Sresbodan & Sresbodan and Ors
[2016] FamCA 954
•20 September 2016 (Amended 27 September 2016 pursuant to r 17.02 of the Family Law Rules 2004)
FAMILY COURT OF AUSTRALIA
| SRESBODAN & SRESBODAN AND ORS | [2016] FamCA 954 |
| FAMILY LAW – COSTS – Where the parties have been involved in protracted proceedings in the Family Court of Australia – Where the husband was a bankrupt – Where creditors were joined to the proceedings – Where the wife and interveners seek costs of the proceedings against the husband – Where one of the husband’s only assets is funds held in a controlled money account – Where the husband’s financial circumstances weigh against the making of costs orders – Where the husband’s conduct of the proceedings favour the making of costs orders – Where the husband has been involved in numerous civil proceedings in courts other than the Family Court of Australia – Where costs orders are appropriate – Whether costs should be fixed or assessed – Where the Court is unable to be satisfied that the fixed sums sought by the parties are reasonable – Where costs must be assessed – Whether costs should be assessed on a party/party basis or an indemnity basis – Where the husband refused several offers of settlement made by the wife – Where the offers of settlement were reasonable – Where the husband’s conduct in the proceedings has unnecessarily prolonged those proceedings – Where the wife should receive costs assessed on an indemnity basis – Where the Trustees seek indemnity costs – Where the Trustees were not wholly successful in the proceedings and should only receive costs assessed on a party/party basis – Where the second interveners sought an order that their costs be fixed – Where the Court is not able to assess costs that are logical, fair and reasonable – Where the second interveners’ costs must be assessed. FAMILY LAW – COSTS – EQUITABLE LIEN – Fruits of litigation lien – Where the husband’s former lawyers are creditors of the husband’s estate – Where the lawyers have a lien over the husband’s funds in the controlled money account – Order for the release from the controlled money account of the funds to which the lawyers are entitled. FAMILY LAW – COSTS – FREEZING ORDERS – Where the parties seek freezing orders for the preservation of the husband’s funds in the controlled money account pending the assessment of their costs – Where it is appropriate to make freezing orders. |
| Civil Procedure Act 2005 (NSW) s 98(4)(c) Family Law Rules 2004 (Cth) r 19.18(1)(a) |
Legal Profession Uniform General Rules 2015 (NSW) r 43(1)(a)
| Browne v Green (2002) FLC 93-115 |
| APPLICANT: | Ms Sresbodan |
| RESPONDENT: | Mr Sresbodan |
| FIRST INTERVENER: | The Trustees of the Bankrupt Estate of Mr Sresbodan |
SECOND INTERVENERS: | Mr D & Mr E trading as D Attorneys |
| FILE NUMBER: | SYF | 4345 | of | 2006 |
| DATE DELIVERED: | 20 September 2016 (Amended 27 September 2016 pursuant to r 17.02 of the Family Law Rules 2004) |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 28 June 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Messner |
| SOLICITOR FOR THE APPLICANT: | Vizzone Ruggero Twigg Lawyers |
| SOLICITOR FOR THE RESPONDENT: | The respondent in person |
| COUNSEL FOR THE FIRST INTERVENER: | Ms Judge |
SOLICITOR FOR THE FIRST INTERVENER: | Goldrick Farrell & Mullan |
| SOLICITOR FOR THE SECOND INTERVENERS: | Mr E in person |
Orders (pursuant to r 17.02 of the Family Law Rules 2004):
The stay ordered on 30 July 2015 and continued from 28 June 2016 is to end at the close of business on Tuesday 27 September 2016.
That R Lawyers forthwith be paid the sum of $30 685.26 out of the funds held in the Controlled Monies Account holding the proceeds of sale of N Street, Suburb K to which the husband is entitled.
Mr Sresbodan is to pay the costs of the proceedings of Ms Sresbodan incurred on and after 18 July 2012, such costs to be assessed on an indemnity basis, if not agreed, within 28 days of such assessment or agreement.
Mr Sresbodan is to pay the costs of Mr Vanin and Mr Cox as the Trustees of the Bankrupt Estate of Mr Sresbodan and D Attorneys, as agreed or in default of agreement, as assessed, within 28 days of such agreement or assessment.
I direct that Ms Sresbodan, D Attorneys and R Lawyers are to file a written undertaking as to damages, in the usual form, within 72 hours.
That the sum of $490 000 held in the Controlled Monies Account, to which the husband is presently entitled, continue to be held in the account on his behalf until 31 August 2017 or further order of the Court.
Mr Sresbodan is hereby restrained from seeking payment of any part of funds referred to in Order 6 hereof, other than by making any application to the Court.
Liberty is granted to any party, the interveners or any creditor of Mr Sresbodan to apply on 7 days’ notice to vary orders 6 and 7.
Liberty is granted to apply within 7 days to raise any issue as to the form of these orders.
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 Sresbodan & Sresbodan and Ors 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 SYDNEY |
FILE NUMBER: SYF 4345 of 2006
| Ms Sresbodan |
Applicant
And
| Mr Sresbodan |
Respondent
REASONS FOR JUDGMENT
Introduction
On 6 July 2015 I delivered reasons and made orders in proceedings SYF4345 of 2006 between Ms Sresbodan (“the wife”), Mr Sresbodan (“the husband”), the Trustees of the Bankrupt Estate of Mr Sresbodan (“the Trustees”) and D Attorneys (Sresbodan & Sresbodan and Ors [2015] FamCA 515). I also made orders in proceedings SYC6323 of 2010 between R Lawyers and the husband, which I heard at the same time (R Lawyers & Sresbodan and Ors [2015] FamCA 523). The orders divided the funds held in a controlled monies account (“CMA”), which funds represented the proceeds of sale of the assets of the parties to the marriage, between the parties and interveners.
The husband appealed the orders and on 27 May 2016 the Full Court dismissed the appeal (Sresbodan & Sresbodan and Ors [2016] FamCAFC 88).
I now have before me applications by the wife, the Trustees and D Attorneys seeking orders that the husband pay their costs of the primary proceedings and, if costs are to be assessed, freezing orders to preserve sufficient of the husband’s funds to enable payment of those costs.
Each of those parties, as well as R Lawyers, obtained orders from the Full Court that the husband pay their costs of the appeal. The parties now seek freezing orders so as to retain sufficient of the husband’s funds to enable payment of their costs of the appeal once those costs have been assessed.
