Leon & Bonnay
[2023] FedCFamC1F 100
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Leon & Bonnay [2023] FedCFamC1F 100
File number(s): MLC 2058 of 2021 Judgment of: HARTNETT J Date of judgment: 23 February 2023 Catchwords: FAMILY LAW – PROPERTY – Interim Orders – Where the applicant wife filed an Application in a Proceeding seeking joinder of Ms J Leon and removal of the second respondent’s caveat as lodged over a property owned by the respondent husband – Where order for joinder made – Where settlement of the sale of the property has failed to take place – Where the respondent husband and second respondent filed no material – Where order for the second respondent to remove her caveat lodged against the property – Leave to the applicant wife’s solicitors to serve orders made upon the second respondent’s conveyancers.
FAMILY LAW – COSTS – Where the applicant wife sought costs on a party and party basis – Where the wife’s application was successful – Where the second respondent pay party and party costs of and incidental to the Proceeding.
Legislation: Family Law Act 1975 (Cth) s 117(2A)
Federal Circuit and Family Court Rules 2021 (Cth) r 3.03, Sch 2 and 3
Division: Division 1 First Instance Number of paragraphs: 30 Date of hearing: 14 February 2023 Place: Melbourne Solicitor for the Applicant: Taussig Cherrie Fildes The First Respondent: Litigant in person The Second Respondent: Litigant in person ORDERS
MLC 2058 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BONNAY
Applicant
AND: MR LEON
First Respondent
MS J LEON
Second Respondent
order made by:
HARTNETT J
DATE OF ORDER:
14 FEBRUARY 2023
THE COURT ORDERS THAT:
1.Leave be granted to the applicant wife to join Ms J Leon as a Second Respondent party to the Application in a Proceeding filed 1 February 2023.
2.Within 24 hours of these orders, the Second Respondent do all such acts and things and sign all such documents as may be required to remove Caveat … secured against the title of the property situated at and known as K Street, L Town, more particularly described as the whole of the land in Certificate of Title Volume … Folio …
3.The Second Respondent pay the wife’s costs of and incidental to this Application in a Proceeding on a party and party basis fixed in the sum of $1,895.
4.Otherwise the Application in a Proceeding filed 1 February 2023 is dismissed.
5.There is leave to the applicant wife to serve a copy of these orders upon N Legal and Ms M of P Legal.
6.Ms J Leon file a Notice of Address for Service within 48 hours hereof.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 the pseudonym Leon & Bonnay has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
PRELIMINARY
Before the Court was an Application in a Proceeding filed by the applicant wife (“the wife”) on 1 February 2023. In support of that Application, the wife relied upon an affidavit affirmed by her on 31 January 2023, and a further affidavit affirmed by Ms Kylie Sanders, the wife’s solicitor, on 13 February 2023.
There was no Response filed by the respondent husband (“the husband”) in respect of the Application in a Proceeding, and nor was there any response filed by Ms J Leon (“Ms J Leon”). There was no affidavit evidence before the Court from either the husband or Ms J Leon.
The orders sought by the wife included that Ms J Leon be joined as a second respondent to the Application in a Proceeding pursuant to r 3.03 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) and that, having been so joined, the second respondent comply with an Order that within 24 hours of the making of the orders, the second respondent do all such acts and things and sign all such documents as may be required to remove caveat … secured against the title of the property situated at and known as K Street, L Town, more particularly described as the whole of the land in Certificate of Title Volume … Folio … (“the K Street property”). Additionally, the wife sought that Ms J Leon pay her costs of and incidental to the Application on an indemnity basis.
Whilst the husband filed no material and made no response to communications emanating from the wife’s solicitors to the husband prior to the filing of the Application in a Proceeding, and thereafter, the husband attended at Court on the hearing of the application and sought to give evidence from the bar table. The husband disrupted the proceeding and accused the other party of lying. I asked him to leave the courtroom in those circumstances. His sister, Ms J Leon, remained in the courtroom for the duration of the hearing and I note the orders as sought were against her. Ms J Leon was present despite also providing no response to any communication emanating from the wife’s solicitors prior to and following the filing of the Application in a Proceeding. The matter essentially proceeded undefended.
