Takahashi and Manichaeus and Ors
[2011] FamCA 198
FAMILY COURT OF AUSTRALIA
| TAKAHASHI & MANICHAEUS AND ORS | [2011] FamCA 198 |
| FAMILY LAW – COSTS – Whether there are exceptional circumstances justifying an order for indemnity costs |
| Family Law Act 1975 (Cth): s 117(1), s 117(2), s 117(2A) |
| Colgate‑Palmolive Co and Another v Cussons Pty Ltd (1993) 46 FCR 225 Davida & Davida (Costs) [2011] FamCAFC 61 Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 Hackshaw & Hackshaw [2010] FamCA 1123 JEL & DEF (No.2) (2001) FLC 93‑083 Manichaeus & Manichaeus [2010] FamCA 397 Munday v Bowman (1997) FLC 92-784 Penfold v Penfold (1980) 144 CLR 311 Steele & Stanley [2009] FamCAFC 39 Stephens & Stephens & Anor (Enforcement) (Costs) [2010] FamCAFC 172 Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029 |
| APPLICANT: | Ms Takahashi (formerly Manichaeus) |
| RESPONDENT: | Mr Manichaeus |
| SECOND RESPONDENT | B Pty. Ltd. |
| THIRD RESPONDENT | Manichaeus Pty. Ltd. |
| FOURTH RESPONDENT | C Pty. Ltd. |
| FILE NUMBER: | CAC | 857 | of | 2007 |
| DATE DELIVERED: | 25 March 2011 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Faulks ACJ |
| HEARING DATE: | 18 November 2010 Written submissions of the applicant filed 13 December 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms A. Tonkin |
| SOLICITOR FOR THE APPLICANT: | Strong Law Pty. Ltd. |
| COUNSEL FOR ALL RESPONDENTS: | Mr D. Lardner |
| SOLICITOR FOR ALL RESPONDENTS: | David Lardner Lawyers |
Orders
IT IS ORDERED THAT:
Within 30 days, the husband, Mr Manichaeus, either personally, or in his capacity as the director of the corporate entities comprising the Manichaeus Group (being the B Pty. Ltd., Manichaeus Pty. Ltd., C Pty. Ltd. which are the second, third and fourth respondents to these proceedings) will pay the sum of one hundred and seventy-five thousand ($175,000) to his former wife, Ms Takahashi (formerly Manichaeus) for costs.
All extant applications before the Court are dismissed.
The matter is removed from the Pending Cases Inventory.
IT IS NOTED that publication of this judgment under the pseudonym Takahashi (formerly Manichaeus) & Manichaeus (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT CANBERRA |
FILE NUMBER: CAC 857 of 2007
| Ms Takahashi (formerly Manichaeus) |
Applicant
And
| Mr Manichaeus |
First Respondent
And
| B Pty. Ltd. |
Second Respondent
And
| Manichaeus Pty. Ltd. |
Third Respondent
And
| C Pty. Ltd. |
Fourth Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court is an Application in a Case filed 11 August 2010 by the applicant wife, Ms Takahashi (formerly Manichaeus) (“the wife”), for costs. This arises following the conclusion of proceedings pursuant to s 79(1) of the Family Law Act 1975 (Cth) (“the Act”) which were first commenced by her in 2007.
The respondent husband is Mr Manichaeus (“the husband”); the second, third and fourth respondents are corporate entities which are or have been operated by him commercially (known collectively as “the Manichaeus Group”) which owned property of the parties beneficially.
In her application, the wife sought the following orders:
a) That the Respondents pay the Applicant Wife’s costs of and incidental to these proceedings on an indemnity basis.
b) That the Respondents pay the Applicant Wife’s costs of and incidental to this application for costs.
IN THE ALTERNATIVE:
c) That the Respondents pay the Applicant Wife’s costs of and incidental to these proceedings on a party/party basis.
d) That the Respondents pay the Applicant Wife’s costs of and incidental to this application for costs.
IN THE ALTERNATIVE:
a) That the Respondents pay the Applicant Wife’s costs of and incidental to these proceedings in a fixed amount as determined by the Court.
b) That the Respondents pay the Applicant Wife’s costs of and incidental to this application for costs.
The wife sought to rely upon an Affidavit of her solicitor, Mr Kevin Robinson (filed 11 August 2010) which included annexures outlining a costs agreement between the wife and Mr Robinson’s law firm, as well as a calculation of the indemnity and party/party costs that have arisen in the proceedings. It was submitted by Mr Robinson that the total indemnity costs incurred by the wife at 18 November 2010 were $266,313.54, and on a party/party basis that total sum was $146,890.37.
The wife also sought to rely upon a Financial Statement (filed on 16 November 2010), and submissions of her counsel, Ms Tonkin, filed 13 December 2010.
The husband filed submissions in response on 13 December 2010. In those submissions, the husband sought the following orders:
a.The wife pay the husband’s costs of and incidental to the proceedings; failing which
b.No order be made pending the outcome of the hearing of the appeal; failing which
c.An order that each party pay their own costs of and incidental to the proceedings.
In the event that His Honour orders that the husband pay some part of the wife’s costs of and incidental to the proceedings then such costs be made on a party and party basis; and further, that the husband not pay for any of the wife’s costs incurred arising from the involvement of the ANZ Bank.
Background
Proceedings pursuant to s 79(1) of the Act were conducted by way of hearing over the course of the following dates:
·1 – 3 July 2009;
·24 July 2009;
·19 – 21 October 2009;
·28 & 29 January 2010;
·24 June 2010;
·6 July 2010; and
·12 July 2010.
Counsel for the wife helpfully prepared a schedule of conduct of the proceedings (filed 13 December 2010). This document appears as Annexure “1”. I do not adopt the document as an entirely accurate list of objective facts, however, I accept it as a relatively neutral chronology of the main events that have occurred during the course of this complex litigation.
Final orders were made by me on 13 July 2010, and were subsequently amended pursuant to the Slip Rule on 14 July 2010: see Manichaeus & Manichaeus [2010] FamCA 397. Those orders appear at Annexure “2”. In summary, the terms of those orders was to give effect to a division of the net assets of the parties (of approximately $4,032,000) based on my findings of the parties respective contributions as to either 53 (or 57) per cent to the wife and 47 (or 43) per cent to the husband. The percentages were conditional upon whether the parties elected to retain or sell the houses in which they primarily resided in.
