Sommer & Sommer
[2021] FedCFamC1F 37
•13 September 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Sommer & Sommer [2021] FedCFamC1F 37
File number(s): SYC 2639 of 2016 Judgment of: HENDERSON J Date of judgment: 13 September 2021 Catchwords: FAMILY LAW – COSTS – Costs arising from a final application – Where the second and third respondents to the substantive application seek the wife pay their costs on an indemnity basis – Where the husband seeks the wife pay his costs on an indemnity basis from a particular date – Where the conduct of the wife throughout the course of the litigation warrants the Court departing from the usual course – Where multiple offers of settlement made – Order for indemnity costs of the second and third respondents – Order for the husband’s costs in a fixed sum
FAMILY LAW – PRACTICE AND PROCEDURE – Solicitor’s lien – Where the wife’s former solicitors claim a lien over unpaid legal fees – Consideration of relevant principles – No lien established
FAMILY LAW – PRACTICE AND PROCEDURE – Slip Rule – Where application to amend the sum referred to in Order 6(a)(i) and (e) of final orders granted under rule 10.14(b) and 10.13(h) – Question of whether pursuant to rule 10.13(h) and/or 10.14(b) the slip rule applies in respect of paragraph 170(m) of the final judgment and Order 6(a)(i) stood over for submissions
Legislation: Family Law Act 1975 (Cth) s 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 rr 12.17(1)(a), 10.13, 10.14
Cases cited: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Firth v Centrelink (2002) 55 NSWLR 451
Jackson v Richards (2005) NSWSC 630
J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2) [1993] FCA 70
Kohan & Kohan (1993) FLC 92-340
Leamey v Heath [2001] NSWSC 1095 (Campbell J, 22 November 2001, unreported)
Marsh & Marsh [2014] FamCA 361
Moorcroft & Moorcroft [2017] FamCAFC 147
Munday v Bowman (1997) FLC 92-784
Nada & Nettle (Costs) (2014) FLC 93-612
Penfold v Penfold (1980) 144 CLR 311
Phillips & Hansford (2020) FLC 93-941
Rankin & Rankin (No. 3) [2019] FamCAFC 133
Sfakianakis & Sfakianakis (2019) Fam LR 419
Smith & Fields (third party costs) [2013] FamCA 505
Vadisanis & Vadisanis and Anor (2015) FLC 93-671
Worth & Worth (No. 2) (2019) FLC 93-910
Division: Division 1 First Instance Number of paragraphs: 146 Date of last submission/s: 6 July 2021 Date of hearing: 29 March 2021 Place: Sydney Solicitor for the First and Second Applicants: York Law Family Specialists Counsel for the Third Applicant: Mr O’Reilly Solicitor for the Third Applicant: One Group Legal The Respondent: Self-Represented Litigant Counsel for the Intervener: Mr Lawrence Solicitor for the Intervener: C Pty Ltd T/As C Lawyers ORDERS
SYC 2639 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR N SOMMER
First Applicant
P PTY LTD
Second Applicant
MR SOMMER
Third ApplicantAND: MS SOMMER
Respondent
AND: C PTY LTD T/AS C LAWYERS
Intervener
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
13 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.That pursuant to Rule 10.14(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 Orders 6(a)(i) and 6(e) of 18 February 2021 be amended as follows:
“6(a)…
(i)The Court notes the monies paid by Mr N Sommer to C Lawyers are part of the wife’s verdict of
$452,354$404,306.80 to be paid by him to the wife reducing the sum then payable by Mr N Sommer to the wife accordingly;
…
(e) Simultaneously with the husband’s compliance with Order 5 herein pay to the husband the sum of
$276,229$247,400.69 and his entitlement pursuant to order 6(c) herein less…”
2.The wife’s application to release $20,000 to her from monies held in trust is dismissed.
3.The Court declares the intervener does not have a lien in respect of the wife’s verdict for their unpaid costs.
4.The Court finds the costs of Mr N Sommer and P Pty Ltd on an indemnity basis for the final hearing are fixed at $161,676.30.
5.The Court finds the costs of Mr N Sommer and P Pty Ltd for the slip rule application are assessed at $11,000.
6.The application by Mr N Sommer and P Pty Ltd for the costs of the costs application is dismissed.
7.The Court finds the husband’s costs are assessed and fixed at $76,000.
8.The Court notes the intervener’s costs claimed are $236,238.81.
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 Sommer & Sommer has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
This is a judgment in respect of the following applications:
(1)An application for costs by various parties against the wife, Ms Sommer (“the wife”), in property proceedings heard in 2020;
(2)A slip rule application to correct an error in my calculations of money to be paid to the wife by the second and third respondents from $452,354 as ordered to $404,306 and similarly a slip rule application in relation to monies ordered to be paid to the husband from $276,229 as ordered to $247,400.69. The husband consented to this application and the wife did not.
(3)A release of $20,000 to the wife from monies held in trust. All parties objected to this application.
(4)The intervener’s claim of a lien over the wife’s verdict in respect of their unpaid costs.
The parties seeking costs against the wife are her former brother-in-law Mr N Sommer (“the second respondent”) together with the company he is the sole owner of, P Pty Ltd (“the third respondent”), who were joined to the proceedings by the wife, her former husband Mr Sommer (“the husband”), and lawyers who acted on her behalf for a period but not at the final hearing, C Pty Ltd Trading As C Lawyers (“the intervener”).
Suffice to say the wife resists the application that any cost be paid by her to any party. The reality is the verdict the wife received was 62.5 per cent of the matrimonial pool including superannuation and, after deducting interim property distributions she had received and monies owed to the second and third respondents, the wife is to net some $404,306 if the slip rule application is successful. Even if the slip rule application is not successful, her verdict of $452,354 is insufficient to pay all the costs sought by all parties against her.
This matter was conducted by way of oral submissions on 29 March 2021 from the second and third respondents and the husband, and the wife was given a transcript of those submissions in order to prepare her response by way of written submissions. All parties provided written submissions.
I read the following for the parties.
For Mr N Sommer, and on behalf of his company P Pty Ltd:
(1)Application in a Case filed 2 March 2021;
(2)Affidavit of the second respondent filed 2 March 2021;
(3)Written submissions filed 26 March 2021;
(4)Written submissions in reply filed 11 June 2021.
