Curtain & Curtain (No 2)
[2023] FedCFamC1F 661
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Curtain & Curtain (No 2) [2023] FedCFamC1F 661
File number: ADC 4409 of 2013 Judgment of: KARI J Date of judgment: 11 August 2023 Catchwords: FAMILY LAW – INJUNCTIONS – Preservation of property
FAMILY LAW – COSTS – Where the wife pursues costs for interlocutory application and hearing – costs awarded
Legislation: Family Law Act 1975 (Cth) (‘the Act’),
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’).
Cases cited: Curtain & Curtain [2016] FamCA 577,
Curtain & Curtain [2019] FamCA 919,
Curtain & Curtain [2022] FedCFamC1A 134,
Curtain & Curtain [2022] FedCFamC1F 186,
Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157.
Division: Division 1 First Instance Number of paragraphs: 57 Date of hearing: 20 July 2023 Place: Adelaide Counsel for the Applicant: Mr Tredrea Solicitor for the Applicant: Jordan & Fowler Family Lawyers Counsel for the Respondent: Mr McQuade Solicitor for the Respondent: C M Tucker & Associates ORDERS
ADC 4409 of 2013 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CURTAIN
Applicant
AND: MR CURTAIN
Respondent
ORDER MADE BY:
KARI J
DATE OF ORDER:
11 AUGUST 2023
THE COURT ORDERS THAT:
1.Within 90 days, the husband do pay to the wife costs in the amount of FOUR THOUSAND THREE HUNDRED AND FIFTY FIVE DOLLARS AND THIRTY TWO CENTS ($4,355.32).
2.The Application in a Proceeding filed 15 May 2023 and the Response to an Application in a Proceeding filed 12 July 2023 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 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 the pseudonym Curtain & Curtain has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
KARI J
INTRODUCTION
These proceedings arise as a result of an Application in a Proceeding filed by the wife on 15 May 2023 in which she seeks certain injunctions to restrain the husband from dealing with various assets.
In his Response filed 12 July 2023 the husband opposed the making of any injunctions, however, towards the end of his Counsel’s submissions at the contested hearing on 20 July 2023, the husband agreed to the injunctive relief sought by the wife.
While orders in the terms agreed between the parties were made by agreement at the hearing on 20 July 2023, the parties remained in dispute as to a further order initially proposed by the wife, but abandoned by the conclusion of the hearing. In addition, the wife made an application for costs.
At the conclusion of the hearing on 20 July 2023 I made the additional order. In addition I heard submissions relating to the wife’s costs application and I reserved my decision in that regard.
These reasons, accordingly, relate to the additional injunction that was made on 20 July 2023 and the disposition of the wife’s costs application.
BACKGROUND
These proceedings have a lengthy history. While there are no less than five written judgments in the matter, four in particular encapsulate the history of the proceedings, namely:
(a)The decision of Berman J delivered on 15 July 2016, Curtain & Curtain [2016] FamCA 577 determining the parties’ competing property settlement applications pursuant to s 79 of the Family Law Act 1975 (Cth) (‘the Act’).
(b)The decision of Mead J delivered on 4 December 2019 refusing the wife’s application to bifurcate the determination of her application pursuant to s 79A(1)(a) of the Act from any ultimate determination of her s 79 application in the event that the former application was successful; Curtain & Curtain [2019] FamCA 919.
(c)The decision of Mead J delivered 25 March 2022 dismissing the husband’s application for summary dismissal of the wife’s application pursuant to s 79A(1)(a) of the Act to set aside the orders made by Berman J on 15 July 2016; Curtain & Curtain [2022] FedCFamC1F 186.
(d)The decision of the Full Court delivered 31 August 2022 dismissing the husband’s appeal of Mead J’s orders made 25 March 2022, which refused the summary dismissal application bought by the husband; Curtain & Curtain [2022] FedCFamC1A 134.
In circumstances where I have had regard to those reasons, I do not propose to set out a detailed history of the proceedings. Instead I propose to summarise the relevant facts and history of the litigation to date.
