Bolt and Waldo

[2018] FamCA 546

FAMILFAMILY COURT OF AUSTRALIA

BOLT & WALDO [2018] FamCA 546

FAMILY LAW – COSTS – Application for costs on an indemnity basis arising from trial of de-facto financial dispute – Where the Respondent was wholly unsuccessful in that proceeding – Where the Applicant seeks an order for the Respondent to pay her costs on an indemnity basis, as per costs agreement, since the commencement of proceedings - Where the Respondent opposes any costs order being made – Where the Respondent has substantial wealth and is in a position to meet a costs order – Where the Applicant is entitled to a costs order – Where the indemnity basis is not applied – Ordered the Respondent pay the costs of the Applicant as agreed and in default of agreement, as assessed, to be paid within 42 days of agreement or assessment

Family Law Act 1975 (Cth) s 117

Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225
Graft & McCormick [2018] FamCAFC 82
Nada & Nettle [2014] FamCAFC 207

APPLICANT: Ms Bolt

RESPONDENT: Mr Waldo

FILE NUMBER: MLC 558 of 2015

DATE DELIVERED: 23 May 2018

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Cleary J

HEARING DATE: 21 May 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hutchings

SOLICITOR FOR THE APPLICANT: Curwen-Walker & Co. Solicitors

COUNSEL FOR THE RESPONDENT:	Dr Ingleby
SOLICITOR FOR THE RESPONDENT:	Duane Portway Family Law

Orders

1. That the Respondent Mr Waldo pay the costs of the Applicant Ms Bolt as agreed, and in default of agreement, as assessed; for the period from 24 October 2016 (excluding costs related to the parenting dispute between the parties).

2. Costs to be paid within 42 days of agreement or assessment.

3. Any application for costs in respect of this application to be filed and served within 28 days of the date of these orders, with response likewise within a further 28 days.

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 Bolt & Waldo 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 NEWCASTLE

FILE NUMBER: MLC 558 of 2015

Ms Bolt

Applicant

And

Mr Waldo

Respondent

EX TEMPORE REASONS FOR JUDGMENT

Introduction

1. This is an application for costs, on an indemnity basis, by the applicant, Ms Bolt (“Ms Bolt”), against the respondent, Mr Waldo (“Mr Waldo”).

2. The application relates to a trial, in respect of a financial dispute, heard by me in Melbourne, over four days, in April and May 2017.

3. On 9 June 2017 judgment was delivered.

4. The parties agree that Ms Bolt was entirely successful with her application and, accordingly, Mr Waldo unsuccessful.

5. The dispute had been in two parts:

   a)Whether the relationship between the parties fell within the definition of a de facto relationship; and

   b)If so, the appropriate adjustment of interests in property.

6. Mr Waldo lodged an appeal on 6 July 2017, but subsequently withdrew it on 2 March 2018. The costs sought in this application do not relate to that discontinued appeal.

7. The first Application was filed on 15 September 2017. It sought costs on an indemnity basis, from 24 October 2016, that date being the date of a relevant offer of settlement, in the form of a counterproposal by Ms Bolt.

8. An Amended Application was filed on 17 April 2018, which expanded the order to “costs on an indemnity basis, as per costs agreement, since the commencement of these proceedings.”  The application was opposed by Mr Waldo.

9. On 21 May 2018, the matter came before me, by video link, for hearing and proceeding by way of submissions which were, for both parties, focused and helpful.

The Law

1. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) sets out the principle that each party bear his or her own costs. If the Court forms the opinion that there are circumstances that justify doing so, the Court may make such order as to costs as the Court considers just.

2. I consider that the making by Ms Bolt of an offer, via a Calderbank letter justifies consideration of departure from the general principle.

3. Section 117(2A) of the Act directs the Court to the following considerations, which I will turn to now.

(a) Financial Circumstances

1. It is not in dispute that Mr Waldo has substantial wealth, several properties and that he is in a position to meet a costs order on either of the bases sought.

2. Ms Bolt has had the benefit of the transfer to her of an interest in property, which provided accommodation and income.

