Preiss and Preiss

[2018] FamCA 720

FAMILY COURT OF AUSTRALIA

PREISS & PREISS [2018] FamCA 720

FAMILY LAW – PROPERTY – Enforcement – adjournment as husband had not filed material – costs thrown away – interim orders to satisfy part of wife’s entitlement.

Family Law Act 1975 (Cth)

APPLICANT: Ms Preiss

RESPONDENT: Mr Preiss

FILE NUMBER: MLC 10148 of 2014

DATE DELIVERED: 11 September 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 5 September 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Salamanca

SOLICITOR FOR THE APPLICANT: Gadens Lawyers

THE RESPONDENT: In Person

Orders

1. The application of the wife filed 31 July 2018 is adjourned to 10.00am on 21 September 2018 as a one day matter.

2. To the extent that he is so advised, the husband is to file and serve an initiating application seeking also interim orders if he so wishes supported by any affidavit material upon which he intends to rely by no later than 4.00pm on 17 September 2018.

3. That the wife file and serve a formal response and any other material upon which she intends to rely by 4.00pm on 20 September 2018.

4. That by no later than 4.00pm on 17 September 2018, the husband provide to the solicitors for the wife comprehensive details including documents of all shares he has sold since the orders were made by this court in 2017 including where those funds from those sales were deposited.

5. That the husband pay the wife’s costs fixed in the sum of $2740 by no later than 21 September 2018.

6. That from the sale of the 4000 shares to which the husband referred in submissions, he pay to the wife the sum of $80,000 or thereabouts and that he forthwith sell 8000 shares in the said company and make up the difference to a total payment to the wife of $200,000 and that such actions be taken immediately.

7. That the reasons for these orders be published as soon as practicable.

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 Preiss & Preiss 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 MELBOURNE

FILE NUMBER: MLC 10148 of 2014

Ms Preiss

Applicant

And

Mr Preiss

Respondent

REASONS FOR JUDGMENT

1. Final property orders were made between the parties to these proceedings on 18 January 2017.  The application before the court now filed 31 July 2018 by the wife seeks enforcement of those orders.

2. Relevantly, paragraph 11 of the final orders reads as follows:

   11.That the husband (as trustee for the husband and the wife) pursuant to these orders forthwith place the shares held by him in K Limited on the market for sale with a broker agreed between the parties and such shares be sold at the best market price on the day listed for sale and upon the sale, the proceeds be applied as follows:

   (a)      First, to pay all costs, commissions and expenses of the sale;

   (b)Secondly, to set aside in an interest bearing account in the joint names of the parties such agreed sum as the parties may be so advised, to pay any taxes anticipated arising from the sale; and

   (c)Thereafter, to pay the balance to the wife (subject to such sum not otherwise exceeding her entitlement under these orders).

3. It is uncontentious that the wife has not received the total entitlements that she should have under the orders and hence she brings the enforcement application.

4. The husband is no longer represented by lawyers and it is self-evident from what he told the court, he is highly critical of those who represented him during the final hearing.  With respect, his criticisms are of no assistance in the immediate issue.

5. Fundamentally, the husband says that the purpose of the order was for the relevant shares to be sold at the best possible price and in his view that meant he determined if, and when, they were placed on the market.  The second line of paragraph 11 of the orders indicates that all of the shares were to be placed on the market immediately.  His interpretation of the order is that it was not meant to be immediate and he has effectively determined the process thereafter.

6. The husband filed no documentation but came with a prepared statement.  Over muted opposition from counsel for the wife, I read that document.  It now remains on the court file at the request of the husband.  That statement is not evidence nor could it be any more than a submission that does not support any orders.

7. During the hearing, the husband asked on two occasions to be able to have a moment to “consult” with his “consultant”.  Whilst counsel for the wife objected, I could see no apparent difficulty and treated that particular gentleman as a “McKenzie Friend”.  I have warned the husband that whether this gentleman is a consultant or not, he needs to be cautious about the advice that he receives of a legal nature having regard to the matters to which I now turn.

8. In the course of his statements, the husband told the court that he was intending to bring an initiating application.  It was difficult initially to get some sense of what sort of application it would be but in any event this intention formed the foundation for an adjournment application because the husband said that he could file and serve it within two weeks. 

