Bele & Vaughan (Costs)
[2012] FamCAFC 198
•4 December 2012
FAMILY COURT OF AUSTRALIA
| BELE & VAUGHAN (COSTS) | [2012] FamCAFC 198 |
| FAMILY LAW – APPEAL – APPLICATION IN AN APPEAL – COSTS – INDEMNITY COSTS – where the respondent seeks that the applicant pay his costs of and incidental to the proceedings on an indemnity basis – where the conduct of the applicant and the fact that she was wholly unsuccessful in the proceedings provide circumstances that justify an order for costs being made – where the respondent has demonstrated the presence of exceptional circumstances to warrant a departure from the ordinary rules as to costs – where the respondent should not have to bear any of the legal costs incurred by him in responding to the mala fide actions of the applicant – where the clear intention of the applicant was to obstruct and thwart the execution of the consent orders made on 13 December 2011 – costs order made as sought by the respondent. |
| Family Law Act 1975 (Cth) s 117 Family Law Rules (2004) (Cth) r 19.08(3) and Schedule 3 |
| Colgate-Palmolive Co & Another v Cussons Pty Ltd (1993) 118 ALR 248. Munday v Bowman (1997) FLC 92-784 |
| APPLICANT: | Ms Bele |
| RESPONDENT: | Mr Vaughan |
| FILE NUMBER: | MLC | 9056 | of | 2009 |
| APPEAL NUMBERS: | SOA | 45 | of | 2011 |
| SOA | 46 | of | 2012 |
| DATE DELIVERED: | 4 December 2012 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Melbourne and Adelaide via video-link |
| JUDGMENT OF: | Strickland J |
| HEARING DATES: | By way of written submissions |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 9 June 2011 |
| LOWER COURT MNC: | [2011] FamCA 436 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT CONSENT ORDER DATE: | 13 December 2011 |
| LOWER COURT MNC: | N/A |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Y (solicitor) - 13 July 2012 |
| Applicant appeared in person - 19 July 2012 |
| SOLICITOR FOR THE APPLICANT: | Y Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Harriss (solicitor) |
| SOLICITOR FOR THE RESPONDENT: | Mills Oakley Lawyers |
Orders
The application of the applicant for costs be dismissed.
The applicant pay the respondent’s costs of and incidental to the application in an appeal filed by the applicant on 13 June 2012 and the response of the respondent filed on 6 July 2012 calculated on an indemnity basis from the date of filing of the application in an appeal until judgment (but including the costs incurred in preparing written submissions as to costs).
In default of agreement as to the costs payable by the applicant to the respondent pursuant to these orders, such costs be as assessed on an indemnity basis.
The costs payable by the applicant to the respondent pursuant to these orders be paid from the applicant’s share of the net proceeds of sale of the real property at No 9, sold pursuant to the consent orders made by the Honourable Justice
Le Poer Trench on 13 December 2011.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bele & Vaughan has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE AND ADELAIDE |
Appeal Numbers: SOA 45 of 2011 and SOA 46 of 2012
File Number: MLC 9056 of 2009
| Ms Bele |
Applicant
And
| Mr Vaughan |
Respondent
REASONS FOR JUDGMENT
Introduction
On 21 August 2012 I delivered my reasons for judgment and made orders in relation to the application in an appeal filed by the applicant on 13 June 2012.
As to the issue of costs of and incidental to that application I made the following orders:
(3)The parties are at liberty to file written submissions with regard to the question of costs in accordance with the following timetable:
(a)On behalf of the respondent within twenty-one (21) days hereof;
(b)On behalf of the applicant in response thereto within twenty-one (21) days thereafter;
(c)On behalf of the respondent in reply thereto within fourteen (14) days thereafter.
(4)Each submission as to costs have endorsed on the cover sheet the date on which a copy of that submission was served on the other party.
On 11 September 2012 the respondent filed written submissions in support of the orders sought by him in relation to costs. The orders that he seeks are as follows:
(a)That the Applicant pay the Respondent’s costs of and incidental to the appeal proceedings (including the Application in an Appeal filed by the Applicant on 13 June 2012 and the Response of the Respondent filed on 6 July 2012), on an indemnity basis from the date of issuing of the Applicant’s application filed 13 June 2012 until judgment (but including the costs incurred in preparing submissions).
(b)That in default of agreement as to the costs payable by the Applicant to the Respondent pursuant to these orders, such costs be taxed and assessed by a Registrar of the Melbourne Registry of this Court on the basis of the respondent being entitled to costs as regulated by the costs agreement between he and Mills Oakley Lawyers rather than the schedule to the Family Law Rules 2004.
