Anison and Anison (No. 2)

[2018] FamCA 745

FAMILY COURT OF AUSTRALIA

ANISON & ANISON (NO. 2) [2018] FamCA 745

FAMILY LAW – COSTS – where an entity previously joined to property settlement proceedings between the parties but subsequently disjoined on the basis that the Court concluded that the Applicant Wife had no reasonable prospects of succeeding in her claims against it seeks costs against the Wife on an indemnity basis in either a fixed amount or as agreed or assessed or, alternatively as assessed on a party and party basis – where the Applicant Wife seeks the Application be dismissed and that she and the entity each bear their own costs – Application dismissed – each of the entity and the Applicant Wife to pay their own costs of and incidental to the entity’s application for costs.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
D & D (Costs) (No 2) (2010) FLC 93-435
In the Marriage of Kohan (1993) FLC 92-340
Limousin v Limousin (Costs) (2008) 38 Fam LR 478

APPLICANT: Ms Anison

RESPONDENT: Mr Anison

FILE NUMBER: BRC 1827 of 2013

DATE DELIVERED: 21 September 2018

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: Determined in Chambers
following the receipt of written submissions

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Wiltshire Family Law

SOLICITOR FOR B PTY LTD IN ITS CAPACITY AS TRUSTEE FOR THE C TRUST: Hirst & Co Family Lawyers

Orders

IT IS ORDERED THAT

1. The Application in a Case filed 7 December 2015 is dismissed.

2. Each of B Pty Ltd in its capacity as Trustee for the C Trust and the Applicant Wife bear their own costs of and incidental to the Application in a Case filed 7 December 2015.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Anison & Anison (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1827 of 2013

Ms Anison

Applicant

And

Mr Anison

Respondent

REASONS FOR JUDGMENT

1. On 13 March 2013, Ms Anison commenced proceedings against her former husband, Mr Anison by the filing of an Initiating Application in the Federal Circuit Court. The Initiating Application joined Mr D Anison, the adult son of the husband, personally as Second Respondent.

2. On 5 June 2013, orders were made by Judge Turner, by consent, substituting B Pty Ltd in its capacity as Trustee for the C Trust (which I shall refer to as “the company” in these Reasons) for Mr D Anison as Second Respondent. The proceedings were transferred to this Court.

3. By Application in a Case filed 10 February 2014, the company applied to be removed from the proceedings and to have the proceedings, insofar as they concerned relief against it, struck out.

4. On 6 November 2015, I made orders, which relevantly provided that:

   (1)In so far as they refer to B Pty Ltd as Trustee for the C Trust and the Trust, paragraphs 1, 2 and 2(a) of the Amended Initiating Application filed 21 February 2014 are struck out.

   (2)         The Second Respondent is removed as a party to the proceedings.

5. I also made orders in relation to the exchange of written submissions in the event that any party sought costs against the other.  The company sought an order for costs; Ms Anison resisted the making of the same.

6. The finalisation of the costs application awaited the finalisation of the property settlement proceedings between Mr and Ms Anison, so that I could ascertain the financial position of Ms Anison, whose financial situation at or around November 2015 was limited to her ownership of a car, a limited number of Suncorp shares, limited funds at bank and personal chattels and whose only means of support at that time was the aged pension; from 9 November 2015 onwards, she received  $500.00 per week, being the amount Mr Anison was ordered, on 6 November 2015, to pay to her by way of spousal maintenance.

7. The property settlement proceedings between Mr Anison and Ms Anison were finalised on 28 February 2018. The consequence for Ms Anison of the orders made that day is that Mr Anison is to pay her the sum of $233,550.00 and she is otherwise to retain, as her own property absolutely, all property in her possession (which was found to have a total value of $34,313.00).

8. However, as outlined in the Reasons for Judgment delivered on 28 February 2018, Ms Anison also owes her solicitors in excess of $200,000.00;[1] evidence filed on Ms Anison’s behalf, as part of her application for an order that Mr Anison pay her costs of and incidental to the proceedings and of and incidental to an interim application and in response to Mr Anison’s application that she pay his costs of and incidental to the proceedings and in respect of particularised actions related to the proceedings before the company was disjoined from them, is to the effect that her legal costs are in excess of $300,000.00.

   [1] At [92].

9. Even if such evidence should properly be ignored for the purposes of determining the current application, the findings expressed in the Reasons for Judgment delivered on 28 February 2018 make it clear that Ms Anison’s indebtedness to her solicitors is very significant (in both real and relative terms).

