Bortoli & Bortoli
[2020] FamCA 1055
•11 December 2020
FAMILY COURT OF AUSTRALIA
Bortoli & Bortoli [2020] FamCA 1055
File number(s): MLC 3359 of 2018 Judgment of: HARTNETT J Date of judgment: 11 December 2020 Catchwords: FAMILY LAW – COSTS – Applicant husband’s liability for all or part, if at all, of previous costs order for payment by the Respondent wife – where previous costs order made for wife to pay costs of the Second and Third Respondents on party-party basis – where Respondent wife’s application for property orders wholly unsuccessful – where delay in proceeding due to conduct of the wife – determination of liability quantum determined and order for payment by the husband Legislation: Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 19.08
Cases cited: Collins & Collins (1985) FLC 91-603
I and I (No 2) (1995) FLC 92-625
Jensen and Jensen (1982) FLC 91-263
Kelly and Kelly (No 2) (1981) FLC 91-108
Penfold v Penfold (1980) 144 CLR 311
Number of paragraphs: 45 Date of last submission/s: 29 September 2020 Date of hearing: 9 September 2020 (considered in Chambers) Place: Melbourne Counsel for the Applicant: Mr Lethlean Solicitor for the Applicant: McDonald Slater & Lay Counsel for the First Respondent: Mr Guzzo Solicitor for the First Respondent: Cavoli & Co Solicitor for the Second and Third Respondents: Sayer Jones ORDERS
MLC 3359 of 2018 BETWEEN: MR BORTOLI
ApplicantAND: MS BORTOLI
First RespondentMS B BORTOLI
Second Respondent
MR ROMANO
Third Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
11 DECEMBER 2020
THE COURT ORDERS THAT:
1.The Applicant husband pay the Respondent wife the sum of $20,000 being the extent of his liability toward the costs order payment made by the wife pursuant to order 24 of the order made on 21 February 2020 and order 1 of the order made on 28 August 2020. Such payment is made pursuant to order 25 of the order made on 21 February 2020.
2.There is liberty to the wife to seek an urgent listing in respect of any enforcement application that may become necessary in respect of order 1 herein.
3.Otherwise all extant applications are dismissed.
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 Bortoli & Bortoli has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J:
PRELIMINARY
This matter was previously before the Court in relation to a property order proceeding commenced by the Applicant husband (‘the husband’) on 28 March 2018.[1] The First Respondent wife (‘the wife’) filed a Response to Initiating Application on 19 June 2018.[2] The final hearing of that proceeding took place on 20 August 2019; 21 August 2019; 18 February 2020; and 21 February 2020.
[1] Initiating Application by the Applicant husband filed 28 March 2018.
[2] Written submissions by the Respondent wife filed 23 September 2020, [2].
On 21 February 2020, final orders as to the property order proceeding were made with the consent of the husband; the wife; and the previously involved Second and Third Respondents, namely and respectively, the husband’s mother Ms B Bortoli and the husband’s uncle Mr Romano.[3] Relevantly, order 1(e) and 17 of the orders by consent (‘the husband’s indemnity orders’) stated:-
the Husband otherwise fully indemnify the Wife for all time with respect to any costs, taxes, capital gains or other liabilities and imposts associated with the construction and sale of Suburb F Units so the Wife is not out of pocket.
…
The sum of $157,000 due and payable to the Husband pursuant to these orders be retained and held in the trust account of J Lawyers as security for the Wife pursuant to order 1(e) hereof and to be released to the Husband at settlement of Suburb F Units or upon confirmation by the builder that he has been paid in full.
[3] Order of Hartnett J dated 21 February 2020, orders 1-23.
On 21 February 2020, the Court ordered the costs of the Second and Third Respondents be paid by the wife on a party-party basis and within seven days as agreed or at a quantum as taxed.[4] The Court ordered the husband’s liability for all or any part of that costs order against the wife be further determined by the Court.[5] That further determination was adjourned by request and consent, ultimately to 9 September 2020 whilst the parties, including the Second and Third named Respondents, litigated further.[6]
[4] Order of Hartnett J dated 21 February 2020, order 24.
[5] Order of Hartnett J dated 21 February 2020, order 25.