For the husband:
(1)Application in a Case filed 3 March 2021;
(2)Affidavit of the husband filed 3 March 2021;
(3)Case Outline;
(4)Written submissions in reply filed 6 July 2021.
For the intervener:
(1)Response to an Application in a Case of the second and third respondents filed 17 March 2021;
(2)Response to an Application in a Case of the husband filed 17 March 2021;
(3)Affidavit of Mr AA filed 17 March 2021;
(4)Written submissions filed 25 March 2021;
(5)Written submissions in reply filed 16 June 2021.
For the wife:
(1)Her response to all parties' written and oral submissions filed 12 May 2021; and
(2)Affidavit filed 26 March 2021.
THE RESPECTIVE APPLICATIONS
The second respondent, and on behalf of the third respondent, seeks costs be paid on an indemnity basis in the amount of $161,676.30 for the substantive litigation. Alternatively, that costs be paid on a cascading basis from solicitor/client, party/party or as assessed by the Court. No less than $105,089.60 is sought.
Additionally, the second and third respondents seek their costs of the costs application and slip rule application be paid by the wife on an indemnity basis if they are successful. The amount claimed for the costs and slip rule application is $21,865.
Further, the second and third respondents have made a claim against the wife in tort which they may or may not pursue after the result of the costs application is known. The amount claimed against the wife is $100,000 for “loss of income, loss of opportunity, pain and suffering and emotional distress” which it is asserted occurred as a direct result of the joinder of them to the litigation and the conduct of the wife throughout litigation to which my judgment makes many references.
The second and third respondents seek to amend the monies I ordered to be paid to the husband and wife by them under the slip rule, rule 10.14(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”), due to a mathematical error in my calculations in my judgment and reflected in the orders.
The husband seeks his costs be paid by his former wife on an indemnity basis in the sum of $307,353.27. In the alternative, solicitor/client costs from 1 May 2016 to 15 June 2018 in the sum of $96,969.85 and thereafter on an indemnity basis from 16 June 2018 in the amount of $168,824.91. These claims are based on the wife’s failure to accept offers made by the husband which would have provided the wife with substantially more than the Court determined was her entitlement and her conduct during the litigation and at the hearing.
The intervener seeks payment of their costs in the sum of $236,238.81 being a taxed sum for legal services and that their claim have a priority over all other claims. The intervener claims a lien over the wife’s verdict as a result of the crystallisation of the “fruits of the wife’s litigation”.
The wife sought a release of $20,000 from monies held in trust to fund legal representation. This was objected to by all the parties given the money in trust and the wife’s verdict is insufficient to pay the claimed costs.
PROCEDURAL CHRONOLOGY
On 18 February 2021 final property judgment was delivered. The husband and wife were ordered to assign all their interest in the Suburb D properties to the second respondent, who was to refinance the mortgage over these properties, discharge the husband and wife’s liabilities in respect of those mortgages and pay the husband and wife the amounts assessed by the Court.
On 2 March 2021 the second and third respondents filed an urgent costs application seeking the wife pay their costs on an indemnity basis in an amount fixed in the sum of $161,676.30. In the alternative, that the wife pay their costs on a solicitor/client basis, or a party/party basis. The second and third respondents also sought the wife pay to them $100,000 by way of compensation and that, pursuant to the slip rule, Orders 6(a)(i) and 6(e) of the final orders be amended to read $404,306.80 and $247,400.69 respectively.
On 3 March 2021 the husband filed a costs application seeking the wife pay his costs on an indemnity basis in an amount fixed in the sum of $307,353.27 or, in the alternate, on a solicitor/client basis from 1 May 2016 to 15 June 2018 in the sum of $96,969 and thereafter on an indemnity basis from 16 June 2018 in the sum of $168,824.
On 5 March 2021 orders were made staying the operation of the orders made on 18 February 2021 requiring money to be paid to any party until the costs applications were determined and listed the costs applications for hearing on 29 March 2021.
On 17 March 2021 the intervener filed a Response to both the second and third respondents’ costs application and husband's costs application seeking they be paid $236,238.81 pursuant to Order 6(a) of the final orders in priority to all claims for costs. They also sought that all other monies payable to the wife be held in trust pending the finalisation of the Federal Circuit Court proceedings regarding the intervener and the wife which was a taxation of the costs asserted as owing by the wife to them.
On 29 March 2021 the costs applications were heard and submissions were made by the husband and second and third respondents. The matter was adjourned in respect of the order of priority of payment of the costs assessed by the Court to be paid. The final orders requiring the second and third respondents to pay a sum of money to the intervener, the husband and wife were stayed pending further order.
The wife was ordered to file and serve a Response and written submissions in relation to the costs applications, outstanding slip rule application and in support of her argument seeking a release of funds of $20,000 to herself, with other parties given right of reply. The second and third respondents were to file and serve points of claim in respect of their compensation claim. This has not occurred. The matter was listed for hearing of the priority argument after delivery of this costs judgment.
OFFERS TO SETTLE MADE BY THE HUSBAND AND SECOND RESPONDENT
The husband made offers to settle to the wife on the following occasions:
(1)22 September 2016;
(2)14 November 2017;
(3)26 June 2018;
(4)24 April 2019.
The second and third respondents made offers to settle to the wife on the following occasions:
(1)6 June 2018;
(2)14 June 2018;
(3)15 June 2018;
(4)7 September 2020.
SYNOPSIS
A relevant factor in any costs application that I must have regard to is the quantum of costs sought to be paid. This is particularly heightened in this matter where, if successful in the claim for indemnity costs and a lien, the costs sought by all parties would be in excess of the monies I determined the wife was entitled to receive from monies held in trust.
Even if I merely assessed the costs on a party/party basis or as I determined appropriate, satisfaction of the husband’s, second and third respondents’ and the intervener’s costs claims is likely to result in the wife receiving nothing from her verdict. As the facts stand, the wife's verdict is all she has by way of assets. In light of these facts it is unlikely the wife’s claim for a release of $20,000 to her will be successful.
By orders of 18 February 2021 the wife was to receive the sum of $452,354.