The wife was born in 1963 and she is presently 59 years of age. The husband was born in 1963 and he is presently 59 years of age.
The parties were in a relationship of approximately 28 years; forming a relationship in 1983, marrying in 1988 and separating on 14 November 2011.
On 25 November 2013 the wife commenced proceedings for alteration of the parties’ interests in property pursuant to s 79 of the Act.
On 15 July 2016 Berman J made final orders resolving the parties competing s 79 applications for property settlement pursuant to s 79 of the Act, having heard a trial over five days (“the final property orders”).
The effect of the final orders made by Berman J on 15 July 2016 was that:
(a)There was to be a 55/45 apportionment of property in favour of the husband;
(b)The husband retained a property in C Town and farming land in Region AF (known separately as “N Property”, “Suburb TT” and “M Property”) and the related farming enterprise; and
(c)The wife retained 3 properties located in each Suburb G, Town J and Town L.
A significant aspect of the dispute between the parties during the hearing before Berman J centred over which of the parties were to ultimately retain ownership of certain farming land and the related farming ventures operated on that land (in particular “Suburb TT” and “N Property” in circumstances where “M Property” was held solely by the husband). Berman J ultimately resolved that dispute in favour of the husband by accepting the husband’s evidence that in the post separation period the parties had brokered an agreement to resolve their financial dispute on terms which included the husband retaining the farming land and enterprise (at [162] and [192] – [215]).
While the wife lodged an appeal in relation to the final property orders, the same was abandoned.
Some 15 months later on 29 November 2017 the wife filed a fresh Initiating Application seeking orders pursuant to s 79A(1)(a) of the Act to set aside the final property order, and for fresh orders to be made adjusting the parties’ interests in property pursuant to s 79 of the Act. I shall return later in these reasons to the basis of this application. However it would be remiss of me not to record that it is of some considerable concern that this application remains extant almost five years later.
There is, however, some explanation for the fact that the s 79A proceedings remain before the court. While there have been various interlocutory skirmishes, there have been two applications of significance which have impacted the orderly progression and resolution of the wife’s s 79A application first filed 29 November 2017.
The first Application in a Case was filed by the wife on 20 November 2019 at the direction of the court and on the eve of trial listed to commence on 3 December 2019. The court directed the wife to file that application because it had become obvious to the primary judge that the parties were not agreed as to the basis upon which the trial was to proceed. That application had as its central focus a request by the wife to bifurcate determination of the s 79A question from any ultimate determination of the parties’ competing s 79 claims, if indeed the s 79A question was determined in the wife’s favour (“the wife’s bifurcation application”).
The husband opposed the wife’s bifurcation application.
The wife’s bifurcation application was heard on 26 and 28 November 2019 with reasons published and orders made on 4 December 2019 dismissing the wife’s bifurcation application.
For reasons which are not entirely clear, it was not until 18 January 2021 that anything of significance thereafter took place in the proceedings. On that day, however, the husband filed an Application in a Case in which he sought on order for summary dismissal of the wife’s s 79A application (“the husband’s summary dismissal application”). That application was filed nearly three years after the wife filed her s 79A application.
The husband’s summary dismissal application was heard on 23 and 24 August 2021, with reasons published and orders made on 25 March 2022 dismissing the same.
The orders of 25 March 2022 dismissing the husband’s summary dismissal application were the subject of an appeal by the husband commenced on 20 April 2022. That appeal was heard by the Full Court on 29 July 2022. Reasons were published and orders were made on 31 August 2022 dismissing the husband’s appeal.
On 27 April 2022 and as a result of the orders made 25 March 2022, the wife filed an Application in a Proceeding seeking an order that the husband pay her costs on an indemnity basis arising from the husband’s unsuccessful summary dismissal application (“the wife’s costs application”).
The wife’s costs application was heard by the primary judge on 12 October 2022 and judgment was reserved.
