Baum & Lokare (No 2) - [2019] FamCA 292

FAMILY COURT OF AUSTRALIA

BAUM & LOKARE (NO. 2)

[2019] FamCA 292

FAMILY LAW – COSTS – Circumstances justifying order – Where the wife has sought that the husband pay one third to half of her costs – Where the husband has not filed a response to the wife’s application and did not attend the hearing – Court finds that the husband’s conduct throughout the proceedings justifies the making of a costs order against him – Court orders that the husband pay 50 per cent of the wife’s costs.

Family Law Act 1975 (Cth) ss. 117
Federal Court of Australia Act 1976 (Cth) s. 37M(1)
Family Law Rules 2004 (Cth) rr. 1.04, 19.18

Cross & Beaumont (2008) 39 Fam LR 389
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123
Hawkins & Roe (2012) 47 Fam LR 526
Idoport Pty Ltd v National Australia Bank Limited & Ors [2007] NSWSC 23
Julstar Pty Ltd v Hart Trading Pty Ltd [2014] FCA 108
Parke & the Estate of the Late A Parke (2016) FLC 93-748
Penfold v Penfold (1980) 144 CLR 311
Sfakianakis & Sfakianakis [2019] FamCAFC 54
Sklavos v Australasian College of Dermatologists [2013] FCA 1065
Stoian & Fiening (Costs) [2014] FamCA 944
Wrensted & Eades (2016) FLC 93-697

APPLICANT:

Ms Baum

RESPONDENT:

Mr Lokare

FILE NUMBER:

DNC

2013

DATE DELIVERED:

10 May 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

McClelland DCJ

HEARING DATE:

7 May 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Fowler

SOLICITOR FOR THE APPLICANT:

Corbett Jessop Law

SOLICITOR FOR THE RESPONDENT:

Self-represented, no appearance

Orders

The husband pay the wife’s costs, as a lump sum, in the amount of $96,780, within 30 days.
In the event of the husband failing to comply with order (1) herein, the funds payable to the husband pursuant to order 22(i) made on 12 March 2019, shall be credited towards the costs payable to the wife, pursuant to order (1) herein.
To avoid doubt, the husband remains liable to pay to the wife the total amount specified in order (1), even in circumstances where the funds available pursuant to order (2) are insufficient to satisfy the husband’s obligation to pay that total amount.

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 Baum & Lokare (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 SYDNEY

FILE NUMBER: DNC 17 of 2013

Ms Baum

Applicant

And

Mr Lokare

Respondent

REASONS FOR JUDGMENT

Introduction

This decision concerns an application for costs made by Ms Baum (“the wife”) on 17 April 2019. The wife has sought costs in respect to proceedings initiated by Mr Lokare (“the husband”) on 16 January 2013. The proceedings concerned applications by the parties for both parenting and property orders. Those proceedings were heard over a period of five days, from the 3 to 7 December 2018, and final judgment was delivered on 12 March 2019.
The husband was substantially unsuccessful and in my decision dated 12 March 2019, in which I recorded concerns regarding the merits of orders sought by him, the veracity of his evidence and the fact that he showed reckless disregard for his obligations of disclosure. I also recorded my concern that the husband made baseless criticisms of, what I found to be, the mother’s sincere and, indeed, commendable efforts to ensure that the parties’ child, Z, born in 2011 (“the child”), retains a meaningful relationship with the father, her paternal family and her Aboriginal heritage and culture.
Despite the matter being called several times outside the Court and the hearing delayed by 15 minutes, the husband did not appear at the hearing of the mother’s application for costs on 7 May 2019. He has also not filed any documents in response to that application.

The wife’s application

In her Application in a Case filed on 17 April 2019, the wife seeks the following orders:
1. The Applicant, [Mr Lokare], pay the Respondent, [Ms Baum’s], costs of an incidental to these proceedings on an indemnity basis.
2. The funds payable to the Applicant pursuant to Order 22(i) of the Court Orders dated 12 March 2019 following the sale of the property located at Town B, shall be credited towards the costs payable to the Respondent pursuant to Order 1.
3. The balance of the costs be paid by the Applicant to the Respondent within a period of 6 months from the date of this order.
At the hearing on 7 May 2019, Counsel for the wife indicated that an appropriate alternative form of the orders sought by his client might be that any costs ordered be payable by the husband within 30 days and, in the event of that not occurring, proposed order 2 be activated.
For reasons which I set out below, I am satisfied that the alternative form of the order proposed by Counsel for the wife is appropriate.