Rule 12.17(1)(a) of the Rules, formerly rule 19.18(1)(a) of the Family Law Rules 2004 (Cth) (“Family Law Rules”), permits the Court to order costs in a specific amount and this is the Order the husband and second and third respondents seek in the event I determine this is a more appropriate course than the award of indemnity costs. There is much force in the submission that I should assess the costs to be awarded to the husband, respondents and intervener for if I do not do so this litigation may never end. It is an imperative to henceforth minimise costs and end this litigation for all parties.
The purpose of this rule is practical. It is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation, as referred to by their Honours in the decision of Rankin & Rankin (No. 3) [2019] FamCAFC 133 (“Rankin”) at paragraph 19, which decision was determined under rule 19.18(1)(a) of the Family Law Rules 2004 (Cth).
In this decision, their Honours held that they were satisfied that the respondent's schedule of costs filed, read with their respective written submissions, provided sufficient material to enable the Court to justly fix a sum for costs in accordance with the rule and principles as to its application, and they relied upon the decision of Moorcroft & Moorcroft [2017] FamCAFC 147 to support this realistic and practical approach. Although I accept their Honours' statement in Rankin at paragraph 23 relates to costs in an appeal, there is no impediment to the application of this principle to costs sought in a first instance trial.
The Court further said at paragraph 23 that a “Court is not obliged to, nor should it attempt, something akin to a taxation of costs undertaken by an assessor”, that only where the parties have provided sufficient particulars of the costs claimed and there has been a sufficient challenge to the costs claimed, would the Court been a position to assess the costs. I find the careful and thorough schedule of costs provided by the first, second and third respondents based upon costs charged in accordance with cost agreements, the breakup of the cost for specific dates and particular applications, excising the costs for the parenting aspect of the matter by the husband, an aspect of the matter that was not part of my judgment, together with the extensive and voluminous annexures read, the case outlines filed by all parties, the alternatives provided to an indemnity costs Order, and the written submissions by the husband, respondents and intervener together with the wife's written submissions in response have provided sufficient evidence to embark upon an assessment of costs if that be the course I determine is proper.
The consequences for the wife of a finding in favour of the husband, second and third respondents and intervener are very serious. The outcome of this application is a matter of extreme importance to the wife and her financial future.
I have determined to deal with the application under the slip rule and the costs application by the second and third respondents initially, then the costs application of the husband and finally the costs application of the intervener and the issue of the existence of a lien. Finally, the wife’s claim to release $20,000 to her.
SECOND AND THIRD RESPONDENT’S APPLICATION
The second and third respondents are in a vastly different position to all other parties. They are not parties to the marriage as is the husband, nor in the litigation as one of the party's legal representatives as is the intervener. They are true third parties and innocent in that sense to the consequences of the marriage.
The intervener's costs are claimed on the basis of a lien for work they undertook which is connected to the verdict the wife received.
The Act
Going to the law and section 117 of the Family Law Act 1975 (Cth) (“the Act”) which relates to costs and is as follows:
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
I must first determine whether I would exercise my discretion to make an order for costs pursuant to section 117(2) of the Act. If I determine that I should exercise that discretion, I must then determine the costs to be paid.
The Law
The power to award costs involves a wide exercise of discretion and the breath of that discretion is not limited as was recognised in a matter of Penfold v Penfold (1980) 144 CLR 311 (“Penfold”). The Court need not be satisfied that all the factors under section 117(2A) of the Act have occurred before making a costs order, rather the Court is required to find a justifying circumstance or circumstances as an essential preliminary step before making any costs Order.
There is voluminous authority from the Full Court of the Family Court and in other jurisdictions in relation to costs and in particular in relation to indemnity costs. Decisions such as Kohan & Kohan (1993) FLC 92-340 (“Kohan”) are still good authority in relation to the Court's discretion to award indemnity costs and the factors which may weigh upon a judge's exercise of the discretion to so do.
Three recent decisions of Phillips & Hansford (2020) FLC 93-941 (“Phillips”), Rankin,Worth & Worth (No. 2) (2019) FLC 93-910 (“Worth”) and Sfakianakis & Sfakianakis (2019) Fam LR 419 (“Sfakianakis”) all deal with the broad discretion of the Court in relation to a costs application. The power is to award costs on an indemnity basis, solicitor/client basis, party/party basis, scale costs, costs as assessed by the Court or a taxation by a Registrar. As always in family law proceedings, each case turns on its particular and unique facts.
The second and third respondents seek their costs on an indemnity basis and such costs are only ordered in exceptional circumstances.
The matters of Kohan and Smith & Fields (third party costs) [2013] FamCA 505 dealing with third party costs are all authority for this proposition. The category of cases in which indemnity costs may be awarded are not closed. Costs on this basis have been ordered in matters where an application is pursued with wilful disregard of known facts or clearly established law, where there has been an imprudent refusal of an offer to compromise, as in the decision of Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive”).
In relation to pursuing an application with wilful disregard to known facts or clearly established law, the decisions of Phillips, Rankin, Worth and Sfakianakis reiterate that indemnity costs may be awarded where the applicant, properly advised, should have known he had no chance of success and where a party persists in what should, on a proper consideration, be seen to be a hopeless case.
This principle was referred to by his Honour Justice French in J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2) [1993] FCA 70 at [5].
In Worth their Honours quoted from Justice Holden's decision in Munday v Bowman (1997) FLC 92-784 (“Munday”), where the Court drew the following principles relevant to costs at [9]:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e) An imprudent refusal of an offer to compromise.
As their Honours quote in Worth from Sheppard J in Colgate-Palmolive at [17]:
4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course …
It is trite to say that the evidentiary onus is upon the respondents to satisfy me, using Sheppard J's words, that “the circumstances of the case must be such as to warrant the Court in departing from the usual course”.
The options available to me in determining the cost order to be made are: fixed costs at scale; party/party costs; solicitor/client costs; as assessed in the exercise of my discretion or on an indemnity basis.