On the same day the primary judge made an order vacating the trial which had been listed to commence on 20 February 2023 in circumstances where “a closely related matter has now been listed for a 10 day trial commencing 17 April 2023 in the Federal Court of Australia.”[1]
[1] Order 1 dated 12 October 2022.
Unfortunately judgment has yet to be delivered in relation to the wife’s costs application. This is because the primary judge has taken an extended leave of absence from the court due to serious ill health.
It is this extended leave of absence which has seen the present application listed before me.
In addition, the court understands from information before the court in the present applications that the Federal Court proceedings have been finalised. Accordingly, the s 79A application of the wife is now in a position where the parties agree that it can be listed for trial.
So far as the Federal Court proceedings are concerned, this court understands that:
(a)Those proceedings related to the husband’s asserted interest in the company known as W Pty Ltd.
(b)The wife asserted that those proceedings resolved approximately a week prior to the scheduled trial in April 2023 on the basis of a transfer of shares in W Pty Ltd to the husband with an estimated value of $4,000,000 to $6,000,000.[2]
(c)The husband deposed in his affidavit filed 12 July 2023 that:
(i)The proceedings were discontinued one week prior to the scheduled trial on 10 April 2023.[3]
(ii)Prior to the filing of the Notice of Discontinuance, the husband received a transfer of 5,750,000 units in the AG Trust.[4]
(iii)Of those units 3,771,350 were transferred by the husband to his litigation funder, leaving the husband holding 1,978,650 units,[5] which the husband asserts in his Financial Statement filed 12 July 2023 have a “settlement value” of $2,235,874, but a “market sale value significantly less”.
[2] See wife’s affidavit filed 15 May 2023, paragraph 18.
[3] See husband’s affidavit filed 12 July 2023, paragraph 2.
[4] Ibid [3].
[5] Ibid [3(b)].
THE BASIS FOR THE WIFE’S S 79A APPLICATION
Before turning to the present application, more needs to be understood about the s 79A application which has been made by the wife.
The basis for the application was neatly summarised by the Full Court in Curtain & Curtain [2022] FedCFamC1A 134 at [3] where it was stated that on 29 November 2017, the wife, filed an Initiating Application seeking to set aside the orders of Berman J dated 26 July 2016 pursuant to s 79A(1)(a) of the Act, on the ground of a miscarriage of justice, by reason of fraud, suppression of evidence (including failure to disclose relevant information) or the giving of false evidence.
The wife relied upon the following in support of her s 79A application:
(a)The failure by the husband to disclose a letter dated 18 February 2013 from W Pty Ltd as trustee for the Q Trust, which confirmed, upon the commencement of his employment with them, that they intended to issue him or his nominee with 20 per cent of the equity in Q Trust.
(b)An email dated 19 August 2013 from the husband to W Pty Ltd, in which he advised them that he and the wife had separated and that she had asked for his “correspondence of engagement” with them. The email also stated that he had told her (falsely) that he was engaged as a consultant by W Pty Ltd “on a needs basis” not as an employee and that he had drafted the letter attached to that email (which was backdated to 4 May 2013) for their consideration. The backdated letter made references to the husband being a consultant.
(c)The husband’s failure to disclose income from E Pty Ltd, namely the sum of $74,200 for work undertaken but not billed by him prior to the trial before Berman J.
As highlighted by the Full Court (at [27] – [38]), in her judgment regarding the summary dismissal application (Curtain & Curtain [2022] FedCFamC1F 186), Mead J identified the following:
(a)That the correspondence dated 18 February 2013, 19 August 2013 and that backdated to 4 May 2013 “could not be described as other than information material to the question of property settlement as between” the parties (at [48]).
(b)That the husband had failed to inform Berman J of both the letter of 18 February 2013 and also that he had drafted the letter dated 4 May 2013 on 19 August 2013 and that he had backdated that letter to the May date (at [64]).
(c)That the husband had received correspondence one month prior to trial which included “discussion as to how the Units in the [Q Trust] could be allocated to him in a manner that allowed them to be transferred to him at a later stage when settlement as between he and the wife was finally completed” (at [69]).