Relevant documents

At the hearing, the wife relied upon her Affidavit filed on 8 April 2019, along with exhibits tendered at the hearing, including an email to both the husband and the Independent Children’s Lawyer serving a copy of her Application in a Case, her Affidavit and the exhibits to that Affidavit.

Relevant law

Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the basis upon which the Court is empowered to make an order for costs. Relevant to these proceedings are the first three sub-sections of s 117, which are, as follows:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) 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) and (5) 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.
(2A) 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 the proceedings and the terms of any such offer; and
(g) such other matters as the Court considers relevant.
Those provisions make clear that, while the general rule in family law proceedings is that each party bears his or her own costs, the Court may order a party to pay the costs of another where there are circumstances justifying the making of such an order.
As such, a litigant seeking a costs order must establish that the justice of the case requires an order for costs by reference to the non-exhaustive list of statutory considerations set out in s 117, before such an order is made. Although the applicant for costs must establish circumstances which would justify such an order, it is not the case that a costs order can only be made in, what has been described as, “a clear case”: Penfold v Penfold (1980) 144 CLR 311 at 315.
The considerations set out in s 117(2A) must be taken into account in deciding whether or not to order a party to pay the costs of another. However, there is “nothing to prevent any factor being the sole foundation for an order for costs” being made: Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123 at 130.
There is some controversy as to whether a different standard applies in considering the issue of costs in respect to property proceedings, on the one hand, and parenting proceedings, on the other. In Hawkins & Roe (2012) 47 Fam LR 526, the majority (May and Ainslie-Wallace JJ) said at [147]:
While the categories of occasions when costs may be ordered is not limited, the occasions on which such an order should be made in a parenting dispute should have some particular features. Where there is a complete absence of preparedness to compromise in the face of unambiguous expert evidence, where false allegations are made, or where one party is clearly motivated by self interest rather than the best interests of a child, then a judge may well conclude that there are circumstances justifying an order for costs.
However, in Wrensted & Eades (2016) FLC 93-697, the Full Court (Bryant CJ, Finn and Strickland JJ) expressed some concern with that analysis, if it was to be construed as establishing extra-legislative guidelines or criteria for the making of a costs order in parenting cases. In that respect, the Full Court said at 81,153:
However if the majority in Hawkins & Rowe, by the use of the words “the occasions on which such an order should be made in a parenting dispute should have some particular features”, were intending to indicate that certain features need to be present before a costs order can be made, we respectfully disagree. The wide discretion in s 117(2) of the Act and lack of distinction between categories of family law cases (including the lack of distinction between parenting and property cases) would in our view render such a conclusion plainly erroneous, place a fetter on discretion which does not have a legislative basis and require us to depart from that conclusion (Nguyen v Nguyen 169 CLR 245 at 268-270; Gett & Tabet (2009) ALR 504 at [261]-[301] especially at [294]; Green v The Queen; Quinn v The Queen (2011) 244 CLR 462 per Heydon J at [84] and [85]; F Firm & Ruane and Ors (2014) FLC 93-611) at [163]).
I respectfully agree with the reasoning of the Full Court in Wrensted & Eades (supra) in finding that there is no distinction in the legislative considerations that the Court is required to have regard to in respect to an application for costs in parenting proceedings, as opposed property proceedings.

