Cull & Lenz (No. 3)

[2020] FamCA 1039

FAMILY COURT OF AUSTRALIA

Cull & Lenz (No. 3) [2020] FamCA 1039

File number(s):	SYC 6598 of 2017
Judgment of:	REES J
Date of judgment:	8 December 2020
Catchwords:	FAMILY LAW – PRACTICE AND PROCEDURE – Where the applicant is owed outstanding fees by the wife – Where the applicant seeks these monies be paid from settlement of the property – Where the funds will be preserved and the applicant’s claim dealt with in the substantive proceedings.
Number of paragraphs:	19
Date of hearing:	7 December 2020
Place:	Sydney
Counsel for the Applicant:	Mr Lonergan
Solicitor for the applicant:	ZZ Lawyers
First Respondent:	In Person
Counsel for the Second Respondent:	Mr Lethbridge SC
Solicitor for the Second Respondent:	Nolan Lawyers
Solicitor for the Third Respondent:	HH Lawyers
Fourth Respondent:	In Person
Fifth Respondent:	Did not appear
Sixth Respondent:	Did not appear

ORDERS

SYC 6598 of 2017

BETWEEN:

ZZ PTY LTD ACN …

Applicant

AND:

MS CULL

First Respondent

MR LENZ

Second Respondent

HH PTY LTD (and others named in the Schedule)
Third Respondent

ORDER MADE BY:	REES J
DATE OF ORDER:	8 DECEMBER 2020

THE COURT ORDERS:

1.That the application of ZZ Pty Ltd filed 1 December 2020 be dismissed.

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 Cull & Lenz has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

Rees J

1. Proceedings relating to parenting and property between Ms Cull (“the wife”) and Mr Lenz (“the husband”) were filed in 2017 and directions have been made for the preparation of the matter for final hearing.

2. The parties to those proceedings are the wife, the husband and the wife’s parents.

3. On 12 February 2018, the following orders were made:

   That each of the parties are restrained from selling dealing with, transferring, assigning or further encumbering or increasing the secured debt or their interest in:

   (a)       Apartment KK, Suburb LL, City MM, Japan;

   (b)       Apartment PP, NN Street, United Kingdom;

   (c)       EE Street, Suburb FF NSW Australia.

   (As per the original)

4. On 24 November 2020 I delivered reasons and made orders in relation to an application by the husband to set aside a contract for sale of the property at EE Street, Suburb FF owned by the wife.

5. Relevantly, the following orders were made:

   1.That the application of the husband, pursuant to section 106B of the Family Law Act 1975 (Cth) to set aside the contract for sale between the wife and Mr DD, in relation to the property at EE Street, Suburb FF (“Suburb FF”), is dismissed.

   2.That the husband serve ZZ Lawyers and HH Pty Ltd with the Application in a Case filed on 9 September 2020 and all affidavit material filed in relation to this application, including that of the wife and the respondents and a copy of these Orders and reasons for judgment forthwith.

   3.That ZZ Lawyers and HH Pty Ltd be joined as respondents in these proceedings.

   4.That upon the settlement of the sale of Suburb FF, the husband, ZZ Lawyers, HH Pty Ltd and Mr B Cull do all acts required to withdraw their respective caveats lodged on the title of Suburb FF.

   5.That ZZ Lawyers and HH Pty Ltd have liberty to apply by arrangement with the Associate to the Honourable Justice Rees in relation to Orders 3 and 4.

   6.That upon the settlement of the sale of Suburb FF, the proceeds of sale be applied in the following order and priority:

   (a)       To discharge the mortgage;

   (b)       To pay the agent’s commission and costs;

   (c)To pay the sum of $10,000 to JJ Pty Ltd simultaneously with the withdrawal of the caveat lodged by that entity;

   (d) To pay the balance of the amount into a controlled monies account held by Nolan Lawyers on trust for the husband and the wife, pending further order.

6. ZZ Pty Ltd, as trustee of the trust which operates ZZ Lawyers (“the applicant”) was joined as party to the proceedings. They acted as solicitors for the wife in the proceedings until 25 February 2020 when they ceased to act. The applicant is the trustee of the service company which operates the ZZ law practice.

7. The applicant has lodged a caveat on the property claiming to be owed outstanding fees by the wife.

8. Pursuant to the liberty to apply which was granted in the orders of 24 November 2020, the applicant seeks to vary the orders and, in effect, to be paid $100,000 on the settlement of the sale.

9. That application is opposed by the husband, the wife and the wife’s father.

10. The applicant relied on an affidavit of Mr AB sworn on 1 December 2020. Mr AB deposed to having carried out legal services for the wife from 7 March 2019, however, I accept that the applicant, in fact, acted for the wife from an earlier time and acted for the wife at the time when the injunction order was made on 12 February 2018.

11. On behalf of the applicant, counsel submitted that the applicant’s outstanding fees should be paid because the wife charged her interest in the property with the payment of fees due to the applicant before the relevant injunctive orders were made.

12. However, the evidence did not support that assertion.

13. The applicant relied on an unsigned costs agreement between the applicant and the wife which is dated 7 March 2019 and which incorporates, at Clause 6, a charge over the property. The wife did not dispute the validity of the document or suggest that she had not signed it.

14. Although the document dated 7 March 2019 referred to previous fee agreements dated 6 October 2017 and 3 April 2018, those agreements were not in evidence.

15. There is no evidence that the charge which forms part of the fee agreement dated 7 March 2019 also formed part of the earlier agreements.

16. Accordingly, the applicant relied on a charge which was executed after the wife was restrained from dealing with her interest in the property, a fact that was known to the applicant.

17. Accordingly, I am not satisfied that the applicant should have priority over the other claimants against the wife’s interest in the Suburb FF property and the application will be dismissed.

18. The applicant will be a respondent in the substantive proceedings. The funds will be preserved until such time as all of the claimants have an opportunity to argue their respective entitlements to be paid from the funds.

19. Insofar as the wife sought to agitate the Applications in a Case sworn by her on 17 November 2020 and 5 December 2020, those applications seek to deal with the substantive issues in the property proceedings and will be heard in conjunction with the substantive proceedings.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees J.

Associate:

Dated:       8 December 2020

SCHEDULE OF PARTIES

SYC 6598 of 2017
Respondents
Fourth Respondent:	MR B CULL
Fifth Respondent:	MS C CULL
Sixth Respondent:	MR DD