BLAKE & BLAKE

[2015] FCCA 2710

FEDERAL CIRCUIT COURT OF AUSTRALIA

BLAKE & BLAKE [2015] FCCA 2710

Catchwords:
FAMILY LAW – Property – Interim Orders – undertaking – application for release of undertaking – application for interim distribution – injunction – where interim property distribution sought to meet outstanding debts and on account of legal costs.

Legislation:

Evidence Act 1995 (Cth), s.131

Family Law Act 1975(Cth), ss.79, 80

Cases cited:
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2009) 241 FLR 1; (2011) FLC 93-466

Applicant: MS BLAKE

Respondent: MR BLAKE

File Number: SYC 6614 of 2010

Judgment of: Judge Scarlett

Hearing date: 30 September 2015

Date of Last Submission: 30 September 2015

Delivered at: Sydney

Delivered on: 6 October 2015

REPRESENTATION

Solicitor for the Applicant: Ms Leckie

Solicitors for the Applicant: Leckie Law

Solicitor for the Respondent: Ms Dalton

Solicitors for the Respondent: Carty & Cox

ORDERS

UNTIL FURTHER ORDER

1. The Respondent husband is released from his undertaking given to the Court on 14 April 2015.

2. The parties are to do all things necessary to release from the (omitted) mortgage facility the sum of $8,000.00 to the Applicant wife and the sum of $8,000.00 to the Respondent husband within seven (7) days from the date of this Order, such sums to be by way of interim property distribution in respect of each party.

3. The sum of $8,000.00 payable to the Applicant wife referred to in Order (2) is to be paid into the Trust Account of her solicitors Leckie Law and the sum of $8,000.00 payable to the Respondent husband referred to in the said Order is to be paid into the Trust Account of his solicitors Carty & Cox.

4. The Respondent husband is restrained by injunction from withdrawing any further amounts from the redraw facility until 1 December 2015.

5. The matter is adjourned to the sittings of the Court at Coffs Harbour on Tuesday 24 November 2015 for further mention at 11:30 am.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 6614 of 2010

MS BLAKE

Applicant

And

MR BLAKE

Respondent

REASONS FOR JUDGMENT

(As Corrected)

Application in a Case

1. This is an Application in a Case by the husband, who is the Respondent in the substantive proceedings between the parties, to be released from an undertaking he gave to the Court on 14 April this year not to withdraw any more than $2,400.00 each calendar month from a redraw facility until the matter resolves either by court order or by consent.

2. The wife, who is the Applicant in the substantive proceedings, opposes the Application and seeks that it should either be dismissed or that there should be an interim distribution to both parties and the husband should be bound by an injunction in terms of the earlier undertaking.

3. The husband claims that the wife is at fault by reneging on an agreement that they had reached at a mediation. The wife claims that the husband has already flagrantly breached the undertaking.

4. The matter has been complicated by a considerable amount of evidence that the parties sought to lead in the proceedings about their daughter, who is the subject of Orders under the Children and Young Persons (Care and Protection) Act 1998 (NSW). At the hearing of this Application in a Case I held that most of the evidence sought to be led was inadmissible because it was irrelevant.

Orders Sought

1. The husband, by his Application in a Case filed on 22 September 2015, seeks the following Order:

   That the husband be released from the undertaking he gave to the court on 14 April 2015.

2. The wife, by her Response to an Application in a Case filed on 24 September 2015, sought the following orders:

   1.  That the Husband’s application be dismissed.

   And or in the alternative

   2.  That the sum of $8,000 be released to the Wife and $8,000 released to the Husband from the redraw facility with such sums to be seen as an interim distribution to both parties.

   3.  (This Order was not pressed at the hearing)

   4.  That the Husband be restrained and injunction issue restraining the Husband from withdrawing any more than $2,400 each calendar month until the matter resolves either by Court order or by consent. The Husband’s use of such funds to be considered at the final hearing of this matter.

   5.  That the Husband pay the Wife’s costs of and incidental to these proceedings.

Procedural History

1. The wife applied for a Divorce by means of an Application filed on 28 October 2010 at the Sydney Registry of the Court. The Application was returnable on 9 December 2010.

2. The Application was adjourned by the Registrar because neither party had attended Court but there was (and still is) a child of the marriage under the age of 18 years.

