Nagel (deceased) and Nagel & Anor
[2017] FamCA 751
•27 April 2017
FAMILY COURT OF AUSTRALIA
| NAGEL (DECEASED) & NAGEL AND ANOR | [2017] FamCA 751 |
FAMILY LAW – PROPERTY – Application by Legal Personal Representative and Intervener for orders regarding the sale of property and distribution of funds in Australia and internationally – Application for money held in trust by the husband’s solicitors and property held by the husband’s power of attorney to be paid to the applicant’s solicitors – Application granted
Family Law Act 1975 (Cth)
Watson & Watson [2013] FamCAFC 25
| APPLICANT: | Mr Burton (Legal Personal Representative for the late Ms Nagel) |
| FIRST RESPONDENT: | Mr Nagel |
| INTERVENER: | Ms Curtin |
| FILE NUMBER: | HBC | 796 | of | 2014 |
| DATE DELIVERED: | 27 April 2017 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 27 April 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Lewinski |
| SOLICITOR FOR THE APPLICANT: | Butler McIntyre & Butler |
| COUNSEL FOR THE RESPONDENT: | Mr Ayliffe SC |
| SOLICITOR FOR THE RESPONDENT: | James McConvill & Associates |
| COUNSEL FOR THE INTERVENOR: | Mr Gunson SC |
| SOLICITOR FOR THE INTERVENOR: | Phillips Taglieri |
Orders
The applicant and respondent do all such acts and things and sign all such documents as may be required to forthwith sell:-
a.with an agent to be appointed by the President, for the time being, of the Real Estate Institute of New Zealand (or such similar body if that institution is not for any reason able to appoint an agent) at the request of the applicant’s solicitors;
b.at a price not less than that ascertained by a valuation to be obtained from a registered valuer by the applicant’s solicitors; and
c.on such reasonable sale terms as approved by the applicant’s and respondent’s solicitors
the property situated at E Street, Town G in New Zealand (“the Property”) being the whole of the land more particularly described as Lot 1 Deposited Plan ….
Following settlement of the property the proceeds of sale shall be allocated as follows:-
a.firstly, to pay all costs, commissions and expenses of the sale including valuation fee and fee to the President, for the time being, of the Real Estate Institute of New Zealand or such similar body;
b.secondly, to discharge any registered encumbrances affecting the Property; and
c.thirdly, the balance of the funds are to be repatriated to Australia to the applicant’s solicitors (Butler McIntyre & Butler) and deposited by a representative of that firm with L Group in an interest bearing account in the names of the applicant and the respondent, and such funds are not to be released unless agreed or as ordered by this Honourable Court.
Within seven (7) days of the date of this order any money held in trust for either the respondent or the applicant or both of them by Simmons Wolfhagen be paid to the applicant’s solicitors (Butler McIntyre & Butler) and deposited by a representative of that firm into an interest bearing account with L Group in the names of the applicant and the respondent and such funds are not to be released unless agreed or ordered by this Honourable Court.
Any money received by Butler McIntyre & Butler (being money repatriated from the European Union pursuant to Order of this Honourable Court made on the 13 October 2016) be deposited by a representative of Butler McIntyre & Butler into the interest bearing account referred to in Order 3 herein and shall not be released unless agreed or ordered by this Honourable Court.
Within fourteen (14) days of the date of this order the European gold coins held by Mr S be surrendered to the solicitor for the applicant (Butler McIntyre & Butler) who shall store them in a safe place, including any bank safety deposit box that might be arranged by a representative of Butler McIntyre & Butler, on trust for the applicant and the respondent.
Pursuant to s 106A of the Family Law Act 1975 (Cth), the Registrar of the Family Court of Australia at Hobart is hereby appointed to execute all deeds and documents in the name of the respondent and do all acts and things necessary to give validity and operation to all such deeds and documents so as to effect the implementation of the terms of this order.
Each party have liberty to apply upon the giving seven (7) days notice to the court and to the other party.
The response filed on behalf of the respondent in court on 6 April 2017 is adjourned sine die.
Leave be given for any of the parties to these proceedings to provide copies of documents, transcripts or orders of this Court or the Federal Circuit Court in relation to any complaint that such party shall make to either the Tasmanian or Victorian Legal Regulators.
Costs of all parties be reserved.