Pursuant to r 3.03(4) of the Rules, the wife sought to add Ms J Leon to the Application in a Proceeding only, and not to the substantive proceeding where final orders are sought by each of the wife and the husband. The Court was satisfied that the wife had, in accordance with the Rules, filed the subject Application in a Proceeding and affidavit material which set out the facts relied upon by her to support the addition of the proposed new party. That affidavit evidence included identification of Ms J Leon’s relationship to the husband, namely, Ms J Leon is the husband’s sister.
The Court was also satisfied that service had been effected (of the Application in a Proceeding and affidavits relied upon by the wife) upon Ms J Leon and the husband given the factual circumstances described hereafter and the attendance of both the husband and Ms J Leon at the hearing.
CONSIDERATION
On 26 August 2021, orders were made by the Court (“the August orders”) which, at Order 6, restrained the husband, by himself, his servants and/or agents from “encumbering or further encumbering” without the prior written approval of the wife a number of real properties, which included the K Street property.
On 5 April 2022, Ms J Leon lodged a caveat against the K Street property, being a further encumbrance on the real property. The caveat was purportedly lodged as security for repayment by the husband of an alleged loan advanced to him by Ms J Leon.
On 8 August 2022, the wife became aware of the alleged loan agreement entered into between Ms J Leon and the husband on 12 August 2021 for $200,000. Such alleged loan was purportedly lent to fund the build for the “untitled” business. The wife had been unaware of any such loan agreement, notwithstanding that it had allegedly been entered into a year prior.
On 21 November 2022 (“the November orders”), the Court made orders which dealt with the sale of the K Street property and how the proceeds of sale of the property were to be distributed. In particular, Order 3 of the November orders provided as follows:
Upon settlement of the sale of [K Street] the proceeds be applied as follows:
(a)first, in payment of any legal costs of conveyance and commissions of sale (if any) provided an invoice for same is first disclosed to the wife;
(b)second, in the event that the deposit has not been released, in payment to [Ms Q] in accordance with Order 2(a) hereof;
(c)third, such sum to NAB (estimated in the sum of $77,000) in payment of the arrears due and owing in relation to the [B Street] mortgage.
(d)fourth, such sum to NAB (estimated in the sum of $33,000) in payment of the arrears due and owing in relation to the [R Town] loan;
(e)fifth, the amount of $7,337 due and owing to [T Council] in payment of the outstanding rates due and owing over [B Street];
(f)sixth, the amount of $6,577.10 due and owing to [S Council] in payment of the outstanding rates due and owing over [R Town];
(g)seventh, to pay to each of the husband and wife the sum of $50,000 by way of partial property settlement; and
(h)finally, the balance thereafter to be held on trust by Taussig Cherrie Fildes lawyers, such funds to be applied to meet the mortgage repayments due and owing over the [B Street] and [R Town] properties as and when they fall due.
Ms J Leon was present at Court when the November orders were made and was privy to the negotiation of those orders. She was also present at Court when the husband inquired of the Court whether some of the proceeds of the K Street property could be released to Ms J Leon in repayment of expenses the husband alleged to have been met by his sister, as dealt with in the alleged loan agreement of 12 August 2021 and/or otherwise. The orders made no allowance for any moneys to be released to Ms J Leon, any entitlement of Ms J Leon being ultimately a matter for determination at trial.
On 24 November 2022, the wife instructed her lawyers to serve a copy of the November orders on N Legal (“N Legal”), the conveyancers engaged by the husband in respect of the K Street property sale.
On 10 January 2023, the wife’s lawyers received an email from N Legal, which stated in part:
We have received the total payment figure for caveat […] and have been advised it will be removed at settlement.
