TAPPER & MCFARLANE (No.2)
[2013] FCCA 798
•2 July 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TAPPER & MCFARLANE (No.2) | [2013] FCCA 798 |
| Catchwords: FAMILY LAW – Bond – failure to comply. |
| Legislation: Family Law Act 1975, s.117 |
| Mead v Watson [2005] NSWCA 133; (2005) 23 ACLC 718 Weirs & Weirs [2012] FMCAfam 247 Australian Consolidated Press v Morgan (1965) 112 CLR 483 |
| Applicant: | MS TAPPER |
| Respondent: | MR MCFARLANE |
| File Number: | MLC 1290 of 2012 |
| Judgment of: | Judge Riethmuller |
| Hearing date: | 2 July 2013 |
| Date of Last Submission: | 2 July 2013 |
| Delivered at: | Melbourne |
| Delivered on: | 2 July 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Isles |
| Solicitors for the Applicant: | Stephen Peter Byrne |
| Counsel for the Respondent: | Ms Southey |
| Solicitors for the Respondent: | Aitken Partners Pty Ltd |
THE COURT HAVING FOUND that the Respondent committed a contempt of Court as provided for in section 112AP(1)(b) of the Family Law Act1975 (Cth) in that he contravened order 3 of the orders made by the (then) Federal Magistrates Court constituted by Judge Burchardt on 14 May 2012
ORDERS
That the Respondent enter into a Bond upon the following conditions:
(a)For a period of twenty-four (24) months from and inclusive of 2 July 2013
(i) To be of good behaviour;
(ii)To comply with all extant orders and directions, and any future orders and directions and any court rules applying to the property settlement proceedings and any related proceedings between the parties in the Federal Circuit Court of Australia; and
(iii)Appear before the court on a date to be fixed for determination of the appropriate orders in the event that this bond is breached.
Paragraph 3 of the orders of Judge Burchardt made on 14 May 2012 be discharged.
Until further order, or written consent of the Applicant, the Respondent be hereby restrained from in any way dealing with or disposing of or mortgaging or encumbering the land known as:
(a)Property H in the State of New South Wales; or
(b)Property B, in the State of Victoria;
or his interest in either.
The Respondent pay the Applicant’s costs of this application, including reserved costs, to be paid on a solicitor-client costs basis, or as agreed, and failing agreement to be taxed on the Family Court of Australia scale.
AND THE COURT NOTES:
A.The Respondent entered into the Property B in the Federal Circuit Court of Australia on 2 July 2013 in open court in the presence of Judge Riethmuller and Counsel for the Applicant, and a copy of the signed Property B is annexed to these orders.
IT IS NOTED that publication of this judgment under the pseudonym Tapper & McFarlane is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 1290 of 2012
| MS TAPPER |
Applicant
And
| MR MCFARLANE |
Respondent
REASONS FOR JUDGMENT
(Revised from Transcript)
The facts surrounding the contempt in this case are set out in the judgment that I gave yesterday. I need not repeat them.
The respondent is a man 45 years of age with no criminal convictions. He has a child of 15 years that he sees rarely and is not actively supporting at the moment. He has been in a relationship with the applicant for a period of time, although there remains a very real issue about the extent of the relationship and the length of the relationship.
The primary concern of the applicant is that there be sufficient assets to meet her claim. On the current valuations as described, it appears that there is presently a net equity in real property of around $300,000 and a net equity in motor vehicles of around $117,000.
The case for the applicant is that she should receive one half of the property of the parties on the basis of a nine year de facto relationship without children. The equity, had the respondent not dealt with the property, would have been around $520,000.00 on his valuations and therefore, the applicant’s claim would, it seems to me, be covered by the equity in the property subject to the extent to which there may be other creditors such as the applicant’s solicitors and/or any possible business creditors, (although none have been identified). If there is not enough money for all to be paid then she will share rateably in what resources there are.
On these figures there is a particularly modest risk at best to the applicant. If it transpires that her valuations of the property are correct then it seems to me she is at no practical risk of not recovering her entitlements. Provided there are no adverse dealings between now and trial this can be protected by appropriate injunctions being issued today.
To the extent that the solicitors for the respondent had a caveat to secure a charge over the Property B property in respect of legal fees, this has been released which places them back in the position of an unsecured creditor along with the applicant. Had the charge been adjusted, so that it would not take priority against her, it would not have changed the proposition that on the personal obligations the respondent would nonetheless have owed his solicitors the money and they would have ranked equally as unsecured creditors with her in any event.
In these circumstances I am not persuaded that the release of the charge, as opposed to altering the terms of it, has had a practical effect of worsening the position of the applicant. Indeed, it seems to me that it is more likely that the course was adopted of releasing the charge and caveat in order to ensure that there could be no suggestion that what the solicitors had engaged in, in any way caused any harm to the applicant. I proceed on the basis that as presently before me the situation has been placed in the position where nothing that has occurred with respect to the solicitor’s charge relating to fees (that will undoubtedly be owing to them) has any adverse affect on the applicant.