The husband initiated an appeal against my orders. The parties subsequently settled the appeal. I gave leave to the parties to file an updating affidavit outlining the terms of settlement on appeal. The wife and the husband filed affidavits pursuant to leave of the court on 17 March 2011 and 24 March 2011 respectively. I have considered the content of those affidavits under my consideration of s 117(2A)(g) of the Act in my Reasons for Judgment below. Annexed to the wife’s updating affidavit were the orders made by consent in the Full Court of this Court. The orders made by her Honour, Finn J, appear at Annexure “3”. It would appear that the wife settled for: the sum of $500,000 to be paid for the husband within a clearly outlined timeframe, that the husband would depart from the relevant administrative assessment of child support in relation to the children of the marriage such that he would pay an amount of $0 per week until the children turned 18 years of age, and that he would be responsible for the payment of private school fees for the children at D School
Financial Statement of the wife – filed 16 November 2010
The Financial Summary[1] contained in the wife’s Financial Statement provides as follows:
[1] Financial Statement of the wife, filed 16 November 2010, Part B.
| Total average weekly income | $952 |
| Total personal expenditure | $930 |
| Total value of property owned by you | $525,000 |
| Total gross value of superannuation | $10,702 |
| Total liabilities | $314,311 |
| Total financial resources | $0 |
The wife’s principal assets are her home at E Street, Suburb F ($500,000) and motor vehicle 1 ($10,000).[2] Her principal liabilities are a mortgage encumbering the Suburb F property ($210,000), a debt she owes to her father ($64,000), credit card debts (approximately $12,000) and outstanding legal fees ($28,000).[3]
[2] Ibid, Part I.
[3] Ibid, Part K.
Relevant Law
The power to award costs is governed by s 117 of the Act.
Section 117(1) of the Act relevantly provides:
Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
Section 117(2) of the Act relevantly provides:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory orders or otherwise, as the court considers just.
Section 117(2A) of the Act relevantly provides:
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
Counsel for the wife, Ms Tonkin, provided helpful and succinct submissions on the case law relevant to a determination about whether to award costs on an indemnity basis. Ms Tonkin referred me to: Colgate‑Palmolive Co and Another v Cussons Pty Ltd (1993) 118 ALR 248, Munday v Bowman (1997) FLC 92-784; Yunghanns & Ors v Yunghanns & Ors and Yunghanns (2000) FLC 93-029 and JEL & DEF (No.2) (2001) FLC 93‑083.
In Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123, the Full Court of the Family Court of Australia (Kay, Warnick & Boland JJ) relevantly commented on the application of s 117(2A) that (at [130]):
130.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. (Emphasis added)
In Penfold v Penfold (1980) 144 CLR 311, Stephen, Mason, Aickin and Wilson JJ said (at 315):
It is an accurate description of s. 117 (1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s. 117 (2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
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”.
Their Honours then went on to state (at 315-16):
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 [(1970) 92 W.N. (NSW) 503, at p. 505]). 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. (Emphasis added)
More recently, in Steele & Stanley [2009] FamCAFC 39, the Full Court of the Family Court of Australia (Faulks DCJ, Thackray & Ryan JJ) relevantly stated after considering the above passage from Penfold (at [39] to [40]):
39.Counsel for the husband conceded that s 117 had been amended since Penfold was decided but submitted that the inclusion of s 117(2A) had been designed to direct the Court’s attention to specific matters in exercising its discretion but was not designed to limit the Court’s discretion, as was evidenced by the inclusion of s 117(2A)(g).
40.We accept that the insertion of s 117(2A) in the Act has placed a greater obligation on judicial officers in giving reasons in costs matters than was originally the case. Benjamin J clearly accepted this, as is evident from his citation from Brown v Brown (1998) FLC 92-822 at 85,347 where Kay J drew attention to the fact that the matters contained in s 117(2A) are now a “mandatory consideration”. Benjamin J also cited I & I (No 2)(1995) FLC 92-625 at 82,277, where the Full Court said that the “relevant matters referred to 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”.
As identified by the Full Court of the Family Court of Australia (Lindenmayer, Holden & Mullane JJ) in Yunghanns (at 87,471) (and affirmed by the Full Court of the Family Court of Australia (Kay, Holden & Guest JJ) in JEL & DDF (No.2) (at 88,442)):
It will suffice to say that the categories of circumstances which enliven the discretion to award indemnity costs are not closed, and that it is not a condition precedent to the exercise of the discretion that some collateral purpose or species of fraud be established against the party against whom such an order is sought. All that is required is that the Court asked to exercise the discretion be satisfied that some “particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis”: per Shepherd J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233.
As identified by Shepherd J in Colgate-Palmolive, and as pointed out to me by counsel for the wife in her written submissions, the types of matters that might give rise to an order for costs on an indemnity basis include (but are not limited to):
a) A party making false allegations with knowledge that those allegations are false, or the making or irrelevant allegations of fraud;
b) Evidence of particular misconduct that causes loss of time to the Court and to other parties;
c) The fact that proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law;
d) The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; or
e) The imprudent refusal of an offer to compromise.
It is also important for the Court to keep in mind what the Full Court of the Family Court of Australia (May, Boland & O’Ryan JJ) said in Stephens & Stephens & Anor (Enforcement) (Costs) [2010] FamCAFC 172 (at [67]):
67. …An order for costs is made to compensate a party against expense incurred in litigation and is not punitive in nature. Costs are not a penalty or damages: Latoudis v Casey (1990) 170 CLR 534 per Mason CJ at 543 and McHugh J at 567; Ruddock and Ors v Vadarlis and Ors (2001) 188 ALR 143 per Full Court of the Federal Court at [12] and Brott and Joachim (2006) FLC 93-259 per Full Court (Holden, Warnick and Boland JJ) at 80,403-404. (Emphasis added)
Finally, I observe what was stated in Davida & Davida (Costs) [2011] FamCAFC 61, where the Full Court of the Family Court of Australia (Finn J delivering the principal Reasons for Judgment of that Court, with whom O’Ryan & Ainslie-Wallace JJ separately agreed) (at [16] and [17]):
16.Finally, I turn to that aspect of the husband’s application which sought that any order for costs should be on an indemnity basis. As presently advised, the most recent consideration of the question of indemnity costs is to be found in a decision of the Full Court reported as D & D Costs (No. 2) (2010) FLC 93-435. In that decision, the Full Court reviewed extensively earlier authorities, including decisions to which we have been referred today or have discussed with Counsel today, including Limousin & Limousin (Costs) (2008) 38 Fam LR 478 and Kohan and Kohan (1993) FLC 92-340, and also Sheppard J’s decision in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248.
17.It emerges from the discussion by the Full Court in the D & D (Costs) that there still needs to be exceptional circumstances to justify an order for indemnity costs in this jurisdiction. In my view, there are no such exceptional circumstances in this case.
Ultimately, it is a matter that requires my judgement as to whether there are matters justifying the making of a costs orders and whether I should, in all the circumstances, having regard to the necessary factors I must have regard to pursuant to s 117 of the Act and the authorities, exercise my discretion to make an order for costs, and on what basis. As was established by the Full Court in Steele & Stanley, it involves proper and balanced consideration of the matters contained in s 117(2A). I acknowledge that one of those factors contained in s 117(2A) may, in and of itself, in the circumstances be a sufficient justification, singularly, for an order as to costs on a particular basis.
Discussion
In light of the relevant law identified above, I consider below the submissions made by the parties and make the following findings and determinations.
