BRUNO & ESTRELLA

[2019] FCCA 716

FEDERAL CIRCUIT COURT OF AUSTRALIA

BRUNO & ESTRELLA [2019] FCCA 716

Catchwords:
FAMILY LAW – Costs – interim applications.

Legislation:

Family Law Act 1975 (Cth), s.117

Child Support (Registration and Collection) Act 1988 (Cth), s.111C

Federal Circuit Court Rules 2001 (Cth), sch.1

Applicant: MS BRUNO

Respondent: MR ESTRELLA

File Number: ADC 4659 of 2015

Judgment of: Judge Mead

Hearing date: 15 February 2019

Date of Last Submission: 15 February 2019

Delivered at: Adelaide

Delivered on: 22 March 2019

REPRESENTATION

Counsel for the Applicant: Ms Dickson

Solicitors for the Applicant: Belchamber Legal

Counsel for the Respondent: Ms Cocks

Solicitors for the Respondent: Norman Waterhouse Lawyers

ORDERS

1. That on or before 3 May 2019 the respondent husband pay to the applicant wife’s solicitors’ trust account on account of the applicant the sum of $4,574.00 with respect to the application in a case filed herein on 17 April 2018 and the reply filed herein on 16 July 2018.

2. That the reply filed on 16 July 2018 be otherwise dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Bruno & Estrella is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 4659 of 2015

MS BRUNO

Applicant

And

MR ESTRELLA

Respondent

REASONS FOR JUDGMENT

Background

1. By way of Application in a Case filed on 17 April 2018 the wife sought payment of the sum of $80,000.00 held in the trust account of the husband’s solicitors to be paid into her solicitors’ trust account such that she be at liberty to apply those funds to the payment of legal fees and disbursements incurred in the preparation of her case for trial.

2. She sought that the characterisation of the payment be a matter for the trial judge, a vacation of the trial listing due to commence on 1 May 2018, certain orders by way of discovery and valuation and details of the investment of the said sum of $80,000.00 since it had been removed from the wife’s possession by the husband on 14 July 2016.

3. On 18 April 2018 the parties consented to a vacation of the trial date and the Application in a Case was listed for argument on 9 May 2018.

4. The husband was ordered to file a Response and affidavit in support on or before 3 May 2018.

5. Both parties were ordered to file and serve affidavits of documents on or before 3 May 2018.

6. On 3 May 2018 the husband filed responding documents as ordered. The husband sought that the wife’s application be dismissed, certain orders with respect to valuations and certain parenting orders with respect to the parties’ child [X].

7. He further sought orders that pursuant to s.111C of the Child Support (Registration and Collection) Act 1988 (Cth) both the operation and collection of Child Support with respect to the parties’ older child [Y] be suspended and certain orders with respect to Child Support in relation to the parties child [X].

8. In the wife’s affidavit filed 16 April 2018 she deposed in paragraph 3 to a list of assets and liabilities of the parties which on her case alleged that net assets available for distribution between the parties were in excess of E$5,000,000.00.

9. The assets deposed to by the wife consisted of assets inherited by the husband and those she deposed were non-inherited assets. The assets relate to a farming enterprise.

10. In circumstances where the husband’s Response opposed the orders sought the matter was listed for argument on 9 May 2018.

11. Certain consent orders were made on 9 May 2018 with respect to the valuation of certain farming properties at the joint and equal expense of the parties. After submissions with respect to the application in relation to the payment of $80,000.00 into the wife’s solicitors’ trust account on account of anticipated legal fees, judgment was reserved to 10 May 2018.

12. On 10 May 2018 the court delivered ex-tempore reasons in relation to the competing applications save and except as to issues concerning parenting orders in relation to the parties’ child [X] as well as the outstanding applications contained in the Response in relation to Child Support orders. These were adjourned for hearing to 13 June 2018.

13. On 10 May 2018 the court ordered, inter alia as follows:

    a. That on or before 5:00pm on 16 May 2018 the sum of $80,000.00 presently held in the Norman Waterhouse trust account on account of the respondent be paid to the Belchamber Legal trust account on account of the applicant.

    b. That the applicant be entitled to the said sum by way of interim property settlement NOTING THAT the question of how the payment made pursuant to this order shall be taken into account at the final hearing is reserved to the trial judge.

    c. That the application filed herein on 17 April 2018 be otherwise dismissed.

