Benanti & Benanti
[2023] FedCFamC1F 474
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Benanti & Benanti [2023] FedCFamC1F 474
File number(s): SYC 8093 of 2022 Judgment of: SCHONELL J Date of judgment: 9 June 2023 Catchwords: FAMILY LAW – COSTS – Where the putative second respondent sought a costs order after the wife’s withdrawal of proceedings against him – Consideration of factors in s 117(2A) of the Family Law Act 1975 (Cth) – Where an offer of settlement had been made – Costs ordered as agreed or assessed. Legislation: Family Law Act 1975 (Cth) ss 106B, 117 Division: Division 1 First Instance Number of paragraphs: 31 Date of hearing: 9 June 2023 Place: Sydney Counsel for the Applicant: Ms Hamilton Solicitor for the Applicant: Fox & Staniland Lawyers Counsel for the Respondent: Ms Dart Solicitor for the Respondent: Enza Ruscica Solicitors Counsel for the Putative Second Respondent: Mr Cummings SC Solicitor for the Putative Second Respondent: Tonkin Drysdale Partners ORDERS
SYC 8093 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BENANTI
Applicant
AND: MR BENANTI
Respondent
MR B BENANTI
Putative Second Respondent
order made by:
SCHONELL J
DATE OF ORDER:
9 JUNE 2023
THE COURT ORDERS THAT:
1.The applicant wife pay the costs of the putative second respondent as and from the date of filing of the Application in a Proceeding on 10 March 2023, with such costs to be as agreed or assessed.
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 Benanti & Benanti has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
SCHONELL J:
By Application in a Proceeding filed 10 March 2023 and subsequently amended by an Amended Application in a Proceeding filed 21 April 2023, the applicant wife (“the wife”) sought to join as a party to proceedings between the respondent husband (“the husband”) and wife, the husband’s son of a prior relationship as the putative second respondent.
In support of that application, various orders and directions have been made by the Court including orders made by Wilson J on 11 May 2023, directing the filing of Defences to a Points of Claim filed by the wife on 26 April 2023.
The application for joinder together with various other applications in the alternative pursuant to s 106B of the Family Law Act 1975 (Cth) (“the Act”), injunctions and orders for valuation were listed for hearing today.
During the course of the hearing of that application, various discussions took place between bench and bar in relation to aspects of the application that the wife prosecuted and ultimately agreement was reached between the husband and the wife in relation to a form of order that would deal with injunctions sought by the wife as well as the issues of valuation.
There remained for determination by the Court the application for joinder and also applications for various injunctions.
I was informed by counsel for the applicant shortly before lunch that she was in some discussions with counsel for the putative second respondent and was also in the process of seeking instructions from her client.
At about 2.30 pm, I was informed that the wife no longer sought to prosecute her application in so far as it related to the putative second respondent.
Mr Cummings SC who appears on behalf of the putative second respondent seeks an order for costs. He draws the Court’s attention to a number of factors including a letter dated 17 April 2023 from the wife’s solicitors indicating that they no longer sought to join Mr Cummings’ client to the proceedings together with a letter dated 21 April 2023 where there seems to have been a change of heart on the part of those whom the wife instructs and consequently the Amended Application was sought against the putative second respondent.
In the affidavit for the putative second respondent, he says this:
9. Neither [the wife] nor either of her solicitors have approached me, either before or after she filed her Application in an Proceeding on 14 March 2023, seeking that in my capacity as director of [C Pty Ltd], I consent to and cooperate with valuation exercises as are required in order for [the husband] and [the wife] to conduct their family law proceedings. Had [the wife] or her solicitors made that approach to me, I would have given such consent and for the avoidance of doubt, I say I will promptly, properly and fully cooperate with that process without the need for a Court Order binding me to do so.
…
11. I have no intention of altering the directorship of [C Pty Ltd] and [the husband] has not expressed to me any desire to do so. Neither [the wife] nor either of her solicitors have approached me, either before or after she filed her Application in a Proceeding on 14 March 2023, seeking that I agree, or formally undertake to the Court, to give no less than 28 days advance written notice to [the wife] of my intention to alter the current directorship of [C Pty Ltd]. I would have given such undertaking if asked and for the avoidance of doubt, I say I remain willing to do so.
…
21. [O Pty Ltd] has acted as trustee of the Trust since it was established, and performed no function other than to act as the corporate Trustee. It does not own any assets or trade in its own right.
…
26.[The wife] has offered no undertaking as to damages. [The wife] is seeking orders that are likely to adversely impact upon the business and operations of the Trust. The orders sought by [the wife] will impair the Trust’s capacity to raise finance, invest in assets, including by sale or raising finance, and engage in other business activity. With respect to:
a. [C Pty Ltd] and [O Pty Ltd], [the wife] is seeking reinstatement of [the husband] as sole director. [The husband] is not competent to resume formal control of multimillion-dollar businesses, and while I expect he would follow my instruction if that reinstatement were to happen it still is not proper. [The husband] is also seeking orders that will prevent me from altering that situation for the Trust, by restraining me from exercising my powers under the Trust Deed;
b.the business activity of the Trust:
i. the Trustee on behalf of the Trust has paid a deposit and exchanged contracts to purchase [1 D Street], [E Town] (the property next to other property of the Trust, at [2 D Street], [E Town]). The Trustee will need to complete that purchase on behalf of the Trust.
