D Attorneys & Sresbodan & Ors
[2017] FamCA 266
•27 April 2017
FAMILY COURT OF AUSTRALIA
| D ATTORNEYS & SRESBODAN AND ORS | [2017] FamCA 266 |
| FAMILY LAW – APPLICATION IN A CASE – ENFORCEMENT – Where the husband’s former lawyers seek the enforcement of orders to obtain payment in satisfaction of a Costs Assessment Order made in their favour – Where the lawyers contend that r 20.07(d) of the Family Law Rules 2004 (Cth) gives the court the power to directly order a payment to them from a controlled monies account – Where there is doubt as to whether the court has the jurisdiction to make such an order – Where the order can be enforced by the lawyers asking the court to issue a Third Party Debt Notice – Application for the court to issue a Third Party Debt Notice allowed. FAMILY LAW – APPLICATION IN A CASE – INTERLOCUTORY ORDERS – Where the applicant husband seeks a variety of interlocutory orders – Where the court has no jurisdiction to make the orders sought – Application dismissed. |
| Bankruptcy Act 1966 (Cth) ss 35, 35A Family Law Act 1975 (Cth) |
Family Law Rules 2004 (Cth) rr 1.12, 19.37, 19.38, 20.01, 20.05, 20.07, 20.30, 20.31, 20.32
Sresbodan & Sresbodan and Ors [2015] FamCA 515
Sresbodan & Sresbodan and Ors [2016] FamCA 954
Sresbodan & Sresbodan and Ors [2016] FamCAFC 88
| APPLICANTS: | Mr D and Mr E trading as D Attorneys |
| FIRST RESPONDENT: | Mr Sresbodan |
SECOND RESPONDENT: | Ms Sresbodan | ||||
THIRD RESPONDENTS: | Trustees of the Bankrupt Estate of Mr Sresbodan | ||||
| FILE NUMBER: | SYF | 4345 | of | 2006 | |
| DATE DELIVERED: | 27 April 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 13 March 2017 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANTS: | D Attorneys |
| THE FIRST RESPONDENT: | In person | |
| SOLICITOR FOR THE SECOND RESPONDENT: | No appearance | |
| SOLICITOR FOR THE THIRD RESPONDENTS: | Goldrick Farrell & Mullan |
Orders
Application in a Case filed by D Attorneys on 8 March 2017
The orders made on 20 September 2016 freezing funds of Mr Sresbodan are varied to the extent necessary to permit D Attorneys to apply for a Third Party Debt Notice seeking the payment of $14 700 pursuant to a Costs Assessment Order made on 14 December 2016, to serve that notice upon the holder of the Controlled Monies Account (“CMA”) referred to in that order and to permit the holder of the CMA referred to in those orders to comply with the Third Party Debt Notice.
Pursuant to r 20.32 of the Family Law Rules 2004 (Cth), upon D Attorneys filing three copies of the Third Party Debt Notice in the form annexed to the Affidavit of Mr E sworn 8 March 2017, the court issue the Third Party Debt Notice in that form.
Pursuant to r 1.12 of the Family Law Rules 2004 (Cth), the requirement to file an Affidavit pursuant to r 20.32 of the Family Law Rules 2004 (Cth) be dispensed with.
Application in a Case filed by Mr Sresbodan on 15 December 2016
The application is dismissed.
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 D Attorneys & Sresbodan and Ors 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).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 4345 of 2006
| Mr D and Mr E trading as D Attorneys |
Applicant
And
| Mr Sresbodan |
First Respondent
And
| Ms Sresbodan |
Second Respondent
And
| Trustees of the Bankrupt Estate of Mr Sresbodan |
Third Respondent
REASONS FOR JUDGMENT
Introduction
There are two applications before the court. The first is an Application in a Case filed on 8 March 2017 by Mr D and Mr E trading as D Attorneys. By this application they seek enforcement orders to obtain payment of $14 700 in satisfaction of a Costs Assessment Order made in their favour on 14 December 2016.