[6] Order of Hartnett J dated 21 February 2020, order 26; Order of Hartnett J dated 10 March 2020, order 1; Order of Hartnett J dated 24 March 2020, order 1; Order of Hartnett J dated 17 June 2020, order 1; Order of Hartnett J dated 5 August 2020, order 1.
On 20 July 2020, the wife filed a Notice Disputing Itemised Costs Account (‘the wife’s Notice’) along with the Itemised Costs Account of the Second and Third Respondents. On 30 July 2020, the wife’s solicitor served upon the Second and Third Respondents’ solicitor copies of those sealed and filed documents.[7]
[7] Affidavit of Mr G sworn 17 August 2020, [2].
On 28 August 2020, the wife’s Notice was considered by Registrar Sudholz in Chambers. By consent of the parties, including the Second and Third Respondents, the Court ordered:- [8]
1.The [wife] agrees to pay the second and third respondents the agreed sum of $100,000 in full and final settlement of the second and third respondent’s claim for costs pursuant to order 24 of the orders on 21 February 2020 (“the settlement sum”).
2.That within 7 days of the date of these orders the wife do all things necessary and sign all documents to direct J Lawyers to distribute the $150,000 held on trust on behalf of the wife pursuant to order 3 of the orders dated 11 March 2020 as follows:
a.payment of the settlement sum, into the trust account of the solicitors for the second and third respondent, Sayer Jones being BSB … Account …27; and
b.the remainder to the wife at her direction.
[8] Order of Registrar Sudholz dated 28 August 2020.
On 9 September 2020, the Court considered an Application in a Case filed by the husband on 7 September 2020. Amongst other procedural and costs orders as sought, the husband sought an order for $21,107.82 of the remaining $50,000 (from the proceeds of sale of the former matrimonial home) held on his behalf[9] in the trust account of J Lawyers to be paid to the Australian Tax Office in order to satisfy the husband’s overdue employee superannuation contribution/s.[10] There was leave given to the husband to amend his Application in a Case by filing an Amended Application in a Case within seven days, and in the event same was not filed within seven days, the Application in a Case then before the Court would stand dismissed.[11] There was no Amended Application in a Case filed by the husband. Accordingly, the Application in a Case was dismissed. As to the costs issue remaining (and pursuant to order 25 of the order made 21 February 2020) the Court ordered that the Applicant and the Respondent file and serve written submissions with respect thereto within 14 days of that date.[12]
[9] Order of Hartnett J dated 21 February 2020, order 2(d).
[10] Application in a Case by the Applicant husband filed 7 September 2020, page 3.
[11] Order of Hartnett J dated 9 September 2020, order 1 and order 2.
[12] Order of Hartnett J dated 9 September 2020, order 3.
The wife submitted that the sum of $100,000 (‘the settlement sum’) was paid in full from her personal funds held on trust with J Lawyers.[13] That payment is not in dispute.
[13] Written submissions by the Respondent wife filed 23 September 2020, [5].
The husband submitted that the wife should remain wholly responsible for the payment of agreed sum of $100,000 to the Second and Third Respondents,[14] whereas the wife contended that the parties should share equally in the payment liability of the $100,000 party-party costs, with the husband to reimburse her in order to effect such equal apportionment of the payment sum.[15]
[14] Written submissions by the Applicant husband filed 23 September 2020, [12].
[15] Written submissions by the Respondent wife filed 23 September 2020, [6].
The wife sought the said sum of $50,000 be paid directly to her from the husband’s funds in the sum of $157,000 held on trust with J Lawyers (‘the J Lawyers funds’).[16] The husband’s submission in reply was the Court has “no power to order any costs out of [the J Lawyers funds]” should the Court order an apportionment to the husband in relation to party-party costs.[17]
[16] Written submissions by the Respondent wife filed 23 September 2020, [6].
[17] Written submissions in Reply by the Applicant husband sent to the Court 29 September 2020, [3].
MATERIAL RELIED UPON
Each of the husband and the wife filed Written Submissions on 23 September 2020 and the Court additionally received, from the husband, Written Submissions in Reply on 29 September 2020 by email to Chambers. The Court shall grant leave to the husband in respect of his filing of and reliance upon his written submissions in reply.