In SYC6323 of 2010, R Lawyers sought the payment of $30 685.26 from the husband’s share of the CMA. That sum represents the balance of a judgment obtained by them against the husband in the District Court of New South Wales on 10 December 2015 in the sum of $124 472.07. On 4 April 2011 Watts J set aside $93 786.81 from the husband’s funds so that there would be funds available to meet any judgment. That sum remains held for the benefit of R Lawyers and an order will be made for its release. Consideration will need to be given, however, as to whether orders should be made providing for the payment of the balance of $30 685.26.
On 28 June 2016, I ordered that proceedings SYF4345 of 2006 and SYC6323 of 2010 again be heard together and that the evidence in one be evidence in the other.
During the hearing of the applications it became apparent that the sums claimed by the various parties for costs and the outstanding damages ranged between $863 589.66 to $1 139 836.63, depending on whether costs are fixed. The husband is presently entitled to approximately $639 000 from the CMA. (The 6 July 2015 orders provided for him to receive $646 425.60 together with 10.7 per cent of any remaining balance. On 27 November 2015 I made an order for an interim distribution to the husband of $50 000. Of that sum, $37 102.33 has yet to be collected by the husband. The best estimate of what the husband was likely to receive from the CMA was $602 000.) Other than the second-hand van in which he lives, that sum is the husband’s sole asset.
Faced with this dilemma, each of the applicants asked me to fix their costs and order them to be paid immediately from the husband’s share of the CMA. The applicants sought freezing orders in the event that I declined to fix their costs.
I shall first determine the applications for costs and then turn to the freezing orders. I shall then give my reasons for refusing the husband’s application for an adjournment of the proceedings and a stay of the earlier orders.
Costs of the primary proceedings
The wife, the Trustees and D Attorneys each seek orders that the husband pay their costs of the primary proceedings. R Lawyers, who have their own proceedings, made no application for costs either in these proceedings or in SYC6323 of 2010.
Costs are governed by s 117 of the Family Law Act 1975 (Cth) (“the Act”). Each party is to pay their own costs (s 117(1)) unless the court is of the opinion that circumstances justify a different order (s 117(2)). In considering whether to make such a costs order the court is to have regard to the matters set out in s 117(2A). These provisions give the court a broad discretion as to costs (Penfold v Penfold (1980) 144 CLR 311).
The approach to costs generally in this matter
Whilst each application for costs must be looked at individually because different considerations apply, there are some matters that are common to each. It is useful to discuss these at this stage.
The first consideration is the financial position of the husband. It is clear from the reasons given on 6 July 2015 that, apart from the second-hand van in which he lives, his only assets are whatever he will receive from these proceedings. I was informed, without opposition, that pursuant to the orders, the husband will receive $602 000 approximately from the CMA as it presently stands. To that must be added $37 102.33, which is the balance of the interim payment made to him pursuant to the orders of 27 November 2015.
There is no reason to think that the husband’s living circumstances have changed recently. In my reasons I described them as dire (Sresbodan & Sresbodan and Ors [2015] FamCA 515 at [220]). At the time of the hearing, the husband was living in his van in the car park of a shopping centre and was receiving $800 per fortnight in Centrelink benefits.
The wife has a home unit and will receive over $2 million from the CMA. Her financial position is very much better than the husband’s.
The Trustees act for the benefit of the creditors of the bankrupt estate of the husband. Little is known of the creditors, but it is they who will bear the burden of the Trustee’s costs, to the extent they are not met by the husband. The husband’s son is a creditor of the estate, as is D Attorneys.
D Attorneys and R Lawyers are firms of lawyers. Neither adduced any evidence of their financial position.
The payment of any costs by the husband must necessarily reduce the sum that will become available to him from these proceedings. There is no evidence that $639 000 would or would not be sufficient for the husband to acquire accommodation in Sydney, but it is safe to say that any significant erosion of that sum would, at the least, make it very difficult for him to do so.
This is a consideration that weighs against the making of the costs orders sought, or, at the least, the making of costs orders that would deplete the funds available to the husband.
The conduct of the proceedings is a relevant matter. As explained in the reasons for judgment, the husband’s bankruptcy flowed from costs orders made against him in the Land and Environment Court in 2005. He eventually paid the costs, but only after a sequestration order was made against him. His subsequent application to annul the bankruptcy did not succeed.
The husband asserts that because the proceedings had been dismissed, the costs order could not have been made and was, therefore, a nullity. It follows, he asserts, that the failure to pay these costs could not be relied on to found the sequestration order, that it too was a nullity and that he is not now, and never has been, a bankrupt.
Whilst it is true that the proceedings taken against the husband by the Suburb F Shire Council were dismissed for want of prosecution in 2005, it is also clear that they were subsequently re-instated. This is so, despite the fact that the re‑instatement was never the subject of a formal order. The husband participated in the re-instated proceedings. All this was made clear by Foster J in his reasons for dismissing the husband’s annulment application. His Honour recorded that the Land and Environment Court had dismissed the husband’s application to set the costs order aside.
In 2013 Yates J dismissed an application by the husband for leave to appeal from the decision of Foster J.
The husband continues to assert that the costs order was improperly made by the Land and Environment Court because the proceedings had been dismissed.
The husband raised that issue unsuccessfully and on three separate occasions in the New South Wales Court of Appeal:
The husband loudly and persistently maintained that stance in the proceedings before me. He filed an Application in a Case seeking the following order:
That the court issue a formal statement to clarify specific point of law as to the definition on application of the word “dismiss” when Judge or Magistrate orders that a case is dismissed.
Despite dismissal of that application the husband continued to agitate his position. In my reasons of 6 July 2015 I said:
36.For the reasons just given that did not terminate his bankruptcy. The husband is implacably of the view that his payment of the debt means that he ought never have been a bankrupt and that his bankruptcy is fraudulent. He implored me to ignore the decisions of the Federal Court to the contrary.
…
39.The practical effect of the husband’s belief is that he does not recognise the appointment of the trustees and will not co-operate with them. During the hearing he refused to accept any document from the trustees, or indeed the intervenors, and would not look at any documents that were tendered by them. Although these documents were placed in front of the husband he did not, as far as I could see, read them.
40.Because of his view as to the appointment of the trustees the husband did not engage with the other issues in the proceedings. I formed the view that he had come prepared only to argue that he was not, or should not, have been made a bankrupt and nothing more.
In addition to describing the bankruptcy as fraudulent, the husband asserts that lawyers who acted for him prior to his bankruptcy were part of the fraud. At [154] of my reasons, referring to the debt of D Attorneys, I said:
…There is no doubt that the husband will not voluntarily pay the debt. He regarded the lawyers with whom he has had dealings as part of a wicked and fraudulent conspiracy against him.
