Bollen & Bollen

[2021] FamCA 429

FAMILY COURT OF AUSTRALIA

Bollen & Bollen [2021] FamCA 429

File number(s):

MLC 10697 of 2017

Judgment of:

MACMILLAN J

Date of judgment:

23 June 2021

Catchwords:

FAMILY LAW – COSTS – where the husband seeks an order that the wife pay his costs as and from 7 days after 26 April 2019 or 5 July 2019 or 27 November 2019 or two thirds of his costs as and from 7 days after 27 November 2019 or his costs of the hearing – where the wife opposes the husband’s application – where there are circumstances which justify the Court departing from the general rule that each party should bear their own costs – where the matter is adjourned for mention with respect to the quantum of the husband’s costs.   

Legislation:

Family Law Act 1975 (Cth) s 117

Family Law Rules 2004 (Cth) r 19.18

Cases cited:

In the Marriage of I & I (No. 2) (1995) FLC 92-625

Number of paragraphs:

25

Date of last submission/s:

21 September 2020

Date of hearing:

Written Submissions

Place:

Melbourne

Solicitor for the Applicant:

Kenna Teasdale Lawyers

Solicitor for the Respondent:

Marshalls and Dent and Wilmoth

ORDERS

MLC 10697 of 2017
BETWEEN:	MS BOLLEN Applicant
AND:	MR BOLLEN Respondent

ORDER MADE BY:	MACMILLAN J
DATE OF ORDER:	23 JUNE 2021

THE COURT ORDERS THAT:

1.The wife pay the costs of and incidental to the hearing commencing 16 December 2019 on  a party and party basis including but not limited to any costs incurred by the husband with respect to the single expert witness’s conference with the wife’s adversarial witness, the joint statement of experts and the cost of the single expert’s evidence.

2.The quantum of the costs to be paid by the wife be reserved.

3.The husband’s application for costs be otherwise adjourned for mention before the Honourable Justice Macmillan at 11.00 am on 29 June 2021.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bollen & Bollen has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

MACMILLAN J

1. The husband, who was the respondent in the property proceedings heard over a period of three days in December 2019, seeks an order for costs in his favour. It is his case that he is entitled to an order for costs in decreasing order of preference as follows:

   a.As and from seven days after the date of his letter to the wife’s solicitors of 26 April 2019;

   b.As and from seven days after the 5 June 2019 when he filed his Further Amended Response;

   c.As and from seven days after his letter to the wife’s solicitors dated 27 November 2019;

   d.That the wife pay two thirds (or such other proportion as the Court may deem fit) of the costs as and from 7 days after his letter to the wife’s solicitors of 27 November 2019; or

   e.The costs of the three days of hearing.

2. Judgment was delivered on 23 July 2020 (“the Reasons”) and on 3 August 2020 I made final property orders. I also made orders with respect to the parties filing written submissions in support of any application for costs. The husband filed written submissions in support of his application that the wife should pay his costs of the proceedings. The wife opposes the husband’s application for costs and has filed written submissions in reply.

   BACKGROUND

3. The background to these proceedings is set out in detail in the Reasons. In summary, the parties having agreed by the commencement of the final hearing upon an in principle equal division of their property, the focus of the hearing was the value of the property owned by the husband and wife at D Street, F Town (“the F Town Property”) and what orders should be made with respect to that property. It was the wife’s case that it could not be valued and accordingly that it should be sold. The husband sought orders permitting him to retain the property. Ultimately the husband was successful and pursuant to the orders made on 3 August 2020 he was permitted to retain the property.

   LEGAL PRINCIPLES

4. Pursuant to s 117(1) of the Family Law Act 1975 (Cth) ("the Act") the general rule in this Court is that each party to proceedings pursuant to the Act shall bear his or her own costs of those proceedings. However if the Court is satisfied that there are circumstances in the particular case which justify it doing so it can make such order as to costs as it considers just (s 117(2)).

5. In considering what if any order should be made the Court must have regard to the matters in s 117(2A) of the Act which are as follows:

   (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, inspections, 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.

6. All these matters must be considered to the extent that they are relevant to the particular case and no one factor in s 117(2A) of the Act prevails over any other [In theMarriage of I & I (No 2) (1995) FLC 92-625]. The list is not intended to be exhaustive.

