Stopford Malloy and Malloy & Ors (No 2)
[2016] FamCA 1087
•9 December 2016
FAMILY COURT OF AUSTRALIA
| STOPFORD MALLOY & MALLOY AND ORS (NO 2) | [2016] FamCA 1087 |
| FAMILY LAW – EVIDENCE – Admissibility – Where the wife submitted the husband filed and served affidavits in breach of rr 5.09 and 9.08(3) of the Family Law Rules 2004 (Cth), but she also sought to rely on multiple affidavits and erroneously complained of having insufficient time to respond to the husband’s fresh affidavits when the husband did not raise any other justiciable issue – Decided evidence admitted FAMILY LAW – EVIDENCE – Admissibility – Costs Dispute – Where the 2nd and 3rd respondents objected to the admissibility of evidence adduced by the wife from an adversarial expert – Application of ss 55, 56 and 135 of the Evidence Act 1995 (Cth) – Decided evidence was admissible on the costs dispute FAMILY LAW – EVIDENCE – Admissibility – Spousal maintenance –Where the husband objected to the admissibility of evidence adduced by the wife from an adversarial expert – Where the requirements of the Rules for engagement of single experts and the admissibility of evidence from adversarial experts were not fulfilled – Where the controversial expert evidence should come from a single expert – Leave for the wife to rely on the adversarial expert evidence in relation to the spousal maintenance dispute was denied FAMILY LAW – SPOUSAL MAINTENANCE – Application for variation – Where the previous orders restrained the husband from causing the wife to lose use of a German 4WD car – Where the car was owned by the 3rd respondent and not the husband – Where the 3rd respondent’s recovery of the car from the wife was beyond the husband’s control – Where the wife has the use of her own European car – Decided application dismissed FAMILY LAW – COSTS – Between parties – Where the husband is in default of current spousal maintenance orders – Where enforcement orders were made – Where the wife sought an urgent injunction to prevent frustration of the enforcement orders by the 3rd respondent and other 3rd parties – Where the wife later consented to the dismissal of that application – Where there are cross claims for cost orders – Decided the wife acted reasonably in her initial prosecution of the application – Ordered applications for costs dismissed |
| Evidence Act 1995 (Cth) ss 55, 56, 135 Family Law Rules 2004 (Cth) rr 1.04, 1.06, 1.07, 5.03, 5.08, 5.09, 9.08, 15.5, 15.42, 15.51, 15.52 |
| Malloy & Stopford Malloy & Ors [2016] FamCA 1040 |
| APPLICANT: | Ms Stopford Malloy |
| 1st RESPONDENT: | Mr Malloy |
| 2nd RESPONDENT | Mr Q Malloy |
| 3rd RESPONDENT | The Malloy Group |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Services Commission Of South Australia |
| FILE NUMBER: | ADC | 2595 | of | 2015 |
| DATE DELIVERED: | 9 December 2016 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle/Adelaide |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 9 December 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wells QC and Mr McGinn |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Duggan SC and Mr Richards |
| COUNSEL FOR THE 2ND AND 3RD RESPONDENTS | Mr Harris QC and Ms Karri |
Orders
The Application in a Case filed on 10 June 2016 is dismissed.
The Response to an Application in a Case filed on 14 October 2016 is dismissed.
The Application in a Case filed on 2 December 2016 is dismissed.
The Application in a Case filed on 8 December 2016 is dismissed.
The oral application for costs made by the second and third respondents against the applicant wife on 1 December 2016 (reserved to today by Order 1(b) made on 1 December 2016) is dismissed.
Any and all other outstanding applications for interim relief are dismissed.
No order as to costs.
Notations
(A)The proceedings remain listed before the registrar on 7 March 2017 in respect of directions related to the substantive applications under Part VIII of the Family Law Act.
(B)The proceedings remain listed before Austin J on 19 June 2017 in respect of directions related to the substantive applications under Part VII of the Family Law Act (see Order 1 made on 21 October 2016).
