Barstow & Barstow
[2021] FedCFamC1F 238
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Barstow & Barstow [2021] FedCFamC1F 238
File number(s): ADC 560 of 2017 Judgment of: BERMAN J Date of judgment: 29 NOVEMBER 2021 Catchwords: FAMILY LAW – COSTS – Circumstances justifying an order – Where the applicant seeks costs on a party/party basis – Where the respondent opposes the order sought- Where the final hearing proceeded on a discrete issue – Where the respondent concedes he was wholly unsuccessful in relation to the discrete issue – Where the parties financial circumstances are modest but not a barrier to a costs order being made – Where various offers were made and rejected – Where an order for costs should be made. Legislation: Family Law Act 1975 (Cth) s 117(2A)
Federal Circuit and Family Court (Family Law) Rules 2021 (Cth) r 12.17, Sch 3
Division: Division 1 First Instance Number of paragraphs: 47 Date of hearing: 20 October 2021 Place: Adelaide Counsel for the Applicant: Mr Faull Solicitor for the Applicant: Lindbloms Lawyers Counsel for the Respondent: Litigant in person ORDERS
ADC 560 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BARSTOW
Applicant
AND: MR BARSTOW
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
29 NOVEMBER 2021
THE COURT ORDERS:
1.That the respondent pay the applicant’s costs fixed in the sum of TEN THOUSAND TWO HUNDRED DOLLARS ($10,200) inclusive of GST on or before three (3) calendar months from the date of this order.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Barstow & Barstow is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
Ms Barstow (“the applicant”) and Mr Barstow (“the respondent”) were parties to proceedings for settlement of property. The proceedings were listed for hearing on 19 May 2021. Judgment was delivered and orders made on 23 June 2021 which provided for the parties to retain their separate property free from claim of the other together with orders being made which enabled a superannuation split of a base amount of $64,067.47 to be allocated from the respondent’s H superannuation fund to a fund nominated by the applicant.
Consequent upon the orders being made, the applicant filed an Application in a Case on 5 July 2021 seeking the following order:
2.The husband pay the wife’s legal costs on a solicitor/client basis from the 8 September 2020 to the date of Judgement Orders made 23 June 2021.
The Application in a Case was listed for hearing on 20 October 2021 whereupon judgment was reserved.
The order sought by the applicant was the subject of amendment in that on 18 October 2021 the applicant’s solicitors forwarded to the Court and the respondent, an amended itemised tax invoice that had been prepared pursuant to Sch 3 of the Federal Circuit and Family Court (Family Law) Rules 2021 (Cth) (“the Family Law Rules”).
The difference is that the costs sought by the applicant were assessed on a party/party basis rather than solicitor/client. The quantum of costs now sought is $19,445.44 inclusive of GST plus counsel fee in the sum of $2,200 inclusive of GST.
The Court is not required to consider whether if successful in her application, costs should be assessed on an indemnity basis.
BACKGROUND
As the applicant in the substantive proceedings, the respondent sought the following orders in his Amended Initiating Application filed 28 April 2021:
1.That the superannuation assets of the parties be split 60/40 in favour of the respondent based on the current balances of the respective funds.
2.That the respondent deliver up the personal items and household effects as previously requested by the applicant at a mutually agreeable time and location.
3.That the respondent does all things necessary to allow for the closure of joint Westpac Savings account …19.
4.That the respondent does all things necessary to be removed from the joint E Bank accounts associated with membership …59.
5. The parties bear their own costs with respect to this hearing.
…
The applicant, being the respondent in the substantive proceedings, filed an Amended Response to Initiating Application on 12 May 2021 in which she agreed with the superannuation split sought by the respondent and relevant to the current application, the applicant sought that each of the parties retain property held by them free from any claim by the other.
Whilst there remains some relevance to the superannuation division, the prime issue for determination was the claim by the respondent that the applicant deliver up to him a list of items set out in an email forwarded to the applicant dated 16 May 2016, being annexure “A1” to the respondent’s affidavit filed 28 April 2021.
Whilst I found that the respondent was not disingenuous in his evidence nor that he was an unreliable witness, I was not satisfied that the respondent had established on the balance of probabilities that the applicant retained the items as contended by him and if so that they should be delivered up.