Financial circumstances of each of the parties to the proceedings
Counsel for the wife submitted that the wife’s income was approximately $49,504 per annum. It was submitted that the wife had little discretionary income remaining after paying for living expenses and for care of the children. It was also submitted that the wife has not received child support from the husband and that there had been difficulties in ensuring he pays the school tuition fees for the three children.
Counsel for the husband acknowledged that the earnings of the husband are significantly greater than those of the wife.
The wife deposes to legal costs of $266,313.54 and a mortgage over her home of $210,000 and a debt to her father of $64,000.
Counsel for the wife urged me to take into account the fact that the husband has had full control of the assets of the parties including income received from the residential and commercial leases managed by the Manichaeus Group.
On the question of costs, the husband chose not to file any further information about his income or his personal financial circumstances, or indeed, those of the Manichaeus Group. Accordingly, I am unable to make any finding which would suggest other than that he is in a better financial position than the wife so far as income is concerned. This is based principally upon the probability that his significant entrepreneurial abilities have continued notwithstanding these proceedings and that he is still able to derive an income from his business efforts.
To the extent that the factor is relevant, it is a factor which I take into account relevantly in favour of the wife.
The wife’s debts incurred for legal fees add, of course, to her financial burden generally. But this should not be taken into account and then, in effect, double counted by an order for costs. I take account of the fact that if she does not receive an order for costs, her debt burden will remain significant. In the context of her overall situation, including that of the care of the three children, it is a factor that I can properly take into account, again in her favour, in relation to the question of costs.
I note that the husband engaged senior counsel in relation to his appeal. This supports the contention that self-representation during the trial (with its consequences as discussed below) was the husband’s choice.
Whether any party to the proceedings is in receipt of assistance by way of legal
aid and, if so, the terms of the grant of that assistance to that party
This factor is not relevant to these proceedings as neither party is, or was, on legal aid. The husband represented himself throughout the majority of the hearing days before the Court of his own volition.
Conduct of the parties to the proceedings in relation to the proceedings including,
without limiting the generality of the foregoing, the conduct of the parties in
relation to pleadings, particulars, discovery, inspection, directions to answer
questions, admissions of facts, production of documents and similar matters
The conduct of the proceedings as conducted by the parties is central to both of the submissions of the parties as to the justification of an order for, or as to, costs.
One significant aspect of counsel for the wife’s submission about the husband’s conduct was that he had the financial capacity to engage solicitors and did not do so. As a consequence, in representing himself, the wife asserted that the husband had significantly protracted the duration of the proceedings. This was illustrated by the filing of voluminous lever-arch folders of materials without leave of the Court immediately prior to a hearing day (notwithstanding direction from the Court for earlier filing).
In my Reasons for Judgment of 21 May 2010, I stated (at [22] to [27]):
22. I digress to deal with this matter at this point. The husband’s disclosure in this matter was, to put it at its kindest, gradual, confused, periodic and non‑comprehensive. Counsel for the wife would have me believe that this was a deliberate policy on his part and that his failure to provide information in an easily understandable fashion was, in some ways, sinister.
23.With the husband, it is difficult to determine to what extent his self‑representation is driven by ego or by financial circumstances or because he genuinely believed he could do a better job than any lawyer. The matter was adjourned three times. This usually occurred because on the day on which the matter came before the Court, the husband would arrive with a substantial lever‑arch folder filled with what might under some circumstances pass as an affidavit with various annexures. Sometimes the annexures were copies of original documents. Sometimes they were summaries produced by the husband. More often, they were summaries produced by his employees who laboured (I do not doubt diligently) to produce what he required of them over many hours. The consequence of conducting the hearing in this way, contrary to directions given for the production of relevant material long before the trial was scheduled to begin,[4] meant that uncovering what precisely was being “discovered” in a legal sense was difficult and confusing. Adjournments regularly occurred as a consequence and when the matter resumed, fresh arguments developed about how the values of properties increased or decreased or had been affected by market conditions or by vacancies in tenancies since the last time the matter was before the Court.
24.The episodic nature of the hearing largely generated by the husband’s (and there is really no other word for it) inept self-representation has made findings of fact difficult and has necessarily aroused suspicion on the part of the wife and her legal representatives about the honesty of the case presented by the husband.
25.Notwithstanding all of these factors, at the end of substantial cross‑examination, many documents produced and inspected and cross‑examined about, no evidence has been satisfactorily put before me that there is any hidden fund on the part of the husband or that funds have in some way have been channelled in to a separate vehicle or company or overseas. The can be no doubt that the size of the assets of the parties has shrunk. There is also no doubt that debts have increased. It seems more likely than not and I find, on the balance of probabilities, that to the extent that the net equity of the parties has diminished, it is logically attributable to ineffective share‑trading on the part of the husband or inappropriate business decisions or possibly the husband’s failure properly to assess and anticipate market trends.
26.While this may in some respects be seen as a “negative contribution”, such a term should properly only be assigned to instances of waste as that term is understood in legal proceedings. I do not find that there has been waste in that sense on the part of the husband in these proceedings.
27.I made earlier reference to the decisions of the Full Court of the Family Court in relation to “special contributions.” The counterpart to such special contributions and the effect that they might have is that entrepreneurs or those that might be said to have special skills will not always succeed. And when they do not, there will be a diminution of the property to be divided between the parties. To some extent, parties to a marriage have to accept the “good with the bad.” Sometimes it is “for worse” rather than “for better.”
[4] Orders of Deputy Chief Justice Faulks of 30 September 2008; Orders of Deputy Chief Justice Faulks of 18 November 2008; Orders of Deputy Chief Justice Faulks of 27 November 2008; Orders of Deputy Chief Justice Faulks of 12 February 2009; Orders of Deputy Chief Justice Faulks of 13 March 2009; Orders of Deputy Chief Justice Faulks of 19 June 2009.
There is no doubt that the proceedings that were before me were prolonged by the husband’s inability to provide information in a timely fashion, to conduct the hearing in an appropriate way and by his failure properly to fulfil his obligation to make a full and frank disclosure. (On the sanctity of this obligation, see in particular Murphy J’s statement in Hackshaw & Hackshaw [2010] FamCA 1123 at [22] to [33]).
Information about the financial affairs of the Manichaeus Group, valuations, leases and the like came through on intermittent drip-feed. The conduct of the proceedings by the wife was responsive, patient, appropriate and was adjusted to the changing patterns of the case presented by the husband.
In terms of matters under s 117(2A)(c), this is a ground which clearly and strongly favours the wife’s case. Moreover, a large part of the expense of the trial was brought about by the way in which the husband conducted the proceedings. The proceedings were unquestionably prolonged as a consequence.
Whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court
I have already commented on the husband’s failure to properly comply with my directions as to the filing of materials in a timely manner over the course of the proceedings.
Whether any party to the proceedings has been wholly unsuccessful in the proceedings
It not unusual in complex property adjustment matters that neither party was wholly unsuccessful. All parties lost in these proceedings in one way or another.
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
It appears that offers of settlement were exchanged between the parties. Each party draws conclusion to those offers adverse to the interest of the other party.