BACKGROUND
The husband was born in 1977 and is now 43 years of age.[18] The wife was born in 1982 and is now aged 38 years.[19] The parties commenced cohabitation in approximately June of 2010 and were married in 2010.[20] Separation occurred in either August or September 2017.[21] There are two children of the marriage, namely, Y born in 2011 now nine years of age; and X born in 2012 now eight years of age.[22] The children live with each party in a week about arrangement commencing on Wednesday of each week.[23]
[18] Written submissions by the Respondent wife filed 23 September 2020, [7].
[19] Written submissions by the Respondent wife filed 23 September 2020, [8].
[20] Written submissions by the Respondent wife filed 23 September 2020, [9] and [10].
[21] Written submissions by the Respondent wife filed 23 September 2020, [11] and [24].
[22] Written submissions by the Respondent wife filed 23 September 2020, [18].
[23] Affidavit of Ms Bortoli sworn 9 August 2019, [14].
Since 2018, the wife has worked part-time as an administrative assistant and her salary is $32,000 per annum.[24]
[24] Affidavit of Ms Bortoli sworn 9 August 2019, [7]; Written submissions by the Respondent wife filed 23 September 2020, [19].
During the course of the marriage and cohabitation, the husband was declared a bankrupt 2012[25] and was then discharged from bankruptcy in 2015.[26] He has resumed his occupation as a tradesman is now self-employed as the sole proprietor of the business ‘C Company’.[27]
[25] Affidavit of Mr Bortoli sworn 21 June 2019, [36]; Affidavit of Ms Bortoli sworn 9 August 2019, [43].
[26] Written submissions by the Respondent wife filed 23 September 2020, [12] and [14].
[27] Affidavit of Mr Bortoli sworn 21 June 2019, [2].
The property order proceeding involved, amongst other real property, the real property situate at and known as D Street Suburb F in the State of Victoria (‘the Suburb F property’). The Suburb F property was purchased in early 2015 for the sum of $275,000.[28] It was registered in the name of the wife, the husband being an undischarged bankrupt at that time.[29] There was no material before the Court as to when in 2015 the husband was discharged from bankruptcy,[30] so the accuracy of that submission could not be substantiated. The Second Respondent mother of the husband advanced the sum of $275,000 to the husband and the wife which was utilised by them to purchase the Suburb F property unencumbered.[31] This property was undeveloped land.
[28] Affidavit of Mr Bortoli sworn 21 June 2019, [29].
[29] Written submissions by the Respondent wife filed 23 September 2020, [13].
[30] Outline of case of the Applicant husband filed 19 August 2019, [35].
[31] Written submissions by the Respondent wife filed 23 September 2020, [21].
The husband and the wife agreed the intention of the purchase was for the construction of two units on the Suburb F property, which property was to be subdivided by them. The construction works as were necessary would be undertaken in part by the husband and otherwise under his supervision. Given the husband’s undischarged bankruptcy as claimed, he utilised the building licence of the wife’s father.[32] The intention of the parties was to sell one unit on the subdivided land to the Second Respondent “off the plan” for $300,000; and the other unit on the open market, also “off the plan” at a profit.[33] The wife, in her submissions, described each individual lot as “a house and land package”.[34]
[32] Affidavit of Mr Bortoli sworn 21 June 2019, [14]; Written submissions by the Respondent wife filed 23 September 2020, [17] and [20].
[33] Affidavit of Ms Bortoli sworn 9 August 2019, [29]; Written submissions by the Respondent wife filed 23 September 2020, [20].
[34] Written submissions by the Respondent wife filed 23 September 2020, [23] and [23].
The Second Respondent and the Third Respondent (with Ms H, the Third Respondent’s wife) agreed to purchase one lot each for the sum of $300,000.[35] The Third Respondent is the uncle of the husband. The husband entered into and completed the negotiations with his mother and uncle and neither of the proposed units, nor proposed sub-divided lots, were placed on the open market. The wife was not cognisant of the entirety of the dealings between the husband and his family members and as her and the husband’s separation occurred prior to the completion of the units and sub-division of the land, considerable dispute between the husband and the wife ensued, together with much acrimony in respect of this development.
[35] Affidavit of Mr Bortoli sworn 21 June 2019, [49].
