Carpenter and Carpenter (No 2)

FAMILY COURT OF AUSTRALIA

CARPENTER & CARPENTER (NO. 2)

[2014] FamCA 959

FAMILY LAW – PRATICE & PROCEDURE – ENFORCEMENT – application by husband for retention of funds in trust in satisfaction of monies owed to the husband by the wife pursuant to Court Order, but not yet paid – application for delivery of chattels.

FAMILY LAW – COSTS – costs sought on an indemnity basis – costs ordered on party/party basis.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
D & D Costs (No. 2) (2010) FLC 93-435
Kohan and Kohan (1993) FLC 92-340
Latoudis v Casey (1990) 170 CLR 534
Limousin & Limousin (Costs) (2008) 38 Fam LR 478
Marsden & Winch [2013] FamCAFC 177
Vlug and Poulos (1997) FLC 92-778

APPLICANT:

Mr Carpenter

RESPONDENT:

Ms Carpenter

FILE NUMBER:

BRC

3510

2011

DATE DELIVERED:

7 November 2014

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Hogan J

HEARING DATE:

3 November 2014

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

Mr Greer from Damien Greer Lawyers

THE RESPONDENT:

In Person

Orders

That Mr SS, in his capacity as Trustee for Sale, retain from the monies payable to the Respondent pursuant to Clause 14(ix)(II) of the Order made 6 June 2014, the sum of $50,000.00 and cause this sum to be paid into the trust account of Damien Greer Lawyers to be held in that firm’s trust account on behalf of the parties pending the earlier of the Court’s determination of the quantum of costs to be paid by the Respondent to the Applicant pursuant to the Order made by the Full Court on 18 June 2014 or written agreement of the parties.
That Damien Bernard Greer is hereby authorised to invest this sum of $50,000.00 on behalf of the parties by way of a bank deposit (term deposit or cash management account) in an Australian licensed Bank and for that purpose:
(a) this Order is sufficient authority for such investment; and
(b)the parties shall, should Damien Bernard Greer request the same, provide him with their respective tax file numbers and any other documents required for identification purposes within 24 hours of his request for the same.
That in the event either party fails to provide Damien Bernard Greer with their respective tax file numbers and any other documents he requires for identification purposes within 24 hours of his request for the same, Damien Bernard Greer shall be relieved of the obligation to invest the sum of $50,000.00 on behalf of the parties and shall simply hold it in trust pending the earlier of the Court’s determination of the quantum of costs to be paid by the Respondent to the Applicant pursuant to of the Order made by the Full Court on 18 June 2014 or written agreement of the parties.
That the Applicant arrange for the collection of the chattels provided for in Clause 13 of the Order made 6 June 2014 from the Respondent and for that purpose:
(a)the collection of the chattels shall take place before 4.00 pm on Friday. 14 November 2014 and shall be performed by a commercial removalist; and
(b)the Applicant shall, by noon on Monday, 10 November 2014, nominate a date on which and a time at which the chattels shall be collected from the Respondent’s residence and notify the Respondent in writing of this nomination; and
(c)the Respondent shall make the chattels available for collection on the date and at the time nominated by the Applicant.
That the costs of transporting the chattels as ordered in Clause (4) of this Order shall be paid from the monies received by the Trustee for Sale from the settlement of the sale of real property due to occur on Monday, 10 November 2014 and in order to facilitate this:
(a)the Trustee for Sale shall retain the sum of $500.00 in trust with such sum to be deducted from the net sale proceeds provided for in Clause 14 of the Order made 14 June 2014 after the payment provided for in Clause 14 (viii) of that Order; and
(b)the Applicant shall be responsible for meeting the cost of the transportation of the chattels at first instance and the Trustee for Sale shall reimburse him the costs of the same upon production of a receipt issued by the commercial removalists engaged to undertake the transportation of the chattels.
That in the event the cost of transporting the chattels does not expend the entirety of the $500.00 held in trust for this purpose, the Trustee for Sale shall distribute any balance remaining so as to give effect to Clause 14 (ix) of the Order made 6 June 2014.
That the Respondent pay the Applicant’s costs of and incidental to the Application in a Case filed 8 October 2014 with such amount to be as agreed between the parties and, in default of agreement, as assessed on a party/party basis.
That the Respondent’s application for an Order that the Applicant be restrained from instituting proceedings in the Court without first obtaining the leave of the Court is dismissed.
That there is no order as to costs in relation to the Respondent’s application for an Order that the Applicant be restrained from instituting proceedings in the Court without first obtaining the leave of the Court.
That save as is otherwise provided for in this Order, the Application in a Case filed 8 October 2014 and the Response to an Application in a Case filed 16 October 2014 are dismissed.