(c)That the costs payable by the Applicant to the Respondent pursuant to these orders be paid from the Applicant’s share of the net proceeds of sale of the real property at [No 9], sold pursuant to Orders of the Honourable Justice Le Poer Trench on 13 December 2011.
On 2 October 2012 the applicant filed her written submissions in response comprising 52 pages with a further 26 pages of annexures. Unfortunately, it is readily apparent that these submissions were prepared by Mr A as was almost all of the material presented and sought to be presented to this court on behalf of the applicant in the substantive proceedings.
In paragraph 11 of my reasons for judgment I described this material as invariably comprising “meaningless and incoherent drivel”, and that description, together with the adjective “unintelligible” can also be applied to the submissions filed on 2 October 2012. They repeatedly seek to go behind the reasons for judgment and to re-agitate issues and arguments that have been finally dealt with in those reasons.
Bearing in mind first the nature of the application that I dealt with in my reasons for judgment, secondly that there has been no appeal or application for special leave to appeal from the orders that I made on 21 August 2012, and thirdly that what is before me is an application for costs of and incidental to the said application, I set out in full the three pages of orders sought by the applicant in her submissions to demonstrate the validity of my description of those submissions:
Orders sought by the Applicant
163.That Respondent to pay all the costs of the Applicant and to refund the costs orders already ordered against the Applicant as the Respondent did not act in accordance with the affected orders of
13 December 2012.164.That this court provide a supplementary reason of judgment, to address issues the Applicant has set out in this submission and its annexures, to address any incorrect statements in the reason of judgments dated 19 July 2012 and/or 21 August 2012 by His Honour Strickland J.
165.That the orders of His Honour Strickland J of 19 July 2012 and
21 August 2012 be set aside.166.The cost agreement of the Respondent has a provision that the Respondent can dispute the charges before VCAT. Whereas the Applicant when ordered to pay costs charged by the Respondent’s legal representatives, is not afforded the same rights to challenge the costs. She is faced with charges to which she does not know how they relate to any of the proceedings. For example, the cost charged for the 91 page Affidavit filed by Mr Damian Harriss filed on
21 March 2012 which was used in the proceedings before
His Honour Cronin J on 26 March 2012 to claim costs. Damian Harriss did not serve this affidavit on the Applicant’s (sic) or her legal representatives. Therefore a list should be provided to the Applicant of all cost charges that Mills Oakley Lawyers so far have charged to the Respondent and proof of payment by the Respondent.167.It appears that the Respondent was obtaining transcripts whilst Mills Oakley Lawyers claimed they represented the Applicant. Thus the Applicant seeks an order for Respondent or Mills Oakley Lawyers to provide these transcripts to the Applicant.
168.The Applicant’s Application for a STATUS QUO was at all times a proper Application as the Applicant from the outset maintained her OBJECTION TO JURISDICTION. His Honour Cronin J from outset failed to deal with the objection to jurisdiction, as per rule 9.03 of the Family Law Rules 2004. It is not a matter of the court just assuming jurisdiction. It is matter for the court to determine if there is any valid jurisdiction to begin with. It was for the Respondent (then Applicant) to prove the validity of the legislation to be applied within s40(2) of the Family Law Act 1975. Until, the court does hear this OBJECTION TO JURISDICITON the Court can only make limited orders as to maintain the STATUS QUO, including any orders for cost. Thus, the Applicant seeks the court to provide stay orders as sought by the Applicant in these submissions.
169.All previous orders in this matter are set aside unde (sic) 90SN due to misleading and possibly fraudulent conduct of the Respondent and Mills Oakley Lawyers in conducting a sale of a property when they did act lawfully and/or in accordance with the affected orders of 13 December 2012.
170.That this Honourable Court requests the Applicant is to provide the Respondent with costs she has incurred for litigation subsequent to the Orders of His Honour Le Pour (sic) Trench J. If the Respondent fails to come to an agreement with the Applicant to settling this cost claim, the Registrar of this court is to assess the cost claim and to provide such cost compensation to the Applicant as the Registrar deems appropriate. This is to ensure that the Applicant is not out of pocket for her legal representation and other out of pocket expenses, including but not limited to her travel and accommodation costs to attend the hearings in Australia.
171.Having regard to the matters set out by the Applicant in these submissions and annexures;
(a)The Respondent files with the Court and serves upon the Applicant (preferably in CD/DVD format), within 4 weeks of the date of these orders,
1) A set out of all cost charges (Bill of Cost).
2)Any monies the respondent has had refunded by Mills Oakley Lawyers.
3)This includes all details regarding Family Court of Australia litigation as well as before VCAT.
