Tarelli & Langley (No 3)
[2024] FedCFamC1F 399
•14 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Tarelli & Langley (No 3) [2024] FedCFamC1F 399
File number(s): PAC 4311 of 2014 Judgment of: BERMAN J Date of judgment: 14 June 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application to set aside an order – Application to vary a default order – Final orders made in May 2023 – Where the applicant seeks to list the property for sale in accordance with the default provisions – Where the applicant now seeks that he be solely able to organise the sale – Where there is a genuine concern that the respondent will take steps to frustrate the default provision and the sale – Orders made to vary the final default provision orders.
FAMILY LAW – COSTS – Circumstances justifying an order – Where the respondent has been wholly unsuccessful in multiple Applications in a Proceeding – Where the Court finds that the applicant is entitled to his costs – Consideration of party/party costs – Consideration of the applicant’s itemised costs schedule – Order for costs.
Legislation: Family Law Act 1975 (Cth) ss 106A, 117.
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13
Real Property Act 1900 (NSW) s 74J
Cases cited: Langley & Tarelli (No 6) [2024] FedCFamC1A 17
Tarelli & Langley [2023] FedCFamC1F 386
Tarelli & Langley (No 2) [2024] FedCFamC1F 163
Division: Division 1 First Instance Number of paragraphs: 74 Date of hearing: 31 May 2024 Place: Adelaide via MS Teams Counsel for the Applicant: Mr Shaw Solicitor for the Applicant: F W Ewart & Ewart Counsel for the Respondent: Litigant in person ORDERS
PAC 4311 of 2014 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR TARELLI
Applicant
AND: MS LANGLEY
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
14 JUNE 2024
THE COURT ORDERS THAT:
1.Order 1(a) of the Orders made 18 May 2023 (as amended on 18 March 2024) be discharged and in lieu thereof the following shall apply:
(a)In addition to the forgoing the [respondent] shall pay or discharge any outstanding council and water rates in relation to the Suburb C property.
2.Order 3 of the Orders made on 18 May 2023 be varied to read as follows:
(3)In the event that the respondent is unable to refinance the Suburb C property and pay out the amount a provided for in Order 2(d)(iv) herein, and the default shall not be remedied within twenty-one (21) days of the date of this order, the parties shall do all things and sign all necessary documents to effect the sale of the Suburb C property as follows:
(a)The Suburb C property shall be listed for sale with a real estate agent appointed by the applicant.
(b)The list price shall be such amount as is proposed by the applicant on advice from the real estate agent appointed by him.
(c)The parties shall cooperate with the real estate agent appointed by the applicant in relation to the marketing of the Suburb C property for sale including, giving access to and making the property readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective purchaser.
i.To avoid doubt, in the event that the respondent fails to cooperate with the applicant in relation to the marketing of the Suburb C property in the respects identified in subparagraph (c) above, the applicant shall within seven (7) days of such failure to cooperate on the part of the respondent, be appointed by self-executing order as the sole trustee of the sale of the Suburb C property.
(d)The proceeds of sale of the Suburb C property shall be paid in the following manner and priority:
i.To discharge the mortgage to the Commonwealth Bank of Australia;
ii.In payment of the agent’s commission and advertising or other expenses, if any, payable in relation to the sale;
iii.In payment of legal costs relating to the sale;
iv.In payment to trust account of F W Ewart on behalf of the applicant of the settlement sum ($51,308.00) together with the further sum of $13,167.29 making a total of $64,475.29 (“the new settlement sum”) pursuant to the order of the court dated 28 February 2024;
a.Costs awarded to the father in the sum of $8,711.85.
v.The balance then remaining to be paid to the respondent or as she may direct.
3.The respondent take all steps and execute all documents necessary to withdraw caveat …43 entered on the Title to the property situate at B Street, Suburb C, NSW, this being one of the caveats to be removed from the Title to enable orders made by this Honourable Court on 18 May 2023 to be given effect.