Consideration

The Court was greatly assisted by an outline of submissions provided by Counsel for the wife. Those submissions are well balanced, researched and accurate. In the absence of a contradictor, I have substantially accepted the contentions of Counsel for the wife in respect to the matters set out in s 117(2A) of the Act, to which I am required to have regard. The wife’s submissions relevant to those considerations are set out at paragraphs 6 to 12, as follows:
6. S 117(2A) (a)-the financial circumstances of each of the parties to the proceedings.
a. The wife’s current net income after her share of rent is $311.50/week, during the first 26 weeks of her maternity leave.
b. The wife has about $5,700 in savings and has a debt to her parents for the legal costs she has incurred in these proceedings of $227,264.79. The wife deposed to this in her evidence filed for the final hearing and was not challenged on that evidence by the husband.
c. Assuming a sale value of the [Town B] property of $500,000 and selling costs of about $15,000, it is estimated that the parties will receive approximately the following amounts from the sale proceeds of [Town B]:
i. Wife  $390,301.62
ii. Husband       $74,898.38
The husband is required to pay the debt, if any, to the Public Utility (principal amount claimed $48,617). The husband deposed that “…the amount is disputed and is a debt.” As such, and on the husband’s evidence, if the husband’s disputation of the debt is successful he will have no obligation to pay this amount.
Of the amount to be received by the wife, which includes a component for child support arrears, she will repay $227,264.79 to her parents, leaving her with about $162,800.
d. The husband has a history of non-payment of child support and it is likely that the wife will alone carry the ongoing burden of financially supporting [Z] until she is an adult. [Z] is currently 8 years old. The husband has, since hearing, not paid child support even though there is an assessment in place.
e. The husband’s financial circumstances are still uncertain. The husband has at all times, including during the hearing, failed to make a full and frank disclosure of his financial circumstances. There are continuing doubts about his income and earning capacity, although he gave evidence that he expects his income from his employment to increase to between $1,300 and $1,400 per week in early-2019. He also receives income from his employment. The husband has still failed to account for much of the inheritance of $157,253.68 he received after separation from [Mr F], including $70,000 he transferred on 5 December 2013 out of his CBA account (no. …) into another account which remains undisclosed by him.
f. The Full Court has said that “It seems to us that once it has been established that there has been a deliberate non-disclosure, which follows from his Honour's findings in this case, then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.”
g. The husband, as a qualified professional, has had the benefit of being able to conduct his own case, and has largely done so.   The unchallenged evidence of the wife in the proceedings was that she had worked and financially supported the parties to allow the husband to complete his qualifications.
7. S 117(2A)(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.
a. Neither party is in receipt of legal aid assistance.
8. S 117(2A)(c)- the conduct of the parties to the proceedings in relation to the proceedings, including their conduct in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters.
a. The husband, prior to and since the commencement of the proceedings, has failed to make a full and frank disclosure of his financial circumstances. The husband’s non-disclosure includes not only multiple failures to comply with reasonable requests made by the wife’s lawyers for financial disclosure, but failures to comply with court orders and the filing of inaccurate, incomplete and misleading affidavits and financial statements during the course of proceedings. The husband’s failure in this regard continued during the course of the hearing e.g. his evidence that his annual income from work as a professional was $5,000 and his evidence that he had not received income from employment since he relocated from Darwin to Sydney.
b. Issues concerning the husband’s non-disclosure took up considerable time during the hearing. They are discussed in His Honour’s reasons for judgement. They are further dealt with in the wife’s affidavit in support of her application for costs dated 8/4/2019.
c. The husband’s ongoing failure to comply with his disclosure obligations have resulted in increased cost to the wife in that:
i. Resolution of the property proceedings before final hearing was not possible.
ii. The wife’s solicitors needed to make repeated requests to the husband for disclosure.
iii. The wife’s solicitors needed to issue subpoena to third parties to produce documents.
iv. The wife’s solicitors needed to inspect subpoenaed documents in detail.
