Katic and Katic

[2013] FamCA 693

FAMILY COURT OF AUSTRALIA

KATIC & KATIC [2013] FamCA 693

FAMILY LAW – PRACTICE AND PROCEDURE – Adjournment with costs

Family Law Act 1975 (Cth)

APPLICANT: Ms Katic

RESPONDENT: Mr Katic

INTERVENER: Mr B

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 7934 of 2010

DATE DELIVERED: 17 June 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 17 June 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Laidlaw

SOLICITOR FOR THE APPLICANT: Boon Legal

COUNSEL FOR THE RESPONDENT: Mr Young

SOLICITOR FOR THE RESPONDENT: Verduci Lawyers

COUNSEL FOR THE INTERVENER: Mr Sala

SOLICITOR FOR THE INTERVENER: RTC Legal

COUNSEL FOR THE INDEPENDENT

CHILDREN’S LAWYER:

Mr Whitchurch

SOLICITOR FOR THE INDEPENDENT

CHILDREN’S LAWYER:

Agricola Wunderlich

Orders

1. That the final hearing be vacated this day.

2. That the final hearing of all outstanding applications is adjourned to 10.00am on 14 October 2013 as a four day matter.

3. That the husband file and serve any further response and affidavit material upon which he intends to rely by no later than 4.00pm on 23 August 2013.

4. That Mr B have leave to intervene in the proceedings.

5. That the intervener file and serve a statement of claim as previously ordered by 4.00pm on 28 June 2013.

6. That the intervener have liberty to file and serve any further affidavit material upon which he intends to rely by 4.00pm on 28 June 2013.

7. That by 4.00pm on 25 June 2013, the husband pay to the wife $60,000 by way of partial distribution of property.

8. That by 4.00pm on 22 July 2013 the husband and the intervener jointly and severally pay:

   (a)    $4000 costs thrown away by the wife to the wife’s solicitors; and

   (b)    $1900 to the Independent Children’s Lawyer for costs thrown away.

9. That if the husband fails to comply with any order set out above within the time stipulated under these orders, the wife has liberty to immediately apply to have the case relisted and to proceed on an undefended basis to the exclusion of the husband subject to any order to the contrary made by the trial judge.

10. That if the intervener fails to comply with any order set out above within the time stipulated under these orders, the wife has liberty to immediately apply to have the case relisted and to proceed on an undefended basis to the exclusion of the intervener subject to any order to the contrary made by the trial judge.

11. That there be general liberty to apply on short notice.

12. That the wife have liberty to file any further affidavit by 4.00pm on 13 September 2013.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Katic & Katic 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 MELBOURNE

FILE NUMBER: MLC 7934 of 2013

Ms Katic

Applicant

And

Mr Katic

Respondent

And

Mr B

Intervener

Independent Children’s Lawyer

REASONS FOR JUDGMENT

1. I am proposing to adjourn these proceedings and to make some fresh orders in relation to a timetable.  I propose to make those orders in chambers when I have had an opportunity to carefully look at what the diary has ahead of me bearing in mind that as of a couple of days from now, I am down to three judges for the entire southern area.  But what I do propose to do is to tentatively put a date in for the hearing.  Most likely it will be in October and most likely it will be for four days.  I propose to ensure in this case that it is ready for trial. 

2. I propose to make orders that in the event that there is a default with the timetable which will be liberal because the wife’s case is already in, I will give her a right of reply to whatever the intervener and the husband say. 

3. I am proposing to grant the adjournment, notwithstanding it is opposed, for two main reasons.  The first is that on any view, notwithstanding the history of this case, I feel that I would have some difficulty determining the matter on the evidence that is before me today and that includes the parenting issue. 

4. The second reason is one that is always difficult to deal with and that is the personal embarrassment of counsel who obviously have to try and deal with cases that are just not, from their client’s perspective, ready for trial.  To some extent the prejudice to the wife here is ameliorated by a costs order and in the parenting case, the child is not having any contact with the husband and having regard to the way in which he has prepared his case, he is creating his own problem. 

5. In terms of the financial matters, I propose to make an order for a partial property settlement of $60,000 and that is to be paid within seven days and if it is not, then it will be a trigger of the wife to make an application to then bring on the case again and to proceed on an undefended basis. 

6. Turning then to the question of the oral application for either a spousal maintenance order or a partial property settlement.  In my view, it would be difficult for me to deal with a spousal maintenance case on the basis that I am not entirely sure that I understand what the husband’s case is.  On that basis, even though I could rely upon the wife’s evidence, it seems to me that I am not entirely sure whether she meets the threshold. 

7. A more important way of dealing with it seems to me to be the case that was mentioned of the Full Court decision in Strahan.  In Strahan, what the Full Court said was that it was effectively a two-step process.  The first step is to decide whether there is sufficient evidence that might justify the court making an order.  The second step is then to decide whether in the circumstances of the particular reason that the application arises, the court should exercise its discretion and make the order.  This is an unusual case because the wife’s material satisfies a number of the relevant evidentiary criteria. 