4)All communication between the respondent, his lawyers and purchasers, the titles office and the real estate agents.
(b)The Applicant within 6 weeks of the date of having been served such a set out referred to in (b)
1)File (preferably in CD/DVD format) with the court a response as to all and any charges.
2)As well as file and serve at the same time, her set out of all and any legal charges she incurred from commencement of engaging legal representation in the litigation in the Family Court of Australia.
(c)The Registrar of this Court list the matter for hearing no earlier than 20 weeks after the date of these orders for a Judge of this court to consider the material filed and any relevant applications either party may have filed. Such applications shall be filed and serve (sic) no later than
19 weeks of the date of these orders and may be filed and served electronically.(d)Where either or both parties prefer to file details other than in CD/DVD format being it in hard copy then this is permitted.
172.The Respondent shall file with this court and serve upon the Applicant within 6 weeks of the date of this order a proper detailed set out as to why the Respondent failed to comply with the terms of the Orders of His Honour Le Pour (sic) Trench J of 13 December 2011. Where the Respondent has evidence the Applicant failed or was deemed to be a “defaulting party” to sign such document/instrument, then the Respondent sets out in details (sic) what the respondent pursued for the registrar to sign on behalf of the Applicant. Where the Respondent did obtain authority by way of the Applicant or the Registrar to sell in trust the said property, the Respondent then also sets out which documents were signed, including any contract of Sale, Notice to Vacate, Exclusive auction authority, S32 Statement or other relevant document as trustee for the Applicant.
173.The Respondent’s legal representatives Mills Oakley Lawyers shall file with this court and serve upon the Applicant why they listed themselves as representing the Applicant and continued to do so despite the Applicant (sic) written objections. This is to include the legal basis upon which Mills Oakley Lawyers claimed they were the Applicant’s legal representatives.
174.The Respondent’s legal representative shall place all and any monies received from the settlement, other than what was paid out to the Real Estate Agent or other authorities such as to rates, insurance and water authorities with the Law Institute of Victoria in a trust account. The Law Institute of Victoria shall hold such monies in trust until further order of this court. In the alternative the monies can be placed in a trust fund mutually appointed by the Applicant and Respondent, but such trust shall not be permitted to disperse of any funds without an order of this court.
175.Each party shall file within 6 weeks of the date of these orders and serve upon each other, a Statement of Financial Circumstances setting out their financial positions as of 25 August 2012. Such Statement of Financial Circumstances to include any outstanding legal cost to be paid with evidence of such charges and to be paid with evidence of such charges.
176.The Respondent shall file and serve within 6 weeks of the date of these orders a set out of all and any rent he received from his
[K] property supported by rental receipts, taxation records and receipt’s (sic), as well as other incoming and outgoing expenses. The Respondent shall file and serve with this details as to how the Respondent’s income was contributing to the de facto relationship in a State in Australia. This is to include the details of his wages or other payments he received during that time both in [a European country] and/or in the Commonwealth of Australia, including any tax refunds, also all and any bank records, credit union or other financial institution in [a European country] and/or in the Commonwealth of Australia which he claims were contributions he made in a State in Australia.
(original emphasis)
Plainly, none of these orders can be made, and in relation to the order for costs that the applicant seeks in paragraph 163, given my reasons for judgment there is no basis whatsoever, and there could never have been any basis whatsoever, to make such an order in favour of the applicant. I propose to dismiss her application for costs.
The submissions of the applicant are a waste of time and space, yet it has been necessary for this court, and the respondent and his legal advisers to read them, and that has inevitably increased the legal costs incurred by the respondent in this case.
The relevant statute law
The principles which govern an application for costs in proceedings under the Family Law Act 1975 (Cth) (“the Act”) are set out in s 117 of the Act. The relevant subsections provide 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.
Thus the general rule is that each party should bear his or her own costs of proceedings under the Act. However, the court is empowered to make an order for costs if it is of the opinion that there are circumstances which would justify such an order, and s 117(2A) sets out the range of matters to which the court should have regard in considering whether to make an order for costs, and, if so, how much that order should be.
Turning then to the relevant factors set out in s 117(2A).
(a) The financial circumstances of the parties
Neither party chose to place before the court current information as to their respective financial circumstances. The respondent relies on the fact that there is available to the parties pursuant to the consent orders made by Le Poer Trench J on 13 December 2011 $1,760,000 from the sale of the No 9 property. In accordance with his Honour’s orders those net proceeds of sale, after meeting the costs of sale, are to be divided 46.75 percent to the respondent and the balance to the applicant with the applicant to pay $100,000 from her share to the respondent.