NOTATION

The Court notes that:
a.save for a dispute as to the quantum of the amount to be retained in trust, the parties agreed that funds from monies payable to the Respondent pursuant to the Order made 6 June 2014 should be retained in trust pending resolution of the dispute about the quantum of the costs to be paid by the Respondent to the Applicant pursuant to the Order made by the Full Court on 18 June 2014 or written agreement of the parties; and
b.the parties agreed that the monies retained in trust on their behalf pursuant to this Order should be invested on their behalf.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Carpenter & Carpenter (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 3510 of 2011

Mr Carpenter

Applicant

And

Ms Carpenter

Respondent

REASONS FOR JUDGMENT

The parties have been engaged in litigation in this Court in relation to parenting and property matters for some time.
On 6 June 2014, Forrest J made Orders which finalised the property proceedings between the parties (the June 2014 Order). The June 2014 Order specifically provided for the way in which the Respondent’s entitlement in the parties’ self-managed superannuation fund was to be dealt with: in broad summary, His Honour ordered that the Respondent’s member entitlement in the same be determined and, after this, rolled out into a superannuation fund of her choosing. Further, as soon as the Respondent’s member benefit entitlement in the self-managed superannuation fund was rolled into another complying nominated fund, she was to transfer all her right, title and interest (including shareholdings) in I Pty Ltd, resign as an office holder in that company and as a member of the parties’ self-managed superannuation fund and sign documents in relation to a number of other corporate entities.
The June 2014 Order also specified, in Clause 13, that the Applicant retain certain particularised chattels, valued at $22,215.00, as his sole property absolutely. It does not, however, identify which – if any – of those specific chattels are currently within the Applicant’s possession, nor does it provide the manner by which those (unidentified) chattels not in his possession are to move from the Respondent’s possession into the Applicant’s possession.
Clause 14 of the June 2014 Order further directed the Trustee for Sale - appointed by an earlier Order made on 27 May 2014 - to distribute the net sale proceeds of two real properties in the manner outlined. It is common ground that, when settlement of the sale of the last of the two properties occurs on 10 November 2014, the Respondent will be entitled to receive an amount of about $150,000.00 from the same, payable to her by the Trustee for Sale in compliance with the terms of the June 2014 Order.
On 18 June 2014, the Full Court dismissed the Respondent’s appeal against parenting orders made by Murphy J on 29 November 2012. The Court ordered that the Respondent pay the Applicant’s costs of and incidental to the appeal with such costs to be as agreed between the parties and, in default of such agreement, as assessed on a party/party basis, save and except in relation to Ground 9 of the Amended Notice of Appeal filed 27 June 2013, which costs are to be assessed on an indemnity basis. The Full Court further ordered that the Respondent pay such costs to the Applicant within 28 days of orders being made to finalise the property settlement proceedings between the parties.
It is uncontentious that the Respondent is yet to pay the Applicant any sum in compliance with the order for costs made by the Full Court.

The Application in a Case filed 8 October 2014 and the Response to the same filed 16 October 2014[1]

[1]as amended informally by the terms of the ‘Amended – 02.11.14’ document filed by the Respondent on 3 November 2014.

