Vargason and Macinnes and Anor

[2013] FamCA 219

FAMILY COURT OF AUSTRALIA

VARGASON & MACINNES & ANOR [2013] FamCA 219

FAMILY LAW – COSTS – Intervenor’s costs

Family Law Act 1975 (Cth) s 117(2A)

APPLICANT: Ms Vargason

1^st RESPONDENT: Mr Macinnes

2^nd RESPONDENT: A Pty Ltd

FILE NUMBER: SYC 6065 of 2011

DATE DELIVERED: 21 March 2013

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGEMENT OF: Rees J

HEARING DATE: 5 March 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Othen

SOLICITOR FOR THE APPLICANT: Swaab Attorneys

COUNSEL FOR THE 1^ST RESPONDENT: No Appearance

COUNSEL FOR THE 2^ND RESPONDENT: Mr Auld

SOLICITOR FOR THE 2^ND RESPONDENT: William Cotsis

Orders

1. That the application of the second respondent for costs be dismissed.

IT IS NOTED that publication of this judgement by this Court under the pseudonym Vargason & Macinnes and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6065 of 2011

Ms Vargason

Applicant

And

Mr Macinnes

1^st Respondent

And

A Pty Limited

2^nd Respondent

REASONS FOR JUDGEMENT

the proceedings  

1. The proceedings before the Court relate to an application by Ms Vargason (“the wife”) to enforce orders for property settlement made against Mr Macinnes (“the husband”) on 14 May 2004.

2. The orders required the payment of a sum of money by the husband to the wife. The husband paid some but not all of the money.

3. The husband is a property developer and in 2010 he entered into an agreement with a building company, A Pty Ltd (“the second respondent”) to undertake construction work on a property owned by the husband in return for payment.

4. On 14 December 2011, pursuant to an application brought by the wife for enforcement, orders were made in the Federal Magistrates Court of Australia which required the husband to sell properties at Suburb B and to use the proceeds of sale to pay to the wife the monies which were due to her. Those properties, or some of them, were duly sold, but there was not sufficient money, after the satisfaction of encumbrances, to pay any further monies to the wife. In the meantime the husband also failed in his obligation to pay money to the second respondent who, on 8 December 2011, obtained judgement for a determined amount against a company, controlled by the husband, with whom he had contracted.

5. On 9 December 2011, the husband placed that company into voluntary liquidation and, on 9 January 2012, the second respondent commenced proceedings against the husband in the Supreme Court of NSW.

6. The wife was unaware of the proceedings between the husband and the second respondent.

7. On 14 June 2012, the wife filed an application in the Federal Magistrates Court of Australia seeking further orders by way of enforcement and in particular seeking the sale of a property in Suburb C and the payment out to her of the monies owed pursuant to the orders for property settlement.

8. The wife also lodged a caveat over the Suburb C property.

9. The second respondent sought to enforce its judgement by the recording of a writ against the title to the Suburb C property. The Registrar General refused to record the writ because of the terms of the applicant’s caveat but indicated that the writ would be registered if an order were obtained in the proceedings between the second respondent and the husband which were on foot in the Supreme Court of NSW.

10. The second respondent wrote to the wife’s solicitors indicating that it sought to be paid, from the proceeds of the Suburb C property, in priority to her claim.

11. On 18 June 2012, the second respondent filed an Application in a Case seeking to be joined as a party to the proceedings and seeking orders which, in summary, required the wife to remove her caveat and allow the second respondent to enforce its judgement over the Suburb C property taking priority over the wife’s claim.

12. Whether or not the Court had jurisdiction to entertain the application of the second respondent is a matter to be considered, although that issue was not raised between the parties.

13. It is clear that at the time the Application in a Case was filed there were proceedings on foot in the Supreme Court of NSW between the husband and the second respondent in which the second respondent was seeking orders for the sale of the Suburb C property and control of the proceeds of sale.

14. On 12 July 2012, the proceedings in the Federal Magistrates Court of Australia were transferred to the Family Court of Australia. On 7 August 2012, the competing applications were put in the list of cases waiting the allocation of the first day of a trial and on 8 August 2012 the wife withdrew her caveat over the Suburb C property.

15. On 27 September 2012, without notice to the wife, the second respondent obtained orders in the Supreme Court of NSW for the sale of the Suburb C property and the payment out of the proceeds of sale to it in priority to the wife.

