BALDEV & BALDEV
[2019] FCCA 1544
•12 June 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BALDEV & BALDEV | [2019] FCCA 1544 |
| Catchwords: FAMILY LAW – Property – application for costs – husband to pay the wife’s costs. |
| Legislation: Family Law Act 1975 (Cth), ss.79, 114, 117 Family Law Rules 2004 (Cth), sch.3 |
| Cases cited: Penfold v Penfold (1980) 144 CLR 311 |
| Applicant: | MS BALDEV |
| Respondent: | MR BALDEV |
| File Number: | SYC 2661 of 2019 |
| Judgment of: | Judge Morley |
| Hearing date: | 16 May 2019 |
| Date of Last Submission: | 16 May 2019 |
| Delivered at: | Sydney |
| Delivered on: | 12 June 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Levet |
| Solicitors for the Applicant: | Segal & Associates Solicitors |
| Solicitors for the Respondent: | Ms Winning of Barkus Doolan |
ORDERS
That within 28 days the husband pay to the wife costs of attendance by Counsel for the wife at Court on 16 May 2019 in the sum of $560.
IT IS NOTED that publication of this judgment under the pseudonym Baldev & Baldev is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 2661 of 2019
| MS BALDEV |
Applicant
And
| MR BALDEV |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property settlement proceedings in which each of the parties seek final orders pursuant to section 79 of the Family Law Act 1975 (Cth) (‘the Act’). Each of the parties also seeks interim or interlocutory orders including, on the applicant wife’s part, injunctive relief pursuant to section 114 of the Act to preserve the matrimonial asset pool and on the respondent husband’s part a sole occupation order and interim property distribution orders.
The parties agree that they married on … 1995 and commenced cohabitation on … 1995. The parties separated on 1 February 2019.
There is one child of the relationship, [X] born … 2003, aged 16 years at the date of commencement of these proceedings.
The Proceedings
The proceedings were commenced by the wife filing her Initiating Application on 30 April 2019, at which time her solicitors made an Application for Leave for Short Service on her behalf. The wife filed her affidavit sworn 29 April 2019 and a Financial Statement sworn that same day with her Initiating Application.
The Initiating Application was given a return date of 4 June 2019 at 9:30a.m. In the Initiating Application, the wife had sought leave to proceed in the first instance ex parte and that ex parte interim orders be made restraining the husband from dealing in a certain manner with matrimonial property, and from leaving the Commonwealth of Australia or going within 300 metres of any place of international departure. The wife also sought interim property distribution orders.
The basis of the urgency sought by the wife was contained in her affidavit evidence, that the husband had, since the date of the parties’ separation, removed cash to a total of $269 000 from accounts in the joint names of the parties with Westpac Bank. The wife deposed in paragraph 21 who her affidavit:
The respondent husband did not tell me that he was going to make any of the above withdrawals. I do not give the respondent husband permission to make any of the above withdrawals. I do not know what the respondent husband has done with such monies.
The wife also deposed in her affidavit that there had been correspondence between the solicitors and the husband commencing with a letter between her solicitors and husband on 28 March 2019 summarising the matter from the wife’s point of view and seeking disclosure by the husband of relevant financial information. There was a subsequent letter dated 10 April 2019 from the husband to the wife’s solicitors indicating that the parties had agreed that the husband would provide further details by the end of May 2019, indicating that he is taking legal advice and that he will contact the wife’s solicitors “as soon as possible”.
The wife’s solicitors then forwarded an email to the husband on 17 April 2019 indicating that before settlement negotiations could commence there was a need for “full and proper disclosure” and advising:
… Your delay in providing the information is unacceptable. In the circumstances we put on notice that if the information that has been requested from you is not provided to us within seven days then we are instructed to commence proceedings without further notice to you.
The husband then wrote to the wife’s solicitors by letter dated 17 April 2019 advising that he was “making efforts and progress in taking legal advice and engaging a solicitor” and again advising “We will contact your firm as soon as possible.”
Having been given the return date of 4 June 2019 on filing the Initiating Application, it was considered that greater urgency was warranted and at 4:35 p.m. on 30 April 2019 wife filed an Application for Review seeking that the matter be listed before the Court as a matter of urgency and that the interim orders as sought be made.
The matter came before me in Chambers for consideration of the Application for Review on 6 May 2019 and I made a direction that the matter be listed before me in Court at 9:30 a.m. on 8 May 2019. A letter was forwarded to the solicitors for the wife by the Court dated 6 May 2019 advising of the listing on 8 May 2019. That letter may not have reached those solicitors in time.
When the matter came before me in court on 8 May 2019 there was no appearance by or on behalf of either party. I surmised that the listing date alteration had not reached the wife’s solicitors in time and adjourned the matter for further mention and directions to 9:30 a.m. on 16 May 2019.
No Affidavit of Service has been filed by the wife and so I am not aware when the Initiating Application, affidavit in support and Financial Statement was served on the husband, however on 10 May 2019 a Notice of Address for Service was filed on the husband’s behalf by his solicitors, Barkus Doolan and therefore it can be inferred that the documents had been served on the husband prior to that time.
