Galvan and Galvan & Ors

[2011] FamCA 1033

FAMILY COURT OF AUSTRALIA

GALVAN & GALVAN AND ORS [2011] FamCA 1033

FAMILY LAW – PRACTICE AND PROCEDURE – Adjournments – Application for adjournment made during the course of final hearing – where Husband’s adult children joined as parties to the proceedings during final hearing – reduced time to finalise the proceedings – adult children unprepared to meet the case – cross-examination of one of the parties occurred before adult children were joined as parties – adjournment granted

FAMILY LAW – PROPERTY – interim arrangements – need to preserve status quo during period of adjournment – matrimonial home – Wife currently has sole occupation of matrimonial home – matrimonial home currently listed for sale – Husband’s application for both parties to reside in matrimonial home until sale completed – recent history of alleged assaults and apprehended violence between parties – adjournment and delay in proceedings was not a result of Wife’s actions – Husband’s application refused – Wife and Husband appointed as trustees for sale – injunction – adult children restrained from disposing of real property

FAMILY LAW – COSTS – Between parties – Wife’s application for costs “thrown away” as a result of joinder and subsequent adjournment of proceedings – s 117(2A) factors considered – counsel’s fees – counsel’s cancellation fee – solicitor’s fees – costs order made

Family Law Act 1975 (Cth), ss 117(1), 117(2), 117(2A)

APPLICANT: Mr Galvan Snr

FIRST RESPONDENT: Ms Galvan Snr

SECOND AND THIRD RESPONDENTS: Ms Galvan Jnr and Mr Galvan Jnr

FILE NUMBER: CAC 31 of 2010

DATE DELIVERED: 16 November 2011

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Faulks DCJ

HEARING DATE: 16 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kumar

COUNSEL FOR THE RESPONDENT: Mr Howard

SOLICITOR FOR THE RESPONDENT: Dobinson Davey Clifford Simpson

COUNSEL FOR THE SECOND AND THIRD RESPONDENTS: Mr de Robillard

Orders

IT IS ORDERED THAT:

1. The proceedings formally are adjourned part heard to 20 February 2012 for further hearing. 

IT IS NOTED THAT:

1. Five days are allocated for the hearing.

IT IS FURTHER ORDERED THAT:

1. The second and third respondents will jointly and severally pay the first respondent’s costs of and incidental to the adjournment quantified by me, including GST, in the sum of $11,800, such sum to be paid by them to the respondent’s solicitors on or before 5pm on 29 November 2011.

2. Until further order, the first respondent be at liberty to occupy the premises known as D Street, Suburb E in the Australian Capital Territory until settlement of the sale of the property.

3. Each of the applicant and the respondent are appointed as joint trustees for sale in relation to the property and will do such things together, or through their solicitors if they are unable personally to communicate, as may be necessary to ensure the effective and prompt sale of the property and the discharge of the existing mortgage.  

4. Without limiting the terms of the sale or the matters to be agreed between the parties and noting that liberty to apply in relation to those terms hereafter reserved upon settlement of the sale of the property the net proceeds together with the deposit will be held by the solicitor, as jointly agreed between the parties to conduct the conveyancy, Mr Curtis in his trust account until further order or agreement between the parties.

5. (a)      Each of the second and third respondents be and is hereby restrained from disposing of any real estate in which he or she has any interest or further encumbering any such real estate without the consent of all parties to the proceedings or further order of this Court. 

   (b) Each of the second and third respondents has liberty to apply on two working days notice to the other parties for a suspension or discharge of part of that order in relation to any one or more of the properties. 

6. Each of the second and third respondents will file a Notice of Address for Service on or before 4pm this day, 16 November 2011.

7. Any further material to be filed on behalf of the second and third respondents as parties to the proceedings will be filed by affidavit or in an affidavit on or before 16 January 2012.

8. Any party be at liberty to apply after 16 January 2012 for further directions if the material filed on behalf of the second and third respondent should give rise to a need for additional evidence to be put before the Court either by way of affidavit or otherwise.

9. Each of the parties will, in fulfilment of their obligations under the Family Law Act 1975, make prior to 15 December 2011 full and frank disclosure of all matters and documents in his, her or their possession or control which are relevant to the proceedings before the Court. 

10. Each of the parties may issue any subpoenas as they wish to issue returnable on any day on which subpoenas are ordinarily returnable before this Court provided such return date proceeds 15 December 2011. 