By Application in a Case filed 8 October 2014 (the Application), the Applicant seeks that the Court make a number of Orders by way of enforcement of the June 2014 Order and in relation to the Order made by the Full Court on 18 June 2014.[2] He also seeks that the Respondent pay his costs of and incidental to this Application on an indemnity basis.
[2] Family Law Rules (2004), Rules 20.01(1)(a), (1)(d) and Rule 20.07.
The Applicant does not pursue orders in terms of Clauses 3 and 4 of the Application nor in terms of Clause 2 of the Amended document filed on his behalf on 31 October 2014: that is, he does not seek to vary the June 2014 Order by the payment of $3,230.00 in lieu of the requirement that he receive specified chattels, nor does he seek to restrain the payment out to the Respondent of any funds other than the $50,000.00 (discussed below) pending the Trustee for Sale being satisfied that the Respondent has complied with Clauses 2, 3, 5, 6 and 7 of the June 2014 Order.
By the time of the hearing before me, the Applicant accepted that the Respondent had complied with Clauses 2, 3, 5, 6 and 7 of the June 2014 Order.
Whilst the Respondent sought to restrain the Applicant’s receipt of those funds payable to him by the Trustee for Sale pursuant to the June 2014 until the receipt of her superannuation entitlements was confirmed in writing by her nominated superannuation fund, Australian Super Fund, she did not make submission in support of this order at the hearing. This absence of submissions makes sense given the information that a cheque in the amount of her member entitlement in the parties self-managed superannuation fund had been sent to Australian Super Fund as at the hearing.

Monies to be held in trust pending the resolution of the costs dispute

Whilst it has not always been the case, there is no longer a dispute between the parties about whether any of the funds payable to the Respondent upon the settlement of the sale of real property should be held in trust pending the resolution of the dispute about the quantum of the Order for costs made by the Full Court.
Rather, they remain in dispute about the quantum of such funds:
a)the Applicant seeks that the sum of $50,000.00 be held in trust; whilst
b)the Respondent seeks that the sum of $45,000.00, or less amount if determined by the Court, be held in trust.
There would be a cost to the parties for the Trustee for Sale to invest such monies in trust pending the resolution of the dispute about the amount to be paid by the Respondent to the Applicant in satisfaction of the costs order made by the Full Court. However, the Applicant’s solicitor, Mr Greer, offered to hold the funds in his trust account and invest them on behalf of the parties at no cost to the parties.
As the Respondent did not say that she agreed with such a course, I have proceeded on the basis that she does not.
I consider that an Order requiring the Applicant’s solicitor to hold the monies in trust pending realisation of the costs dispute between the parties is a more appropriate order than one which casts upon the Trustee for Sale a further obligation. I arrive at this conclusion taking into account that:
a)having the funds held in trust by the Applicant’s solicitor provides the parties with the same service as offered by the Trustee for Sale – but at no cost whatsoever; and
b)the Respondent made repeated submissions about her difficult financial circumstances; and
c)such course will dissolve the dispute between the parties about who is to bear the responsibility for the Trustee for Sale’s cost of holding monies in trust (the Applicant asserting that the Respondent be entirely responsible for the same and the Respondent asserting that the parties should share equally in the same); and
d)such course will mean that the Trustee for Sale’s involvement in this matter – which arose on his appointment by Order made 27 May 2014 – will come to an end after his compliance with Clause 14 of the June 2014 Order and, further, will extinguish the possibility that the parties incur further costs associated with ongoing communication with him arising out of his investment of funds.
For these reasons, I intend to order that the Trustee for Sale cause the necessary sum to be paid from the Respondent’s entitlement to funds pursuant to Clause 14(ix)(II) of the June 2014 Order to the trust account of the Applicant’s solicitor, to be held on trust by that firm pending the resolution of the costs dispute.
Further, the Applicant’s solicitor will be authorised to invest the sum received into trust on behalf of the parties if the parties provide him with the documentation necessary to enable this to occur: if either party does not provide such necessary information following a request for the same, the monies will simply be held in trust pending the resolution of the costs dispute.

How much should be held in trust pending the resolution of the costs dispute?