4.Pursuant to section 106A of the Family Law Act 1975 (Cth), a Registrar of this Court be appointed to execute any document and/or instrument necessary in relation to the withdrawal of the caveat …43 entered on the title of property situate at B Street, Suburb C, NSW.
5.That all interim or interlocutory proceedings are dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Berman J
INTRODUCTION
Mr Tarelli (“the applicant”) and Ms Langley (“the respondent”) have been engaged in highly contested and ongoing litigation since 2014.
Following a final hearing, judgment was delivered on 18 May 2023 with the following order relevant to the unresolved financial issues as between the parties:
1.Within ninety (90) days of this order, [Ms Langley] (“the [respondent]”) shall pay to the trust account of F W Ewart & Ewart, for and on behalf of [Mr Tarelli] (“the [applicant]”), the sum of FIFTY ONE THOUSAND THREE HUNDRED AND EIGHT DOLLARS ($51,308) (“the settlement sum”) and she shall arrange to refinance the mortgage secured over the property at [B Street, Suburb C] in the state of New South Wales (“the [Suburb C] property”) to enable it to be discharged such that the father is no longer liable in respect of same.
The orders also provided a default provision such that if the respondent was unable to refinance the Suburb C property and by necessary implication, pay the settlement sum of $51,308, then the parties will do all things and sign all necessary documents to effect the sale of the Suburb C property such that the proceeds of sale shall be paid in the following manner and priority:
(1)To discharge the mortgage;
(2)The payment of the agent’s commission and advertising or other expenses, if any payable in relation to the sale;
(3)The payment of legal costs relating to the sale;
(4)The payment of the settlement sum to the applicant; and
(5)The balance to be paid to the respondent.
It is not controversial that the applicant is keen to transfer his estate, interest and title in the Suburb C property to the respondent in keeping with the orders she sought.
It was not anticipated that settlement would be delayed or that the respondent may have difficulty in obtaining finance. It was recognised by the applicant that all other things being equal, the Suburb C property should be transferred to the respondent.
The respondent filed a Notice of Appeal on 15 June 2023 which was heard by the Full Court on 1 November 2023 and dismissed by judgment delivered on 27 November 2023.
On 2 January 2024, the respondent made an application for Special Leave to appeal in the High Court of Australia which was subsequently dismissed.
By Application in a Proceeding filed 23 January 2024, the applicant sought the following orders:
1.An Order pursuant to Rule 10.13(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 that the orders made by Honourable Justice Berman on 18th May 2023 being order 1 be amended by adding to order 1 the following order:
“In addition to the foregoing the [respondent] shall pay to the Trust Account of F W Ewart & Ewart for and on behalf of [Mr Tarelli] (“the [applicant]”) the further sum of $9,251.32 being the amount owed by the father to [BZ Council] and also the sum of $3,915.97 being the amount currently owed to Sydney Water making a total of $13,167.29 and that both amounts namely the sum of $51,308.00 (“the settlement sum”) together with the amount of $13,167.29 be paid within 90 days of the 27th November 2023 being the date upon which the stay dated 6th July 2023 ceased to be in force by reason of the orders made by the Full Court being delivered such that the purpose of the said stay had been fulfilled.”
2.That the Respondent to this Application in a Proceeding pay the Applicant Father's costs assessed in the sum of $3,300.00 inclusive of GST.
The basis for the application pursuant to the slip rule was that in Tarelli & Langley [2023] FedCFamC1F 386 the following is said at [326]:
326.The [respondent] will refinance the mortgage and pay out the outstanding council and water rates to the exoneration of the [applicant]. If she is unable to refinance, the [respondent] concedes the [Suburb C] property is to be sold.
The application was opposed by the respondent and whilst initially listed for argument on 27 February 2024, the matter was adjourned to 28 February 2024 to accommodate purported health issues affecting the respondent.
On 28 February 2024, in the absence of the respondent, orders were made in terms of the application:
*Pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), this Order is amended on the 28 February 2024.