Their Honours say in Sfakianakis from paragraph 9:
The ordinary position in proceedings under the Family Law Act 1975 (Cth) (“the Act”) is that each party is to bear his or her own costs (s 117(1)). Where the Court is of the opinion that circumstances justify it in doing so, the Court may make such order as to costs as it considers just (s 117(2)). Thus, an order may be made for the payment of costs on an indemnity basis, although such orders are exceptional…
10. It is, however, a mistake to think that if a costs order is made, that order can only be on a party and party basis or on an indemnity basis. The words “such order as to costs … as the court considers just” permit the Court to fashion an order that is apt to the circumstances. One such well-known example is assessment on a trustee basis, which is more generous than party and party costs, but falls short of an indemnity. Orders for a partial indemnity or for a particular period are obvious possibilities. The Court may also fix costs in a particular sum, taking account of all relevant circumstances; that type of order too is neither one for party and party costs nor an indemnity costs order. For convenience, in these reasons we shall refer to such orders as a “special costs order”.
(Citations omitted)
As their Honours opine, there is a broad discretion in the making of a costs order.
At the outset, I have formed the view that the usual rule of each party bearing their own costs would not be appropriate for the following reasons which are compelling.
The wife's conduct in the litigation and her unfounded and scurrilous assertions of fraud and misbehaviour against the second and third respondents led to a prolonging of the hearing unnecessarily for all the respondents and the husband.
The imprudent refusal by the wife to accept no less than four offers from the second and third respondents to agree that she and her husband owned 50 per cent of the Suburb D properties and the second and third respondents the remaining 50 per cent, the ultimate finding made at the hearing, and to discharge them from the litigation which, if accepted, would have minimised the length of the hearing and minimised the costs incurred by all parties.
The imprudent refusal of the wife to accept any offer to settle made by the husband but, in particular, the offer of June 2018 which would have resulted in the wife receiving $1,124,875, double the verdict I determined she receive, and would have minimised the length of the hearing for both the husband and wife and minimised the costs incurred by all parties.
That the wife was wholly unsuccessful in her claim against the second and third respondents and in many respects against the husband.
That the wife's conduct in maintaining spurious allegations against the second respondent increased the costs and length of the trial, see paragraph 70 of the final judgment of 18 February 2021, Sommer & Sommer [2021] FamCA 61 (“the final judgment”).
Thus the question now is whether I order indemnity costs be paid or some lesser costs.
The relevant facts
Dealing with the wife's joinder of the second and third respondents and their claim for indemnity costs.
The wife joined the second and third respondents to the litigation on 11 January 2018, contending that she and her husband each owned 33 per cent in two properties at Q Street Suburb D (“the Suburb D properties”) and her brother-in-law and his company the remaining 33 per cent. The wife later sought a declaration to that effect by way of further amended response filed on 27 August 2018.
It was the husband and second and third respondents’ contention, unwavering throughout the litigation, that consistent with the liability in respect of the mortgages held over the Suburb D properties and the initial contributions to the acquisition of the properties that the husband and wife owned 50 per cent of the properties and had liability for 50 per cent of the total mortgages, the second and third respondents owned the remaining 50 per cent and had liability for 50 per cent of the mortgages.
I found the husband and second and third respondents’ position was the only position at law that was supported on the evidence, that this had always been the case and that the evidence to support this finding was clear, apparent and overwhelming at the time the wife joined the second and third respondents to the litigation.
Further, I found from paragraph 14 of the final judgment that the wife maintained her scurrilous assertions at the trial concerning her brother-in-law, the second respondent, including that he had fraudulently dealt with her interest in the properties at Suburb D and going so far as to make a complaint of fraud against him to the ANZ bank, which bank in his business as a mortgage broker he has a relationship with, and maintained her former husband was complicit in this and maintained her assertions were supported by the following:
a)By Mr N Sommer having conversations with the ANZ Bank without her knowledge;
b)By Mr N Sommer changing the ownership of the 2 Q Street property to a company owned by him without her knowledge or consent;
c)Mr N Sommer and the husband being party in part to a forgery in that the wife asserts her signature does not appear on the Deed of Novation, which was exhibited in these proceedings;
d)That Mr N Sommer has rented the property for an undervalue, the wife asserting the property could have been rented for $2,150 per week, when it was only rented for $1,000 per week;
e)That Mr N Sommer and the husband have failed to include her in important decisions regarding the property;
f)That Mr N Sommer’s actions have negatively affected her credit rating by claiming hardship in respect of the loans due to COVID-19, and having those loans paced into a hiatus in relation to payment of the mortgage and the like;
g)That the husband has been receiving cash payments from the rental of the properties, and this has not been disclosed;
h) That the husband purchased a boat worth $110,000;
i)That the husband lives a luxurious lifestyle in a penthouse apartment and has holidays overseas and at other locations in Australia;
j) That the husband has failed to declare his real income;
k)That the husband has not been open and honest or forthcoming disclosing what his income is to the Child Support Agency or this Court;
l)That the husband and Mr N Sommer have conspired to minimise the matrimonial pool for division, and minimise her interest in the properties.
15. As the evidence unfolded, it is the wife that has behaved in a most egregious fashion towards Mr N Sommer and, to a lesser extent, her former husband.
16. After hearing the evidence, the wife’s case and her evidence being tested and in reading the voluminous documents produced by the parties, I have unfortunately formed the view the wife is not a witness of truth, and will simply lie to continue her unsupported, ill-informed and totally unfounded allegations against Mr N Sommer and her former husband of fraud, poor behaviour, mishandling of money and endeavouring to cheat her out of her entitlement to property.
17. The legal fees expended in this matter are approaching, between all parties, a million dollars and that is an absolute travesty as the pool of assets for division as between the husband and wife ultimately amounted to just over $1 million. There is perhaps 2 million dollars in net assets as between the three parties to this litigation.
18. Nothing arose from testing the evidence of the husband or Mr N Sommer as it became apparent that their position regarding the properties, their acquisition, the beneficial ownership of the properties and their management was the correct position and the wife’s a mere fiction.
The wife made allegations which were not substantiated. For example, that she and her husband had paid the deposit on the properties and the second and third respondents had not when I found at paragraph 35 of the final judgment as follows:
The wife maintained that as she and her husband alone had paid the initial deposit for the purchase of the 1 Q Street property from their funds and as Mr N Sommer made no contribution to this deposit he has no interest in the property. It is correct that the husband and wife made this initial 5 per cent deposit to secure the property. However, the wife failed to disclose that when the purchase of the 1 Q Street property settled and the entire purchase price including stamp duty was released by the drawdown of the loan, she and her husband were paid all of the deposit they had paid including that on Mr N Sommer’s behalf by a deposit of $92,500 into their joint ANZ bank account on settlement. The facts are no party paid a 5 per cent deposit at the end of the day as the entirety of the purchase price of the 1 Q Street property was borrowed money which they had an equal obligation to repay to the ANZ Bank.
