Cull & Lenz (No 4)
[2022] FedCFamC1F 107
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Cull & Lenz (No 4) [2022] FedCFamC1F 107
File number(s): SYC 6598 of 2017 Judgment of: REES J Date of judgment: 3 March 2022 Catchwords: FAMILY LAW – COSTS – Wife to pay the costs of the first, second and third applicants. Legislation: Family Law Act 1975 (Cth) s 117(2A)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Division: Division 1 First Instance Number of paragraphs: 26 Date of last submission/s: 24 February 2022 In Chambers: 3 March 2022 Place: Sydney Solicitor for the First Applicant: M.C.A. Law Firm Solicitor for the Second and Third Applicants: Finn Roache Lawyers Respondent: Litigant in person ORDERS
SYC 6598 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: M.C.A. LAI & CO PTY LIMITED
First Applicant
SYDNEY COVE SERVICES PTY LTD (ACN …)
Second Applicant
DANIEL PATRICK GEORGES T/AS FINN ROACHE
Third Applicant
AND: MS CULL
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
3 MARCH 2022
THE COURT ORDERS:
1.That the wife pay the costs of Sydney Cove Services Pty Ltd (ACN …) in relation to these proceedings as agreed or assessed.
2.That the wife pay the costs of M.C.A. Lai & Co Limited (trading as M.C.A. Law Firm) in relation to these proceedings as agreed or assessed.
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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Cull & Lenz has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Competing applications for property settlement between Ms Cull (“the wife”) and
Mr Lenz (“the husband”) were heard and determined by reasons for judgment delivered and orders made on 4 March 2022.
M.C.A. Lai & Co Pty Limited (“MCAL”); Sydney Cove Services, trading as Finn Roache Lawyers (“Finn Roache”) and Mr Georges, a director of Finn Roache, all intervened in the proceedings claiming to be creditors of the wife having acted for her in their capacity as solicitors in the wife’s substantive family law proceedings.
The three applicants now seek orders that the wife pay their costs of the family law proceedings.
It is necessary to understand how they became parties to the substantive proceedings between the husband and the wife.
The applicants and the wife have all filed written submissions in relation to these applications. I have had regard to the affidavit of Mr Lai sworn on 20 April 2021; the affidavit of Ms Joya (on behalf of Finn Roache) sworn on 24 January 2022 and the affidavit of Mr Georges sworn on 1 December 2020. The wife relies on an affidavit sworn by her on 24 February 2022.
Finn Roache acted for the wife between September 2017 and 20 February 2020. On 10 November 2017, the wife executed a fee agreement with Finn Roache which provided for her fees to be secured over her property at EE Street, Suburb FF (“Suburb FF”) and permitted Finn Roache to lodge a caveat on the title of the property.
Mr Georges is a director of the trustee of the unit trust which operates Finn Roache. I do not understand that Mr Georges advances a claim separately from the claim of Finn Roache.
On 12 February 2018, orders were made in the substantive proceedings which, inter alia, restrained the wife from selling, dealing with, transferring, assigning or further encumbering a property owned by her at Suburb FF. Finn Roache were the solicitors for the wife when those orders were made.
MCAL acted for the wife in the substantive proceedings between 20 February 2020 and
25 May 2020. The wife signed a costs agreement with MCAL on 20 February 2020 which specified that MCAL could ask for security to be provided. To secure payment of their costs, MCAL lodged a caveat over the title of the wife’s Suburb FF property.
On 4 June 2020, in breach of the orders made on 12 February 2018, the wife sold Suburb FF to a third party purchaser.
On 24 November 2020, orders were made joining Finn Roache and MCAL as parties to the substantive proceedings and requiring each of them to remove the caveat lodged on the title of the Suburb FF property in anticipation of settlement of the sale. Those orders also provided for the net proceeds of sale of the Suburb FF property to be held on trust for the husband and the wife, pending the resolution of the substantive proceedings, thus securing the position of
Finn Roache and MCAL.
The caveats were duly withdrawn.
On 19 March 2021, a trustee for sale was appointed for the Suburb FF property and orders were made to facilitate the settlement of the sale and the preservation of the net proceeds in accordance with the orders made on 24 November 2020.
On 6 December 2021, Finn Roache obtained judgment against the wife in the District Court of NSW in the sum of $127,996.13 (inclusive of costs). The wife did not contest the application and has not applied to set aside the judgment.
The three applicants filed affidavits in the proceedings and appeared on the first day of the hearing. The three applicants agreed that, in circumstances where the claims of the wife’s creditors exceeded the amount she was likely to receive by way of property settlement, the appropriate course was for one of them to bring a creditors’ petition and for a trustee in bankruptcy to determine how the bankrupt estate should be distributed.
I will determine the applications for costs of their intervention in the family law proceedings separately.
The applications are governed by the provisions of the Family Law Act 1975 (Cth) s 117(2A).
THE APPLICATION OF FINN ROACHE AND MR GEORGES
Until the orders of 24 November 2020, which required the removal of its caveat, Finn Roache had some security for the payment of the costs owed by the wife.
When those orders were made, Finn Roache lost that security and, in order to secure its costs, had no choice but to join in the family law proceedings.
The participation of Finn Roache was brought about by the failure of the wife to make any proper arrangement for the payment of the money she owed.
The wife should pay the costs of Finn Roache in the family law proceedings.
Finn Roache estimates those costs to be $27,612.75.
It is not clear how that amount was calculated and the order will provide for the costs to be as assessed or agreed.
THE APPLICATION OF MCAL
The same considerations apply to the application of MCAL who were also obliged to join in the family law proceedings to secure payment of their professional fees.
MCAL claims fees of $16,225 but it is not clear that those costs have been calculated in accordance with the scale specified in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
It is appropriate that the wife pay the costs of MCAL as agreed or assessed.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 3 March 2022
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