IT IS DIRECTED
A copy of the reasons for these orders be taken out and placed on the court file.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Nagel (Deceased) & Nagel and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: HBC 796 of 2014
| Mr Burton As Legal Personal Representative for the Late Ms Nagel |
Applicant
And
| Mr Nagel |
First Respondent
And
| Ms Curtin |
Intervener
EX TEMPORE REASONS FOR JUDGMENT
These are proceedings between Mr Burton as the legal personal representative of the estate of Ms Nagel (‘the legal personal representative’) and ‘the applicant’ respectively’) of the one part, Mr Nagel (‘the husband’) of the other part and Ms Curtin an intervener (‘the intervener’). The proceedings are of a fundamental nature, property proceedings arising out of the relationship between the husband and the applicant. The applications before me fall into a number of areas. First, there is the application made by the intervener and the applicant for orders regarding the sale of property in New Zealand, money held by Simmons Wolfhagen solicitors or under their control, moneys in Country Y, some gold coins held by Dr S, the husband’s Power of Attorney, and some general orders.
I will deal briefly with those to start with. There is no issue that orders should be made substantially as set out in Exhibit A1 in terms of orders 1,2, 3 and 4. There is opposition to order 5 and, presumably, 6 in relation to the gold coins and the appointment of a registrar to sign documents. I have adopted most of the recommendations or the submissions of senior counsel for the respondent in respect of those orders, but I reject his submissions in relation to the gold coins and I will be ordering that the gold coins are placed in the care of the solicitors for the legal personal representative who in turn can have them placed in a secure place such as a bank.
Accordingly, in relation to the application in a case of the intervener and the legal personal representative, I make orders 1, 2, 3, 4, 5, 6 and 7 of the Exhibit A1 and direct that the solicitors for the legal personal representative forward to my associate within one business day in a form of that order subject to the following: Order 1(c) shall be varied to provide on such reasonable sale terms as are as approved by the applicant and respondent’s solicitors. Order 2 will be amended in terms of 2(b) to provide for the discharge of any registered encumbrance.
Order 4 is amended by providing on the second last line, a reference to order 3 and noting that the Country Yn money is held in trust for both the legal personal representative and the respondent, and order 5 will provide that the Country Y gold coins held by Dr S to be surrendered to the solicitors for the legal personal representatives who shall have them placed in a safe place on trust for both the legal personal representative and the respondent. Such safe place may include in a safe deposit box of a bank and the liberty to apply provision will operate on the giving of seven days notice by either one or other of the three parties.
Today, Mr Gunson, senior counsel, represented the intervener. Mr Lewinski represented the legal personal representative and Mr Ayliffe, senior counsel, represented the respondent. Mr Moon appeared in a watching brief for the solicitors for the respondent and I did not call upon him to make submissions given that there was no particular application against his clients in this part of the matter.
On a reading of the transcript it could have been concluded there was some criticism of Mr Ayliffe, senior counsel. I have indicated, and so has Mr Gunson of senior counsel, that there was no criticism of him and during the course of the hearing. Such was Mr Ayliffe’s concern, that he arranged for Mr Reid, senior counsel, to object and I indicated to Mr Reid, senior counsel, and Mr Ayliffe, senior counsel, and confirmed with Mr Gunson, senior counse,l that nothing in these reasons should be taken as being a criticism of Mr Ayliffe.
The application which has caused such consternation is that contained in the response filed on behalf of the respondent in court on 6 April. In particular, Mr Ayliffe, senior counsel, on behalf of the respondent was seeking the release or the availability of up to $75,000 to enable the respondent to brief counsel and pay a solicitor for a hearing which is listed in early May in the Supreme Court of Tasmania arising out the circumstances to which I later refer. The respondent was also seeking release of funds or the availability of funds to enable the provision of legal assistance to the respondent for the hearing of property proceedings in this Court later this year where directions have been made for trial.
The background to this matter is this: the wife was born in 1977 and if she were alive today would have been aged 39 years. The respondent was born in 1942. He is aged 75.
The parties married in 1997 and separated in September 2014. There are no children of that marriage, although there are children of a previous relationship of the respondent. Proceedings were commenced in the Federal Circuit Court on 27 October 2014 and on 17 November 2014 certain orders were made restraining the respondent from “selling, encumbering or any way dealing with the following assets:
(a)the real property at Town M in Tasmania;
(b)the Timber Supply; and
(c)any bank account in the name or under the control of the husband.
That order remains in force today.
The husband, it is agreed, has assets in Country Y, in New Zealand and in Australia which have a value of somewhere between $2 million and $2.5 million, the parties having been in a relationship of some just under 17 years and the proceedings were tracking along for hearing in the Federal Circuit Court.
In 2015 the applicant was killed by the respondent. Some weeks ago the respondent was convicted after a defended hearing of her murder. At the time that the applicant was killed she had in the car with the intervener who suffered a significant injury as a result of a gunshot to her hand. The intervener subsequently sought to become a party in these proceedings, given that she has proceedings on foot in the Supreme Court of Tasmania for damages, including exemplary damages. It is unclear as to how much those damages will amount.
