Surridge and Surridge and Anor
[2016] FamCA 615
•29 July 2016
FAMILY COURT OF AUSTRALIA
| SURRIDGE & SURRIDGE & ANOR | [2016] FamCA 615 |
| FAMILY LAW – COSTS – where enforcement application for child support arrears – where application for husband to procure removal of caveat over property lodged in breach of orders – where consideration of general principles – where husband to pay 80 per cent of wife’s costs as assessed or agreed. |
| Family Law Act 1975 (Cth) s 117 |
| Hawkins & Roe [2012] FamCAFC |
| APPLICANT: | Ms Surridge |
| 1st RESPONDENT: | Mr Surridge |
| 2nd RESPONDENT: | Mr Q |
| FILE NUMBER: | PAC | 4412 | of | 2012 |
| DATE DELIVERED: | 29 July 2016 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 24 June 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Gillies |
| SOLICITOR FOR THE APPLICANT: | Matthews Folbigg Pty Ltd |
| SOLICITOR FOR THE 1ST RESPONDENT: | Tilley Family Law and Mediation |
| SOLICITOR FOR THE 4TH RESPONDENT: | Tilley Family Law and Mediation |
Orders
That the husband pay 80 per cent of the wife’s costs on a party/party basis as assessed or agreed in relation to the subject proceedings within 2 months from such assessment or agreement.
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 Surridge & Surridge and Anor 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 PARRAMATTA |
FILE NUMBER: PAC 4412 of 2012
| Ms Surridge |
Applicant
And
| Mr Surridge and Mr Q |
Respondents
REASONS FOR JUDGMENT
Property proceedings between the husband and wife were the subject of orders made on 29 June 2015 (Surridge & Surridge [2015] FamCA 493).
Those orders provided:
By Consent:
(1) That the parties forthwith do all acts and things and sign all documents to cause the following things to occur with respect to the company [B Pty Ltd]:
(a) The 2013 and 2014 statements of financial position to be amended so as to consolidate into one loan account in the joint names of the parties all advances and loan accounts of the parties reported in the statements of financial position;
(b) Dividends then to be declared to each of the parties fully franked for each of the following financial years:
(i) For the 2013 financial year $37,479 imputation credit and $87,452 franked amount;
(ii) For the 2014 financial year $15,366 imputation credit and $35,855 franked amount;
(iii) For the 2015 financial year $115,505 fully franked;
(c) That on the dividends being declared and the 2015 financial statements and tax return prepared and lodged the company to be struck off the company register conducted by ASIC;
(d) The 2015 financial statements to be prepared so as to:
(i) Write off the office equipment;
(ii) Write off the loan to [C Pty Ltd];
(iii) Write off the loan to [D Pty Ltd].
(2) That the husband shall assign to the wife the benefit of any loan account in his favour created by virtue of Order (1)(d)(iii) in the event that the wife retains that company and the units in the [Surridge] Unit Trust pursuant to the final orders for property settlement.
(3) That each of the parties shall pay one half of the costs of implementation of these orders including accounting and ASIC fees.
It is further ordered:
(4) That within that 2 months from the date of these orders the husband do all necessary things and sign all necessary documents so as to transfer to the wife his interest in the property at [E Street, Suburb F] New South Wales being the whole of the land comprised in Folio Identifier … and that concurrently with that transfer the wife do all necessary things and sign all necessary documents so as to procure a discharge of the present mortgages secured over the said property in favour of the Commonwealth Bank of Australia being home loan number … and line of credit account number … and in respect of such discharge the husband shall sign all necessary documents for his part necessary to facilitate the wife obtaining a discharge of the said mortgages.
(5) That the wife hereinafter indemnify the husband from all or any liability arising out of the present mortgages secured over the [Suburb F] property.
