L Associates Limited and Conlon and Anor
[2015] FamCA 659
•13 August 2015
FAMILY COURT OF AUSTRALIA
| L ASSOCIATES LIMITED & CONLON AND ANOR | [2015] FamCA 659 |
FAMILY LAW – PROPERTY– Single expert valuer fees – Where the property proceedings have concluded – Where the single expert valuer seeks orders to vary previous orders so it can prosecute its claim against the wife for its fees of preparing a report in the proceedings – Where the Court ordered that the wife pay the costs of the valuer in the first instance – where the Court ultimately ordered that the husband pay the costs of the valuer – Where the valuer was not a party to the proceedings – Where an order is made pursuant to the Slip Rule to accommodate the fact of the contractual obligation between the wife and the valuer – Where an order is made that the husband indemnify the wife in relation to her obligation to pay the fees of the valuer.
| Family Law Act 1975 (Cth) s 79, 75 |
Family Law Rules 2004 (Cth) r 15.47, 15.60, 17.02
APPLICANT: FIRST RESPONDENT: | L Associates Limited Ms Conlon |
| SECOND RESPONDENT: | Mr Merrigan |
| FILE NUMBER: | SYC | 8096 | of | 2010 |
| DATE DELIVERED: | 13 August 2015 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 23 July 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Davis |
| SOLICITOR FOR THE APPLICANT: | Bartier Perry |
SOLICITOR FOR THE FIRST RESPONDENT: | Clearys Commercial Lawyers Pty Ltd |
| SECOND RESPONDENT: | No appearance |
Orders
That the orders made on 10 July 2014 be rectified by deleting order 2 and replacing it with the following:
2.The husband shall forthwith indemnify the wife and keep her indemnified in relation to her obligation to pay the fees of L Associates Limited, incurred in respect of these proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym L Associates Limited & Conlan and Anor 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 SYDNEY |
FILE NUMBER: SYC 8096 of 2010
| L Associates Limited |
Applicant
And
| Ms Conlon |
First Respondent
And
Mr Merrigan
Second Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings in relation to the fees of the single expert valuer incurred in connection with concluded proceedings for property settlement between husband and wife. The applicant is the valuer, L Associates Limited and the first and second respondents are the wife and husband in the substantive proceedings, Ms Conlon and Mr Merrigan.
There are enforcement proceedings on foot between the valuer and the wife in the Local Court at the Downing Centre, Sydney and on 28 May 2015 those proceedings were stayed. I understand that the stay was granted in anticipation of these proceedings or similar proceedings.
The valuer seeks orders to vary previous orders in order to allow it to prosecute its claim against the wife for its fees.
Applications
The applicant sought orders as set out in its Application in a Case filed 18 June 2015, as follows:
1.A declaration that order 8 made on 22 April 2013 by Justice Loughnan and order 2 made on 10 July 2014 by Justice Loughnan determine the liability for payment of the fees of [L Associates] as between the applicant husband ([Mr Merrigan] and the respondent wife ([Ms Conlon]) only, and leave undisturbed the contractual rights and obligations as between [L Associates] and [Ms Conlon].
2.An order that order 8 made on 22 April 2013 by Justice Loughnan be varied by adding the words: “This order leaves undisturbed the contractual rights and obligations as between [L Associates] and the Applicant Respondent” (sic).
3.An order that order 2 made on 10 July 2014 by Justice Loughnan be varied by adding the words: “This order leaves undisturbed the contractual rights and obligations as between [L Associates] and the wife”.
In her Response filed 20 July 2015 the wife sought that the valuer’s application be dismissed and an order for costs on an indemnity basis.
The husband’s solicitors filed a Notice of Ceasing to Act on 1 July 2015 but no Response to the valuer’s application was filed by the husband. There was no appearance by the husband or on his behalf at the hearing.
Background Facts
Proceedings for settlement of property were instituted by the husband on 22 December 2010.
A draft Balance Sheet settled by the parties on 13 March 2012, included at Item 17, a claim on behalf of the wife for an add-back in the hands of the husband in the sum on $117,776 for “Part of the proceeds of invoices for work done substantially prior to DOS[1] taken by the Applicant as a loan to director in that financial year.”
[1] date of separation
On 26 March 2012, among other orders, the following orders were made:
17.In relation to Item 17 in the Draft Balance Sheet of 26 March 2012 the Court noted that the wife asserts that the husband has not adequately accounted for and has indeed wasted part of the proceeds of invoices issued by that company.