9. It transpires that in late 2017, the wife had what was described as a psychotic episode consequent upon which, the parties’ child has been living permanently with the husband.  There seems to be some complaint about whether or not the wife has been able to access that child but in any event, the husband’s initiating application as proposed, will include parenting orders.  In the course of discussion, it became apparent that the husband intends to apply to vary the property orders.  It was upon that subject that he sought the consultation with his consultant.  I have warned the husband that there are difficulties in varying or setting aside final property orders and that he would do well to get some legal advice. 

10. The wife opposed the adjournment but in my view having regard to what I have just set out, it is important to allow the husband an opportunity to file such an application.  If he fails to bring an application within jurisdiction or one that is doomed to fail, then he faces not only the prospect of a dismissal of that application but also an inability to defend the wife’s extant interlocutory application.

11. The wife’s present interlocutory application sought orders which her counsel conceded were perhaps infelicitously worded and it may be as contemplated by her counsel, that she will propose on the return date to seek orders that she be appointed as trustee for the sale of all of the shares such as to have control of them.  All of that obviously depends upon whether or not the husband can show that he has an arguable case in respect of varying or setting aside the orders.

12. That leads to the question of some interim orders.

13. The wife who had opposed the application for the adjournment indicated that as the reality was that the share proceeds were predominantly to pay her entitlement under the extant property orders, she should at least have $200,000.  The husband was unable to advance any argument why that was not so. 

14. On that basis, I have made orders for the payment to be made in two tranches.

15. The wife then sought costs on the basis that whilst she certainly achieved something during the day, there would have to be a further hearing and therefore the costs were largely thrown away.  There is substance to that argument.  She sought costs of $3300 for counsel’s fees and three hours at the solicitor’s commercial rate. 

16. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that in proceedings under the Act, each party shall bear their own costs unless there are reasons to depart from the principle which justify the court so doing. If the court does contemplate such a departure, it must take into account the matters set out in s 117(2A) of the Act. In this case, the husband had been aware of the existence of the wife’s application for over a month. He maintained that he had been endeavouring to engage in communications to negotiate but the wife’s solicitors had rejected that. That might simply indicate there was nothing to talk about. Nothing in the husband’s submissions indicated he had offered a permanent solution and he is now anticipating bringing an application to set the orders aside or vary them. The lack of response when the application warned the husband that he needed to do something about the matter is in itself a justifying circumstance to depart from the position that each party bear their own costs. That is particularly so when costs are not intended as a punishment but rather as a compensation for the party who has had to engage in proceedings unnecessarily. In this case, the wife has incurred costs unnecessarily by the husband’s refusal to complete the necessary documentation required by the court rules.

17. The husband’s position was that he is a sole parent and been working and doing the best he could.  However, he has been in control of the shares for over 18 months and the wife has still not received her entire entitlement.  To the extent that his position as a single parent came into play, that occurred in December 2017.  He has not made any application to the court in circumstances where even on his argument, the wife’s solicitors refused to engage in any negotiation.

18. Counsel for the wife asserted that there had been negotiations between solicitors and demands had been made for the sale of the shares but they had been unsuccessful.

19. Even if the husband saw some injustice or basis to renegotiate the terms of the orders made in 2017, he has had control of all of the assets and done nothing further about the resolution of the matter. In my view, there are justifying circumstances here to depart from the principles set out in s 117.

20. In contemplating the matters in s 117(2A), the financial circumstances of the parties are that the wife is impecunious according to her counsel and the husband has a unit in Israel not to mention the control of the shares. The husband is in a position to pay costs; the wife is not in a position to fund her own costs. She already owes her lawyers a significant sum from the final hearing.

21. The court is also obliged to take into account legal aid considerations and I am not advised that there is any such issue here.

22. The court is obliged to look at the conduct of the litigant in respect of the proceedings and as I have already observed, the husband has failed to comply with the requirement to file appropriate documents and attended the court ultimately seeking an adjournment.

23. In my view, there is every basis here to make an order for the costs thrown away.

24. Counsel for the wife sought indemnity costs.  In my view the authorities are clear in respect of indemnity costs.  There must be exceptional circumstances to justify such an order.  In this case, whilst counsel for the husband seemed to suggest that the husband was deliberately orchestrating this or in other words was malevolent, nothing I heard indicated that he was anything more than misguided.  If he was taking advice from his consultant as he seemed to be, perhaps that might indicate the misguided nature of what he was doing.  In my view the circumstances here are not unusual albeit they do waste significant time of the court as well as the costs of the wife.  In my view the appropriate order for costs is something on scale and having calculated those I made an order for $2740.

25. The orders are otherwise made as set out in those that were published.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 11 September 2018.

Associate: 

Date:  11 September 2018