10. In contrast, according to the evidence relied on by the company for the purpose of this application, it had a nett equity of $2,968,740.00.[2]

    [2] As at 30 June 2012.

11. Neither the company nor Ms Anison were in receipt of legal aid. There is no suggestion that the aspect of the proceedings disposed of by order made on 6 November 2015 was necessitated by the failure of either the company or Ms Anison to comply with previous orders of the Court.

Competing proposals

1. The company seeks[3] an order that:

   a)Ms Anison pay its costs associated with her Initiating Application[4] and Amended Initiating Application[5] and its Application in a Case[6] on an indemnity basis, with such costs to be fixed in the amount of $81,924.10 or, alternatively, as agreed or assessed on that basis; or, alternatively

   b)Ms Anison pay its costs associated with her Amended Initiating Application[7] and its Application in a Case[8] on a party and party basis, as agreed or assessed in accordance with the Family Law Rules 2004 (Cth); and

   c)Ms Anison pay its costs of and incidental to this Application.

   [3] By way of Application in a Case filed 7 December 2015.

   [4] Filed 13 March 2013.

   [5] Filed 21 February 2014.

   [6] Filed 10 February 2014.

   [7] Filed 21 February 2014.

   [8] Filed 10 February 2014.

2. Ms Anison proposes that the company’s application for costs is dismissed and that she and it bear their own costs.[9]

   [9] By way of Response to an Application in a Case filed 11 December 2015.

Consideration of the submissions

1. It was submitted on behalf of the company[10] that the Court would be persuaded that the circumstances justify the making of an order that Ms Anison pay costs as sought because:

   a)she failed to comply with pre-action procedures designed to encourage  parties to narrow the issues between them; and

   b)she unreasonably maintained her position that the assets of the company should be included as part of the property of the parties in the proceedings between her and Mr Anison, even after disclosure had been made by the company about the manner in which the Trust was established; and

   c)she failed to respond to the company’s request to particularise a reasonable basis upon which she made her claim against it; and

   d)the company was involved in the proceedings only at her instigation and she completely failed in her claim against it, as a result of the decision to strike out her claim against it and order its removal from the proceedings.

   [10] Filed 7 December 2015.

2. It was also submitted on behalf of the company that, in the event the Court is persuaded to make an order for costs, the amount of the same should be fixed by the Court in order to avoid the company having to incur the further costs associated with attempting to negotiate an agreed sum or, failing that, engaging in the assessment process.

3. The submissions made on behalf of Ms Anison[11] contend that the company’s intention (and those of Mr Anison) was to delay the process, discredit her intentions, mislead the Court, avoid full and frank disclosure, ignore the Court’s direction to mediate and exhaust her very limited financial resources. I am not persuaded by these submissions.

   [11] Filed 11 December 2015.

4. It was also submitted on Ms Anison’s behalf that it was reasonable for her to assume the Trust assets did form part of the matrimonial asset pool and that the Court would not be persuaded she wilfully disregarded the information made available to her by the company (and Mr Anison) concerning the Trust. Whilst it is accepted that she did not engage in pre-action procedures, reasons for such decision were advanced in the evidence relied on; they do not seem to me to be inherently unreasonable.

Do the circumstances justify the making of an order as to costs?

1. Section 117(1) of the Family Law Act1975 (Cth) provides that each party to proceedings under the Act shall bear his or her own costs. However, if the Court is satisfied there are circumstances which justify it, the Court may make such order as to costs as it considers just.[12] In considering what order, if any, as to costs should be made, the Court must have regard to the matters set out in s 117(2A) of the Act.

   [12] Section 117(2) Family Law Act 1975 (Cth).

2. I accept that, whilst the Court must consider the financial circumstances of each party, impecuniosity on the part of a party opposing the making of an order for costs is, of itself, no bar to an order for costs being made where it is otherwise warranted.[13] I also accept that the company’s financial circumstances are vastly superior to those of Ms Anison.

   [13] See, for example, D & D (Costs) (No 2) (2010) FLC 93-435.