The second is an Application in a Case filed on 15 December 2016 by Mr Sresbodan, by which he seeks a variety of orders in relation to the proceedings, but principally orders for the taking of accounts and production of bank records.
In order to understand the applications it is necessary to give some background. However, I shall not repeat what I have said in earlier judgments and regard should be had to those as set out herein:
· Reasons for judgment dated 6 July 2015 (Sresbodan & Sresbodan and Ors [2015] FamCA 515);
· Reasons for judgment dated 20 September 2016 (Sresbodan & Sresbodan and Ors [2016] FamCA 954); and
· Full Court decision dated 27 May 2016 (Sresbodan & Sresbodan and Ors [2016] FamCAFC 88).
On 6 July 2015 I made orders dividing a sum of money that was being held pending the resolution of the proceedings. An order was made that Mr Sresbodan receive $646 425.60 from the fund together with 10.7 per cent of any balance remaining. Those orders were stayed pending the disposition of an appeal taken by Mr Sresbodan.
The appeal was dismissed and on 20 September 2016 I made orders terminating the stay. At the request of Ms Sresbodan, D Attorneys and Armstrong Legal, I made a freezing order against $490 000 of the funds being held on Mr Sresbodan’s behalf and directed that they remain held in the Controlled Monies Account (“CMA”).
On 27 September 2016, on the application of Mr Vanin and Mr Cox as Trustees of the Bankrupt Estate of Mr Sresbodan, I varied those orders so that the sum of $520 000 of the funds payable to Mr Sresbodan were frozen.
In the judgments that gave rise to the freezing orders, I was at pains to point out that the purpose of a freezing order is to ensure that the judgments of the court are not rendered nugatory by the dissipation of assets. The purpose of freezing orders is not to ensure that any particular creditor gets paid and they do not in effect convert an unsecured creditor into a secured creditor. Thus the funds, whilst frozen, remain those of Mr Sresbodan. The proceedings otherwise having concluded, the only jurisdiction of the court is to determine whether or not to freeze those sums for a reasonable time to permit creditors either to seek execution against those funds or to take appropriate bankruptcy proceedings. As I said earlier, any creditor has leave to apply. So too does Mr Sresbodan, particularly in relation to funds he reasonably needs for living or legal expenses.
With those general comments in mind, I turn to the applications.
Application by D Attorneys
The two principal orders sought by D Attorneys are sought in the alternative. They seek an order that they be paid $14 700 from the CMA or that they be permitted to serve a Third Party Debt Notice upon the holder of the CMA. In each case an order is sought to vary the freezing order accordingly.
The debt arises in this way. On 27 May 2016 the Full Court dismissed Mr Sresbodan’s appeal against the Orders of 6 July 2015. Amongst the orders made by the Full Court was an order that Mr Sresbodan pay the costs of D Attorneys.
On 14 December 2016 a Registrar of the Family Court of Australia issued a Costs Assessment Order pursuant to r 19.37 of the Family Law Rules 2004 (Cth) (“the Rules”) in the sum of $14 700.
On 21 December 2016 D Attorneys sent a copy of the Costs Assessment Order to Mr Sresbodan at his post office box by express post.
Pursuant to r 19.38 of the Rules a party may, within 14 days of receiving a Costs Assessment Order made under r 19.37, apply to have the order set aside. No such application has been made.
D Attorneys submit that I have the power to make the order for payment directly to them from the CMA pursuant to r 20.07(d) of the Rules, which provides:
The court may make an order:
…
(d) in aid of the enforcement of an obligation.
They were not able to refer me to any authorities as to what the phrase “in aid of the enforcement of an obligation” might mean.