This stance of the husband made it essential for the Trustees, D Attorneys and R Lawyers to appear to protect their position and their interests. It made the proceedings much longer and more complex.
This consideration weighs in favour of the costs orders sought.
This leads to a further consideration. The applicants submit that if costs are to be assessed, the husband will continue to use the assessment as a means of ventilating his views as to the validity of the bankruptcy, thus exposing the applicants to further proceedings burdened by irrelevancies and further merciless appeals (insofar as the appeal relates to the validity of the costs orders and the bankruptcy).
I accept that this will be so.
In addition to the hearings to which I have already referred, the husband maintained that stance in the appeal. His first ground of appeal was:
1.THAT His Honour Justice Aldridge erroneously proceeded to make his Judgment by disregarding the fact that the case of the [Suburb F Shire Council] against [Mr and Ms Sresbodan], Matter No: … was not re-instated by any “further order of the court” following it being “Dismissed for want of prosecution” on … 2005 and, therefore, the “Costs Order” made by Her Honour Justice Pain on … 2005 is a nullity.
(Errors as in the original)
The Full Court said:
52.It is apparent from the transcript of the hearing before the primary judge that the husband was obsessed with the fact of the bankruptcy and refused to address the issues at the trial despite the best efforts of Aldridge J. This obsession and refusal to address the issues arising from the trial was evident in the husband’s written argument and in the hearing of the appeal.
…
56.It is readily apparent that by Grounds 1 and 2 of his appeal, as expanded upon by the husband in oral argument before us, the husband seeks by his appeal, as he did in the trial before Aldridge J, to mount a collateral challenge to the legitimacy of the sequestration order made against his estate on 12 May 2009. The husband contends that the trial judge erred in not embracing this collateral challenge in the respects identified in Grounds 1 and 2.
57.The insurmountable difficulty for the husband in advancing these challenges was identified and articulated by the trial judge (Reasons at [10], [32], [241] to [251]). In summary, as referred to by the trial judge, these same issues have previously been agitated by the husband in various proceedings in the Federal Court of Australia and have been determined adversely to the husband by that Court. As is also referred to by the trial judge, correctly with respect, it was not open to the husband to attempt to re-agitate the same issues or to challenge the making of the sequestration order in the property settlement proceedings.
58.The trial judge’s Reasons contain various references to the respective determinations of each of Foster J, Emmett J and Yates J in various Federal Court of Australia proceedings related to the husband’s bankruptcy.
During the hearing on 28 June 2016 the husband constantly raised his point about the nullity of the costs orders and the sequestration orders. He said many, many times “dismissed means dismissed”. He said that the Trustees are here “totally illegally” and because the Land and Environment Court proceedings had not, according to his version of events, been re-instated, there “is fraud at the highest level”.
The husband informed me that he has filed a Notice of Motion in the Land and Environment Court seeking, again, to set aside the costs orders. That Motion was before the Court in July 2016.
The parties’ concerns about assessment of costs are justifiably held. There is no doubt such a process will be long and expensive. There are likely to be reviews and appeals.
Thus, all of the applicants urged me to make a fixed order for costs myself so as to avoid that delay and expense. They accepted that such an assessment would be arbitrary, to a degree, and would result in them receiving less than they were likely to receive on an assessment. The advantages to them would be certainty, the speedy finalisation of all remaining aspects of the proceedings and reduced costs.
There are benefits, too, for the husband in this course. The husband will receive whatever funds he is to receive sooner and is likely to pay less in costs than if the costs were assessed.
The alternative is assessment.
This is the course preferred by the husband. He says that he wishes to have the costs assessed line by line and, further, that he is entitled to do so.
It is useful to set out the costs claimed by the parties. In doing so I list the wife’s claim for costs at $100 000, which was the costs order she sought, if costs were to be fixed by me. Her evidence, however, was that she had paid $376 246.73 to her lawyers since 16 June 2009. D Attorneys sought an order that their costs be fixed in the sum of $100 500 and I list that sum accordingly.
Costs of the Hearing
The wife$100 000.00
Trustees$579 777.33
D Attorneys $100 500.00
Costs of the Appeal
The wife$34 168.40
Trustees$18 375.73
D Attorneys $15 214.20
R Lawyers$15 554.00
Total$863 589.66
It is obvious that there are insufficient funds available to the husband to pay these costs. That may well be the case even if the costs are significantly reduced on assessment.
Thus, if there is not to be a lump sum assessment of costs, the applicants seek a freezing order to ensure that a sum will be available to meet their costs when assessed. Plainly enough, on their case, that would require freezing all of the funds payable to the husband.
The creditors submit that if their costs are to be assessed, the Court will still be faced with the decision as to how much, if any, of the husband’s funds should be frozen. So much may easily be accepted. It is in the interests of everyone, they submit, for the costs to be fixed and the matter finalised now. They made that submission, accepting that some funds will need to be paid to the husband.
Principles as to fixing lump sum costs
Section 117 of the Act and r 19.18(1)(a) of the Family Law Rules 2004 (Cth) clearly permit the Court to fix the amount of the costs to be paid.
Whilst it is relatively common for costs to be fixed where the costs are not significant, it is rare, for obvious reasons, where the costs are substantial.
In Idoport Pty Limited v National Australia Bank Limited and Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23, Einstein J considered the application of s 98(4)(c) of the Civil Procedure Act NSW (2005), which permits the making of an order for costs in “a specified gross sum”. There the costs sought exceeded $61 million. Einstein J comprehensively summarised the principles to be involved in such an assessment, saying:
8.As may be expected in what is likely the largest claim ever made in this country for a gross sum costs order, both parties took the court to the authorities which inform the principled exercise of the relevant discretion. Notwithstanding that some areas of difference arose concerning disparate parameters/appropriate emphases, in terms of the application of the appropriate principles, there were in the main no areas of serious disagreement.