16. On 14 December 2012, the Suburb C property was sold. Both the wife and the second respondent received the whole of the amounts due to them respectively from the proceeds of sale. In an affidavit sworn by her on 1 March 2013 the wife deposed to receiving the sum of $412,712 in full satisfaction of the orders for property settlement. She further deposed that the second respondent, in full satisfaction of its claims against the husband, received $483,470.41 plus interest and costs of $250,000.

17. Thus when the matter came before the Court for the first day of the trial the substantive issues between the parties had been resolved and the only issue which remained outstanding was the second respondent’s application that the wife should pay its costs of the proceedings in the Family Court of Australia.

18. Applications for costs are dealt with according to the provisions of section 117(2A) of the Family Law Act 1975 (Cth). Each counsel addressed submissions to the matters referred to therein.

19. There was no evidence before the Court of the financial circumstances of each of the parties to the proceedings, that is the wife and the second respondent, (the husband having taken no part in the proceedings), except for the fact that each had received substantial amounts of money from the sale of the Suburb C property, with the second respondent receiving substantially more than the wife.

20. The second respondent relied substantially upon the wife’s refusal to withdraw her caveat in support of his application for costs.

21. The wife submitted that it was never necessary for the second respondent to become involved in the proceedings in the Family Court of Australia, that the matter could have been dealt with by way of an application to the Supreme Court of NSW pursuant to section 74MA of the Real Property Act 1900 (NSW) or by way of a lapsing notice pursuant to section 74I of the Real Property Act 1900 (NSW).

22. Indeed as the wife’s counsel pointed out, the Registrar General had invited such an application in correspondence to the second respondent.

23. Ultimately the matter was resolved as a result of the delivery of judgement in the proceedings between the second respondent and the husband in the Supreme Court of NSW and without any reference to the proceedings in the Family Court of Australia.

24. The second respondent has not demonstrated that it was necessary to intervene in the proceedings between the husband and the wife in order to achieve the orders which he sought in the Supreme Court of NSW, those orders being made without any reference to the wife and without any regard to the proceedings which were on foot in the Family Court of Australia.

25. Because the proceedings were in fact resolved by virtue of the Supreme Court of NSW proceedings rather than any proceedings in the Family Court of Australia neither party was either successful or unsuccessful in the Family Court proceedings.

26. Having regard only to the matters in section 117(2A), in all of the circumstances set out above, no order for costs should made.

27. However, it was conceded by counsel for the second respondent that in the event that the Court had no jurisdiction to entertain the second respondent’s substantive application then the Court had no jurisdiction to entertain its application for costs.

28. Both parties were permitted to file written submissions in relation to jurisdiction.

29. Submissions filed on behalf of the second respondent did not address the statutory basis on which it claimed the Court had jurisdiction to hear and determine the application of a third party in proceedings such as these. The authorities to which the second respondent referred, dealt with the jurisdiction of the Court in relation to removal of a caveat in proceedings between the husband and wife pursuant to section 79 of the Family Law Act. None of the authorities upon which the second respondent relied dealt with applications by third parties in circumstances where section 79 proceedings had been completed.

30. Counsel for the wife submitted that the Family Court of Australia did not have original jurisdiction because there was no matrimonial cause and that the matters which were to be determined fell within the jurisdiction of the Supreme Court of NSW.

31. Insofar as the submissions might be interpreted to infer that the Court should exercise accrued jurisdiction, it is difficult to conclude that there was a justiciable issue between the husband and the wife and the second respondent. It was not disputed that the husband owed each of the wife and the second respondent a sum certain.

32. Counsel for the wife submitted that there was no single justiciable issue as the two claims did not arise from the same common sub-stratum of facts. The wife’s claim arose from the breach of section 79 orders made in 2004 in proceedings between the husband and the wife. The second respondent’s claim arose out of a contract entered into in 2010 between the husband and the second respondent.

33. It would appear that the second respondent was simultaneously proceeding in the Supreme Court of NSW and in the Family Court of Australia, by implication asserting that both Courts had jurisdiction to hear the application. The second respondent asserts that the Family Court of Australia had exclusive jurisdiction to determine the application in circumstances where the same cause of action was being pursued by it in the Supreme Court of NSW.

34. While I express doubt that the Family Court of Australia had jurisdiction to hear the application of the second respondent, it is not necessary to express a concluded view because of the conclusion I have already set out in relation to the section 117(2A) considerations.

35. The application will be dismissed.

I certify that the preceding thirty five (35) paragraphs are a true copy of the reasons for judgement of the Honourable Justice Rees delivered on 21 March 2013.

Associate: 

Date:  21 March 2013