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 Stopford Malloy & Malloy and Ors (No 2) 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 NEWCASTLE |
FILE NUMBER: ADC 2595 of 2015
| Ms Stopford Malloy |
Applicant
And
| Mr Malloy |
First Respondent
And
| Mr Q Malloy |
Second Respondent
And
| The Malloy Group |
Third Respondent
ex tempore
REASONS FOR JUDGMENT
By my count, this is the fifth interim hearing with which the parties have been indulged within the last three months. There have been other interim hearings before that.
The stage will soon be reached, if it has not been reached already, when the Court will need to seriously consider whether any further interlocutory application by the parties will even be entertained, since:
(a)The Court is mandated by the Family Law Act 1975 (Cth) (“the Act”) to ensure the proceedings are not protracted (s 97(3));
(b)The Family Law Rules 2004 (Cth) (“the Rules”) require the Court 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 (r 1.04);
(c)The Court is obliged to consider whether the likely benefits of taking a step in the litigation justifies the cost of that step (r 1.06(g));
(d)The Court must apply the Rules in a way that is proportionate to the issues in the case, taking into account their complexity and likely cost (r 1.07(c)), and which gives an appropriate share of the Court’s resources to a case, taking into account the needs of others (r 1.07(e));
(e)Parties are obliged to make a reasonable and genuine attempt to settle their interlocutory disputes before making an application for the Court to resolve them (r 5.03); and
(f)The Court must consider whether all of those considerations have been properly addressed in determining whether any interim orders should be made at all (r 5.08(d)).
The parties may not care how much money they spend spitefully engaging each other in this litigation, but the Court will henceforth be much more careful about the apportionment of its precious resources to them.
Before the Court for determination today are two interim disputes.
The first is an application by the wife for the husband’s payment of spousal maintenance, but it involves the following three separate applications:
(a)The wife’s Application in a Case filed on 10 June 2016, seeking amended spousal maintenance orders;
(b)The wife’s Application in a Case filed on 2 December 2016, seeking leave to rely upon extra evidence to prosecute her primary application for spousal maintenance; and
(c)The husband’s Response to an Application in a Case filed on 14 October 2016, in which he seeks dismissal of the wife’s primary application for spousal maintenance.
The second dispute involves the parties’ competing applications for costs in relation to an Application in a Case, filed by the wife on 28 November 2016, but dismissed consensually on 1 December 2016. The parties’ respective applications in respect thereto are:
(a)An oral application made by the second and third respondents against the wife for their costs on 1 December 2016, which application was adjourned until today for hearing, and
(b)An Application in a Case filed by the wife on 8 December 2016 (that is yesterday), seeking her costs against the second and third respondents in relation to her dismissed Application in a Case.
Evidence
The wife relied upon:
(a)Her affidavits filed on 7 June, 10 June, 14 October, and 7 December 2016;
(b)The affidavits of her solicitor, Ms AH, filed on 14 October, 28 November, and 8 December 2016; and
(c)The affidavit of the Court appointed receiver, Mr R, filed on 14 October 2016.
The husband relied upon:
(a)His affidavits filed on 14 October 2016 (being the affidavit of that date comprising 13 paragraphs) and 5 December 2016; and
(b)His financial statement filed on 5 December 2016.
The second and third respondents relied upon the affidavit of Mr GG filed on 16 June 2016.
There were some preliminary skirmishes over the admissibility of the evidence relied upon by the spouses, the outcome of which needs explanation.
The wife objected to the husband’s reliance upon his affidavit and financial statement, both of which were filed some days ago on 5 December 2016. Over her objection, he was allowed to do so.
The wife contended the documents were filed and served late. They were not. Rule 9.08(3) allowed them to be filed and served as late as only two days ago, but they were filed and served before that.