8. That evidence is clearly challenged but I am not at all clear on what the husband’s position is.  The better way of looking at it here though is that it is unchallenged that there is at least $1.2 million in assets as between the two parties.  It is inconceivable, on the evidence that I have read from both the husband and the wife, that she will not get a further $60,000 at least.  Under those circumstances, it is appropriate that I exercise the discretion and treat that as a partial distribution of property.  Counsel for the husband quite properly says that his client’s instructions are that the money which was thought to be $120,000 is now down to $78,000 and he has a business to run. 

9. In Bing the Full Court said that it is not the function of the court on an interim property dispute to look at how that order is enforced.  To say that there is not sufficient cash, or in other words require the applicant to point to the source of the funds, is not the issue for the court.  The wife is entitled to that money and, under those circumstances, an order should be made.  The difficulty here is that having regard to what I can only describe as a recalcitrant approach by the husband, it would seem that I could, at this stage, agree with the position of the wife that she would have some difficulty about getting her hands on the money and if it was not paid then she would have to commence enforcement proceedings.  In the husband’s financial statement sworn only 17 days ago, he said he had $120,000 and it is now down to $78,000. 

10. I think it is appropriate that I make that payment of $60,000 a condition of the adjournment because otherwise there will be further proceedings and that may ultimately defeat the purpose of the whole exercise.  So for all of those reasons, I propose to grant the adjournment.  An order will issue later today setting out the exact date that the case will start and, indeed, there will be a timetable which will be reasonably close to that period of the starting date for the filing.  In the event that the filing is not met or the $60,000 is not paid within the seven days to the solicitors for the wife, I shall give the wife liberty to apply to immediately bring the matter back on and the husband is on notice that he will struggle to get the court to allow him further time. 

11. The final matter then relates to the question of costs. The wife seeks the costs thrown away for today as indeed does the counsel for the Independent Children's Lawyer. In respect of costs, s 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party shall bear their own costs unless there are circumstances that justify a departure from that principle. If the court is contemplating a departure from the principle, it has to take into account the matters set out in s 117(2A) of the Act and a separate provision in s 117 in respect of the Independent Children's Lawyer.

12. Dealing firstly with the wife, she seeks costs totalling $4000 being her solicitor’s fees for attendance today and her counsel’s fees.  There is no agreement as to quantum and I have not looked at the scale but I am very confident that even if I was not to make an order for an indemnity costs order, those sorts of costs would be very close to the right amount in any event. 

13. The Independent Children's Lawyer’s costs are $1900 and those seem to me below scale level in any event.  The first question though is whether or not there ought to be a departure from the principle that each party pays their own costs. 

14. I cannot think of a more appropriate case to justify a departure from the principle in circumstances where someone comes along in a case that has the gestation that this one has had and simply says that they are not ready to proceed.  Whose fault that is does not matter.  The reality is the wife has incurred the cost that she has today, she has been paying her own costs and she is clearly out of pocket.  It is not her fault that the case is not proceeding today and she has been told on a number of occasions that if the husband failed to comply with orders then she could proceed on an undefended basis. 

15. As such, it seems to me that I can easily find in this case that there is a justifiable circumstance to depart from the principle. Section 117(2A) provides a number of matters that must be considered. The first of those is the financial circumstances of the parties. Here, the husband has the business but he also has approximately $1.2 million or thereabouts in assets. Three of those assets are real properties, all of which are unencumbered. He has the business whereas the wife is working as a part time person presumably earning $150 a week and that is supplemented by the public purse.

16. There is a vast gulf between the parties’ financial circumstances and it certainly favours the husband.  I am obliged to take into account the way in which the parties have prepared for trial and the way they have complied with orders.  The husband and his son have not complied with those orders.  I am obliged to take into account legal aid considerations and there are none and whether or not someone has been successful or unsuccessful.  The husband has not prepared properly causing the loss of the trial date.  He should have prepared properly. 

17. The wife has prepared and she is ready to proceed.  This is a case, therefore, where the wife should not be out of pocket and the amount of costs that she has sought is not unreasonable.  The same applies to the Independent Children's Lawyer.  Those funds are paid out of the public purse.  Everyone knows what is happening with Victoria Legal Aid and their paucity of funds.  It seems to me that this is a case where the public purse should not be drained any further particularly having regard to the assets that the husband has. 

18. In those circumstances, I propose to make orders and as I have earlier indicated I will make the orders in relation to the wife’s costs payable as a condition of the adjournment.  If those costs are not paid within – and I will make it a little bit longer having regard to the order for the $60,000 – I will make those within one month.  Then that, too, will be a triggering event for the matter to come back on the basis of a possible application for an undefended hearing.  Those orders will issue as part of the overall orders I will make today and I will have the reasons today transcribed.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 17 June 2013.

Associate: 

Date:  16 July 2013