v. The length of the final hearing increased.
d. The husband also failed to comply with orders of the Court for the preparation of his case for final hearing. This also caused increased cost to the wife in that the hearing time increased, the wife’s lawyers had to read and consider late documents, and the wife’s lawyers had to spend additional time answering the husband’s written submissions and aborted application to reopen his case.
e. The Full Court in Oriolio approved the following ‘principles’ stated by Smithers J in Briese
“The wife has sought an order that the husband pay her legal costs of the proceedings. She relies upon the husband's conduct of the litigation, which in a number of respects I have referred to in this judgment. This conduct has had the effect of very greatly increasing the costs of the wife. The husband's counsel submitted that it was a matter for the wife to pursue her rights under the Family Law Regulations and that there was no positive obligation on the husband to do more than comply strictly with the Regulations and with orders of the court. He likened his client's position in this respect to that of a defendant in a civil action.
In my opinion this submission is not correct. I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner. The Regulations, and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty. They are not intended as the outer limits of the obligation of financial disclosure, but as providing avenues towards disclosure. The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding.”
9. S 117(2A)(d)- whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court.
a. The proceedings were not necessitated by the failure of a party to the proceedings to comply with previous orders of the court, although early resolution of the property proceedings were, at the very least, inhibited by the husband’s failure to comply with previous orders made by the Court for disclosure, including the orders made in the Federal Magistrates Court (as it then was) by Judge Walker on 15/4/2014, 25/6/2014, 16/7/2014 and 12/8/2014
10. S 117(2A)(d)- whether any party to the proceedings has been wholly unsuccessful in the proceedings.
a. The husband was wholly unsuccessful in the orders he sought at the commencement of the hearing for both parenting and property issues. The wife was not.
b. The parenting orders sought by the father at the commencement of the proceedings were set out in his Outline of Case document (Father’s exhibit “A”). Those orders sought, among other things, orders that:
i. The parties have equal shared parental responsibility for [Z];
ii. That [Z] spend equal time with the Father and the Mother “on a week about basis”.
c. There was no issue between the parties that [Z] had not yet stayed overnight with the father and that [Z] was resistant to spending time with the father other than for very brief periods (the father said not more than 2 hours) and that the father generally returns [Z] to the mother before the end of the time agreed for her to stay with the father. [Ms BB’s] recommendations in the Family Report were for [Z] to continue to live with the mother and her time with the father progress to overnight time. In the circumstances the parenting orders sought by the father were doomed to fail. The father changed his position on his parenting orders substantially on the final day of the hearing. The father was unsuccessful in obtaining the significant parenting orders he sought at the commencement of the hearing.
d. The only property order sought by the husband at the commencement of the hearing was an order that he retain his superannuation. The husband’s evidence indicated that he wished to retain the [Town B] property, although the property orders sought by the husband would have had the effect of leaving the [Town B] property in the joint names of the husband and the wife. The husband was wholly unsuccessful in the property orders sought by him.
11. S 117(2A)(e)- whether either party to the proceedings has, in accordance with s 117C or otherwise, made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer.
a. Not applicable.
12. S 117(2A)(f)- such other matters as the court considers relevant.
13. While a costs order against the husband will potentially leave him with little left over from his share of the sale of the [Town B] property, it is submitted that a costs order in favour of the wife is justified as the husband’s wilful and derelict conduct in the proceedings resulting in significant additional costs to the wife together with his ongoing failure to provide financial support for [Z] thus leaving that burden solely to the wife, will result in a significant unfairness to the wife if a costs order is not made in her favour. The Court can also infer from the evidence that that husband has retained the benefit of undisclosed moneys from the inheritance he received from [Mr F], including the undisclosed account into which he transferred $70,000. [References omitted].