11. The period for payment of costs will be extended to 20 December 2011.

IT IS DIRECTED IN CHAMBERS THAT:

1. Each party will pay one quarter of the hearing fees for the hearing in February 2012.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Galvan & Galvan and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 31 of 2010

Mr Galvan Snr

Applicant

And

Ms Galvan Snr And Others

Respondents

REASONS FOR JUDGMENT

1. The proceedings before me began on Monday, 14 November 2011.  In the proceedings, as they were at that point, Mr Galvan Snr was the applicant and Ms Galvan – and I refer to her with that title only for convenience – was the respondent.  On the morning of the proceedings, both the applicant and the respondent through their lawyers provided to the Court a minute of the orders they were seeking in the proceedings.

2. The minute of orders sought on behalf of the wife involved an extensive analysis of the properties that had been in issue for some time, but which were substantially owned (or potentially owned at least) by the children of Mr Galvan Snr.  The effect of the orders sought would be to require that some of those properties be sold if it were necessary for the purposes of meeting what was the wife’s claim under the Family Law Act1975.

3. This would necessarily have invoked the provisions of Part VIIIAA of the Family Law Act 1975.  Mr Kumar quite properly at lunchtime on the first day of the hearing on behalf of the husband suggested that it might be appropriate for me to cause a copy of the orders that were sought on behalf of the wife to be made available to his client’s adult children. That occurred by e-mail and telephone communication as soon as practicable after the matter was raised.

4. This was in the interests, he said and I agree, of procedural fairness, in that while the children may, and indeed were, aware of the general nature of the proceedings before the Court and had been made aware previously by me as to the possibility at least that there would be some application of Part VIIIAA of the Family Law Act 1975, the precise nature and the intrusive nature of the orders sought were not immediately or might not have been immediately apparent to them.

5. On the morning of 15 November 2011, both Ms Galvan and Mr Galvan Jnr appeared in Court and sought initially, in representing themselves, that there should be an adjournment of the proceedings to enable them to obtain legal advice.  That application was the subject of some discussion and was initially opposed by the respondent’s counsel and also, I think, fairly it might be said by Mr Kumar, but I cannot recall precisely whether he opposed it or not.

6. In any event, I canvassed with the parties the consequences of an adjournment and the costs and implications that would have for all of the parties and, in particular, the fact that each of the parties in this matter is at some risk as to the proceedings not concluding in a way that accords with what he or she regards as a favourable outcome.  I recommended that the parties might spend some time in considering questions of settlement.

7. Those negotiations were ineffective and it became clear that it was necessary for the matter to proceed in some way at some time.  At this stage, both Ms Galvan Jnr and Mr Galvan Jnr were seeking to become parties to the proceedings and by my order became so on 15 November 2011.  I then directed that they each provide documents in fulfilment of their duty as a party of full and frank disclosure, so far as they were able to do so, to Mr Howard (on behalf of Ms Galvan Snr) on or before 10 o’clock this morning and adjourned the proceedings until 11 o’clock to enable the extent of the additional material to be assessed by Mr Howard.

8. Mr Howard had already indicated yesterday that if the matter were to be adjourned, he would be seeking costs thrown away, which he quantified at that point in the sum of some $36,000.  At some stage, Ms Galvan Jnr and Mr Galvan Jnr took the view that they wanted the matter to proceed this week.  Whether this was because of the claim for costs or not is not clear to me nor do I draw any inference that that was so. But, in any event, this morning when the matter was called on Mr de Robillard of counsel appeared on behalf of Ms Galvan Jnr and Mr Galvan Jnr and urged that the matter should proceed over the next few days.

9. He also submitted to me that the documents that had been produced had been substantially the subject of discovery previously and that a delay of any substance was not required to enable the matter to go ahead.  The reality of the situation is, however, of course, that interventions have now occurred, there is a reduction of the time available to complete the matter, there are now two new parties and their counsel has not yet – and I say this without any suggestion of criticism - had an opportunity to get on top of all the rather complicated issues involved in these proceedings.

10. The issues now raised by the second and third respondents’ being party to these proceedings mean that it is unlikely that the matter would finish in the allocated time, which is by Friday of this week.  If that were the case, the matter could not proceed next week.  In fact, if there is to be an adjournment, practically speaking, the matter must be adjourned until February 2012.

11. In the circumstances, on the application of Mr Howard for an adjournment as a result of the intervention by Mr Galvan Jnr and Ms Galvan Jnr, it seems to me I should grant the adjournment. 

12. I say that for the following additional reasons.  If the matter were to be effectively forced on for the rest of this period and potentially, although unlikely in my opinion, concluded on Friday of this week, it would not be beyond the realms of imagination that Mr Galvan Jnr and Ms Galvan Jnr would claim that they had not received procedural fairness because their counsel had not had a proper opportunity to be acquainted with all of the material and, in fact, cross-examination of Mr Galvan Snr would have occurred in their absence.