9.For present purposes it seems convenient to commence with a recitation of the principles which inform the exercise of the discretion:
i.the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation: Beach Petroleum NL v Johnson (1995) 57 FCR 119, Von Doussa J page 265: [following Purchase J in Leary v Leary [1987] 1 All ER 261 who described the purpose of the rule allowing the fixing of a gross sum as “the avoidance of expense, delay and aggravation involved in protracted litigation arising out of taxation” (All ER page 265)];
ii.the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum at [16];
iii.the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrison v Schipp (2002) 54 NSWLR 738, per Giles JA at para [22]; [following (Wentworth v Wentworth (CA, 21 February 1996, unreported, per Clarke JA) and adopted in Sony Entertainment v Smith (2005) 215 ALR 788; [2005] FCA 228; BC200500963 at para [199];
iv.a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: Harrison v Schipp at para [22];
v.the gross sum “can only be fixed broadly having regard to the information before the Court”: Beach Petroleum at 124;
[In Hadid v Lenfest Communications Inc [2000] FCA 628 at [35] it was said that the evidence enabled fixing a gross sum “only if I apply a much broader brush than would be applied on taxation, but that … is what the rule contemplates”.]
vi.nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119 at 120;
vii.In terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson & Ors (No 2) (1995) 57 FCR 119, put the matter as follows, at paras [16]:
“On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary ‘fail safe’ discount on the cost estimates submitted to the Court: Leary v Leary at 265. … ”
A closer examination of the requirement to act judicially
10.I accept as correct the submissions of the Idoport Parties in contending that the proper approach of the Court in the present environment should not be described as ‘arbitrary’. In short:
i.although the principles set forth above are helpful in providing guidance to the Court as to the manner in which the discretion to make a gross sum costs order is to be exercised, ultimately whether an approach is logical, fair and reasonable falls to be determined by reference to the particular case before the Court;
ii.as explained by Purchas LJ in Leary v Leary [1987] 1 WLR 72 at 76:
“The unlimited discretion given by Ord. 62, r. 9 must be exercised in a judicial manner. How the powers are to be used varies widely from case to case and each case must be considered on its own merits. It is easy to envisage cases where a judge could be said to have acted unjudicially, e.g. by clutching a figure out of the air without having any indication as to the estimated costs; receiving such an estimate without the details being made available to the other side; or refusing a request to hear submissions on such a schedule if the party against whom the order is to be made makes, on reasonable grounds, an application to be heard.”;
iii.the requirement that the power to award a gross sum should be exercised judicially does not mean that it must be exercised in any scientific or formulaic manner.; At the heart of the judicial function is the responsibility to weigh up competing factors and considerations, many of which might conflict, to reach a determination. Acting judicially carries with it an obligation to apply the rules of natural justice, to act impartially and to apply the law to the facts. As Kitto J explained in The Queen v Trade Practices Commission; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 at 374:
“Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation so that an exercise of the power creates a new charter by reference to which that question is in the future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist.”;
iv.the scope and nature of judicial power was also addressed by Gaudron J in Harris v Caladine (1991) 172 CLR 84 at 150 in these terms:
“Judicial power is usually defined in terms of its subject matter, but it is a power that, for complete definition, requires description of its dominant and essential characteristic, namely, that it is exercised in accordance with that process which is referred to as ‘the judicial process’. Thus, in general terms, it is a power which cannot be exercised until the ‘tribunal which has power … is called upon to take action’ (Huddart Parker), which (subject to limited exceptions) proceeds by way of open and public inquiry, which involves the application of the rules of natural justice, and which is directed to ascertaining ‘the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined’: Tasmanian Breweries, per Kitto J.” (references omitted);
v.more recently, Gaudron J explained the nature of judicial power in Nicholas v The Queen in these terms:
“In my view, consistency with the essential character of a court and with the nature of judicial power necessitates that a court not be required or authorised to proceed in a manner that does not ensure equality before the law, impartiality and the appearance of impartiality, the right of a party to meet the case made against him or her, the independent determination of the matter in controversy by application of the law to facts determined in accordance with the rules and procedures which truly permit the facts to be ascertained and, in the case of criminal proceedings, the determination of guilt or innocence by means of a fair trial according to the law. It means, moreover, that a court cannot be required or authorised to proceed in any manner which involves an abuse of process, which would render its proceedings inefficacious, or which brings or tends to bring the administration of justice into disrepute.” (1998) 193 CLR 173 at [74].
11.In the result it is not an arbitrary exercise of power for the Court to weigh up competing factors and make a determination, even if, as is often the case, the task cannot be undertaken in a mathematical or precise manner. As the Court of Appeal found in Norris v Blake (by his Tutor Porter) [No 2] (1997) 41 NSWLR 49 mathematical weightings of potential outcomes in loss of chance cases might be unsustainable and reliance rather should be placed on more intuitive methods to determine loss: (1997) 41 NSWLR 49 at 71-73. Similarly, the courts are frequently required to estimate damages that are not capable of precise quantification and require a degree of approximation and even guesswork. [Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83, 138 and 153; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257 at [37]-[38]]
In Stoian & Fiening (Costs) [2014] FamCA 944, D J referred to those principles with approval. His Honour said:
95....In short, I am satisfied that the purpose of the subject rule to avoid the expense, delay and aggravation involved in further litigation surrounding assessment of costs ought in this case be achieved and is achievable.
96.I am fortified in the conclusion that, accepting that r 19.18(1)(a) is “to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation” that purpose or object ought be attained in any case where it is possible to so do by reference to the Rules more generally.
97.For example, r 1.04 expresses the main purpose of the Rules and provides as follows:
Rule 1.04 Main purpose of Rules
The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.
98.Rule 1.06 mandates that the Court applies the Rules to promote that main purpose.
99.Rule 1.07 relevantly provides:
Rule 1.07 Achieving the main purpose
To achieve the main purpose, the court applies these Rules in a way that:
(a) deals with each case fairly, justly and in a timely manner;
…
(c) is proportionate to the issues in a case and their complexity, and the likely costs of the case;
(d) promotes the saving of costs;
(e) gives an appropriate share of the court’s resources to a case, taking into account the needs of other cases; and
…
I respectfully agree with his Honour’s comments. In Hand & Bodilly [2013] FamCAFC 98, the Full Court held that the primary judge, who had fixed a costs order in a substantial sum, was not in error in doing so.
I am satisfied that if costs can be fixed now, much expense, delay and aggravation that will be involved in taxation and the monitoring of freezing orders will be avoided. All the parties, including the husband, will be advantaged. I accept that the husband will not see it to be to his advantage.
I also accept that if the costs are not fixed, the process of assessment will be the subject of much aggravation and expense. It is also likely that the sum available to pay those costs will be less than it now is. Even if the funds are held pursuant to freezing orders they are likely to be whittled away by reasonable living expenses and legal expenses.
Whether costs should be paid, and whether there is sufficient information before the Court to enable the costs to be fixed in a judicial manner, must depend on the evidence adduced in each application, to which I shall now turn.