In addition to the points raised in those submissions, which I accept, I note the following as also being relevant to my reasoning in ordering the husband to pay the wife’s costs.
In terms of s 117(2A)(a), while I am not in a position to determine the husband’s financial circumstances, I accept that he will have some financial difficulties in meeting an order for costs. However, in Cross & Beaumont (2008) 39 Fam LR 389 at [60], the Full Court held that financial incapacity to pay a costs order is not a barrier to the making of such an order where the conduct of the party may warrant the same. In the circumstances of this case, I am satisfied that such an order should be made.
In respect to s 117(2A)(e), I note that the husband was wholly unsuccessful in his application, as set out in the wife’s submissions, to which I have referred. In that regard, I accept that the mere fact that a case is wholly unsuccessful is not a justification for ordering that a party pay the costs of the other. As Thackray J (in dissent) said in Hawkins & Roe (supra): “[E]ven a meritorious case can be “unsuccessful” when the other case is found to have greater merit”. However, it is significant that, in dismissing the husband’s application in my decision dated 12 March 2019, I found that there were a number of aspects of the husband’s evidence that lacked credibility (see paragraphs [92] to [106]). In that regard, I find that the wife was put to unnecessary expense by the husband agitating his case on the basis of false factual premises.
In considering what order to make, I have had regard to the fact that parties to proceedings before the Family Court are obligated to conduct themselves in accordance with the main purpose of the Family Law Rules 2004 (Cth) (“the Rules”), as set out at r 1.04, as follows:
The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.
Rule 1.04 is consistent with the obligation of parties and practitioners, under ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (“the Federal Court Act”). Specifically, s 37M(1) of the Federal Court Act provides:
The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
There is an obligation, under those principles, to not unreasonably fail to accept an offer to resolve a matter in dispute. This is made clear by Greenwood J in Julstar Pty Ltd v Hart Trading Pty Ltd [2014] FCA 108, where his Honour said, at [94], that this requires a party to “carefully assess all the material … to determine and confront the strengths and weaknesses of their case”.
As stated by Jagot J in Sklavos v Australasian College of Dermatologists [2013] FCA 1065 at [35]:
These provisions are not merely exhortatory. The duty is real and can be enforced, if necessary, by appropriate costs orders.
In this matter, I am satisfied that the husband, who is a professional, conducted the proceedings in a manner which caused the wife to incur unnecessary expense and to suffer unnecessary emotional trauma. I am further satisfied that the husband conducted himself in that manner in circumstances where the wife, at all times, acted in good faith in her dealings with him, the Court and, most significantly, in what she perceived to be the best interests of the child. This included genuine steps to ensure that the child retain her connection to her paternal family her Aboriginal culture.
In that regard, I find that the husband’s pursuit of the parenting aspect of these proceedings was totally unnecessary. Despite the fact that there have been no parenting orders in place since 2016, the wife has, at all times, been cooperative and encouraging of the child retaining her relationship with the husband, despite the fact that the father has, since the parties’ separation, drifted in and out of the child’s life.
Further, for reasons set out in my decision dated 12 March 2019, I totally rejected the husband’s assertion is that the wife had failed to ensure that the child retains her connection to her paternal family and her Aboriginal culture. In that respect, I noted that the wife was subject to unjustified criticism in respect to enrolling the child in the Aboriginal Playground program and attempting to assist the child to learn the indigenous language and to gain greater familiarity with her cultural heritage by acquiring appropriate literature and audiotapes. Similarly, the proceedings were unnecessary to facilitate the child attending a “smoking ceremony”, the significance of which I refer to in my decision dated 12 March 2019. To the contrary, the wife, at all times, indicated a preparedness to facilitate that occurring and, on a number of occasions, made constructive suggestions to the husband as to how that could occur.
It is unnecessary for me to make a determination in respect to the husband’s motives for conducting the case in the manner in which he did. However, I am satisfied that he, as a professional, failed to carefully assess the material upon which his contentions were based and, at least until the final day of the hearing, failed to confront the strengths and weaknesses of his case. The husband is entitled to some credit for the fact that, on the final day of hearing, he substantially accepted the contentions of the Independent Children’s Lawyer and the wife in respect to appropriate parenting orders. However, by that stage, the wife had already incurred unnecessary expense.
In that respect, in Sfakianakis & Sfakianakis [2019] FamCAFC 54, the Full Court, relevantly, held as follows:
19. In respect of such contentions, the respondent unsurprisingly submitted:
The arguments raised by the appellant were contrary to authority, contrary to the position adopted below and contrary to the scheme of the Family Law Act. The respondent wife was required to meet these arguments despite their obvious flaws. In doing so the wife was required to incur costs which were not reasonably necessary to have incurred [sic]…
20. Her retort was correct and commendably restrained.
21. Second, the appellant recklessly made false submissions in his original Summary of Argument, which the respondent needed to be prepared to meet. …
27. Understandably, time and money were wasted grappling with such false and misconceived submissions. …
30. We consider that both these considerations apply to the abandoned grounds of appeal and much of the Summary of Argument. The respondent was required to deal with and respond to all the matters raised in the Notice of Appeal, even though the allegations were outlandish, indefensible, reckless and doomed to fail, no doubt at considerable expense to her. Such a description clearly identifies this as an exceptional case in which more than party and party costs should be paid. The circumstances of this case justify a special costs order.
In applying that reasoning, I am satisfied that the circumstances of this case similarly justify a special costs order.
Having regard to the matters raised in the submissions of Counsel for the wife and the matters I have set out in the paragraphs immediately above, I am satisfied that the wife has established a proper basis for an award of costs in her favour, pursuant to s 117 of the Act. The question, therefore, becomes the form of that order, in particular, whether the costs should be paid in a lump sum, as sought by the wife.

