Neville and Neville

[2009] FamCA 1211

FAMILY COURT OF AUSTRALIA

NEVILLE & NEVILLE [2009] FamCA 1211

FAMILY LAW – APPLICATION FOR REVIEW – leave granted for application to be heard out of time – global approach to administration of justice – whether orders fixing substantive hearing dates should be discharged – issue of possible late receipt of expert’s report – application dismissed
FAMILY LAW – COSTS – indemnity costs – where one party wholly unsuccessful on the substantive issue – costs ordered on party/party basis

Penfold and Penfold (1980) FLC 90-800
In the Marriage of Tormsen (1993) FLC 92-392
Kohan and Kohan (1993) FLC 92-340

Family Law Act 1975 (Cth) ss 75(2), 79, 117

APPLICANT: Ms Neville

RESPONDENT: Mr Neville

FILE NUMBER: PAC 3369 of 2008

DATE DELIVERED: 27 November 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Honourable Justice Rose

HEARING DATE: 27 November 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:	J Heazlewood
SOLICITOR FOR THE APPLICANT:	Branston Neville, Solicitors
SOLICITOR FOR THE RESPONDENT:	Matthews Folbigg, Solicitors

Orders

1. That the application for leave to bring an Application in a Case filed 26 November 2009 is granted.

2. That the application for a review of the Orders made by Judicial Registrar Johnston on 21 August 2009 and 21 October 2009 is dismissed.

3. That the wife file and serve her affidavits including that of her proposed witness and an updated financial statement on or before 4.00 pm 4 December 2009.

4. That each of the parties cause their solicitors to provide to the other written notice of all documents by category or by specific reference as well as information which it is contended were not disclosed in accordance with the Rules on or before 4.00 pm 4 December 2009.

5. That each of the parties make available for inspection by the other of all documents required to be disclosed pursuant to the last-mentioned order and provide all further information if any that is sought on or before 11 December 2009 and facilitate inspection of such documents to take place in accordance with the Rules by 5.00 pm 11 December 2009.

6. Liberty to apply to vary all or any of the directions made this day and for any application to call an additional expert witness in accordance with the Rules upon three days’ written notice being given.

7. That the wife pay the husband’s costs of and incidental to her Application in a Case filed 26 November 2009 in the sum of $1,165.00.

8. That the terms of payment be fixed by the Judicial Registrar upon his determination of the substantive property settlement proceedings.

NOTATIONS:

(A)The current orders make provision for filing and service of their case outline document and that remains in force.

IT IS NOTED that publication of this judgment under the pseudonym Neville & Neville is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER:  PAC3369 of 2008

MS NEVILLE

Applicant

And

MR NEVILLE

Respondent

REASONS FOR JUDGMENT

Introduction

1. The proceedings before me are instituted by the wife’s Application in a Case filed 26 November 2009 and supported by an affidavit of her solicitor, Ken Neville (no relation) sworn 19 November 2009 and filed 26 November 2009.

2. The application seeks first of all, that leave be granted for it to be heard, notwithstanding that it is out of time.  Secondly, that on the assumption that it will be heard, albeit out of time, that orders fixing the substantive property settlement proceedings for 17 and 18 December 2009 be discharged.  In addition, certain other orders made on 21 October 2009 be discharged.

3. In relation to the latter, which appears in paragraph [6] of the application, counsel for the wife informed me that that paragraph is no longer pressed.

Issues for determination

1. The first issue which I must determine is whether or not leave should be granted to the wife to proceed with her application to review the Orders made by Judicial Registrar Johnston on 21 August 2009 in relation to the dates fixed for the substantive hearing.

2. I have reluctantly determined that leave should be granted.

3. I do so on the basis of the affidavit of the wife’s solicitor, which impressed me as being frank and straightforward. My only misgiving is that it does not seek to come to grips with one of the issues of preparation, which is not hindered by concerns in relation to valuation, and that is the affidavit evidence of the wife setting out her case in relation to contributions pursuant to s.79 of the Family Law Act 1975 (“Act”) and relevant matters pursuant to s.75(2).