(d)That the wife had been unable at the time of hearing of the summary dismissal application to establish the value of any interest the husband may have had in W Pty Ltd or Q Trust at the time of trial before Berman J, but considered that the wife’s inability to do so was attributable to the husband’s lack of disclosure (at [76] – [77]).
(e)That the husband “took no formal steps to obtain the benefit to which he considers himself entitled until the issuing of proceedings in the Federal Court in 2020, an application in respect of which he may or may not succeed, is immaterial to this element of the parties’ dispute” (at [72]).
(f)That another instance of issue of non-disclosure by the husband was his failure to disclose income from E Pty Ltd in circumstances where he did not issue invoices for his services until after the trial for work undertaken by him in the period predating the trial (at [78-82]).
It was for all of these reasons that Mead J was ultimately unable to find that the wife’s s 79A application had no reasonable prospect of success.
It is also important to understand at this juncture that in the event that the wife is successful in her s 79A application, then by paragraph 2 of her Initiating Application filed 29 November 2017, she seeks an unparticularised order in the following terms:
That pursuant to Section 79 of the said Act the Court to make such Order for settlement of property or adjustment of interests in property as the Court deems just and equitable.
THE WIFE’S APPLICATION FOR INJUNCTIONS
On 15 May 2023 the wife filed an Application in a Proceeding in which she sought injunctions in the following terms together with an order for costs:
1.That until further order the Respondent be restrained and an injunction be granted restraining him from:
(a) in his capacity as appointor of the [E Trust] or as a director of the corporate trustee ([E Pty Ltd]) selling mortgaging encumbering or in any way dealing with the land and improvements thereon known as “[Suburb TT]” being the land described in Certificates of Title Register Books Volume […] Folios […];
(b)in his capacity as appointor of [Mr Curtain Family Trust] or as director of the corporate trustee ([D Pty Ltd]) selling mortgaging or encumbering or in any way dealing with the land and improvements thereon commonly known as “[M Property]” being the land described in Certificates of Title Register Books Volume […] Folio […] and Volume […] Folio […];
(c)in his capacity as trustee of [Mr Curtain Superannuation Fund] selling mortgaging encumbering or in any way dealing with the land commonly known as “[N Property]” being the land described in Certificate of Title Register Book […] Folio […];
(d)in any way dealing with the amount or property received by him in settlement of proceedings in the Federal Court of Australia in Suit No […] entitled […].
2. Costs.
By his Response filed 12 July 2023, the husband sought the following orders:
1.That the Application filed the 15th May 2023 be dismissed.
2.That the wife pay the husband’s costs of this Application.
The parties competing applications were set down for hearing on 20 July 2023.
In preparation for the hearing, the wife’s counsel prepared written submissions, which, while formally filed on 21 July 2023, were available for the hearing.
From the wife’s perspective the application for injunctions had been made to preserve assets pending the resolution of her substantive application. The focus of the wife’s application was to preserve the farming properties but also significantly the fruits of the Federal Court litigation in circumstances where the wife asserts the husband’s “non-disclosure [is] akin to a fraud to the extent of multi-million dollars.”[6]
[6] See wife’s written submissions filed 21 July 2023, paragraph 9.
It is the wife’s position that:
(a)There is a serious issue to be tried, as confirmed by the way in which the primary Judge and the Full Court dealt with the husband’s summary dismissal application;
(b)The balance of convenience favours the making of the injunctions sought, given the serious non-disclosure by the husband; and
(c)The balance of convenience favours the making of the injunctions she has sought not only because of the husband’s serious non-disclosure, but also because he has dissipated the fruits of the litigation to his litigation funder on what the wife argues to have been non-commercial terms, and where the husband appears to have an intention to further dissipate the same.
The court additionally understands that the wife first sought injunctive relief in relation to the three farming properties as early as 8 May 2020 when she filed a Response to an Application in a Case that had been filed by the husband in relation to disclosure. That application however was not ultimately determined in circumstances the wife says where the application was “overtaken by a trial listing for 23 August 2021.”[7]
[7] See wife’s affidavit filed 15 May 2023, paragraph 12.
