Darling and Darling and Anor

[2010] FamCA 332

FAMILY COURT OF AUSTRALIA

DARLING & DARLING AND ANOR [2010] FamCA 332

FAMILY LAW – COSTS – Interim

Family Law Act 1975 (Cth)

APPLICANT: Ms Darling

RESPONDENT: Mr Darling

2^ND RESPONDENT: W Trustees Ltd

FILE NUMBER: MLC 6328 of 2007

DATE DELIVERED: 23 April 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 23 April 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bartfeld QC with Dr Ingleby

SOLICITOR FOR THE APPLICANT: Taussig Cherrie & Associates

COUNSEL FOR THE RESPONDENT: Ms Vohra

SOLICITOR FOR THE RESPONDENT: Hall & Wilcox

COUNSEL FOR THE RESPONDENT: Mr Wood

SOLICITOR FOR THE RESPONDENT: Nunan & Bloom

Orders

1. That W Trustees Ltd pay the costs thrown away of the wife for the hearing on 16 April 2010 and 23 April 2010 in such sum as may be agreed and in default of agreement, as assessed.

2. I certify that it was appropriate in the circumstances on both days for the wife to be represented by senior counsel and in fact two counsel.

IT IS NOTED that publication of this judgment under the pseudonym Darling & Darling and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 6328 of 2007

MS DARLING

Applicant

And

MR DARLING

Respondent

And

W TRUSTEES LTD

2^nd Respondent

REASONS FOR JUDGMENT

1. In this case I propose to make an order for costs against W Trustees Limited.  Those costs are the costs of the wife in respect of the hearings before me on 16 April 2010 and 23 April 2010.  These are my reasons.

2. The substantive issue between the husband and the wife is a complex property matter. On 9 June 2009, Murphy J made orders by consent that the wife have leave to amend her application for final orders specifically to seek orders pursuant to s 106B, s 85A and/or Part VIIIAA of the Family Law Act 1975 (Cth) (“the Act”).

3. The amended application referred to in the orders was to be filed and served in 21 days.

4. One of three parties to be served pursuant to the orders was W Trustees Ltd.  The application was to be served by pre-paid post.

5. In an affidavit filed 9 April 2010, the husband referred to the fact that his mother was the appointor of the Darling Family Trust, the Darling Family Trust No 1 and the Darling Family Trust No 2.  He said his mother appointed “W Trustees” trustee of the Darling Family Trust and the Darling Family Trust No 1 and Darling Family Trust No 2.  He said that “W Trustee” is a professional trustee company owned by O Accountancy Practice in Cyprus.

6. The significance of the foregoing paragraph is that on 30 June 2009, the wife filed her amended application for final orders.  It was within time as required by the orders of Murphy J.

7. The wife’s amended application sought inter alia:

   4. That the following transactions be set aside pursuant to s 106B of the Family Law Act 1975:

   (d)Settlement of The [Darling] Family Trust on 31 December 2005;

   (e)Settlement of the [Darling] Family Trust No 1 on 23 June 2006; and

   (f)Settlement of the [Darling] Family Trust No 2 on 23 June 2006.

8. It will be evident therefore that the wife’s amended application sought orders under s 106B of the Act relating to the three trusts of which W Trustees Ltd is the trustee.

9. By an affidavit of service filed 1 July 2009, it was asserted that W Trustees was served with the amended application for final orders by post to the Cyprus address referred to in the orders of 9 June 2009.  The affidavit referred to the fact that they were posted to that address on 30 June 2009.  As such, I conclude that they were served within time.

10. Nothing was heard from W Trustees Ltd for months thereafter according to the court file.

11. A further amended application for final orders was filed by the wife on 10 March 2010.  This time she named a variety of entities including W Trustees Ltd.  In my view, nothing turns on that document.  What it did do however was galvanise W Trustees Ltd into becoming an active participant in the proceedings.

12. On 21 January 2010, Registrar Marrone made an order that all outstanding applications were adjourned for mention before me on 16 April 2010 for the purposes of being listed for final hearing with the provisionally allocated date of 17 May 2010.

13. I am unaware of whether W Trustees Ltd was made aware of the orders of 21 January 2010 but it matters little because I am satisfied the orders of 9 June 2009 and the service of the amended application arising there from, put W Trustees Ltd on notice that orders were being sought by the wife under s 106B of the Act. They apparently did nothing.

14. Just prior to the hearing on 16 April 2010, W Trustees Ltd filed a Notice of Address for Service nominating lawyers acting on their behalf.