Application by the wife, Ms Sresbodan
In her Application in a Case filed on 31 July 2015 the wife sought an order that the husband pay her costs of the proceedings on an indemnity basis or, alternatively, on a party and party basis. However, by an Amended Application in a Case filed on 22 June 2016, she sought an order that $100 000 be paid to her from the husband’s share of the CMA for her costs. In her case outline and an affidavit filed 22 June 2016, the wife explained that her costs since 28 April 2009, when she made her first offer to settle, were $376 246.73. Notwithstanding that this figure greatly exceeds the sum she now claims, she proposed the lesser sum of $100 000 in order to avoid the costs and difficulties associated with assessment.
The wife accepted that in the ordinary course in property proceedings it would be appropriate for each party to the marriage to pay their own costs. She also accepted that as a result of the final orders she is financially much better off than the husband, although she did point out that the husband’s financial situation is largely of his own making.
Significantly, however, the wife relies on three offers of settlement she made to the husband on 28 April 2009, 18 July 2012 and 4 April 2014 which were not accepted by him.
The wife made an offer of settlement of 28 April 2009, before the sequestration order was made against the husband. It proposed that their sole asset, N Street, Suburb K, be subdivided into two equal portions with the husband and the wife to receive one portion each. The husband was obliged to remove, at his expense, all rubbish and building material from the wife’s half of the property. The parties were to be jointly liable for the debt of Mr S (who had lent money to the parties in relation to the development of this land), the mortgage and outstanding land tax and council rates. The husband was to be liable for any legal costs of Mr S and any claims against the parties taken by the Suburb F Shire Council.
The offer of 18 July 2012 was that the wife be paid $1 500 000 from the CMA and that the parties would retain all other property, including superannuation, that was in their possession at the time.
On 4 April 2014 the wife offered to settle the proceedings on the basis that she receive 50 per cent of the net matrimonial asset pool as quantified in that letter. The effect of that offer, as set out in the letter, was that she agreed to settle the proceedings on the basis that she received $2 012 504.24 from the CMA.
In the event, I ordered that the wife receive $2 023 311 from the CMA, together with a further payment of $1984 and 60.8 per cent of any balance remaining in the CMA.
This gave effect to my finding that the appropriate property division was that the wife should retain 50 per cent of the proceeds of the sole matrimonial asset of significance. She had earlier received interim payments from the CMA of $1 150 000 together with further distributions from the CMA for payment of income tax accrued on her interest. It follows that the wife’s last offer of compromise realistically anticipated the outcome of the proceedings. It also follows that the offer made on 18 July 2012 (that the wife receive $1.5 million) was most imprudently rejected. Since the date of that offer the wife incurred legal costs of $265 259.59.
As is made clear by s 117(2A)(f), offers of settlement carry significant weight. See also Robinson and Higginbotham (1991) FLC 92-209 at 78,417; Browne v Green (2002) FLC 93-115.
Taking into account the difference between the husband and wife’s financial positions and the husband’s present living circumstances, I am nonetheless satisfied the husband’s failure to accept the wife’s reasonable offers, particularly that of 18 July 2012, and his conduct of the proceedings makes it appropriate that he bear the wife’s costs of the proceedings.
As I have said, the wife sought costs on an indemnity basis but limited her claim to $100 000. As her actual costs were in excess of $300 000, no question of indemnity in fact arises. However, I accept that she did so in an attempt to have the court fix her costs. If they are not to be fixed, the question arises as to whether they should be assessed on an indemnity basis or on a party and party basis.
Indemnity costs are only justified in exceptional cases: Kohan & Kohan (1993) FLC 92-340 at 79,614; D & D (Costs) (No 2) (2010) FLC 93-435; Limousin v Limousin (Costs) (2007) 38 Fam LR 478. A well-established category for the payment of costs is where there has been, as here, an imprudent refusal of an offer of settlement. A further consideration is the undue prolongation of the case, again as here, by making groundless contentions. As to both, see the often quoted Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FLR 225 at 233-34.
I find these two matters to be persuasive, even taking into account the husband’s poor financial position. The property proceedings were commenced some 10 years ago. They were prolonged unnecessarily by the husband’s bankruptcy and his approach to it. The case was prolonged unduly by his groundless contentions. The husband refused a most reasonable offer.
Taking all of these matters into account, the appropriate order is that the husband pay the wife’s costs of the proceedings from 18 July 2012, such costs to be assessed on an indemnity basis.
The question then becomes, can I properly fix the wife’s costs at $100 000, on the basis that the appropriate means for assessment is an indemnity basis?
The wife’s solicitor swore an affidavit which annexed, she said, an “itemised account of all costs paid by my client from the date of her first offer to settle dated 28 April 2009.” In fact, it is a one page summary of the costs paid. This stands in contrast to the itemised account of the costs of the appeal which gives a detailed breakdown of the costs. It discloses that the costs incurred by the wife since that date (including counsel’s fees and disbursements but excluding interest) are $265 259.59.
The wife was represented by counsel and her solicitor on each occasion the matter was before the court. She relied on affidavits of significant length and complexity. Her lawyers were required, as were all parties and the Court, to come to grips with a number of difficult factual and legal issues arising from the husband’s bankruptcy. A particularly difficult issue was the determination of the various claims against the CMA. All this would have taken time and expense.
The husband submitted that I should not fix the costs, because there was not an itemised account which, he submitted, must be gone through line by line. That, of course, is an assessment or a taxation. Such a process would entirely defeat the purpose of a lump sum assessment.
The issue is whether the Court can be confident that an appropriate sum can be assessed on the materials available. I do not consider that the evidence enables a costs figure to be rationally reached. I have not been informed of the hourly or daily rates of the solicitor and barrister who appeared for the wife or the hours they worked. Attempting to quantify an appropriate amount would be little more than guesswork. It is no answer to say that the wife is seeking but less than two fifths of her costs of $265 259. That is a very large sum of costs, even for an eight day trial. Whilst that sum might be entirely justified, the evidence before me does not enable me to be satisfied that it is.
It is tempting to say that an assessment of $100 000 would be appropriate, as that is less than two-fifths of what is claimed. Nevertheless, the fixing of costs must be seen to be logical, fair and reasonable on the evidence that is available. Whilst a broad brush approach can be easily justified, speculation cannot. On balance, therefore, the costs will be assessed.
Application of the Trustees
In their Application in a Case filed on 30 July 2015, the Trustees sought an order that the husband pay their costs of the proceedings on an indemnity basis or alternatively on a party and party basis. In an Amended Application in a Case filed on 22 June 2016 they sought the following order:
1.The Respondent, [Mr Sresbodan], pay the costs of the Applicant, [Mr Vanin] and [Mr Cox], the Trustees of the Bankrupt Estate of [Mr Sresbodan], as follows:
(a)On an indemnity basis calculated as a gross sum of $579,777.33;
or in the alternative
(b)On an indemnity basis as assessed;
or in the alternative
(c)On an ordinary party / party basis in a gross sum;
or in the alternative
(d)On an ordinary party / party basis as assessed from 12th May 2009 or from such date as determined by the Court.