It is likely to be more than $500,000, according to senior counsel, and is likely to be less than $3.5 million. That is the range which is involved. Those proceedings were put on hold pending the outcome of the criminal trial and are now listed for hearing before an acting judge of the Tasmanian Supreme Court in May over a period of five days. I accept the submissions by senior counsel for the respondent that these are likely to be complex proceedings.
The proceedings in the Federal Circuit Court were transferred to the Family Court and orders have been made by this Court, including orders for discovery and orders to secure property including the orders that I have made today. During the course of these proceedings there have been orders enabling funds to be released to the respondent to ensure that he could be properly represented on the criminal trial. An affidavit of Mr Kovacic filed 21April 2017 was relied upon. The respondent relied upon an affidavit of his solicitor, Dr McConvill, which was sworn or filed in early April, but has been reconstituted in an affidavit sworn 24 April and filed 27 April. There is also an affidavit by Dr McConvill sworn 20 April and filed 21 April. Before the Court is an affidavit by Kristi Foale who represented the respondent at an earlier time and that affidavit was sworn 20 April and filed 21 April. There is also an affidavit of Mr Kendell.
It seems not in issue that when the matter came before the Chief Justice of the Supreme Court on 8 March 2017 it was indicated that the intervener was amenable to moneys being made available to the respondent for the purpose of the civil trial and that the solicitors for the legal personal representative had not been obstructionist in the terms of the release of the funds.
What then happened was that Dr S on behalf of the respondent and presumably with the respondent’s consent, having regard to the telephone conversations set out in the affidavits, instructed James McConvill & Associates to act for him or to act for the respondent in relation to the civil proceedings.
In his affidavit of 21 April 2017 Dr McConvill sets out in a disclosure statement that he anticipated the costs of the proceedings to be about $75,000 to prepare court forms for appearance, to review the file, to prepare pleadings and defence, to prepare a brief for counsel, to prepare the trial case books and to appear in court on behalf of the respondent on 27, 28 and 29 March 2017, although I note that that did not include an allowance for counsel’s fees in that proposed bill.
What in fact happened was that instructions were taken apparently on 25 March 2017 and three invoices were issued in respect of three days work: the first on 25 March for some $28,209; the second on 26 March of some $20,322; and the third on 28 March of some $26,468.50 which added up to some approximately $75,000. Money was withdrawn from an account which was, in my view, clearly the subject of the order made by her Honour, Judge Baker, and in breach of that order, although there is no formal finding of contempt. It is clear that this money ought to only have been released with the approval of this Court or a court exercising jurisdiction under the Family Law Act 1975 (Cth).
I make no finding either positively or negatively against Dr McConvill, although I must say that the amount of his accounts and the amount of work charged over those three days are deeply troubling and it will be something that will no doubt attract the attention of others in due course. Secondly, it is clear from the evidence before me of Kristie Foale that a power of attorney was drafted on 29 May 2015 and executed on 1 June 2015.
There is some evidence that on 22 July 2016 Dr S may have sought or may have received some information in relation to the consequence of breaching injunctive orders. What is absolutely clear, given the history of these proceedings, is that the respondent well knew that he had to seek consent of this court for release of funds. The affidavit of Mr Kovacic is particularly telling.
He says that on 1 March he had a telephone discussion with Dr S and advised Dr S as to what needed to be done for securing funds for further legal representation. Dr S was told that funds to pay lawyers would need to be released by order of the Family Court. Further, he was told that time was of the essence and urgent steps should be taken to make the application to the Family Court to release the funds.
What then happened was that Dr S instructed James McConvill & Associates and between 27 March and 31 March 2017, the sum of $75,000 was paid into the general account of Dr McConvill. Mr Kendall deposes that on 27 March 2017, he sent an email to James McConvill & Associates via email and attached to it a copy of the order made on 17 November 2014. Senior counsel for the intervener provided to me, the decision of the Full Court in Watson & Watson [2013] FamCAFC 25 delivered on 7 March. I do not intend to repeat the submissions made by senior counsel however, I will set out paragraphs 25, 26, 27, 30, 32 and 36.
25.In Fahmi and Fahmi (1995) FLC 92-637 the Full Court (Ellis, Finn and Brown JJ) considered the question of whether there is any rule which prevents a Court exercising jurisdiction under the Act from hearing, or which confers on the Court a discretion not to hear, an application by a party who is in breach or contempt of earlier orders. Specifically, in that case the question was as to the hearing of an application for dissolution of marriage brought by a husband who had not complied with previous orders for payment of sums by way of child maintenance and property settlement, but the principles identified by the Full Court obviously have general application when a Court is exercising jurisdiction under the Act.
