Blakeley and Jaine (No. 4) - [2020] FamCA 811

FAMILY COURT OF AUSTRALIA

BLAKELEY & JAINE (NO. 4)

[2020] FamCA 811

FAMILY LAW – COSTS – indemnity costs sought by respondent following the applicant’s unsuccessful stay application – stay application was opportunistic – held, indemnity costs payable.

Family Law Act 1975 (Cth), s 117

Armington & Armington and Ors (No. 2) [2020] FamCA 765
Colgate–Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Goodridge & Beadle [2019] FamCA 786
Harlen & Hellyar (No 2) [2020] FamCA 413
Hearl & Digby [2020] FamCA 474
Re JJT; ex parte Victoria Legal Aid (1998) 195 CLR 184

APPLICANT:

Mr Blakeley

RESPONDENT:

Ms Jaine

FILE NUMBER:

SYC

7125

2018

DATE DELIVERED:

25 September 2020

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Wilson J

HEARING DATE:

21 September 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Not applicable

SOLICITOR FOR THE APPLICANT:

Not applicable

COUNSEL FOR THE RESPONDENT:

Mr S. Schonell

SOLICITOR FOR THE RESPONDENT:

Dorter Family Lawyers

Orders

Pursuant to s 117(2) of the Family Law Act the husband must pay the wife’s costs of and incidental to the stay application to be assessed by a registrar of this court on an indemnity basis

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 Blakeley & Jaine 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 MELBOURNE

FILE NUMBER: SYC 7125 of 2018

Mr Blakeley

Applicant

And

Ms Jaine

Respondent

REASONS FOR JUDGMENT

On Monday 21 September 2020 I handed down my reasons for judgment on the husband’s application for a stay pending appeal of orders requiring the father to make spousal maintenance payments. I dismissed the husband’s stay application. The wife now seeks an order that the husband pay the wife’s costs of and incidental to the stay application on an indemnity basis.
In invoking an order under s 117(2) of the Family Law Act, the wife relies on s 117(2A) of the Family Law Act, especially the subsection that speaks of one party being wholly unsuccessful in the proceeding as a whole or an aspect of the proceeding.
The husband resists any order for costs contending that his financial circumstances were such that he not only appealed against my orders made in March of this year but he was required, so he said, to seek a stay of those orders on account of his financial circumstances pending the hearing and determination of his appeal.
The wife filed submissions in relation to costs on 23 September 2020. In essence she seeks costs to be paid by the husband pursuant to s 117(2) and for those costs to be fixed in the sum of $14,052.50.
The husband filed submissions in relation to costs on 25 September 2020. In essence he submitted that s 117(1) should apply. He said that if the court was to consider the making an order under s 117(2), costs should be measured against his capacity at the interim stage and not in relation what his predicted income may be in the future. The husband has contended that his current cash reserve is only $14,000 and as such his ability to meet a costs order at this stage is doubtful.
For the reasons that follow I am of the view that the husband must pay the wife’s costs of and incidental to the stay application and that those costs should be assessed on an indemnity basis.
In Re JJT; ex parte Victoria Legal Aid[1] the High Court of Australia has held that the Family Law Act is the sole repository of the basis of an order for costs in litigation in this court.
[1] (1998) 195 CLR 184, 201.
Section 117(1) provides that subject to subsection (2) each party must bear his or her own costs.
Section 117(2) of the Family Law Act authorises a judge to make an order other than one under s 117(1) if circumstances warrant the making such an order.
When considering the making of an order under s 117(2), the court must (and this is a mandatory obligation) take into account the matters canvassed under s 117(2A) of the Family Law Act.
The parties’ financial circumstances require examination under s 117(2A)(a). That was done for the purpose of the husband’s stay application. The wife submitted that the husband is in a favourable financial position as his financial statement does not include his profit allocation. The husband submitted that his financial circumstances are not as favourable as the wife says they are. He submitted that the wife is in a favourable financial position as he is bound to pay the mortgage that allows her to live without expense and that he does not enjoy the benefits of any COVID-19 related ‘repayment holiday’(his terminology). I found that the husband had capacity to pay the sum ordered by way of spousal maintenance.
Under s 117(2A)(b) it is necessary to consider whether either party is in receipt of legal aid. Neither is.
Under s 117(2A) (c) the conduct of the parties is relevant. The wife submitted that the husband unnecessarily brought this stay application, that he is not as financially limited as he asserted and that he should have simply continued making spousal maintenance payments until an appeal court ordered him not to.
Conversely, the husband argued that he perceived a basis on proper grounds for bringing his stay application.
Section 117(2A)(d) was not applicable.
Section 117(2A)(e) was relied on by the wife. She said the husband has been wholly unsuccessful in his stay applications.
That was true. The husband failed comprehensively.
In relation to s 117(2A)(f), the wife submits that an open offer was made on 9 September 2020 to the husband to withdraw the stay application to which no response was received. The husband submitted that the letter was not an offer, for the purpose of s 117(2A)(f), rather it was an ‘invitation.’ I found that contention curious. But the husband is not legally trained so he may not be aware of the concept of an offer for the purposes of compromises.
For the purpose of s 117(2A)(g) the husband made a collection of submissions that indicated that he was in disagreement with judgments and reasons previously given.
A party may invoke s 117(2) in applying for a costs order by demonstrating that he or she has enlivened only one of the several subsections of s 117(2A). Here, in my view the wife properly relied on s 117(2A)(e) as the husband was wholly unsuccessful in his stay application.
So far as the basis of an assessment of costs is concerned, in my view the wife is correct in contending that she is entitled to an order for costs on an indemnity basis. Over several recent decisions including Goodridge & Beadle (No 2)[2], Harlen & Hellyar (No 2)[3] , Hearl & Digby[4] and Armington & Armington and Ors (No. 2),[5] I have descended to very great detail to explain in what circumstances an order for indemnity costs may validly be made. Applying Colgate–Palmolive Co v Cussons Pty Ltd[6] the test is conventionally described in the following terms–
Costs on an indemnity basis may be awarded –
a)where a party made allegations of fraud knowing them to be false or where that party made irrelevant allegations of fraud;
b)where evidence of misconduct existed causing loss of time to the court and the other parties;
c)whether the proceeding was commenced for some ulterior motive;
d)whether the proceeding was commenced or continued with wilful disregard of known facts or clearly established law;
e)where allegations were made that ought never to have been made;
f)where the proceeding was unduly prolonged by groundless contentions; and
g)where there was an imprudent refusal of an offer of compromise.
[2] [2019] FamCA 786.
[3] [2020] FamCA 413.
[4] [2020] FamCA 474.
[5] [2020] FamCA 765.
[6] (1993) 46 FCR 225.
The wife seeks an order fixing those costs at $14,052.50. That is a large sum for a short appearance before me. At first blush I would not approve an amount of that size. However I am of the view that the proper sum must be determined by a Senior Registrar.
Here, I take the view that the husband’s pursuit of the stay application was opportunistic. The wife’s financial circumstances are poor. The husband is a man of substance, at least financially. True, his financial affairs are complicated and will require considerable investigation at trial. However he was and remains well able to meet his previously ordered payments of spousal maintenance. In bringing his stay application the husband was endeavouring to arrange his financial affairs so that he met almost every outgoing – actual or conditional – ahead of his liability to pay spousal maintenance. I have not allowed him to that. His application had no prospects of success. It should not have been brought.
I order the husband to pay the wife’s costs of and incidental to the stay application to be assessed by a senior registrar of this court on an indemnity basis.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 25 September 2020.

Associate:

Date: 25 September 2020.