18.That within 7 days the wife provide to the solicitor for the husband the names of 3 experts to provide an analysis of the application of those funds. That within a further 14 days the solicitor for the husband elect one of those experts and that thereafter the parties as soon as practicable join in instructing the elected expert. That in the first instance the wife be solely responsible for the costs of that expert and that the husband fully co-operate with the expert in relation to the provision of relevant documents.
On 15 February 2013 the wife’s lawyers wrote to the valuer. The letter was countersigned by the husband’s solicitors and included the following:
Clearys Commercial Lawyers Pty Ltd acts for [Ms Conlon] in this matter and Smallwoods Solicitors acts on behalf of [Mr Merrigan]. You have been nominated by His Honour Justice Loughnan to prepare a financial review of the affairs of [BV Pty Ltd] and [Mr Merrigan] (“the entities”).
…
We note that Clearys Commercial Lawyers Pty Ltd will be solely liable for your costs and disbursements.
…
In March 2013 extensive correspondence commenced between the solicitors for the husband and wife and the valuer. On 31 March 2013 the wife’s lawyers wrote to the valuer in respect of the letter of 15 February 2013. The correspondence suggests that the dispute between the solicitors for the husband and wife boiled down to the husband’s solicitors maintaining that the valuation of BV be undertaken and costed on the business records and as a separate exercise from what might be described as a forensic examination of the husband’s use and accounting for business income. The wife was opposed to that course. Ultimately the wife invited the valuer to report in accordance with the original letter of instructions of 15 February 2013 and her letter of 31 March 2013. The husband’s solicitors insisted that the original letter of instructions be adhered to. On 2 April 2013 the valuer wrote a letter to the parties’ lawyers which included the following:
I am still concerned that both parties have a differing view as to the scope of work which should be undertaken. Can both parties please confirm that they are in agreement that I proceed in accordance with [Ms Conlon’s] letter of 31 March 2013.
On 3 April 2013 the wife filed an Application in a Case and soon thereafter filed an Amended Application in a Case. She sought among other orders an order that the husband’s solicitors be restrained from contacting the valuer without the agreement of the applicant’s solicitors and that the valuer’s instructions include an order (order 10) that the wife be at liberty to instruct the valuer on behalf of the parties to make specific reports. The wife sought that in the event that certain findings were made against the husband in relation to his financial accounts, BAS or taxation returns, that he bear the costs of all work done by the valuer.
On 10 April 2013 the valuer wrote to the parties’ lawyers enclosing a letter outlining the terms and conditions of its retainer and another letter seeking further information. The first letter included:
“…
Billing Arrangements
15.We understand that [Ms Conlon] is responsible for the payment of fees for this engagement. It is our policy to request payments on account during our engagement. An initial fee for $5,000 plus GST will be invoiced to [Ms Conlon] upon acceptance of our terms and conditions. Fee accounts will be rendered monthly and/or upon completion of certain milestones. Fees will be addressed to [Ms Conlon], care of the office of their instructing solicitor.
16.All fees must be paid the earlier of 14 days from invoice date or prior to the date of completion of our final report. Before signing the final report, we will therefore require payment of our fees in full.
On 18 April 2013 the valuer wrote to the wife. Omitting formal parts, the letter comprised:
In accordance with our Engagement Letter, please find attached our Fee on Account for $5,000 plus GST.
At 4.49 pm on 22 April 2013 the wife emailed the valuer in the following terms:
We refer to the joint instructions of 15 February 2013.
We apologise for the ongoing confusion as to your instructions. Please find enclosed a copy of orders made by the Court. We trust that these should be sufficiently clear for you to complete your analysis.
…”
The email was accompanied by a document setting out the text of the orders made on that date. Relevantly, the orders of 22 April 2013 included:
“…
4.That [L] make reports of:
A.Any expenditures that appear in the opinion of L not to relate to proper business purposes or expenses of [BV PL]
B.their estimate of:
(i)interest expenses that would not have been incurred,
(ii)tax liabilities that may have been cleared, and
(iii)the value that [BV PL] would have had if there been no payments out of [BV] on account of the matters mentioned in item A of this Order 4 and assuming the funds available to [BV Pty Ltd] had instead been applied to the reduction of loans and payment of taxes.
5.L be instructed to forensically examine the accounts and records of [BV] to fully substantiate the above, including with complete reference to primary source documents such as tax invoices or receipts as requested by [L] in their letter of 1 March 2013.
