Cattell & Lund

[2021] FamCA 447

FAMILY COURT OF AUSTRALIA

Cattell & Lund [2021] FamCA 447

File number(s):

MLC 1703 of 2020

Judgment of:

BENNETT J

Date of judgment:

16 June 2021

Catchwords:

FAMILY LAW – FINANCIAL – non-compliance with orders.

FAMILY LAW – COSTS – indemnity costs not warranted- costs calculated as a hybrid of costs at scale and solicitor/client costs ordered and fixed in sum of $28,000 payable within 30 days.

FAMILY LAW – CASE MANAGEMENT – case requires management – mediation should not occur until disclosure completed and valuation are subject of evidence.

Legislation:

Family Law Rules 2004 (Cth)

Cases cited:

Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248

Number of paragraphs:

21

Date of hearing:

16 June 2021

Place:

Melbourne

Solicitor for the Applicant:

Ms Kotzapavlidis

Counsel for the First Respondent:

Mr Catlin

Solicitor for the Second Respondent:

Vassis & Co

Counsel for the Second Respondent:

Mr Mort

Solicitor for the Third Respondent:

Vassis & Co

Counsel for the Third Respondent:

Mr Mort

Solicitor for the Fourth Respondent:

Vassis & Co

Counsel for the Fourth Respondent:

Mr Mort

Solicitor for the Fifth Respondent:

Vassis & Co

Counsel for the Fifth Respondent:

Ms Mort

ORDERS

MLC 1703 of 2020

BETWEEN:

MS CATTELL
Applicant

AND:

MR LUND
First Respondent

MR B LUND
Second Respondent

MR C LUND (and others named in the Schedule)

Third Respondent

ORDER MADE BY:	BENNETT J
DATE OF ORDER:	18 JUNE 2021

THE COURT ORDERS BY CONSENT THAT:

Extension of time

1.That the time for the Second and Third Respondents to comply with Order 14 made on 13 April 2021 (file and serve contentions of fact and law) be extended to 16 July 2021.

2.That the time for the Respondent, Second and Third Respondents to comply with Order 15 made on 13 April 2021 (discovery listed in Annexure ‘A’ to the 13 April 2021 order) be extended to 16 July 2021.

3.That the parties jointly appoint a single expert pursuant to Order 10 of the Orders made on 13 April 2021 to prepare a valuation, by 30 July 2021.

Mediation

4.That the parties engage Mr Peter Young QC to conduct the private mediation pursuant to Order 20 made on 13 April 2021 following compliance with orders for discovery and valuation.

Enforcement

5.That pursuant to section 106A of the Family Law Act, the Registrar of this Court is appointed to execute any and all deeds or instruments and all such documents as may be required to give effect to Order 3 of the Interim Orders made on 13 April 2021 (“the Default Sale”) AND IT IS NOTED that the docket registrar is Registrar Sudholz and execution of documents pursuant to this Order is to be effected as expediently as possible.

6.That the Applicant have the conduct of the Default Sale and the Applicant do all acts and things and sign all such documents as may be required in relation to the Default Sale, including but not limited to:-

(a)Appointing the selling agent;

(b)In respect of the lease relating to the D Street property, giving any notice or causing any notice as may be required to be given to the tenant; and

(c)Appointing and engaging the lawyer or conveyancer to conduct the sale.

7.That Order 7 made on 13 April 2021 be varied as follows:-

That all rental income from the D Street property be deposited into an account in the sole name of the Applicant and unless by prior written agreement, be used:

a)   For the making of so much of the payments of principle and interest due under any mortgage affecting the D Street property for which the respondent is personally liable;

b)   To meet the rates, taxes, insurances and other outgoings in relation to the D Street property as and when they fall due;

c)   To meet all reasonable and necessary expenses relating to the Default Sale, including the costs of undertaking such work as may be recommended by the selling agent in preparation for sale and to meet all up front marketing, advertising or like selling costs.

8.That the Applicant notify the Respondent when the D Street property is listed on the market for sale, the method of sale, all offers to purchase the D Street property (as soon as practicable after any such offers are received) and the terms of  the Default Sale.

9.The Applicant provide to the Respondent copies of all documents executed by the Registrar pursuant to these Orders.