At the commencement of the hearing on 20 July 2023, the wife’s counsel indicated that the wife sought some slight variations to the injunctions set out in her Application in a Proceeding and a further proposed Minute of Order was provided to the court.
The matter then proceeded to argument, with the court hearing fulsome submissions on behalf of the wife and then the husband.
Towards the end of the husband’s counsel’s submissions, the husband’s initial strident opposition to the making of any injunctions whatsoever softened and the court was informed that the husband would consent to injunctive relief in relation to the farming properties. The matter was stood down to enable the husband’s instructions to be confirmed, and ultimately an order was made by consent in the exact terms that had been proposed by the wife during the hearing as follows:
1.Subject to paragraph 2 until further order the Respondent is restrained and an injunction is granted restraining him from:
1.1In his capacity as appointor of [E Trust] or as director of the corporate trustee ([E Pty Ltd]) selling mortgaging encumbering or in any way dealing with the land and improvements thereon known as “Suburb TT” being the land described in Certificates of Title Register Book Volume […] Folios […];
1.2In his capacity as appointor of [Mr Curtain Family Trust] or as director of the corporate trustee ([D Pty Ltd]) selling mortgaging or encumbering or in any way dealing with the land and improvements thereon commonly known as “[M Property]” being the land described in Certificates of Title Register Books Volume […] Folio […] and Volume […] Folio […];
1.3In his capacity as trustee of [Mr Curtain Superannuation Fund] selling mortgaging encumbering or in any way dealing with the land commonly known as “[N Property]” being the land described in Certificate of Title Register Book Volume […] Folio […]; and
1.4In any way dealing with the 1,978,650 units held by him in the [AG Trust].
1.5Notwithstanding paragraph 1, the Respondent may refinance the [AH Bank] mortgage held in the name of [E Trust] and the ANZ Bank overdraft in the name of the [Mr Curtain Family Trust] ON CONDITITION that any subsequent mortgage or mortgages against the “[Suburb TT]” property and “[M Property]” property shall not exceed the total amount of $1,000,000.00.
That then left for argument an additional order initially proposed by the wife, but abandoned by her during the hearing, and then sought by the husband.
That order was ultimately made by the court and was in the following terms:
3.Notwithstanding paragraph 1.4, upon providing not less than 30 days written notice to the Applicant’s solicitors, the Respondent may sell up to 500,000 units held by him in the [AG Trust] ON CONDITION that the net proceeds of any such sale, or sales, be utilised entirely in payment down of the [AH Bank] mortgage held in the name of [E Trust] (or any subsequent mortgage or mortgages against the “[Suburb TT]” property), and/or in payment of any amounts of personal taxation liabilities of the Respondent to the Australian Taxation Office that pre-date 2016.
I was satisfied that the balance of convenience favoured the carving out of certain obligations created by the injunction agreed between the parties in relation to the units held by the husband in the AG Trust (being the fruits of the Federal Court litigation) in circumstances where:
(a)It appears undisputed that the husband has significant liabilities to the ATO.
(b)While the wife raises questions including over the quantum of those liabilities, the husband asserts the liabilities predate the final hearing before Berman J, and were in the amount of $303,000, represented by $175,000 in personal taxation and $128,000 in unpaid PAYG instalments by E Pty Ltd.
(c)The husband further asserts that he made an application to the ATO to delay the payment of those liabilities until the resolution of the Federal Court proceedings, which have now resolved and therefore the ATO liability is payable.
(d)Aside from the farming properties, and the farming equipment, from the husband’s Financial Statement filed 12 July 2023 it is apparent that the husband has limited ability to pay these taxation liabilities without recourse and sale of some of the units in the AG Trust.