The effect of the order was that in addition to the settlement sum of $51,308 the respondent was required to pay to the applicant’s trust account the further sum of $13,167.29 resulting in a new settlement sum of $64,475.29. The new settlement sum was to be paid within 90 days of 27 November 2023.
The settlement sum either in terms of its original form or amended by reference to arrears of counsel fees and water rates has not been paid.
As discussed below, the Application in a Proceeding was heard and determined on 28 February 2024 and orders were made in the absence of the respondent.
By Application in a Proceeding filed 13 March 2023, the respondent now seeks that orders 1 and 2 made 28 February 2024 be set aside pursuant to r 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). The respondent relies upon her affidavit filed 13 March 2024 in support of the orders that she seeks to set aside orders made 28 February 2024.
Rule 10.13(1)(a) enables the Court to vary or set aside an order if it was made in the absence of a party.
BACKGROUND
The applicant’s Application in a Proceeding sealed 30 January 2024 was served on the respondent with an affidavit of his solicitor on 9 February 2024 which set out service. In reasons given in support of the orders made on 27 February 2024, I indicated that I was satisfied that the respondent had been appropriately served with the Application in a Proceeding.
The Application was first listed on 14 February 2024. On the same day the respondent filed a Response seeking orders that the Application be dismissed.
The Application in a Proceeding was listed for hearing on 14 February 2024. At that hearing, the respondent appeared as a self-represented litigant and opposed the orders sought. She made an oral application that the matter be adjourned on the basis that she did not agree that the orders could be made pursuant to the slip rule and she was in the process of taking legal advice.
I acceded to the respondent’s oral application and adjourned the proceedings to 27 February 2024 for an interim hearing noting that I would be sitting in the Sydney Registry of this Court. In reasons delivered on 27 February 2024, I made it clear that I was satisfied that the respondent was aware of the proceedings and that the Court was likely to hear and determine the matter on the next occasion.
On 26 February 2024 at 12.10 pm the respondent forwarded to chambers a medical certificate under cover of an email. The email indicated that the respondent was not able to attend the hearing on 27 February. Further, the respondent filed an Application in a Proceeding dated 26 February 2024 seeking to adjourn the proceedings “due to illness”. The supporting affidavit annexed the medical certificate that had been emailed to chambers.
At the hearing on 27 February 2024, there was no appearance by or on behalf of the respondent.
I referred to the medical certificate attached to the respondent’s affidavit and considered that her period of ill-health, by reference to the medical certificate, concluded on 27 February 2024. I also made it clear that there would be no opposition to the respondent appearing remotely if she had a physical impediment to attend court.
As matters transpired, the proceedings were adjourned until the following morning to enable the respondent to attend. I brought to account the Court needing to appropriately manage its matters but in particular, this litigation given that it has been before the Court for now ten years, tempered by the proper administration of justice.
On 27 February 2024 at 6.22 pm the respondent sent correspondence via email to chambers attaching an Application in a Proceeding and a supporting affidavit. She again sought for the matter to be adjourned “due to illness” and attached a further medical certificate. Upon close inspection, the certificate no longer contained a reference to the respondent having one medical condition but confirmed that she had another medical condition and so could not attend court from 28 February to 1 March.
On 28 February 2024 the respondent did not attend the hearing and consideration was given as to whether the matter should proceed in her absence. The applicant sought for his application to be heard and determined and presented the Court with a letter outlining the party/party costs (exhibit ‘1’).
On 28 February 2024, I provided extensive reasons and brought to account the respondent’s continued non-attendance, the fact that due to her professional experience she was aware of the Court processes and the need for representation either personally or by legal representative and given there had been three tranches of final hearings, the Application in a Proceeding was not in an appropriate form.[1] It was a matter of considerable weight that I had given the respondent two previous adjournments in short compass.
[1] Tarelli & Langley (No 2) [2024] FedCFamC1F 163.