The wife complained the affidavit was filed in breach of r 5.09, which rule only ordinarily permits each party to rely upon one affidavit in an interlocutory application. She was right, because the affidavit was the husband’s second, but it was a high-handed submission to make given she wanted to rely upon four of her own affidavits and three more affidavits sworn and filed by her solicitor. If waiver of the rule was good for her, consistency demanded that it also be good for the husband.
The wife complained she had no chance to answer the husband’s fresh evidence, but the submission was misconceived, since the husband only sought to repel the wife’s spousal maintenance application and not raise any separate and distinct justiciable issue. The Rules do not envisage an applicant (as the wife is) having an opportunity to file evidence in reply when no new controversy is raised by the respondent.
I reject the wife’s submission that she was denied procedural fairness by the reception of such evidence, as the husband’s submission revealed. His financial statement simply fulfilled his continuing obligation of financial disclosure, because he deposed to his changed financial circumstances. The wife distrusts the husband and rejects his evidence as untruthful, but that does not render his evidence inadmissible. The affidavit filed by the husband merely deposed to recent developments and is the vehicle by which he placed many documents of indisputable provenance before the Court. He could have tendered the documents as exhibits, but annexing them to an affidavit does not prejudice the wife. Otherwise, the husband only really gave evidence about his relative lack of income, which corroborates the affidavit of Mr GG, whose affidavit was not the subject of any objection.
Given the decision to admit both the affidavit and financial statement filed by the husband on 5 December 2016, he then abandoned his objection to the wife’s reliance upon her affidavit filed on 7 December 2016.
The second and third respondents objected to the wife’s reliance upon the affidavit of her solicitor, Ms AH, filed on 14 October 2016. The significance of that affidavit was its annexure of an affidavit sworn by Mr NN, which affidavit was not itself filed in these proceedings. That is because Mr NN is a forensic accounting expert engaged unilaterally by the wife for her advice in the proceedings and she has not been granted leave to adduce evidence from him. The wife wished to adduce the evidence of Mr NN’ opinions about the “unpaid present entitlements” enjoyed by the husband in several corporations either in, or aligned with, the “Malloy Group”.
Presently, the “Malloy Group” is joined to these proceedings as the third respondent and was apparently joined as a party in that name at the wife’s behest. She deposed she joined the second and third respondents to the proceedings by an Application in a Case filed on 13 May 2016. I need not presently address the question of whether there is any controversy over which particular entities comprise the “Malloy Group” and whether such entities should instead be individually named as respondents to the proceedings.
Regardless, the affidavit of Mr NN addresses the husband’s proprietary interests in the third respondent group of corporations and expresses an opinion about the proportionate value of those interests which might be recoverable by the husband, so as to render such cash or assets amenable to property settlement orders between the spouses.
The wife sought to rely upon the evidence only to demonstrate both the bona fides and reasonableness of her application for injunctions against the second respondent, third respondent, and other third party entities, which application was dismissed on 1 December 2016. Such evidence provided context to the wife’s conduct and therefore bore upon both the prosecution of her costs application and her resistance of the second and third respondents’ costs applications arising out of the dismissal of her application.
The second and third respondents’ submissions only addressed the asserted unreliability of the NN affidavit, not its admissibility. On its face, the NN affidavit was not so unreliable as to be irrelevant to the issues in dispute or, instead, liable to be misleading, confusing or wasteful of time to consider it (see ss 55, 56, 135 of the Evidence Act1995 (Cth)), so it was admitted on the costs dispute as between the wife and the second and third respondents. The fact the Chief Justice rejected that affidavit in another interim hearing involving a quite different dispute is not influential (see Malloy & Stopford Malloy & Ors [2016] FamCA 1040 at [17]-[18]).
Following the decision to permit the wife’s reliance on her solicitor’s affidavit (annexing the NN affidavit), the second and third respondents abandoned their application to adjourn the hearing of the costs dispute, which application they earlier foreshadowed if the affidavit was received in evidence over their objection.