…
8.In the event that it is shown that the financial accounts and any associated BAS or taxation returns supplied by the Husband, are in the opinion of the Court, substantially incorrect, misleading in material respects or fraudulent, the costs of all work by [L] will be paid solely by the said Husband.
At 5.42 pm on 22 April 2013 valuer emailed the parties’ lawyers to provide an update as to the status of the report and warning the parties that the cost of the investigation would exceed the initial estimate.
On 26 April 2013 the wife emailed the valuer including:
“...
Would you please proceed on the basis of estimate for the additional items, noting that was the standard set out in the Orders made on 22 last [sic].”
On 1 May 2013 the valuer wrote to the wife claiming payment of an interim fee of $16,500 within 14 days.
On 6 May 2013 there was a telephone conversation between the wife and Julie P (an employee of the valuer). It is the wife’s evidence that she asked if Ms P had read paragraph 1(8) of the orders of 22 April 2013 in respect of the conditions for the husband paying the costs of the valuer. Ms P said she had seen that provision and said that she thought the condition would be triggered. The wife told Ms P that it served the husband right for doing such dodgy accounts.
The draft report was sent to the parties under cover of a letter of 6 May 2013.
On 7 May 2013 the wife wrote to Ms P to ask if she had seen the wife’s email of 22 April 2013 and the orders of that date attached thereto. Ms P responded that she had.
On 8 May 2013 a corrected version of the report was sent to the parties. The final report was filed on 8 January 2014 as an annexure to the affidavit of Ms P.
On 17 May 2013 the valuer wrote to the wife claiming payment for work undertaken from 25 February 2013 to 8 May 2013, including the preparation of the valuer’s report dated 8 May 2013. The fee was put at $32,500 and it was noted that fees of $13,750 had already been billed.
On 12 July 2013 the valuer wrote to the wife claiming payment on an attached invoice in the sum of $32,500 plus GST and asking when it could expect payment.
On 12 July 2013 the wife wrote back to the effect that she expected that the Court would order that the husband pay the valuer’s account but that a hearing was some months off. The wife offered to pay by instalments of $200 per month.
On 16 July 2013 the valuer emailed the wife accepting the periodic payment proposal, pending final orders. The valuer provided the wife with bank details for the periodic payments.
The final hearing was conducted on 11, 12 and 13 February 2014 with the final written submissions being received on 2 June 2014.
On 18 February 2014 the valuer wrote to the wife attaching an invoice for $726.00 for further work undertaken by the valuer. The letter included:
..
2.We take this opportunity to enquire as to the likely timing of the Court’s ruling on our outstanding account. We were previously advised there was a strong possibility that the husband would be ordered to settle the cost of the single expert’s account in full.
…”
On 18 February 2014 the wife emailed the valuer to the effect:
The Court has ordered [Mr Merrigan] of [U Street, Suburb N] to pay your costs in (I think) the sum of $33,500. I will check when I get a copy of the order in the mail and will send you a copy of the order.
On 14 March 2014 the valuer emailed the wife to the effect:
“Can you please advise if you have received a copy of the Court order.
We would like to commence our communication with [Mr Merrigan] regarding payment of our account.”
On 14 April 2014 the valuer emailed the wife to the effect:
Further to our email below can you please forward us a copy of the Court order stating [Mr Merrigan] is liable for our costs.
This account is significantly overdue and requires settlement as soon as possible.
On 16 April 2014 the wife emailed the valuer to the effect that she had written to the Court requesting a copy of the order.
On 13 May 2014 the valuer emailed the wife, again seeking a copy of the Court order.
On 18 June 2014 the valuer wrote to the wife in the following terms:
1.We enclose a copy of four invoices (104260, 104278, 104288, 104576) totalling $36,476 which remain outstanding, and (all but $726) have been outstanding for over 12 months.
2.Given the significant sum of the outstanding fees and the length of time which they have remained outstanding, we believe that we have been more than patient and reasonable in awaiting payment for our outstanding fees.
3.Whilst we appreciate that your ex-husband may have been ordered to pay your costs of the Family Law proceedings, our contract of engagement was with you, and accordingly, liability for payment of our fees lies with you.
4.If payment of the full amount of $36,476.00 is not received within 14 days of the date of this letter (i.e. by Friday 4 July 2014) we will commence proceedings against you to recover our outstanding fees.”
On 19 June 2014 the valuer wrote to the wife in the following terms:
1.We refer to your emails of 18 June 2014 of 6:27 PM and 6:38 PM.