On 15 May 2019 a Response to Initiating Application, affidavit by the husband and Financial Statement of the husband, both sworn 15 May 2019 were filed in the registry on his behalf by his solicitors.
In his affidavit, the husband traversed the same evidence as the wife in relation to the correspondence between himself and the wife’s solicitors prior to commencement of proceedings in this Court. The husband confirmed in paragraph 36 thereof the wife’s evidence in relation to the removal by him of $269,000 from the parties’ joint accounts with Westpac Bank on 24 April 2019.
In paragraph 37 of his affidavit the husband deposed:
I deposited all these funds into my Commonwealth Bank account to safeguard them from those funds.
The Mention
On call of the matter on 16 May 2019, Mr Levet of Counsel appeared for and with the wife, instructed by her solicitor. Ms Winning, solicitor, appeared for and with the husband. At the parties’ request the matter was stood in the list to enable the parties to negotiate in relation to interim orders.
In the event that no interim orders were agreed between the parties then it was Mr Levet’s position on behalf of the wife that the matter should have some attention by way of interim hearing on the day and in particular consideration of the wife’s application for injunctive relief to protect the matrimonial asset pool.
In due course on the day the parties presented a minute of consent orders and, though the document had not been signed by either of the parties or their legal representatives, a joint application was made that I make interim orders in accordance with the document. I did so.
The matter was then stood over for further mention and directions to 10:30 a.m. on 14 August 2019.
Costs Application
An application that the husband pay the wife’s costs of and incidental to her Application for interim orders was contained as order 6 in the interim orders sought in her Initiating Application. Mr Levet pressed the wife’s application for costs and submitted that a costs order should be made in favour of the wife against the husband based upon the husband’s conduct in relation to the proceedings to that date in that:
a)On the evidence of both parties he had removed substantial funds ($269,000) from the parties joint Westpac bank accounts on 24 April 2009;
b)That he had been served with the wife’s application by at least 10 May 2019, that the wife’s application sought to restrain him from disposing of property “of the parties or either of them” and that her affidavit served with her application had specified the funds removed by him from the Westpac bank accounts on 24 April 2019 and had made plain that the wife’s evidence was that she “[did] not know what the respondent husband has done with such monies”,
c)That there was no communication to the wife’s solicitors or to the wife by either husband or his solicitors of what he had done with the $269 000 until 5:30 p.m. on 15 May 2019 when it was communicated by the husband solicitors to the wife’s solicitors that the money had been placed in the husband’s bank account to preserve the funds.
It was submitted by Mr Levet that had the husband, himself or through his solicitors, informed the wife or her solicitors of what he had done with the funds prior to the close of business on the day before the Court mention that it would not have been necessary for the wife to brief Counsel with a view to Counsel conducting an interim hearing on 16 May 2019.
The Law
Costs in relation to matters under the Act are governed by section 117, which provides in subsection 117(1) that the normal position in relation to costs in family law matters is that:
Subject to subsection (2)…each party to proceedings under this Act shall bear his or her own costs.
Subsection 117(2) provides for a departure from the usual rule in subsection 117(1) as follows:
If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Subsection 117 (2A) provides as follows:
In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle proceedings in the terms of any such offer; and
(g)such other matters as the court considers relevant.
If, having considered the matters referred to in subsection 117 (2A) the Court is of the opinion that the circumstances justify a departure from the usual rule that each party bear his and her own costs, then the Court must determine the quantum of the costs to be awarded.
Pursuant to section 117(2), a finding by the Court of circumstances that justify the making of a costs order is the necessary preliminary to the making of an order and beyond that there is no additional or special onus on an applicant for a costs order.
In Penfold v Penfold[1] Stephen, Mason, Aickin and Wilson JJ of the High Court discussed section 117 of the Act and said:
It is an accurate description of section 117(1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to section 117(2). As subsection (1) is expressed to be subject to subsection (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.
Subsection (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the 2 provisions which imposes any additional or special onus on an applicant for an order for costs. Consequently, with respect to their Honours in the Family Court, we do not agree with the suggestion made in the judgement under appeal that an order can only be made under section 117 (2) in “a clear case”.
[1] Penfold v Penfold (1980) 144 CLR 311.
The Court’s discretion in relation to costs is broad and the considerations listed in subsection 117(2A) are not restrictive.[3] There is nothing to prevent any one factor in this subsection being the sole determinant for an order for costs.[4]
[3] Penfold v Penfold (1980) 144 CLR 311.
[4] PBF as Child Representative for AF (Legal Aid Commission of Tasmania)& TRF & LKL (2005) 33 Fam LR 123, 130.
Rule 21.02 in Division 21.2 ‘Orders for Costs’ under Part 21 ‘Costs’ of the Federal Circuit Court Rules 2001 (Cth) (‘the Rules’) provides:
Order for Costs
(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c) refer the costs for taxation under Part 40 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceedings is concluded.
