MEREDITH & MEREDITH

[2013] FamCA 417

FAMILY COURT OF AUSTRALIA

MEREDITH & MEREDITH [2013] FamCA 417

FAMILY LAW – COSTS – where the wife seeks a costs order against the husband on an indemnity basis – where the wife relies upon the husband’s non-compliance with consent orders made in 2010 - where the consent orders included a provision for implementation by way of the sale of a property – where the wife brought an enforcement application – where it was not clear that the wife’s enforcement application would have been successful – the wife’s application for costs dismissed

Family Law Act 1975 (Cth)

APPLICANT: Ms Meredith

RESPONDENT: Mr Meredith

FILE NUMBER: SYF 2775 of 2005

DATE DELIVERED: 30 May 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 13 December 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Bell

SOLICITOR FOR THE APPLICANT: Clinch Long Letherbarrow

SOLICITOR FOR THE RESPONDENT: Litigant in person

Orders

1. The applicant wife’s application for costs in her Application in a Case filed 3 September 2012 is dismissed.

2. The respondent husband’s application in his Response filed 11 December 2012 is dismissed.

3. The husband be permanently restrained from enforcing any costs order as referred to in paragraph 9 of the husband’s affidavit filed on 11 December 2012.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Meredith & Meredith has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2775 of 2005

Ms Meredith

Applicant

And

Mr Meredith

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. In 2010 the parties consented to orders which required the husband to make certain payments to the wife. The payments were not made. The orders provided for the sale of a property if the payments were not made. The wife brought an enforcement application seeking that she be appointed trustee for the sale of the property. She ultimately did not press the application because the property was sold and she was paid. The wife now seeks she be paid her costs of the enforcement application on an indemnity basis.

2. In the event a cost order is not made against the husband, he offers concessions relating to claims he makes against the wife. 

APPLICATIONS

1. The wife seeks the following:

   1.   That there be an assessment of the Applicant Wife’s costs, and within 7 days of such assessment the Respondent shall pay the costs of the Applicant for the following:-

   a.The proceedings conducted 14 March 2012

   b.The proceedings conducted 11 April 2012

   c.The proceedings conducted 2 May 2012

   d.The proceedings conducted 16 July 2012

   e.The proceedings conducted 13 August 2012

   f.Preparation of the Enforcement Application calculated from 22 November 2011 to 13 August 2012 on an indemnity basis.

   2.   The Respondent pay the Applicant’s costs on an indemnity basis in relation to this Application for costs.

   3.   That the cost awards set out in paragraphs 1 and 2 above be assessed pursuant to the Court Rules or be as agreed.

   4.   That in default of the Respondent’s payment on all sums calculated under Order 3, the Respondent shall pay interest on the costs at the rate referred to in the Family Law Rules, calculated from the due date for payment to the date on which the payment is made. [emphasis in original]

2. The husband seeks the following

   1.   Dismiss all orders that the wife seeks.

   2.   The wife pay to the Husband the overpaid amount of $9666.10 as calculated in annexure “B” of the Husbands [sic] affidavit sworn on 10 December 2012.

   3.   That the wife pay the costs and incidentals of the husband to these proceedings to the value of $10000.00.

DOCUMENTS RELIED UPON

1. The wife relied on:

   5.1.Amended Application in a Case filed 17 January 2012

   5.2.Application in a Case filed 3 September 2012

   5.3.Wife’s affidavit filed 16 January 2012

   5.4.Wife’s affidavit filed 3 September 2012

2. The husband relied on:

   6.1.Response to an Application in a Case filed 1 March 2012

   6.2.Response to an Application in a Case filed 11 December 2012

   6.3.Husband’s affidavit filed 1 March 2012

   6.4.Husband’s affidavit filed 11 December 2012

   6.5.Husband’s financial statement filed 1 March 2012

CHRONOLOGY

1. The parties married in March 1991 and finally separated on 7 October 2002. There are no children of the marriage.

2. The parties initially entered into final consent property orders on 24 December 2002 (“the 2002 orders”).

3. On 25 March 2010, Fowler J made orders (“the 2010 orders”) pursuant to s 79A Family Law Act 1975 (Cth)(“FLA”) by consent setting aside the 2002 orders and providing, inter alia, the husband pay the wife $630,000 in the following manner:

   9.1.$240,000 by 30 January 2010, or upon settlement of the sale of Lot 1, Property B, which ever occurred first (“the first payment”); and

   9.2.$230,000 by 30 June 2010 or upon settlement of sale Lot 2, Property B, which ever occurred first; and

   9.3.$160,000 by 30 June 2011.