3. In so far as it was asserted that Ms Anison’s conduct in failing to comply with the pre-action process is something which, when considered with the other matters raised in the submission made on behalf of the company, persuades of circumstances justifying the making of an order for costs as sought, I note that, on 12 June 2013, Judge Turner ordered – at least in part based on her Honour’s conclusion that Ms Anison had made no attempt at any time to engage in the pre-action procedures specifically provided for in the Rules – that Ms Anison pay $6,000.00 by way of costs to Mr Anison and that, at that time, the company and Mr Anison were both represented by the same solicitor.

4. I accept that, by correspondence dated 15 January 2014, the company’s solicitors provided Ms Anison with a document which contained a “detailed history” about the formation of the Trust and the subsequent appointment of the company as its corporate trustee. By this correspondence, the company’s solicitor advanced that the Trust was not a sham; was not controlled by Mr Anison and that none of the assets of the Trust had been accumulated through the personal efforts of the parties to the marriage during their cohabitation and there was no prospect that the nett assets of the Trust would be considered as the property of the parties to the marriage in the property settlement proceedings between them. Ms Anison was invited to discontinue all proceedings against the company. It seems that no response was received to this correspondence.

5. I accept that, by correspondence dated 28 January 2014, the company’s solicitors, (engaged by it according to a Costs Agreement signed on 6 December 2013, but in relation to work done on or after 29 November 2013) asked that Ms Anison outline a reasonable basis upon which her claim against it was made. The correspondence notified that, absent the same, an application would be commenced for the company to be removed from the proceedings and costs would be sought on an indemnity basis. No response to that correspondence was received. I accept that, on 31 January 2014, the company’s solicitors advised that, as no response to the earlier correspondence had been received, the foreshadowed application would be filed – this occurred on 10 February 2014.

6. I accept that the correspondence between the solicitors for the company and Ms Anison in evidence establishes that Ms Anison’s solicitors requested and continued to request disclosure from the company and that, on occasion, documents were provided and, on occasion, they were told that company documents had been destroyed. I also accept that the issue of the adequacy (or otherwise) of disclosure was an issue of particular significance for Ms Anison’s solicitors.

7. I am not persuaded that Ms Anison positively acted not to narrow the issues in dispute; the question of whether the Trust assets would be included in the property of the parties for the purpose of the property settlement proceedings between Mr and Ms Anison was very significant because of the value of those assets in real terms and relative to the value of the other assets of the parties to the marriage. Given this, whilst Ms Anison was wholly unsuccessful in her claim against the company, I am not persuaded that it was unreasonable for her to maintain the same in the circumstances in which the claim was made. I am not persuaded that, in pursuing the claim as she did, Ms Anison acted other than on a genuine basis. I am not persuaded that she had some ulterior motive or wilfully disregarded matters asserted by the company or that she unduly prolonged the litigation against the company. That Ms Anison was wholly unsuccessful in her claim against it does not, for me, change these matters.

8. I am not persuaded that, in the circumstances of this case, the company’s situation is analogous to that of an administrator or liquidator involved in property settlement proceedings by a party to a marriage.

9. Taking into account the matters advanced on behalf of the company and, in particular, that Ms Anison was wholly unsuccessful in her claim against the company, in the exercise of the broad discretion afforded to judges in their consideration of applications for costs (noting the legislative starting point in proceedings under the Act is that parties to them bear their own costs), I am not persuaded that the circumstances justify the making of an order that she pay the company’s costs as sought or at all – particularly given the vast disparity in the financial circumstances vis-à-vis the company and Ms Anison and the potential significance of her claim about the manner in which the assets of the Trust ought be treated in the overall context of the property settlement proceedings.

10. If I am wrong in that decision, I would not have been persuaded that the circumstances of this case justify the making of an order that Ms Anison pay the company’s costs on an indemnity basis because I am not persuaded that the circumstances here are such as to warrant the making of such an order which is, as has been noted in well-known authority, a “very great departure” from the “normal standard” in this and other jurisdictions.[14]

    [14]D & D Costs (No. 2) (2010) FLC 93-435; Limousin & Limousin (Costs) (2008) 38 Fam LR 478; In the Marriage of Kohan (1993) FLC 92-340; Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 per Sheppard J.

11. Whilst I have determined that the company’s application for costs should be dismissed, I am not persuaded that the circumstances surrounding the making of it are such as to justify the making of an order that it pay Ms Anison’s costs of and incidental to the same. I arrive at this conclusion even where it has been wholly unsuccessful and its financial position is vastly superior to that of Ms Anison.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 21 September 2018.

Associate: 

Date:              21 September 2018