I also had the advantage of the judgment of Langley & Tarelli (No 6) [2024] FedCFamC1A 17 whereby Harper J heard an application in the respondent’s absence and made orders to dismiss her Application in a Proceeding seeking a stay of the Full Court’s orders. During the hearing, his Honour also dismissed the respondent’s Application in a Proceeding, filed on the morning of the hearing, wherein she sought an adjournment on the basis of illness.
It is a trite observation that litigation is best heard and determined rather than it be the subject of unnecessary delay. This is particularly so in circumstances where the amount involved is relatively modest and the breadth of litigation must be tempered by the potential of the costs incurred to overwhelm the amount sought.
The respondent concedes that even on her version of the events she does not challenge the underlying settlement sum of $51,308.
The respondent also asserts that the refusal by Mr Ewart to give her his trust account details in terms of branch and account number has been an impediment to her paying the settlement sum. The assertion by the respondent is without merit. When challenged, the respondent conceded that settlement monies could have been paid into the Court or in some way quarantined pending the resolution of the interim and interlocutory proceedings.
The applicant sought to dismiss the respondent’s Application in a Proceeding on the basis that it was without merit and that it was reasonable for the Court to hear and determine the interim proceedings in circumstances where the respondent did not appear, did not instruct a legal representative or to adduce medical evidence in support of her contention that she was not able to attend the Court.
I did not consider that the respondent’s explanation for her non-attendance was the subject of complete answer by reference to the medical certificates. They were documents lacking any detail that enabled me to better understand the basis for the application for an adjournment but also the respondent’s prognosis to be able to set a date for the resumption of proceedings.
More is required than a medical certificate that provides only the briefest description of the purported illness contracted by the respondent. There was no indication as to whether the medical certificate was provided after an interview and assessment with the respondent’s general practitioner or whether the medical certificates were obtained online.
I was not satisfied as to why the respondent was not able to obtain legal representation nor whether the purported ill-health prevented her from engaging in the proceedings in its entirety or only representing a physical impediment that would enable a remote hearing to be conducted.
APPLICATION TO SET ASIDE AN ORDER
The respondent now seeks orders as set out in her Application in a Proceeding filed 13 March 2024 that orders 1 and 2 of the orders dated 28 February 2024 be set aside. She relies upon her affidavit in support filed 13 March 2024.
The matter was listed for hearing on 15 May 2024, adjourned to 27 May 2024 and finally heard on 31 May 2024.
The applicant’s counsel conceded that if it was of assistance then he would agree to allow the respondent to make submissions and if the Court considered they were compelling then the orders could be set aside.
The respondent made submissions in terms of her affidavit and at the end of the submissions, and upon the rehearing, I was satisfied that the orders should be amended pursuant to the slip rule given the respondent’s concession that she recognised that at all material times she occupied the Suburb C property and agreed that she should be responsible for any rates and utility charges incurred during the relevant period of occupation. I propose to discharge the orders made on 28 February 2024 and pursuant to the slip rule to include a general order consistent with the reasons as set out in Tarelli & Langley [2023] FedCFamC1F 386 at [327] and treat the matter as an enforcement application.
The advantage to the respondent of the concession by the applicant is that I propose to discharge the order for costs that I made in favour of the applicant on 28 February 2024.
APPLICATION TO VARY DEFAULT ORDER
The applicant filed Applications in a Proceeding on 13 March 2024 and 3 May 2024 which both sought the same variation to order 3 of the final orders made on 18 May 2023.
In summary, order 3 provides for a default provision that would enable the Suburb C property to be listed for sale and the manner in which the net proceeds of sale would be disbursed. The orders sought by the applicant seek a variation that requires the parties to reach agreement as to the method and manner of sale whereas he now seeks that he should have the sole ability to do so.
The application is supported by an affidavit of the applicant sealed 18 April 2024.
The applicant sets out the difficulties that he asserts he has had in obtaining agreement from the respondent to carry out the orders made on 18 May 2023. It is acknowledged that the respondent has not paid the settlement sum and certainly not the current amended amount to take into account council and water rates together with the cost of the respondent’s failed Application in a Proceeding.