The wife submitted the contracts for sale were entered into in or around April 2016 and at that time no deposit was paid by either of the Second or Third Respondents.[36] The husband’s affidavit evidence was that proposed Lot 1 of the Suburb F property (‘Lot 1’) was purchased by the Third Respondent by the payment of an initial sum of $162,253.92 which funds were applied toward the construction of the units.[37] Upon settlement of the sale of the units, the balance of the purchase price owing by the Third Respondent would become due and payable. Order 22(b) of the orders made by consent on 21 February 2020 in fact provided that:-
(22)At settlement:
…
(b)the Third Respondent will pay the balance of the purchase price under his contract of sale in the sum of $137,746.08.
[36] Written submissions by the Respondent wife filed 23 September 2020, [15], [22] and [23]; Affidavit of Ms Bortoli sworn 9 August 2019, [31] and [32].
[37] Affidavit of Mr Bortoli sworn 21 June 2019, [51].
The husband’s evidence was also that proposed Lot 2 of the Suburb F property (‘Lot 2’) was purchased by the Second Respondent for $300,000 which amount included the sum of $275,000 the Second Respondent had already applied to enable the wife’s purchase of the land.[38] The remaining part of the purchase price was in the sum of $25,000[39] and again this payment was provided for in order 22(a) of the order made on 21 February 2020.
[38] Affidavit of Mr Bortoli sworn 21 June 2019, [50].
[39] Affidavit of Mr Bortoli sworn 21 June 2019, [50].
At the time of separation, the home loan draw down facility held by the husband and the wife with the Australia and New Zealand Banking Group (‘ANZ’) and secured by the former matrimonial home had a balance of $834,872.12 (‘the ANZ drawn down facility’). Following separation, that balance had increased to $1,050,000 and the wife submitted the differential of $215,127.88 may have been applied by the husband toward the construction costs of the Suburb F property.[40] This caused considerable disquiet and uncertainty to the wife.
[40] Written submissions by the Respondent wife filed 23 September 2020, [24]; Affidavit of Ms Bortoli sworn 9 August 2019, [34].
Following separation in August or September 2017 and until February 2018,[41] the husband continued to work at the Suburb F property.[42] He did so until construction of the two units was approximately 80 percent complete, as submitted by the wife.[43]
[41] Written submissions by the Respondent wife filed 23 September 2020, [25].
[42] Affidavit of Mr Bortoli sworn 21 June 2019, [14].
[43] Written submissions by the Respondent wife filed 23 September 2020, [25].
In around March 2018, the wife’s father took control of the worksite at the Suburb F property[44] and “effectively locked [the husband] out”.[45] Prior to his death, the wife’s father, in the name of his company K Pty Ltd, lodged caveats over the Suburb F property and the former matrimonial home of the husband and wife.[46] Upon communication occurring between the husband’s solicitor and the wife’s solicitor, on the husband’s evidence, it became “clear there was no basis for a [c]aveat and they were subsequently removed.”[47]
[44] Affidavit of Mr Bortoli sworn 21 June 2019, [13].
[45] Affidavit of Mr Bortoli sworn 21 June 2019, [52].
[46] Affidavit of Mr Bortoli sworn 21 June 2019, [19].
[47] Affidavit of Mr Bortoli sworn 21 June 2019, [21].
Following the commencement of the proceeding, and on 22 June 2018,[48] the wife’s solicitors served termination notices on the Second and Third Respondents as to their contracts of sale for the Suburb F property. The units were not completed and the land not sub-divided.[49] The wife’s submission was that she “had no real option but to terminate the contracts” to protect the interests of herself and the husband as they had no money to complete the units at that time.[50] The wife further submitted that this “position” the husband and the wife found themselves in “arose from the relationship of the parties and their joint endeavours with their family and ultimately the breakdown in their marriage.”[51] That is correct. The termination notices served upon the Second and Third Respondents by the wife, however, a different issue.
[48] Written submissions by the Respondent wife filed 23 September 2020, [30].
[49] Affidavit of Mr Bortoli sworn 21 June 2019, [17].
[50] Written submissions by the Respondent wife filed 23 September 2020, [29].
[51] Written submissions by the Respondent wife filed 23 September 2020, [29]; Affidavit of Ms Bortoli sworn 9 August 2019, [39].
On 15 August 2018, the husband’s solicitors provided to the wife’s solicitors a job activity summary for the Suburb F property units, maintained by the husband on behalf of L Company, which indicated the total cost of construction for both units up until that date was $441,682.34.[52] The wife submitted that following receipt of the job activity summary she requested the husband provide her with all relevant documents pertaining to the Suburb F property units.[53] That became an ongoing saga.
