

MR BECKLEY

Respondent

REASONS FOR JUDGMENT

1. This was the hearing of an application by the wife’s former solicitors seeking, inter alia, leave under Section 92 of the Family Law Act 1975 to intervene in the property proceedings as a third-party creditor.

2. In essence, the application is brought by the wife’s former solicitors to enable them to recover what is contended to be outstanding legal costs owed to them by the wife arising out of the property proceedings.

3. The property proceedings were listed for a 1 day final hearing on 20 March 2017 and the parties had each sought to file their own Notice of Discontinuance on 17 March 2017 (discontinuing each of their respective Initiating Application and Response documents); the Court notes that the parties now require the leave of the Court to so file such Notices: FCC Rule 13.01(2).

4. Initially the wife’s solicitors filed an Application in a Case on 7 March 2017 and it was heard initially at Court on 20 March 2017 in the presence only of the former solicitor for the wife. Then the Court telephoned the husband and wife who provided certain information to the Court, in particular in relation to their efforts to stave off the mortgagee bank (referred to in the above Application in a Case) from executing a writ of possession. The Application was then adjourned to 22 March 2017, at which time both the former solicitor and the husband and wife appeared personally. At that point the former solicitor for the wife handed up to the Court a revised proposed minute of order, Exhibit A. This Proposed Short Minute of Order sought:

   a)Leave is granted pursuant to Section 92 of the Family Law act for Crox Pty Limited t/as Lewarne & Goldsmith, Solicitors to intervene in the proceedings as a third party creditor being the former solicitors for the Applicant wife.

   b)The Applicant wife to make such application as she deems necessary or considers appropriate to apply to have the costs and disbursements of Crox Pty Limited t/as Lewarne & Goldsmith, Solicitors comprising 3 invoices attached to the Affidavit of the Intervener being Annexures “F”, “G” and “H” assessed with such application for assessment to be made within a period of 21 days from the date of this order.

   c)The Respondent husband to forthwith pay to the Intervener the sum of $1,320 being the costs order made against the Respondent husband by Registrar Kimmorley on 15 January, 2016.

   d)The Application for leave to withdraw the proceedings filed by the Applicant and Respondent be adjourned until………………………….

   e)The Applicant and/or Respondent to relist the proceedings on 7 days notice in the event the mortgagee’s solicitors proceed with any enforcement action in relation to the mortgage default and the Respondent to notify the Intervener within 3 days of such notice being provided by the mortgagee.

5. It is helpful to set out a brief background to the Application in a Case.

6. The property proceedings were commenced by the wife against the husband on 24 August 2015 in the Family Court of Australia at Parramatta. She sought a final order that the family home at Property P be sold and distributed in a certain manner.

7. A Response was filed on 28 January 2016 by the husband. He sought a final order that the property be sold and the proceeds distributed on a different basis to that of the wife’s proposal.

8. On 13 November 2015 there was a mention of the proceedings before a Registrar. Both parties appeared. The Respondent husband was directed to file and serve his documents within a certain period, namely 13 December 2015. The proceedings were adjourned to 15 January 2016 for a Conciliation Conference. The parties were each to provide full details of the mortgage within 28 days and other directions were made.

9. On 15 January 2016, the parties appeared; the wife through her former solicitor and the Respondent in person. The Respondent husband not having complied with the above directions, the Registrar made an order that he pay the wife’s costs of $1,320 inclusive of GST by 4 April 2016.

10. On 10 March 2016 interim consent orders were made between the parties providing for the husband to cause the property to be listed for sale, and that after settlement of such sale the proceeds of sale be distributed in a certain manner (25% of the balance to each of the husband and wife by way of partial property settlement; after this distribution of the net proceeds, the balance was to be held by the Norton Law Group in trust for the parties pending further agreement between them or order of the Court), and it was stated that, “from the husband’s share of the funds he pay $1,320 to the solicitors for the wife in satisfaction of the outstanding costs order.”

11. On the 31 May 2016 proceedings were transferred to this Court.

12. The proceedings were set down for hearing on 11 October 2016, with the hearing date being 20 March 2017.

13. On 23 February 2017 the husband’s solicitor filed a notice of intention to withdraw as lawyer.

14. On 27 February 2017 the wife’s solicitor filed a notice of intention to withdraw as lawyer.

15. On 17 March 2017 each of the parties sought to file separate Notices of Discontinuance seeking to discontinue the whole of their proceedings, namely the wife’s Initiating application, and the husband’s Response.