In reliance on an itemised costs account prepared by a costs assessor, the Applicant asserts that the costs payable by the Respondent, pursuant to the Full Court’s Order made on 18 June 2014, are in the amount of $45,381.72. The Respondent contends, in reliance on a similar account prepared by another costs assessor, that the quantum of costs payable by her to the Applicant is in the amount of $18,476.85.
Whilst the Respondent had agreed[3] that the sum of $45,000.00 be held pending the resolution of the costs dispute, she did so before she was in receipt of information from the person she engaged as a costs assessor. Following receipt of the assessment from that person, she amended her response to seek the retention of funds in the amount of $45,000.00 or such lesser amount as the Court determines.
[3] On 13 October 2014
The Respondent’s material and submissions make it clear that she is highly likely to spend those funds received by her following settlement of the sale of last of the two real properties: she clearly says she needs access to as much of the proceeds to which she is entitled pursuant to the June 2014 Order to support herself and the children, particularly during the time they will spend with her over the upcoming end of year holiday period.
I am quite confident in concluding that, if an amount less $45,381.72 is held in trust pending resolution of the costs dispute, it is highly unlikely the Applicant will be able to recover, from monies released to the Respondent, any monies determined to be payable to him in that amount or any greater amount.
Thus, I am not persuaded that the funds to be held in trust pending the resolution of that dispute should be limited to $18,476.85 - the amount which the Respondent asserts she is likely to have to pay in compliance with the Full Court’s Order.
In determining to order that the sum of $50,000.00 is held in trust pending the resolution of the costs dispute between the parties, I take into account that:
a)given that the Full Court ordered the Respondent to pay the Applicant’s costs within 28 days after the June 2014 Order was made, interest is payable on the outstanding costs at a rate of 6 per cent above the cash rate last published by the Reserve Bank of Australia before the relevant period, being either 1 January to 30 June or 1 July to 31 December in any year[4]: that is, at a rate of 8.5 per cent; and
[4] Family Law Act1975 (Cth), s117B (1); Family Law Rules (2004) Rules 19.02 and 17.03.
b)there remains the possibility that there may be a further costs order made arising out of the determination of the costs dispute.
I consider that retaining in trust funds in the amount sought by the Applicant will ensure that he is not deprived of the benefit of the costs order made by the Full Court. Whilst this will obviously mean that the Respondent is kept out from receipt of the entirety of the funds payable to her pursuant to the June 2014 Order, I am confident that her receipt of the remaining sum of about $100,000.00 will enable her to support herself and the children (when they are in her care) whilst the dispute about the quantum of costs is resolved.

The dispute about the chattels

As noted above, the Applicant did not persist with his application to vary the June 2014 Order by imposing a requirement that the Respondent pay him a specified amount of money for the chattels to which he is entitled pursuant to the June 2014 Order but which he asserts remain in the Respondent’s possession. The Respondent disputes that she has possession of some of these chattels and proposes that the Applicant be responsible for collecting those which she admits to possessing [the items described in Clause 13(xxiv) to (xxxi) inclusive] from her home. The Applicant asserts the Respondent should be responsible for delivering all of the items to his home.
As noted above, the June 2014 Order does not provide the mechanism by which the chattels to be retained by the Applicant shall be delivered into his possession. Nor does it specify which of the listed items were in the Respondent’s possession at the time the Order was made. Recourse to the Reasons for Judgment delivered on 6 June 2014 provides no assistance in this regard.
I consider that the most appropriate way to deal with the dispute about chattels is to order that the Applicant make arrangements for their transport by a commercial removalist and that the parties share in the cost of this. Given the difficulties between the parties which the evidence reveals, it would be inappropriate and highly likely to be productive of further litigation to permit a situation to arise whereby the Applicant is seeking the Respondent transmit her half of the costs of the commercial removalist directly to him
Consequently, I consider it appropriate that the Applicant meet the costs up front but be reimbursed by the Trustee for Sale from the net sale proceeds of the real property (which sale will settle on 10 November 2014) upon the production of a receipt from the commercial removalist.

Do the circumstances justify making an order that the Respondent pay the Applicant’s costs of and incidental to this Application?

Mr Greer submitted that:
a)the Court would be persuaded that the circumstances of the matter are such as to justify the making of an order that the Respondent pay the Applicant’s costs of and incidental to the Application;
b)despite being put on notice by correspondence sent on 26 September 2014 and having a final opportunity to remedy non-compliance with the terms of the June 2014 order, the Respondent failed to do so with the consequence that the Application in a Case was filed and the Applicant incurred legal costs that would otherwise have been avoided;
c)the Court would be persuaded that the order should require payment of the Applicant’s costs on an indemnity basis, the Applicant having incurred costs in the vicinity of $11,500.00 associated with this Application; and
d)the Respondent should be ordered to be solely responsible for paying the costs incurred by the Trustee for Sale in addressing this mater, with such costs to be fixed in an amount of $462.00.

