Atkins and Hunt

[2013] FamCA 70

FAMILY COURT OF AUSTRALIA

ATKINS & HUNT [2013] FamCA 70

FAMILY LAW – COSTS –Where the wife made an application seeking payment of legal costs incurred in an interim application – Where wife sought costs on an indemnity basis – Where consideration of costs is more appropriate at forthcoming final hearing

Family Law Act 1975 (Cth): ss 117(1); 117(2); 117AA; 118; 117(2A)
Real Property Act 1900 (NSW): s 57(2)(b)

APPLICANT: Ms Atkins

RESPONDENT: Mr Hunt

FILE NUMBER: SYC 425 of 2012

DATE DELIVERED: 15 February 2013

PLACE DELIVERED: Sydney

JUDGMENT OF: Ryan J

HEARING DATE: By way of written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kearney SC

SOLICITOR FOR THE APPLICANT: Paltos Briggs

COUNSEL FOR THE RESPONDENT: Ms Gillies

SOLICITOR FOR THE RESPONDENT: Robyn Sexton & Associates

Orders

1. That Ms Atkins’ (“the wife’s) application for costs is adjourned to the final hearing.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Atkins & Hunt 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 425 of 2012

Ms Atkins

Applicant

And

Mr Hunt

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an application for costs in relation to an Application in a Case filed on 13 April 2012 (“Interim Application”) by Ms Atkins (“the wife”). 

2. The proceedings were commenced by Mr Hunt (“the husband”) when he filed his Initiating Application for property settlement on 30 January 2012. Subsequently, the wife filed an interim application seeking interim property settlement orders for the payment of her legal expenses and for spousal maintenance. No final property settlement has yet been determined.  The matter is listed for final hearing before Aldridge J for five days commencing 15 April 2013.

3. Having achieved a degree of success, the wife has applied for an order that the husband pay her costs of the interim application on an indemnity basis.

Salient facts

1. I published reasons for my decision on 15 June 2012 which supply the context to this costs application, which it is unnecessary to repeat, albeit a few salient facts will be referred to.

2. The parties married in 2003 and separated in 2011. Following this date and until 1 November 2011 the husband paid the wife’s expenses as follows:

   ·    registration and insurance in relation to her vehicle;

   ·    her petrol;

   ·    wife’s telephone accounts;

   ·    Foxtel account;

   ·    electricity account;

   ·    council rates;

   ·    water rates and insurance for the Town M Property in which she continued to reside;

   ·    scheduled repayments on each of the Line of Credit and the Rocket facility; and

   ·    $1, 288.77 per week to the wife.

3. On 24 October 2011, the husband’s solicitors wrote to the wife’s solicitors advising that the husband intended to stop meeting the mortgage instalments effective immediately and proposing that the Town M Property be listed for sale forthwith.

4. From December 2011 to January 2012 the husband ceased to pay the loan repayments with respect to the Rocket facility secured over the Town M Property, payments of the mortgage and payments of the wife’s telephone accounts.

5. In January 2012, the husband commenced property settlement proceedings against the wife pursuant to the Family Law Act 1975 (Cth) (“the Act”), thus instigating the present proceedings.

6. In February of 2012, Westpac issued a Default Notice pursuant to s 57(2)(b) of the Real Property Act1900 (NSW) in relation to the mortgage on the Town M Property.

7. In March 2012 and again in April, the wife’s solicitors wrote to Westpac seeking that the bank defer enforcement proceedings until a determination of the family law proceedings.

8. During the course of April 2012, the wife learnt that the husband was no longer willing to pay the telephone and electricity bills.

9. On 13 April 2012, the wife filed the interim application which is the subject of this application for costs.

10. The interim application was heard on 31 May 2012. On the 15 June 2012 I made orders, favouring the wife’s application, that the husband pay her legal expenses ($200,000.00) by way of interim property settlement and interim spousal maintenance. The main thrust of the relief sought by the husband in his response was dismissed.  However, he too secured a degree of success.

Submissions

1. Written submissions were received on behalf of the wife on 15 November 2012 and from the husband on 29 November 2012. The wife’s response to the husband’s cost submissions was received on 7 December 2012.