36. The parties then determined to purchase the 2 Q Street property in June 2015. This property was purchased for $1.575 million and the parties were able to secure 80 per cent of the purchase price with a loan from the ANZ bank of $1.2 million. The parties were required to make up the shortfall of borrowings of $314,000 including paying stamp duty from their own resources.
37. The wife failed to acknowledge in her affidavit or orally that Mr N Sommer used the proceeds of sale of his property at Suburb NN to fund his share of the deposit and stamp duty required to enable the parties to purchase the 2 Q Street property. The wife maintained that the money to fund the 20 per cent deposit for the 2 Q Street property came from the parties’ joint account with the ANZ Bank. This too is a correct statement. However, again the wife failed to disclose the source of deposits totalling $186,000 into their joint account was the proceeds of sale of Mr N Sommer’s Suburb NN property.
I also found that had it not been for the second and third respondents continuing to maintain the mortgage and outgoings on the Suburb D properties when the husband and wife separated and ceased making any payments for these investment properties in May 2016, they would not have had these assets to divide at the hearing.
I found that the wife made unfounded allegations of fraud against her former brother-in-law and made those allegations to the ANZ bank with whom the second respondent does business and he was suspended for three months whilst these unfounded allegations were investigated and no action was taken because the wife's assertions were found to be, at paragraph 106, “a thin tissue of lies”.
There was no evidence whatsoever that the second third respondents had acted improperly at any time towards the wife.
The practical reality is that the second and third respondents made an offer to settle the proceedings when they filed their Response as that Response sought a declaration that they owned 50 per cent of the Suburb D properties and the husband and wife the remaining 50 per cent. This was ultimately the order made by the Court.
This offer was repeated on 6 June 2018 at a mediation between the parties and draft terms were sent to the wife. On 14 June 2018 another offer was made by the second and third respondents and a further offer was made on 7 September 2020 in similar terms.
The findings at paragraph 21 of the final judgment were as follows:
That Mr N Sommer maintains this position is unusual and commendable for, at law, Mr N Sommer owns 90 per cent of the 1 Q Street property, the husband and wife 5 per cent each and P Pty Ltd owns the totality of the 2 Q Street property. Mr N Sommer is the sole director and shareholder of that company. It is rare I see a matter where a third party to a family law matter says he owns less of a property than is his or her legal entitlement.
22. Mr N Sommer says:
The way these properties are held at the Land Titles Office done for tax purposes is incorrect and that I hold on trust for my brother and former sister-in-law 50 per cent interest equally as between them, and I have been wishing to ensure that their entitlement to property passes to them.
It is apparent that the wife imprudently failed to accept a multitude of offers of settlement by the second and third respondents including at a time when she was represented by the intervener, which representation ceased about January 2019.
This is a matter where the wife's conduct and behaviour are of an exceptional and egregious nature and an indemnity costs order should be considered by the Court.
The wife's response to this costs application did not assist her case.
The wife is not working and has limited financial resources. Her only asset of any substance is this verdict. Despite the wife’s limited financial resources, as per the decision of Nada & Nettle (Costs) (2014) FLC 93-612, “that a party is impecunious…is not a bar to the making of a costs order if the Court is otherwise of the opinion that such an order ought to be made”.
The wife continued to maintain in her costs submissions that she had been defrauded by the second respondent, that he had lied to the Court and not properly accounted for costs incurred by him in maintaining the Suburb D properties solely since May 2016 and repeated many other scurrilous complaints against him which I had not accepted. The gravamen of the costs application was that the second and third respondents should never have been joined and/or when they filed their response the wife should have accepted their position as did the husband. This conduct is made more egregious as she was legally represented and it was clear on the evidence available at that time that her case against them was, from the outset, doomed to fail.
All these factors make an indemnity costs order an appropriate order given the wife's conduct supports a finding of special or unusual features in the case to justify the Court “departing from the usual course”, see Justice Sheppard in Colgate-Palmolive.
The wife is liable to pay the second and third respondents’ costs on an indemnity basis from the date of filing of their Response in the sum of $161,676.30.
The wife is liable to pay the second and third respondents’ costs for the slip rule application. The wife would not agree I had made an error in my calculations of the money to be paid by the second respondent to her when on a reading of the material filed by him to support the application, the error was clear.
The error was set out at paragraphs 94, 95, 96 and 97 of Mr N Sommer’ affidavit filed 2 March 2021. In calculating the monies owing by Mr N Sommer to the husband and wife I gave them credit for monies the Bank required they pay into the Suburb D properties mortgage when their matrimonial home was sold. However, I used the current mortgage in my calculations of what Mr N Sommer now owed them and not the mortgage at the time the money was paid. The current mortgage is less than it was at the relevant time and this reduction in the mortgage was due to Mr N Sommer’s actions.
The wife's response to this application was but an attempt to re-litigate her version of events and she failed to address the clear error I had made in using the wrong mortgage amount. If the wife had accepted the second respondent's position, no costs would have been incurred on this application at all and her case in answer had no prospects of success. The wife is liable to pay the second and third respondents’ costs for the slip rule application.
In relation to the costs claimed for this costs application, I have formed the view I will not exercise my discretion to make a costs order for the following:
(1)The wife is unrepresented;
(2)The consequences of the orders sought by the second and third respondents are profound for the wife and she had a right to be heard on this important issue.
The costs for the slip rule application and costs applications is $21,865. The schedule in support includes costs incurred in the costs claim and in respect of the lien claimed by the intervener. In these circumstances I assess the second and third respondents’ entitlement to costs for the slip rule application at 50 per cent of the sum claimed for both matters being $11,000 rounded up.
HUSBAND'S COSTS APPLICATION
The husband seeks costs on an indemnity basis in the sum of $307,353.27 for the whole of the proceedings.