In oral submissions the Trustees pursued the claim for indemnity costs, but eventually and realistically submitted that the court should assess the costs in a lump sum, acting broadly but making a generous assessment in favour of the Trustees.
The Trustees quite properly submit that they had no choice but to be involved in these proceedings and that the husband refused to accept his bankruptcy. Indeed the husband refused to acknowledge the Trustees in the proceedings at all at any stage. The husband continued to assert that his bankruptcy was not valid, despite that issue having been determined against him many times in other courts. There is no doubt that the conduct of the husband prolonged the proceedings, adding to the Trustees’ costs.
The Trustees are clearly entitled to costs – as Trustees of the husband’s bankrupt estate they were essential parties to the proceedings. They had claims against the husband’s share of the CMA, which were established against the opposition of the husband. They have no personal interest in the litigation, but were required to participate as an incident of their appointment. As the reasons for judgment indicate, there is likely to be a shortfall in the bankrupt estate. Any costs not the subject of a cost order will be borne by the husband’s creditors by way of a reduced dividend.
I take into account the husband’s circumstances. Nonetheless, the success of the Trustees, and the husband’s conduct of the proceedings as referred to earlier, are circumstances that justify a costs order in the Trustee’s favour.
In seeking indemnity costs the Trustees submitted:
32.In this case the husband ought to have known that he had no reasonable prospect of success in challenging his bankruptcy.
33.Whilst not specifically asserting fraud he has gone as far as to deny that the Trustees exist and displayed disrespect for Court findings and Court procedures.
34.The Husband’s attitude to the Trustees and his bankruptcy prolonged the litigation and meant that it was impossible for the trustees to disentangle themselves from the litigation.
35.The Husband’s attitude meant that there was no chance of him settling with the Trustees and rendered any offers of settlement by them futile.
36.The Trustees simply had no choice but to incur significant costs to achieve any form of order within any range in the proceedings.
37.These circumstances are unusual and exceptional justifying serious consideration of an award for indemnity costs.
There is force in those submissions. However, against that it must be said that the Trustees were not wholly successful. I did not accept all of their claims for payment from the CMA. I also found that a considerable part of the Trustees’ case, which was described as the First Intervener’s Schedule or the Trustees’ Undertaking Document, to be of little assistance (see [94] to [102] of 6 July 2015 reasons). The purpose of that document was to try to allocate to the various parties the various interests of the parties to the sums being held in the CMA, including interest, from time to time. These two matters are sufficient to persuade me that, on balance, these costs should not be assessed on an indemnity basis but rather on a party and party basis.
The Trustees’ legal costs of the Family Court proceedings up to 6 July 2015 are said by an employee of the Trustees to be $609 331.15, which is comprised of payments to DD & DD of $482 866.04, Goldrick Farrell Mullan of $80 677.61 and counsel of $45 787.50. The existing orders will see a payment by the husband to the Trustees of $29 553.82, pursuant to costs orders made during the proceedings which have now been assessed. Thus, the Trustees’ claim is for $579 777.33.
The Trustees have placed their lawyers’ costs disclosures and memoranda of fees before the Court. They clearly disclose that fees range far beyond work in relation to the Family Court proceedings. The DD & DD memorandum is replete with references to, for example, proceedings in the Federal Court before Foster J and Emmett J, discussions about proofs of debt and meetings with trustees. On their face they have nothing to do with the present proceedings, although it is possible they may do. These considerations, however, are sufficient for me to have little confidence that I could accurately fix costs of this proceeding on the basis of this material.
Whilst the memoranda of the other two lawyers do not suffer from this problem, all three were pressed. Again, it would have been of great assistance, if not essential, to be provided with a summary setting out the charge out rates of the lawyers and the hours and days that they were engaged.
These difficulties make it impossible for there to be a logical, fair and reasonable fixing of the costs. Detailed memoranda, in a sense, add to the difficulty unless there is an explanation as to how the fees are derived, the hourly rates and why the work was necessary in an appropriate summary. In short, the court must have confidence that it is fixing the costs in a justifiable way. It is incumbent on the parties who ask the court to fix their costs to provide the material to enable that task to be done. I do not regard that obligation is met by the provision of a detailed memorandum of fees and with an invitation, in effect, just to pick a figure.
Thus, unfortunately, the Trustees’ costs will have to be assessed.
Application of the second interveners
In an Application in a Case filed on 30 July 2015, the second interveners, D Attorneys, sought an order that the husband pay their costs on an indemnity basis or, in the alternative, on a party and party basis. That approach was maintained in their Amended Application in a Case filed on 23 June 2016. Alternatively, D Attorneys sought an order that the court quantify their costs in the sum of $100 500. D Attorneys asked me to fix the costs in whatever sum I considered appropriate.
In my reasons for judgment on 6 July 2015 I found that D Attorneys were creditors of the husband in the sum of $61 279.02 and this was a debt the husband would not voluntarily pay (at [154]). I found that it was appropriate to make an order for payment to them of that sum from the monies being held in the CMA to which the husband was otherwise entitled.
The debt arose from proceedings taken against D Attorneys by the husband and consisted of costs that the husband had been ordered to pay. D Attorneys had previously acted for the husband as his lawyers. They were completely successful in the proceedings. It was reasonable for them to be parties to the proceedings because it was likely they would not otherwise be paid.
I am not satisfied, however, that there are any exceptional circumstances that would justify the impost of indemnity costs.
I am concerned about the quantum of D Attorneys’ costs. The interests of D Attorneys could have been protected by them attending on the first day of the hearing and attending on the last day for the purpose of submissions, instead of attending every day of the hearing. It is true, however, that during the hearing, the husband made scandalous statements about them. They too had to present evidence and prepare for the hearing. The balancing of these two considerations is not easy.
D Attorneys have presented a detailed memorandum of fees. It must be said, however, that the mere writing down and recording of an expense does not make it reasonable or appropriate.
Ultimately, the question is whether I am confident in making an assessment of the costs that is logical, fair and reasonable. I do not consider that I can make such an assessment. The costs will have to be assessed.