10.All interim orders otherwise remain in full force and effect.

11.The Applicant be responsible for service of a sealed copy of this Order and the Order made 13 April 2021 on any tenant of the D Street property and on the proper officer of any mortgagee bank.

12.Liberty to apply in relation to implementation of this Order be reserved.

BY THE COURT

13.That the Respondent, the Second Respondent and the Third Respondent pay the Applicant’s costs of and incidental to this Application in a Case on an indemnity basis, and fixed in the sum of $28,000 with a stay of 30 days.

14.All extant interim applications be dismissed.

15.My reasons for decision this day be transcribed and when settled placed on the Court file and a copy provided to the parties.

16.This matter be fixed in my docket and be listed before me on 18 August 2021 to check on the readiness of the matter for the private mediation to which the parties have agreed.

17.This matter be tentatively allocated a final hearing date of 9 May 2022 estimated to take 5 days (“the final hearing”).

18.In anticipation of the final hearing the parties file and serve any amended application or response and contentions of fact and law upon which they propose to rely and all evidence and proofs of evidence as follows:

a.The applicant wife by not later than 17 February 2022;

b.The respondent husband by not later than 17 March 2022;

c.The second to fifth respondents by not later than 24 March 2022; and

d.The wife in reply by not later than 13 April 2022.

IT IS DIRECTED:

19.That the minute of proposed orders with tracked changes be marked Exhibit “A” and remain on the Court file.

20.The Schedule of Costs incurred by the Applicant be marked Exhibit “W1” and remain on the Court file.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Cattell & Lund has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

EX TEMPORE REASONS FOR JUDGMENT

Introduction

1. On 13 April 2021 I made extensive interim financial orders and adjourned proceedings until today to check on compliance with my orders and on the readiness of the matter for a private mediation. There has been little or no compliance and on 20 May 2021 I made directions to facilitate the filing of an enforcement application by the wife and the responses of the husband and the interveners so that compliance could be dealt with today.

2. On 27 May 2021 the wife filed an Application in a Case and a detailed affidavit by her solicitor in support. Any Response to the Application in a Case was to be filed by the respondent husband and the second to fifth respondents by 8 June 2021 whereupon the wife could file a reply by 14 June 2021.  None of the respondents filed a Response to the Application in a Case filed by the wife.

3. The wife is represented by Hargreaves Family Lawyers.

4. The respondent husband does not have a solicitor. Mr Catlin, of counsel, accepts direct briefs from the husband. The husband lives at F Town.

5. Vassis & Co represent the second to fifth respondents who include Mr C Lund and Mr B Lund who are adult sons of the of the husband. Mr C Lund is the sole director and shareholder of G Pty Ltd which is the fourth named respondent. On 13 April, 2021 the second to fifth respondents were represented by Mr Lethlean of counsel. Today they are represented by Mr Mort of Counsel. By an application in a case filed on 9 April, 2021, Mr C Lund and Mr B Lund and G Pty Ltd seek an order that the husband and wife pay them $2,301,703.17 and that such “sum be paid from the net asset pool divisible between the Applicant [wife] and the respondent husband and any distributions of funds.” One of the orders which I made on 13 April 2021 was:

   14.      By not later than 7 June 2021 the second and third respondents each file and serve contentions of fact and law upon which they rely to assert that property in the name of the first respondent husband is not property in which he has a legal or equitable interest which can be altered in these proceedings pursuant to s 90SM of the Act and/or any other claims they may assert against the first respondent husband or entities within his control. 

6. That is one of the orders with which Mr C Lund and Mr B Lund have failed to comply.

7. The husband and the second to fourth respondents have been conspicuously non-compliant with orders of the court in these proceedings. I have been asked to, and will, make orders sought, directed to outstanding compliance issues. The respondents consent to the orders.

   Application for costs

8. The only issue which I am asked to determine today is the wife’s application for costs. The wife’s Application in a Case seeks that the husband and Mr C Lund and Mr B Lund pay her costs of an incidental to the Application in a Case on an indemnity basis and in such proportions as the court considers appropriate. However, today the wife does not press for any order against Mr C Lund and Mr B Lund and seeks that the husband pay her costs on an indemnity basis. The wife has complied with my direction to prepare a note of her costs drawn in accordance with Schedule 3 to the Family Law Rules 2004. That calculation of costs on scale comes to some $16,000. Indemnity costs are calculated at about $39,000.