7. Rule 19.18 of the Family Law Rules 2004 (Cth) ("the Rules") sets out the various methods by which any costs that are ordered may be calculated. The Court may order costs of a specific amount, as assessed on a particular basis such as party and party or indemnity costs, in accordance with the method specified in the order or for part of a case or part of an amount assessed in accordance with Schedule 3 of the Rules. The general rule is that when the Court makes an order for costs those costs are calculated on a party and party basis.

   ARE THERE CIRCUMSTANCES JUSTIFYING A COSTS ORDER

   Financial Circumstances of each of the Parties

8. The husband’s case is that the financial circumstances of the parties are only relevant “to the extent that the wife can afford to meet any order for costs absent any impact on her capacity to house and support herself.” Although I accept that this is the case it is also the case that the husband has the means to meet his own costs and will not be at a significant financial disadvantage if he is required to do so. In these circumstances, the party’s respective financial circumstances neither militate against nor are of themselves a reason why the Court should make an order for costs in the husband’s favour.

   Legal Aid

9. Neither party in this case is in receipt of Legal Aid.

   The Conduct of the Parties to the Proceedings

10. The husband’s application for costs focused on the wife’s conduct, in particular in relation to her application for the sale of the F Town Property. It is his case that the proceedings were unduly lengthened in relation to the F Town Property because of the way the wife put her case. In summary the husband submitted as follows:

    (a)That the wife’s application to adduce adversarial evidence as to the value of the F Town Property being made at the commencement of the final hearing was not properly made in that it did not allow sufficient time for the experts to confer and the parties to reflect upon their joint statement;

    (b)That the wife sought to adduce adversarial evidence of value thereafter seeking leave to cross examine her own witness and ultimately submitting that the evidence of her adversarial expert should not be accepted and without having adduced any evidence in support of her contention that the property was not capable of being valued;

    (c)That notwithstanding the evidence of her own expert witness she put her case on the basis of her belief that the property was worth $16,500,000 but did not adduce any evidence in support of that belief; and

    (d)That the wife’s evidence raised questions about the bona fides of her application for a sale in particular her evidence that she would sell the property even if the only bid at auction was for $9million and her evidence with respect to there being a level playing field.

11. Although the husband submits that the wife’s application to adduce evidence from an adversarial expert was not properly made and I accept that it would have been preferable for her to have made that application prior to the commencement of the final hearing, it is not possible to determine, after the fact, whether, even if an application had been made, it could have or would have been listed prior to the final hearing or what impact that might have had upon the final hearing. In any event, despite the lateness of the wife’s application for leave to adduce adversarial evidence the experts were able to confer and prepare a joint statement.  

12. However in circumstances where it was the wife’s case that the F Town Property was impossible to value and should be sold irrespective of the value attributed to it by her own expert witness, or as agreed by the single expert and her expert witness, I am not satisfied that even if she had filed that application earlier that would have changed the way in which she put her case or in those circumstances reduced the time required to hear the matter.

13. By way of response to the husband’s submissions, the wife submitted firstly that there was nothing in the way she had conducted the proceedings which would justify an order for costs and that the husband’s conduct, being far from exemplary, should not escape scrutiny. The wife relied upon a number of examples of the husband’s conduct including the following matters:

    (a)That notwithstanding that the parties were married for 46 years, the husband persisted in resisting an order for equal division of property until 5 June 2019, over one and a half years after the proceedings commenced. The wife asserts that this issue went nowhere but prolonging the litigation and adding to the costs;

    (b)That until 5 June 2019 the husband sought to make any division subject to "interests or claims made in relation to the parties adult children and/or the Bollen Family Trust” which if successful would have substantially diminished the size of the pool that was available for division;

    (c)That the husband encouraged the parties' son to involve himself in the proceedings by paying him $35,000 towards his legal fees. The wife asserts that "the regrettable and ultimately futile attempt to involve at least one of the children in the litigation could only result in undue stress and hurt to the Applicant, unduly prolong the litigation and add undue expense for all parties.” The wife states however that it is notable and not to the husband's credit that he resisted orders making him solely accountable for that expense; and

    (d)That the wife’s lack of faith in the valuations of the F Town Property was in part referable to the husband’s conduct in particular his failure to disclose in a timely manner a valuation which valued the property at $2 million more than the single expert’s valuation.