The further matter that I should take into account in considering the facts and circumstances for the purpose of sentencing, is that the hypothesis of the equity that may have been available in the Sydney property (had there been no draw downs) must be tempered with the proposition that it would not have been unlikely that the Court, with appropriate material before it, would have been persuaded to release injunctions to allow the respondent to continue in his business dealings (such as purchasing a further property), particularly if there were already contracts in place with respect to the Property B property as there were. Further, to the extent that improvements were being made to the Sydney property as part of his course of business or investing, again, the Court would have been likely to have released injunctions sufficient to enable that.
An injunction is not given solely upon the theoretical best position of the applicant but strikes a reasonable balance between the needs of the parties to these types of proceedings. In the circumstances as they presently stand, bearing in mind what has occurred this morning with respect to agreement to injunctions and withdrawal of the caveat, I am not persuaded that I could conclude that the applicant is now in a worse position than she would have been had the respondent acted appropriately throughout.
I have regard to the sentence imposed by Judge Harman in Weirs & Weirs [2012] FMCAfam 247 of nine months imprisonment, however, it seems to me that that case was significantly different to the present one. The conduct in Weirs’ case involved the complete wastage of the only asset of the parties; spending it on nefarious purposes. The conduct here does not appear to me to have been a course of conduct to cause wastage, in that substantial real property was purchased, although there were certainly significant costs in GST and stamp duty. I note that GST and stamp duty were around $52,000 and I also note the draw down amounts for the improvements were around $122,000.
Bearing all of these matters in mind and the actual consequences in this case, it appears to me that counsel for the respondent is correct in submitting that a bond is an appropriate result. It appears to me that a bond for 24 months is appropriate so as to ensure that it does not, by being for a shorter time period, potentially impact upon the range of orders that Judge Burchardt may consider in the property proceedings. I note here that the property in Sydney was owned by the respondent prior to the relationship and that motor vehicles in a collection are commonly items that are close to a person’s heart and that people do seek to have orders structured to enable them reasonable opportunity to retain property of this type.
It appears to me that it is appropriate that the bond in this case simply be that the respondent be of good behaviour and comply with all orders or directions already made or to be made in proceedings between the parties in this Court and any Court rulings in proceedings between the parties in this matter in this Court for a period of 24 months.
I would therefore impose such a bond.
I will settle the precise wording in written form so that it can be shown to the respondent before formally asking him whether he agrees to the imposition of such a bond. A further condition would be that if it were to be breached that he appear before me to allow me to consider whether or not an alternative sentence is more appropriate. It seems to me that this better preserves a range of discretions if there is a breach. If it is a substantial breach that has consequences such as occurred in Wiers’ case, then consequences similar to Wiers’ case may need to then be considered.
Costs
On the question of costs, I note that costs in Family Law proceedings are governed by s.117 of the Family Law Act 1975 which provides that ordinarily parties bear their own costs. The section also provides for circumstances to be taken into account for the Court to consider whether the circumstances of a particular case justify an order for costs. The relevant circumstances are set out in s.117(2A).
The parties in this case refer particularly to items (c) to (g). The proceedings themselves are financial proceedings between the parties. The parties are not in receipt of legal aid. The conduct of the respondent has required the contempt proceedings to be brought for the reasons set out in my earlier reasons in this case. The proceedings were certainly necessitated by his breach of the order of Judge Burchardt and the non-response to a letter raising the issue between the solicitors. The respondent has, in my view, been wholly unsuccessful in that the applicant succeeded in the contempt proceedings and a penalty is to be imposed.
To the extent that there can be said to have been an offer in writing, the letter of the applicant’s solicitors to the respondent’s, appears to make clear that in substance there was an offer to settle the contempt allegations without bringing Court proceedings, which was not responded to by way of acceptance. The result of the proceedings has been at least as good as what was sought in that letter.
The cases with respect to costs do not provide a great deal of guidance as it is a matter to exercise the discretion with respect to individual facts and circumstances of particular cases.
In my consideration of this matter I note the comments by the Full Court in Mead v Watson [2005] NSWCA 133; (2005) 23 ACLC 718 to the effect that it is not appropriate to make an order for indemnity costs without at least viewing the solicitor and client costs agreement and an itemised account. I do not have these before me. Exhibit 10 provides only an estimate.
I also have regard to comments by Windeyer J in the High Court in Australian Consolidated Press v Morgan (1965) 112 CLR 483 that ordinarily solicitor/client costs are the appropriate costs for purging a contempt.
In this case, having regard to the circumstances and facts set out above, I am of the view that solicitor/client costs are the appropriate order and they should be as agreed or failing agreement, taxed on the Family Court scale.
I certify that the preceding twenty-one (21) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller
Date: 29 July 2013
0
3
2