ii. the Trustee on behalf of the trust has a Development Application before [F Council] to build […] at the rear of property of the Trust at [G Street], [H Town]. The Development Application will need to be properly prosecuted and if successful, the Trust will wish to move on the approval.
iii. the Trustee on behalf of the Trust is in the process of developing [J Street], [K Town] by building [a mixed use site].
iv. the Trustee on behalf of the Trust is upgrading the [capacity] at [2 D Street], [E Town] by pending application to the NSW Government and will move on an approval, if granted, such that my trading company for which I am sole director and shareholder, [L Pty Ltd] ([…]), will expand its operations at that site.
v. I am contemplating causing the Trustee of the Trust to pursue [a] development of Trust property at [M Street], [N Town].
vi. [P Pty Ltd] trades from [J Street], [K Town] and [2 D Street], [E Town]. [L Pty Ltd] trades from [2 D Street], [E Town].
(Affidavit of putative second respondent filed 22 May 2023)
The wife’s application for joinder faced a number of significant hurdles, particularly in circumstances where the wife’s affidavit was completely absent any evidence to support the contention that the trust, which the putative second respondent contended he controlled by virtue of the power of appointment, had any connection to the matrimonial property of the parties other than by virtue of the fact that at a particular point in time the husband had been the director and shareholder of the trustee company.
In that respect, the wife adduced no evidence of any contribution having been made by the husband to the assets of the trust, any contribution made by her, and/or any discussion with the husband about the assets of the trust. There was indeed a complete absence of any evidence.
Likewise, there was a complete absence of any evidence of any intent on the part of the putative second respondent to deal with the matrimonial assets. In that respect, in her affidavit, the wife said the following:
17. I am concerned that [the husband] and [prospective second respondent] are attempting to hide a large portion of the matrimonial asset pool. [O Pty Ltd] has five properties, and I am unsure of what other assets are held by [O Pty Ltd] and/or the [Benanti Family Trust].
(Affidavit of wife filed 10 March 2023)
Beyond the bald assertion, there is not a scintilla of evidence to support the proposition that the husband and the putative second respondent were attempting to hide matrimonial assets.
The putative second respondent seeks an order for indemnity costs. Those costs are assessed in the sum of $119,152.
It has been said that to warrant the making of an indemnity costs there needs to be something of an exceptional nature that would engage a departure from the usual rule either in the common law jurisdiction that costs follow the event or alternatively in this Court where each party should pay their own costs.
I am not satisfied notwithstanding that the wife has withdrawn her application that the circumstances are of such an exceptional nature that would warrant the awarding of indemnity costs. In addition, I am not satisfied that the costs as sought are in any way reasonable. In that respect, I have regard to some of the documents that were tendered in support of the application.
An application for costs is governed by the provisions of s 117 of the Act, which provides as a general rule that each party should bear their own costs.
Section 117(2) reposes in the Court a discretion to make a costs order in circumstances where the Court determines there are circumstances that justify it doing so.
It is well settled law that no one factor under s 117(2A) is determinative and the Court may give such weight as to such matters as it considers relevant.
(a) the financial circumstances of each party to the proceedings
Having regard to the financial circumstances of each of the parties to the proceedings, it is clear that the parties’ financial position is at this particular juncture unclear in circumstances whereby proceedings have only just commenced.
I am informed by senior counsel for the putative second respondent that the parties contend that the pool is somewhere between either $25,000,000 or $150,000,000.
Senior counsel for the putative second respondent also identified that the wife’s Financial Statement filed 15 November 2022 identified that she had the sum of $150,000 in the bank. I would be surprised if that money remains static at that sum but I have no other evidence.
That said, impecuniosity is not a basis for a resistance to a costs order.
(b) whether the parties are in receipt of legal aid
I do not know and I am not informed as to whether either party is in receipt of legal aid.
(c) the conduct of the parties to the proceedings
The putative second respondent relies upon what is contended to be the conduct of the wife in the proceedings in bringing an application that, with the kindest of descriptor, might be described as premature or alternatively, one that had no possibility of success. It probably falls somewhere between the two in my mind.
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court
Not relevant.
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings
The proceedings have not been necessitated by the failure of a party to comply with previous orders and that subsection of the Act that deals with a party to the proceedings having been wholly unsuccessful probably has no application in circumstances where Mr Cummings’ client has not yet been made a party to the proceedings.
(f) whether any party has made an offer in writing
The putative second respondent relies upon an offer made to resolve the proceedings by the payment of costs. Clearly, if that offer had been accepted then the parties would not have incurred significant costs.
(g) any other matter the Court considers relevant
I am satisfied that there are circumstances that justify the making of an order for costs.
I propose to make such an order based largely upon the withdrawal by the wife of her application during the course of the litigation today and on the basis that an offer of settlement had been made by the putative second respondent.
CONCLUSION
I propose that that order be that the wife pay the costs of the second respondent as and from the date of filing of the application on 10 March 2023; such cost to be as agreed or assessed.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 14 June 2023
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