As a result of my invitation, I received from the wife an affidavit in which the result of the appeal was set out. This indicates that, to some extent, if I accept the submissions of the husband (as opposed to his evidence supporting those submissions) the “end result” was less favourable to the wife than he was prepared to offer to settle for at an earlier point. What the wife settled for was less than the amount that I had granted her by order in the proceedings before the Court.
It is difficult to draw any satisfactory conclusion from the settlement that was achieved. Settlements may be based on pragmatism as opposed to assertion of right or, indeed, an accurate assessment of what the outcome of an appeal is likely to be. There may also be a pragmatic assessment of the costs, both financial, time and emotional, that will be needed to continue litigation. Accordingly, the fact that as a result of the settlement reached on appeal, the wife received less than the husband may have offered her at an earlier point is perhaps not as significant. It does not outweigh other considerations.
The wife, for her part, complains that the husband failed properly to engage with her in the process of settlement negotiations and that accordingly contested proceedings became inevitable.
I do not regard the exchanges of offers to settle this matter as being in any way determinative of the question of costs. Virtually until the end of the proceedings, there was no certainty as to the value of either assets or liabilities of the parties. The assessment by either party of an offer from the other (particularly in the case of the wife who did not have as much information as the husband) made the task of the proper evaluation of settlement offers nigh on impossible.
The inclusion in s 117(2A)(f) in the Act relating to exchanges of offers was to parallel, in some respects, the procedure in civil courts of paying money into Court to resolve litigation. In the case of payment of money into Court (or, indeed, in relation to “Calderbank offers”) it is not necessary that there should be a logical connexion between the amount offered and the final determination solution. If, for example, a defendant manages, whether by luck or good judgement, to pay into Court an amount which approximates to that to that which the plaintiff ultimately receives, it is irrelevant if this was based upon considerations other than those finally determined by Judgment. That is, there need not be necessarily be a coincidence between the Reasons for Judgment and the quantum of the offer.
While the same might be said about offers in s 117(2A)(f) of the Act, in matters of complexity such as this, it would be reasonable for a Court to take account of the difficulty associated with assessing an offer. In the context of why an exchange of offers and the rejection of an offer should be taken into account, regard should be held to the fact that an informed assessment of the offer was not reasonably possible at the relevant time.
Accordingly, I do not take the exchange of offers in this matter into account on the question of costs on either side.
Such other matters as the court considers relevant
I also take account of the material filed by the parties relating to the proceedings subsequent to the application for costs. By leave of the Court, the wife and the husband filed affidavits on 17 March 2011 and 24 March 2011 respectively. This was done in light of the settlement of the proceedings before the Full Court of this Court.
I note the further prolongation of the proceedings by the husband although it is not possible to ascertain from the affidavit filed by the wife to conclude that the proceedings undertaken on behalf of the husband subsequently necessarily were inappropriate. The necessary consequence of those proceedings, however, was that the wife has incurred a further $83,000 legal fees and disbursements. This is a proper matter for me to take into account in relation to her financial circumstances as well, and I do so.
Relevantly, in the husband’s affidavit filed 24 March 2011, he deposes in (at [4] – [11]):
4. I believe that the settlement of the matter was upon that basis that it resolved all of the outstanding matters between myself and the wife, including the costs of the hearing before the Deputy Chief Justice Faulks J and those were my instructions to my legal representatives.
5. I am advised by Mr Lardner that Mr McGrath SC believes he negotiated on my behalf a settlement whereby the sum of $500,000 (i.e. that sum that is to be paid to the wife pursuant to the settlement of the appeal proceedings in lieu of the sum ordered by the court in the proceedings before the Deputy Chief Justice at first instance) was inclusive of the wife’s costs of the proceedings before his Honour at first instance.
6. A primary purpose of my seeking and instructing my legal representatives to seek to negotiate a lump sum figure inclusive of costs was so that I would know precisely what my ultimate obligations were to my former wife and to the ANZ, so that I could in turn ascertain whether I could refinance to avoid the receivership and potential winding up of my companies. I have since acted upon that basis and have obtained an indicative letter of refinancing from the Bank of Queensland, which refinanced sum does not include provision for the wife’s costs. A true copy of the said indicative letter of the Bank of Queensland is annexed and marked “B”.
7. It was only after I provided a copy of the indicative letter of finance to the wife’s legal representatives, via my solicitors, that the wife advised that she was continuing to seek costs of the proceedings before the Deputy Chief Justice.
8. I left the matter to my legal advisers as to how best to prepare the necessary paperwork to give effect to the agreement. Terms were prepared under some time pressures in light of the ANZ Bank’s action appoint receivers and have them take possession of the subject properties, but to the best of my information and belief those terms were intended to finally [resolve] all outstanding matters between myself and my former wife.
9. I am advised by Mr Lardner and believe that, although it is not recorded in the minute of orders made in the Appeal Court, Her Honour Finn JA allowed the appeal in order and to the extent necessary to make the consent orders settling the matter.
10. Although I have obtained the indicative letter concerning refinancing from the Bank of Queensland, I still do not have the consent of the ANZ Bank to the refinancing arrangements and a fearful that the costs dispute and any, if any, order for costs will end the hope of refinancing.
11. If this Honourable Court does proceed to consider the issue of costs, I humbly ask the Court to make no orders as to costs in the exercise of its discretion.
It is not open to this Court to go behind the reasons as to why either of the parties settled their dispute. Settlement is ultimately a question of pragmatic balancing by each of the parties of the likely outcome against the possibilities of success. There is nothing in the terms of settlement upon which I have already commented to indicate that the costs of the proceedings before me were compromised by the terms made on appeal. Indeed, I note that in the orders signed by the parties, which were an exhibit to the orders made by Finn J on 21 February 2011,[5] contained the following order:
5. That the appeal and cross-appeal filed herein otherwise be dismissed, with no order as to costs with the intent that each party shall [bear] his, her or its own costs of and incidental to the appeal and cross appeal.
[5] Affidavit of the wife, filed 17 March 2011, Annexure “A”.
There is no relevant matter in the affidavit of Mr Manichaeus of 24 March 2011 which would cause me not to exercise my discretion to award an order for costs to the wife. I do not accept Mr Manichaeus’ submission that I should not, in the exercise of my discretion, refrain my making an order for him to pay the wife’s costs as I determine in my Reasons for Judgment below.
Conclusion
In this matter, taking account of all the matters I am obliged to take into account, it seems to me that there should be an order for costs in favour of the wife. Specifically, the orders are grounded
This order should fall short of a complete indemnity. This is because, in my opinion, there are no exceptional circumstances within the meaning of the authorities which justify the making of such an order. I take into account the primary restriction outlined in s 117(1) of the Act; that the matter was eventually settled for less than the amount that I ordered in my Judgment; and while the husband’s conduct of proceedings was inept, it was not, in my opinion, malicious, but rather the product of an exaggerated and misguided assessment on the part of the husband of his own abilities and skills in litigation.