The Respondent opposes the making of any order for costs. She submits each party should bear their own costs. In the event that an order is made requiring her to pay the Applicant’s costs of and incidental to the Application, she opposes it being made on an indemnity basis.
As I understood his submission, Mr Greer relied on the Respondent’s conduct in respect of the obligations imposed on her by Clauses 2, 3, 5, 6, and 7 of the June 2014 Order generally as the circumstance justifying a departure from the statutory starting point that each party bear his or her own costs.[5]
[5] Family Law Act1975 (Cth), s 117(1).
Clauses 2, 3, 5, 6, and 7 of the June 2014 Order are as follows:
2.That once the member entitlements of each of the Husband and the Wife in the [F] Super Fund as at 30 June 2014 are determined, the Wife shall give the trustee company due notice of an election to roll her member benefit entitlement as at 30 June 2014 into any other complying superannuation fund of her nomination and the trustee of the [F] Super Fund shall do all things necessary to cause the Wife’s member benefit entitlement to be rolled out in accordance with the Wife’s election.
3.That as soon as the Wife’s member benefit entitlement in the [F] Super Fund is rolled out into another complying superannuation fund of the Wife’s nomination pursuant to paragraph (2) of these Orders, the Wife shall forthwith, at the Husband’s expense sign all documents and do all things necessary to transfer to the Husband or his nominee all of her right, title and interest, including all of her shareholdings, in the company, [I] Pty Ltd (ACN …) and to resign as an office holder in that company and also as a member of the [F] Super Fund.
…
5.That the Wife shall forthwith, at the Husband’s expense, sign all documents and do all things necessary to transfer to the Husband or his nominee all of her right, title and interest, including all of her shareholdings, in the companies, [P] Pty Ltd (ACN …) and [Q] Pty Ltd (ACN …) and to resign as an office holder in those companies.
6.That the Wife shall, at the Husband’s expense, transfer to the Husband and/or assign to the Husband at the Husband’s expense any entitlement she has in respect of any of the companies named in these Orders or under any trust of which the Husband or any of the companies is trustee including any loan account entitlements, thereby renouncing any entitlements to any loan account or beneficiary entitlement in any of those companies or under any of those trusts.
7.That when the Wife has complied with paragraph (3) of these Orders, she shall also transfer to the Husband and/or assign to him at his expense any entitlement she has under any trust of which [I] Pty Ltd is trustee including any loan account entitlements, thereby renouncing any entitlements to any loan account or beneficiary entitlement under any of those trusts.
The member entitlements of each of the Applicant and the Respondent in the F Super Fund as at 30 June 2014 were determined not later than 18 July 2014.
The affidavit material establishes the following occurred on the dates specified:

Date	Event
18 July 2014	Mr HX, of W Accountants forwarded correspondence to the parties, attaching copies of the documents relevant to transfer of the Respondent’s interest in the parties’ self-managed superannuation fund (F Super Fund) to another fund.
22 July 2014	Applicant emails Respondent asking her to confirm she will sign the documents forwarded by Mr HX and return them within 14 days of receipt – that is, by 1 August 2014
22 July 2014	Respondent replies to accountant advising “[she] will run all of these past [her] accountant next Monday and get back to [him] with queries”.
22 July 2014	Applicant informs Respondent that if she has not signed everything by 6 August 2014, he will request a Registrar act to do so on her behalf at an upcoming Directions hearing.
6 August 2014	Applicant emails Case Coordinator asking that a Registrar be appointed to sign the documents in the Respondent’s stead.
7 August 2014	Respondent emails Case Coordinator in response to the Applicant’s email of 6 August 2014, indicating she is “currently working through the documents and actions needed with [her] accountant and will resolve the matter as soon as possible”.
8 August 2014	Case Coordinator emails the parties to inform the Applicant of the requirements of having a Registrar sign the documents.
8 August 2014	Applicant emails the Respondent again seeking the return of the relevant documents (noting that they were provided 21 days earlier) and asking that she sign and return them and nominate a superannuation fund into which her member entitlements can be rolled over. Applicant seeks the return of the chattels.
8 August 2014	Respondent advises Applicant that she is “currently reviewing the member funds available and will select one shortly for [the accountant] to roll over” her member entitlement, stating that she is a bit snowed under with work from the amount of court action and related activities she has to deal with from him in relation to the children’s matter and advising that she will be back in touch with the required materials ‘probably by the end of next week’.
8 August 2014	Respondent emails Applicant attaching copy of unsigned correspondence to accountant which refers to enclosed signed F Super Fund Tax Returns and related documents and advises that she is researching options for self-managed super funds and hopes to have a fund for him to arrange rollover of her member entitlements by the end of the week.
8 August 2014	Respondent emails Applicant asking that he gift those chattels described at Clause 13(xxiv) to (xxxi) to her so she and the children have some furniture to use
13 August 2014	Applicant emails Respondent and thanks her for the signed tax return documents and asks her the super fund she wants her super rolled into.
14 August 2014	Applicant emails the Respondent in relation to the outstanding chattels.
14 August 2014	Respondent responds in relation to the issue of chattels to seek the Applicant’s response to her request that he gift them to her and the children.
16 August 2014	Applicant emails Respondent noting that it is ‘the end of the week’ and asking that she nominate a superannuation fund. He notes it is 71 days since the June 2014 Order was handed down
20 August 2014	Respondent responds to Applicant stating: “the details are coming soon.”
20 August 2014	Respondent responds in relation to the issue of chattels, saying “Once the children and I have finished using the items I will give them to you.”
22 August 2014	Applicant writes to the Case Coordinator seeking confirmation that the Registrar would be authorised by the June 2014 Order to nominate a fund for the Respondent.
22 August 2014	Applicant writes to Respondent noting that ‘another week has passed’ and telling her that he has been in contact with the Case Coordinator
22 August 2014	Case Coordinator informs that the Registrar is unable to nominate a superannuation fund for the Respondent.
22 August 2014	Respondent writes to the Case Coordinator and tells him that she has selected an industry super fund called the “Super Industry Fund”, is awaiting final documentation and expects that the details required for finalisation of the superannuation issue and her resignation from the companies will be completed by Wednesday of the next week (that is, 27 August 2014).
26 August 2014	Applicant’s solicitors serve Respondent with Itemised Costs account and Costs Notice
28 August 2014	Applicant writes to the Respondent seeking the relevant details about the superannuation fund (Super Industry Fund) emailed to the Case Co-Ordinator the previous week, noting that 83 days have passed since the June 2014 Order was made, that she had still not provided the necessary information in compliance with the June 2014 Order and putting her on notice that if the details were not provided by 29 August 2014 he will commence enforcement proceedings.
6 September 2014	Applicant writes to the Respondent to seek the details of her nominated superannuation fund immediately as it was 92 days (3 full months) since the June 2014 Order was made.
8 September 2014	Applicant corresponds with the Case Coordinator and canvasses the potential of bringing a contravention application.
17 September 2014	Respondent advises Trustee for Sale that she does not consent nor give her approval for him to withhold any sale proceeds as requested by the Applicant’s solicitor.
26 September 2014	Applicant’s solicitors write to Respondent detailing her non-compliance with the June 2014 Order and requesting immediate rectification of the same. The stated purpose of the correspondence is to give the Respondent a final opportunity to rectify her non-compliance with the June 2014 Order before “the incursion of further unnecessary legal costs between you both.” Respondent asked to comply with her obligations pursuant to the June 2014 Order within 7 days of the date of the correspondence.
26 September 2014	Respondent replies to Applicant’s solicitors notifying that she is “currently working through many complex, interrelated financial issues arising from the property matters and my personal circumstances and I will reply as soon as I can. I note your client is threatening that the Court put me in jail. As I am self- represented and that threat is particularly horrific, can you please point out where in the legislation you are referring to this potential reality”.
6 October 2014	Respondent writes to Applicant’s solicitors providing a ‘status update’ on the relevant Orders made by Forrest J, noting that she had been away on holidays with the children for a period of time; she informs, amongst other things, that she will give notice of her election to roll her member entitlements into another complying superannuation fund on 17 October.
6 October 2014	Respondent writes to Applicant’s solicitors informing them of her intention to seek an extension of time to dispute the bill of costs.
8 October 2014	Applicant files Application in a Case
13 October 2014	Respondent deposes to having signed the relevant documents exiting her from the entities, agrees to Mr SS holding the sum of $45,000.00 on trust from the proceeds of sale and provides details about the relevant chattels. Respondent provides details of her preferred superannuation fund (Australian Super and not ‘Super Industry Fund’ as previously advised) and her member number with a request that the Applicant arrange for W Accountants roll her superannuation funds into this account ‘as soon as possible’. Respondent encloses correspondence resigning from various entities – including Standard Share transfer forms bearing the dates ‘10/13/14’ and ‘6/10/14’.
13 October 2014	Respondent writes to Mr SS and gives her consent for him to withhold $45,000.00 pending the determination of her disputing the costs account
14 October 2014	Respondent writes to Case Coordinator seeking that the Registrar not progress the Applicant’s Application in a Case as there is now no need to do so
15 October 21014	Applicant’s solicitor writes to respondent informing that the steps she had taken in relation to the roll-over of her superannuation entitlements were insufficient to comply with the June 2014 Order and that the roll-over could not occur until she complied with the requirements of Australian Super.
23 October 2014	Respondent writes to Applicant’s solicitor outlining her compliance with the June 2014 Order and seeking his agreement to stop further proceedings in the matter