13. It would be impossible to obtain the transcript of the cross-examination of Mr Galvan Snr in the time available and accordingly there would be a disadvantage to the second and third respondents.  Further, both Mr Galvan Jnr and Ms Galvan Jnr would be in a situation where they had come to Court substantially unprepared to meet the case that has most recently been articulated in the minute of orders sought on behalf of Ms Galvan Snr.  For these reasons, on their behalf, it would not be appropriate for the matter to proceed.

14. So far as Mr Howard is concerned, he submitted to me and I accept that he is placed in the unenviable position, on a change of case necessitated by the intervention of the second and third respondents, of perhaps not being as well prepared to deal with the matter as he might reasonably have expected to be, given the time that he has already spent in preparing the case on a different basis altogether.

15. I accept that the late intervention of the second and third respondents has necessitated as a matter of justice to the parties (and indeed to Mr Galvan Snr, who is now looking at a slightly different proposition from that which originally confronted him) the need for an adjournment, and the matter will be adjourned for further hearing on the 20^th to the 24^th, if necessary, days of February 2012.

16. In relation to the adjournment, certain issues arise:  first, there is a question to some extent of preserving the status quo or of maximising the assets of the parties during this period.  These involve a number of determinations on my part. 

17. The first of these is a practical one.  At this point, the property in which the wife resides, which was the former family home, is on the market for sale.  It would appear that the agent, who was originally suggested by Ms Galvan Snr, may well have an alliance, at least in spirit, with Mr Galvan Snr, but that would not necessarily impede his capacity to obtain the best possible price for the sale of the house given that both the parties are anxious that the sale should occur.

18. Not only are they anxious, I do not doubt that the bank (the mortgagee) is also anxious about the sale occurring because while the property is in place and unsold no one at this stage is meeting the mortgage repayments.  This means the debt to the bank is increasing and it would be appropriate that should be terminated as soon as is practically possible. 

19. Mr Kumar suggested that it might be appropriate that his client also occupy the premises on a different floor from Ms Galvan Snr until the settlement of the sale.  I reject that without hearing any evidence whatsoever.  Putting the parties in proximity to each other would, in my opinion, be a recipe for disaster.  The marriage terminated in a series of incidents and Court cases relating to assaults and alleged apprehended violence and other matters.  I do not wish to see that repeated nor do I think the parties need it at this stage.  It is inconvenient for Mr Galvan Snr that the property remains substantially tenanted only by his wife and her daughter, but it seems to me that is the inevitable consequence of the further delay in these proceedings.

20. As a result, I propose to make an order continuing the existing situation, which is that Ms Galvan Snr continues to live in the property.  It seems to me to be lacking in any commonsense to suggest that she move out pending a further hearing of this matter, particularly as its delay has not been occasioned by any actions on her part. 

21. I will not make any order about the payment of the mortgage.  It seems to me that I cannot, on the evidence before me, determine whether either the applicant or the first respondent has a capacity to pay.  Each asserts he or she does not.  In which case, they each have an interest in seeing that the property is sold as soon as possible.

22. I will, however, at the request of Mr Howard (or perhaps arising from a request of Mr Howard) but on my own motion make an order appointing both parties as joint trustees for sale.  This ensures that the agent can obtain instructions without fear of having infringed in some way upon these proceedings or impinged upon them, and will also mean that each of the applicant and first respondent has a vested interest and an appropriate check on the other person’s involvement in the process of sale.  I will make that order accordingly.

23. I will also make an order that the second and third respondents – that is Mr Galvan Jnr and Ms Galvan Jnr – be restrained, without the consent of the other parties or order of the Court, from disposing of or further encumbering any of their real estate until further order.  That interim order is designed to ensure that the properties are not in any way alienated to third parties to complicate the proceedings further before they can finally be disposed of before me.

24. In this regard, I will, however, as suggested by me and sought by Mr de Robillard, provide liberty to apply on short notice, which I put at 48 hours or two normal working days, to seek either further encumbrance of or sale of any of the properties of either of the second and third respondent.  If the parties are not able sensibly to resolve any interim issues of that sort, I will deal with the matter directly.

25. Finally, there is the question of the costs thrown away. In this situation, the costs relating to the adjournment are properly, in my opinion, the costs of the respondent wife thrown away by the intervention of the second and third respondents. There might also have been costs thrown away on behalf of Mr Galvan Snr, but he makes no application for costs. The matters that I am to take into account in determining whether or not I should make an order for costs are set out broadly in s 117 of the Family Law Act 1975.

26. In s 117(1), the primary position in relation to costs in Family Law proceedings under the Family Law Act 1975 is that each party to proceedings shall bear his or her own costs. In subsection (2), however, the Act provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the Court considers just.