I take into account also the question of the costs of this application for costs. I have had the benefit of careful and precise submissions on behalf of the wife about costs. The submissions on the part of the husband were somewhat less helpful, but it was obvious that those advising him had a difficult case in the light of the findings I had made about the husband’s conduct of and during the proceedings.
Rather than subject the parties to a further process of evaluation or assessment by a Registrar in relation to the costs of the application for costs, it seems to me just that I should make a global determination about amount that the husband should pay to the wife within the broad discretion conveyed by the Act including the cost of this (at least partially) successful application for costs.
Accordingly, in my opinion, the appropriate figure for the husband to the wife for costs both in relation to the primary proceedings and in relation to the application for costs itself is $175,000.
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of the Honourable Acting Chief Justice Faulks.
Associate
Date: 25 March 2011
Annexure “1”: Schedule of Conduct of Proceedings – filed by the applicant wife, 13 December 2010
| Date of proceedings | History of the conduct of the proceedings |
| 31st July 2004 | Parties Separate |
| 19th May 2006 | Parties divorce |
| 3rd May 2007 | Wife’s files an application for adjustment of property interests |
| 30th May 2007 | Ken Cush & Associates files an address for service on behalf of the husband |
| 12th June 2007 | Orders made by consent that parties provide disclosure – Husband represented by Steven Fraser |
| 14th November 2007 | Conciliation Conference – adjourned by consent due to unavailability of the husband’s lawyer Further Conciliation conference delayed until August 2008 |
| 12th March 2008 | Parties consent to procedural orders |
| 21st August 2008 | Registrar Parker makes orders requiring Mr Manichaeus to file a financial statement and financial questionnaire by 19th September 2008 |
| 19th September 2008 | Mr Manichaeus fails to comply with Registrar Parker’s direction |
| 22nd September 2008 | Conciliation Conference – Registrar Parker requires Mr Manichaeus to complete a financial statement by hand – costs of $400 reserved Husband disclosed assets of $19m and liabilities of $15m QA50 – husband says he draws a salary of $150,000 QA55 - $1.5m is not particularised Leave granted by Registrar Parker to issue a subpoena to NAB and ANZ |
| 29th September 2008 | Mr Manichaeus files a typed financial statement and response completed with the assistance of Steven Fraser |
| 30th September 2008 | DCJ Faulks makes an order that Mr Manichaeus provide further disclosure Husband claims debts of $12,995,576 |
| 9th October 2008 | Mr Manichaeus refinances the Manichaeus Group with the ANZ bank without the wife’s knowledge and consent |
| 20th October 2008 | ANZ settlement statement indicates NAB mortgage discharge of $13,345,967.89 |
| 12th November 2008 | Directions hearing before DCJ Faulks regarding issues of valuation and disclosure – adjourned to 18th November 2008 |
| 18th November 2008 | Further directions hearing before DCJ Faulks regarding issues of valuation and disclosure – adjourned to 27th November 2008 |
| 27th November 2008 | Further directions hearing before DCJ Faulks – directions made for the filing of affidavits and market appraisals by 30th January 2009 |
| 30th January 2009 | Both parties file affidavits – Mr Manichaeus refuses to agree to meet the costs of market appraisals for the properties owned by the Manichaeus Group |
| 12th February 2009 | Orders made by DCJ Faulks joining the husband’s companies (2nd, 3rd and 4th Respondents) and requiring the parties to compete a joint balance sheet after receiving market appraisals |
| 25th February 2009 | Wife files an amended application Subpoenae issued to St George Bank, NAB and ANZ |
| 11th March 2009 | Order made by DCJ Faulks for solicitors to settle a joint balance sheet Both parties through their solicitors agreed to adopt the ANZ bank valuations |
| 13th March 2009 | Joint balance sheet filed – husband resiles from accepting ANZ Bank valuations |
| 19th June 2009 | Husband sacks his lawyer and represents himself Husband files an application in a case to vacate the hearing date – |
| 23rd June 2009 | Husband self represented Notice to Produce served on the husband – Mr Manichaeus fails to produce documents in accordance with the Notice to Produce – once the hearing had commenced he organised for staff to retrieve the original commercial leases |
| 30th June 2009 | Husband self represented On the evening immediately before the hearing and contrary to directions Mr Manichaeus served the wife’s solicitor with 3 lever arch folders of documents and an affidavit |
| 1st to 3rd July 2009 | Final hearing – Husband self represented Hearing conducted over 3 days Adjourned part heard to 8th July 2009 |
| 8th July 2009 | Resumed hearing – Husband self represented Mr Manichaeus seeks an adjournment due to ill health – proceedings adjourned to 24th July 2009 |
| 24th July 2009 | Resumed hearing – Husband self represented During re – examination of Mr Manichaeus by Counsel for the wife Mr Manichaeus produces a further affidavit with 280 pages of annexures contrary to the Court’s directions necessitating an adjournment of the proceedings The hearing was adjourned to a date to be fixed – DCJ Faulks made an order that no further evidence was to be adduced without leave of the Court, he indicated an intention to transfer E Street, Suburb F to Mrs Manichaeus and invited the ANZ bank to intervene on the issue of the transfer |
| 1st September 2009 | ANZ bank were joined as a party to the proceedings and indicated to the Court they had no objection to E Street Suburb F being transferred to the wife |
| 20th September 2009 | Wife’s solicitors issue a subpoena to RBS Morgans following Mr Manichaeus’ evidence that he had disposed of his interest in the share portfolio (approximately $135,000) |
| 19th October 2009 | Resumed hearing – Husband self-represented Orders made by DCJ Faulks that a registered valuation of G Street and H Street be obtained at the husband’s expense [Noting that the husband has not paid the valuer’s costs to date] |
| 20th October 2009 | The husband refused to sign the transfer form for E Street |
| 21st October 2009 | Resumed hearing – husband self represented Adjourned to 18th December 2009 Leave given to the wife’s solicitors to issue further subpoenae to the ANZ bank Wife’s oral application for spousal maintenance was unsuccessful |
| 4th November 2009 | Husband self represented DCJ Faulks issues draft interim orders and invited written submissions from both parties – Mr Manichaeus failed to file any submissions |
| 14th December 2009 | Husband self represented Wife files an application in a case seeking an order that the Registrar be permitted to sign the transfer of E Street in Mr Manichaeus’ stead |
| 18th December 2009 | Resumed hearing – Husband self represented Husband files a lever arch folder including an affidavit with numerous annexures |
| 21st December 2009 | Wife’s application on 14th December 2009 successful DCJ Faulks makes orders authorising the Registrar to sign the transfer of E Street |
| 28th January 2010 | Resumed hearing – Husband self represented Matter continues to 2nd day due to the length of Mr Manichaeus’ submissions (7 hours) |
| 29th January 2010 | Resumed hearing – Husband self represented Evidence concluded Judgment was reserved |
| 5th February 2010 | Injunctions imposed by the Court restraining the Manichaeus Group from further encumbering assets pending judgment |
| 26th February 2010 | EBA on behalf of the husband forward a letter to the wife advising that the husband requires the net proceeds of Unit 5 to pay debts. The letter advises “there are sufficient assets from the existing pool for your client to receive her share of the pool even on the basis of the best scenario in her favour” |
| 3rd March 2010 | Blake Dawson on behalf of the ANZ forward a letter to the wife’s solicitor advising that the net proceeds from the sale of Unit 5 would be applied to reduce ANZ debt |
