BRONLEY & SANDERSON

[2012] FamCA 656

FAMILY COURT OF AUSTRALIA

BRONLEY & SANDERSON [2012] FamCA 656

FAMILY LAW – COSTS – Wife acted unreasonably “in relation to” the proceedings – Justifying circumstance to make a costs order – Exercise of discretion – Indemnity costs – Costs order made on indemnity basis

Family Law Act 1975 (Cth) s 90SM, s 117(1), s 117(2), s 117(2A), s 117(2A)
Family Law Rules 2004 r 9.08(3)

Colgate-Palmolive Company & Anor v Cussons Pty Ltd [1993] FCA 536
Fennessy & Gregorian [2009] Fam CAFC 44; (2009) FLC 93-399
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397
J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) No 2 (1993) 46 IR 301
Penfold and Penfold (1980) 144 CLR 311

APPLICANT: Mr Bronley

RESPONDENT: Ms Sanderson

FILE NUMBER: BRC 12008 of 2010

DATE DELIVERED: 3 July 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: O’Reilly J

HEARING DATE: 2 July 2012

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Rebolledo
Spranklin McCartney Lawyers

COUNSEL FOR THE RESPONDENT: Mr Black

SOLICITOR FOR THE RESPONDENT: Think Legal

Orders

IT IS ORDERED

1. The wife’s application for costs is dismissed.

2. The wife pay the husband’s costs of and incidental to his application in a case filed 18 April 2012 on the indemnity basis, if not agreed within 14 days from today, to be assessed.

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

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER:  BRC 12008 of 2010

Mr Bronely

Applicant

And

Ms Sanderson

Respondent

REASONS FOR JUDGMENT

Ex Tempore

Applications

1. The husband seeks an order that the wife pay his costs, on the indemnity basis, of and incidental to an application in a case filed 18 April 2012, which document commenced the current component of these proceedings. 

2. It is implicit in his application that in the alternative he seeks an order for costs on the party and party basis.

3. The wife, by her response filed 29 June 2012, seeks an order that the husband pay her costs.

Background

1. On 24 December 2010, the parties entered into a consent property order under section 90SM of the Family Law Act 1975 (Cth).

2. Although section 90SM relates to a property order between former de facto partners, it is convenient, and the custom in the Court, unless a party objects, to refer to parties as the husband and the wife respectively.

The husband’s application in a case filed 18 April 2012

1. The husband’s application in a case filed 18 April 2012 sought orders that:

   1.     A Registrar of the Court execute a form styled Australasian Animal Registry on behalf of the wife as “previous owner” of a border collie dog “[J]” currently registered in the wife’s name carrying microchip number No 98 1000 3000 76475.

   2.     The wife deliver up [the dog] to the husband within three business days.

   3. In default, a warrant issue pursuant to Rule 20.55 of the Family Law Rules 2004 authorising an enforcement officer to seize [the dog] and deliver him to the husband.

   4.     The wife pay the husband’s costs on the indemnity basis.

2. The husband’s application in a case, without any Registry events, was listed in the judicial duty list yesterday 2 July 2012.

The wife’s response filed 29 June 2012

1. The wife, by her response filed 29 June 2012, resisted the relief sought by the husband and sought the dismissal of his application in a case and costs.

Settlement

1. By yesterday, 2 July 2012, the matter had settled with no required substantive orders, leaving argument only in relation to costs.

2. The settlement of the matter involved four aspects:

   1.     The wife already had delivered [the dog] to the husband at about 4 pm on Sunday 1 July 2012.

   2.     Before Court time yesterday the wife had signed the requisite transfer document for the husband to become the registered owner of [the dog], that occurring, as I understand it, at the door of the Court.

   3.     Yesterday, during the hearing, the wife voluntarily signed and was given leave to file an undertaking that she would not change the registration of [the dog] with the Australasian Animal Registry at any time from yesterday onwards (not the subject of any order sought by the husband).

   4.     The wife need not give the husband any veterinary records held by her on the basis that she held no such records and had not taken [the dog] to any veterinary practitioner in the time that [the dog] was in her care that is, between 27 March 2012 and July 2012 (also not the subject of any order sought by the husband).

