BLAKE & WALKER
[2013] FCCA 1039
•18 July 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BLAKE & WALKER | [2013] FCCA 1039 |
| Catchwords: COSTS – Whether costs should be paid on an indemnity basis. |
| Legislation: Family Law Act 1975 (Cth) ss.79, 80 |
| Cases cited: Colgate Palmolive Pty Ltd v Cussons Limited (1993) 46 FCR 225 Goode & Goode [2006] FamCA 1346; (2006) 36 Fam LR 422; FLC 93-286 Kohan & Kohan (1993) FLC 92-340 Prantage & Prantage [2013] FamCAFC 105 Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2009) 241 FLR 1; (2011) FLC 93-466 |
| Applicant: | MR BLAKE |
| Respondent: | MS WALKER |
| File Number: | SYC 7663 of 2012 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 18 July 2013 |
| Date of Last Submission: | 18 July 2013 |
| Delivered at: | Sydney |
| Delivered on: | 18 July 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Shaw |
| Solicitors for the Applicant: | Soothill & Associates Lawyers |
| Counsel for the Respondent: | Mr Watkins |
| Solicitors for the Respondent: | Di Lizio & Associates |
ORDERS
That the Husband and, to the extent necessary, the Wife do all things and execute all documents necessary to direct and authorise New South Wales Lotteries Limited and/or the Tatts Lotto Group to pay the sum of $75,000.00 to become payable to the Husband on or about Sunday 28 July 2013, being part of the proceeds of the lotto win titled Win for Life lottery win, to the trust account of the Husband’s lawyer, James D. Soothill trading as Soothill & Associates Lawyers Proprietary Limited Law Practice Trust Account in lieu of the funds being paid direct to the Husband by the paying entity.
That the Husband irrevocably authorise in writing the said James D. Soothill to apply the lottery win in the manner following:
(i)to pay to the trust account of the Wife’s solicitor, Mario Fiorenzo Di Lizio, the sum of $28,000.00 by way of an interim property settlement.
(ii)to pay to the Husband the sum of $47,000.00 less any moneys payable to the said James D. Soothill pursuant to the contractual arrangements of the Husband and the said solicitor, such payment to be by way of an interim property settlement.
That in the event of the Husband and/or the Wife failing to execute any document necessary to give effect to the foregoing orders within four working days from the date hereof, then the party not in default may approach a Registrar of this Court to execute such document on behalf of and in lieu of the party in default. The costs so occasioned shall be paid by the party not in default.
IT IS NOTED that publication of this judgment under the pseudonym Blake & Walker is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 7663 of 2012
| MR BLAKE |
Applicant
And
| MS WALKER |
Respondent
REASONS FOR JUDGMENT
The interim application for the Court has changed somewhat from the form in which it was in when it was listed for Interim Hearing. Originally the matter was listed for an order by way of injunction in respect of an amount of $75,000.00 due to come from a lottery win from a form of a lottery known as a “scratchie”. The characteristics of this particular scratch lottery are that the winner receives an annual payment of $75,000.00 over a period of years.
The reason for the urgency in the application brought by the Respondent to the substantive application is due to the fact that the next payment is due to be made on the 28th of this month.
The Applicant sought a variety of orders for payment out of the money for various useful purposes including payment to a contact centre and in payment of certain costs. The Respondent, by means of an affidavit and a case outline document, has now brought what is often known as a Strahan & Strahan[1] application, referring to the decision in the Strahan & Strahan (Interim Property Orders), seeking an amount of money which, amongst other things, can be used for the provision of funds so that the Respondent may meet her present and ongoing legal costs.
[1] [2009] FamCAFC 166; (2009) 241 FLR 1; (2011) FLC 93-466
Such an application has been supported, as I said, by the affidavit of the Respondent’s solicitor, Mr Di Lizio in which he estimates the costs required for the entire proceedings, should they go that far, as requiring some $53,000.00 for solicitor’s fees and $58,000.00 for counsel’s fees. Of course, Mr Shaw of Counsel for the Applicant has expressed some criticism of the amounts sought, indicating that they were calculated on a very generous basis indeed, even going so far as to suggest that he would be quite happy to be paid according to the scales set out in Mr Di Lizio’s affidavit.
In dealing with such an application, the Court must, as I made it clear earlier, regard estimates of costs with a critical eye and I am inclined to agree to the submission that the costs estimate is prepared on a most generous scale indeed. I am certainly not of the view that there is a need, say, for a case assessment conference which applies in the Family Court, but usually with the nature of matters in this Court would not be necessary.
There is provision for costs for a conciliation conference with a Registrar of the Court and it is hard to see why that should not be necessary or desirable as the Court is greatly aided by the provision of conciliation conferences where a Registrar can often assist the parties to resolve matters or, at the very least, settle the issues or narrow the issues between them.
This, of course, depends on the degree of preparation for the conference that is undertaken. The Court makes directions about this and fortunately both parties are represented by competent solicitors and have the advantage of experienced counsel.