14. On 15 February 2019 the question of costs in relation to both the Application in a Case and the husband’s Response was listed for argument on the papers. Counsel for the wife submitted that the wife had been wholly successful in obtaining the orders she sought with respect to the payment of the $80,000.00 into her solicitors’ trust account on account of anticipated legal fees. She submitted that the wife had incurred fees totalling $9,648.10 with respect to that application.

15. On 11 February 2019 the wife filed an affidavit with respect to the issue of costs. Annexure “A” to that affidavit was the bill of costs referred to in paragraph 2 of the wife’s affidavit itemising the costs totalling $9,648.10.

16. The wife’s counsel submitted that the wife’s instructing solicitor had sent correspondence to the husband’s solicitor on 11 May 2018 offering to accept the sum of $3000.00 by way of settlement of the wife’s costs application which offer was not accepted by the husband.

17. On 15 February 2019 the amount sought by the wife’s counsel was $3,995.22 being an amount calculated on the Federal Circuit Court scale of costs schedule comprising the costs of the Application in a Case as well as an additional $500.00 by way of costs of the preparation of the bill of costs together with the costs of the wife’s counsel attending on the hearing on 15 February 2019.

18. The application was opposed by the husband’s counsel.

Relevant law

1. Section 117 of the Family Law Act 1975 (Cth) provides for parties in litigation in family law proceedings to bear their own costs. If there are circumstances however that justify the court in doing so it may make an order for costs and security of costs as the court considers just[1].

   [1] Family Law Act 1975 (as amended) s.117(1)(2)

2. In determining whether an order for costs should be made it must take into account the factors referred to in s.117(2A) of the said Act.

Findings

1. It was submitted on the part of the wife that the husband, at the time of the hearing of the application on 9 May 2018, retained the bulk of the parties’ non-inherited assets with a value of at least E$2,000,000.00. It was submitted that annexure “C” to the affidavit of the wife filed 16 July 2018 was a copy of a letter to the wife from the Child Support Agency dated 21 May 2018 setting out the income amounts upon which Child Support was to be calculated for the period 1 October 2017 to 31 December 2018.

2. The parties incomes upon which the current assessment at that time was in place were $92,000.00 provisional for the husband and $41,884.00 for the wife taxable. The correspondence referred to the new assessment for the period 1 October 2017 to 31 December 2018 being made on the basis of the husband’s taxable income for the 2016/2017 year of $68,040.00 and that of the wife for the same year being $41,884.00.

3. It was submitted in those circumstances that the husband’s financial circumstances supported an order for costs in favour of the wife taking into account the disparity in the assets held by the parties and the income of the parties.

4. It was submitted by the wife’s counsel that at the time of the application being filed the amount sought by the wife was some 2% of the asset pool and that the husband’s argument that the $80,000.00 that had been the subject of dispute had been concealed by the wife at the time of separation was an argument that had been taken into account by the court at the time the order was made in favour of the wife.

5. It was submitted that the wife had been wholly successful in her application and further that she had immediately thereafter offered to settle for an amount in respect of costs significantly less than the fees incurred by her. This offer had been declined by the husband.

6. It was submitted on the part of counsel for the husband that the application for the payment of the $80,000.00 into the wife’s solicitors’ trust account had been “bedevilled” by the failure of the wife to disclose the existence of the $80,000.00 at the time of or shortly after the parties’ separation. These funds were ultimately discovered by the husband and removed from the possession of the wife and paid into his solicitors’ trust account.

7. I accept the submission of counsel for the wife that that was a matter that was taken into account in making the order for the $80,000.00 to be paid from the husband’s solicitors’ trust account to the wife’s solicitors’ trust account on account of her anticipated legal fees on 10 May 2018.

8. It was further argued by counsel for the husband that the position of the wife’s finances was uncertain. She submitted that certain assets had not been disclosed and that in those circumstances the court should be cautious about making an order for costs. She further submitted that courts tend to hear arguments as to costs at trial.

9. She further submitted that the wife did not disclose certain bank accounts prior to the order being made.

10. I am satisfied that the wife was wholly successful in her application with respect to the issue of the payment of $80,000.00 into her solicitors’ trust account. I accept the argument of the wife’s counsel that the conduct of the wife with respect to disclosure of financial affairs had been taken into account prior to the order sought by her being made on 10 May 2018.

11. I find that the husband is in a superior financial position to that of the wife. I am satisfied that an offer to settle the wife’s costs claim was refused by the husband in circumstances where the wife had been wholly successful.