Principles relating to costs applications

1. Section 117 of the Family Law Act 1975 (Cth) applies. Pursuant to s 117(1) and (2) the parties are to bear their own costs, unless the Court forms the opinion that there are circumstances to justify a costs order in which case it may make such order as it considers just. Before making a costs order the Court must identify the circumstance or circumstances on which it relies to justify the order, and must have regard to the matters in s 117(2A).

2. In Penfold and Penfold (1980) 144 CLR 311 the High Court said at 315:

   It is an accurate description of s.117(1) to say that it expresses a general rule, provided that it is firmly understood that the sub-section is not paramount to s.117(2). As sub-s. (1) is expressed to be subject to sub-s. (2) the former must yield whenever a judge finds in a particular case that there are circumstances justifying the making of an order for costs.

   Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order.  Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions which imposes any additional or special onus on an applicant for an order for costs. … (emphasis added)

Costs application husband: grounds

1. Ms Rebolledo, solicitor, for the husband, relied on 2 section 117(2A) grounds, namely:

   1. Section 117(2A)(d) – the husband’s proceedings were necessitated by the failure of the wife to comply with a previous order of the Court.

   2. Section 117(2A)(c) – the conduct of the wife “in relation to” the proceedings, in particular, her delay in addressing the substantive subject matter of the proceedings, and her delay in filing a response until last Friday 29 June 2012 (although I understand from Mr Black of Counsel, for the wife, that the response was lodged for filing and served on the due date 28 June 2012), directly causing the husband to incur costs.

Costs application wife: grounds

1. Mr Black of Counsel, for the wife, relied on 1 section 117(2A) ground, namely:

   1. Section 117(2A)(f) - the husband’s failure to accept an offer in writing to settle the proceedings and the terms of such offer.

Husband: ground 1 - section 117(2A)(d) – alleged breach by wife of previous order of the Court

1. Ms Rebolledo relied upon par 8.6 of the parties’ consent property order:

   8.     The applicant [husband] will forthwith retain the title and possession of and, if necessary, the respondent [wife] will within thirty (30) days from the date of this order do all acts and things and sign all documents necessary to transfer and relinquish all right, title and interest (if any) in and to the following:

   …

   8.6All other property and financial resources (except as otherwise provided for in this order) of which he is the legal owner or is currently in his possession or control. (emphasis added)

2. In resistance, Mr Black relied on par 9.6 of the parties’ consent property order:

   9.    The respondent [wife] will forthwith retain the title and possession of and, if necessary, the applicant [husband] will within thirty (30) days from the date of this order, do all things and sign all documents necessary to transfer and relinquish all right, title and interest (if any) in and to the following:

   …

   9.6All other property and financial resources (except as otherwise provided for in this order) of which she is the legal owner or is currently in her possession or control. (emphasis added)

3. Ms Rebolledo relied also upon par 13:

   13.The applicant and respondent each do all acts and procure the doing of all things and sign and procure the signing of all documents necessary to give full force and effect to the provisions of this order and in the event that either party refuses or neglects to comply with any provisions of this order within fourteen (14) days of a written request to do so, then a Registrar of this Court at Brisbane is appointed pursuant to section 106A of the Family Law Act 1975 to execute all documents in the name of that party and do all acts and things necessary to give validity and operation to this order. (emphasis added)

4. In relation to pars 8.6 and 9.6, there is practical ambiguity, because on both parties’ evidence, which I accept, the dog, as at 24 December 2010, the date of the consent property order, was legally registered in the wife’s name as owner, but undoubtedly in the possession and control of the husband and indeed had been so since about May 2010.  The husband indeed says that the dog had resided with him since the date of separation which had occurred in early 2010, although the dog spent time with the wife until being re-delivered to the husband in early May 2010 and, as I said, remained in the husband’s possession and control from that date up to and including the date of the consent property order.