Rule 20.07(c) provides that the court may make an order for enforcement and it directs the reader to r 20.05. Rule 20.05 provides:
20.05 Enforcing an obligation to pay money
An obligation to pay money may be enforced by one or more of the following enforcement orders:
(a) an order for seizure and sale of real or personal property, including under an Enforcement Warrant (see Part 20.3);
(b) an order for the attachment of earnings and debts, including under a Third Party Debt Notice (see Part 20.4);
(c) an order for sequestration of property (see Part 20.5);
(d) an order appointing a receiver (or a receiver and manager) (see Part 20.6).
None of these is an order for payment of money from a particular fund. I have some doubt as to whether r 20.07(d) extends to an order for payment of money from a specific account. There is already an order obliging Mr Sresbodan to pay $14 700 to D Attorneys. That is an enforceable obligation under r 20.01(1)(a) and r 20.01(2)(f) to which r 20.05 applies.
In the alternative, D Attorneys seek that a Third Party Debt Notice issue and that the freezing orders be modified accordingly to allow the notice to be served and complied with.
Rules 20.30, 20.31 and 20.32(1) provide:
20.30 Application of Part 20.4
This Part applies to:
(a) money deposited in a financial institution that is payable to a payer on call or on notice;
(b) money payable to a payer by a third party on the date when the enforcement order is served on the third party; and
(c) earnings payable to a payer.
20.31 Money deposited in a financial institution
(1) Money deposited in an account in a financial institution that is payable on call is a debt due to the payer even if a condition relating to the account is unsatisfied.
(2) Money deposited in an account in a financial institution that is payable on notice is a debt due to the payer at the end of the notice period required, starting on the date of service of the Third Party Debt Notice on the third party debtor.
20.32 Request for Third Party Debt Notice
(1) A payee may, without notice to the payer or third party, ask a Family Court to issue a Third Party Debt Notice requiring the payment to the payee of any money to which this Part applies by filing:
(a) 3 copies of the Third Party Debt Notice; and
(b) an affidavit.
The money of Mr Sresbodan subject to the freezing order is held in a CMA by Ms JJ, the solicitor acting for the wife. The funds are lodged with a financial institution, are payable to her and, subject to the freezing orders, are payable from her to Mr Sresbodan. I am therefore satisfied that those rules apply.
The service of a Third Party Debt Notice will entitle D Attorneys to include within the debt notice their costs of preparing the notice. It will thus be more expensive than an order for payment.
It is clear that Mr Sresbodan will not agree to any payment.
Notwithstanding that the service of a Third Party Debt Notice will be more costly than an order for payment, I consider that the former is the preferable course. This is because of the doubt I have as to the jurisdiction to make the latter.
There will be orders for the issue of a debt notice and for the variation of the freezing order accordingly. Rule 20.32(2), which requires the filing of an affidavit setting out prescribed information, has been complied with by the affidavit in support of this application and I will dispense with any further compliance with that rule pursuant to r 1.12 of the Rules.
Application of Mr Sresbodan
Mr Sresbodan seeks the following orders:
1.With regard to the proceeds of the sale of the property and the accounts set up controlled by my ex-wife’s solicitor with my ex‑wife an myself being the beneficiary, my ex-wife and/or her solicitor are to supply full accounting of all interest earned in the Westpac account from 14 September 2010 (the date of the sale of the property) to today’s date, indicating full interest earned daily.
2.Order 1 is to apply to all 3 Westpac bank accounts set up by my wife’s solicitor and any other accounts opened to deposit the proceeds of the sale of the property and interest.
3.The respondent ex-wife and her solicitor are to provide full financial statements to the applicant from Westpac and any other financial institution as the basis for the full accounting. The full accounting is not to be based upon only unsupported representations from the respondent ex-wife’s solicitor as is the current practice.
4.An order that the applicant, as beneficiary, is entitled to full access to all bank records held by Westpac or any other institution in which the proceeds from the sale of the property have been deposited including any interest from those proceeds. (The ex-wife has ordered Westpac not to disclose any information as advised by her solicitor).
5.An order restraining the respondent ex-wife and her solicitor from denying access to the applicant to any financial institution account in which the proceeds of the sale of the property including any interest have been deposited.
