Duncan and Duncan

[2007] FamCA 326

FAMILY COURT OF AUSTRALIA

DUNCAN & DUNCAN [2007] FamCA 326

FAMILY LAW – Costs

Family Law Act 1975 (Cth) s 79
Family Law Rules 2004

APPLICANT: MRS DUNCAN

RESPONDENT: MR DUNCAN

FILE NUMBER: NCF 1494 of 2003

DATE DELIVERED: 9 March 2007

PLACE DELIVERED: Newcastle

JUDGMENT OF: The Honourable Justice Ryan

HEARING DATE: 9 March 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Page QC and
Mr Austin

SOLICITOR FOR THE APPLICANT: Trisleys

COUNSEL FOR THE RESPONDENT: Mr Richardson QC,
Ms Langley and Mr Allan

SOLICITOR FOR THE RESPONDENT: CMC Lawyers

COUNSEL FOR THE INTERVENER: Mr Bateman

SOLICITOR FOR THE INTERVENER: Crown Solicitor’s Office

Orders

1. !Unexpected End of Formula!Unexpected End of FormulaBY CONSENT of Mrs Duncan that the applicant wife do all acts and sign all documents necessary to pay to the Deputy Commission of Taxation within 60 days from the date of these orders the following:

   (a)       her liability to the Commissioner of Taxation on a second Running      Balance Account in relation to a BAS debt of $74,129.63;

   (b)       her liability as a director of P Pty Ltd in the sum of $93,513.00

2. That other than as is provided in the above order, the Intervenor’s application for orders in accordance with Exhibit “C” is dismissed.

3. That the Australian Taxation Office pay the wife’s costs incurred in relation to its intervention in these proceedings which costs are limited to her provision to the Australian Taxation Office of photocopy documents.  These costs shall be calculated in accordance with the Family Law Rules and paid within 28 days.

4. That the Australian Taxation Office pay the husband’s costs incurred in relation to its intervention in these proceedings which costs are limited to his provision to the ATO of photocopy documents.  These costs shall be calculated in accordance with the Family Law Rules and paid within 28 days.

5. That all outstanding applications are dismissed.

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCF 1494  of 2003

MRS DUNCAN

Applicant

And

MR DUNCAN

Respondent

REASONS FOR JUDGMENT

1. This is an application by the Australian Tax Office for orders securing a debt due to it by the wife.  The extent of the debt is agreed and reflected in paragraphs 1.2 and 1.3 of the Minute of Proposed Orders submitted on the second day of this hearing.  These proposed orders are Exhibit “C”.

2. Immediately prior to embarking on this aspect of the proceedings, the parties’ and counsel for the Australian Taxation Office's consent, I made property orders which finalised the s 79 proceedings. Thus it is submitted the Court lost whatever jurisdiction the Australian Taxation Office sought to invoke. I do not agree. At this point the orders have not been perfected and if I was satisfied there had been an abuse of the Court's process by allowing the orders to be made, I would have set them aside.

3. With respect to senior counsel, if by inviting Mr Bateman to enter his consent, even if at my suggestion, to the s 79 orders, if by doing so they consider the Court may exhaust its jurisdiction, they should have raised that issue with him and me. This is, however, rather a non sequitur.

4. On the Australian Taxation Office's application the Court made orders granting it leave to intervene for the purpose of seeking orders against the parties for the payment of $330,809.55.  Having been given leave to make the application on 18 September 2006, the Australian Taxation Office did nothing further pursuant to the leave given vis a vis filing an application.

5. Counsel for the Australian Taxation Office proffers no insight as to why no further action was taken.  Without an application the intervenor has been in the curious position of being awarded party status, rather than participating as a right, but not making an application. 

6. In this capacity, the intervenor has at its request been served with voluminous affidavit, applications and reports by each of these parties. From these documents it is immediately apparent that the parties’ property proceedings involve consideration of an asset pool somewhere between a minimum of approximately $10 million and about $15 million.  At all times the husband proposed that the wife receives assets worth far more than the debt she owes to the Australian Taxation Office.

7. In these circumstances, I accept senior counsel for the husband’s analysis of the purpose of intervention and notice as discussed in Biltoft and am left wondering why it was that the Australian Taxation Office sought to intervene in the proceedings.  Perhaps this is the answer to their failure to pursue an application, although leave to pursue an application was earlier given.

8. The wife, for clarity, agrees that orders may be made in accordance with paragraphs 1.2 and 1.3 of the Australian Taxation Office's application.  In essence, she accepts that the Australian Taxation Office should be given leave to make an oral application for orders limited to those two subparagraphs of its Proposed Minutes of Order.  She opposes leave being given at this late stage for the Australian Taxation Office to proceed with the balance of the orders presented in the exhibit.

9. In the face of her opposition and by virtue of the Australian Taxation Office having approximately six months within which to bring an application but not doing so, I do not consider it would be just to allow the Australian Taxation Office to pursue an application when it is opposed.  It simply denies procedural fairness.

10. The issue then arises, should the Australian Taxation Office pay the parties’ costs said to have been incurred by the Australian Taxation Office's involvement in the proceedings.  There is no doubt that the parties have been indebted to the Australian Taxation Office and they have been in discussion and indeed litigation with the Australian Taxation Office concerning the debt.  In order to determine the asset pool I needed to understand the parties' indebtedness.  

11. Although senior counsel submitted that the parties had incurred professional costs in relation to their dealings with the Australian Taxation Office, I am not persuaded that those costs have been incurred because of the Australian Taxation Office's involvement in the proceedings.  It seems to me, with the debt due to the Australian Taxation Office by each of the parties, notwithstanding it has been compromised, it could not be said that the parties have incurred unnecessary professional costs in their dealings with the Australian Taxation Office in this Court. 

12. The only exception to this is the provision of documents to the Australian Taxation Office.  Because it was a party, the Australian Taxation Office sought and was afforded the same right as any other party to receive all documents relied upon in the proceedings.  It is difficult to understand why the Australian Taxation Office required production of all of the documents but, having sought it, they received it. 

13. Without the Australian Taxation Office then making an application, I consider the parties should have the costs of providing copies of the documents to the Australian Taxation Office reimbursed.  Basically this is because I cannot see how the Australian Taxation Office's requirement for production of those documents in this action was necessary or appropriate.  Had they brought an application for orders, I may have taken a different stance.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan

Associate: 

Date:  18 April 2007. 

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as DUNCAN & DUNCAN