5. The wife said that she did not consider that the dog was the subject of pars 8.6 or 9.6, first, because in agreeing the consent property order there was no specific contemplation, at least on her part, that the dog was any part of its subject matter; secondly because long before the consent property order was made she alleges the parties antecedently had an agreement or “arrangement” about the dog, namely, that on and after May 2010 the dog would be in the husband’s care provided that he cared for the dog properly; and thirdly that at no stage was change of ownership of the dog contemplated or agreed. The third matter however belies that the tenor of the consent property order, plainly, was to bring to an end all property and financial matters between them, as a full reading of the consent property order shows, in particular the word “All” prefacing each of pars 8.6 and 9.6.

6. The husband contends that the dog was a birthday gift from the wife to him.  The wife denies this.  See the husband’s affidavit, par 7; wife’s affidavit, pars 7-9. 

7. In any event it came about that the dog lived with the husband, as I said, between at least May 2010 and 26 March 2012 when, according to the husband in his affidavit  pars 11, 12 and 13:

   11.On or about 26 March 2012, [the dog] escaped from my house via the side fencing of the house. I know this because one of the fence palings had fallen down.

   12.I was at home at the time [the dog] escaped from the house.

   13.I realised [the dog] was missing around 5:50pm on 26 March 2012. I looked for him for approximately 2 hours but could not find him.

8. Plainly, the wife did not “take” the dog from the husband. 

9. Equally plainly, however, at the time of the consent property order, whilst the wife was the legal owner of the dog at that date, for a considerable period of time before that date and indeed on that very date, he was in the possession and control of the husband.

10. The wife says in her affidavit pars 12-17:

    12.On or about 26 March 2012 I was contacted by a vet clinic at [G], Brisbane, they told me that they had [the dog] in their clinic. They contacted me as I was the registered owner of [the dog]. Annexed hereto and marked “SMS 2” is a true copy of the original Microchip registration form for [the dog]. As I was living in Melbourne at the time I had a friend collect [the dog] from the Clinic. My friend told me that [the dog] was in very poor condition.

    13.From what I had been told by my friend I concluded that [the dog] was not being properly cared for by the applicant and I arranged for [the dog] to be sent to Melbourne where I was living at the time on 27 March 2012 as per the booking provided by the applicant at Exhibit “PFB4” to his affidavit where I was living at the time.

    14.On 21 June 2012 I went into the Brisbane City Council (BCC) and spoke with a Customer Service Officer (CSO) who conducted a search under the applicant’s name and his partner Ms [F], and they checked the address that I knew that [the dog] had been at in [G] and [the dog] was not registered at that address or under the names that I checked. On the same day I telephoned the [B] Regional Council […] and made the same inquiries as I had with the BCC. I was informed by the [B Regional Council] that they had no record of [the dog] being currently registered, only the previous registration under my name. As a dog, [J] is required to be registered in the council area in which he resides.

    15.I do not believe that the applicant is taking proper care of [the dog] and has therefore breached our agreement that he can have [the dog] and only whilst he looks after him.

    16.When the property settlement was arranged and agreed to, nothing was ever discussed about [the dog] as I [was] prepared to allow [the dog] to stay with the applicant if he was being properly cared for. From the events of March 2012 and the condition of [the dog] I have concluded that the applicant is not capable of properly caring for [the dog], unless he is prepared to do all things required in dog ownership.

    17.I never intended that [the dog] would become the applicant’s ‘property’, and always thought of [J] as my dog. I believe the applicant knew this was [the] arrangement, and that is why he never asked for a transfer of ownership or registration.

11. It seems to me that several factors emerge. 

12. The first is that whilst the wife was the registered and thus legal owner of the dog at the date of the consent property order, for the purposes of pars 8.6 and 9.6 there is as I said practical ambiguity because of the word “or” in each of those paragraphs, because as I have explained the dog nonetheless at that time was in the possession and control of the husband.

13. Ms Rebolledo argued that the wife “breached” the consent property order, in particular par 8, by failing to sign a requisite document for transfer within 30 days. However, there is not any evidence that the husband’s solicitors presented to the wife a document of transfer to sign at that stage and it appears to me to be something that may have been simply overlooked.