3. On 10 February 2011 the Court pronounced a Divorce Order, to become effective in one month.

4. On 26 June 2014 the wife filed an Application for property orders, including an application to file the application out of time. The Application was returnable at the Coffs Harbour sittings of the Court on 30 September 2014.

5. The husband filed a Response on 26 September, seeking property orders and a child support departure order.

6. On 30 September 2014 His Honour Judge Kemp granted the wife leave to commence proceedings out of time and ordered that the parties should attend a mediation in respect of the financial issues between them. His Honour adjourned the proceedings to 10 February 2015 but, by consent, made orders in Chambers on 13 November 2014 vacating the orders for a mediation and directed that the parties attend a Conciliation Conference with a Registrar.

7. The parties attended the Conciliation Conference on 28 January 2015 but no agreement was reached.

8. On 10 February 2015 Judge Kemp directed that the parties should attend a property mediation with an accredited Family Dispute Resolution Practitioner on 7 April 2015.

9. On 14 April 2015 His Honour made further Orders by consent for the appointment of an agreed joint single expert valuer. His Honour noted the undertaking provided to the Court by the husband and adjourned the proceedings to the sittings of this Court on 22 September 2015.

10. The matter did not come back to Court until 24 September when the husband’s Application in a Case was returnable.

11. The wife filed her Response to the Application in a Case on that day and the matter was adjourned to the following day at 10:00 am for mention.

12. On 25 September the parties did not reach any agreement and the matter was listed for an interim hearing in Sydney on Wednesday 30 September. The parties’ solicitors were given leave to attend by telephone.

13. On 30 September I heard submissions from the parties’ solicitors.

Evidence and Submissions

1. The husband relied on his later affidavit of 28 September 2015. It is his case that he currently only has a gross income of about $100.00 per week and his current wife has an income of $500.00 per week from Centrelink.

2. At the time he gave the undertaking that he would only withdraw $2,400.00 per month from the surplus in the (omitted) mortgage account he was in receipt of a NEIS allowance paid by Centrelink. Those payments stopped in late July 2015.[1] He estimated his weekly expenses for himself, his current wife, his daughter X and his stepdaughter at $1,436.00.

   [1] Affidavit of Mr Blake 28.9.2915 at paragraphs [18]-[19]

3. The husband deposed that he attended mediation on 23 June 2015 and left the mediation believing that a settlement had been reached:

   Minutes of consent orders were subsequently prepared and signed by Ms Blake however I am informed and believe that on 9 September 2015 Ms Blake’s solicitor wrote to my solicitor advising that she no longer consented to the orders agreed upon being made by the court.[2]

   [2] Ibid at [23]

4. The husband deposed that he cannot meet his family’s essential needs without having access to the mortgage surplus.

5. The wife deposed in her affidavit of 24 September that she does not have sufficient funds to meet her daily living expenses. She also has debts, including:

   a)Susan Green Legal Practice for care proceedings      $670.45;[3]

   b)An amount owing to her current solicitor for these proceedings  $23,237.00; and

   c)(omitted) for an overdue mobile telephone account    $1480.61.

   [3] The wife’s affidavit says at paragraph [27] that the amount owing is $640.45 but the annexed tax invoice shows a balance due of $670.45.

6. Copies of relevant invoices are annexed to the wife’s affidavit at Annexure “E”. A Pre Billing Guide from her current solicitors forms part of the Annexure, showing a total of $23,237.50. Of that sum, the only amount that appears to be billed to date is an amount of $120.00 for disbursements.

7. The wife deposed that the husband has already taken various sums from the mortgage account, being $11,000.00 in August and $4,000.00 in July.[4]

   [4] Affidavit of Ms Blake 24.9.2015 at [33]

Conclusions

1. Each party blames the other for the situation in which they find themselves.

2. There is no doubt that the husband does not “come to court with clean hands” as he concedes that he has, as the wife asserts, already withdrawn amounts from the mortgage account in excess of the limit of $2,400.00 per month given in his undertaking. In his affidavit, the husband gives a rather unconvincing explanation of the circumstances:

   On 23 June 2015 I attended mediation. I left the mediation believing that a settlement had been reached whereby I would pay Ms Blake a fixed amount. Having reached agreement I thought I was at liberty to draw on the surplus in the mortgage account since my withdrawals would have no impact on the sum that I was to pay Ms Blake…There was some correspondence about what should occur if the orders agreed upon were not complied with but nothing that made me think that the settlement wasn’t going to proceed to final orders.[5]

   [5] Affidavit of Mr Blake 28.9.2015 at [22]

3. Had the husband obtained legal advice he would no doubt have been informed that he was mistaken in this belief. The undertaking given on 14 April 2015 stated that it remained in force “until the matter resolves either by court order or by consent.”