The husband also objected to the wife’s reliance upon her solicitor’s affidavit (annexing the NN affidavit), but in respect of their spousal maintenance dispute, and I sustain that objection because the wife relied upon the affidavit for a quite different purpose in that dispute. She wanted to use it prove the husband’s substantial financial means.
To avoid the problem of potential bias caused by parties’ reliance upon adversarial witnesses, Part 15.5 of the Rules establishes the regime for the procurement of expert evidence. The overriding purpose of the Part is to ensure that, if practicable and without compromising the interests of justice, any necessary expert evidence should be given by a single expert (r 15.42(c)). However, a party may apply to adduce evidence from an adversarial expert if it is necessary in the interests of justice (rule 15.42(e)).
Mr NN was engaged by the wife for a forensic purpose and she sought to rely upon his evidence as an adversarial expert. Any application for permission to rely upon his adversarial evidence should have been supported by an affidavit containing prescribed information (rr 15.51(1) and 15.52). No such affidavit was filed and apparently no attempt was made by the wife to confer with the husband over the appointment of a single expert forensic accountant (r 15.52(2)(a)).
In her affidavit filed on 14 October 2016 the wife deposed:
I say no attempt has been made to agree the appointment of [Mr NN] to be appointed as a single expert witness on account of the relatively brief time within which the said applications for a stay were listed to come before this honourable Court.
At that point in time, she was referring to a stay application which was pending before the Chief Justice in relation to an appeal against decrees which are not relevant to the applications now before me. The NN affidavit was prepared on 13 October 2016. Today is 9 December 2016. More than enough time has elapsed between those two dates for the wife to approach the husband about procuring single expert forensic accounting evidence if she considered it was necessary. No submission advanced on behalf of the wife established it was necessary, in the interests of justice, to permit her reliance upon the unfiled NN affidavit (r 15.42(e)).
A significant fact which was not the subject of any submission by any party is that the Court appointed receiver, Mr R, filed an affidavit in these proceedings on 14 October 2016 (that is, only a day after the NN affidavit) and it was not the subject of any objection by any party. In that affidavit, Mr R deposed to the husband having “unpaid present entitlements” in the sum of $2,739,325, which sum was only marginally different from the sum independently calculated by Mr NN. Consequently, the NN affidavit, on that issue at least, was entirely superfluous.
The opinion expressed by Mr NN in his affidavit about the proportion of the husband’s entitlements that might be recoverable from the debtor corporations was a hotly contested issue. That is a matter on which expert evidence is required and it should come from a single expert, not an adversarial expert. The wife is therefore denied leave to rely upon the affidavit of her solicitor (annexing the NN affidavit) in the spousal maintenance dispute.
Spousal Maintenance
Before turning to the specifics of the wife’s application, some background is required.
On 19 October 2015, with the spouses’ consent, Dawe J made orders in the following terms:
(1)The husband do pay the wife by way of interim spousal maintenance:
1.1 the sum of TWO THOUSAND DOLLARS [$2,000,00] per week with the first such payment to be made on Friday 23 October 2015;
1.2 the sum of up to SIX HUNDRED AND FIFTY DOLLARS [$650.00] per week in such instalments or multiples as the lease of any property the wife shall rent together with the amount of any bond payable by the wife such payment to be made to the wife’s landlord or to her agent as and when they fall due and payable under the lease or rental agreement.
…
(4)The husband be restrained and an injunction granted restraining the husband from doing anything or taking any steps to cause or facilitate the removal of the [German 4WD] Registration number … from the possession or control of the wife.
(original emphasis)
Thereafter, the wife moved into an unencumbered property she owned and she sought variation of the spousal maintenance orders.
On 22 April 2016, Dawe J determined that Order 1.2 made on 19 October 2015 should be varied, and therefore made further orders as follows:
(4) Paragraph 1.1 of the Orders of 19 October 2015 is continued.