Lump sum costs

Rule 19.18 of the Rules provides for the methods of calculating costs. These include, in r 19.18(1)(a), the Court fixing upon a specific amount for costs or, in r 19.18(1)(b), an order for the costs to be assessed on a particular basis: Stoian & Fiening (Costs) [2014] FamCA 944 at [82].
In Stoian & Flemming (Costs) (supra) at [91], Kent J endorsed the principles relevant to the application of s 98(4)(c) of the Civil Procedure Act 2005 (NSW), as adumbrated by Einstein J in Idoport Pty Ltd v National Australia Bank Limited & Ors [2007] NSWSC 23, stating it was “similar” to r 19.18. Those principles are:
i. the purpose of the rule is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation;
ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable;
iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available;
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place;
v. the gross sum “can only be fixed broadly having regard to the information before the Court” … [References omitted].
In Parke & the Estate of the Late A Parke (2016) FLC 93-748 at 81,944, Murphy J, after referring to a number of authorities, held that:
If the court is to fix a sum [in respect to cost] it should be “fixed broadly having regard to the information before the court” and, in that respect, the process does not “by its very nature – and usage that a process similar to that involved in a traditional taxation or assessment of costs should take place.
In that regard, r 19.18(3) provides that “in making an order under subrule (1) the court may consider a number of factors” including in r 19.18(3)(b), “the reasonableness of each party’s behaviour in the case”.
For the reasons that I have set out, I am satisfied that the husband’s conduct in respect to this litigation was unreasonable. It has resulted in the wife being subjected to years of litigation, at considerable financial expense and emotional distress. I respectfully agree with Counsel for the wife that, while the case may not meet the threshold for an order for indemnity costs, the Court is certainly justified in making an order for lump sum costs. That is because, in the circumstances I have outlined, I am satisfied that the wife would be put to further expense, delay and distress in preparing, and having assessed, an itemised bill of costs.
In so finding, I note that the costs incurred by the wife have been particularised in printouts of electronic records included in the exhibits to her Affidavit. In other words, the amount of costs sought by the wife are not fanciful and are based on detailed records of work that has been undertaken by both her solicitors and Counsel. In those circumstances, I accept that the wife has incurred a total cost of $227,264.79 in these proceedings. The wife has previously been successful in obtaining costs orders totalling $33,705.60, and so, remains “out of pocket” to the extent of $193,559.19.
While Counsel for the wife noted that it is not possible to determine the husband’s current financial circumstances, in my decision dated 12 March 2019, I noted that, from the sale proceeds of the parties’ property at Town B in the Northern Territory, it is likely that the husband will receive approximately $22,500. That figure, however, is based on an outdated valuation, as the husband did not respond to requests made by the wife for an updated valuation of the property. The quantification of the sale proceeds received by the husband will also be impacted by whether or not he successfully contests a debt to Public Utility, which I determined should be paid from the sale proceeds, prior to the husband receiving his distribution.
Counsel for the wife noted that it is commonly inferred by Courts that the party/party component of costs will be approximately two thirds of costs actually incurred by that party. However, in circumstances where the husband will receive a substantially smaller percentage of the net proceeds of the sale of the Town B property, as compared to the wife, it was submitted that the Court may consider it appropriate to order the husband to pay a sum between one third and 50 per cent of the costs actually incurred by the wife, above and beyond those which the husband has already been ordered to pay.
I note that s 117(2) of the Act provides that, in circumstances where I have determined that the making of an order for costs as against the husband is justified, the Court may “subject to sections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs… as the court considers just”. Having regard to the matters I have set out, I am satisfied that it is just to require the husband to pay 50 per cent of the wife’s outstanding costs, which calculates to a rounded up figure of $96,780.

Orders

Accordingly, I will order that the husband pay the wife’s costs of $96,780, as a lump sum, within 30 days.
In circumstances where the husband has a history of ignoring his financial obligations to the wife and the child, including by way of paying child support and failing to satisfy the previous costs orders made against him, I will also include an order to the effect of order 2, as set out in the wife’s Application in a Case filed on 17 April 2019.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 10 May 2019.

Associate:

Date: 10 May 2019