14. The second matter, however, is this.  Whilst pars 8.6 and 9.6, in themselves, have practical ambiguity, the parties’ intentions under them are not ambiguous, it appears to me, evidenced by their conduct, in that after the making of the consent property order on 24 December 2010 at no stage did the wife assert that the husband should deliver the dog to her pursuant to par 9.6. Rather, it seems plain that both parties treated par 8.6 as including the dog because on that very date the dog was in the possession and control of the husband.

15. It seems to me thus that the parties treated the dog as the husband’s property, pursuant to the consent property order, and have been doing so since, indeed, before the date of the order, since May 2010.

16. Further, it seems to me that any antecedent agreement concerning the dog, as alleged by the wife, whether or not true, merged in the consent property order, and that their intentions concerning the dog were and are as evidenced by the parties’ subsequent conduct, as I have mentioned.

17. If I am correct in this analysis, then it seems that the signing of a transfer document was merely overlooked at the time of the making of the consent property order.

18. It seems to me thus that there was no “breach” of the order 8. Rather, a situation developed which was not anticipated by the parties, which was that the dog escaped through a panel in a fence, and ended up at a veterinary surgery, which called the wife because of her details on the microchip. Despite the wife’s evidence thus that she always regarded the dog as “my dog”, that was not the practical effect of the consent property order.

19. I have mentioned already that in my view, whether or not there was an antecedent agreement concerning the dog, as alleged by the wife, and whether or not such is true, it merged in the consent property order.

20. Further however, as to the wife’s contention of an antecedent agreement that the dog live with the husband provided that he was properly cared for, and that in her assessment as at 26/27 March 2012 this had not occurred, one would think that if the dog had been in poor condition at that time, the wife, as a dog trainer, and a dog lover, immediately would have taken the dog to a vet; yet on her own case, she had not, from which I would infer that the dog was not in any poor condition on 27 March 2012 when, wrongfully, she took possession of him. I say “wrongfully” because in my view, it would have been reasonable to expect that she would either tell the vet to contact the husband to collect the dog, or for herself to collect the dog, contact the husband and deliver the dog back into the husband’s possession.

21. Relevantly, there was a technical breach of par 13 of the consent property order, by reason of a letter before action, to which shortly I will refer. However, the husband’s remedy for any breach of par 13 was to approach a Registrar, not commence these proceedings. Despite that circumstance, such overlooks that the husband was required to commence these proceedings to re-obtain possession of the dog, at his primary objective, ignored by the wife after the letter before action, to which, as I said, I will shortly refer.

22. I would conclude nonetheless that no justifying circumstance under s 117(2A)(d) is made out.

Husband: ground 2 – section 117(2A)(c) – conduct of wife “in relation to” the proceedings

1. I turn now to the second matter relied upon by the husband, which is conduct “in relation to” the proceedings.

2. The words “in relation to” are of wide import, and capable thus of including pre-action conduct.

3. Expressly, s 117(2A)(c) is non-exhaustive as to the matters of conduct “in relation to” proceedings which are capable of amounting to a justifying circumstance.

4. Here, the husband relies upon delay by the wife in respect of two discrete periods, first, between the date of the letter before action, being a request to the wife to sign the transfer document and to deliver up the dog; and secondly, from the start of the proceedings 18 April 2012 until yesterday.

5. The affidavit material and submissions refer to the letter before action; to matters of service on the wife; when the wife first learned of the husband’s claim and the institution of the proceedings; and accusation of her delay between then and Sunday 1 July 2012 in delivering up the dog, and until yesterday morning signing the transfer document.

6. I accept that the incurrence of costs by the husband “in relation to” the proceedings could have been avoided. 

7. The letter before action, annexure ER2 to Ms Rebolledo’s affidavit, on the first page set out the various matters that had occurred, and alleged that the wife unlawfully had taken possession of the dog; and on the second page, said:

   Accordingly, pursuant to Order 8.6 and Order 13 of the Consent Orders we hereby request that your client:

   1. Within 14 days herein sign and return the attached Australasian Animal Registry Form to update registered owner details.

   2.Return, at her own cost, the dog to our client’s residence within 7 days herein. 