[52] Written submissions by the Respondent wife filed 23 September 2020, [26].
[53] Written submissions by the Respondent wife filed 23 September 2020, [26]; Affidavit of Ms Bortoli sworn 9 August 2019, [35].
The contributions of the parties towards the acquisition and construction of the Suburb F property were, in the wife’s submission, as set out in the following table:-[54]
[54] Written submissions by the Respondent wife filed 23 September 2020, [27].
Applicant husband and Respondent wife $279,428.42 Second Respondent $275,000 Third Respondent $162,253.92 Total Contributions $716,682.34
In addition, the wife, in her submission, provided the valuation figures as at 1 September 2018[55] for the Suburb F property units upon completion, as set out in the following table:-[56]
[55] Affidavit of Ms Bortoli sworn 9 August 2019, [37].
[56] Written submissions by the Respondent wife filed 23 September 2020, [27].
Valuation if complete – Unit 1 $580,000 Valuation if complete – Unit 2 $595,000 Total value (both units) if complete $1,175,000
On the basis of the valuation figures, the wife submitted that the Second and Third Respondents will ultimately receive the properties to the detriment of herself and the husband, as the contract price for each of the properties was $300,000 and that these significant financial benefits to each of the Second and Third Respondents is “entirely through [the husband’s] doing by reasons of his relationship” with them.[57]
[57] Written submissions by the Respondent wife filed 23 September 2020, [28].
The above calculations of contributions and valuation figures, as submitted by the wife, were disputed by the husband in his submissions, he referring generally to his oral evidence under cross-examination, which was given during the property order proceeding.[58]
SECTION 117 OF THE FAMILY LAW ACT 1975 (CTH)
[58] Written submissions in Reply by the Applicant husband sent to the Court 29 September 2020, [5].
Section 117 of the Family Law Act 1975 (Cth) (‘the Act’) provides the Court with power to make orders in relation to costs. Sub-section 117(1) creates a statutory presumption that each party to proceedings under the Act “shall bear his or her own costs”.[59] This presumption is subject to s 117(2) of the Act, which empowers the Court to “make such order as to costs…as the court considers just”[60] if it is “of opinion that there are circumstances that justify it in doing so.”[61] This is an “essential preliminary to the making of an order.”[62] Sub-section 117(2A) provides that in “considering what order (if any) should be made” for the payment of costs, “the court shall have regard to” the matters identified in ss 117(2A)(a) to (g) of the Act. Similarly, r 19.08 of the Family Law Rules 2004 (Cth) (‘the Rules’) empowers the Court to make an order for costs. The wife submitted, in addition, s 117 of the Act “negates any principle that costs should follow the event.”[63]
[59] Family Law Act 1975 (Cth), s 117(1).
[60] Family Law Act 1975 (Cth), s 117(2).
[61] Family Law Act 1975 (Cth), s 117(2).
[62] Written submissions by the Respondent wife filed 23 September 2020, [37] quoting Penfold v Penfold (1980) 144 CLR 311 at paragraph [13].
[63] Written submissions by the Respondent wife filed 23 September 2020, [38] quoting Collins & Collins (1985) FLC 91-603.
The Court has made an order for costs against the wife as provided for in order 24 of the order made on 21 February 2020. Those costs were costs of the Second and Third Respondents, whose contracts for sale of the Suburb F property entered into with the wife should not have been the subject of termination notices, in particular, in circumstances where no funds were refunded by the wife to them. They lost the opportunity cost of their monies, amongst other things. But the involvement of the Second and Third Respondents was also necessitated by the husband’s arrangements with them, which included the selling price to his uncle. The wife considered there to be insufficient transparency in those dealings. That was compounded by discovery issues and the increasing level of animosity between the husband and the wife. That animosity also impacted the parties’ children which included the wife suffering some withdrawal of financial support of them by the husband. The costs order made was agreed as to quantum by order of 28 August 2020 by consent of all parties. That left the operation of order 25 of the order made on 21 February 2020. What part of the costs paid by the wife in the sum of $100,000, if any, should be contributed to by reimbursement to the wife by the husband.