In the alternative, from the commencement of the proceedings on 1 May 2016 to 15 June 2018 on a solicitor/client basis in the amount of $96,969.85 and $168,824.91 on an indemnity basis from 16 June 2018 to date. 26 June 2018 is the date when the wife imprudently refused to accept his offer of settlement which would have provided her with the home and net assets including superannuation of $1.2 million (paragraphs 42 to 45 of the husband's affidavit filed 3 March 2021), a far greater sum than she ultimately received.
Costs on this basis (indemnity) have been ordered in matters where an application is pursued with “wilful disregard of the known facts or the clearly established law”, Colgate-Palmolive at [16], or where there has been “an imprudent refusal of an offer to compromise”, Colgate-Palmolive at [24].
In relation to pursuing an application with wilful disregard to known facts or clearly established law, the decisions of Phillips, Rankin, Worth, and Sfakianakis reiterate that indemnity costs may be awarded where a party, properly advised, should have known they had no chance of success and where a party persists in what should, on a proper consideration, be seen to be a hopeless case.
Holden CJ’s decision in Munday provides the following principles in indemnity costs applications at 84,660, quoting from Colgate-Palmolive:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud.
(c)Evidence of particular misconduct causing loss of time to the court and to other parties.
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
(e) An imprudent refusal of an offer to compromise.
All these categories apply to the wife's conduct.
However there were issues between the parties to be litigated and I made findings in favour of the wife as follows:
(1)The husband did not explain discussions had between he, his brother and an accountant in the absence of the wife, due to her ill health, concerning the reason for entering into a Deed of Novation regarding the change of ownership of one of the Suburb D properties from the parties to the third respondent after exchange and before settlement, see paragraphs 72, 73,75 and 96 of the final judgment;
(2)That the husband had acted poorly towards the wife at times during the marriage, see paragraph 145 of the final judgment;
(3)That this behaviour did have a negative impact upon her parenting and homemaker responsibilities, see paragraph 149 of the final judgment;
(4)That the wife had relevant 75(2) factors and the husband has been deleterious in paying his child support, see paragraphs 77 and 150 of the final judgment; and
(5)An outstanding parenting issue settled at the final hearing.
The options available to me in determining the costs order to be made are: fixed costs at scale; party/party costs; solicitor/client costs, as assessed by me in the exercise of my discretion or on an indemnity basis.
Their Honours say in Sfakianakis at paragraph 9:
The ordinary position in proceedings under the Family Law Act 1975 (Cth) (“the Act”) is that each party is to bear his or her own costs (s 117(1)). Where the Court is of the opinion that circumstances justify it in doing so, the Court may make such order as to costs as it considers just (s 117(2)). Thus, an order may be made for the payment of costs on an indemnity basis, although such orders are exceptional (Kohan and Kohan (1993) FLC 92-340 at 79,614; Limousin v Limousin (Costs) (2007) 38 Fam LR 478; D & D (Costs) (No. 2) (2010) FLC 93-435).
10. It is, however, a mistake to think that if a costs order is made, that order can only be on a party and party basis or on an indemnity basis. The words “such order as to costs … as the court considers just” permit the Court to fashion an order that is apt to the circumstances. One such well-known example is assessment on a trustee basis, which is more generous than party and party costs, but falls short of an indemnity. Orders for a partial indemnity or for a particular period are obvious possibilities. The Court may also fix costs in a particular sum, taking account of all relevant circumstances; that type of order too is neither one for party and party costs nor an indemnity costs order. For convenience, in these reasons we shall refer to such orders as a “special costs order”.
As there Honours opine, there is a broad discretion in the making of a costs order.
Although the wife imprudently refused to accept the husband’s offer to settle the matter, the above factors militate against an indemnity costs order being made in respect of the husband and I will assess the costs to be paid as a “special costs order”.
The offer the husband made on 14 November 2017 of $693,090 was almost the same as the verdict the wife obtained and no costs flow from that offer.
I find that the husband is entitled to costs he has claimed from 26 June 2018, not 16 June, as on 26 June 2018 he offered to settle the matter on terms where the wife would have received 68 per cent of the asset pool and retained the home, a net total including superannuation of some $1.2 million. I determined the wife was entitled to 62.5 per cent of the pool, a gross amount of $662,898 and nett $452,000 amended under the slip rule to $404,306. I assess his entitlement to costs at 45 percent of the indemnity costs sought.
The indemnity costs he claims from 16 June 2018 is $168,824 and 45 per cent is $75,971, rounded up to $76,000.
INTERVENER’S CLAIM
The intervener claims a lien for legal work they carried out on behalf of the wife. The costs they initially claimed from the wife were in excess of $330,000 and that claim has been reduced pursuant to a taxation to $236,238.81.
The intervener claims the lien at law and also by orders I made on 18 February 2021, relevantly as follows:
(6) Mr N Sommer is to refinance 100% of the current mortgages over the properties at 1 Q Street, Suburb D and 2 Q Street, Suburb D, discharge the husband and wife’s liabilities in respect of those mortgages and thereafter:
(a)Pay to C Lawyers on behalf of the Intervenor, C Pty Ltd, the sum of $236,238.81, or the sum as has been determined in Federal Circuit Court proceedings SYG697/2020 relating to the wife and Intervener’s costs dispute with those monies to be held on trust pending the conclusion of the Federal Circuit Court proceedings or by agreement between the wife and Intervener…
The intervener also relies upon notations to consent orders made on 23 November 2020 wherein it is noted:
1.C Pty Ltd T/A C Lawyers have an interest in these proceedings in the sum of $236,238.81, a sum claimed by them by way of lien and owed by the First Respondent wife with respect to unpaid legal fees from the conduct of these proceedings on her behalf;
2. The wife is seeking orders and declarations in proceedings at the Federal Circuit Court number SYG 697/2020 to the effect that the amount claimed by C Lawyers be reduced to a lesser amount or nil.
By consent, the following was ordered:
3. Any property adjustment order in favour of the wife in these proceedings will take into account the lien of the Intervener, subject to the outcome of proceedings number SYG 697/2020.
4. The Court will not approve any settlement of the property adjustment proceedings which does not take into account the said lien.
These were orders and notations made by consent and no determination on that which the intervener claimed, namely that they had a lien for the legal fees in respect of the wife’s verdict, and there was no argument on this issue at all. Further, the consent orders were notations of the positions of the parties to the consent orders and not a reflection of a determination or agreement to their positions.