2.Whilst we appreciate the comments of those emails, we maintain that you are liable for payment of our fees which have been outstanding for over 12 months.
3.We are not a party to any current proceedings in relation to this matter. Should you be successful in any current proceedings, then any subsequent costs order will be between you and a third party and is a matter for you to seek enforcement of any such order.
4.With respect, payment of our fees must be made by yourself. Should you receive any costs order in your favour, then it is your responsibility to enforce that order and seek reimbursement of our costs.
5.We enclose a copy of your letter dated 15 February 2013 and draw your attention to the penultimate paragraph in which it is advised to us that you are to be solely liable for our costs. We reject your assertion that we should be seeking half the amount of our costs from another party.
6.Unless payment in full of the outstanding amount of $36,476 is received by Friday, 4 July 2014, we will commence proceedings against you to recover our outstanding fees.
On 10 July 2014 the following final orders were made in the property settlement proceedings as follows:
(1)That there be no order under s 79 Family Law Act 1975 (Cth).
(2)That within one month from the date of these orders the husband pay $33,750 to L Associates Limited.
(3)That within one month from the date of these orders, subject to any written agreement between the parties to the contrary, the husband discharge any arrears of his child support liability.
On 3 September 2014 the wife emailed a Ms C as follows:
Clearys will respond via my son [T] to your solicitor.
In my own capacity, refer to the engagement letter attached which superseded the original instruction and which makes it clear that Clearys is not responsible for the account but rather the writer personally. That is of course now subject to proportionate liability, as I had discussed. I write personally only so you might save legal costs withdrawing the statutory demand.
Would you let me know if you were aware of this as it is been incorrect to treat Clearys as liable when the original letter of instruction of 15 February 2013 was superseded by your formal engagement letter of 10 April 2013.
On 3 September 2014 Clearys Commercial Lawyers Pty Limited sent an email to Carrie Peters at Bartier Perry solicitors, to the following effect:
We refer to the statutory demand “the demand” served by you on behalf of [L and Associates Ltd] on us, Clearys Commercial Lawyers Pty Limited.
We note that the demand requires us to pay the sum of $33,750 relating to the performance of services valuing a business for the purposes of Family Court proceedings between [Ms Conlon] and [Mr Merrigan] we were instructed in those proceedings by [Ms Conlon].
We advise that Clearys Commercial Lawyers Pty Limited is not liable for the sum claimed at all. We refer you to paragraph 15 of your clients retainer letter of 10 April 2013, in which it is made clear that it is Ms Conlon who is liable for payment of your clients fees, not Clearys Commercial Lawyers Pty Limited. Accordingly, we request that you confirm in writing that you withdraw the demand forthwith. Should you not provide us with this within seven days we will then apply to have the demand set aside, and will seek our costs of doing so.
Please don’t hesitate to contact me if you have any further enquiries.
On 10 October 2014 Bartier Perry solicitors faxed a letter of that date to Clearys Commercial Lawyers Pty Limited to the following effect:
[L Associates Limited]
Demand For Payment Of Overdue Monies Totalling $33,750.00
We refer to the above matter, and to previous communications between the parties.
We note the following:
1.On or about 10 April 2013, the parties entered into an agreement (“the agreement”) for the provision of services.
2.It was an express term of the agreement that [Ms Conlon] pay our clients fees.
3.In about May 2013, our client provided the services.
4.Our client indicated (on a number of occasions and in writing) that in the event that [Ms Conlon] obtained an order that [Mr Merrigan] pay our client’s fees, any such order would not absolve [Ms Conlon] from liability to pay our client’s fees, and further, that [Ms Conlon] would, nonetheless, be required to enforce any such order against [Mr Merrigan].
5.On 10 July 2014, an order was made in the Family Court proceedings (“the Proceedings”) in [Ms Conlon’s] favour (“the Orders”).
6.The Orders included an order that [Mr Merrigan] pay $33,750 (being our client’s fees) (“The debt”).
7.Our client was not a party to the Proceedings.
8.The Orders were not made in our client’s favour.
9.Our client has no standing to enforce the Orders.
10.The Orders did not nullify the agreement between the parties.
11.The Orders did not affect the contractual rights of the parties to the agreement.
12.[Ms Conlon] has not paid the Debt, despite repeated demands to do so.
Accordingly, in circumstances where our client does not have an order in its favour, we are instructed to commence proceedings against [Ms Conlon] unless:
1.she seeks to enforce the orders; and
2.Provides evidence of the bankruptcy notice to be issued against [Mr Merrigan]
on or before 14 October 2014.