The respondent has not been able to refinance the Suburb C property and a written proposal seeking the respondent’s consent to the appointment of an agent has received no response.
There is apparently a necessary fee payable to enable the president of the Real Estate Institute of New South Wales to nominate the real estate agent pursuant to the orders. No response was received from the respondent nor was there any suggestion that she would provide her share of the necessary appointment fee.
The concern of the applicant is that the respondent will take no action to facilitate the sale of the Suburb C property in circumstances where hitherto she has not been able to secure finance sufficient to refinance the current mortgage and to pay the settlement sum to the applicant.
A further concern is that by letter of demand dated 11 March 2024, the applicant has received communication seeking an amount necessary to discharge the arrears under the mortgage. As is apparent, at all material times the respondent has resided in the Suburb C property and it is the agreed position of the parties that subject to her ability to refinance and pay the settlement sum, the applicant will transfer his estate, interest and title in the Suburb C property to the respondent.
The applicant seeks that he receive his settlement sum and that he be removed from any potential liability under the mortgage.
A further aspect of the proceedings is the acknowledgement that irrespective of whether the default provisions are altered to give the applicant a level of autonomy in terms of the method and manner of sale, there appears to be a difficulty in the respondent being prepared to remove a caveat lodged by her over the Suburb C property pursuant to s 74J of the Real Property Act 1900 (NSW).
The applicant’s solicitors have warned the caveat and gave notice to the respondent that they intend to bring about an application for lapse of caveat. The respondent has apparently made an application for an extension of time for the operation of the caveat in the Supreme Court of New South Wales equity division. A Summons was filed in the Supreme Court in mid-2024.
There is some uncertainty as to the attitude of the Supreme Court, but I am satisfied that there is no impediment to my consideration of the following orders sought by the applicant in an Amended Application in a Proceeding sealed 9 May 2024:
1.In addition to the relief sought in his Application in a Proceeding filed on 3 May 2024 the Applicant Father seeks the following additional Orders which are numbered conveniently as Orders 5, 6 and 7.
(5) Order that the Respondent Mother takes all steps and execute all documents necessary to withdraw Caveat […43] entered on the Title to the property situated at [B Street, Suburb C], this being one of the Caveats that needs to be lapsed or removed from the said Title to enable the Orders made by this Honourable Court on 18 May 2023 to be carried into effect.
(6)Order that the Respondent Mother not only do all things and execute all documents to remove the said Caveat from the title to the [Suburb C] property but also be restrained by injunction from lodging any further Caveat on the title to the [Suburb C] property or attempting to do so notwithstanding any leave that may be granted to the Respondent Mother to enter a further Caveat on the [Suburb C] property by a Court of competent jurisdiction in this case, the Supreme Court of NSW Equity Division.
(7) Costs as assessed by the Court.
Counsel for the applicant advised that an order in terms of proposed order 6 was no longer being sought.
What is sought by the applicant is that the respondent executes all necessary documents to cause the withdrawal of the caveat and in the absence of her compliance, then there would be reliance on s 106A of the Family Law Act 1975 (Cth) (“the Act”) seeking that a Judicial Registrar sign the necessary withdrawal of caveat.
There is a reasonable concern on the part of the applicant that the respondent has and will continue to take such action as may be necessary in order to frustrate the applicant taking steps to secure the settlement sum.
The respondent’s position is that she would wish to retain the property and whilst not the subject of disclosure or discovery, she asserts that she is able to refinance the property and pay the original settlement sum of $51,308. The respondent does not concede or accept that she should be required to pay any further amount relating to rates and taxes incurred on the property during her occupation nor costs of various proceedings and interest on the unpaid amount.
The respondent was not prepared to disclose the detail of the proposed refinancing and accordingly there is no evidence that would give the applicant any confidence that the respondent has the means to be able to comply with the orders thereby enabling a transfer of the interest of the Suburb C property to her.