(5) Paragraph 1.2 of the Orders made 19 October 2015 be varied by inserting the following in lieu of the present order:
“that the sum of SIX HUNDRED AND FIFTY DOLLARS [$650.00] per week, the first payment of which is to be paid and received as from Friday 22 April 2016, such amount to be paid to an account nominated by the wife’s solicitors in writing
(original emphasis)
Order 4 made on 19 October 2015 remained undisturbed and the wife was still then in possession of the German 4WD.
However, later in the afternoon of 22 April 2016, she received a demand requiring her delivery up of the German 4WD. The demand was made of her by the parties who are now, but were not then, the second and third respondents to these proceedings.
The wife accepts the car is and was the property of the third respondent. So much was made plain to her by a letter she received nearly 12 months before in July 2015, during an earlier separation of the spouses (see annexure OSM-8 to the wife’s affidavit filed 7 June 2016).
The wife surrendered the car to the third respondent’s agent on 2 May 2016. The next day, she asked the husband to give her another German car which was in his possession, but he refused and she now accepts that second car is also the property of the third respondent.
The wife filed her Application in a Case on 10 June 2016, seeking variation of the spousal maintenance order by:
(a)Her payment by the husband of an extra $525 per week, which was the sum paid by the third respondent to maintain the lease repayments on the German 4WD;
(b)Alternatively, her payment by the husband of an extra $210 per week to cover the running costs of a comparable car; or
(c)Alternatively, her payment by the husband of an extra $185 per week to cover the running costs of her own motor vehicle, which car she considers unfit for use by her and the spouses’ child.
The wife abandoned her alternative claim for the husband’s provision to her of the second German car, which she now concedes is not within his power to give.
The wife accepts she must satisfy the requirements of s 83 of the Act before the existing spousal maintenance order can be varied. She correctly identified two changes in circumstances which warrant reconsideration of the orders.
First, the orders contemplated she would be paid $2,650 per week and she would additionally have use of the German 4WD free of cost. That was the “factual matrix” against which her entitlement was formerly assessed and the matrix is now different (s 83(2)(a)(i)).
Second, the decisions made in October 2015 and April 2016 were made on the assumption the husband had the power to ensure the wife could retain the German 4WD. In fact, he had no such power, and the factual assumption was wrong (s 83(2)(c)). Nonetheless, in July 2015, the wife was told the third respondent owned the car and the husband confirmed that fact in an affidavit he swore on 4 August 2015. The wife admitted those facts in her affidavit filed in these proceedings on 7 June 2016.
Accordingly, the wife must establish her need for the proposed alternative variations of the spousal maintenance orders. Her underlying entitlement to cash of $2,650 per week was not disputed. She is only currently receiving $650 per week, but her non-payment of the remaining weekly sum of $2,000 is an enforcement issue, not a fact that goes to enlargement of her entitlement.
The wife’s grievance relates solely to her deprivation of use of an expensive European car but, in order to make circumstances abundantly clear, the wife is not thereby deprived of her use of any vehicle at all. She has, and has always had, her own European motor vehicle. She bought it in May 2010, before marriage to the husband. Although she enjoyed the use of the German 4WD during their marriage, she retained her motor vehicle and has used it since the German 4WD was taken from her in May 2016.
She finds her own motor vehicle unsatisfactory. She deposed in her affidavit filed on 7 June 2016 (at [26]):
I find the use of the [motor vehicle] to transport (the child) inconvenient and uncomfortable.
This motor vehicle was maintained for her until separation by the third respondent. Again, she deposed in her affidavit filed on 7 June 2016 (at [53]):
The [motor vehicle] was used as my everyday car until I was nearing the end of my pregnancy in September 2014. It was insured, registered and maintained at all times by the [Malloy Group].
Inferentially, she has been able to maintain the car herself since the third respondent ceased doing so. I am not satisfied the wife has demonstrated any need for variation of the spousal maintenance orders and her application will be refused.