We put you on notice that a copy of this correspondence will be tended in support of an application for indemnity costs against [Ms Conlon] in the event proceedings are required.
Lastly, please confirm that you have instructions to accept service of the a statement of claim on behalf of [Ms Conlon].
On 30 October 2014 Bartier Perry solicitors wrote a letter to the wife at Clearys Commercial Lawyers Pty Limited to the following effect:
[L Associates Limited]
Demand For Payment Of Overdue Monies Totalling $40,291.87
We act on behalf of [L and Associates Ltd] ([L])
[L] will has instructed us that you are indebted to it in the sum of $33,750.00 , for the provision of valuation services rendered in relation to Family Court proceedings (P)SYC8096/2010 and on the basis that you would be solely liable for [L’s] costs and disbursements. We refer to your letter of instruction dated 15 February 2013.
In addition, [L] claims its legal costs pursuant to the terms of the engagement in the present amount of $6541.87.
Unless you receive a bank cheque for $40,291.81 made payable to [L and associates Ltd] by 4 PM on 4 November 2014, recovery proceedings will be instituted against you for the full amount claimed plus interest and costs without further notice.
We suggest you give urgent attention to the matter.”
On 18 June 2015 these proceedings were commenced with the filing by the applicant valuer of an Application in a Case.
Discussion
The Family Law Rules 2004 deal with the costs of single experts as follows:
FAMILY LAW RULES 2004 - RULE 15.47
Single expert witness's fees and expenses
(1) The parties are equally liable to pay a single expert witness's reasonable fees and expenses incurred in preparing a report.
(2) A single expert witness is not required to undertake any work in relation to his or her appointment until the fees and expenses are paid or secured.
Note: This rule applies unless the court orders otherwise (see rule 1.12).
A single expert has the right to bring issues before the Court, including disputes in relation to costs:
FAMILY LAW RULES 2004 - RULE 15.60
Expert witness's right to seek orders
(1) Before final orders are made, a single expert witness may, by written request to the court, seek a procedural order to assist in carrying out the expert witness's function.
Note: The written request may be by letter and may, for example:
(a)ask for clarification of instructions;
(b)relate to the questions mentioned in Division 15.5.6; or
(c)relate to a dispute about fees.
(2) The request must:
(a) comply with subrule 24.01(1); and
(b) set out the procedural orders sought and the reason the orders are sought.
(3) The expert witness must serve a copy of the request on each party and satisfy the court that the copy has been served.
(4) The court may determine the request in chambers unless:
(a) within 7 days of being served with the request, a party makes a written objection to the request being determined in chambers; or
(b) the court decides that an oral hearing is necessary.
The present Application was filed after the final hearing and the wife does not consent to it being filed out of time. The wife’s complaint apparently relates to the proposition that, had she known that she continued to be liable for the valuer’s fees in the first instance, she would have sought different orders at the final hearing. As I will develop below, in my view there is merit in the valuer’s Application and it raises an important issue about the Court facilitating the payment of the fees of a single expert witness. Leave is granted, now for then, for the filing of the Application out of time.
There are two critical issues: Firstly, the valuer has an enforceable right to payment of its fees. Secondly, the Court has the power to order how the ultimate responsibility for the costs of proceedings should be borne between the parties to the proceedings.
On 26 March 2012 the Court made orders for the selection of a single expert and for the wife to be solely responsible for the fees of that expert, in the first instance.
No expert was identified in that order and no obligations arose for the valuer under it.
On 15 February 2013 the wife’s lawyers wrote to the valuer. The letter was countersigned by the husband’s solicitors and included the following:
Clearys Commercial Lawyers Pty Ltd acts for [Ms Conlon] in this matter and Smallwoods Solicitors acts on behalf of [Mr Merrigan]. You have been nominated by His Honour Justice Loughnan to prepare a financial review of the affairs of [BV Pty Ltd] and [Mr Merrigan] (“the entities”).
…
We note that Clearys Commercial Lawyers Pty Ltd will be solely liable for your costs and disbursements.
…”
In my view, upon the acceptance of those terms, there arose an enforceable obligation between the wife and the valuer. If not before, by its letter of 10 April 2013, the valuer accepted the parties’ proposal. The crux of the case relies on the fact that, without the valuer’s agreement, nothing done after that date could change the wife’s obligation to the valuer, in a way that bound the valuer.
The issue of the costs of the valuation report were addressed in the reasons for judgment in the substantive proceedings, as follows:
The Costs Of [Ms P’s] Report.