9. Counsel for the husband, Mr Catlin, did not seek to be heard as to liability for costs. However, he did require that the wife justify her application for indemnity costs.

10. I consider the matters set out in s117(2) of the Act:

    (a)I do not have comprehensive details of the financial circumstances of the husband and wife. The Order made 13 April 2021 declared arrears owing by the husband to the wife under three separate orders to be $128,670.50 of which I understand $100,000 was a litigation funding order.

    (b)Neither the husband nor the wife are in receipt of legal aid.

    (c)The husband has failed to fulfil his obligations to make full and frank financial disclosure.

    (d)I am mindful that the respondent husband has failed to comply with numerous orders. He has also caused, permitted or suffered his significant income to be applied in payment of a mortgage under which he has no personal liability in the face of any order which specified that certain funds could only be applied by the husband in payment of a mortgage for which the husband is personally liable.

11. I am satisfied that there are circumstances which justify a departure from the usual position whereby each party is responsible for his or her own costs.

12. I consider the matters set out in s117(2) of the Act:

    (e)I do not have comprehensive details of the financial circumstances of the husband and wife. The Order made 13 April 2021 declared arrears owing by the husband to the wife under three separate orders to be $128,670.50 of which I understand $100,000 was a litigation funding order.

    (f)Neither the husband nor the wife are in receipt of legal aid.

    (g)The husband has failed to fulfil his obligations to make full and frank financial disclosure.

    (h)I am mindful that the respondent husband has failed to comply with numerous orders. He has also caused, permitted or suffered his significant income to be applied in payment of a mortgage under which he has no personal liability in the face of any order which specified that certain funds could only be applied by the husband in payment of a mortgage for which the husband is personally liable.

13. I am not satisfied that costs should be calculated on an indemnity basis.

14. The circumstances where an order for costs on an indemnity basis may be made are not closed but indemnity costs are the exception rather than the rule.  In Colgate Palmolive Co v Cussons[1] described some of the circumstances where such an order might apply to be as follows:

    ·Where false allegations of fraud are made by a party who knows them to be false or the making of irrelevant allegations of fraud;

    ·Where there is evidence of particular misconduct which causes loss of time to the court and the other parties;

    ·Where the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law;

    ·Where allegations were made which should never have been made or the litigation was prolonged by groundless contentions;

    ·Where there was an imprudent refusal of an offer to compromise;

    ·Where a party is in contempt of court.

    [1] Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248.

15. I am satisfied that there ought to be a costs order based on a hybrid calculation. I will have regard to the solicitors’ costs at something approximating the scale provided for in Schedule 3 of the Family Law Rules 2004 but the disbursements, including counsel’s fees, will be allowed on a solicitor client basis. 

    Order for costs

16. I fix the contribution by the husband to the wife’s costs of and incidental to the wife’s Application in a Case filed on 16 June 2021 at $28,000.

17. The sum of $28,000 is payable by the husband to the solicitors for the wife within 30 days.

    Case management

18. The incidence of non-compliance in this case is most concerning. Litigation which has been run as the respondents have run this case to date consumes an inordinate amount of court time and clogs the lists. It is also hugely expensive for the wife.

19. As I have mentioned to the practitioners, I will take this matter into my docket, with the express approval of the Case Management Judge, and manage it.

20. I have allocated a final hearing date to which the parties and practitioners should now work towards.

21. The respondents are keen to mediate. However, it would be inappropriate to embark on further mediation until after the husband and his sons have complied with their duty of full and frank financial disclosure and valuations are agreed or the subject of evidence. A further mediation at this stage would merely fatigue the wife and be an unwarranted expense for what, I am confident, would be no benefit.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bennett j.

Associate:

Dated:       25 June 2021

SCHEDULE OF PARTIES

MLC 1703 of 2020
Respondents
Fourth Respondent:	G PTY LTD (CAN …)
Fifth Respondent:	H TRUST (H PTY LTD, AS TRUSTEE)