This spousal maintenance dispute has been pending for the last six months. It has involved an abundance of evidence and the spouses’ representation by senior counsel, counsel and solicitors. The costs they have devoted to this interlocutory dispute over the use of a car would shamefully exceed the cost of running the car many times over. They would have been much better served saving their money and applying it to their living expenses. Publicity about the nature of this dispute risks bringing the litigants, their lawyers, and perhaps even the Court into disrepute. Their egregious waste of money over such a petty squabble is scandalous.
On the available evidence, the husband did not breach Order 4 made on 19 October 2015. The recovery of the German 4WD car from the wife in May 2016 was beyond his legal control, notwithstanding such facts and circumstances may have suited him.
The wife contended there was nefarious complicity between the husband and the second respondent (his father), but the facts and circumstances are just as consistent with the second and third respondents being motivated to protect their own commercial interests. There is no need to decide that debate.
Lest the husband contemplate a costs application against the wife following dismissal of her application, he would do well to remind himself that:
(a)He led the Court to believe, in October 2015 and again in April 2016, he could ensure the wife would retain possession of an expensive car;
(b)He is not paying the wife her spousal maintenance entitlement of $2,000 per week and, on my calculation, he now owes her about $70,000. Only the third respondent is paying her the residual sum of $650 per week in part fulfilment of the spousal maintenance orders; and
(c)His legal representation on this discrete issue hardly warranted a senior counsel, counsel and solicitor and he said no more in his affidavits and financial statement than was said by Mr GG, as witness for the third respondent, in his affidavit filed in June 2016.
Costs dispute between the Wife and Second and Third Respondents
As already indicated, the husband is in default of the current spousal maintenance orders by failing to pay the wife $2,000 per week. Understandably, the wife was displeased and sought to enforce the order. She successfully made application to the Court to do so.
On 5 September 2016, the Chief Justice made orders appointing receivers of the husband’s income and property so as to ensure, as far as practicable, his fulfilment of the spousal maintenance orders.
The receiver reported to the Court, by his affidavit filed on 14 October 2016, that money totalling $2,739,325 was owed to the husband by corporations affiliated with the third respondent. Mr NN simultaneously reported privately to the wife that the sum of $2,739,257 was owed to the husband by the same corporations, albeit in different aggregate amounts.
Obviously, if the receivers could recover such property of the husband, it would satisfy the unpaid spousal maintenance debt and realise property for ultimate distribution between the spouses pursuant to property settlement orders.
In late November 2016, the husband advised the wife that Notices of Demand were served on the corporations that owed him money. The demands were served by other creditor corporations that were either members of, or associated with, the third respondent “Malloy Group.”
The wife and her lawyers were concerned that, if the debtor corporations’ liabilities were paid to other creditors in priority over the husband, his proprietary interests would be impinged and the work of his receivers would be nullified, or at least impaired.
The wife therefore filed an Application in a Case on 28 November 2016, seeking urgent injunctions to prevent enforcement action being taken on the Notices of Demand by those creditor corporations. The application was listed for hearing urgently on 1 December 2016 but, by then, the perceived damage was already done. Receivers had already been appointed by the creditor corporations to call in the property of the debtor corporations. In recognition of that fact, the wife consented to the dismissal of her application when it came before the court on 1 December 2016. As a consequence, the second and third respondents sought costs against the wife to compensate the initial work they did to resist her application. The wife then filed an Application in a Case on 8 December 2016, seeking to press her own claim for costs against the second and third respondents for needlessly having to urgently mount the application, which was rendered nugatory.
Section 117(1) of the Act provides that, ordinarily, each party to proceedings under the Act shall bear his or her own costs. Nevertheless, s 117(2) of the Act envisages that costs orders may be made and, if such costs orders are considered, s 117(2A) of the Act specifies the factors which the Court must consider in determining whether to make such a costs order. Consequently, I address the following reasons to the factors prescribed by s 117(2A).
