Vaughan and Bele - [2012] FamCA 506

FAMILY COURT OF AUSTRALIA

VAUGHAN & BELE

[2012] FamCA 506

FAMILY LAW – DE FACTO PROPERTY – Enforcement.
FAMILY LAW – Costs.

Family Law Act 1975 (Cth)

PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 FLC 123
Latoudis and Casey (1991) 70 CLR 534
Munday and Bowman (1997) FLC 92-784
Penfold and Penfold (1980) 144 CLR 311

APPLICANT:

Mr Vaughan

RESPONDENT:

Ms Bele

FILE NUMBER:

MLC

9056

2009

DATE DELIVERED:

25 June 2012

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

25 June 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Sweeney

SOLICITOR FOR THE APPLICANT:

Mills Oakley Lawyers Pty Ltd

COUNSEL FOR THE RESPONDENT:

Mr Y

SOLICITOR FOR THE RESPONDENT:

Y Lawyers

Orders

That the respondent forthwith produce or cause to be produced to Messrs Mills Oakley of Level 6, 530 Collins Street, Melbourne, duplicate Certificate of Title Volume … Folio …being the duplicate Certificate of Title in respect of the real property at No 9 and thereafter, Mills Oakley hold the said title on trust pending the settlement of the sale of the real property and the lawyers be authorised to hand over the title to the purchasers or their representatives or bankers upon the settlement of the sale.
That the respondent forthwith produce or cause to be produced to Mills Oakley the lawyers for the applicant, all communications which are not the subject of the claim for privilege exchanged by her or by her employees, servants and agents (including Y Lawyers, Mr A and Mr H) with the tenants at the real property at No 9, namely Ms GG and Mr GG, such communications to include but not be limited to emails, letters, facsimile transmissions and transcripts of text messages.
That until further order, the respondent, by herself, her employees, servants and agents, be and is hereby restrained from having any communication of whatsoever kind and nature with the purchaser of the real property at No 9 and her conveyancers M & D except through Mr Y, Lawyer.
That the respondent pay the applicant’s costs on an indemnity basis in respect of:
(a)the application filed 12 June 2012; and
(b)the actions taken subsequent to December 2011 which have required approaches to the registrar to exercise the powers under s 106A of the Family Law Act 1975 (Cth),
by agreement and failing agreement, as may be assessed by the registrar such determination be upon the basis of the applicant being entitled to costs as regulated by the costs agreement between she and Mills Oakley Lawyers rather than the schedule to the Family Law Rules 2004.
That all interim applications are otherwise dismissed.
That the electronic data provided by Mr GG pursuant to subpoena filed 18 June 2012 be released to Mr Damian Harriss for the purposes of copying and then be returned to the subpoena clerk of the Registry upon the basis that Mr Harriss provide to Mr Y a copy of the relevant data.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Vaughan & Bele 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 MELBOURNE

FILE NUMBER: MLC 9056 of 2009

Mr Vaughan

Applicant

And

Ms Bele

Respondent

REASONS FOR JUDGMENT

This is an application filed by Mr Vaughan, who is the applicant, against Ms Bele, who is the respondent. It arises out of an order made by this court in December 2011, by Le Poer-Trench J. Consequent upon those orders the property at No 9 was to be sold. An auction which took place on 24 March was ultimately successful in that a contract was signed and the settlement of the contract is to take place on 2 July.
I have already this morning rejected an application for an adjournment by the respondent. The controversial question is whether or not the relevant legislation is valid, but that is not for me to decide. As far as I can, I am to deal with the order that was made in December 2011 on the basis that it is valid until set aside.
The application before me today was foreshadowed before Strickland J last week on an appellate issue and there can be no doubt that the parties were aware that the matter was to proceed today.
All that has been pressed today is paragraphs 2, 6, 7 and 8 of the application filed on 12 June.
Mr Y, by telephone on behalf of the respondent, says that paragraph 7 relating to an injunction against his client, dealing with the perspective purchasers of the property, other than through him, is not controversial.
Paragraph 2 of the application seeks that the respondent produce the duplicate certificate of title for the purposes of giving effect to the settlement of the sale.
In relation to that, the affidavit of the applicant shows that on 7 June, a letter was written by Mr Y to the solicitors for the applicant, in which these words were written:
We are seeking instructions in relation to the duplicate certificate of title and the matter of rental. It would appear that nothing further has occurred.
At some stage on 21 June 2012, in city X, the respondent swore an affidavit before a consul in the Australian Embassy. No reference was made by the respondent in that affidavit to the production of the title. In fact, there is very little reference in the affidavit material at all to the issues in dispute before me today.
There are matters in the affidavit associated with allegations of conflict of interest but there is no application before me today that would permit me to preclude the current solicitors continue to act.
On the basis that the order is valid until set aside and the evidence in the affidavit is not controversial about attempts being made to thwart the settlement of the sale, it seems to me that it is quite proper for me to make the order as requested in paragraph 7.
Paragraph 6 of the application seeks an order that the respondent produce all of the communications exchanged by her or her employees with the tenants of the property, noting that some of the documents presumably may appear in a subpoena, which was answered this morning by one of the tenants.
The assertion by the applicant is that the respondent and/or her agents have somehow or other endeavoured to thwart the process of the auction. I am not sure what exactly has occurred, but paragraph 6 is not an injunctive order; it is a discovery order, and it seems to me that what is really being asked for underpins paragraph 7. Mr Y says that is not controversial. In those circumstances I propose to make orders in terms of paragraphs 2, 6 and 7.