15. On 16 April 2010, Mr Long, the solicitor for W Trustees Ltd requested that the first day hearing before me be adjourned because he needed to obtain instructions which had to come from overseas.  He made clear that he anticipated difficulty in the matter running as trial.

16. When the matter returned on 23 April 2010, Mr Wood of counsel appeared on behalf of W Trustees Ltd.  Notwithstanding the wife’s clear position of not wanting the trial date vacated, all counsel agreed there was an inevitability about it.

17. The proceedings were therefore adjourned and the trial date vacated on the basis that a further mention will occur to ascertain the state of readiness for trial.

18. As a result of all of the above, counsel for the wife sought an order for costs.

19. Mr Bartfeld QC said that both the husband and W Trustees Ltd had notice of the pending application by the wife. He said the wife would assert that the assets held by the trusts which are the subject of the application under s 106B were assets held by the husband. He said the husband was the bare trustee for this late father and the wife would assert that the husband was the beneficial owner of the property. He said the husband was in control. Because of the connection between the husband and W Trustees Ltd, the application of the wife could not be seen to have taken him by surprise.

20. Counsel for the husband rejected the assertions of Mr Bartfeld.  She said that there was no evidence to connect the husband and W Trustees Ltd and at all times, the husband was ready to proceed.  She added however that there was a taxation audit being undertaken and that the husband had been advised it would not be completed until November.  There was no application however for the trial to be adjourned.

21. Mr Wood of counsel on behalf of W Trustees Ltd conceded that he could add little to the factual matrix because his instructor had only become very recently.  He said he did not know what happened after June 2009 but because of that, I should reserve the costs of the wife.

22. The power to make a costs order is governed by s 117 of the Act. It provides that each party shall pay their own costs. Section 117(2) however provides that if the circumstances justify a departure from the principle referred to, the court may make such order as it considers just. If the court decides to make such an order, it must contemplate the various matters set out in s 117(2A).

23. The first question therefore is whether there are circumstances that justify the court making an order. 

24. It is quite clear that the wife with the husband’s consent, put W Trustees Ltd on notice in July 2009.  In so far as there is a family connection of some description between the husband and those associated with W Trustees Ltd, it could hardly be said that W Trustees were not aware of the moves that the wife was making.  Even if that is not right, the application of the wife made it clear what she was pursuing. 

25. Section 106B of the Act, provides the power for a court to set aside various transactions specifically for the purposes of enabling property to be brought back within its control for the purposes of division between the parties to a marriage. The grounds for setting those various transactions aside are clearly set out in s 106B. Natural justice requires that before any such order is made, a party who may have to disgorge property or provide other forms of compensation should be put on notice. That occurred in this case.

26. There was clearly court activity and amended documents from January 2010 and thereafter relating to specific hearing dates.  W Trustees Ltd had shown no interest in joining the proceedings.  From what I can understand, it has not been suggested that they inquired of the proceedings or sought to intervene.  That latter course only occurred when the court indicated that the proceedings were going to be completed by way of a final hearing.  The precipitous action then of W Trustees Ltd in wishing to participate has brought about the vacation of the hearing.  Had their activities occurred in late 2009 or early 2010, the vacating of the trial may not have occurred.  More importantly, W Trustees Ltd could have had a significant role in the hearings on 16 April 2010 and 23 April 2010. 

27. Accordingly, this is a case where the court is justified in departing from the principle that each party pay its own costs. The two hearings have been wasted as a result of the fact that W Trustees Ltd did nothing about the fact that they were given notice that they faced the prospect of a s 106B of the Act order.

28. W Trustees Ltd now wishes to significantly participate in the proceedings and that has necessitated the vacating of the hearing.

29. I take into account all of the matters in s 117(2A) of the Act but there is no suggestion other than this is a professional trustee organisation of international renown and no doubt, with significant assets. They could afford to engage Melbourne practitioners and to that extent, I should not be troubled about the financial circumstances. I do take into account that these matters are complex and significant costs have been thrown away as a result of the late activities of that respondent. I see no reason why the wife should be out of pocket as a result of that.

30. Accordingly, I propose to make an order that W Trustees Ltd pay the costs of the wife for 16 April 2010 and 23 April 2010 respectively in a sum to be agreed and failing agreement as assessed by the registrar.  For the purposes of both of those days, I certify that it was appropriate for the attendance of senior counsel and in fact two counsel because of the complexity of the matter involved.

I certify that the preceding Thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  30 April 2010