Application for the payment of damages
On 4 April 2011, in proceedings SYC6323 of 2010 Watts J made the following order:
Pending further order, the solicitors for the wife retain the amount of $93,786.81 in the controlled monies account of the solicitors for the wife as funds that are not to be released until the resolution of any dispute between R Lawyers and the husband in respect of outstanding fees and any other cross-claim that the husband may seek to bring against [R Lawyers].
On 6 July 2015 I varied that order as follows:
(2)That from the husband’s share of the husband’s interest in the controlled monies account holding the proceeds of sale of [N Street Suburb K], subject to further order of this court and pending determination of the proceedings between R Lawyers and Mr Sresbodan, $93 786.81 to [R Lawyers] is to be held by them subject to the orders of Watts J made on 4 April 2011.
On 10 December 2015 a District Court judge gave judgment for R Lawyers against the husband in the sum of $124 472.07. The husband’s cross‑claim was dismissed. An appeal taken by the husband was dismissed by the Court of Appeal in May 2016. No application for special leave to appeal to the High Court was lodged by the husband and thus the dispute between R Lawyers and the husband has been finally resolved. There is no reason why the sum of $93 786.81, which is being held on their behalf, should not now immediately be released to R Lawyers. R Lawyers also seeks the payment of the balance of $30 685.26 to be paid from the husband’s share of the CMA to make up the balance of the judgment debt.
R Lawyers are a creditor in this amount and entitled to be paid. The husband will not voluntarily pay them. R Lawyers acted for the husband in these proceedings and the sum which the husband is presently entitled to receive are the fruits of that litigation. R Lawyers thus have a lien over those funds to secure payment: Firth v Centrelink (2002) 55 NSWLR 451 at [35]; Jackson v Richards [2005] NSWSC 630 at [47].
It follows that orders should be made providing not only for the release of the $93 786.81 but also for payment of $30 685.26 from the husband’s share of the CMA.
Applications to fix the appeal costs
The wife, the Trustees, D Attorneys and R Lawyers each asked me to quantify their costs pursuant to the orders of the Full Court.
The issue of the costs of the appeal was a matter for the Full Court. The orders that were made provided for the costs to be assessed if the quantum could not be agreed. Those orders therefore provide the mechanism for determining the quantum and preclude any other option. Further, in making the costs orders the Full Court was exercising its appellate jurisdiction, which is not available to me sitting as a trial judge.
The costs of the parties of the appeal must be assessed if they cannot be agreed.
Claims for freezing orders
The wife, the Trustees, D Attorneys and R Lawyers each received an order from the Full Court on the hearing of the appeal that the husband pay their costs. Each of those parties now seeks an order that funds be retained from the husband’s share of the CMA pending assessment of their costs.
The sums claimed are:
·The wife $34 168.40
·The Trustees $18 375.73
·D Attorneys $15 214.20
·R Lawyers $15 554.00
Total $83,312.33
I have also referred to the claims for costs of the primary hearing of:
Costs of the Hearing
The wife$265 259.59
Trustees$579 777.33
D Attorneys $100 500.00
The wife’s claim is included in the above amount because I understood that the wife was limiting her claim to $100 000 only if it could be fixed in that amount.
It is without doubt that this Court has power to make a freezing order (which is sometimes known as an asset preservation order) (Jackson v Stirling Industries Limited (1987) 162 CLR 612; Waugh and Waugh (2000) FLC 93‑052; Mullen and De Bry (2006) FLC 93-293). That jurisdiction extends to making an order preserving assets even after judgment has been given pending execution. However, the purpose of such orders is to restrain the defendant from disposing of specific assets until after judgment or, in this case, assessment of costs, so as to avoid the judgment being rendered nugatory. The purpose is not to create a security in favour of the plaintiff for payment of the debt (Jackson & StirlingIndustries Limited (1987) 162 CLR 612 at 625 per Deane J).
In that same case Wilson and Dawson JJ, who otherwise agreed with Deane J, said at 617-618:
One important result of viewing the Mareva injunction in this way is to emphasize the limits of the remedy. Its use must be necessary to prevent the abuse of the process of the court. As Ackner L.J. pointed out in A. J. Bekhor & Co. Ltd. v. Bilton, the Mareva injunction represents a limited exception to the general rule that a plaintiff must obtain his judgment and then enforce it. He cannot beforehand prevent the defendant from disposing of his assets merely because he fears that there will be nothing against which to enforce his judgment nor can he be given a secured position against other creditors. The remedy is not to be used to circumvent the insolvency laws.
(Citation omitted)
Each of the parties seeking the freezing order is a creditor of the husband. He will not pay them voluntarily. Indeed, he regards them as participants in a fraud. He is pursuing further proceedings which appear to be doomed to fail, in which he has, or proposes, to engage lawyers. It is telling that he did not wish to receive a trust account cheque but rather wished to receive cash or a cheque made payable to cash (see paragraphs [121] to [130] below). He told me that this was because money in a bank account could be garnisheed. The husband is likely to retain these funds in a manner that keeps them hidden. This is not only because he wishes to avoid paying his creditors. The husband will take whatever steps he can to ensure that the Trustees, D Attorneys and R Lawyers are never paid because of his view of them.
I am satisfied that in the absence of a restraining order, these funds will be dissipated or hidden by the husband. The costs orders to be made by me and those made by the Full Court would be rendered entirely nugatory.
A freezing order is a species of interim injunction and should be supported by an undertaking as to damages. For understandable reasons the Trustees declined to give such an undertaking. They submitted that they should not be required to give an undertaking because of the small amount involved and the role of the Trustees. I do not agree because the point of the undertaking is to protect the interests of the husband. I will not make the freezing order sought by them. The wife, D Attorneys and R Lawyers proffered the usual undertaking as to damages.
I was asked to make orders providing for payment from the frozen funds after the assessment has been undertaken.
It is not appropriate to make that order. It would have the effect of converting unsecured creditors into secured creditors, which is impermissible. The frozen funds will remain held, but held on behalf of the husband. It is impossible to stress this too highly. Any creditor may execute against it and the husband can seek to have the freeze lifted. Consistently with authority, the funds will be frozen for a specific period only.
Such an order is neither a species of execution nor the creation of a security in favour of the creditor. It follows that where a person whose funds are frozen relies on those funds for living and legal expenses, provision will be made out of the frozen assets for the payment of those expenses.
It is necessary to consider what orders should be made for the appropriate living expenses and legal expenses of the husband.
The husband is presently entitled to receive approximately $602 000.00 from the CMA. This will be reduced by $30 685.26 which will be paid to R Lawyers. The husband has $37 102.33 awaiting collection by him.
