Bulleen and Bulleen (No 2)

[2012] FamCA 594

FAMILY COURT OF AUSTRALIA

BULLEEN & BULLEEN (NO. 2) [2012] FamCA 594

FAMILY LAW - Costs

Family Law Act 1975 (Cth)

APPLICANT: Mr Bulleen

RESPONDENT: Ms Bulleen

FILE NUMBER: MLC 12431 of 2007

DATE DELIVERED: 26 July 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: By way of written submissions

SUBMISSIONS RECEIVED FROM

SOLICITOR FOR THE APPLICANT: Gaden Lawyers

SOLICITOR FOR THE RESPONDENT: Lewis Allen Janover

Orders

1. That the wife pay three-quarters of the husband’s costs arising out of the proceedings culminating in the orders made on 8 March 2012, such costs to be by agreement and failing agreement, as determined according to the scale set out in the Schedule to the Family Law Rules 2004.

2. That the applications for costs are otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bulleen & Bulleen 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 MELBOURNE

FILE NUMBER: MLC 12431  of 2007

Mr Bulleen

Applicant

And

Ms Bulleen

Respondent

REASONS FOR COSTS JUDGMENT

1. On 6 March 2012, I determined a dispute arising out of final property orders made earlier by me.  I made provision for either party to make an application for costs.

2. By written submission filed 16 March 2012, the husband applied for his costs and by written submission in reply filed 29 March 2012, the wife set out her position opposing the husband’s costs. 

3. The husband’s application was based upon the fact that the wife’s approach was an unsuccessful attempt to re-agitate the property proceedings fixed at trial in November 2009.  It was submitted that the wife had received a significant amount of money and had been overpaid and she was also to resign various corporate positions.  It was asserted that she had failed to do so.  In respect of the proceedings before me in March, it was asserted by the husband that the wife had been wholly unsuccessful.

4. Essentially, the proceedings before me related to two issues.  The question of the entitlement of the husband to his money, having overpaid the wife and secondly the distribution and completion of the distribution of the artwork which had been ordered by a series of earlier orders. 

5. In her submission in relation to costs, the wife said that there was a Notice of Appeal filed against my orders and there should be no order pending the decision of the Full Court. It was submitted in the alternative that each party should bear their own costs but that there were no circumstances here that would justify any order being made. The submission drawn by counsel for the wife referred to the matters set out in s 117. It was submitted by the wife that there was no basis to assert that she had not properly applied for her entitlements. She did not seek to change the percentage divisions but rather how they were applied because the pool of assets was in dispute. It was submitted further that the problem associated with her percentage entitlement was that it was affected by valuations and the distribution of artwork as well as taxation expenses. The wife submitted she was justified in challenging the husband’s view of her entitlement because the amount involved was a significant amount of money which had initially been accepted by the husband and his accountant.

6. Counsel for the wife then dealt with the matters in s 117(2A) indicating that each party had substantial financial resources, the wife’s application raised an issue that had not been considered before and that it was not attempt to re-agitate the proceedings as had been asserted by the husband. There was no suggestion she had failed to comply with previous orders and was not wholly unsuccessful because she obtained the relief she sought in respect of the painting.

7. In respect of the orders I made, I gave reasons which included the following:

   26.Counsel for the wife also provided an outline of her case highlighting the fact that the central issue was whether the amount to be paid to the wife should take into account 46.7 per cent (being her entitlement from the 2010 orders) of the income earned subsequent to 1 July 2009 until she ultimately received the monies.  It was argued that the property of the parties comprised real estate, shares in listed companies, artwork and cash but also the earnings on the various passive assets. 

   I went on to point out that to the extent that subsequent to the determination I had made, the value of the assets had changed, there was no basis in my view to recalculate the pool.  That was so because the parties had litigated about a defined amount of equity in a specific set of assets. 

8. I then said:

   36.Accordingly I find that the power in s 79 has been exhausted largely because of the fact that the parties agreed upon how the individual assets within the pool were to be divided and that the consequences were that each knew what was being received and the values were then calculable having regard to the amounts set out in the trial.  The only obvious variation would have arisen in circumstances which I had contemplated.  That is, where a valuation altered because of the sale of a particular asset.  That must be so in circumstances where the parties knew that that was the likely occurrence.