As the chronology outlined above makes clear, the Applicant first sought the Respondent’s nomination of her superannuation fund in mid July 2014 and the Respondent finally provided some details of the relevant fund on 13 October 2014, after he had filed the Application in a Case.
The Respondent appears to accept she delayed in signing relevant documents but asserts this arose because, “based on advice”; she was concerned she needed to remain a company director to achieve certain tax minimisation benefits following the sale of the assets. She asserts that following seeking advice from her accountant on 12 October 2014 in relation to potential tax consequences, she signed the documents immediately (on 13 October 2014).
I am not persuaded that it is likely the Respondent could not have received the advice to which she refers much earlier than she in fact did. There is nothing to suggest that she sought such advice immediately after the June 2014 Order was made. Rather, the chronology of the matter after that Order was made suggests that the Respondent took little action until about late September 2014.
The Respondent also appears to accept she delayed in signing the documents in relation to rolling over her superannuation entitlements. The chronology set out above makes that abundantly clear. The Respondent’s assertion that the identity of the Fund in which her superannuation entitlements were to be retained would affect her entitlement to Legal Aid funding seems to me to be unlikely.
I am satisfied that the Applicant afforded the Respondent ample time within which to comply with her obligations under the June 2014 Order before filing the Application in a Case. The Respondent simply delayed – for whatever reason – in attending to those matters required of her by that Order. I am satisfied that her delay in complying necessitated the bringing of the Application in a Case and I consider it highly likely, given the Respondent’s repeated promises to comply with the June 2014 Order and provide the details of her nominated Fund and her repeated failure to comply with her own promises to act in such a manner, that the filing of the Application in a Case was required to have the Respondent comply with the terms of the June 2014 Order.
I take into account the Respondent’s submission that her only source of funds from which to meet any order for costs is that property to which she is entitled pursuant to the June 2014 Order. I note that she will receive about $150,000.00 in total, from which she will be required to pay whatever amount is finally determined as appropriate to discharge her obligation under the Order made by the Full Court. Whilst this means that her financial circumstances are certainly modest, impecuniosity is not, of itself, a bar to the making of an order for costs. I take into account that the Applicant has previously incurred legal fees in earlier proceedings between the parties, which costs are likely to have impacted on his financial circumstances.
I note that neither party is in receipt of Legal Aid in relation to the proceeding before me. I consider that the proceeding before me was necessitated by the Respondent’s failure to comply, in a timely manner, with the June 2014 Order.
Given the terms of the Order I intend to make, neither party has been wholly unsuccessful in the proceedings. I take into account the Applicant’s repeated entreaties to the Respondent to provide the information required for compliance with the June 2014 Order and the terms of the correspondence dated 26 September 2014 which provided a final opportunity for compliance before proceedings were commenced.
I am persuaded that all of these circumstances – in particular the Respondent’s repeated failure to provide details of her nominated superannuation fund despite repeated assurances that she would do so – are such as to justify the making of an order that the respondent pay the Applicant’s costs of and incidental to the Application in a Case.