(6) That within 2 months from the date of these orders the husband pay to the wife $98,541 and concurrently with that payment the wife do all necessary things and sign all necessary documents to transfer to the husband her interest in any units in the [Surridge] Unit Trust and any other entitlements that she may have in or against the trust, resign all positions that she holds in the trustee company [D Pty Ltd] ACN … and transferred to the husband her shareholding in the said company.
(7) That the husband shall hereinafter indemnify and save harmless the wife from all or any liability including any liability to the Australian Taxation Office arising from the activities of the [Surridge] Unit Trust or its trustee [D Pty Ltd].
(8) That otherwise the wife shall be declared solely entitled to:
(a) The 4WD;
(b) Her Horse float, horses and equipment;
(c) Her watch;
(d) Her Jewellery;
(e) Her K Superannuation Fund interest;
and that subject to these orders otherwise the wife is declared solely entitled to the exclusion of the husband of all items of personalty in her possession, custody and control including but not limited to motor vehicles, cash at bank, superannuation, furniture and personal belongings.
(9) That the wife shall hereinafter indemnify and save harmless the husband from all or any liability pursuant to the judgement obtained against the parties by the wife’s parents [Mr and Ms G].
(10) That otherwise the husband shall be declared solely entitled to:
(a) His K Superannuation Fund interest;
(b) New boat shell;
(c) Boat “[1]”;
(d) Boat “[2]”;
(e) Car parts;
(f) Boat equipment;
(g) Motor vehicle;
(h) Vintage vehicle 1;
(i) Vintage vehicle 2;
(j) Vintage vehicle 3;
(k) Vintage vehicle 4;
(l) Motor Bike 1;
(m) Motor Bike 2;
(n) Motor Bike 3;
(o) Watch 1;
(p) Watch 2;
(q) Watch 3;
(r) B Pty Ltd Bank account;
(s) D Pty Ltd account;
(t) Bank of America account;
(u) German motor vehicle (net);
and that subject to these orders otherwise the husband is declared solely entitled to the exclusion of the wife of all items of personalty in his possession, custody and control including but not limited to motor vehicles, cash at bank, superannuation, furniture and personal belongings.
(11) That the wife shall within 7 days from the date of these orders cause to make available for collection by the husband or his nominee any of the items referred to in the previous order that remain in her possession or control.
(12) The husband shall hereinafter indemnify the wife from all or any liability arising from monies advanced to the husband by his parents [Mr and Ms Surridge] and any moneys owing to [J Repairs].
(13) That within 14 days from the date of these orders the wife shall do all acts and things necessary to cause her existing superannuation entitlements in the [K] Superannuation Fund to be rolled out of that fund to an approved superannuation fund nominated by the wife and upon completion of that rollover the wife shall resign all positions that she holds in the trustee of the [K] Superannuation Fund, [L Pty Ltd] and transfer her shareholding in that company to the husband and the husband shall for his part do all acts and things necessary to promptly facilitate the rollover of the wife’s entitlements in the said fund.
(14) Liberty to apply as to implementation or enforcement of these orders.
Those orders are currently the subject of an appeal to the Full Court of this Court.
On 18 September 2015 on the wife’s application for certain stay orders pending appeal the following orders were made (Surridge & Surridge [2015] FamCA 755)
(1) That the operation of Orders 6 and 7 made on 29 June 2015 be stayed pending further order or determination of the wife’s appeal.
(2) Liberty to apply as to implementation or operation of the previous order.
(3) That the costs of the parties be reserved until determination of the appeal.
The application for determination is the wife’s application for costs arising out of various Applications in a Case before the Court that were ultimately resolved by consent.
It is necessary to consider the course of the wife’s applications.
The wife by Application in a Case filed 30 October 2015 sought orders seeking to enforce payment of an outstanding child support debt owed by the husband by way of sale of a vintage motor vehicle the property of the husband that remained in her possession. She further sought an order for costs.