The claims referred to in [102] and [103] above, excluding the Trustees’ claims, total $430 696.19.
It is inherent in the nature of freezing orders that circumstances might change. It is also possible that the husband can identify genuine living expenses that are not covered by the order that will be made today. Both will be ameliorated by an order giving liberty to apply for further orders on 7 days’ notice.
It is therefore highly likely that the matter will return to Court more than once. I consider it prudent that some funds be preserved to allow for the parties’ costs, should the matter be unnecessarily relisted. A further $60 000 will be frozen to cover such exigencies and costs and expenses that arise out of the assessment of costs.
Thus, I will make orders freezing $490 000 of the husband’s funds. Again, it is worth repeating that these funds will remain the husband’s until otherwise dealt with. There will be liberty to any person with any claim against those funds to apply for a variation of the order. This, of course, includes the husband, who may apply for a variation at any time, if appropriate allowance has not been made for his living expenses and legal expenses. It also includes other creditors of the husband.
If this order is made, the husband will be entitled to receive approximately $80 000 from the CMA. As I have said, he has $37 102 awaiting collection. This sum should be sufficient to ameliorate his living expenses for the next two years, which will be the period of the freezing order (this being my best estimate of the time the assessments of costs will take). If this sum is not sufficient, the husband has liberty to apply. He may do so immediately, if he has a genuine need for further funds.
I assume that the present holder of the funds (the wife’s solicitor) will continue to do so. If she does not, then of course, the liberty to apply includes her as well.
I will also stay these orders for seven days and give the parties liberty to apply in the event they wish to make submissions as to the form of the orders.
Application for an adjournment
On 28 June 2016 the husband applied for an adjournment of the applications before the court so that he could retain a lawyer to represent him. I declined the application and indicated that I would give my reasons at the time of making final orders. These are the reasons.
In order to understand the husband’s application it is necessary to give some background.
I refer to and incorporate my earlier reasons for judgment of 6 July 2015 (Sresbodan & Sresbodan and Ors [2015] FamCA 515) and the reasons of the Full Court on 27 May 2016 (Sresbodan & Sresbodan and Ors [2016] FamCAFC 88).
As will be seen from the orders made, the husband had an entitlement to a payment from the CMA of $646 425.60 together with 10.7 per cent of any remaining balance.
On 27 November 2015 I made some orders for interim payments out from the CMA pending the appeal. One of the orders made was:
2.In the event that the orders for preparation of the Appeal Books are amended by the Appeals Registrar, and the wife is directed to prepare the Appeal Books, a payment to Vizzone Ruggero Twigg Lawyers for the costs of preparing and serving the Appeal Books in accordance with their Costs Disclosure dated 20 February 2015 filed herein and that such payments are to be on the account of [Mr Sresbodan].
The effect of that order was to provide an interim distribution of funds to the husband. Not all of the $50 000 so distributed was required for the preparation of the appeal books and a balance of $37 102.33 remained in the trust account of the wife’s solicitor. Consequent upon the appeal, an application for a stay of the distributions from the CMA was made so as to preserve funds pending the determination of the costs orders in the proceedings before me and the assessment of the costs orders to be made by the Full Court. The husband sought a stay of all payments pending an application to the Land and Environment Court to set aside the costs orders that had been made against him. Not all of the matters were in a position to proceed on that day and by consent the proceedings were adjourned to 28 June 2016. By consent an order was made on 14 June 2016 staying payments from the CMA up to and including 28 June 2016.
That stay did not extend to the monies held in favour of the husband in the wife’s solicitor’s trust account. It was the husband’s position that he wished to use part of those funds to instruct a barrister to appear for him when the matter returned to the court.
Returning then to the adjournment application, the husband asserted that he had not had the opportunity to brief the barrister of his choice because he had not been provided with the funds from the trust account. He submitted it was therefore necessary for there to be a further adjournment so that he could receive those funds and instruct the barrister.
A trust account cheque in the sum of $37 102.33, in favour of Mr Sresbodan, was drawn on 15 June 2016. The husband accepted that it was handed to him on 16 June 2016. It appears that the husband was not happy with the form of the cheque. He wanted a cheque payable to cash. He told me that he was concerned that if he paid the money into his bank account it could be garnisheed.
On 21 June 2016 the husband took the cheque to the offices of the wife’s solicitor and demanded that the cheque be made payable to cash.
The husband was told that there was no one present who had the authority to do so and he was asked to return the following day.
He did so. He again asked for the cheque to be altered so as to be made payable to cash. The husband was told that this was not possible and the husband then demanded cash instead of a cheque. He was again told that was not possible. The husband then demanded that the cheque be changed so that it be payable to Mr Sresbodan instead of M. Sresbodan. Later that day the husband returned and exchanged the cheque for a cheque made out to Mr Sresbodan. The husband then complained, again, that the cheque had not been made out to cash. An argument ensued and ultimately the husband threw the cheque onto the ground saying “I told you if it’s not made to cash I don’t want it” and that “I see Judge tomorrow and tell him how you robbed me”.
The cheque remains in the possession of the wife’s solicitor and is available to the husband any time he wishes to collect it.
The wife’s solicitors were entirely correct. A trust account cheque must not be made payable to bearer or to cash: see Legal Profession Uniform General Rules 2015 (NSW) r 43(1)(a). The difficulties in receiving the cheque and being able to instruct his barrister were entirely of the husband’s own making.
Further, it was not at all clear when and if the barrister would accept instructions to act for the husband (according to the husband that barrister is owed funds in respect of work carried out for the husband in the Supreme Court of New South Wales and the Land and Environment Court of New South Wales) and that he was presently overseas. There could be no confidence that if an adjournment was granted, that barrister would be willing or able to appear for the husband on that date. I also took into account the fact that all of the other parties were present and ready to proceed, which was the purpose of the earlier adjournment. I also took into account the very pressing need to finalise this long and protracted and contentious proceedings as quickly and as inexpensively as possible.
It was for these reasons that I refused the adjournment.
Application to stay the orders pending the application to the land and environment court
I accepted an oral application from the husband to stay the 6 July 2015 orders pending determination of his Notice of Motion returnable in the Land and Environment Court in July 2016. He adduced no evidence in support of the stay. Indeed, it was unclear from his submissions whether he pursued it at all.
The husband seeks to set aside the costs order made in 2005. The decisions of the Federal Court (which in turn referred to decisions of the Land and Environment Court), the Court of Appeal and the Full Court, to which I have referred earlier, doom his application to failure. There is no point in the stay and the application is refused.
I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 20 September 2016.
Associate:
Date: 20 September 2016
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