On what basis should the costs be payable?

I turn now to consider the basis upon which such costs should be paid given that the Applicant sought that they be paid on an indemnity basis. Unless there are exceptional circumstances, an order for costs should be made on a party and party basis. It must also be remembered that an order for costs, including indemnity costs, is not something ordered by way of punishment.[6]
[6] Latoudis v Casey (1990) 170 CLR 534, 543.
I have had regard to D & D Costs (No. 2) (2010) FLC 93-435 in which the Full Court reviewed extensively earlier authorities, including Limousin & Limousin (Costs) (2008) 38 Fam LR 478 and Kohan and Kohan (1993) FLC 92-340, and also Sheppard J’s decision in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248.
Mr Greer submitted that the Respondent’s conduct was such as to justify the making of an order for costs on an indemnity basis. Whilst such a submission is certainly not without merit – especially given the Respondent’s imprudent refusal of repeated requests to provide the necessary information in compliance with the June 2014 Order - I am not persuaded that there are “exceptional circumstances” so as to warrant an order for costs on an indemnity basis.

Respondent’s orders sought – rolling out superannuation

I was informed by Mr Greer from the Bar table that a cheque in the amount of the Respondent’s member entitlement in the self-managed superannuation fund has been sent to the Respondent’s nominated superannuation fund for deposit into her account.
The Respondent accepted that this was the case. Consequently, any concern she deposed to having that the Applicant will “attempt to dissipate [her] super funds and not roll them over” should, I consider, evaporate.
Whilst the Respondent voiced concerns that there may be other issues arising which necessitate further documentation or actions by the Applicant, only time will tell. There is not, I consider, at present any basis for making orders in terms proposed by the Respondent in paragraphs 1 and 2 of the Response to an Application in a Case filed 16 October 2014 and, accordingly, I decline to do so.
Whilst it is, perhaps, moot given that determination, I note in passing that, despite articulating, in her affidavit material, the concern that “the SMSF rollover process [she has] been advised to follow by the Accountants [W] is incorrect”, the Respondent herself sought an order that those accountants be appointed to complete all Australian Taxation Office requirements for rolling her entitlement in the self-managed superannuation fund into a fund of her own selection.

Respondent’s application that the Applicant be restrained from commencing further proceedings without first obtaining the leave of the Court

That the Respondent sought an order restraining the Applicant from commencing proceedings in the Court without first obtaining the leave of the Court[7] became apparent on 3 November 2014 when she filed an Amended List detailing the Applications/Responses and affidavits on which she intended to rely at the hearing before me.
[7] Family Law Act1975 (Cth), s 118(1)(c).
Despite this, the Applicant did not oppose the Court dealing with this cross-application. Instead, Mr Greer submitted that the Court would dismiss the Respondent’s application on the basis that the evidence did not support the making of an order in the terms sought.
The Applicant has not previously brought proceedings in this Court or any other which have been dismissed on the basis that the Court dealing with such proceedings was satisfied that they were frivolous or vexatious. I am not persuaded that the Application in a Case filed by the Applicant on 8 October 2014 is frivolous or vexatious[8]: rather, it was filed to seek the Respondent’s compliance with the terms of the June 2014 Order and to ensure that the Applicant was not deprived of the fruits of the costs Order made in his favour by the Full Court in June 2014.
[8]Marsden & Winch [2013] FamCAFC 177 referring to Roden J in Attorney General (NSW) v Wentworth (1988) 14 NSWLR 481, at [491].
Given that I am not satisfied that the proceedings are frivolous or vexatious, there is no power to make the order sought by the Respondent to restrain the Applicant from instituting proceedings without leave of the Court.[9]
[9]Marsden & Winch [2013] FamCAFC 177; Vlug and Poulos (1997) FLC 92-778 at p. 84,603.

I certify that the preceding fifty-two paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan delivered on 7 November 2014.

Associate:

Date: 7 November 2014

[2014] FamCA 959

7 November 2014

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Costs

Remedies

Jurisdiction

Res Judicata