   We hereby reserve our client’s right to institute any proceedings reasonably required to regain possession of his dog. (original emphasis)

8. That letter was dated 30 March 2012. It was marked “Urgent”. It was sent to the wife’s former solicitors, Hartley Healy. They held no current instructions from the wife, including as to the acceptance of service of any correspondence or proceedings. As I understand the matter, however, the letter came to the wife’s attention by about or shortly after 2 April 2012: wife’s affidavit, par 23. Thus, between about 2 April 2012 and 18 April 2012, there was not so much delay but unwillingness on the wife’s part to recognise her moral if not legal obligation to return the dog to the husband; and under par 13 of the consent property order, by reason of the merger to which I have referred, her legal obligation to sign the necessary document to transfer the dog to the husband.

1. It is true that the wife was entitled to be somewhat confused when first contacted by the vet because of the microchip information. However, in my view, as mentioned, either she should have instructed the vet to contact the husband, or within a day, or a few days, sensibly, would have realised that she ought to contact the husband, or his former lawyers, to say that the dog was with her and where the dog could be collected, and certainly ought to have signed the transfer document on request as contained in the letter before action. 

2. I have read carefully and considered carefully the wife’s perspective that she is a dog trainer and had been told by her “friend” that the dog was in a poor condition and thus regarded the husband as being in breach of what she alleged was an agreement, or “arrangement”, prior to the consent property order, that the dog could stay in the husband’s possession only if he properly cared for the dog.  If, as to which I am uncertain, the wife’s reason for adopting the course which she did, instead of the plainly sensible and proper course is an honest reason, which in her favour I will presume, such was not reasonable from the legal perspective compared with her explained perspective in her material, particularly after her receipt of the letter before action. 

3. Ms Rebolledo submitted that in all of the circumstances the husband had no alternative but to commence the proceedings, and did so promptly, indeed within 2 days of the wife’s default in not signing the transfer document, such that the husband’s costs necessarily were incurred and could have been avoided by the wife by delivery up of the dog and signing the transfer document in a timely fashion and indeed pursuant to the letter before action. I accept this submission.

4. The wife’s conduct therefore falls into the category of conduct “in relation to” the proceedings, within the meaning of section 117(2A)(c); or alternatively comes within section 117(2A)(g), that is, the catch-all provision of “such other matters as the Court considers relevant”, in considering whether there is a justifying circumstance to order costs.

5. Mr Black submitted in respect of delay, first, that there was no “undue” delay because of the haste within which the husband commenced his action after delivery of the letter before action. This is in the husband’s favour, however, not a matter against him.

6. By the Family Law Rules 2004, rule 9.08(3) (and see further the last page of the initiating application, third bullet point) strictly a response was due by 28 June 2012 (such being 2 clear days before the listed hearing date shown on the first sheet of the initiating application, 2 July 2012). The wife’s compliance either was met, or if not met, only by one clear day, which in my view is immaterial.

7. However, neither of these matters in my view detracts from what I have determined already that the wife acted unreasonably in not acting pursuant to the letter before action by complying with it. Regardless of the wife’s own thoughts as a dog trainer of the condition of the dog, she had a moral if not legal obligation to return the dog to the husband in a timely fashion either on 26 or 27 March 2012, or within a few days after that, and certainly in response to the letter before action.

8. Further, although the wife asserted in her material that she had an independent antecedent agreement in relation to the dog, the fact of the matter is that by the final consent property order, all property of the parties was dealt with once and for all, and such, as I have said, was the tenor of the parties’ order, read as a whole.

9. I am conscious that the wife’s material includes that her former lawyers on the record, Hartley Healy, apparently, without her instructions, undertook on her behalf to accept service of the initiating application. The salient point however is that service of the initiating application was effected personally on her by the husband by email 27 April 2012: wife’s affidavit, par 24.

10. Next, the wife said that although Hartley Healy was not acting for her, that she received “advice” from Hartley Healy on 14 May 2012 to the effect that she did not have to return the dog because of par 9.6 of the consent property order because she was the legal owner of the dog: same affidavit, par 24. However, subsequently to the consent property order there was mutual conduct by the husband and the wife making clear their intent that the dog, after the consent property order, belonged to the husband as his property, regardless of the state of registration, which seems to have been overlooked.