12. The balance of the Application in a Case filed by the wife on 17 April 2018 was dealt with by way of consent orders with respect to the vacation of the trial date and otherwise orders as sought by the wife or similar orders with respect to valuations. These orders were made by consent resulting in that application being finalised on 10 May 2018.

13. The orders sought by the husband with respect to Child Support being stayed both with respect to operation and collection and variation were listed for hearing on 13 June 2018. This date was administratively adjourned to 20 June 2018.

14. Those matters were then further adjourned to 31 August 2018.

15. I find that this is a matter where it is, taking into account the matters to which I have referred, appropriate to make an order that the husband pay the costs of the wife, assessed on the basis of Schedule 1 to the Federal Circuit Court Rules 2001 in the following terms:

    a.Item 3: Interim or summary hearing – as a discrete event – $1,867.00.

    b.$840.00 ($560.00 being 50% of the half day hearing fee increased by 50% advocacy loading) for counsel fees.

    TOTAL: $2,707.00.

16. On 10 May 2018 the wife was ordered to file an affidavit on or before 31 May 2018 in response to that of the husband filed by him in support of his Response.

17. The wife complied with that order.

18. By letter dated 3 July 2018 annexed to the affidavit of the wife filed 11 February 2019, the wife’s solicitor forewarned the husband’s solicitor that if her client was put to the expense of filing responding documents in relation to the orders sought by the husband with respect to Child Support an order for costs would be sought by the wife on an indemnity basis.

19. The wife offered through her solicitor to resolve the matter and vacate the hearing. In the absence of agreement by the husband to that course of action the wife was required to file responding documents.

20. On 16 July 2018 the wife filed a Reply seeking that the orders sought by the husband with respect to Child Support be dismissed. As well as the responding documents filed by the wife she filed a further affidavit in support of her Reply on 16 July 2018.

21. On 25 July 2018 the husband filed a Notice of Discontinuance with respect to all outstanding orders sought by him.

22. With respect to the application for costs concerning the Child Support aspects of the Response, counsel for the wife again relied on the disparate financial circumstances of the parties. She also submitted that the conduct of the husband was such that he was clearly on notice from early July 2018 that the wife’s solicitor made a formal offer to settle that aspect of his Response. This offer was rejected by him.

23. It was submitted by Ms Dickson of Counsel that effectively neither party had been successful in relation to that part of the Response but that the wife had been put to the expense of responding to issues in respect of which the husband ultimately withdrew his Response.

24. It was submitted on behalf of the wife that she had incurred the sum of $2,073.50 in circumstances where she was required to file responding documents and further, that counsel had been required to be briefed to attend on her behalf with respect to the issue of costs.

25. It was submitted by Ms Cocks of Counsel for the husband that the parties had been in conflict in relation to Child Support issues, that the orders sought by the husband sought to recognise what he considered to be an agreement between the parties but that ultimately he decided to discontinue his Response in circumstances where to proceed was not beneficial to either party.

26. I find for the same reasons to which I have already referred that the husband is in a superior financial position to that of the wife.

27. I am satisfied that the wife through her solicitor made an offer in writing to the husband to settle the proceedings. Such offer was refused by the husband but in circumstances where some nine days after the wife filed her Reply seeking a dismissal of the Response and some 22 days after the date of correspondence from the wife’s solicitor offering to settle that aspect of the Response, the husband filed a Notice of Discontinuance.

28. I find that the conduct of the husband in relation to that aspect of the proceedings resulted in the wife incurring significant unnecessary costs.

29. Taking into account the Reply filed by the wife and the affidavit in support thereof prior to the filing of the Notice of Discontinuance by the husband but subsequent to receipt by the husband of the wife’s solicitors correspondence containing an offer to settle the outstanding matters, it is appropriate for an order for costs to be made on the same basis as the order for costs in relation to the Application in a Case referred to earlier herein.

30. For those reasons I make a further order for costs as follows:

    a.Item 3: Interim or summary hearing – as a discrete event – $1,867.00

31. I will not of course make a further order with respect to counsel attending in relation to this aspect of the matter in circumstances where cost applications with respect to both aspects of the proceedings were heard contemporaneously.

32. The total order for costs therefore will be in the sum of $4,574.00.

33. For those reasons I make the following order.

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Judge Mead

Date: 22 March 2019