Sresbodan & Sresbodan and Ors

Case [2016] FamCA 954


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 Act 1975 (Cth) s 117(2A)

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
Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FLR 225
D & D (Costs) (No 2) (2010) FLC 93-435
Firth v Centrelink (2002) 55 NSWLR 451
Hand & Bodilly [2013] FamCAFC 98
Idoport Pty Limited v National Australia Bank Limited and Ors, Idoport Pty Limited v Donald Robert Argus [2007] NSWSC 23
Jackson v Richards [2005] NSWSC 630
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Kohan & Kohan (1993) FLC 92-340
Limousin v…

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AGLC
Sresbodan & Sresbodan and Ors [2016] FamCA 954
Case
[2016] FamCA 954
Decision Date

CaseChat Overview and Summary

In the Family Court of Australia, Aldridge J considered applications for costs arising from protracted proceedings involving Mr Sresbodan, Ms Sresbodan, and various interveners, including trustees of Mr Sresbodan's bankrupt estate and his former lawyers. The central dispute revolved around the allocation of costs given Mr Sresbodan's bankrupt status and limited assets, specifically funds held in a controlled money account.

The court was required to determine whether costs orders were appropriate against Mr Sresbodan, given his financial circumstances and conduct throughout the litigation. Further issues included whether costs should be fixed or assessed, and if assessed, whether on a party/party or indemnity basis. The court also considered the claims of Mr Sresbodan's former lawyers for payment of their outstanding fees, which they asserted a lien over funds in the controlled money account. Additionally, the court addressed applications for freezing orders to preserve Mr Sresbodan's funds pending the resolution of costs.

Aldridge J reasoned that while Mr Sresbodan's financial position weighed against making costs orders, his conduct in prolonging the proceedings and refusing reasonable settlement offers favoured such orders. The court found it could not be satisfied that the fixed sums sought by the parties were reasonable, thus directing that costs be assessed. Ms Sresbodan was awarded costs on an indemnity basis due to Mr Sresbodan's conduct. The Trustees, not having been wholly successful, were awarded costs on a party/party basis. The court also ordered the payment of a specific sum to Mr Sresbodan's former lawyers, R Lawyers, from the controlled money account, acknowledging their lien. Freezing orders were made to preserve the remaining funds in the controlled money account.

Orders

Orders of the court

1.

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.

2.

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.

3.

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.

4.

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.

5.

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.

6.

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.

7.

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.

8.

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.

9.

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.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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