4. The 2010 orders had an inbuilt order for enforcement. Order 16 of the 2010 orders provided that if the husband failed to make the three payments to the wife by 30 June 2011, the wife could provide notice to the husband and the husband’s Property B (excluding Lots 1 and 2) (“the property”) would be offered for sale by private treaty.

5. The orders also provided that interest would accrue should the payments not be made. The orders also provided that the wife was not entitled to commence enforcement proceedings until 30 June 2011.

6. Justice Fowler also made a supplementary notation on 25 March 2010 noting that the husband had not made the first payment by 30 January 2010, and that interest had commenced to run on that payment.

7. On 23 April 2010, the husband sold Lot 1, Property B. The parties agreed the wife would receive $50,000 of the first payment and the balance of $190,000 would accrue interest until it had been paid in full.

8. As at 30 June 2011, the wife had only received $50,000.

ENFORCEMENT OF THE 2010 ORDERS

1. On 30 June 2011, the wife sought implementation of order 16 of the 2010 orders. On 12 July 2011, the husband nominated a listing agent.

2. By 28 July 2011, the parties had agreed that the property be listed by private treaty for a listing price of $4,025,000. The property was officially listed for sale on 15 August 2011.

3. Order 17 of the 2010 orders provided that if the property did not sell at private treaty, it would subsequently be listed for auction. The wife and the husband agreed on a reserve for an auction on 3 November 2011 at $3,850,000.

4. I accept the husband “organized the first auction to be brought forward from the time specified in order 17… to avoid a delay that would of [sic] resulted with a clash of the Christmas/New year holidays.”

5. There were no bids at the auction.

6. On 16 January 2012, the wife commenced enforcement proceedings.

7. On 31 January 2012, the wife’s lawyers wrote to the husband in relation to listing the property for a further auction in February 2012 with a lower reserve price (pursuant to Order 18 of the 2010 orders). The husband actioned that by way of writing a letter to the wife’s lawyers on 14 February 2012 to set the auction on 29 March 2013. 

8. On 13 March 2012, the husband received an offer for the sale of Lot 2, Property B in the sum of $3.5 million. That offer was ultimately accepted and contracts were exchanged on 14 May 2012.

9. The wife’s application for enforcement came to court on 14 March 2013.  At that stage, the wife was aware of the offer on Lot 2, Property B as her solicitors had been informed on 13 March 2012. 

10. The settlement of Lot 2, Property B occurred on 23 July 2012. The wife received $701,640.06 which was the full amount to which she was entitled, including interest at the penalty rate provided in the Family Law Rules.

THE WIFE’S COSTS APPLICATION

1. The wife submitted her enforcement application filed 16 January 2012 was necessary because the husband failed to make payments pursuant to the 2010 orders. The wife submitted that the husband’s non-compliance with orders and his conduct throughout the proceedings warrants a costs order against the husband.  

2. I find that the husband did everything necessary under the enforcement mechanisms built into the orders to comply with those orders and although the wife may have had some other complaints about tardiness at other times, essentially there was no guarantee at all that her enforcement application was going to be successful. She ultimately didn’t press the enforcement application given the exchange of contracts for the property took place in May 2012. She was subsequently paid the full amount that she was owed, together with interest.

3. In order to resolve matters once and for all, the husband has indicated that if no costs order is made against him, he is prepared to forego a claim that he makes of $9,666.10 for other monies that he says the wife owes him because of miscalculation of interest and an amount of $2,500 that the husband says the wife owes him as a result of another costs order in the Supreme Court and interest on those monies.

4. I take the husband’s concession into account when considering the wife’s application for a costs order.

5. Section 117(1) FLA provides that both parties should pay their own costs.

6. In relation to enforcement applications, normally a costs order would flow if that enforcement application is justified. In the circumstances of this case, I am not satisfied on balance that the husband’s conduct was such as would have automatically entitled the wife to an order that she be appointed trustee for sale had she pressed that application.

7. Accordingly I dismiss the application.

8. I note given the concession made by the husband, there is no need for the wife to provide any further submissions in relation to the issue as to whether or not interest has been miscalculated by her.

9. The parties have agreed that the husband be permanently restrained from enforcing any costs order as referred to in paragraph 9 of his affidavit filed 11 December 2012.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 30 May 2013.

Associate:   

Date:  30 May 2013