By way of an Amended Application in a Case filed 13 November 2015 the wife relevantly sought further orders seeking:
a)To have the husband procure the removal of a caveat lodged over the property at E Street, Suburb F by one of the husband’s creditors;
b)That the wife cause the income of D Pty Ltd be applied to payment of the company’s debts as and when they fall due pending further order;
c)That the husband repay to D certain monies withdrawn by him from the company account;
d)That pending determination of the application for enforcement of child support arrears the husband be restrained from dealing with the vintage motor vehicle; and
e)Costs.
On 16 November 2015 relevantly the following orders were made:
…
BY CONSENT AND PENDING FURTHER ORDER, IT IS FURTHER ORDERED THAT:
3. Within seven (7) days of the date of Order the Wife:
3.1. Provide to the Husband’s lawyer copies of all statements and records showing the application by her of the funds withdrawn from the [D] bank account number… since 01/07/2015 being account fees, mortgage statement, council and water rates, land tax invoice, insurance invoice, repairs invoices and front page of Telstra account and BAS.
3.2. Pay to the [D] account the current balance of accounts NAB...
3.3. Provide the Husband all statement of NAB … where [D] funds were deposited.
4. Each of the parties is restrained from withdrawing any funds from the [D] account save that the Wife may pay the expenses as set out in Annexure “A”. Within twenty four (24) hours of the date of Order each of the parties attend upon the National Australia Bank and sign all documents necessary so as to:
4.1. Remove the Husband as a signatory of the account (account number …);
4.2. Leave both parties with internet access for the Wife to pay expenses as per annexure “A” for the Husband to view only;
4.3. Provide the bank with a copy of these Orders.
On 14 January 2016 it was ordered:
a) That the wife file a further amened application in a case and affidavit in support by 28 January 2016; and
b) That the husband file a reply (sic) and affidavit in support by 18 February 2016.
On 12 February 2016 the wife filed a Further Amended Application in a Case seeking relevantly orders in summary:
a)That the husband procure a withdrawal of the caveat over the property at Suburb F;
b)In default the wife be at liberty to dispose of the vintage motor vehicle to procure a discharge of the caveat;
c)That the husband’s solicitor be joined as a party as to the issue as to whether he has a solicitor’s lien over the vintage motor vehicle;
d)The payment of child support arrears of $45,797 and in default the husband transfer the vintage motor vehicle car to the wife; and
e)That by way of enforcement the husband be examined as to his financial circumstances.
On 17 February 2016 the wife filed a Second Further Amended Application seeking in summary orders:
a)That the husband procure a withdrawal of the caveat over the property at Suburb F;
b)In default the wife be at liberty to dispose of the vintage motor vehicle car to procure a discharge of the caveat;
c)That the husband’s solicitor be joined as a party as to the issue as to whether he has a solicitor’s lien over the vintage motor vehicle;
d)That to the extent that the solicitor has a valid lien over the vintage motor vehicle car it be set aside;
e)The payment of child support arrears of $45,797 and in default the husband transfer the vintage motor vehicle car to the wife; and
f)That by way of enforcement the husband be examined as to his financial circumstances.
On 22 April 2016 the husband’s solicitor filed a Response to the wife’s application seeking orders that by way of declaration he have a lien (equitable charge) over the husband’s property (including the vintage motor vehicle car) and the husband’s money for his unpaid costs and that the wife deliver up the vintage motor vehicle car to the solicitor or his nominee.
On 22 June 2016 the husband filed an Amended Response to the wife’s Application in a Case seeking orders to the effect:
a)That the wife’s Application in a Case be stayed until she complies with certain final property orders including the delivery up of the vintage motor vehicle car to the husband;
b)That child support enforcement be not dealt with pending administrative assessment of the husband’s application to change the assessment application had been finalised;
c)That leave be granted to the Registrar of the Child Support Agency to consider child support assessments for the period 22 August 2013 to 30 June 2014;
d)That otherwise the wife’s application be dismissed; and
e)Costs.