4. Counsel for the wife quite properly conceded that the affidavit does not directly deal with that matter.  However, he informed me that a draft of the wife’s affidavit had been prepared, although further work needs to be carried out to complete that draft document with a view to it being able to be filed and served by 4.00 pm on 4 December 2009 in the event that leave to do so is granted.

5. The approach that I have taken in granting leave to proceed with the application for review is due to my review of the relevant authorities which emphasise the need to meet the administration of justice in a global sense, having regard to relevant matters as set forth in the Full Court judgment in In the Marriage of Tormsen.[1]

   [1](1993) FLC 92-392 at [80,017]

6. There has been explanation for the delay, which is arguably adequate.  There are substantial issues that need to be dealt with, and in my view there is no prejudice to the husband in granting leave to proceed out of time.

7. I will now proceed to deal with the application so far as the review of the relevant orders made on 21 August 2009 is concerned.

8. Counsel for the wife has made submissions on all matters that are relevant in terms of his instructions, regarding the obstacles which lie in the way of completing preparation for the hearing in a reasonable time.  It seems that lying at the crux of the difficulties, which he outlined, are the instructions that have been given on potentially disputed matters of valuation of real estate and the prospective late receipt of the business valuation from the single expert, Mr P, which may not be received, according to Mr P, until 16 December 2009.  In the event that occurred, it potentially creates substantial problems so far as the matter proceedings on 17 December 2009.

9. In my view, that is the only matter of substance which can be relied upon in the application which is now before me.

10. The solicitor for the husband opposes the discharge of the orders which have fixed the dates for hearing of the substantive proceedings. The basis for that opposition is represented by a number of matters. They include the intense litigation between the parties which has taken place now for approximately 18 months commencing from orders that were made by consent in relation to property settlement and parenting issues on 24 July 2008; a subsequent application made by the husband for orders pursuant to s.79A; and orders ultimately being made on 1 June 2009 which, by consent, discharged the final orders inferentially dealing with property settlement only made on 24 July 2008.

11. There have been a number of applications for interim orders of an injunctive nature as well as for spousal maintenance, appointment and payment of fees of two single experts, a Mareva injunction, various case management court events, as well as interim costs and interim property settlement.

12. I accept that as a result of the issues that needed to be dealt with in the range of that litigation, each of the parties has incurred substantial legal costs.  I was informed by the solicitor for the husband that he has experienced severe financial problems due to the impact of the global financial crisis so far as the motor vehicle industry is concerned, given that he has been a self‑employed person in the car industry.  The husband has had to move to being employed by others and is now seeking to re‑establish a business in that industry.  It is not suggested that those instructions did not have any foundation.

13. I am further informed by the solicitor for the husband that he has complied with the orders for filing and service of his affidavit material and that the only possible updating evidence may relate to a change of financial circumstances that have occurred, if at all, since the filing and service of his financial statement on 19 October 2009.  Consequently, subject to preparation for the hearing, including any conference or conferences with counsel and perhaps inspection of documents, the husband is ready to proceed.

14. The solicitor for the husband further advised the Court that he understands it is possible that depending upon the content of Mr P’s valuation report, an application for adjournment of the substantive hearing may be made and may be successfully made.  He also understands, so I am told, that the substantive hearing before a Judicial Registrar carries with it the potential for an application for review which, if made, would result in there being a new or fresh hearing unrestrained by the principles for appellate review that apply following an appeal from orders made by a single Judge.

15. One of the interim orders made on 21 October 2009 relates to the sale by the wife of her property at G.  An issue in the proceedings is whether or not that real estate represents the only significant equity that the parties have in property.  That is a matter which may need to be ventilated during a substantive hearing if the parties do not reach an overall compromise in the meantime.

16. It follows, therefore, that an order which would result in vacating of the hearing dates may potentially result in further costs being incurred by both parties by having to be prepared for a later hearing, not to mention further interim hearings which, having regard to the history of this matter, represents a reasonable prospect.

Conclusion

1. I have considered the submissions made by counsel for the wife.

2. In my view, there was only one matter of real substance which may have influenced me to make the orders as sought, and that is the potentially late receipt of the business valuation of Mr P.  Whilst it potentially does create problems in terms of preparation and instructions to deal with such issues of contention, if any, that arise in his report, it is also possible, given that he is the agreed single expert, that his report will not raise issues of controversy.