(e)Bearing in mind:
(i)That the wife presently holds net assets and superannuation of $960,710 (comprised of total property with a value of $1,237,100, superannuation of $196,872 less liabilities of $473,262) according to Part B of her Financial Statement filed on 11 October 2022;
(ii)The husband holds net assets and superannuation of $4,254,206, according to Part B of his financial statement filed on 12 July 2023, comprised of total property to the value of $4,806,857, superannuation to the value of $978,079, less liabilities of $1,530,730;
(iii)The wife’s presently unparticularised s 79 claim, but with regard to the fact that she sought a 60 per centum division of assets in her favour during the s 79 proceedings heard and determined by Berman J; and
(iv)When considering the terms of the injunctions made by consent, together with the carve out made by the court;
on any view there are sufficient assets from those to be preserved, to meet the wife’s s 79 claim if she is ultimately successful in her s 79A application.
THE WIFE’S COSTS APPLICATION
The wife has sought an order for costs in relation to the Application in a Proceeding filed 15 May 2023.
The quantum of costs sought by the wife was an amount of $4,355.32 calculated in accordance with Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) as follows:
(a)Item 108, Solicitors fees of 6 hours at the rate of $259.22 per hour, totalling $1,555.32;
(b)Items 203, Counsel’s fees of 4 hours at the rate of $400 per hour, totalling $1,600;
(c)Item 204, Counsel’s fees of 3 hours at the rate of $400 per hour, totalling $1,200.
THE LEGAL FRAMEWORK
Costs applications in respect of proceedings under the Family Law Act 1975 (Cth) (‘the Act’) are governed by s 117 of the Act.
The factors that are to be considered when contemplating the making of a costs order are those set out in s 117(2A) of the Act; albeit the Court may give such weight as it considers appropriate to any relevant factor (Medlon & Medlon (No 6) (Indemnity Costs) [2015] FamCAFC 157 at [24]).
The Rules also provide assistance when considering the making of an order for costs. In particular, r 12.17(1) provides the method for the calculation of costs:
12.17 Method of calculation of costs
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c)to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
In addition, r 12.17(3) sets out the matters that may be considered in the calculation of costs:
(3)In making an order under subrule (1), the court may consider the following:
(a) the importance, complexity or difficulty of the issues;
(b)the reasonableness of each party’s behaviour in the proceeding including by having regard to the matters set out in subrule 12.08(2);
(c)the rates ordinarily payable to lawyers in comparable proceedings;
(d)whether a lawyer’s conduct has been improper, unfair, unreasonable or disproportionate;
(e)the time properly spent on the proceeding, or in complying with pre-action procedures;
(f)whether expenses (paid or payable) are fair, reasonable and proportionate.
DISCUSSION
Turning to the relevant factors to be considered pursuant to s 117(2A) of the Act:
(a)I have identified earlier in these reasons the net property and superannuation held by each of the parties.
(b)The parties are of similar age.
(c)According to her Financial Statement filed 11 October 2022 the wife is a healthcare professional working full time and earning an income of $1,650 per week. The wife’s expenses almost entirely consume her weekly income with little surplus.
(d)According to his Financial Statement filed 12 July 2023, the husband does not disclose any employment nor employment income, albeit that he has retained the farming enterprises which are leased but continue to operate. While the husband discloses weekly personal expenditure of $1,406, it is not clear to the court from the documents that he has filed how it is that the husband funds his personal expenditure.
(e)It is of some significance that the husband’s Response filed 12 July 2023 sought the dismissal of the wife’s application, and that such position was maintained until the eleventh hour in the hearing when a concession was ultimately made. On any view the concession made at the husband’s end could have been made much sooner saving the need for the application and/or the contested hearing.
(f)The husband did not comply with orders made on 1 June 2023 for the filing of his Response and Affidavit in support to occur by 22 June 2023. Rather filing late on 12 July 2023 and leaving little room for the wife to consider the material, obtain advice and enter into some discussions with the husband (through his solicitors) prior to the interim hearing.
I am satisfied on balance that those factors weigh in favour of the making of an order for costs as sought by the wife.
I now make those orders that appear at the commencement of these reasons.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kari. Associate:
Dated: 11 August 2023
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