187.An order was made on 22 April 2013 to the effect that the husband would pay the costs if the expert found certain things as outlined above in paragraph 51.
188.The Report cost $33,750. As I understand it, [Ms P] has invoiced the parties but has as yet not been paid. The expert reported that the financial accounts and associated tax returns supplied by the husband for [BV] are substantially incorrect and misleading, if not fraudulent. I find that the quantum of the costs that the husband is required to pay is $33,750. I will order that the husband pay that sum to Ms P within one month from the date of these orders.
Notwithstanding the wording of that order, the order could only affect the rights and obligations of the parties, as against each other. The valuer was not a party to the proceedings; was not heard in relation to the orders; and has no standing to enforce them. In my view, notwithstanding that order, the valuer retains the right to recover its fees from the wife.
The question then arises as to the Court’s power to revisit the wording of the earlier orders in the ways proposed by the applicant. In my view the Court has that power. Firstly, the Court has an obligation to facilitate the payment of the fees of a witness before the Court. Secondly, among other instances, where an order has had an unintended consequence on the rights of a third party, the Court must retain power to remedy that situation. The particular wording of the orders sought by the applicant were not the subject of specific submissions. The wording proposed is unusual. It may be that it would successfully clear the obstruction to enforcement and allow the issues to be addressed on their merits. Nevertheless, Courts do not normally send each other messages about the import of orders.
A more orthodox remedy would be found in the Court’s power to correct errors in the reduction of the intention of the Court, into orders. That power is colloquially know as the slip rule. Here the wording of the final order was obviously drawn without regard to the contractual obligation owed by the wife to the valuer. The contractual obligation was prompted by an earlier order of the Court but was not created by that order. It was created by a written agreement between the wife and the valuer.
The slip rule is an inherent power of superior courts but for litigants in the Family Court the procedure to invoke that power is described in Rule 17.02 as follows:
FAMILY LAW RULES 2004 - RULE 17.02
Errors in orders
(1) If a party claims that there is an error in an order issued by the court, the party must give written notice of the error to the Registry Manager and all parties.
(2) A Registrar may rectify an error that appears obvious on reading the order.
Example: A kind of amendment that a Registrar may make under subrule (2) is the correction of a typographical error.
(3) If the Registrar:
(a) is in doubt about whether there is an error in an order; or
(b) believes that an error in an order has, or may have, arisen from an accidental slip or omission;
the Registrar may take action under subrule (4).
(4) If subrule (1) or (3) applies, the party or Registrar may, after giving reasonable notice to each party, refer the order to the judicial officer who made it.
Note: If the judicial officer who made the order is unavailable, it may be referred to another judicial officer (see rule 1.13).
(5) A judicial officer may, after giving each party a reasonable opportunity to be heard, rectify a suspected error referred to the judicial officer.
Note: An amendment of an order may be made under this rule only if it is an error obvious when reading the order. Any other amendment must be remedied by appeal or consent.
Without hearing from the valuer, the Court had no power to change the rights of the valuer. The Court’s intention and power was to affect the position as between the husband and wife. In this case, it was to sheet home to the husband the ultimate responsibility for the costs of the valuation. Therefore, the correction would be to rectify order 2 made on 10 July 2014 to accommodate the fact of the contractual obligation between the wife and the valuer. In my view that would be achieved with the following wording.
1.That the orders made on 10 July 2014 be rectified by deleting order 2 and replacing it with the following:
2.The husband shall forthwith indemnify the wife and keep her indemnified in relation to her obligation to pay the fees of L Associates Limited incurred in respect of these proceedings.”
I note that the problems experienced by the valuer were in part of its own making. Despite the wife’s acknowledged obligation to pay, it indulged her request to accept periodic payments on its invoice rather than the full payment to which it was entitled pursuant to its written agreement with the wife. That entitlement was made clear in the valuer’s correspondence of 10 April 2013. The condition specified in that letter reflected what is the normal practice of experts in the valuer’s position: to secure payment of its fees before releasing the final report to the parties. If that had been done here, there would be no issue before the Court. Perhaps that approach was not adopted out of professional courtesy, because the wife was herself an officer of the court and or because she had pressed the valuer for the urgent delivery of the report in aid of the impending final hearing. Importantly, however, the valuer’s punishment for that indulgence should not be the denial of its right to enforce its agreement. I will make the foreshadowed order.
I certify that the preceding fifty seven (57) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 13 August 2015.
Associate:
Date: 13 August 2015
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