On 23 June 2016 the wife filed a Third Amended Application in a Case seeking in summary:
a)That the husband’s Response be dismissed;
b)That the application of the husband’s solicitor as to an asserted lien for costs be dismissed; and
c)Otherwise orders reflecting orders sought in the Second Further Amended Application in a Case save that child support arrears were asserted in the sum of $57,892.
Prior to hearing the wife issued numerous subpoenas for production going to the issue of the husband’s financial circumstances. The husband lodged objections, which were later withdrawn, to each and every one.
The matter was listed for hearing as to all issues on 24 June 2016. All issues were resolved by consent save for the wife’s application for costs. Orders were made as follows:
BY CONSENT IT IS ORDERED THAT:
1. The husband shall cause a Bank cheque to be drawn payable to the Child Support Agency in the sum of $50,742.00.
2. The Court notes and the parties agree that the husband has provided the Bank cheque outlined in Order 1 to the wife’s solicitor who shall cause the cheque to be lodged with the Child Support Agency for the credit of the wife.
3. The Court notes and the parties agree that the payment outlined in Order 1 will not preclude the parties from proceeding with any Application for Departure or Review that may be available to them.
4. The husband shall cause a Withdrawal of Caveat to be lodged with LPI no later than 4pm on 1.7.16 and he shall be responsible for all costs connected with that, such Caveat being Caveat number … on Lot …/DP ...
5. The husband is injuncted from taking any steps or causing any third party to take any steps to cause the Bank cheque outlined in Order 1 to be stopped, cancelled or otherwise not honoured.
6. The Court notes that the parties agree that the wife has agreed not to pursue her claim for child support arrears on the basis that her child support account is shortly to be credited with $50,742.00.
7. That in the event that either party neglects or refused to sign any document or give any consent necessary to give effect to these orders then the Registrar of the Court shall and is hereby empowered pursuant to S106A of the Act to give such consent and to sign such documents on his/her behalf. Such default to be proved by Affidavit.
8. In the event that the husband has complied with these Orders the wife acknowledges notional receipt of a non-agency payment in the sum of $7,150.00 and shall sign all necessary documents to cause the Child Support Agency to acknowledge that.
9. Pursuant to s 111 and 112 of the Child Support (Assessment) Act 1989 (Cth) leave is granted for the Registrar to make a determination under s 98S of the Child Support (Assessment) Act 1989 (Cth) in respect of a child support assessment for the period 22 August 2013 to 30 June 2014 being for the period covered in the assessment issued on 7 September 2015.
10. The Fourth Respondent [Mr Q] solicitor have a charge by way of equitable lien for the purposes of securing his unpaid legal fees over the items of personality more particularly set out in Order 10 of the Court’s judgment dated 29 June 2015.
IT IS FURTHER ORDERED THAT:
11. The Wife within 14 days from today’s date make available at a time mutually agreed between her and the Fourth Respondent for delivery up to the Fourth Respondent the [vintage motor vehicle] presently in the Wife’s possession or control.
12. The matter as to costs is adjourned to a date to be advised for delivery of reserved judgment.
13. Leave is granted to the parties to inspect documents produced on subpoena by Leasewise Australia Pty Ltd and Interim Finance noting that the Husband’s previous objections to such subpoena have been withdrawn.
IT IS NOTED THAT:
A. The parties agree that the time for their compliance with Order 4 made on 29 June 2016 be extended to 19 August 2016.
Costs
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party to the proceedings shall bear his or her own costs.
That principle is, however, subject to the discretion afforded to the trial judge in subparagraph (2), which provides that if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may, subject to further subsections thereof and the applicable Rules of the Court, make such order as to costs as the Court considers just.
Although s 117(2) requires a finding of justifiable circumstances as an essential preliminary to making an order for costs, there is no additional or special onus on an applicant who seeks an order for costs: see Penfold v Penfold (1980) 144 CLR 311.