Mr Watkins for the Respondent, who is the Applicant in the interim application, conceded that it was not now sought that the entire sum of $75,000.00 due and payable on the 28th of this month should now be paid to the Respondent. Instead, he suggested that a more reasonable arrangement and possibly a just and equitable one was for the amount to be evenly divided between the parties. This is not agreed to by the Applicant. Mr Shaw of Counsel told the Court that whilst a sum of $15,000.00 had been put, his instructions were now to make, if one likes, an open offer of $20,000.00 instead.
It did occur to me that the parties had reached the stage from being $75,000.00 apart to $17,500.00 apart. However, the gap between them was still too wide. I have had the benefit of minutes of proposed orders sought by both parties prepared by their counsel, just as I have had the benefit of reading the case outline documents prepared by counsel with a great degree of care and with an emphasis on legal accuracy. It certainly aids the Court when counsel can provide this assistance which not only assists their clients, but assists the Court.
This is an interim hearing and whilst there are criticisms raised about credit and failure to make full and frank disclosure, these are matters which cannot be taken very far because they involve findings of fact on written evidence that is totally at odds with the written evidence of the other party and, in the truncated nature of proceedings for interim orders, as the Full Court of the Family Court said in the decision from 2006 of Goode & Goode[2] the truncated nature of these proceedings made it well-nigh impossible for the Court to come to a concluded finding of fact.
[2] [2006] FamCA 1346; (2006) 36 Fam LR 422; FLC 93-286
However, I am of the view that this is a matter where interim orders should be made. Both counsel, as I said, have prepared minutes of order. I have not followed either one in its entirety. Mr Shaw has suggested that amounts as determined by the Court in its discretion should be paid to the Applicant’s solicitor, subject to certain directions which would involve payments to the trust account of the Wife’s solicitor and amounts to be paid to the Husband.
The suggestion from counsel for the Applicant was that the Court should leave the issue of how to characterise the payments to the discretion of the trial judge.
In my view, that is not a preferable course for two reasons. First the matter is in my docket, so I am the trial judge or I will be the trial judge at the trial of this matter, all else being equal. Second, it is my view that the Full Court of Family Court in Strahan & Strahan[3] made it clear that the Court must identify the head of power upon which it relies to make such an order.
[3] supra
The Full Court also spoke of the difference between interim property orders and partial property orders. In the latter, of course, a consideration of whether orders are just and equitable would be mandatory. The Court is not required to find that there are compelling circumstances and, on my view of the current law, where a party seeks a release of money to assist with the funding of legal expenses for the purpose of there being a level playing field, it is not necessary for there to be an assurance by the legal advisers that they will not undertake any further work until their costs are either paid or secured.
In my view, this is a matter where the Court should make some orders by way of interim property orders and they will be characterised as such. One of the mechanisms in the minute proposed by Mr Shaw of counsel covered the situation of what should occur in the event of either party failing to execute any document necessary to give effect to the orders. Such an order would permit a party to approach a Registrar of this Court to execute such document on behalf of and in lieu of the property in default. With that provision I most certainly agree. What was further proposed was that the costs so occasioned should be paid to the party not in default on the indemnity basis. I am not persuaded that the Court should act hastily in predicting costs of a future event should be paid on an indemnity basis rather than the usual basis of party and party costs.
The Full Court of the Family Court has recently reaffirmed the view that the usual practice is that costs be paid on a party and party basis, unless there are some unusual or specific circumstances to justify otherwise. The decision to which I refer is the recent decision of Prantage & Prantage[4] and in it their Honours hark back to decisions from 1993 and the well-known authority of Colgate Palmolive Pty Ltd & Cussons Limited[5] and the Full Court of the Family Court decision in Kohan & Kohan[6].
[4] [2013] FamCAFC 105
[5] (1993) 46 FCR 225
[6] (1993) FLC 92-340
Their Honours also, very helpfully, undertook a survey of the costs regimes in all courts exercising federal jurisdiction and in the higher courts of the various states. Whilst it may well be appropriate in the event of some default for an order for costs to be made on an indemnity basis, I consider that the Court should wait to see what such a failure should be before committing itself to departing from the usual rule.
It would hardly be controversial, however, that where a party specifically defaults from following a Court order, that costs would follow. That would seem to me to be almost inevitable. The sum of $75,000.00, indeed, should be divided. Mr Shaw has pointed out for his client that there are various loans that need to be repaid at a significant rate of interest of 14 per cent or more and suggested that it would not, therefore, be to the parties’ advantage for moneys to be paid into a controlled moneys account with interest at four per cent. It is easy to see the commercial reality of that.
I am of the view that there should be a payment by way of interim property settlement in favour of the Respondent Wife. I am not persuaded that it should be as high as $37,500.00 as proposed by her counsel, but I am of the view that it should be somewhat greater than the $20,000.00 which counsel for the Applicant told the Court.
The balance should be paid to the Applicant’s solicitor, again subject to the Applicant’s contractual arrangements with his solicitor. Again, I am of the view that payments should be made characterised as an interim property settlement.
I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 6 August 2013
Key Legal Topics
Areas of Law
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Family Law
Legal Concepts
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Costs
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Remedies
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