26.We do not read or interpret the subsequent first instance ex tempore decision of Warnick J in Sparkes & Eberle [2000] FamCA 2146, to which primary reference was made in the proceedings below, and has also been referred to in this appeal, as representing any departure from, or expansion of, the principles identified by the Full Court in Fahmi. However, for reasons which follow we consider that, with respect to his Honour, his specific reference to the Full Court’s discussion in Fahmi at p 82,425 of the judgment of Romer LJ in Hadkinson v Hadkinson [1952] P. 285 may, if applied generally in circumstances materially different to those before Warnick J, be somewhat apt to mislead (we note that there is a typographical error in Warnick J’s judgment referring to Romer LJ as “Reimer LJ” and this error is repeated in the judgment of Coates FM).
27.In Fahmi, the Full Court carefully traced, by reference to the authorities examined, the history of the rule at common law expressed as “that a party in contempt will not be heard”. The Full Court referenced authorities demonstrating that the scope of the rule’s application from its origin came to be restricted over time. From the position that a person in contempt would not be heard in that or any other proceeding, except if the Court “of special grace suspend the contempt”, importantly the rule came to be restricted by the Court confining its operation to contempt in the same cause or in the same proceedings as that in which the application was made. Further, the Full Court identified the progression from the rule being regarded as a strict rule subject only to specific exceptions to, at least in some jurisdictions, a discretionary rule. That is, as a rule giving rise to a discretion not to hear the party in contempt in the same cause or in the same proceedings as that in which the application was made.
…
30.After discussion of further authorities, the Full Court noted at p 82,427:
In light of the above authorities and texts we are satisfied that the rule that a party in contempt may not be heard is a discretionary rule and is limited, at least in its modern operation, to circumstances in which the person in contempt makes an application in the same proceedings or in the same cause in which the contempt has been committed. …
…
32.It can be seen that the Full Court ultimately concluded in favour of the discretionary approach of Denning LJ in Hadkinson, as distinct from the approach of Romer LJ in holding that there was a strict rule against hearing a person in contempt, subject only to certain limited exceptions.
…
36.From the detailed discussion by the Full Court in Fahmi of the various authorities referred to, and the express or implicit acceptance of particular statements of principle or approach, the following propositions emerge as to the discretionary rule that a party in a contempt may not be heard when a court is exercising jurisdiction under the Act:
(a)Procedural justice dictates that the fact that a party has disobeyed an order of the Court is not of itself a bar to the party being heard on a subsequent application brought by that party;
(b)In courts exercising jurisdiction under the Act, the rule, when it operates, gives rise to a discretion not to permit a party being heard. That is, unlike other jurisdictions such as New South Wales and South Australia where the rule is to be applied as a strict rule subject to limited exceptions, in this jurisdiction the discretionary approach applies (as to New South Wales see Young J in Young v Jackman (1986) 7 NSWLR 97; 11 Fam LR 331 at 335 referring to the Court of Appeal decision in Permewan Wright Consolidated Pty Ltd v Attorney General (unreported, Court of Appeal, Hutley JA, 11 December 1978); and as to South Australia see per Bray CJ (with whom Mitchell and Jacobs JJ agreed) in Short v Short (1973) 7 SASR 1 at 11);
(c)The rule applies where facts establish disobedience of an order, even though there has been no application for the party to be dealt with for contravention or contempt, and no determination has been made that the party is guilty of a contravention or contempt;
(d)The Court may, in its discretion, refuse to hear a party in breach of an order only if that party makes an application in the same proceedings or in the same cause in which the disobedience of an order has occurred. If the application by that party is not in the same proceedings or in the same cause of action in which the contempt has been committed, no question as to the party in alleged contempt being heard arises;
(e)The question of whether the application is in the same proceeding or in the same cause is crucial and is determined by reference to the structure and content of the definition of “matrimonial cause” in the Act, the relevant parts of the Act and the Family Law Rules 2004 (Cth) that apply and, ultimately whether the proceedings may be identified as distinct because the nature of the relief claimed in them respectively is determinative;
(f)No question as to a party being heard arises:
(i) if that party is defending, rather than bringing, an application;
(ii) on an appeal by the party to set aside the order on which the alleged contempt is founded;
(iii) where a party applies for the purpose of purging the party’s contempt;
(iv) where a party against whom contempt is alleged seeks to be heard on a submission that, having regard to the true meaning and intent of the order which the party is said to have disobeyed, the party’s actions did not constitute a breach of it, or having regard to all the circumstances, the party ought not to be treated as being in contempt.