Thus, plainly there are sufficient funds available to meet any order for costs that may be made against the applicant. The applicant does not dispute this, but suggests that she has “negative equity in a European country” having gone into “substantial debt to pay legal fees”. However, no detail is provided of the alleged “negative equity”, or of the “substantial debt”.
In these circumstances I proceed on the basis that the respective financial circumstances of the parties do not militate against an order for costs being made.
(b) Legal aid
Neither party has received legal aid.
(c), (d) & (g) The conduct of the parties to the proceedings, Compliance with previous orders of the court, and Other matters
The respondent seeks to rely on the conduct of the applicant stretching back to the filing by her on 7 July 2011 of an unmeritorious appeal against the orders made by Cronin J on 9 June 2011.
That conduct is amply described in my reasons for judgment, and I do not propose to repeat all that I said. I observe though that in relation to the initiating application and the application in a case filed by the applicant on
20 March 2012, they were heard and determined by Cronin J on 26 March 2012, and his Honour made orders for costs in favour of the respondent. Obviously then, the applicant’s conduct in bringing those applications cannot be the subject of this application, but it can still be relevant background.
In summary, the conduct of the applicant that I detailed in my reasons for judgment includes the following:
a)The filing by the applicant of an unmeritorious appeal on 7 July 2011 against the orders made by Cronin J on 6 June 2011 and the failure to comply with the orders of the court as to the filing of appeal books leading to the deemed abandonment of the appeal.
b)The failure by the applicant to provide any relevant evidence explaining her failure to comply with the order for the filing of the appeal books in support of the application for reinstatement.
c)The failure by the applicant to execute the consent orders made by
Le Poer Trench J on 13 December 2011 including her refusal to sign any document in relation to the sale of the property at No 9 and her failure to produce the duplicate certificate of title to enable settlement to take place.
d)The unexplained failure of the applicant to file a Notice of Appeal against the orders of Le Poer Trench J within time and to file an application seeking an extension of time expeditiously.
e)The filing on 20 March 2012 of an initiating application which effectively only sought interim orders, and which raised an unintelligible objection to the jurisdiction of the court. This application was then withdrawn at the hearing on 26 March 2012.
f)The filing on 20 March 2012 of an application in a case in respect of which the orders sought were set out in an accompanying document headed “Address to the Court”, and which orders were nonsensical.
g)The finding in paragraph 76 of my reasons for judgment that the arguments put by Mr Y and fuelled by Mr A were nothing more than “an esoteric legal frolic … as part of a concerted effort on behalf of the applicant to prevent the sale of the property at [No 9] being completed pursuant to the consent orders of Le Poer Trench J made on
13 December 2011”. That included the attendance by Mr A at the auction on 24 March 2012 and his attempts to thwart that auction, the “mischievous and misleading” correspondence to the Registrar of Titles, the intimidation of the purchasers of the property at No 9, the attempt to lodge an ill-founded caveat on the title to that property, and the incitement of the tenants to resist vacating that property.
h)The nonsensical basis on which the applicant sought to file a Notice of Appeal in May 2012 against the orders made by Cronin J on 7 July 2012 and Le Poer Trench J on 13 December 2011.
i)The failure to present meritorious grounds of appeal in the Notice of Appeal that was sought to be relied on in the event of the reinstatement application succeeding.
j)The failure by the applicant to comply with the orders of Cronin J of
25 June 2011 for the production of the duplicate certificate of title.
k)The filing of “meaningless and incoherent drivel” prepared for the applicant by Mr A.
l)The farcical submissions and presentation of the applicant’s solicitor,
Mr Y, on 13 July 2012, and the transparent and contrived actions of
Mr A towards the end of that hearing on that day in order to obstruct and delay the finalisation of the hearing.
m)The incomprehensible nature of the order sought in paragraph 4 of the application before me and which, once explained, was nothing more than a re-agitation of previous unsuccessful applications for a stay.
n)The time taken to hear and determine the ill-founded oral application made by the applicant on 19 July 2012 for Mr A to represent her in the proceedings.
o)The applicant’s lack of credit and the finding that she lied to this court in her affidavit material.
p)The finding of a lack of bona fides in pursing the appeal and the application.
It is readily apparent that this conduct has led to and required the respondent to incur unnecessary costs in addressing and responding to the actions of the applicant and in attempting to carry out the consent orders made by Le Poer Trench J on 13 December 2011.
That conduct permeates the filing and pursuing of the application in an appeal that was before this court, and thus is highly relevant to the application for costs that is now before this court.
(e) Wholly unsuccessful in the proceedings
The applicant has been wholly unsuccessful in the proceedings, and significantly, it would have been readily apparent to the applicant, to Mr Y and to Mr A that the application was never going to succeed. However, as I found, bringing the proceedings was an integral part of an elaborate ruse, and was a contrivance to thwart the completion of the sale of the property at No 9.