| 3rd March 2010 | Husband files an application in a case for orders for the sale of Unit 5 and the transfer of net proceeds to husband for his exclusive use (he says to pay debts) |
| 4th March 2010 | Husband files an application in a case seeking to lift the injunctions |
| 9th March 2009 | Husband represented by solicitor and Counsel Hearing of husband’s application in a case – evidence produced by Mr Manichaeus’ lawyers at the bar table – adjourned to enable Mr Manichaeus to file further evidence to support his application |
| 12th March 2010 | Husband represented by solicitor and Counsel Husband serves a lever arch folder containing an affidavit with numerous annexures |
| 15th March 2010 | Husband represented by solicitor and Counsel Husband serves a further affidavit and folder of documents |
| 16th March 2010 | Husband represented by solicitor and Counsel Husband’s application in a case dismissed with costs |
| 21st March 2010 | Court hands down judgment with draft Orders |
| 10th June 2010 | Further interim hearing – husband represented by solicitor Certus law on behalf of the husband advised that husband has an offer for Unit 6 and that contracts have been exchanged – noting that contracted were exchanged on 20th May and settlement scheduled for 18th June 2010 Wife’s solicitor request judgment be altered in accordance with the slip rule |
| 11th June 2010 | Parties given time to make submissions in respect of the draft final orders |
| 24th June 2010 | Husband represented by solicitor and opposes the wife’s application under the slip rule DCJ Faulks determines that the slip rule does not apply but corrects draft judgment in accordance with the evidence before the Court during the final hearing |
| 8th July 2010 | Husband self represented Hearing regarding draft judgment and proposals for implementing orders ANZ bank is heard in respect of the draft orders |
| 12th July 2010 | Husband self represented Husband filed application in a case seeking 5 years to pay the sum of $1,050,000 Parties including ANZ bank heard in respect of the draft orders |
| 13th July 2010 | Final property orders issued |
| 14th July 2010 | Final Orders amended at Mr Manichaeus’ request to include CGT and GST in respect of properties to be sold Wife and ANZ not heard on the amendment of the orders |
| 3rd August 2010 | Husband represented by a solicitor Husband files an application for stay which is defective as it is not supported by a Notice of Appeal |
| 10th August 2010 | Husband represented by a solicitor Husband files Notice of Appeal |
| 27th August 2010 | Husband represented by a solicitor and Senior Counsel Hearing of stay Court makes orders staying final orders |
Annexure 2: Orders of Faulks DCJ made 13 July 2010, amended on 14 July 2010
IT IS NOTED THAT:
The husband proposes to transfer a car formally driven by Mr U, former Corporate Counsel to the Manichaeus Group, to the parties’ eldest son.
Based on the findings of fact in my Judgment of 21 May 2010, with corrections on those facts as accepted by the parties since that time:
a.the total value of the assets of the parties is $17,580,000;
b.the total value of the liabilities of the parties is $13,548,460.15;
c.the total value of the net assets of the parties is $4,031,539.85, rounded up to $4,032,000.
d.The value of the wife’s home is $500,000.
e.The value of the husband’s home is $635,000.
If all of the properties were to be sold, then in accordance with the terms of my Judgment of 21 May 2010, Ms Manichaeus (‘the wife’) would receive 53.5 per cent of $4,032,000, that is $2,157,120, rounded up to $2,158,000. Mr Manichaeus (‘the husband’) would receive 46.5 per cent of $4,032,000, that is approximately $1,875,000.
As a consequence of the orders I make hereunder, the parties are to retain proprietary ownership of the houses in which they presently reside, and, thereafter, the wife is to receive 57 per cent of the total remaining net assets of the parties and the husband is to receive 43 per cent of the total value of the remaining net assets of the parties.
Discounting the value of the wife and the husband’s house, the total value of the remaining net assets is $2,897,000. It is intended by the orders that appear hereunder that the wife will receive 57 per cent of this sum (a notional value of $1,651,290) and the husband will receive 43 per cent of this sum (a notional value of $1,245,710).
The Manichaeus Group is the nomenclature which refers to the group of corporate entities as identified in the diagram attached to my Judgment of 21 May 2010.
IT IS ORDERED THAT:
The wife is declared to be the owner both at law and in equity of the property situate and known as E Street, Suburb F, in the Australian Capital Territory (ACT) (‘the E Street property’).
The wife will indemnify and keep indemnified the husband in respect of any outgoings on the E Street property as and from the date of these orders.
The husband is declared to be the owner both at law and in equity of the property situate and known as I Street, Suburb J ACT (‘the I Street property’).
10.The husband will indemnify and keep indemnified the wife in respect of any outgoings on the I Street property as and from the date of these orders.
11.The wife is declared to be the owner both at law and in equity of motor vehicle 1, registration number ‘…’.
12.The husband is declared to be the owner both at law and in equity of motor vehicle 2, registration number ‘…’.
13.The husband will pay the sum of one million two hundred and fifty eight thousand dollars ($1,258,000) (‘the Judgment sum’) to the wife within 14 days of the date of these orders.
14.In the event that the husband does not pay the Judgment sum to the wife, the husband will:
a.list the following (‘Group A’) properties for sale:
i.Unit 2, K Street, Suburb L, ACT immediately;
ii.Unit 1, K Street, Suburb L, ACT immediately (on the basis that a sale will be by auction within 35 days);
iii.M Street, Suburb N, ACT immediately (on the basis that a sale will be by auction within 35 days);
iv.Upon exchange of contracts for Unit 1, K Street, Suburb L, ACT, then H Street, Suburb L, ACT immediately;
v.Upon exchange of contracts for H, Suburb L, ACT, then Units 3, 5 & 7 K Street, Suburb L, ACT (to be offered for sale in one line);
1.In each case, the listed Group A properties will be sold:
a.at a price agreed to by the husband and the wife or in default thereof at a price nominated by the President of the Real Estate Institute of the ACT or his nominee;
b.with a real estate agent agreed to by the husband and the wife or in default thereof by an agent nominated by the President of the Real Estate Institute of the ACT or his nominee;
c.with a solicitor as agreed to by the husband and the wife or in default thereof Phelps Reid solicitors;
2.If any of the listed Group A properties are not sold within 75 days of there being listed for sale in accordance with these orders then such properties as remain unsold are to be listed for auction at the first available auction date with a reserve price as agreed by the husband and wife or in default thereof as determined by the President of the Real Estate Institute of the ACT or his nominee;
3.Upon sale of the listed Group A properties, the net sale proceeds after deduction of reasonable sale expenses and legal expenses associated with the sale and any Capital Gains Tax (CGT) and Goods & Services Tax (GST) (should CGT or GST be payable) is to be paid in permanent reduction of the debts of the entities within the Manichaeus Group (as that term has been previously described in my Judgment) secured with the ANZ Bank, [which were noted
inas in July 2010 to be in the order of twelve million, two hundred and eighty nine thousand, two hundred and thirty nine dollars and nine cents ($12,289,239.09), but which sum it is noted from time to time may vary, either by the addition of interest in respect to the said sum or by other fees that ANZ Bank may impose in accordance with their proper agreement between the [Manichaeus Group] and the ANZ Bank. It is further noted that the sum will reduce as a result of the proceeds of each sale being paid to the ANZ Bank] and thereafter as to 57 per cent to the wife and 43 per cent to the husband.