Rule 21.10 of the Rules provides:
Costs and disbursements
Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:
(a) costs in accordance with Parts 1 and 2 of Schedule 1; and
(b) disbursements properly incurred.
I note here that though Rule 21.10 provides that costs be in accordance with Parts 1 and 2 of Schedule 1 to the Rules, Rule 21.11(2) provides:
(2) When taxing a statement of costs, a taxing officer must apply:
(a)for a family law or child support proceeding--the scale of costs set out in Schedule 3 to the Family Law Rules; …
Schedule 1 of the Rules 2001 is composed of ‘composite amounts’ for stages in the proceedings and Schedule 3 in the Family Law Rules2004 (Cth) is composed of per item of work or per hour amounts.
It was established by the decision of Raphael FM (as his Honour then was) in Colan Products Pty Ltd v Luxon Pty Ltd (No 2)[5] that, when applying the scale provided by the Rules, Counsel’s fees are not claimable as a disbursement and what is to be claimed is the advocacy loading on the daily hearing fee. That is applicable in this matter as what is sought by way of costs on behalf of the wife is the cost of attendance before the Court by Counsel to conduct an interim hearing.
[5] Colan Products Pty Ltd v Luxon Pty Ltd (No 2) [2002] FMC 90
Discussion
The basis upon which the applicant wife press the urgency of her application for ex parte interim orders, including by filing of an Application for Review to obtain an earlier hearing date, was that she was aware that the husband had removed the sum of $269,000 from the joint accounts with Westpac Bank and that she was not aware of what the husband had done with those moneys.
It was not known to the wife whether the husband had retained those moneys in a safe manner (as it turned out he had done) or whether he had transferred those moneys overseas (as the orders sought by the wife indicated she feared), or whether the husband had in some other manner disposed of or hidden the monies.
In preparing to press her application for interim orders with urgency she had instructed her solicitors to brief counsel to conduct an interim hearing seeking injunctive relief set out in her application. To brief counsel in that event was appropriate.
The husband was aware from at least 10 May 2019 that the wife asserted that she was aware that he had removed the monies, but that she was unaware of what he had done with those monies. Since that time, the husband had access to legal advice from his legal representatives (his solicitors having filed a Notice of Address on his behalf on that day).
The husband was further aware since that time that the wife pressed for urgent interim relief – the fact that the wife sought that such orders be made on an urgent ex parte basis was sufficient indication to the husband, once he had received legal advice, that it was most likely that the wife would press for interim consideration of the matter by the Court on the first return date.
Despite being in a position, himself or through his solicitors, to notify the wife through her solicitors or directly that the monies were ‘safe’ at any time on or after 10 May 2019, the husband did not do so until 5:30p.m. on the evening before what was effectively the first return date of the matter before the Court. Had the husband conveyed that information to the wife or her solicitors prior to close of business on the day before the first return date, it may have been possible for the wife to be saved the extra expense of briefing Counsel for that occasion.
In terms of the considerations in subsection 117(2A):
a)I find on the basis of the Financial Statements filed in the proceedings by each of the parties that the financial circumstances of the husband would not prevent the making of the costs order sought by the wife (noting that the Court has held on numerous occasions that impecuniosity is not a bar to an order for costs where such an order is otherwise justified).[6]
b)I find on the basis of the husband’s conduct in the proceedings in not notifying the wife or her solicitors until too late, as described above, that there was no need for an interim hearing on the first return date of the matter before the Court that there are circumstances that justify making of an order as to costs be paid by the husband to the wife.
[6] D & D (No 2) (2010) FamCA 64; COG15 & Child Support Registrar (2016) FamCAFC 272.
Quantum of Costs
When I questioned Mr Levet in relation to the quantum of the costs sought by the wife he indicated that his fee for a half-day brief was $2750. I pointed out that on that basis the wife would be seeking, in effect, indemnity costs, and that I could not consider that the matter was appropriate for an order that the husband pay costs on the indemnity basis, the matter not being one presenting the “unusual or exceptional circumstances” required for an order of that nature.[7]
[7] Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248; In the Marriage of Kohan (1992) 16 Fam LR 245; Prantage & Prantage (2013) 49 Fam LR 197.
I indicated to Mr Levet that in the event that I made a costs order in favour of the wife it should be pursuant to the costs set out in Schedule 1 of the Rules.
Accordingly, I find that the appropriate quantum of costs is that provided in item 12 ‘Advocacy loading’ in that Schedule being 50% of the daily hearing fee mentioned in item 13 that applies to the hearing.
The matter was completed before the Court in half a day, being more than a short mention. The relevant amount for a half-day hearing is $1120. The advocacy loading appropriate in the matter is $560.
Accordingly, I find that there are circumstances that justify the Court in making an order that the husband pay the wife’s costs thrown away in relation to briefing Counsel to appear on interim hearing and I find that the quantum of those costs should be $560.
On that basis I make the orders as set out at the start of these reasons.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge Morley
Date: 12 June 2019
[2] Penfold v Penfold (1980) 144 CLR 311, 315 per Stephen, Mason, Aickin and Wilson JJ.
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Remedies
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