   37.I had determined that a division of the known assets on the percentages that I declared was just and equitable and the parties themselves had decided who was keeping what assets within that just and equitable determination.  Accordingly, there is no basis for any further contemplation of the pool.

   38.It is important to also recognise that this was not an oversight or an error.  The parties knew what they were litigating about and made clear how the Court was to do it.  That situation cannot be revisited now.

   39.As I earlier mentioned, a quantum was not a matter about which there was an argument with evidence and accordingly the only evidence I have is that the wife owes the husband $69,995. 

9. In respect of the artwork that was in dispute, I said that the orders that I had previously made in relation to the delivery of the artwork were of a machinery nature and there was no reason to alter the situation there.  Each of the parties faced the prospect of causing damage and dealing with it depending upon how that delivery occurred.

10. Section 117 of the Family Law Act 1975 (Cth) (“the Act”) provides that each party shall bear their own costs unless there are circumstances that justify a departure from that rule and if the Court considers there is such a situation, it must take into account the matters set out in s 117(2A) of the Act.

11. In this case, although the wife was not endeavouring to alter the percentage division, she certainly was endeavouring to increase the amount that she received by virtue of altering the quantum of the pool upon which I had been working.  As I pointed out, if the pool had changed, there may have to be a reconsideration of a variety of issues associated with such things as contribution factors.  That would have meant a re-arguing of the case.

12. This was an ongoing dispute between the parties over significant sums of money in an environment where each party was walking away with millions of dollars in any event.  The artwork was just another example of how the dispute lingered on and each was prepared to dispute the question of such things as damages that might arise from the removal of a painting from the wall. 

13. Although there is an appeal pending against my decision, I do not believe it is appropriate to leave the issue of costs until the determination of the Full Court.  If I determine the costs issue now, it can be made the subject of that same appeal.  There is no prejudice to either party by me determining the matter in that way.

14. In my view, there are here circumstances that justify a departure from the principle because the wife litigated in circumstances where her trial had been conducted on the basis of a set pool.

15. In determining whether a costs order should be made however, the matters set out in s 117(2A) are relevant. In this case there can be no doubt about the financial circumstances of each party. Each is very wealthy. In respect of compliance with court orders, I do not accept that the wife had failed to comply with orders. This case has had a significant history where the parties disputed interpretations of orders and could not reach agreement about the best way to resolve the problem for their own benefit including in relation to taxation issues. There can be no suggestion of any legal aid issues here and each party complied with orders in relation to the filing of matters in an appropriate way. Neither party was wholly unsuccessful because at least in respect of the artwork, the removal of the painting had to be determined where the parties had not previously indicated there was a problem with the paintings removal and as such, working out a way to avoid themselves being involved in damages.

16. Costs in proceedings such as this are not intended as a punishment but rather to compensate the person who has had to go to the trouble of litigating to get the result that the Court intended.

17. Here, the husband was unable to get a resolution of his entitlement without litigating.  The wife refused to comply with his request to repay money which he had paid to her in anticipation of a result.  Negotiations indicated what he was prepared to do in the early part of that process but agreement could not be reached and as such, I find he had little choice but to continue with the proceedings.  The position adopted by the wife which would have seen her receive substantially more than I have ordered, was one that was opposed on legal grounds which I found to be correct.  On that basis, whilst the artwork may have indicated that neither party was wholly unsuccessful, there can be little doubt that the wife was much more unsuccessful than was the husband.

18. In my view, there is a justification for an order for costs but it should only on the basis of party and party rather than solicitor/client and in the general exercise of my discretion, I propose to say that three-quarters of that costs are associated with the money issue and therefore, the wife should contribute three-quarters of the husband’s costs fixed according to the scale but also bearing in mind that I certified that it was reasonable to engage senior counsel and two counsel for both parties.

I certify that the preceding Eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 26 July 2012.

Associate: 

Date:  26 July 2012