4. There was no court order. The husband is not claiming that there was a specific consent by the wife or he would have sought to tender a written agreement by the wife to that effect. Clearly, to use the vernacular, he “jumped the gun”.

5. Accordingly, there is some force to the wife’s submission that he should be bound by injunction rather than undertaking, as he clearly breached the undertaking.

6. Against this, it is clear that the wife did go back on her agreement to settle the matter after the terms of settlement had been drawn and signed. The wife deposed that “Terms were still being negotiated in August”[6] and annexes copies of some emails. However, one of the emails was held to be inadmissible under s.131 of the Evidence Act 1995 (Cth) as it dealt with settlement negotiations.

   [6] Affidavit of Ms Blake 24.9.2015 at [34]

7. Those emails that are admissible state:

   Linda Dalton is currently on leave and will be returning to the office on Tuesday 18^th August 2015. She will respond to your email after that date.[7]

   Is there someone else that can look at the file in her absence as the settlement may fall through if there is that delay.[8]

   [7] Email from Carty & Cox to Leckie Law 30 July 2015

   [8] Email from Leckie Law to Carty & Cox 30 July 2015

8. The settlement did in fact fall through. On Wednesday 9 September 2015 the wife’s solicitor emailed to the husband’s solicitor:

   My client has instructed today that she no longer agrees to the consent orders. As such please do not attend to filing the documents.[9]

   [9] Affidavit of Mr Blake Annexure “H”

9. Another part of the email has been redacted, presumably because it relates to other settlement negotiations.

10. Clearly, there was an agreement by 9 September and the necessary documents had been signed. However, the wife called off the settlement before Consent Orders could be made.

11. In my view, the husband found himself in an invidious position, as he had grounds to believe, at least shortly before 9 September, that he had a settlement of the property proceedings, which would have given him certainty as to what he was required to pay the wife to resolve the proceedings between them.

12. The orders proposed by the wife in her Response to the husband’s Application in a Case appear to offer a path towards doing justice to both parties.

13. The husband has established that he has financial commitments that he needs to meet and he had a legitimate expectation that the property proceedings would have been settled by now. An amount of $8,000.00, as an interim distribution, would provide him with funds to meet his commitments over the next couple of months. He should not, therefore, need any further amount before the end of November, by which time the matter will have come back to Court and these Orders can be reviewed.  

14. There is no value in a further undertaking. I propose to restrain the husband by injunction from withdrawing any further funds prior to 1 December.

15. On the other hand, the wife has established that she has some pressing financial needs, including a telephone account where the service provider is threatening enforcement action and an amount of costs rendered by a solicitor for proceedings in another jurisdiction. She is also seeking an amount to put her solicitor in funds to finance her continuing legal representation. This is a not uncommon situation (see Strahan & Strahan (Interim Property Orders))[10]. It does not matter that the wife’s solicitors have not yet rendered a memorandum of costs in respect of the work done so far or have not formally informed her that they will not continue to act for her if they do not receive some payment.

    [10] [2009] FamCAFC 166; (2009) 241 FLR 1; (2011) FLC 93-466

16. The amount of $8,000.00 should also be paid to the wife. I am not persuaded that she would receive less than that figure after a final hearing.

17. The amounts should be paid to the Trust Accounts of the parties’ respective solicitors so that they may then distribute or retain the funds accordingly. It would appear to be to the wife’s benefit if her telephone account and the amount owing to her former solicitor were to be paid.

18. The parties should, in my opinion, apply their minds to resolving the property proceedings before them in a just and equitable manner. If the matter has to go to a final hearing it may be another twelve months before it can be heard. The matter will be mentioned before his Honour Judge Kemp in Coffs Harbour on 24 November 2015.  

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Judge Scarlett

Associate: 

Date:  6 October 2015

Corrections

1. The Applicant’s legal representation on the cover sheet was corrected from Ms Dalton to Ms Leckie.

1. The Respondent’s legal representation on the cover sheet was corrected from Ms Leckie to Ms Ms Dalton.