When challenged, the respondent was not able to identify the caveatable or equitable interest that supports the caveat. The caveat was placed on the Suburb C property in the early stages of litigation in order to preserve the property and to ensure that the applicant could not unilaterally sell the property given that he is the sole registered proprietor. Those circumstances have now changed. Tarelli & Langley [2023] FedCFamC1F 386 establishes the legal and equitable interests of the parties. There is no challenge by the applicant to the transfer of his interest in the property to the respondent if she is able to refinance and to pay out the settlement sum.
There is no basis for the caveat to remain. The effect of the caveat is to frustrate not just the applicant’s attempts to resolve the matter but also the orders sought by the respondent that the applicant’s interests in the Suburb C property be transferred to her.
There is no utility in the caveat remaining nor has the respondent been able to establish any equitable or caveatable interest which would support an extension of time in respect of the opposition to the removal of the caveat.
I have given consideration to whether the proposed amendments to the final orders can be categorised as a substantive change or a machinery change. When looked at critically, the orders sought by the applicant predominantly arise because the respondent is either unable or unwilling to refinance the Suburb C property and to pay out the settlement sum and therefore should be considered as part of the suite of default provisions.
The respondent contends that she has been prepared to settle but that the impediment has been a refusal by the applicant’s solicitors to disclose his trust account details. The respondent’s argument is not supported by any objective evidence. The applicant’s solicitor makes it clear that when a date is nominated for settlement then his trust account details will be disclosed but not otherwise. It is a practice designed for security reasons and not in some way to attempt to frustrate the respondent’s desire to resolve the matter.
The respondent had the option of employing the services of a conveyancer who would conduct a trust account, paying money into the Court or placing funds with a solicitor pending settlement. The respondent has not taken the opportunity to do so and as a result, there remains a justifiable suspicion that other than by frustrating the orders sought by the applicant, she is not otherwise able to settle the proceedings.
I propose to make the orders as sought by the applicant to amend the default provisions of the final orders and in addition, to make the orders that if the respondent does not cause the caveat to be discharged, he can rely upon s 106A of the Act enabling a Judicial Registrar to sign documents as may be required for the withdrawal of the caveat. Notwithstanding the reasons given, there is still the potential for the respondent to resolve the matter by the refinance of the mortgage and the payment of the settlement sum together with costs incurred by the applicant.
The applicant’s position has indicated that this would be the preferred outcome. In that regard, I propose to make the default orders as sought by the applicant but that they should be stayed for a period of 21 days to enable the respondent to resolve the matter if she chooses to do so.
COSTS
The applicant seeks costs of the proceedings as and from 29 February 2024 to 31 May 2024.
Consideration of s 117(1) of the Act provides that in the ordinary course of events, each party should bear their own costs in relation to the litigation.
Section 117(2A) provides the considerations that if one or more of the subsections are applicable, it may invite a consideration of costs.
The respondent has been wholly unsuccessful in her Applications in a Proceeding. There is also a suggestion that they have been designed to frustrate the resolution of the matter in terms of the applicant seeking to resort to the default provisions of the final orders that would see the Suburb C property being sold if the respondent is not able to comply with the orders.
There is a real concern that the question of costs incurred by the applicant could well consume a significant proportion of the settlement sum to be paid.
I consider that the applicant should be entitled to his costs.
I note that the applicant relies upon a scale of costs prepared on a party/party basis pursuant to schedule 3 of the Rules. For the period 29 February 2024 to 31 May 2024, the applicant seeks the total sum of $8,711.85. I have had careful regard to the itemised costs schedule and consider that in the circumstances the basis upon which the costs have been calculated and the ultimate amount sought are reasonable.
In addition to the amendment to order 3 of the default provisions of the final orders made 18 May 2023, I propose to add the further sum of $8,711.85.
I make orders as appear at the commencement of these reasons.
I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 14 June 2024
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