Lang & Hardy
[2024] FedCFamC2F 1654
•20 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Lang & Hardy [2024] FedCFamC2F 1654
File number: MLC 7406 of 2020 Judgment of: JUDGE SYMONS Date of judgment: 20 November 2024 Catchwords: FAMILY LAW – Third application in aid of enforcement of final property orders – where orders require sale of property – where first respondent retains original paper Certificate of Title and has failed to produce it – where sale cannot proceed without the Certificate of Title – where applicant seeks cancellation of current Certificate of Title and creation of new electronic Certificate of Title – no engagement by the first respondent – orders and declarations of interest made – order for payment by first respondent of indemnity costs Legislation: Bankruptcy Act 1966 (Cth)
Family Law Act 1975 (Cth), s 117
Transfer of Land Act 1958 (Vic), ss 27B, 103
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), rr, 12.08, 12.13
Cases cited: Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248
Marchesi v Registrar of Titles (2010) 30 VR 397; [2010] VSC 524
Marshall v Williams [1974] VR 592
Roydon & Roydon [2024] FedCFamC1A 105
Division: Division 2 Family Law Number of paragraphs: 38 Date of last submission/s: 19 November 2024 Date of hearing: 19 November 2024 Place: Melbourne Counsel for the Applicant: Mr J Melilli Solicitor for the Applicant: PCL Lawyers Solicitor for the First Respondent: No appearance by or on behalf of the First Respondent Solicitor for the Second Respondent: No appearance by or on behalf of the Second Respondent ORDERS
MLC 7406 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS METZ (AS ADMINISTRATOR OF THE ESTATE OF THE LATE MS LANG)
Applicant
AND: MR HARDY
First Respondent
REGISTRAR OF TITLES (VICTORIA)
Second Respondent
ORDER MADE BY:
JUDGE SYMONS
DATE OF ORDER:
20 NOVEMBER 2024
THE COURT ORDERS THAT:
1.The first respondent produce to the office of the applicant’s solicitor, PCL Lawyers at Level 14, 90 Collins Street, Melbourne, 3000, Victoria the original paper Certificate of Title to the property described in Certificate of Title Volume … Folio …, being the land in Crown Allotment … Section … Township of Town C, Parish of Town C and known as B Street, Town C, in the State of Victoria (the Property) within seven days of the date of these orders.
2.In the event the Certificate of Title is not produced in accordance with paragraph 1 of these orders, and on production of an affidavit from the applicant’s solicitor to that effect, the Registrar of Titles for the State of Victoria is to:
(a)cancel Certificate of Title Volume … Folio … (being the Certificate of Title in respect of the Property);
(b)Create a new folio of the Register and an electronic Certificate of Title for the land in Crown Allotment … Section … Township of Town C, Parish of Town C;
(c)take the steps necessary to carry over to the new folio caveat …;
(d)amend the Register if so necessary.
3.The first respondent pay the applicant’s costs on an indemnity basis, fixed in the amount of $36,886.
4.The applicant serve a sealed copy of these orders on the first and the second respondent by no later than 4 pm on 22 November 2024.
THE COURT DECLARES THAT:
A.For the purposes of the Transfer of Land Act 1958 (Vic) (TLA) and to give effect to the orders for the sale of the Property made on 10 September 2021, the applicant has an interest and an entitlement to the Certificate of Title produced under paragraph 1 of these orders.
B.For the purposes of s 27B(6) of the TLA the applicant or PCL Lawyers on her behalf, is entitled to control of the electronic Certificate of Title to be created pursuant to paragraph 2(ii) of these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE SYMONS:
INTRODUCTION
I have before me what, in effect, is an application for orders made in aid of enforcement. It is the third such application because the first respondent, Mr Hardy, has persistently failed to cooperate in giving effect to final orders made on 10 September 2021 by (then) Judge Carter that required the sale of a property located at B Street, Town C, Victoria (the Property) in the event that Mr Hardy elected to sell the Property or defaulted on his election to pay his former wife, Ms Lang, the settlement sum of $100,000.