(g)Where the discretion arises its exercise depends upon the balance between that party’s right to procedural justice, including the right to be heard, and public policy considerations. Those public policy considerations include that if the party’s disobedience is such that, so long as it continues, it impedes the course of justice in the cause by making it more difficult for the Court to ascertain the truth, or to enforce the orders which it may make, or the party’s further application constitutes an abuse of process in the circumstances, then the Court is unlikely to exercise its discretion in favour of hearing the party or entertaining the application of the party.
I accept that procedural justice dictates that the fact that a party has disobeyed an order of the Court is not of itself a bar to a party being heard on a subsequent application bought by that party. However, the Court does have a discretion not to hear the party in the circumstances of the case. It is clear as set out in paragraph 36(c) by the Full Court in Watson (supra) and I quote:-
The rule applies where facts establish disobedience of an order, even though there has been no application for the party to be dealt with for contravention or contempt, and no determination has been made that the party is guilty of a contravention or contempt;
This is such a case. There is no finding of a contravention or contempt. However, it is clear on the face of the facts that there has been a breach of the orders. The application being made by the respondent is an application in this Court for a partial property settlement to enable him to meet costs of the civil proceedings in the Supreme Court and either a partial property settlement or a costs application in relation to the proceedings to be heard in this Court. I am told by senior counsel for the respondent that the fees will amount to some $70,000 in solicitor’s costs and barrister’s fees for the hearing of the civil proceedings in the Supreme Court. They do not require the funds now and they are happy for those funds to be, as it were, adjusted by a registrar of this Court once they had been incurred.
Senior counsel for the respondent is content with that. In terms of the solicitor for the respondent, I do not know what his view is. He was represented today. I did call on him and would not call on his counsel in relation to that. However, I do note that that solicitor was sought yesterday to appear by telephone today. He was contacted by this Court early this morning, but was not available to take the call on any of the numbers provided.
I accept that there are questions of procedural fairness. I accept that the claim, if not properly defended, may end up decimating any money that is available to the respondent for other circumstances and may militate against moneys available to the legal personal representative on behalf of the estate of the wife. In that respect, I note that the application not to be heard is strongly supported by counsel for the legal personal representative.
There is evidence, and I have heard it myself from time to time in this Court, that the respondent suffers from hearing defects and has been described as being confused and is at a relatively advanced age. I accept that the proceedings are complex. I do not accept that this is a question of character, whether people are of good character or bad character should not impact upon their right to appear or argue cases. But what is the fundamental problem in this case from the respondent’s point of view is that he sought money or he wanted money to fund his defence of the civil proceedings.
He took the money in clear breach of orders, of which I am satisfied he was well aware given the history of this matter and that money was dissipated over three days in circumstances where, as I said, I am deeply troubled by those matters. This matter cannot be dealt with by way of the normal penalties with regard to contempt or contravention. It is almost inevitable that the respondent will spend the rest of his life in prison unless there is a successful appeal, and I do not know and it is not before me whether an appeal has been lodged and I know that he has not been sentenced, but it is likely given his age and the circumstances that he will spend a considerable part of his life, if not the whole of his life, in prison.
So jail for him is not in any way a fearful thing. That is where he is going to be in any event. This Court has to put a stake in the ground and say that if people want funds, they cannot simply grab it, spend it all, whether spent wisely or badly, and then come back and say, “More, please.” There may well be funds available to the respondent at the end of this hearing. I do not know. There may not be any funds available to him at the end of the hearing. The respondent may be able to seek a taxation or assessment of costs in relation to the charges that were made of him and I do not know whether that will be successful or unsuccessful.
If the whole of the $75,000 that he sought for hearing was dissipated in three days, it may or may not give rise to some claims against the solicitor and I make no indication as to whether there ought or ought not to be any such claim. What is clear, however is this: orders were made in this Court. It was appropriate for an application to come to this Court for release of those funds in an orderly and sensible way and I do not in those circumstances intend to hear an application or hear this application by the respondent in respect of the partial property application or cost application. As such, the response filed on behalf of the respondent in court on 6 April 2017, is adjourned sine die. I certify for senior counsel.
I give leave for any of the parties to these proceedings to provide copies of documents, transcripts or orders of this court or of the Federal Circuit Court in relation to any complaint that such party shall make to either the Tasmanian or Victorian legal regulators.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 27 April 2017.
Associate:
Date: 26 July 2017
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