16. The Affidavit of the wife’s former solicitor file 7 March 2017, states, inter alia, that the wife entered into a costs agreement with the former solicitor. The former solicitor asserts that she agreed with the wife that she would accept instructions from the wife on the basis that the wife would pay legal fees and disbursements at the conclusion of the proceedings and after she received funds from her property settlement under Section 79 of the Act.

17. The Affidavit states that the mortgage on the property fell into arrears. It states that the husband received a payout of some $155,000 in a personal injury claim. It states that the mortgagee has taken possession of the property. Further, that the wife had been served with a writ of possession to vacate the property before 17 March 2017.

18. The Affidavit annexes three invoices sent by the former solicitors to the wife in relation to legal costs; 4 May 2015, 12 October 2016, and 21 February 2017. The first invoice is in the sum of $1,360, second invoice is in the sum of $12,083, and the third $2,402.

19. It is stated in the Affidavit that the subject property is solely in the name of the husband. It is stated that the property is worth about $550,000 with an outstanding mortgage of about $265,000.

20. On 20 March 2017, the wife’s former solicitors were informed (see email of the same date, being Exhibit B) by the solicitors for the mortgagee bank that,

    “we have recently cancelled the eviction of the borrower from the property. A hardship application has been made and at the present time we are unable to progress the matter further. The result of a hardship application may determine the future course, and if successful than action for possession will not continue.”

21. This information in the email was consistent with the information provided to the Court by the husband and wife on the telephone on 20 March 2017. The parties had informed the Court further at that time that although they had not reconciled, the parties, for the sake of the children, and to keep a roof over their head, did not wish the property to be sold pursuant to the past interim property orders of the Court of 10 March 2016, and that the parties desired for the wife and the children of the relationship to remain living in the property. The wife informed the Court that she had been under a great deal of stress and anxiety. She frankly informed the Court that she did not know how she would pay for any outstanding fees owed to her former solicitors. The husband informed the Court that he did not want his personal injury settlement monies to be used to pay any outstanding legal costs owed by the wife.

22. At the resumed hearing of the wife’s former solicitor’s Application in a Case on 22 March 2017, the husband and wife, legally unrepresented, essentially confirmed the above information provided by them to the Court on 20 March 2017. On enquiry by the Court, they stated that they wished for the interim orders of 10 March 2016 to be discharged.

23. The wife’s former solicitor submitted, inter alia, that the parties filed Notices of Discontinuance, in all the circumstances, indicated a plan by them to avoid paying the wife’s former solicitor’s legal costs. In response, the parties informed the Court that there was no “plot” to avoid paying such costs. In this context, the wife’s former solicitor had invited the Court to read the parties’ prior Affidavits; the wife’s Affidavit filed 19 February 2016, and the husband’s Affidavit filed 4 March 2016. The Court has read these historical Affidavits. Clearly these Affidavits refer to, inter alia, each party’s version of disharmony within the marriage, their respective assertions as to relevant Section 79 contributions, their property proposals and financial circumstances.

24. Not without relevance, in the wife’s affidavit, she states that the husband has had exclusive occupation of the former matrimonial home since separation in December 2014; she has had to relocate herself and the children and she is now faced with a situation of not being able to have a house to live in with the children and having to move again; and she has taken a video of the conditions the children and herself are currently living in. She refers to her Application in a Case filed 9 February 2016 in which she seeks interim orders that the husband vacate the property, and that the wife and the children have sole and exclusive occupation of the property. The Court notes that the wife’s affidavit states that she proposes to remain in the house following “the orders being made” (a reference to her Application in a Case filed 9 February 2016) until its ultimate sale.

25. The wife’s former solicitor submitted that, in relation to her proposed order 2, in Exhibit A, in relation to the wife applying to have the costs and disbursements of the wife’s former solicitors assessed, she would envisage following any such assessment, that she would seek a charge, in relation to such assessment, against the “wife’s interest in the property”, but that no order for sale would be sought.

26. In relation to the previous costs order made against the husband by the Registrar, on enquiry by the Court, the husband stated that he understood what had been required of him by directions of the Registrar on 13 November 2015, and in relation to which the later costs order had been made. He stated that he was a part-time (occupation omitted) paying child support, groceries, credit card payments and mortgage repayment. At this point, the wife’s former solicitor submitted that the husband should supply documentation as to his alleged financial hardship in paying the costs order.

Discussion

1. The Court has considered all the relevant evidence and other material referred to above, including information supplied by the parties to the Court on two occasions in relation to the wife’s former solicitors proposed orders in Exhibit A.