This caveat was the caveat lodged by Ms J Leon on 5 April 2022. From the time of lodging that caveat until 10 January 2023, no order had been made by the Court which provided for any payment to be made to Ms J Leon.
On 11 January 2023, the wife’s lawyers responded to N Legal indicating that there were no orders for any amount to be paid to the second caveator (namely, Ms J Leon) in respect of her caveat upon the settlement of the sale of the K Street property.
On 16 January 2023, the wife instructed her lawyers to write to Ms J Leon conveying the wife’s understanding that Ms J Leon had provided a “payment figure” to N Legal, upon receipt of which she would remove her caveat, contrary to both the August orders and the November orders. Ms J Leon was put on notice that:
If you do not agree to remove your caveat prior to settlement, our client will consider it necessary to seek orders against you, including an order that you pay her costs on an indemnity basis.
No response was received to that correspondence.
On 25 January 2023, the wife’s lawyers received the following email from N Legal which stated, relevantly:
… We confirm that without no agreement or orders made with respect to the second caveat (which we note was lodged on title prior to the November 2022 orders being made), we cannot effect settlement. We advise that [U Pty Ltd] was the lodger of the second caveator and [Mr V], principal, can be reached via email to […]@[…] and has advised that he’s more than happy to liaise with you regarding the enforceability of the second caveat.
Would you please liaise with [Mr V] regarding the second caveat and it’s [sic] potential removal as soon as possible, noting that settlement is due to be effected on 6 February 2023.
On 27 January 2023, the wife instructed her lawyers to again write to Ms J Leon, with such email correspondence being copied to Ms J Leon’s conveyancer, again seeking that she remove her caveat and, further, putting her on notice that:
Failing written agreement that you will remove your caveat upon settlement of the [K Street] sale by no later than 5 pm today, our client will be left with no choice but to bring an application in a proceeding in the Federal Circuit and Family Court of Australia seeking to join you to the proceedings and seeking orders against you, including but not limited to an order for costs on an indemnity basis.
No response was received to that correspondence.
On 1 February 2023, the wife instructed her solicitors to file the Application in a Proceeding with an affidavit in support. On 3 February 2023, the wife’s solicitors received correspondence from Ms M at P Legal (“Ms M”), who indicated as follows:
We refer to the above matter and confirm that we act for the second caveator.
We understand from the vendor’s conveyancer that you act for the first caveator.
Could you please provide a copy of the court orders regarding the sale of the property at your earliest convenience?
On 3 February 2023, following confirmation that Ms M acted for Ms J Leon, the wife’s solicitors caused the Application in a Proceeding and the affidavit evidence of the wife, both filed on 1 February 2023, to be served upon P Legal and requested of them that they confirm whether they held instructions to accept service on Ms J Leon’s behalf. Ms M was also provided Orders 2 and 3 of the November orders together with Order 6(a) of the 26 August 2021 orders.
The wife’s solicitors then received a response from Ms M who indicated:
We will seek instructions (including whether we have instructions to accept service) and revert as soon as possible. Kindly note that our client is currently overseas.
At 4.23 pm on 3 February 2023, the wife’s solicitors served Ms J Leon with the Application in a Proceeding and affidavit in support by email to her address …@.... The wife’s solicitors then received what purported to be an automatic reply from Ms J Leon’s email address indicating that, “This email is not monitored”. In respect of that email address, I note the following evidence:
(a)the correspondence sent by Ms J Leon to the single expert in the proceeding, Ms Q (on behalf of the husband) was sent from the email address …@...; and
(b)Ms J Leon’s communication with W School in respect of the payment of school fees for the parties’ children for Term 4 2022 in September 2022 was also sent from that same email address.
On 3 February 2023, Ms J Leon was also served by mail to her address at AA Street, Suburb BB, Victoria with sealed copies of the Application in a Proceeding and affidavit of the wife filed 1 February 2023. That correspondence referred to the wife’s solicitors unanswered letters to Ms J Leon dated 16 and 27 January 2023.