The wife, husband and second and third respondents object to the argument of the intervener that they have a lien in the amount claimed.
In their written submissions in support of their claim the intervener cites the decision of Campbell J in Firth v Centrelink (2002) 55 NSWLR 451 (“Firth v Centrelink”) wherein his Honour held at paragraph 33:
A solicitor whose efforts result in the recovery of money for his client has an equitable right to have his proper costs and disbursements paid from the money so recovered.
That by the inclusion of Order 6 in my final judgment, I recognised the lien and it should now be paid.
The husband and respondents’ joint position is that they made no submissions in relation to the alleged lien noted in the 23 November 2020 orders and, importantly, made no submissions in relation to Order 6 made on 18 February 2021. That the order of 23 November 2020 was merely reciting that which I had been told was the case, namely that they asserted they had a lien in respect of $236,238.81 of the wife’s verdict. Most importantly, the second and third respondents were not parties to the consent orders, they being made between the wife, the intervener and the husband. This submission is factually accurate.
I accept this argument and will now determine whether the intervener has established at law that they have a lien for if they do not establish a lien no order I make can create a lien if none exists.
The law on liens is an interesting area of law.
Justice Aldridge in the matter of Marsh & Marsh [2014] FamCA 361 (“Marsh”) discussed the principles relating to liens.
His Honour thoroughly dissected the decision of Campbell J in Firth v Centrelink at paragraph 10 of his judgment and quoting Justice Campbell set out the following, and I have quoted only those paragraphs which are relevant to the facts in this matter:
35. The authorities establish the following propositions concerning this right of the solicitor:
(a)The solicitor's right exists over money recovered through obtaining judgment in litigation, and also over money recovered through the settlement of litigation…
(b)The solicitor's right exists over both the amount of a judgment in favour of the client, and the amount of an order for costs in favour of the client…
(c)It exists over money which is in the possession of the solicitor, and also over money which is in court…
(d)The solicitor need not be still acting for the client at the time that the money was recovered…
(e)For the right to arise it must be shown that there is a sufficient causal link between solicitor's exertions and the recovery of the fund of money…
…
(g) The solicitor's equitable right exists before the court is asked to intervene to protect it; it "arises immediately upon the recovery of monies through the exertions of the solicitor"…
(h)The right of the solicitor is one which the solicitor can enforce against the client, entitling the solicitor to an injunction to prevent the payment of the fund to the client without notice to the solicitor until such time as the quantum of the solicitor's entitlement to be paid from the fund is ascertained…
(i)The right can also be enforced against people other than the client, in certain circumstances. When the money recovered takes the form of a debt owed to the client, which has been assigned, the right of the solicitor will prevail over the rights of an assignee of the debt, save where the assignee is a bona fide purchaser for value without notice…
(Citations omitted)
His Honour says at paragraph 11 of his judgment in Marsh:
As is apparent from paragraphs (e) and (g), a lien can only arise if there is a sufficient causal link between the solicitor’s exertions and the recovery of the fund of money. It arises immediately upon the recovery of money through the exertions of the solicitor.
His Honour Aldridge J, at [12], referred to the decision of Jackson v Richards (2005) NSWSC 630 (“Jackson v Richards”) in which his Honour Justice White said:
47.It is clear from paragraph 62 of the judgment of Sheller JA, which I have quoted, that the Court accepted that for a solicitor to be entitled to a lien over the fruits of litigation, those fruits must be “produced by the industry of the solicitor”. This is not an exacting standard. It is not necessary to demonstrate that a judgment or settlement came about as a result of specific efforts by the solicitor, but there must be some causal link between the solicitor having acted for the client in the proceedings and the resulting payment to the client.
In the matter his Honour Aldridge J was dealing with there were two funds of money. The first was the sum of $250,000 paid into the trust account of Champion Legal as a result of proceedings taken before an interim property settlement for a costs order in which the applicant acted. His Honour found that sum of money was obtained for the respondent through the actions of the solicitor and therefore there was the necessary causal link between the industry of the applicant and the funds.
The second funds were in the Meyer Partners Family Lawyers trust account, a sum of some $23,000 on account of legal fees to be paid. His Honour found that this fund was not obtained as a result of the actions of the solicitors and the purpose of a solicitor’s lien is not to create a general security over the assets of the client. A lien is limited to the specific circumstances set out in the judgment of Campbell J.
The decision of Leamey v Heath [2001] NSWSC 1095 (Campbell J, 22 November 2001, unreported), again a decision of Justice Campbell, found that at paragraph 8:
It is clear that a solicitor who, by his efforts, causes a fund of money to come into existence is entitled to a lien over that fund of money for his own costs, and also for any disbursements for which he is able to pay in connection with the work whereby that fund was generated.
This was a claim by a solicitor for legal fees in respect of a criminal matter including disbursements, being counsel's fees. The facts of that matter were that Mr Leamey was the solicitor acting on behalf of the second defendant whereby information laid against him was dismissed and an order was made that Mr Lim, his client, be paid his costs when that costs order was quantified. Mr Lim's former client sought to injunct Mr Leamey from receiving that money. The facts of that matter make it clear that there was a direct correlation between Mr Leamey’s efforts and the costs order obtained by the second defendant whereby the criminal charges against him were dismissed.
In their submissions the intervener relies heavily upon Justice Campbell's decision in Firth v Centrelink. They argue that the “fruits of the action” described by Justice Campbell provide that the equitable lien is a form of security which prevails and has priority over other claims whereas the application of the husband, second and third respondents is of an entirely different character, namely an unsecured debt.
They further submit the latest time for the lien to have come into existence was the delivery of orders by which the first respondent became entitled to her property settlement, that is, my orders of 18 February 2021.
Further, that I established an order of priority of payment and they ought now not be deprived of their lien which was recognised in my orders and referred to at paragraph 170(m) of the final judgment where I said:
m)Consent orders were entered into between the parties and the Intervener who is the wife’s prior solicitors C Pty Ltd trading as C Lawyers for their unpaid legal fees which are subject to proceedings in the Federal Circuit Court number SYG697/2020. The parties agreed that the sum of $236,238.81 be paid to the Intervener by the husband or Second and Third Respondents, or a lesser sum if Federal Circuit Court proceedings had been determined by the date of this judgment.