b.list the following (‘Group B’) properties for sale within 90 days:
i.O Street, Suburb P, ACT;
ii.1 M Street, Suburb N, ACT;
iii.2 M Street, Suburb N, ACT;
iv.3 M Street, Suburb N, ACT;
1.the listed Group B properties will be sold:
a.by a method of sale (auction or private treaty) and in accordance with the marketing recommendations of the President of the Real Estate Institute of the ACT or his nominee;
b.at a price nominated by the President of the Real Estate Institute of the ACT or his nominee;
c.with a real estate agent agreed to by the husband and the wife or in default thereof by an agent nominated by the President of the Real Estate Institute of the ACT or his nominee;
d.with a solicitor as agreed to by the husband and the wife or in default thereof Phelps Reid solicitors;
2.If any of the listed Group B properties are not sold within 150 days of the date of these orders then such properties as remain unsold are to be listed for auction at the first available auction date with a reserve price as agreed by the husband and wife or in default thereof as determined by the President of the Real Estate Institute of the ACT or his nominee;
3.Upon sale of the listed Group B properties, the net sale proceeds after deduction of reasonable sale expenses and legal expenses associated with the sale and any Capital Gains Tax (CGT) and Goods & Services Tax (GST) (should CGT or GST be payable) is to be paid in permanent reduction of the debts of the entities within the Manichaeus Group (as that term has been previously described in my Judgment) secured with the ANZ Bank, and thereafter as to 57 per cent to the wife and 43 per cent to the husband.
c.list the following (‘Group C’) properties for sale within 150 days:
i.G Street, Suburb N, ACT;
ii.Q Street, Suburb P, ACT;
1.the listed Group C properties will be sold:
a.by a method of sale (auction or private treaty) and in accordance with the marketing recommendations of the President of the Real Estate Institute of the ACT or his nominee;
b.at a price nominated by the President of the Real Estate Institute of the ACT or his nominee;
c.with a real estate agent agreed to by the husband and the wife or in default thereof by an agent nominated by the President of the Real Estate Institute of the ACT or his nominee;
d.with a solicitor as agreed to by the husband and the wife or in default thereof Phelps Reid solicitors;
2.If any of the listed Group C properties are not sold within 210 days of the date of these orders then such properties as remain unsold are to be listed for auction at the first available auction date with a reserve price as agreed by the husband and wife or in default thereof as determined by the President of the Real Estate Institute of the ACT or his nominee;
3.Upon sale of the listed Group C properties, the net sale proceeds after deduction of reasonable sale expenses and legal expenses associated with the sale and any Capital Gains Tax (CGT) and Goods & Services Tax (GST) (should CGT or GST be payable) is to be paid in permanent reduction of the debts of the entities within the Manichaeus Group (as that term has been previously described in my Judgment) secured with the ANZ Bank, and thereafter as to 57 per cent to the wife and 43 per cent to the husband.
15.The husband be, and is hereby restrained from, borrowing further money from the ANZ Bank, or doing any act or thing which would increase the indebtedness of the Manichaeus Group to the ANZ Bank.
16.Nothing contained in the preceding orders in relation to the sale of the properties precludes the ANZ Bank from exercising its powers pursuant to their current documentation between the ANZ Bank and the Manichaeus Group to enforce their security in accordance with that documentation or to seek an accelerated sale of the properties upon termination of the current arrangements on 17
SeptemberOctober 2010. It is noted, however, that subject only to the ANZ Bank’s exercising those rights, the ANZ Bank has agreed to the program set out above for the sale of the properties.17.Within 14 days, the husband will pay the wife the sum of $9,000 together with interest calculated from 1 July 2010 in accordance with the Family Law Rules2004, as required by my orders of 16 March 2010.
a.In the event that the husband fails to this sum within 14 days, the sum of $9,000 together with interest calculated to the date of payment shall be deducted from the husband’s share before any payment is made to the husband pursuant to these orders.
18.That if the husband has not already done so he pay forthwith the costs of CB Richard Ellis in the sum of $3,890 for the preparation of valuation reports of properties situate at H Street, Suburb L, ACT and G Street, Suburb N, ACT as required by my orders of 20 October 2009.
a.In the event that the husband fails to pay this sum within 14 days, the sum of $3,890 shall be deducted from the husband’s share before any payment is made to the husband pursuant to these orders.
19.Within seven (7) days of the date of these orders, the wife will do all acts and things and sign and execute all documents necessary to resign as a director of any of the companies or entities within the Manichaeus Group and transfer her shareholding to the husband or his nominee.
20.Subject to these Orders, the husband will indemnify and keep indemnified the wife absolutely from any claims against her arising from the activities of Manichaeus Group and any corporation in which he is a shareholder and director, including claims for directors’ loans. Such indemnity will include any legal costs incurred by the wife in defending any such claims, actions or demands.
21.If the husband or the wife should fail within 7 days after the periods nominated in these orders above (on the certification in writing by the wife or her solicitors that the husband has so failed) to execute (or sign) any document or to perform any action required in relation to such sale(s), then pursuant to s 106A(1) of the Family Law Act 1975 (Cth) a Registrar of the Family Court of Australia in Canberra is appointed to sign such documents or perform such action in the husband’s stead.
22.Otherwise, each of the parties be and is hereby declared to be the owner both at law and in equity of all the property in his or her possession or control.
23.Any material produced subpoena which became an exhibit will be returned by the Court at the expiration of the appeal period to the person producing it. Any material produced by a party which became the subject of an exhibit will be returned by the Court to the party at the expiration of the appeal period.
24.All material produced subpoena which did not become the subject of exhibits will be returned by the Court to the persons producing it as soon as practicable.
25.That all extant applications, save as to
theany fresh application the parties may wish to make in relation to the question of costs filed before 4.00 pm on 9 August 2010, are discharged.26.The matter is removed from the pending cases inventory.