The wife submitted there exists no “additional or special onus”[64] on her, beyond the demonstration sufficient for the “essential preliminary” finding of “justifying circumstances” resulting in the making of an order.[65] Further, the relevant matters in s 117(2A) of the Act, “must all be taken into account and all balanced in order to determine whether the overall circumstances justify the making of an order for costs.”[66]
[64] Written submissions by the Respondent wife filed 23 September 2020, [37] quoting Jensen and Jensen (1982) FLC 91-263.
[65] Written submissions by the Respondent wife filed 23 September 2020, [37], quoting Penfold v Penfold (1980) 144 CLR 311.
[66] Written submissions by the Respondent wife filed 23 September 2020, [40] quoting I and I (No 2) (1995) FLC 92-625.
Pursuant to s 117(2A) of the Act, in considering what order, if any, should be made under s 117(2) of the Act, the Court is required to 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 their conduct 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, in accordance with s 117C of the Act or otherwise, made an offer to settle; and
(g)such other matters as the court considers relevant.
Section 117(2A)(a): the parties’ financial circumstances
The wife submitted that there is a great or substantial disparity between the income and financial resources of the parties in that the husband’s income and earning capacity exceeds that of the wife and his financial resources are otherwise significantly greater in quantum than the wife’s. She submitted such circumstances may justify an order for costs in favour of the party with fewer financial resources.[67]
[67] Written submissions by the Respondent wife filed 23 September 2020, [41] citing Kelly and Kelly (No 2) (1981) FLC 91-108, page 76,810 and Jensen and Jensen (1982) FLC 91-263, page 77,473 per Nygh J.
The husband in reply submitted that the wife’s “actual financial remuneration has not been fully established, as per trial evidence, including from additional sources of revenue”.[68]
[68] Written submissions in Reply by the Applicant husband sent to the Court 29 September 2020, [4].
Section 117(2A)(b): legal aid assistance
Neither party is in receipt of legal aid assistance.
Section 117(2A)(c): the parties’ conduct in relation to the proceedings
The submission made by the wife in relation to her conduct and the “circumstances in which the parties found themselves” was that it was “through no fault” of her own.[69] She submitted she “cannot be blamed for either the contractual obligations” between her, the husband and the Second and Third Respondents, or “for the breakdown of the relationship.”[70] Her “position of opposition” was, in her submission, “not unreasonable and was not without merit” and was also on the basis of “proper legal foundation” and merit.[71]
[69] Written submission by the Respondent wife filed 23 September 2020, [43].
[70] Written submission by the Respondent wife filed 23 September 2020, [43].
[71] Written submission by the Respondent wife filed 23 September 2020, [43].
The view of the husband was that the proceeding was always capable of being settled between the parties without determination by the Court, and the wife’s conflicting view and related conduct prevented such settlement from occurring.[72] The husband submitted that in relation to the wife’s continuation of the proceeding, she was ultimately “wholly unsuccessful.”[73]
[72] Written submissions by the Applicant husband filed 23 September 2020, [25].
[73] Written submissions by the Applicant husband filed 23 September 2020, [25].
The function of the husband’s indemnity orders made on 21 February 2020, in his submission, was twofold: firstly, “to quarantine [his] entitlement out of the matrimonial property as a guarantee against any cost overruns and the like” towards the Suburb F property; and secondly, to indemnify the wife “completely as against any legal and/or financial liability under the building contract” for the Suburb F property.[74] On that basis and with regard to any “prerequisite conditions”, it was the husband’s submission that the wife “completely walked away from the Suburb F development as advised to the Court by her counsel at the trial”.[75]
[74] Written submissions in Reply by the Applicant husband sent to the Court 29 September 2020, [1].
[75] Written submissions in Reply by the Applicant husband sent to the Court 29 September 2020, [2].
As to the wife’s legal position, the husband contended she instructed her counsel, at all relevant times, to take and support any position other than one which would see the Suburb F property complete.[76] Further, it was “the [w]ife’s conduct [that] necessitated the intervention/joinder of the Respondents.”[77] The husband, in reply, asserted that the wife’s submissions ignored any and all other options other than the option taken by her of terminating the Second and Third Respondents’ respective contracts.[78]
[76] Written submissions by the Applicant husband filed 23 September 2020, [19].
[77] Written submissions by the Applicant husband filed 23 September 2020, [20].
[78] Written submissions in Reply by the Applicant husband sent to the Court 29 September 2020, [5].
