Cattell & Lund (No. 2)

[2021] FamCA 611

FAMILY COURT OF AUSTRALIA

Cattell & Lund (No. 2) [2021] FamCA 611

File number(s):

MLC 1703 of 2020

Judgment of:

BENNETT J

Date of judgment:

18 August 2021

Catchwords:

FAMILY LAW – COSTS – non-compliance with orders in financial proceedings – costs order made.

Legislation:

Family Law Act 1975 (Cth)

Family Law Rules 2004 (Cth)

Cases cited:

Cattell & Lund [2021] FamCA 447

Number of paragraphs:

20

Date of hearing:

18 August 2021

Place:

Melbourne

Counsel for the Applicant:

Mr Barbayannis

Solicitor for the Applicant:

Hargreaves Family Lawyers

Counsel for the Respondents:

Mr Catlin

Solicitor for the Respondents:

Mr Lund

Counsel for the Respondents:

Mr Mellas

Solicitor for the Respondents:

Faram Ritchie Davies

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 AUGUST 2021

THE COURT ORDERS THAT:

1.This matter be adjourned to 17 September 2021 at 9.30 am (“the adjourned date”) NOTING THAT officers of J Bank are likely to give evidence pursuant to subpoena issued at the behest of the wife.

2.There be leave to the wife to issue subpoenae to J Bank for the provision of documents and to give evidence.

3.In respect of any application which a party seeks also be returnable on the adjourned date:

(a)any application be filed by not later than 31 August 2021;

(b)any response be filed by not later than 8 September 2021; and

(c)any reply by the applicant be filed by not later than 14 September 2021.

4.The Order made on 13 April 2021 and the Order made on 16 June 2021 be amended pursuant to Rule 17.02 of the Family Law Rules 2004 to include Annexure “A” to those orders.

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

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

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 17.02 Family Law Rules 2004 (Cth).

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).

EX TEMPORE REASONS FOR JUDGMENT

1. The wife seeks that the respondent husband and the second to fifth respondents be jointly and severally liable for the costs thrown away today in the sum of $5270. These are my reasons for making orders in the terms sought by the wife, over the opposition of the respondents.

2. This matter comes before me to check on the readiness of it for a private mediation to which the parties have agreed.  It is a property matter of some complexity, which has been the subject of previous reasons for decision of mine, delivered on 16 June 2021 in case neutral citation Cattell & Lund [2021] FamCA 447. The parties to the proceedings are the husband and wife and the husband’s children, Mr B Lund and Mr C Lund, and two corporate entities as second, third, fourth and fifth respondents.

3. Mr B Lund and Mr C Lund, for whom Mr Mellas appears today, were required to make discovery, in particular of documents described in Annexure A to that Order, and to do so within seven days, which would have been 20 April 2021.  They failed or neglected to do so, and on 16 June 2021, they sought and obtained an extension of time for compliance to 16 July 2021, but they failed or neglected to comply by that date as well.  Today I noticed that the Annexure referred to is not annexed to the relevant orders and that has been remedied.

4. It was also required, pursuant to the Order made on 13 April 2021, that the applicant nominate three valuers within seven days and the respondents select one of those three valuers to be engaged as a single expert. It appears from correspondence dated 17 August 2021 at page 41 of 44 of the affidavit of the wife’s solicitor filed today that the wife’s solicitor provided “names of prospective valuers and their very general fee estimates by letter dated 28 April 2021”.  So that was one week later than it should have been provided, but only a week.  It is further noted that there has been no response from any of the respondents to the request that a valuer be chosen from those three valuers nominated by the wife.

5. The incidence of default is set out in the affidavit of the wife’s solicitors as follows:-

   17. The Respondent has not complied with the costs order made against him on 16 June 2021. Pursuant to Order 13, the Respondent was required to pay my client’s costs in the sum of $28,000 by 16 July 2021.