2. The wife seeks an order that the husband pay her costs of the interim application on an indemnity basis.

3. The wife says she has incurred the following costs:

   Counsel fees:

Mr Benjamin Jacobs	$1, 683.00
Mr John Levy	$6, 050.00
Mr Michael Kearney	$11, 000.00
Professional costs and disbursements:	$76, 514.90
TOTAL	$95, 247.90

1. In the event that the court does not order costs on an indemnity basis, the wife submits that the husband pay costs in accordance with the Court’s itemised scale of costs, being:

Counsel’s fees:	$11, 000.00
Professional costs and disbursements:	$30, 000.00
TOTAL:	$41, 000.00

1. Counsel for the wife submitted that the wife relies on the significant disparity in the parties’ financial positions to justify an order for costs in her favour. She seeks to rely on the fact that the husband is in a vastly superior financial position to her and that she is financially dependant upon him.

2. Counsel for the wife also points to the conduct of the husband in respect of the interim application as a factor which would justify an order for costs in this matter. In particular, the wife argues that he provoked and necessitated the interim application by stopping his financial support of her, that he failed to put to the wife any proposal that would have resolved the issues without the need of litigation and the inaccurate contention by the husband of constrained financial circumstances and an absence of control of the “[Hunt] Group”.

3. Throughout submissions, counsel for the wife directed the Court’s attention to the fact that the husband was wholly unsuccessful in his resistance to the wife’s interim application and the orders he sought in his Response.

4. In support of her application for indemnity costs, she says that the husband should not have contended financial incapacity to meet the claims of the wife and that his application to seek relief in relation to the sale of the matrimonial home (the Town M Property) was unreasonable and without prospects of success.

5. Submissions on behalf of the wife make special mention of the foreclosure issue with Westpac. The wife contends that the husband engaged in a course of conduct which was designed to force a mortgagee sale of the former matrimonial property.

6. The husband seeks that the wife’s application for costs be dismissed.

7. It is submitted on behalf of the husband that the wife was not entirely successful and in his submissions he points to examples of where the orders she sought were not given.

8. The submissions on behalf of the husband also point to the interim nature of the application and that many of the orders made will be revisited at the final hearing with the benefit of complete evidence and cross examination. One of those issues which counsel argue will be determined at the final hearing is the husband’s refuted claim that he did not try to force a sale of the matrimonial property and in relation to his financial circumstances.

9. In response to the application for indemnity costs, counsel for the husband submits that the circumstances of the case cannot be considered as exceptional, such as to warrant departing from party/party costs (if any costs order is proper).  

10. Specifically, counsel for the husband submits that the wife’s application was not wholly successful, that she did not make any offer of settlement, she did not provide a fundamental document until the morning of the hearing and she did not proffer the necessary undertakings as to damages until required to do so by the Court.

Discussion

1. Section 117(1) of the Act is the relevant provision concerning costs and provides the general rule that subject to s 117(2), s 117AA and s 118 each party to proceedings under the Act shall bear his or her own costs. If there are circumstances that justify it in so doing, the court may make an order for costs pursuant to s 117(2) as the Court considers just. In considering what order, if any, should be made, I am required to have regard to the provisions of

   
   

   s 117(2A) of the Act and take them into account, identify and balance the relevant matters.

2. I first wish to address the issue that this is an application for costs of an interim application and that the substantive proceedings and final determination have yet to be determined.

3. I place particular weight on the submission of the husband’s counsel that the cost order is sought for an interim application and that many of the orders made are to be revisited at the final hearing where the quality of the evidence will be superior and tested by cross-examination. This is relevant as it could very well be the case that one or other of the parties’ application is found untenable.

4. The wife’s costs application, as submitted by counsel for the husband, is sought in part on the basis that her interim application was wholly successful and that the husband’s actions were unreasonable and necessitated the application. It remains to be seen whether his stance overall could be said to have been reasonable in the circumstances.

5. With a final hearing so close, it is more appropriate to deal with whether or not an order for costs should be made at that time so that all questions of costs are considered in the context of the Court’s ultimate determination.

6. For these reasons I make the order identified at the start of this judgment.

I certify that the preceding thirty three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 15 February 2013.

Associate:     

Date:              15 February 2013