First, in respect of s 117(2A)(a), the wife’s financial circumstances are relatively poor by comparison with the second and third respondents’. She deposed to those financial circumstances in her affidavit filed on 14 October 2016 (at [21]-[32]). At that time, the arrears of spousal maintenance due to her amounted to $54,548. On my calculation, about another eight weeks have elapsed since then and, with the default calculated at $2,000 per week, some extra $16,000 should be added to that sum. Other than the amount she receives by way of spousal maintenance in the amount of $650 per week from DD Pty Ltd, she relies upon Centrelink payments of $550 per week. The husband pays no child support at all. She has a credit card with a limit of $8,000, but she only has $752 credit left before the credit is exhausted. She is charged $100 interest each month the credit card remains unpaid. She deposed that she currently has a combined total of only $1,199 in her savings account. By comparison, the second and third respondents control a vast financial empire.
With respect to s 117(2A)(c), I accept the submissions made on behalf of the wife that her conduct in bringing the Application in a Case on 28 November 2016 was reasonable. Based on information in her possession, provided by both the Court appointed receiver and her own adversarial accounting expert, she had grounds to believe the husband had recoverable entitlements of up to about $2.7 million from corporations associated with the third respondent. Mr NN opined a substantial proportion of that sum was recoverable. At that point in time, the husband owed her about $70,000 in unpaid spousal maintenance, so recovery of the entitlements owed to the husband by those corporations would have permitted payment of the unpaid spousal maintenance and realised other property, which would then be amenable to distribution between the parties in the property settlement proceedings.
Recovery of assets from the debtor corporations by other creditor corporations would likely stifle the Court appointed receivers’ recovery of money for the benefit of the husband (and indirectly for the wife). In such circumstances, I am satisfied the wife acted reasonably. Despite the submissions made by senior counsel for both the wife and second and third respondents, I am not prepared to embark upon a detailed analysis of whether the conduct of the creditor corporations was justified, predatory or in contempt of the Court’s orders. If any decision of that ilk is ever required, it should await the final trial when the evidence is tested and the applicable authorities can be closely considered. This is merely an interlocutory dispute about costs.
With respect to s 117(2A)(e), it is true the wife’s application was wholly unsuccessful because it was consensually dismissed on 1 December 2016, but it might not have been if it could have been heard before the critical action was taken by the creditor corporations. The outcome of that dispute will now never be known because all parties recognised the futility of conducting the hearing.
With respect to s 117(2A)(f), there was no evidence placed before the Court about whether the parties made offers in writing to one another.
With respect to s 117(2A)(g), I take into account that the costs of the second and third respondents in meeting the wife’s dismissed application must have been relatively modest. No Response to an Application in a Case or any affidavit was filed on behalf of either the second or third respondent. I impute that their costs must have been confined to conferences with their lawyers and/or adversarial accounting experts in the period between their knowledge of the application and its eventual dismissal (which covered only a period of a few days between 28 November 2016 and 1 December 2016) and, in addition, the appearance of their lawyers at Court on 1 December 2016 for a period of about one hour. Similarly, the wife’s costs would have been confined to the action taken by her between 22 November 2016 (when she learned of the creditor corporations’ intended plans) and the dismissal of her application on 1 December 2016.
I am satisfied by the submission made on behalf of the respondents that it was precipitous for the wife to seek those injunctions on an ex parte basis and that it was appropriate for her application to be served upon them in the orthodox way, thereby allowing them the procedural fairness of being heard.
Taking all of those matters into account, I am not satisfied the wife is entitled to her costs from the second and third respondents and I am similarly not satisfied the second and third respondents are entitled to their costs from the wife.
For those reasons, I make the following orders.
I also make the following notations.
I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 9 December 2016.
Associate:
Date: 19 December 2016