I observe that the respondent has sought to rely on an extract from the transcript of the hearing before Cronin J on 20 July 2012, the day immediately following the completion of the hearing before me, wherein the applicant proposed to his Honour that she withdraw all applications and appeals. That is said to be relevant conduct to be taken into account here. However, I consider that the relevance of that extract is too remote for me to take it into account in these proceedings, and accordingly there is no basis for me to receive that transcript.
Further, the respondent referred me to a letter dated 6 June 2012 sent by the solicitors for the respondent to Mr Y indicating that if the applicant pursued any further proceedings the respondent would seek costs on an indemnity basis. Certainly that put the applicant on notice that that application would be made, but I fail to see how that is a matter that can be taken into account under
s 117(2A).
Conclusion
It is beyond doubt that the conduct of the applicant and the fact that she was wholly unsuccessful provide circumstances that justify an order for costs being made.
I now turn to that aspect of the respondent’s application which effectively sought that any order for costs be on an indemnity basis, i.e., in accordance with the actual costs incurred by the respondent pursuant to the costs agreement between the respondent and his legal representatives, a copy of which agreement has been placed before the court in compliance with r 19.08(3) of the Family Law Rules 2004 (“the Rules”).
A useful recent discussion of the question of indemnity costs is to be found in the decision of the Full Court in D & D (Costs) (No 2) (2010) FLC 93-435. There the Full Court reviewed extensively earlier authorities including Limousin v Limousin (Costs) (2008) 38 Fam LR 478 and Kohan and Kohan (1993) FLC 92-340, and also Sheppard J’s decision in Colgate-Palmolive Co & Another v Cussons Pty Ltd (1993) 118 ALR 248.
The ordinary rule is that an order for costs is calculated on a party/party basis, and it emerges from the authorities referred to above that to depart from that rule exceptional circumstances need to be demonstrated.
As to what might constitute an exceptional circumstance, reference can be made to the oft-cited decision of Sheppard J in Colgate-Palmolive Co & Another v Cussons Pty Ltd where his Honour detailed circumstances that might qualify. Usefully, Holden J in Munday v Bowman (1997) FLC 92-784 at 84,660 drew from the decision of Sheppard J the following examples:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts (see Fountain Selected Meats (Sales) Pty. Ltd. v. International Produce Merchants Pty. Ltd. [1988] 81 ALR 397).
(b)Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud (see Fountain Selected Meats (Sales) Pty. Ltd. (supra)).
(c)Evidence of particular misconduct causing loss of time to the court and to other parties (see Tetijo Holdings Pty. Ltd. v. Keeprite Australia Pty. Ltd (unreported, Federal Court, 3 May 1991)).
(d)The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (see Ragatta Developments Pty. Ltd. v. Westpac Banking Corporation (unreported, Federal Court, 5 March 1993)).
(e)An imprudent refusal of an offer to compromise.
Here, it is readily apparent that the facts and circumstances of this case fit within these examples, and particularly (a), (c), and (d). The conduct of the applicant as a litigant points inexorably to this conclusion.
Accordingly, I have no difficulty in finding that the respondent has demonstrated the presence of exceptional circumstances to warrant a departure from the ordinary rules as to costs.
However, that is not the end of the matter. Costs are always in the discretion of the court and the existence of exceptional circumstances as described above does not oblige the court to make an order for indemnity costs. The relevant factors in the exercise of that discretion are again the matters arising under
s 117(2A) of the Act as well as the terms of any costs agreement between the party seeking the order and his or her legal representatives (Kohan and Kohan at 79,611).
Here, although the costs agreement provides for an hourly rate which is significantly higher than that provided for in Schedule 3 to the Rules, I am not persuaded that that fact alone militates against the making of the order for indemnity costs when weighed with all of the other relevant factors, including in particular the appalling conduct of the applicant described above.
The plain fact of the matter is that the respondent should not have to bear any of the legal costs incurred by him in responding to the mala fide actions of the applicant in both instituting and pursuing these proceedings. The clear intention was to obstruct and thwart the execution of the consent orders made by Le Poer Trench J on 13 December 2011.
As to the order sought that payment of any costs order be made from the applicant’s share of the net proceeds of sale of the No 9 property, I consider that to be an appropriate order in this case. It is unchallenged that the applicant has not paid the order for costs made by Cronin J on 26 March 2012. Further, she resides in a European country and to make the orders sought would be an effective way of having the costs paid.
I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on
4 December 2012.
Associate:
Date: 4 December 2012
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