11. Further, I have referred already to the circumstance that, even if the wife relied on her understanding that pars 8.6 and 9.6 did not apply to the dog, but relied rather on the antecedent agreement which she alleges, there was no rational basis for her to conclude that the husband was not properly caring for the dog, or that he was in poor condition. This is self evident by the circumstance, which I have mentioned, that on the wife’s own admission she had no occasion to take the dog to a vet between 26/27 March 2012 and 1 July 2012. I would infer thus that the dog was not in “poor condition”, and that there was no rational basis for her to conclude that, pursuant to the terms of the antecedent agreement that she alleges, the husband was not “properly caring” for the dog.

12. Finally, in relation to conduct (and perhaps also by reference to s 117(2A)(f), although not expressly invoked) Ms Rebolledo relied upon an offer to settle, in writing, ex 2, by the husband to the wife. However, that offer basically was the husband’s entire claim with a claim for full indemnity costs. It is unusual thus to describe it as an offer to settle, which characteristically has the feature of some measure of compromise, one side to the other. Further, compared with the 2 offers to settle by the wife, exhibits 1 and 3, the substantive content of the 3 offers were substantially the same, with the only area of difference being in relation to the costs offers, the wife offering $243 for costs, but the husband expressly seeking full indemnity costs, which Ms Rebolledo stated from the Bar table yesterday without objection, were in the vicinity of $2,500.

13. There is no merit thus in Ms Rebolledo’s reliance on the offer to settle. 

14. There is the circumstance that substantively the husband was wholly successful in the proceedings and the wife wholly unsuccessful. This ground was not argued or relied upon by Ms Rebolledo, however, I note that the settlement on Sunday afternoon, and yesterday morning, had effect that the further relief sought by the husband of the issue of a warrant was not necessary.  This also was not argued, so that I will ignore these aspects of the matter.

15. In all of the circumstances, I am not satisfied that the wife’s alleged delay in filing a response is a justifying circumstance, in that at all times she had until 28 June 2012 to do so.

16. However, I am satisfied that the wife’s failure to respond in a timely way to the letter before action which, on her own admission, she received on or about 2 April 2012, and her failure thus to avoid the husband’s warned institution of the proceedings contained in the letter before action caused the husband’s incurrence of costs in the institution of the proceedings on 18 April 2012, and all of his costs relating to it since then, and in all of the circumstances which I have described I am satisfied that such amounts to a justifying circumstance for a costs order to be made against the wife.

17. Materially, upon the filing of the husband’s application on 18 April 2012, and his affidavit and Ms Rebelledo’s affidavit on the same date, there were no steps in the proceedings until the listed date 2 July 2012.

18. However, even as at 29 June 2012, a Friday, the wife’s response sought dismissal of the husband’s claim, such that as late as that Friday, the husband and his lawyers were required to prepare for the hearing on 2 July 2012, a Monday, and attend it, only for it to settle at the last minute.

19. Accordingly, I will make a costs order, based upon the justifying circumstance which I have identified.

Section 117 (2A)(a)

1. I turn now to the parties’ financial circumstances. This is a matter which, to the extent that there is evidence, I must consider under section 117(2A). Plainly however not all of the matters under section 117(2A) always will be relevant.

2. Counsel and Ms Rebolledo agreed that the parties’ affidavit material is not directed to their respective financial circumstances, save for an oblique reference in the wife’s affidavit, par 24, in the last sentence: “I am on very limited funds.” 

3. The intent of section 117(2A) is that the Court take into account such of the several matters under it as are relevant, and it is up to the parties to adduce evidence as to relevant matters, for example, the parties’ financial circumstances.

4. I am not able to take this matter into account, however, as a relevant matter, because the parties have not argued it, and thus I would conclude and infer that the parties themselves do not consider this a relevant matter, my obligation being to take into account only the relevant matters.