Between 3 and 6 February 2023, the wife’s solicitors continued to correspond with Ms M who was acting on behalf of Ms J Leon in respect of the conveyance of the K Street property sale. Email correspondence of 3 February 2022 to Ms M of P Legal from the solicitors acting on behalf of the wife proposed that settlement proceed on Monday, 6 February 2023, with all proceeds of sale, including GST, after agent fees and the conveyancing expenses be held by N Legal until 14 February 2023 and pending further order of the Court. The solicitors for the wife noted that such proposal did not prejudice the position of any of the parties, was agreed to between the husband and the wife, and ensured that settlement could take place on 6 February 2023. The solicitors for the wife further noted that, if there was no agreement by Ms J Leon to this course, and settlement was unable to take place on Monday, 6 February 2023, any costs and damages as a result of same would be sought against Ms J Leon personally.
On 6 February 2023, the wife’s solicitors again asked Ms M to:
Please also confirm as a matter of urgency whether you hold instructions to accept service of our client’s application.
The K Street property was due to settle on 6 February 2023. No settlement occurred on that day, and nor did settlement of the K Street property occur in the intervening period between 6 February 2023 and the hearing of the Application in a Proceeding on 14 February 2023.
On 8 February 2023, the wife’s solicitors received an email from Ms M which recorded that her firm did not have instructions to accept service of the wife’s application, and that they acted for Ms J Leon in relation to the removal of her caveat over the K Street property at settlement only.
By way of reply on 8 February 2023, the wife’s solicitors wrote to Ms M as follows:
We note the contents of your email confirming you do not hold instructions to accept service on behalf of [Ms J Leon].
Please confirm whether your instructions from [Ms J Leon] (noting that per your email of 3 February 2023 that she was overseas) have been received from the address at […]@[…] or some other specified address.
Please also confirm when you expect [Ms J Leon] to return from overseas, if she has not already.
We also note that the proceedings relate solely to the issue of the removal of your client’s caveat, and on that basis it will be submitted to her Honour on behalf of our client that [Ms J Leon] is on notice of the application (it being sent to her directly and via your firm) and we will continue to pursue costs against her.
No response was received to that correspondence.
CONCLUSION
This proceeding was undefended. The unchallenged facts as set out by the wife in her affidavit evidence together with the prior orders of the Court support the joinder of Ms J Leon to the Application in a Proceeding. Ms J Leon has lodged a caveat over a property in which the parties both have an interest, whether legal and/or equitable, without the knowledge and consent of the wife, and has failed to remove such caveat to allow for the sale of that property as ordered by the Court (and in circumstances where those orders were well known to Ms J Leon). Damages may flow. Further, whilst Ms J Leon lodged the caveat over the K Street property owned by the husband, with the consent of the husband, it is not obvious on the evidence before the Court that Ms J Leon has an equitable interest in the K Street property of such nature that would support the lodgement of that caveat.
COSTS
As it transpired during the course of the hearing, that Application with respect to the payment of costs was in effect sought on a party and party basis, the quantum claimed being in the sum of $1,895, where such amount equalled and/or was less than the costs provided for as set out in the Rules, Schedules 2 and 3, for the work done. For instance, I note that item 101 of Schedule 3 totalled an amount of $965.77 and that item 204 of Schedule 2 made provision for a solicitor acting as counsel’s fee in a range of $266.27 to $1,247.74. I consider the upper end of that range to be more appropriate in the circumstances of this Application in a Proceeding, being its complexity and time taken. Additionally, other items are applicable in the calculation of these costs and, in my view, the party and party costs if calculated on scale exceeded the claimed amount of $1,895.
When looking to those matters as set out in s 117(2A) of the Family Law Act 1975 (Cth), which are to be considered by the Court, I note Ms J Leon has been wholly unsuccessful. Further, both she and the husband, by their conduct as described in the preceding paragraphs, made the filing of the proceeding by the wife inevitable. Accordingly, the usual order that each party pay their own costs should be departed from, and an order made in terms as sought by the wife.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 23 February 2023
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