   18. The Respondent has not paid any spousal maintenance to my client as such, further arrears are continuing to accrue. Further to the amount declared to be owed by the Respondent, in the Orders made on 13 April 2021, I calculate that the Respondent has since accrued arrears of spousal maintenance (at the rate of $1,000 per week, per the Orders made on 26 May 2020) in the sum of $18,000 as at today.

   19. Notwithstanding the extension of time provided to him under the June orders, the Respondent has not produced any financial documents in relation to his personal financial affairs or otherwise.

   20. As at time date of this my Affidavit, the Second and Third Respondent have not complied with their obligation for discovery pursuant to the Orders made on 13 April 2021 and with the extension of time (to 16 July 2021) afforded to them pursuant to Order 2 of the June orders.

   21. On 17 August 2021, Mr Catlin wrote to me about the status of the valuation of various entities comprised within the K Group. My client nominated four prospective valuers, by letter sent by me to Mr Catlin and to the Second and Third Respondent’s former lawyers dated 28 April 2021. A firm fee estimate cannot be obtained until the Second and Third Respondents comply with their obligation for discovery and the Respondent has not yet selected a valuer.

6. The second and third Respondents have not complied with their obligations under paragraph 14 of the Order made on 13 April 2021 to file and serve a statement of contention of facts and law by 7 June 2021. The time for filing and serving was extended until 16 July 2021 in accordance with paragraph 1 of the Order made on 16 June 2021 for which there was further non-compliance. The application in respect of which the contentions are required was filed on 9 April 2021. The orders sought in the application were as follows:-

   1.That the Applicant and Respondent pay to the second, third and fourth named respondents the sum of $2,301.703.17 (“the sum”).

   2.That the sum be paid from the net asset pool divisible as between the Applicant and the Respondent and prior to any distribution of funds.

   3.Pursuant to Rules 12.02 and 13.04 of the Family Law Rules 2004, each party make full and frank disclosure within 28 days.

   4.Within 42 days of discovery being complete, the parties attend a Mediation convened by an agreed Mediator at their equally shares expense and failing agreement as to the Mediator within 7 days of a request for Mediation, the Applicant propose 3 names and the Respondent nominate one name from the list provided within 7 days of receipt of such request.

   5.That the Applicant pay the costs of the second, third and fourth named Respondents.

   6.Such other Orders as this Honourable Court deems appropriate.

7. The applicant wife now makes an application for costs of this day and what appears to be the modest sum of $5270, being $1870 to prepare the affidavit, which details default by all of the respondents to date, and $3500 for counsel’s fees.  Those amounts are not in accordance with the scale to the Family Law Rules 2004, but they are modest in the scheme of things.

8. Mr Catlin appears for the husband. The husband participated in the hearing. Mr Catlin has accepted a direct brief, he has no instructing solicitor. The respondent husband opposes the application for costs. Mr Catlin says that all of the documents that his client has are lodged with a business which is run by Mr B Lund and Mr C Lund.  That is, on the face of it, an implausible assertion.  Discovery is required to be made of documents not only in one’s possession but also under one’s control. If the husband does not have the documents he must get what documents are relevant and under his control and discover them. As matters stand today, the husband purports to have mortgaged his property to J Bank for an indebtedness of $1.5 million, but now subject to a claim for a further $4 million from J Bank, and he says he has no documents to support that.

9. The husband, on his case, ceased to be involved with the business in approximately 1995. That business bears his name and is operated by his sons.  It is incongruous that he would not have some documents about his own financial life since 1995.  In any event, he has not responded to the correspondence in relation to selecting a valuer.  Counsel for the husband submits that it should be the valuer who agitates for documents and seeks out and locates documents.  That submission is as implausible as it is wrong and is not an excuse for non-compliance.  It is for the parties to instruct a valuer and for the parties to provide documents to the valuer, not for the valuer to take on an inquisitorial role. The valuer is a single expert witness, not an interrogator.

