E Auctioneers and Awle and Anor

[2009] FamCA 904

FAMILY COURT OF AUSTRALIA

E AUCTIONEERS & AWLE AND ANOR [2009] FamCA 904

FAMILY LAW – COSTS – Costs of a third party

APPLICANT: E Auctioneers Pty Limited

1^st RESPONDENT: Mr Awle

2^nd RESPONDENT: Ms Awle

FILE NUMBER: SYC 25709 of 2009

DATE DELIVERED: 24 June 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan JR

HEARING DATE: 24 June 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Gillies

SOLICITOR FOR THE APPLICANT: Minter Ellison

COUNSEL FOR THE 1^ST RESPONDENT: Mr Hodgson

SOLICITOR FOR THE 1^ST RESPONDENT: Julie Singleton

COUNSEL FOR THE 2^ND RESPONDENT: Ms Carr

SOLICITOR FOR THE 2^ND RESPONDENT: Shaw Reynolds Bowen & Gerathy

COUNSEL FOR PROPOSED INTERVENOR: Ms Gillies

Orders

1. That the applicant pay to the solicitor for the husband the costs of the husband of and incidental to an application filed 25 May 2009, such costs to be as agreed or as assessed by a taxing officer.  Subject to the taxation process, payments to be made 14 days after the conclusion of an agreement or assessment. 

2. I adjourn the proceedings in relation to issues of interim costs, interim spousal maintenance and child support to the judicial duty list at 9.30 am on 28 July.

3. That the wife file and serve a financial statement and all affidavit evidence on which she seeks to rely within seven days and that the husband file and serve any material in response within a further 14 days thereafter. 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 25709  of 2009

E AUCTIONEERS

Applicant

And

MR AWLE

First Respondent

MS AWLE

Second Respondent

REASONS FOR JUDGMENT

1. These are proceedings brought by auctioneers in effect to be joined as a party to the proceedings for the purposes of making an application for review of a decision I made and in aid of that application a stay is sought of orders I made.  The parties have compromised that matter and I am asked to make orders in terms of their agreement.  The document titled "Minute of Orders" is exhibit 1 and I make orders and notations in terms of that document.

2. Then there are two applications for costs arising out of the matter today.  They are applications by the husband and wife against the applicant.  The general position is the parties bear their own costs.  The Court has power to make an order and in doing so is required to consider certain matters.  Firstly, the financial circumstances of the parties.  There is no evidence about the financial circumstances of the applicant.  I understand it is an agreed fact that the pool of assets in the marriage is something in the region of about $10 million.  That is all I know.  There is no legal aid.  In terms of the conduct of the parties, there is nothing that comes to attention in relation to that.  That is to do with filing documents and attending court on time.  In terms of whether any party was wholly unsuccessful, a bit hard to say about that.  There have been some orders made today.  Those orders would not have been made unless an application had been filed.  They do not look anything like the orders that were sought, but some orders were made.  In the circumstances I think it is a bit hard to say the applicant was wholly unsuccessful. 

3. As to whether the proceedings were brought as a result of a failure to comply with court orders, there is a nice argument about that.  I think probably not.  Unfortunately, the order that I made, an order in terms sought on behalf of the husband, was an order in rem and not in personam.  So there was no order made requiring the applicant today to do anything.  So it cannot be said that the proceedings arise, I do not think, out of a breach of court orders.  Certainly the spirit of the orders was frustrated, but that is not the criteria in section 117(2A). 

4. Then we go to any offers of settlement in writing under s.117C or otherwise.  There is a course of correspondence.  In summary, it comprises the applicants insisting on the protection of its contractual rights with the security of the items that had been given.  In effect, this is like an inter-pleader application where orders have been sought, a stranger to the litigation has been caught holding the subject matter of the litigation and that person brings the matter back to court.  So what they said was, "Never mind what has been litigated between the two parties, we have a contractual right.  It's protected in terms of a lien by the items of art and we're going to hang onto them or we want to hang onto them."  The best it got was an offer to retain three of the paintings.  That was contained in a letter of 15 May.  The offer was that it would retain those three paintings - and named three of them - pending an auction to be conducted in August and if the withdrawal fee had been paid, then the paintings would presumably be remitted.  If it had not, then the paintings would be sold and the auctioneer would remit to the parties, the husband and wife, the balance.  At all times the husband through his solicitor rejected that proposal and certainly did not agree to hold off in terms of the benefit of the orders that he had obtained on 5 May and, in effect, treated the applicant as if the applicant was an agent of the wife and referred to injunctions restraining the wife's agents from disposing of artwork. 

5. What is missing is a proposal on behalf of the applicants along the lines of the solution that has been provided today whereby there is some formality about protection in terms of the items themselves from damage or loss and protection in relation to encumbrance, sale or dealing with the items.  That would have been a prudent course.  The problem is in the normal course in civil litigation costs follow the event.  In those circumstances, I would think the applicant would be unsuccessful in relation to the costs issue.  These proceedings are more akin to that than they are to the general run of the mill proceeding in family law, which is presumably the basis on which the legislatures made a provision that the general approach is that parties bear their own costs.  That presumably is because usually parties to proceedings in family law are applicants, both of them.  In parenting proceedings each party wants a parenting order, in property proceedings each party wants a property application.  These do not have that flavour.  This is all duck or no dinner.  It seems to me for the purposes of today the husband was successful in his application.  That boiled down to he did not authorise the sale.  There was some inference that the auctioneer knew that he did not authorise the sale or did not know that he had authorised the sale.  A proceeding has been brought.  The applicant has been substantially unsuccessful and it seems to me that there should be an order for costs against the applicant in relation to the husband.

6. In relation to the wife, it is said on behalf of the wife, who is, remarkably, fully aligned with the husband for the purposes of today - I think the last time they have been aligned in the same cause for some time - says that it is unfair that she was brought to court in relation to these proceedings.  The trouble is the orders of 5 May, whether they are right or wrong, reflected a decision that had the wife taking a step with a joint asset that did not have the husband's consent.  Unfortunately, she has been part of causing all this to happen.  As to the rights and wrongs between herself and the applicant today, that is apparently going to be a subject of hotly contested litigation elsewhere.  The applicant says there is a price to pay under a contract of something in excess I think of $600,000 by the parties or by the wife in relation to an abandoned cancelled auction.  The wife says she has a complete defence for that for reasons I do not need to go into.  The truth of that I think will really help in relation to this issue.  So I will make no order in relation to the costs of the wife of today or in relation to anything else to do with today and reserve that issue, with leave to the applicant and to the wife to restore those proceedings to the list by arrangement by my Associate on giving seven days' notice.   From my point of view, it might be sensible that that application be brought back if the parties cannot resolve it but after they have resolved the issue as between themselves of the responsibilities for the implications of the cancellation of the auction. 

I certify that the preceding six (6) paragraphs are a true copy of the reasons for judgment of the Honourable Loughnan JR

Associate: 

Date:  28 August 2009