Since the making of final orders, the original applicant, Ms Lang, has sadly passed away. By order of Judicial Registrar McGee made on 20 December 2023 (amended on 22 December 2023), Ms Metz, who is the administrator of Ms Lang’s estate (and also Ms Lang’s daughter), was substituted as a party to the proceeding in place of Ms Lang.
It is Ms Metz who brings this application which was commenced by an application in a proceeding filed on 24 September 2024 and supported by:
(a)Affidavit of conveyancer Mr D filed 24 September 2024 (Mr D affidavit);
(b)Affidavit of lawyer Ms E filed 25 October 2024 (Ms E affidavit);
(c)Affidavit of lawyer Mr F filed 1 November 2024 (First Mr F affidavit);
(d)Affidavit of lawyer Mr F filed 5 November 2024 (Second Mr F affidavit);
(e)Affidavit of Ms Metz filed 11 November 2024;
(f)Affidavit of lawyer Mr G filed 11 November 2024 (Mr G affidavit); and
(g)Case outline filed 14 November 2024.
The volume of material filed in support of what should be a straightforward application provides some insight as to the steps the applicant has been required to take to engage with Mr Hardy and to bring her application and supporting material to his attention.
BACKGROUND TO AND NECESSITY FOR APPLICATION
As noted earlier, despite the final orders requiring the sale of the Property, Ms Lang (then the applicant) sought the assistance of the Court on two occasions to obtain orders in aid of enforcement.
The first set of enforcement orders were made on 2 February 2022 by (then) Judge Carter and required Mr Hardy to vacate the Property within 28 days. The orders also made provision for how the sale of the Property should proceed.
The second set of enforcement orders were made on 20 December 2023 (amended on 22 December 2023) by Judicial Registrar McGee. They extended the time for Mr Hardy to vacate the Property.
Mr Hardy has now vacated the Property. However, a further issue, for which he is responsible, impedes its sale.
Mr Hardy is the sole registered proprietor of the Property and retains the original paper Certificate of Title.
In mid-2024, Mr Hardy telephoned senior conveyancer, Mr D, of PCL Lawyers, the firm that was first engaged in this proceeding by Ms Lang and who now holds instructions from Ms Metz.
During this conversation, Mr Hardy told Mr D, among other things, that the applicant did not have any right to sell the Property and reminded Mr D that he holds the original paper Certificate of Title to the Property. When requested by Mr D to produce the paper Certificate of Title to the office of PCL Lawyers, Mr Hardy told Mr D that he would promptly retain solicitors who would provide a formal response.
There is no evidence that Mr Hardy did at any time instruct lawyers and he has not produced the paper Certificate of Title. Without the original paper Certificate of Title, the Property cannot be sold.
The evidence before the Court is that PCL Lawyers has taken exhaustive steps in an effort to obtain Mr Hardy’s agreement to produce the paper Certificate of Title. Mr Hardy however did not reply to any of the phone calls made or email and SMS messages sent to him between May and September 2024 (as described in the Mr D and First Mr F affidavits).
It is not surprising that Ms Metz now seeks orders from the Court that would facilitate the sale of the Property in a way that does not rely on the cooperation of Mr Hardy. To this end, Ms Metz seeks orders that would require Mr Hardy to produce the original paper Certificate of Title within seven days, and in default of that production, provide a mechanism for PCL Lawyers to approach the Registrar of Titles (Victoria) to cancel the existing folio for the Property and create a new folio in its place.
The Registrar of Titles was joined to the proceedings as the second respondent by orders made by Senior Judicial Registrar Jenkins on 6 November 2024. On the same day, the application in a proceeding was set down for interim hearing before me on 19 November 2024 for determination of the issue of the provision of a new title for the Property. The joinder of the Registrar of Titles was limited to this issue.
As far as the participation of the Registrar of Titles is concerned, the evidence before me is that the application in a proceeding and Mr D affidavit were sent to the email address used by the Registrar of Titles on 24 October 2024 and on 25 October 2024, a Warrants Officer at Land Use Victoria acknowledged receipt of the email (as described in the Ms E affidavit).
Furthermore, on 28 October 2024, PCL Lawyers received an email from the Registrar of Titles, Ms J, advising that she had received the application in a proceeding and the Mr D affidavit, that she did not intend to participate in these proceeding and that she had no objection to the orders sought in the application (as described in the First Mr F affidavit and annexure MRF‑1).