Section 117(2A)(d): any proceeding necessitated by failure to comply with orders
This factor is not relevant.
Section 117(2A)(e): whether any party wholly unsuccessful
It was the wife’s submission that in circumstances where one party is unsuccessful in their application, this is “no basis for making a cost order in itself as that would be contrary to [s] 117(1).”[79] It is, however, a factor which the Court can take into account, and the wife concedes as such in her submissions.[80] The wife was wholly unsuccessful in her actions with respect to the Second and Third Respondents.
[79] Written submission by the Respondent wife filed 23 September 2020, [42].
[80] Written submission by the Respondent wife filed 23 September 2020, [42] citing Penfold v Penfold (1980) 144 CLR 311.
Section 117(2A)(f): offers in writing
This factor is not relevant.
Section 117(2A)(g): other relevant matters
The husband submitted that the delay in resolving the proceeding centred on the wife’s “obstinate refusal to allow the completion of [the Suburb F property] which was to result in the Second and Third Respondents taking up residence”.[81] Additional costs incurred for the building of the Suburb F property related solely to the wife’s delay in permitting completion of the units and subdivision of the land. Additional legal costs also resulted from the building delays of more than two years, in the submissions of the husband.[82] The husband asserted that amount to be a further $46,000 (additional to the $100,000 paid by the wife) which was sought (and had been incurred) by the Second and Third Respondents at the Assessment Conference before Registrar Sudholz on 28 August 2020 (‘the Assessment Conference’), together with the sum of $12,000 with such an amount calculated from the date of the Assessment Conference and the husband noted this submission was “able to be confirmed in writing by the [Second and Third] Respondents’ solicitors.”[83] This is a further sum of $58,000 which the husband submitted he has and/or will pay to recompense his mother and uncle. The husband’s position from the outset was made clear to the wife, and the Court, that he sought to complete the Suburb F property.[84] Further, he made that formal in his Amended Initiating Application filed 21 June 2019, upon the Respondents joining the proceedings.
[81] Written submissions by the Applicant husband filed 23 September 2020, [14].
[82] Written submissions by the Applicant husband filed 23 September 2020, [14].
[83] Written submissions by the Applicant husband filed 23 September 2020, [23].
[84] Written submissions by the Applicant husband filed 23 September 2020, [7].
The husband submitted the chronology of relevant matters to this costs proceeding, explained “simpl[y]”[85], was thus:-
(a)firstly, the husband was locked out of the Suburb F property shortly after separation and prior to completion of the units;
(b)secondly, the wife, her father and her father’s company, K Pty Ltd, either together or separately, lodged caveats “alleging indebtedness”[86] in excess of $1,000,000 against the Suburb F property; and
(c)thirdly, “when challenged and forced to withdraw, they purported to rescind the contracts”,[87] the contracts being referrable to those between the wife and the Second and Third Respondents respectively.
[85] Written submissions by the Applicant husband filed 23 September 2020, [9].
[86] Written submissions by the Applicant husband filed 23 September 2020, [9].
[87] Written submissions by the Applicant husband filed 23 September 2020, [9].
It was the submission of the husband that due to his time and expense, the Suburb F property was completed and the relevant permits granted. He was required to re-apply for permits, which had expired or lapsed, and insurances.[88]
[88] Written submissions by the Applicant husband filed 23 September 2020, [16].
It is clear that the bulk of the costs incurred by the Second and Third Respondents should be paid by the wife. The submissions which the husband made, and sought the Court to consider, were that the wife did not agree to completion of the Suburb F property until the final hearing, after all legal fees and costs had been incurred, not just for the Second and Third Respondents, but for the husband as well.[89] The wife was at all times on notice as to the risk of costs.[90] The Court determines that the husband should be responsible for one-fifth of the payment made by the wife for the reasons set out herein, namely, that his dealings with the Second and Third Respondents were not always transparent to the wife and that conduct created some of the costs that were thereafter incurred by the Second and Third Respondents albeit the majority of the responsibility for the costs order made must fall at the wife’s feet.
[89] Written submissions by the Applicant husband filed 23 September 2020, [22(h)].
[90] Written submissions by the Applicant husband filed 23 September 2020, [22(i)].
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 11 December 2020
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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Appeal
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Remedies
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Jurisdiction
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