27. Section 117(2A) provides that there are certain matters that the Court shall have regard to and I mention them briefly in this context.

28. The financial circumstances of each of the parties to the proceedings.  I have no evidence before me about the financial circumstances of the second and third respondent, nor was any application made to put that material before me.

29. I take it - as no one has suggested to me to the contrary – that no party to the proceedings is the recipient of legal aid. 

30. The proceedings for adjournment were necessitated in part by the failure on the part of the second and third respondents previously to seek to be involved in the proceedings, notwithstanding that they received notice of the potential detriment to them if they did not and the consequences that may have flowed therefrom. However, their failure to do so could not be asserted to be a failure, as s 117(2A)(d) provides, to comply with any previous order of the court.

31. In these proceedings success is not a relevant consideration and an offer of settlement in writing is not a matter I can properly take into account. 

32. The only remaining matter formally prescribed as a factor to be taken into account under s 117(2A) is the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters.

33. It is asserted – although not agreed – that each of the second and third respondents has been, to some extent, unable or unwilling to be involved in the proceedings to the extent of providing information which may have borne upon the determination of the issues formally between Mr and Ms Galvan Snr Senior.  I am unable in the circumstances of this matter to determine whether that is the case and I specifically mention that I do not rely upon that factor as a basis for granting the adjournment or for making any order for costs.

34. In the long run it comes down to this. This matter was set down for hearing.  Both principal parties were, they asserted, ready to proceed and in fact the final hearing of the matter began.  Owing to the late intervention of the second and third respondents the proceedings are now not able to proceed and it is appropriate in those circumstances that they should bear the costs of the respondent - who has sought such costs be paid - thrown away by their intervention.  In this regard the first estimate of costs that was given to me by Mr Howard became for identification purposes only, and not otherwise, as exhibit ‘W4’.  This involved a total claim for costs in relation to the adjournment in a figure including GST of $36,392.40.

1. Subsequently Mr Howard – after a dialogue with me about the matter and a discussion at my request with both Mr Kumar and Mr de Robillard – revised his estimate of the costs thrown away to a figure, including GST, of approximately $19,000. 

2. This was subsequently revised to approximately $18,000 as a result of the production of his fees agreement, which indicated the maximum he might properly charge as a cancellation fee would be $4,000.  The figures included in the claim of money to be thrown away were: 

   a)$5,000 in counsel’s fees relating to the time Mr Howard says he has lost in relation to yesterday and today because of the application for intervention or to be joined as parties; 

   b)$4,000 in counsel’s cancellation fee, representing the two days that would be thrown away; 

   c)$6,240 in solicitor’s fees for attendance at court for the past two days in relation to the final hearing, time that would otherwise have not necessarily been so incurred; 

   d)There will be costs for a transcript of the cross-examination of Mr Galvan on the first day of final hearing. Given there will be a delay in the matter proceeding, that is a reasonable fee in itself. The cost of obtaining the transcript is estimated at $1,000; and

   e)Ms Galvan Snr has lost pay for two days unnecessarily in the sum of $284.

3. In this regard [Mr de Robillard] opposes this and says that the figures should be, if any - and he disputes there should be any costs awarded against his clients – in the sum of $5,000.  He says with some justification that this day is not entirely lost in the sense that the documents his clients have now produced will be able to be reviewed today and there would not be any loss overall in the general matters relating to the process.  I accept that that is so as to one of the days involved.

4. I accept that the same might be said in relation to Ms Galvan Snr’s solicitor’s fees as instructor, so that would in turn involve some reduction in costs claimed by Ms Galvan Snr.  However, the cancellation fee is clearly a contractual element between Mr Howard and his client and it is a matter which in my opinion I can properly take into account.  He has produced his fees agreement in relation thereto.  It seems therefore that the revised figure for costs that I should make should be:

   a)$2,500 for counsel’s fees;

   b)$4,000 for counsel’s cancellation fees;

   c)$3,000 – rounding downwards - for solicitor’s fees thrown away;

   d)$1,000 for transcript; and

   e)$284 of for Ms Galvan Snr’s lost pay for two days. 

5. That would amount to $10,784 plus GST of $1,078, is $11,862, which for these purposes I will round to $11,800.  That sum will be paid as requested within 14 days by the second and third respondent.

6. In the matter of Galvan & Galvan and Ors, Mr Kumar represents the applicant;  Mr Howard the first respondent;  Mr de Robillard the second and third respondents, being respectively – I said yesterday I will just make it clear – Ms Galvan Jnr is the second respondent and Mr Galvan Jnr is the third respondent. 

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks

Associate:  C Herba

Date:  31 January 2012