10. The second and third respondents have changed solicitors since the last hearing.  They have failed to comply with anything required of them since the last hearing, including discovery, provision of contentions of fact and law and to nominate valuers.  On 22 July 2021, which was the date upon which their previous solicitor filed a Notice of Ceasing to Act, a Notice of Discontinuance was filed on behalf of the respondents.  They discontinued the Application in a Case filed on 17 February 2021.  That was an application to intervene in proceedings and did not specify any orders sought.  They also discontinued their response to an Application in a Case filed on 9 April 2021.  That was a document in which they did claim financial relief as set out above at paragraph 6.  One may assume that they were no longer required to file the contentions of fact and law because they no longer sought relief; however, Mr Mellas, who is briefed to appear by the new solicitors for the respondents, says that his instructions are that the Notice of Discontinuance is not valid.  He does not have instructions to withdraw the Notice of Discontinuance but asks the court to proceed on the basis that his clients still seek orders against the husband and wife in these proceedings.

11. Bearing in mind that the purpose of this hearing was to check that the matter was ready for mediation, it has been, I am satisfied, a complete waste of time for the wife.  I am thereby satisfied that there are circumstances which justify departure from the usual statutory position, whereby each party pays their own costs. 

12. I am satisfied that an order for costs is justified. 

13. In asking what order for costs ought be made and hearing submissions by counsel for the respondent husband through Mr Catlin and Mr Mellas for the other respondents, I was not addressed specifically on the matters set out in section 117(2A) of the Family Law Act 1975 (Cth).

14. I take it that as all respondents have retained lawyers, they have enough money for lawyers, and, in any event, impecuniosity or a lesser financial position than the wife would not be a defence to an application for costs in circumstances such as this.  As it stands, the wife has not received spousal maintenance, due to an order made in May 2020.  So I cannot assume that her financial position is superior to the other parties, I am merely pointing out that not being addressed as to their financial situation does not lead me to assume that they cannot afford to pay costs.

15. An applicant for costs does not need to qualify under each of the factors set out in the legislation.  It is sufficient that one or more are engaged, and in this particular instance I am comfortably satisfied that an order should flow because of the manner in which the respondents have chosen to conduct these proceedings and their noncompliance with outstanding orders.

16. Costs are not a punishment for non-compliance. Costs in this instance is recompense for the wife for costs thrown away today by virtue of the matter not being ready for mediation because none of the respondents have done anything or taken any steps in this proceeding they were required to do before today. Neither sought the consent of the wife’s practitioners to an adjournment of today’s hearing in order to minimise her costs.

17. As to quantum, Mr Catlin said that it seems too high to him.  He is going to charge $1300 or $1350 for today.  That may be.  Mr Barbayannis appears for the wife. He is an experienced and senior member of the junior Family Law Bar.  In my view, the sum of $3500 for his fees of today is reasonable and I will allow it at that rate.  Also, the costs of the affidavit for the instructing solicitor seems to me to be perfectly acceptable at $1870. 

18. No stay was sought but I will allow 30 days.

19. The adjourned date will permit time for oral evidence. Counsel for the wife informs the court that two subpoenas to produce documents have been served on J Bank but no documents have been produced. I am satisfied that there is a real issue requiring investigation and perusal of documents by the wife, to wit, the husband’s liability to J Bank and what recourse the Bank has to the business providers by way of mortgage or otherwise. As best I understand, counsel for the wife says the security interest seems to be $1.5 million but J Bank wants all proceeds of sale, of $5.5 million, applied to repay the loan and cover liabilities of the business in which the respondents assert that it has no entitlement. The previous subpoenas are spent. New subpoenas should issue, appropriately addressed and requiring production of documents well in advance of the adjourned date. Another subpoena should issue to require the attendance at court of the proper officer of the Bank to give evidence. If the wife’s practitioners have concerns about the Bank’s compliance for the adjourned date, the matter can be mentioned at short notice for me to consider any further application directed at ensuring compliance with court processes.

20. Complaints of non-compliance do not progress litigation towards a determination. In the face of continued non-compliance by any or all of the respondents, those who advise the wife must formulate some constructive steps to get the matter ready for a trial determination.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bennett.

Associate:

Dated:       20 August 2021

SCHEDULE OF PARTIES

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