The argument mounted in opposition by the second and third respondents, the husband and the wife to the intervener receiving this money is that they have not established a lien over the wife’s verdict and the intervener’s argument still begs the question: have the solicitors established a lien at law?
The conduct of the litigation
The solicitors ceased acting for the wife, at the latest, in January 2019.
They had previously filed documents on her behalf being applications, affidavits, interim applications and financial statements. They appeared at various interim applications. They were her solicitors when they joined the second and third respondents to the action seeking declarations against them by way of an Amended Response filed on 11 January 2018 and amended again on 27 August 2018.
The matter was listed on 28 February 2020 where directions for trial were made and the solicitors for the wife had ceased acting for her prior to this time and had filed a notice of ceasing to act on 11 March 2019.
Importantly, it was submitted by the second and third respondents as Justice White held in Jackson v Richards at [59]:
…in an appropriate case, [the equitable right] may extend to a judgment obtained for the sale of property and to the fund realised upon such sale, where the order was obtained by the client and can be regarded as a fruit of the litigation.
Correctly, the second and third respondents point out there was no order for sale of any property, including the properties at Suburb D, and they were by order transferred to the second and third respondents upon payment of money to the husband and wife.
The fruits of the litigation were also referable to a sale of the parties’ former matrimonial home and not the sale of the Suburb D properties and this property was sold prior to the judgment and after the wife's solicitors had ceased acting for her. Consent orders were made for the sale of the property on 5 November 2018, further orders were made on 13 March 2019 dealing with the division of the proceeds of sale and the property was not sold until late March/early April 2019 and after her solicitors had ceased to act.
Further, this fund of money was the net proceeds of sale of the parties’ home, an asset the wife always had an interest in unlike in Marsh where the $250,000 costs fund to pursue the litigation came into existence and into the wife’s possession due to the solicitor’s endeavours.
They were not acting for the wife when parenting consent orders were made on 24 November 2020.
They were not acting for the wife when she obtained judgment.
They did not prepare her case for hearing, run the proceedings for the wife, prepare her documentation, issue subpoenas or correspond with the husband or respondents.
They took no part in the recovery of the money for the wife through settlement of the proceedings and a verdict was only obtained after a contested final hearing which the wife prepared and conducted without their representation, or any representation.
The responses they filed on the wife’s behalf to join the second and third respondents to the litigation were entirely unsuccessful and were doomed to fail at the outset.
On the facts of this matter the fruits of the wife’s litigation resulted from her endeavours and not those of the solicitors who had previously acted for her. There is an insufficient causal link between their endeavours and the fruits of the wife’s litigation and I find they have no lien in respect of the wife's verdict and stand, as do the husband and the respondents, as unsecured creditors.
Going to the issue that I had determined the order of priority of payment by Order 6 of the final judgment.
I had at no time determined whether the claim by the intervener was due to a lien they asserted they had and noted this asserted lien at paragraph 13(l) of the final judgment.
Paragraph 170(m) of the final judgment discloses an error as follows. There was no agreement by all parties in the orders of 23 November 2020 to pay a sum of money to the intervener, or that they had a lien or a priority of payment and no submissions were entertained during the hearing or at any time on these issues. The consent or agreement I relied upon was that of the consent orders of 23 November 2020 which were between the intervener, the wife and the husband and not the second and third respondents. Further, these orders only noted what the intervener’s claim was and that their claim would be had regard to in the decision.
Paragraph 170(m) of the final judgment upon which Order 6 was made was premised on all parties having agreed to pay a sum to the intervener and this was incorrect.
This error in the judgment led to an error in Order 6 wherein I ordered the second respondent to pay the intervener the sum claimed by them and as noted in the consent orders.
The intervener maintained I had made an error in failing to include payment to them of the sum ordered to be paid by the second respondent in the event he determined to sell the Suburb D properties and not retain them and that rule 17.02(1)(h) of the Family Law Rules, as it was then, and now is rule 10.13(h) of the Rules, was enlivened and the error could be corrected.
They relied upon Vadisanis & Vadisanis and Anor (2015) FLC 93-671 (“Vadisanis”), a decision of the Full Court of 2015 wherein the Court adopted at paragraph 28 as the test for enlivenment of the “slip rule principles”, “if the matter had been brought to the court’s attention, would the correction at once have been made?”
Rule 10.13 of the Rules is as follows:
(1) The court may at any time vary or set aside an order, if:
(a) it was made in the absence of a party; or
(b) it was obtained by fraud; or
(c) it is interlocutory; or
(d) it is an injunction or for the appointment of a receiver; or
(e) it does not reflect the intention of the court; or
(f) the party in whose favour it was made consents ; or
(g) there is a clerical mistake in the order; or
(h) there is an error arising in the order from an accidental slip or omission.
Rule 10.14 of the Rules is as follows:
The court may, at any time:
(a) vary or set aside reasons for judgment if the reasons were issued by mistake; or
(b) correct a clerical mistake in reasons for judgment, or an error arising in reasons for judgment from any accidental slip or omission.
Answering the question in Vadisanis: had it been brought to my attention that the consent I relied upon in paragraph 170(m) of the final judgment was between the wife, intervener and husband only and not all the parties and that it was a consent to a notation on the position taken by the parties to the orders and no more I would have immediately corrected the error and not published paragraph 170(m) of the final judgment or made Order 6 and stood that aspect of the matter over for further submissions.
There has been no notice to the parties of the position I have arrived at on this aspect of the matter and I will reserve my decision on this issue until after submissions have been made and will hear those submissions on 15 September 2021 when the matter is again before me if that be deemed necessary given my primary finding that there is no lien in existence.
THE WIFE’S CLAIM FOR A RELEASE OF FUNDS
The costs I have determined are owed are as follows:
(1)The second and third respondents: $172,676.30;
(2)The husband: $76,000;
(3)The intervener’s claim: $236,238.
Total: $484,914.30.
The wife is to net $404,306.80 which is insufficient to meet these costs and her claim must fail at this time.
I certify that the preceding one hundred and forty-six (146) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 13 September 2021
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