6.An order that the respondent ex-wife and her solicitor take positive and active steps to ensure the applicant has access to all accounts referred to in orders 1 to 5.
7.An order that the respondent ex-wife and her solicitor are in contempt of court for failing to provide the monies ordered by the court to be paid to the applicant. The court ordered that the applicant be paid certain sums of money but they were not paid until well after the time ordered.
8.An order that the so-called trustee in bankruptcy provide a fully itemised and detailed accounting of all monies that have flowed to or from the alleged bankrupt estate from the alleged commencement of the so-called bankruptcy to date.
9.An order that the ANZ Banking Corporation or any of its subsidiaries relevant to the order provide evidence of when and what time the loan to [Mr and Ms Sresbodan] of $600,000 was approved.
10.An order permitting the applicant to issue a subpoena to [Mr S].
11.Short notice for 20-12-2016
(As per the original)
As I have already explained, the proceedings before me are concluded save for the limited purpose of supervising freezing orders over part of Mr Sresbodan’s funds for a limited period of time.
Prayers 1 to 6 inclusive of the orders sought by Mr Sresbodan clearly relate to events that occurred well prior to the final hearing. The reference in Prayer 1 to the Westpac Bank account from 14 September 2010 makes this quite clear. On that day a property that had been jointly owned by Mr Sresbodan and the wife was sold by trustees for sale pursuant to orders of the court. Thereafter the proceeds of sale were placed in a CMA and dealt with at the direction of the court.
The proceedings before me proffered to Mr Sresbodan the opportunity to take a full accounting in relation to those funds, as the very purpose of those proceedings was the appropriate division of the funds in the CMA between Mr Sresbodan, his wife, his trustees in bankruptcy and his various creditors. As those proceedings have been concluded, it is now too late to seek this information. It is not relevant to an issue before the court. I consider I therefore have no jurisdiction to make the orders and that the application is frivolous, vexatious and an abuse of process.
Prayer 7 is an application for contempt. Reading the prayer for relief as a whole, the complaint seems to be that certain monies ordered to be paid to Mr Sresbodan were paid late. The allegation is defective for want of particularisation. Neither the precise order said to have been breached nor the date of payment is stated. It is entirely unclear as to who the alleged contemnor may be. Finally, there would be considerable doubt as to whether a payment made a few weeks late could be described as contempt. There is no evidence in support of this claim and this aspect of the application will be dismissed.
As to Prayer 8, the court does not have jurisdiction under the Bankruptcy Act 1966 (Cth), save for the limited circumstances set out in s 35 and s 35A which do not apply here. If Mr Sresbodan wishes to take up that aspect of his application, he will need to do so in either the Federal Circuit Court of Australia or the Federal Court of Australia.
As to Prayer 9, the ANZ Banking Corporation is not a party to the proceedings and it has not been served with this application. I understand from the submissions of Mr Sresbodan that at around the time of his bankruptcy, the bank had approved a loan for $600 000 to be made to him and the wife. The wife refused to sign the loan application, which then lapsed. I dealt with these allegations in the judgment of July 2015 and found that the wife was under no obligation to sign (Sresbodan & Sresbodan and Ors [2015] FamCA 515 at [205] – [210]). If, in fact, Mr Sresbodan is referring to yet another refinancing application, it should have been raised at that hearing and cannot be raised now. This aspect of the application will be dismissed.
No basis was identified for issuing a subpoena to Mr S.
Finally, in support of his proposed orders, Mr Sresbodan once again raised the issue that the sequestration order made against him was obtained by fraud because the proceedings in the Land and Environment Court, as referred to in the earlier judgments, were never properly reinstated. I do not see the relevance of these matters to either application, but for the reasons set out in the earlier judgments, including the judgment of the Full Court, those submissions are rejected.
The Application in a Case will accordingly be dismissed.
I certify that the preceding thirty four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 27 April 2017.
Associate:
Date: 27 April 2017
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