It must be remembered that the parties separated in 2014. It was not controversial that the value of the property sought by the respondent was minimal. I found that the respondent’s claim was based on suspicion and speculation but with insufficient evidence for the Court to make a finding on the balance of probabilities.
The applicant’s legal fees are in excess of $250,000. I found that the proceedings had been ruinously expensive and it was likely that her fees in completing the matter would have significantly outweighed the value of the items in dispute.
The applicant argued that offers made by her to settle the proceedings as and from 8 September 2020 should have been accepted by the respondent and if so, the proceedings would have been resolved without the need for ongoing litigation. The respondent contends that it was the applicant who did not readily accept his offer in respect of a superannuation split.
The respondent agrees that he was wholly unsuccessful in the proceedings seeking an order that the applicant deliver up items that he considered were in her possession.
Pursuant to r 12.17 of the Family Law Rules, the applicant seeks that the respondent pay her costs incurred by her as and from 8 September 2020.
The method of calculation of costs is referred to in r 12.17(1):
(1) The court may order that a party is entitled to costs:
(a) of a specific amount; or
(b)as assessed on a particular basis (for example, party and party, solicitor and client or indemnity); or
(c) to be calculated in accordance with the method stated in the order; or
(d)for part of the proceeding, or part of an amount, assessed in accordance with Schedule 3.
In considering what orders should be made, if any, in respect of the applicant’s costs, s 117(2A) of the Family Law Act 1975 (Cth)(“the Act”) requires the Court to have regard to the following:
(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 fact, production of documents and similar matters;
(d)whether the proceedings where 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 the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
Accordingly, I consider that I have a wide discretion in respect of matters relating to a potential costs order.
SHOULD AN ORDER FOR COSTS BE MADE IN FAVOUR OF THE APPLICANT
Financial circumstances of each of the parties
It is not in dispute that the party’s financial circumstances are modest.
By reference to the applicant’s financial statement filed 12 May 2021, her income as a transport worker is $844 per week, with total personal expenditure of $544.
The applicant has the primary care of two children of the relationship with the respondent and whilst he pays child support, it is in the modest amount of $138 per week.
The total property of the applicant is $5,005 but she retains total liabilities of $435,000 which includes $250,000 by way of unpaid legal costs. The applicant’s solicitor was candid in his admission that he does not expect the applicant to be able to pay her legal fees.
The respondent’s financial statement filed 28 April 2021 reveals his income of $2,143 per week from his occupation as a self-employed professional. His expenditure is $1,012 per week and not dissimilar to the applicant, his property is modest in the total sum of $10,500.
Whilst there is some issue raised on behalf of the applicant as to the accuracy of the respondent’s income given that he has not filed a recent taxation return, no finding can be made in that regard.
I do not consider that the financial circumstances of each of the parties to be a barrier to an order for costs being made.
The conduct of the parties to the proceedings
It is apparent that the proceedings have been ongoing since 2017. There is a level of complexity out of proportion to the modest nature of the pool of property. Whilst I have considered that the proceedings were futile in the sense that the costs incurred by the parties but in particular the applicant far outweighed the cumulative value of the modest property sought by the applicant, I do not consider that such a consideration would be a relevant issue pursuant to s 117(2A)(c) of the Act. I do not bring to account matters raised by the applicant’s solicitor asserting that the respondent has been recalcitrant in the provision of financial documents but in particular his personal taxation returns and financial statements pertaining to his business.
Whether any party to the proceedings has been wholly unsuccessful
There are two components to the applicant’s claim for costs. The first is that orders were made in respect of a superannuation split as sought by her. The second is that the respondent’s claim for the deliver up of personal effects and belongings was wholly unsuccessful. I consider there is no merit to the first argument but there is merit in respect of the second argument.
The respondent states that the issue of superannuation was a matter about which he was always prepared to agree but insisted that the settlement be based upon the up to date value of each of the party’s superannuation entitlements. He makes the point that whilst this was initially resisted by the applicant, when the figures were available the matter resolved easily and without contest. He contends that his insistence on current figures being used resulted in a better outcome for the applicant.
My judgment delivered on 23 June 2021 records that at the commencement of the proceedings the parties were able to reach agreement in respect of all outstanding matters other than the claim by the respondent that the applicant retained a quantity of furniture and personal effects that should be delivered up to him.