The application in a proceeding and the Mr D affidavit were sent by email to Mr Hardy on 4 November 2024. No response was received from Mr Hardy to this email (refer Second Mr F affidavit).
On 6 November 2024, PCL Lawyers sent a copy of the orders made on that date to Mr Hardy by email and via SMS text message (refer Mr G affidavit).
When the matter came before me for hearing on 19 November 2024, Mr Melilli of counsel appeared for Ms Metz and there was no appearance from or on behalf of Mr Hardy. Neither was there an appearance from or on behalf of the Registrar of Titles, but this was consistent with the advice communicated by the Registrar to the applicant’s lawyer.
I was satisfied that Mr Hardy had been served, through the two different means identified in the orders made on 6 November 2024 for substituted service, with documents that identified the orders sought in the application and that despite his absence, it was appropriate to proceed without his participation.
CONSIDERATION
There is a compelling case for the making of the orders sought by Ms Metz. Over three years have passed since final orders were made in September 2021 and no substantial steps have been taken to give effect to the property adjustment reflected in those orders. The applicant remains out of funds and the Property is no closer to being sold.
The final, but critical step before this can occur is production of the original paper Certificate of Title. Mr Hardy is aware of the necessity for this document yet has since at least May 2024, failed to produce it. Mr Hardy can also be taken constructively or actually to have knowledge of the orders now sought by Ms Metz and the convening of a hearing to consider whether they should be made.
Ms Metz submits, and I accept, that she is unable to sell the Property without the assistance of the Court. I find on the evidence that her legal representatives have done all that could be expected of them to obtain the Certificate of Title from Mr Hardy. I accept that it is within the Court’s power to make orders to facilitate the issuing of a new electronic Certificate of Title and that it is appropriate in this case to do so.
Section 103(1) of the Transfer of Land Act 1958 (Vic) (TLA) provides as follows:
1) In any proceeding in a court relating to any land or any instrument or dealing in respect thereof if the court directs the Registrar to make any amendments to the Register or otherwise do any act or make any recordings necessary to give effect to any judgement decree or order of the court the Registrar shall obey such direction.
For the purposes of s 103(1) a “court” means a “court of competent jurisdiction” which this Court undoubtedly is by reason of the powers conferred upon it by the Family Law Act 1975 (Cth) (FLA) in relation to property.
In Marchesi v Registrar of Titles [2010] VSC 524, Justice Ferguson (as her Honour then was) considered s 103(1) of the TLA in the context of a bankruptcy proceeding where the trustee sought orders for the replacement of a Certificate of Title for a property vested pursuant to the Bankruptcy Act 1966 (Cth).
Like in this case, the party holding Certificates of Title for the property refused to give them to the Trustee including in contravention of court orders for their production. The Trustee then made application for orders under s 103(1) of the TLA directing the registrar to cancel the existing Certificates of Title and to issue a replacement Certificate of Title for the property in the name of the Trustee.
As to whether an application pursuant to s 103(1) of the Transfer of Land Act was appropriate in the circumstances, the Court in Marchesi said at [48] that the powers conferred on the Court by s 103(1) should be exercised with caution. Justice Ferguson considered that the following matters are relevant in the exercise of the discretion as to whether or not to make orders under the section:
(a)if the orders are not made, additional costs will be incurred and there will be further delay in the administration and finalisation of the bankrupt estate;
(b)the risks associated with having a second “live” Certificate of Title in existence, can be overcome by the making of orders akin to those made in Marshall v Williams [1974] VR 592 – if such orders are made, the principles of the Torrens system are not undermined;
(c)whilst certain third parties may hold or control the existing Certificates of Title, those parties did not have any beneficial interest in the Property;
(d)the beneficial interest in the Property vested automatically in the Trustee in the bankruptcy; and
(e)there are no practical steps the Trustee in bankruptcy could take to obtain the Certificate of Title.
While the statutory context here is different, there are certain parallels between the considerations identified in Marchesi and the considerations that are features of this case. In particular, I am cognisant that further delay and cost is inevitable if the impasse created by the conduct of Mr Hardy is not broken. I am also satisfied that there are no further practical steps Ms Metz (or those who act on her instructions) could take to obtain the Certificate of Title although I will make an order that gives Mr Hardy one final chance to produce it, mainly because Ms Metz, rather generously, has sought this.