(b) Funding of the litigation

1. Both parties privately funded their litigation at all times.

(c) Conduct of the parties

1. For Ms Bolt, it was submitted that Mr Waldo, properly advised, should have known that the relationship of the parties would be declared as a de facto relationship.

2. The main factors of inevitability were contended to be:

   a)The birth of the child to the parties;

   b)Co-ownership of real property;

   c)The care provided by Ms Bolt to Mr Waldo during his severe illness; and

   d)Their periods of living together.

3. There is some force in this argument. Had it been conceded, the length of the trial would likely have been reduced, but there was always a genuine dispute over property to be heard. The parties were tenants in common in a piece of real estate, integral to Mr Waldo’s business.

(d) Failure to comply

1. The Court was taken to tardiness by Ms Bolt, in paying her half share of valuation costs. However, I accept the submission that the value of the relevant contested property was known to the parties and that Mr Waldo was placed to know and did know the value of his other assets.

2. I accept that the wife was late providing her up to date tax returns. Further, that she misrepresented the time of her inquiries in her position with Centrelink. However, none of these matters prevented the matter proceeding or were crucial to its outcome.

(e) Whether a party is wholly unsuccessful

1. Mr Waldo falls into this category. He did not acquire Ms Bolt’s interest in the E Town property. To the contrary, he was compelled to transfer his interests in it to her, with an additional payment of $50,000.

(f) Offers in writing

1. This is, in my view, a compelling argument for a costs order of some sort to be made.

2. Had the offer been accepted, when it was made, the dispute could have been resolved and perhaps the declaration, or the need for the declaration would have fallen away. The terms proposed an identical outcome to the orders made, but with an additional payment of $50,000. The rental dispute between the parties was resolved in VCAT.

3. So the offer made, in October 2016 does, in my view, justify there being an order for party/party costs.

Indemnity Costs

1. Ms Bolt seeks an order for costs on an indemnity basis, not party/party.

2. Mr Waldo made an offer to pay a sum to Ms Bolt, which was very much less than what was ultimately ordered. The counterproposal was swiftly made, being an offer to accept an amount higher than what had been offered, but significantly less than what was ordered. This counterproposal was rejected. That rejection is relevant and justifies an order for costs.

3. However, it does not, in my view, fall within the circumstances identified in   Colgate Palmolive Co v Cussons Pty Ltd[1] which would justify indemnity costs. There has to be something exceptional.

   [1] (1993) 46 FCR 225

4. It is hardly unusual, let alone exceptional for each party in a property dispute to take a stand and not to step back from it. Each party was legally represented, so had advice about the range of outcomes. Each party appeared to be, throughout the trial, incredulous that the other party could not see the merits of their case. Each party was taking a chance, knowing he or she might be unsuccessful.

5. The decision which I was taken to of Nada & Nettle,[2] is a very similar situation and helpful in considering the concept of what is exceptional. In a very recent decision, which was not raised by either of the parties, it having only been delivered in recent weeks, the matter of Graft & McCormick,[3] a decision of the Full Court, Murphy J ordered indemnity costs in a situation which illuminates “exceptional” being a departure from the usual dispute, even if the disparity, in money terms, is high. His Honour referred to one party being wholly successful in voluminous appeals, with an ulterior purpose:

… they provided a vehicle for what might be described as deep-seated criticisms of the “Family Law system” and an opportunity to make allegations, many of them scandalous, against judicial officers and legal practitioners.

[2] [2014] FamCAFC 207

[3] [2018] FamCAFC 82

Costs in respect of this Application

1. It appears to me that each party has been somewhat successful in this costs application. Sufficiently so, as to abide by the general principle in s 117 of the Act. That is a preliminary view. Counsel agree that a timetable for written submissions on this issue be appointed and, accordingly, I have made provision for that in the orders. However, I will leave it to the parties to consider their respective positions.

2. Orders are made accordingly.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the ex-tempore reasons for judgment of the Honourable Justice Cleary delivered on 23 May 2018.

Associate: 

Date:  23 May 2018