A minute of order was tendered that enabled a superannuation split order to be made.
It could not be said that the respondent was wholly unsuccessful in respect of issues of superannuation. The applicant initially sought that the superannuation entitlements of the parties be divided on the basis of 60/40 adopting 2020 figures in her favour. The respondent’s position was that there should be a 60/40 division using the most current figures available. Ultimately, the parties resolved their differences on that basis. I am not able to find that either party was wholly unsuccessful and the issue of superannuation was ultimately resolved on the first day of trial following the applicant conducting an online search to ascertain the value of her superannuation benefit.
The same considerations do not apply to the respondent’s claim for the return of furniture and personal effects which was ultimately dismissed.
I do not consider that the respondent was disingenuous in bringing his claim but given the issue had been outstanding for five years, the consequences of the litigation was out of all proportion to the value of the property sought. The respondent did not accept the applicant’s trenchant assertion that she did not retain the property. The respondent did not present any evidence which enabled me to find that the applicant’s denial was false. I do not find that the applicant was being unreasonable in circumstances where her denial that she held the respondent’s property resulted in a significant cost to her.
The respondent has been wholly unsuccessful.
Whether any party to the proceedings has made an offer in writing to the other party
By letter dated 8 September 2020, being annexure “[MsBarstow1]” to the applicant’s affidavit filed 5 July 2021, the applicant maintained that she did not have nor recognise the majority of the items as claimed by the respondent in his email of 14 July 2020 and set out items 1 to 25 as claimed, with her description of them.
The following extract of the correspondence is relevant to the current application:
Given our client’s response to the status of each item and that the items which you have requested are of nominal value, she proposes that you each retain all items in your current possession and control. Our client will deliver up to you the boxes of clothing and books which she has in her possession which she believes belongs to you.
Our client makes the offers under cover of this letter on a full and final basis, to finalise all outstanding matters between you.[1]
[1] Affidavit of the applicant filed 5 July 2021, annexure “[MsBarstow1]”.
Similar correspondence was forwarded on 20 October 2020[2] and on 15 December 2020.[3]
[2] Affidavit of the applicant filed 5 July 2021, annexure “[MsBarstow2]”.
[3] Ibid.
The offer was further proposed in correspondence dated 1 March 2021[4] and in correspondence dated 4 May 2021[5] which included a comprehensive minute of order.
[4] Affidavit of the applicant filed 5 July 2021, annexure “[MsBarstow3]”.
[5] Affidavit of the applicant filed 5 July 2021, annexure “[MsBarstow4]”.
The respondent rejected the applicant’s various offers.
The respondent was wholly unsuccessful in respect of the matter that went forward to trial. He admits that he was not prepared to accept the applicant’s denials and that it was only by the hearing did he think he could advance his claim.
I consider that an order should be made that the respondent pay the applicant’s costs as and from the first letter proposing a settlement of the proceedings dated 8 September 2020.
QUANTUM OF COSTS
At the commencement of the applicant’s application she tendered to the Court and to the applicant an itemised account prepared pursuant to Sch 3 of the Family Law Rules. There is no quarrel as to the use by the applicant of the appropriate scale. It is not claimed by the applicant that her costs should be assessed on a solicitor/client or indemnity basis even though the fees incurred by her significantly exceed the amount that she seeks.
The itemised account is a detailed document and whilst it provides significant information, I am not able to readily separate the costs incurred by the applicant in relation to the superannuation component, the negotiations and ultimate resolution with the liquidator and the costs incurred that relate directly to the subject of the hearing, namely the respondent’s claim for his furniture and personal effects to be delivered up to him by the applicant.
There is no quarrel with the counsel fees claimed in the sum of $2,200. I consider that the disbursement for counsel fees is modest.
I have given careful consideration to the numerous items in the itemised account and considering how the proceedings were conducted, the evidence that was called and the issues that required determination, it is reasonable to fix the applicant’s costs in the sum of $8,000.
Accordingly, I propose to order that the applicant pay the respondent’s costs fixed in the sum of $10,200. Given the respondent’s circumstances, his income which significantly exceeds his expenditure and the uncertainty of his current circumstances given that he has not filed an income tax return for some years, I will give the respondent three months to pay.
I make orders as appear at the commencement of these reasons.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 29 November 2021
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