The matters relevant to determining what order, if any, should be made for costs are set out in subsection (2A) of that section as follows:
a)The financial circumstances of each of the parties to the proceedings;
b)Whether any party has legal aid and the terms of any grant of aid;
c)The conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers, questions, admissions of facts, production of documents and similar matters;
d)Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court;
e)Whether any party to the proceedings has been wholly unsuccessful in the proceedings;
f)Whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
g)Such other matters as the Court considers relevant.
The Full Court in Hawkins & Roe [2012] FamCAFC 77 said:
17. With respect to the application of the section, in Penfold v Penfold (1980) 144 CLR 311, the High Court said at 315 and 316:
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgment under appeal that an order can only be made under s. 117 (2) in "a clear case".
Sub-section (2) does not in our view as a matter of law require the judge to specify the circumstances which justify the making of an order. It does not expressly say so, and in the context of the making of an order for costs there is no sufficient basis for making an implication. Judges very frequently make orders for costs without giving reasons or making findings, even when costs are in issue. The absence of reasons or findings does not in itself indicate that a judge has erroneously exercised his discretion to award costs, though it will place an appellate court in the position of examining the circumstances and of determining for itself whether the circumstances show that the discretion was erroneously exercised (Kent v. Kent). Accordingly, in the absence of some positive legislative indication we should not attribute to Parliament the requirement that a judge must make particular findings in relation to an order for costs.
(Footnotes omitted)
18. The weight to be given to a particular consideration under s 117(2A) is a matter for the discretion of the judge. However, in I and I (No 2) (1995) FLC 92-625 the Full Court of this Court held that the relevant matters in s 117(2A) “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs”. That is not to say that one single matter may not ultimately be determinative. The Full Court confirmed this in Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at paragraph 41:
… A number of factors are then listed in the subparagraphs. The financial circumstances of each of the parties to the proceedings is the first mentioned factor. Nowhere in subs (2A) or elsewhere in s 117, is there any prescription that more than one factor must be present before an order for costs is made nor of comparative weight of the factors set out in subs (2A). As a consequence, there is nothing to prevent any factor being the sole foundation for an order for costs.
The wife’s contention
It was contended on behalf of the wife that in the context of the present applications the general rule should be displaced.
The financial circumstances of the wife are known. The financial circumstances of the husband have never been clear for the reasons set out in the primary judgment. Even in the context of the present applications and absent his oral examination little is known of his true circumstances save for him retaining significant personalty that is not the subject of appeal. Yet a bank cheque for about $50,000 was produced on short notice to meet child support obligations and presumably to procure the return of the vintage motor vehicle car. In the period from January 2015 to late May 2016 there were unexplained credits to the husband’s Amex account of about $67,000 plus a debit for a card fee of $5000 for a man asserting a parlous financial position.
It was submitted that the husband’s conduct in objecting to financial subpoena in the context of child support enforcement was inappropriate and indeed improper.
It was contended that the wife as against the husband was wholly successful. She recovered her child support and procured a discharge of caveat that precluded her from complying with part of the final property orders. Yet the wife did so in circumstances where she had failed to comply with final orders as to delivery up of the husband’s personalty that was not the subject of her appeal. She retained the vintage motor vehicle car without court order for her own ulterior purpose of enforcement.
The husband’s contention
It was contended that the wife was in a far superior financial position. Yet the husband’s financial position is itself far from clear.
It was contended that the wife was not wholly successful: the claim by way of lien by the solicitor was ultimately conceded after payment of child support arrears.
Overall
Overall the wife has been put to great expense to seek to recover child support and be able to clear the title to allow her to proceed to comply with orders to obtain a transfer of the Suburb F property to her. The husband in breach of orders had allowed the property to be encumbered by a caveat by one of his financiers.
In all the circumstances it is appropriate that the husband pay 80 per cent of the wife’s costs of and incidental to the proceedings considered above.
Orders will be made accordingly.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 29 July 2016.
Associate:
Date: 29 July 2016
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