RECORDED : NOT TRANSCRIBED

Subsequent to the matter being stood down, I was provided with a comprehensive document that seems to be arguing the question of jurisdiction, albeit there is no jurisdictional issue before me. There may very well be a jurisdictional argument before the Full Court of this Court and, indeed, before the High Court, but the reality is that the order I am dealing with is, on its face, valid until it is otherwise set aside.
The reason that I stood the case down a short time ago was to enable Mr Y to have access to the cost agreement of Mr Vaughan with his practitioners. That appears to have been sent and although there is some uncertainty about whether or not Mr Vaughan is bound by that agreement he is certainly not complaining about it. The presumption of regularity would certainly suggest that his costs are being calculated according to that agreement or something similar.
The issue in this case is whether or not there ought to be an order for costs, and, if so, should it be on an indemnity basis?
Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that subject to certain provisions in the Act, each party shall bear his or her own costs. Section 117(2), however, provides that if the court is of the opinion that there are circumstances that justify it in so doing, it may, subject to those provisions, depart from the principle and make such order for costs as it considers just. Those considerations include the matters set out in s 117(2A).
Those considerations include the financial position of each of the parties, the conduct of the procedural aspects of the litigation, the rights to legal aid, the question of whether or not any of the parties has been wholly unsuccessful and, finally, any other matter that the court considers relevant.
No particular factor is more important than any other. That was clearly set out in PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL (2005) 33 FLC 123.
Similarly the High Court in Penfold and Penfold (1980) 144 CLR 311, said that a judge did not have to specify the circumstances which justified the making of an order for costs. Despite that, in my view, it is sensible that I should do so. In this case the respondent has had extensive legal advice and, no doubt, pursues the issue of the validity of the legislation which may affect the consequent orders, but has paid little attention to the fact that the orders require the sale of a real property.
Because of the affidavit of the applicant, the solicitor for the respondent was dealing with a variety of issues as long ago as 7 June.
Intriguing as the constitutional or validity of law point may be, the order remains extant. The applicant is entitled to the fruits of his judgment, which I note was a consent order. There can be no doubt that the respondent took up the point about the validity of the legislation, but that problem seems to me to have been rectified by retrospective validating legislation.
It is clear from the discussion I have had with Mr Y on behalf of the respondent that she challenges that validating legislation as well. That also is a matter that can be determined in a place other than here. It seems to me that until such time as those orders are set aside I am bound by them and bound to enforce them if requested to do so.
It is important to note, also, in this case, that the sale has implications for a number of non-parties, all of whom have a right to some certainty in circumstances where the respondent, in my view, has not vigorously pursued the remedies that she could have. Mr Y’s response was that there was no prejudice to those non-parties or to the extent that there was prejudice, it was not as great as that to the respondent. I have no evidence of the impact of these orders upon the respondent, but I certainly have a legal practitioner sitting in the body of the court, who acts for the purchaser, indicating that the purchaser expects the sale to proceed to settlement.
It is clear, also, that the hearing today was canvassed last week in some an interlocutory hearing relating to an appeal before Strickland J. I am told that the hearing before me today was certainly foreshadowed in those discussions. Even in the running of the argument before me now, the respondent raises the matter of a stay against the December orders without notice or without proper material.
In the circumstances, there must be an order for costs in this case, because the applicant has been put to unnecessary and, in my view, unjustifiable expense.
Costs are not intended to be a punishment. That was clearly set out by the High Court in Latoudis and Casey (1991) 70 CLR 534. Costs are intended to compensate the party who is effectively dragged into the proceedings and has to participate because otherwise their own rights would be imperilled.
It is common ground between the parties and certainly from my knowledge of the hearing last year, they have a number of properties. It could not be said that either of the parties in this case was impecunious.
There are no legal aid considerations and certainly there are no suggestions in this case that the applicant has been tardy in doing what he had to do. There is a settlement of the sale coming up and he took the action expeditiously. It seems to me that the delay caused by the resolution of the matter falls on the respondent, rather than the applicant.
The respondent also argues that if an order for costs is made it should not be made on an indemnity basis, which is what the applicant seeks. The applicant seeks two lots of costs: $11,027.36, being the costs associated with this specific application and $3236.20, being the costs associated with having to take action under the orders of December 2011, in which the Registrar was empowered under s 106A of the Act to step into the shoes of the respondent and sign documents in her name. Those total costs come to $14,263.56, if an order for indemnity costs is made.
Indemnity costs are the exception rather than the rule. That was clearly set out by Holden J in Munday and Bowman (1997) FLC 92-784. His Honour there gave a number of examples as to the circumstances under which indemnity costs might be made. Such examples included, continuing an action where there was no chance of success, making false allegations or fraudulent allegations, evidence of misconduct which wasted court time, and making allegations which ought never have been made or on the basis of groundless contentions unduly prolonging the particular case, and, finally, an imprudent refusal to accept an offer of compromise.
In this case, as I have pointed out, the applicant has done no more than carrying out his obligations under the court order. The respondent has put every hurdle in his way, which is evident by the fact that the Registrar had to use the powers under s 106A of the Act. In addition, the respondent continually runs the jurisdictional type argument, but at the same time a properly founded stay application has not been made.
This is one of those cases where the applicant ought not be out of pocket, which he would be, having regard to the fact that he has signed a costs agreement which has been shown to the respondent’s solicitor.
The respondent argues that it is difficult for him to be clear as to what amounts should be agreed to if, in fact, an order is made for indemnity costs and the solution to that seems to me to be fairly simple: I shall make an order that the respondent pay the applicant’s costs on an indemnity basis if not by agreement, then as assessed by a Registrar. The Registrar will be ordered and empowered to determine the issues associated in the list of items set out in the two documents that have been tendered in the evidence today.
The Registrar’s function is to assess only whether those actions were reasonable in the circumstances and whether or not the amount of work, in fact, was reasonable in the circumstances.

I certify that the preceding thirty four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 25 June 2012.

Associate:

Date: 4 July 2012