3. In any event, should both or either of the parties be prejudiced by the late receipt of Mr P’s report then an application for an adjournment can be made to the Judicial Registrar, and depending on the merits of the application, may be successful.

4. On the other hand, Mr P’s report may not only complete the schedule of properties of the parties, but it could advance the platform for an overall settlement between them. It follows that there are advantages and disadvantages that might flow from the late arrival of Mr P’s report.

5. Consequently, I have concluded that that issue is not sufficient to enable the wife’s application to succeed.

6. I have also taken into account that according to the wife’s counsel, her affidavit material, which will comprise an affidavit sworn by herself, an updated financial statement and an affidavit of a witness being a former employee of the husband, can be filed and served by 4.00 pm 4 December 2009.  That will allow sufficient time for instructions to be obtained by the husband’s solicitor in relation to that affidavit material and consequently will not be prejudicial to his case or, to the wife’s case, if such an extension of time is granted.

7. An issue apparently is still alive as to whether or not there has been full disclosure of documents and information by each party with respect to the issues for determination in the proceedings.  I will make orders which will ensure that those matters are appropriately attended to by the parties and their legal representatives.

8. Consequently, the application for a review of the Orders made by Judicial Registrar Johnston on 21 August 2009 and 21 October 2009 is dismissed.

Costs

1. An oral application for costs was made on behalf of the husband.

2. The submissions reflecting the basis upon which the discretion should be exercised are that this application came before me on very short notice and the wife was wholly unsuccessful.

3. On that basis, an order is sought for indemnity costs in the sum of $2,212.00.

4. In response to my raising the matter with the solicitor for the husband, I was informed that on a party/party basis the quantum of costs sought is $1,165.00.

5. Counsel for the wife, whilst not consenting to an order for costs, submitted that any order for costs should be on a party/party basis.  His client was at least successful on the issue of an extension of time being granted, and that her financial circumstances are such that potentially the only source for payment of costs will be from the net proceeds of sale of her property, being a property which is yet to be sold.

6. I raised with counsel the possibility that if an order for costs was made, then the terms for payment could be fixed by the Judicial Registrar who is due to hear the substantive proceedings.  That course was not opposed.

7. I have determined that there will be an order for costs in favour of the husband for the following reasons.

8. Section 117(1) of the Act provides that as a general principle each party bears his or her own costs in this jurisdiction. However, the High Court has made it clear in Penfold and Penfold[2] that the Court has a wide discretion to make an order for costs pursuant to s.117(2) should there be a circumstance which may justify such an order being made.

   [2] (1980) FLC 90-800.

9. I have concluded that such a circumstance has been established as the wife was wholly unsuccessful in relation to her application for an order that the dates fixed for hearing of the substantive proceedings be discharged.

10. I have taken into account, pursuant to s.117(2A), that the wife has been wholly unsuccessful on the substantive issue. The wife was successful in relation to her application for an extension of time to make the application for review. I have limited information before me in relation to the financial circumstances of each of the parties. However, the tenor of the submissions made on their behalf satisfies me that each of the parties has been for some time under considerable financial strain and that is a factor which continues to the present time.

11. I also accept the submissions made by counsel for the wife, uncontested by the solicitor for the husband, that the wife’s only significant property which may be the source for payment of costs is the net proceeds of sale of her property yet to be sold.

12. It is well established that an order for indemnity costs should only be made in a rare case, where such a case is regarded as being out of the ordinary.[3]  I propose to follow that approach.

    [3] Kohan and Kohan (1993) FLC 92-340.

13. There were matters of substance raised on behalf of the wife so far as the potential late receipt of the report from Mr P.  Consequently, her application was not without merit.  However, it proved to be unsuccessful in all respects.

14. I have provided an indulgence to the wife in terms of a further extension of time to file and serve her affidavit material.

15. For those reasons, there will be an order for costs in favour of the husband on a party/party basis on terms of payment to be fixed by the Judicial Registrar on the determination of the substantive property settlement proceedings.

I certify that the preceding forty two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose

Associate: 

Date:  11 December 2009