Wife: ground 1 – section 117(2A)(f) – husband’s failure to accept offer to settle in writing

1. I turn now to the wife’s cross claim for costs. Mr Black of Counsel, for the wife, referred to 3 offers to settle, exs 1, 2 and 3, submitting that between 26 and 28 June 2012, the matter could have been settled if the husband had not persisted with his costs claim for more than what had been offered, $243.00.  However, as mentioned, the date 2 July 2012 was fixed for hearing as early as 18 April 2012 when the proceedings were commenced.

2. The dog was not delivered to the husband until Sunday 1 July 2012, and the transfer document was not signed by the wife until yesterday morning shortly before 10 .00 am. With the date 2 July 2012 already fixed, it was necessary for the husband’s lawyer thus to come to Court to appear, and for the respondent to come to Court to appear (if she wished), until all relief claimed by the husband was obtained, including the signed transfer document.

3. I reject therefore the wife’s costs claim against the husband as not demonstrating any justifying circumstance and accordingly will dismiss her costs claim.

Conclusion

1. I have determined already that the husband has established a justifying circumstance for costs and that accordingly I will make a costs order.

Indemnity or some other basis

1. In Colgate-Palmolive Company & Anor v Cussons Pty Ltd [1993] FCA 536 it was held that justifying circumstances for indemnity costs included wilful disregard of known facts, the making of allegations which ought never have been made or the undue prolongation of a case by groundless contentions. Further, in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 400-1 it was held that it is appropriate to consider awarding what was there described as solicitor and client or indemnity costs:

   …whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. (emphasis added)

2. In J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) No 2 (1993) 46 IR 301at 303 French J said in relation to indemnity costs:

   It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case. (emphasis added)

3. In Fennessy & Gregorian, the Full Court of this Court at [60] referred to the following passage in Colgate-Palmolive at 257:

   …it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion.  I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors & Weekes); evidence of particular misconduct that causes loss of time to the court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp);  the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata);  an imprudent refusal of an offer to compromise (Messiter v Hutchinson; Maitland Hospital v Fisher (No 2);  Crisp & Kent) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). (citations omitted)

4. I am satisfied, based on my findings above, that if properly advised the wife ought to have acted on the letter before action to avoid the incurrence of the husband’s costs; that the wife acted in the wilful disregard of known facts; and that she raised groundless contentions and indeed a hopeless case; causing loss of time to the Court and to the husband.

5. I am conscious that the wife said that Hartley Healy advised her that pursuant to par 9.6 she had the legal ownership of the dog. In my view however it was not even faintly arguable, based upon all of the facts, that she was entitled to possession of the dog. Further, even to give the wife the benefit of the doubt as to what she considered was an antecedent agreement about the dog, and that the wife said that in relation to the consent property order she was not thinking about the dog, such not only belies the reality of the effect of a full and final property order, but, if the dog had not been cared for properly, one would think that the wife would have had him attend a vet, and expressly, on her own case, she did not, from which I have said earlier I would infer that the dog was not in a poor condition nor not properly cared for.

6. It seems to me therefore that this is one of those very rare cases in which indemnity costs should be awarded. I say rare, because the authorities make clear that, particularly in this Court, an award of indemnity costs is a rare circumstance.  Often parties need to come to Court, for example in relation to a contest over children, where each has an arguable claim and there needs to be an order made by the Court, or in property matters between husband and wife or de facto husband and wife, parties need to come to Court to obtain an order, even a consent order.  But in this particular case, it is unusual because it arose not out of necessity, but out of conduct before action and during action, to which I have sufficiently referred.

7. Finally, it is not to the point, as was argued, that there were no Court events between issue of the proceedings and the listing yesterday. As already explained, nonetheless the husband’s lawyers needed to prepare argument for the listing of the matter on 2 July 2012 and to appear.

8. The order will thus be:

   1.     The wife’s application for costs is dismissed.

   2.     The wife pay the husband’s costs of and incidental to his application in a case filed 18 April 2012 on the indemnity basis, if not agreed within 14 days from today, to be assessed.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly delivered on 3 July 2012.

Associate: 

Date:  10 August 2012