Annexure 3: Orders of Finn J, 21 February 2011
FAMILY LAW ACT 1975
IN THE APPELLATE JURISDICTION
OF THE FAMILY COURT OF AUSTRALIA
AT CANBERRA Appeal No. EA 101 of 2010
File No. CAC 857 of 2007
MR MANICHAEUS
First Appellant
-and-
B PTY LTD
Second Appellant
-and-
MANICHAEUS PTY LTD
Third Appellant
-and-
C PTY LTD
Fourth Appellant
-and-
MS TAKAHASHI (formerly MANICHAEUS)
Respondent
CORAM: Finn J
DATE OF HEARING: 21 February 2011
DATE OF ORDERS: 21 February 2011
UPON the Court having before it as “Exhibit 1” (copy attached) a scanned copy of a Minute of Consent Orders signed by appellant husband and his legal representative, and a scanned copy of a Minute of Consent Orders signed by the respondent wife and her legal representative,
AND UPON Mr Lardner, solicitor, appearing by telephone on behalf of the appellants and Ms Tonkin of Counsel appearing on behalf of the respondent,
IT IS ORDERED:
With the consent of the legal representatives of both parties, the appeal and the cross-appeal against the orders made by the Honourable Deputy Chief Justice Faulks on 13 July 2010 (as amended on 14 July 2010) be allowed, but only to the extent provided in the following orders.
IT IS ORDERED BY CONSENT:
That Order 13 of the orders of the Family Court of Australia at Canberra made on 13 July 2010 and amended on 14 July 2010 (“Orders of the Court Below”) be set aside and the following order be substituted in its place:
13 (a) The husband shall pay the wife the sum of five hundred thousand dollars ($500,000.00) (Judgment Sum) within 90 days of 18 February 2011.
(b)If the Judgment Sum remains unpaid in whole or in part at the expiration of the date referred to in the preceding subparagraph of this order then from the date of such default until payment so much of the Judgment sum as remains owing shall bear interest at the rate prescribed by the Family Law Rules.
That Order 14 of the Orders of the Court Below be varied:
(a)To insert, in the first sentence thereof after the words “does not pay the Judgment sum to the wife”, the additional words “within the 90 days after 18 February 2011”.
(b)To delete the words “and thereafter as to 57 per cent to the wife and 43 per cent to the husband” at the end each of subparagraphs a.v.3, b.v.3 and c.v.3 and to substitute in their place “and thereafter to distribute the remainder of the sale proceeds to firstly discharge the husband’s obligation to pay to the wife the Judgment Sum and any interest accrued thereon pursuant to these orders and, provided that the Judgment Sum and such interest has been paid in full to the wife, to pay the remainder, if any, of the sale proceeds to the husband.”
That Order 15 of the Orders of the Court Below be set aside and the following orders be substituted in its place:
(a)The husband shall at his expense forthwith do all acts and things necessary to procure the Judgment Sum is secured by:
(i)second mortgage registered over the properties referred to in Order 14 (save for the properties at H Street, Suburb L and Unit 2, K Street, Suburb L); and
(ii)second mortgage registered over the property at I Street, Suburb J;
provided, however, that if it is not reasonably practicable for the husband to procure the said second mortgages within 3 working days of the date of these orders then the husband shall procure in their place second unregistered mortgages in favour of the wife over the properties referred to in 15 a) i) and ii) above (all and any of which unregistered mortgages shall be protected by caveat in favour of the wife lodged upon the titles of those properties at the expense of the husband).
(b)If within 7 days of the date of these orders the husband has not procured the said registered second mortgages or said unregistered second mortgages protected by caveats, the Registrar of the Family Court pursuant to s 106A of the Act shall execute all documents and do all things in place of the husband to give effect to the preceding subparagraph.
(c)The husband shall within 90 days of 18 February 2011 do all acts and things necessary to procure the discharge of the mortgages encumbering the properties referred to in Order 14.
That save as set out above in these orders, the Orders of the Court Below be confirmed and that the husband be directed to engross and file in this Court [a] minute of orders incorporating the Orders of the Court Below as amended, set aside or varied by these orders.
That the appeal and cross-appeal are otherwise dismissed, with no order as to costs with the intent that each party shall [bear] his, her or its own costs of and incidental to the appeal and the cross-appeal.
It is noted that the originals of the signed Minutes of Consent Orders shall remain on the appeal file (EA 101 of 2010).
FAMILY LAW ACT 1975
IN THE OF THE FAMILY COURT OF AUSTRALIA
AT CANBERRA
File No. CAC 857 of 2007
MS SAKAMATO (formerly MANICHAEUS)
Applicant Wife
-and-
MR MANICHAEUS
Respondent Husband
CORAM: Finn J
DATE OF HEARING: 21 February 2011
DATE OF ORDERS: 21 February 2011
UPON Ms Tonkin of Counsel appearing on behalf of the applicant wife, and Mr Lardner, solicitor, appearing by telephone on behalf of the respondent husband,
AND UPON Ms Tonkin making an oral applicant on behalf of the wife for orders to be made under the Child Support (Assessment) Act 1989 (Cth),
AND UPON the Court having before it as “Exhibit 1” (copy attached) a scanned copy of a Minute of Consent Orders signed by applicant wife and her legal representative and a scanned copy of a Minute of Consent Orders signed by the respondent husband and his legal representative, with Order 6 of the Minute containing the proposed consent order to be made by the Court under the Child Support (Assessment) Act 1989 (Cth),
IT IS ORDERED:
The wife be at liberty to make an oral application for orders (in the form contained in Orders 3 and 4 of these orders) under the Child Support (Assessment) Act 1989 (Cth).
The oral application made on behalf of the wife referred to in Order 1 be granted.
IT IS ORDERED BY CONSENT:
Pursuant to ss 117 and 118 of the Child Support (Assessment) Act 1989 (Cth) there be a departure from the relevant administrative assessment of child support in relation to R born … July 1993, S born … April 1995 and T born … May 1997 (“the children of the marriage”) for the following periods:
(i)18 February 2011 to 30 June 2011;
(ii)1 July 2011 to 30 June 2012;
(iii)1 July 2012 to 30 June 2013;
(iv)1 July 2013 to 30 June 2014;
(v)1 July 2014 to 31 December 2014;
and the husband’s and the wife’s periodic child support assessment for each of the above periods be determined at $0 per week.
Pursuant to ss 123 and 124 of the Child Support (Assessment) Act 1989 (Cth) by way of departure order the husband shall pay all the private school fees for the children of the marriage attending D School, including the payment of all associated education expenses, until the last child has turned eighteen years of age or has completed his secondary education whichever is the later.
It is noted in connection with these orders:
the Court has been advised by the legal representatives for both parties that prior to the making of these orders there was an existing Child Support Assessment in relation to the children of the marriage;
the Court is satisfied that it has jurisdiction to make these orders pursuant to s 116(1)(b) of the Child Support (Assessment) Act 1989 (Cth) on the basis that there are other proceedings pending in the Family Court of Australia; and
the Court has been advised by the legal representatives for both parties that neither party is in receipt of an income tested pension, allowance or benefit.
It is further noted that a copies of these orders and the annexed exhibit are to be placed on both the first instance file (CAC 857 of 2007) and the appeal file (EA 101 of 2010). The originals of the Minutes of Consent Orders will be placed on the appeal file.
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