If the Certificate of Title is not produced in accordance with this order, then upon Ms Metz’s legal representative producing an affidavit to the Registrar of Titles deposing to the non‑production, the Registrar of Titles is to cancel the current certificate and issue a new one. This is the type of order that was made in Marshall v Williams.
Ms Metz seeks her costs in relation to the application on an indemnity basis.
Her counsel submitted that the considerations that were engaged in this case were:
·Section 117(2A)(a) of the Family Law Act 1975 (Cth) (FLA) – financial circumstances – Ms Metz is a student and a person of limited means;
·Section 117(2A)(c) of the FLA – the conduct of the parties to the proceedings in relation to the proceeding – Mr Hardy’s conduct speaks for itself in that he has failed to meaningfully participate in the proceedings since around 12 January 2021 when he became self-represented and has neglected, failed or refused to comply with orders of the Court;
·Section 117(2A)(d) of the FLA – whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court – the proceedings were brought as a response to Mr Hardy’s ongoing contumelious disregard for the Court’s orders and processes.
As far as Ms Metz seeks an order that Mr Hardy pay her costs on an indemnity basis, I start by acknowledging that before a costs order of this kind can be made, something exceptional is required to justify a departure from the default position that “each party…shall bear his or her own costs” (s 117(1) FLA).
In Roydon & Roydon [2024] FedCFamC1A 105 at [105]-[106] Riethmuller J observed:
Examples of the nature of the conduct required to support an indemnity costs order are set out in the commonly quoted passage from Colgate Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248 at 256 and 257:
…it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud…evidence of particular misconduct that causes loss of time to the court and to other parties…or in wilful disregard of known facts or clearly established law…the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions…an imprudent refusal of an offer of compromise…
The matters identified by Shepard J in Colgate Palmolive as justifying indemnity costs orders all involve significant misconduct in litigation, not simply a party litigating a marginal or speculative case.
In this case the misconduct of Mr Hardy has occurred, not through positive acts but through a complete disregard for orders of the Court and its processes. The impact has been profound and longstanding and has stymied the efforts of Ms Metz, and before her Ms Lang, to give effect to the final orders. I consider that that it is misconduct of a quality that enlivens the Court’s discretion to make a costs order that provides a full indemnity to the applicant.
A party applying for costs on an indemnity basis, in accordance with rule 12.13(4) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (Rules), must inform the Court if the party is bound by a costs agreement in relation to those costs and the terms of that agreement. The applicant has provided the Court with a copy of a series of costs agreements between her mother and PCL Lawyers, as well as a costs letter that adopts the terms of these earlier agreements and the basis for charging. In addition, during the hearing counsel handed up an itemised list of professional fees charged to Ms Metz’s file in relation to this matter from late December 2023 up to the date of hearing.[1] Ms Metz seeks costs reflecting these documents and charges in the amount of $34,885. She also seeks an order that Mr Hardy pay counsel’s fees in the amount of $6,100.
[1] I have marked this document Exhibit A1.
As I have indicated, I accept that in principle this is a case that warrants the making of an indemnity costs order. However, I am also aware of the obligation under rule 12.08(1) of the Rules to ensure that legal costs be fair, reasonable and proportionate. The application prosecuted by Ms Metz was frustrated by the conduct of Mr Hardy and in that respect, had its challenges. It was not however a matter that was especially complex or difficult and for that reason, I consider there to be a lack of proportionality between the complexity of the matter and the costs incurred, especially around the hearing before me which was undefended and discrete in compass. It is not in the interests of the parties to leave the determination of the costs issue to one that is to be agreed or assessed in default of agreement. This matter must come to an end given its history and the lack of engagement from Mr Hardy. I will fix costs but in doing so will apply a discount of ten per cent to the amount sought by Ms Metz, reflecting an amount that more closely approximates an amount that I consider to be fair and reasonable for the work undertaken. I will order that Mr Hardy pay her costs in the amount of $36,886.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons. Associate:
Dated:20 November 2024
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