2. The Court is not satisfied that the parties filing of Notices of Discontinuance recently represents a plan by either of them, whether singularly or together, to avoid paying the wife’s former solicitor’s legal costs; the Court is not satisfied that their filing represents an abuse of process or fraud.

3. The information supplied by the parties to the Court is plausible, and is supported by the email information from the mortgagee’s solicitors to the wife’s former solicitors dated 20 March 2017, Exhibit B, indicating that the parties have made a hardship application to the mortgagee bank and that the mortgagee bank has recently cancelled the eviction of the borrower from the property. Further, the parties wish to have the Court discharge the order for sale of the property made on 10 March 2016, again noting that they have agreed for the sake of the children to provide “a roof over their heads”.

4. Again, by reference to the Affidavit of the wife’s former solicitor filed 7 March 2017, the wife entered into a costs agreement with the former solicitor. The former solicitor agreed with the wife, “Given the financial circumstances of the (wife) at the time and the fact that she had no recourse to any finances”, that she would accept instructions from the wife on the basis that the wife would pay legal fees and disbursements at the conclusion of the proceedings and after she received funds from her property settlement under section 79 of the Act. 

5. Accordingly, it would appear that the costs agreements between the wife and the wife’s former solicitors did not expressly contemplate what would happen, as far as recovery of legal costs by the wife’s former solicitors from the wife was concerned, in the event that the subject property was ultimately not sold, or if the court determined it was not just and equitable to make property settlement orders.

6. There is no evidence that these costs agreements provided any entitlement in the wife’s former solicitors, in the event that the subject property was ultimately not sold, to seek to impose a charge against the wife’s interest in the subject property for the wife’s former solicitors legal costs whether assessed or otherwise.

7. In passing, in this context, the Court notes Clause 6 E3 of the costs agreement providing, inter alia, that on termination of the costs agreement, the wife’s solicitors would be entitled “to retain possession of your papers and documents while there is money owing to me for my charges and expenses, unless and until security is provided for my costs.”

8. In the above circumstances, it would not appear to be in the interests of justice or proper for the Court to grant leave pursuant to Section 92 of the Family Law Act 1975 for the wife’s former solicitors to intervene in the proceedings (nor make the other orders sought in Exhibit A) when the parties seek, for legitimate reasons, to discharge the interim property orders of 10 March 2016 relating to the sale of the subject property, and discontinue the property proceedings.

9. During submissions on 22 March 2017, the wife’s former solicitors also referred to Section 79(10) as a possible source of power in the Court to order the wife’s former solicitors to become a party to the proceedings. This submission is misconceived as the opening words of subsection 10 state “The following are entitled to become a party to proceedings in which an application is made for an order under this section by a party to a marriage (the subject marriage)”; again, the parties, for legitimate reasons, are seeking to discontinue their property proceedings.

10. As to the wife’s former solicitors proposed order in Exhibit A, that the respondent husband forthwith pay to the intervener the sum of $1,320 being the costs order made against the respondent husband by Registrar Kimmorley on 15 January 2016, the Court notes that that order specifically made at that time was that the “respondent husband is ordered to pay the wife’s costs of today of $1,200 + GST by 4 April 2016.”

11. There is no entitlement in the wife’s former solicitors to seek to enforce this costs order in their favour as they propose in Exhibit A, as it is the wife’s costs order. The reference in the interim consent property orders of 10 March 2016 that “from the husband share of the funds he pay $1,320 to the solicitors for the wife in satisfaction of the outstanding costs order”, provides no legal support for this proposed order of the wife’s former solicitors in Exhibit A, in circumstances where the subject property is not to be sold, but in any event, the Court costs order was a costs order in favour of the wife, not the wife’s former solicitors.

12. Accordingly, the court will make the following orders:

    1. The Application in a Case filed 7 March 2017 by the wife’s former solicitors is dismissed.

    2. The application by the wife’s former solicitors seeking orders referred to in the document entitled “Proposed Short Minute of Order” and being Exhibit A, including orders that leave be granted pursuant to Section 92 of the Family Law Act for the wife’s former solicitors to intervene in the proceedings as a third-party creditor, is dismissed.

    3. The interim consent orders of the Court made 10 March 2016, at the request of the parties, are discharged.

    4. The Applicant wife is granted leave to file the Notice of Discontinuance signed by her and dated 17 March 2017, and previously sought to be filed by her on 17 March 2017.

    5. The Respondent husband is granted leave to file the Notice of Discontinuance signed by him and dated 17 March 2017, and previously sought to be filed by him on 17 March 2017.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Newbrun

Date:  13 April 2017