14. These are not matters about which I made findings or could not make findings.

    Whether proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the Court

15. Both parties agree that this is not a relevant consideration in this case.

    Whether any party to the proceedings has been wholly unsuccessful in the proceedings

16. It is the husband’s case that the wife was wholly unsuccessful in securing an order for the sale of the F Town Property.  Although the wife conceded that she had not succeeded in persuading the Court that the agreed value could not be relied upon, it was her case that she had achieved a more favourable outcome than she would otherwise have done had she accepted the valuation of the single expert witness.

    Whether any party to the proceedings has made an offer in writing to the other party to the proceedings to settle and the terms of any such offer

17. The husband relied upon the letters dated 26 April 2019 and 27 November 2019 which were both annexed to the submissions filed on his behalf. The husband submitted that it is clear from his letter dated 26 April 2019 that he was proposing an equal division of the parties’ assets however, it is also clear that there were still matters which remained in dispute. In the letter dated 27 November 2019 the husband proposed a cash payment to the wife of $3,167,527 based upon him retaining the F Town property. Although he conceded that he was ordered to pay the wife more than $3,167,527 it was his submission that this was not determinative in circumstances where it had been clear from the letter from his solicitors to the wife’s solicitors dated 26 April 2019 that he was proposing an equal division and would agree to an updated valuation of the F Town Property.

18. It was further submitted that the wife’s failure to respond to the letter of offer dated 27 November 2019 amounted to a “refusal to negotiate” conduct which could justify an order for costs.

19. The wife submitted in reply that the husband cannot rely upon the offer of settlement dated 27 November 2019 in circumstances where that proposal included the wife reimbursing the husband for half of the costs of her post-separation travel, an application made by the husband during the final hearing which was not successful and because that the offer was made on the basis of the F Town Property being valued at $11,000,000 when it was ultimately found to be worth $12,250,000.

20. The wife further relied upon the fact that in her Initiating Application filed 16 October 2017 she had proposed an equal division and she had made an offer in writing by letter dated 26 March 2019 proposing an equal division of the property.  

    DISCUSSION

21. Although s 117(2A) of the Act refers to the conduct of the parties “in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admission of facts, production of documents and similar matters” it is clear that it is not intended to be limited to those matters. Even if it were so limited the Court can take into account other matters it considers relevant. The way in which the wife conducted her case is in my view such a matter and justifies the Court departing from the general rule that each party should bear their own costs and making and order for costs in the husband’s favour.

22. In circumstances where there were unresolved issues in relation to the parties loans to the children, legal costs including the funds applied by the husband to Mr S’s legal costs and the parties personal expenditure, I am not satisfied that either of the letters of offer relied upon by the husband would support an order costs in favour of the husband. However I am satisfied that the wife’s “belief that the F Town Property is worth many more millions more than the value placed upon it by her own expert witness”, that belief even if it was genuine not being consistent with the evidence, made a hearing inevitable unless the husband agreed to a sale.  It was this issue which the Court was ultimately required to determine and notwithstanding that pursuant to the final orders the wife received more than she was offered by the husband, the wife’s case that the property could not be valued and should be sold was wholly unsuccessful.

23. I am not in a position to make findings with the respect to the way in which the parties conducted the proceedings prior to the final hearing, however even if I could, that would not in my view alter the fact that the costs incurred by the husband of the three day hearing were a direct result of the wife’s case with respect to the F Town Property.  

24. I am satisfied that in these circumstances there are reasons which justify the Court departing from the general rule that each party should bear their own costs and making an order that the wife pay the husband’s costs of the hearing including any costs incurred with respect to the single expert witness’s conference with the wife’s adversarial witness, the joint statement and the cost of the single expert’s evidence.

25. My preference would be to make an order for a fixed sum, however I have not been provided with a schedule of the husband’s costs, and in those circumstances cannot do so. In these circumstances I propose to make and order for costs and otherwise adjourn the matter for mention before me giving the parties an opportunity to reach agreement or otherwise make submissions with respect to the quantum of those costs.  

I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Macmillan.

Associate:

Dated:       23 June 2021