Cambridge and Cambridge (Costs)

[2011] FamCA 249

FAMILY COURT OF AUSTRALIA

CAMBRIDGE & CAMBRIDGE (COSTS) [2011] FamCA 249

FAMILY LAW - COSTS – Whether an order for costs for proceedings for settlement of property should be made against the husband – Not established that the asserted disparity in financial circumstances of the parties would justify the making of an order for costs against the husband – Where the husband failed to give evidence and/or gave misleading evidence – Where an offer of compromise was made on behalf of the wife – In all the circumstances, an order that the husband pay the wife’s costs of the trial of the proceedings would be appropriate

Family Law Act 1975 (Cth) s 117

APPLICANT: Ms Cambridge

RESPONDENT: Mr Cambridge

FILE NUMBER: DUC 420 of 2008

DATE DELIVERED: 8 April 2011

PLACE DELIVERED: Parramatta

PLACE HEARD: By written submissions

JUDGMENT OF: Coleman J

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hodgson

SOLICITOR FOR THE APPLICANT: Booth Brown Samuels & Olney

COUNSEL FOR THE RESPONDENT: Mr Berry

SOLICITOR FOR THE RESPONDENT: Peacockes

Orders

1. That the husband pay the wife’s costs of and incidental to the trial of the proceedings on 6, 7, 8 and 9 September 2010 as agreed or assessed on a party and party basis.        

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: DUC 420 of 2008

Ms Cambridge

Applicant

And

Mr Cambridge

Respondent

REASONS FOR JUDGMENT

(COSTS)

1. Subsequent to the conclusion of the hearing of proceedings for settlement of property between the parties, on 9 September 2010 the wife sought an order that the husband pay her costs of and incidental to the proceedings. That offer was based upon a number of facts or circumstances within Section 117(2) of the Family Law Act 1975 (Cth) (“the Act”).

2. The first of the matters relied upon by the wife was the financial circumstances of the parties. The Court is not of the opinion that the asserted disparity in financial circumstances of the parties would justify the making of an order for costs against the husband.

3. As the evidence at trial established, and the submissions of Counsel for the husband contend, there is a substantial element of ongoing risk in relation to the husband’s financial position. Objectively, for all the Court knows, the husband may presently be in a significantly worse financial position than the wife is, but it does not so find or infer.

4. In its judgment in the substantive proceedings, the Court recognised that the husband had always been in a stronger financial position than had the wife. That was a matter of relevance in the Court’s assessment of the parties’ contribution based entitlements. Without more, that potentially superior financially position would not lead the Court to form the requisite opinion. On the other hand, if the discretion to award costs to the wife were otherwise enlivened, the husband’s potentially superior financial position would preclude declining to make a costs order in the wife’s favour.

5. The second matter relied upon by Counsel for the wife related to the husband’s conduct in the proceedings. As is not in doubt, the husband was found to have blotted his escutcheon in the two significant areas referred to in the submissions of Counsel for the wife. Counsel for the husband essentially submitted that, whilst such conduct would be difficult to justify, the husband got his “comeuppance” in the substantive judgment of the Court. Accordingly, Counsel for the husband effectively submitted that to have regard to that reality would, in the circumstances be no more and no less than to punish the husband for his conduct. The fact that an order for costs may have that effect would not preclude the Court from making it if it was of requisite “opinion”. There may be cases where conduct is such as to render a purely punitive order appropriate, but that is not this case.

6. Whilst it is difficult not to agree with the submission of Counsel for the wife that the husband’s failure to give evidence and/or willingness to give misleading evidence with respect to the two issues identified by him cannot be excused or relegated to insignificance on the basis of naïveté or inadvertence, as the Court noted in its primary judgment, the husband’s attempts were spectacularly unsuccessful, and not consistent with the evidence he otherwise gave. The husband paid dearly for them. It cannot be said that they were always going to be unsuccessful. Indeed, as the Court acknowledged in its primary judgment, but for the intuition, skill and persistence of Counsel for the wife, the husband’s subterfuges may have been successful.

7. As is not in doubt, the amounts of money involved in the husband’s indiscretions were significant, the culpability of the husband’s non-disclosures or inaccurate disclosures being the greater thereby. Whilst, in logic, the submission of Counsel for the husband that he has already been “pinged” for his misdeeds resonates with the Court, the fact remains that the Court is concerned that it not reach a conclusion which, in effect, implies that an unsuccessful attempt at deception ought not rebound on a litigant on the basis that the failure of that deception has resulted in a greater primary liability than would otherwise have been the case. That would potentially set a very undesirable precedent.

8. Approaching the matter in the manner urged by Counsel for the husband in a case such as the present, ignores the nature and magnitude of the non-disclosure, or misdisclosure, and ignores the reality that the trial of the proceedings was thereby necessitated and that, albeit not a lengthy trial, time was necessarily taken up in the revelation of things which the husband should have revealed sooner and more honestly than he did. In the absence of a full and frank disclosure, as Counsel for the wife submitted, the wife’s costs were increased, and she had no alternative than to proceed to trial. This factor would incline the Court to form the opinion that the costs of trial should be visited upon the husband.

9. That is said having regard to the submissions of Counsel for the husband as to the timing of the filing of material and the reality that, as events at trial confirmed, right up to the time his cross-examination commenced, it was open to the husband to “come clean”, as he readily did when confronted with the damaging evidence he had failed to disclose, or had misdisclosed, by Counsel for the wife in cross-examination. It is also relevant to have regard to the material which proved so devastating to the husband’s case at trial, when it emerged, and how it did. All of these significant events occurred during the trial itself.

10. Counsel for the wife also relied upon the making of an offer of compromise on behalf of the wife. As is not in doubt, in July 2009 the wife made an offer to compromise the proceedings on the basis that she retain the property possessed by her and receive an additional $456,252.77. As is also not in doubt, at trial the wife was awarded $478,000 in lieu of $456,252.77 on that basis.

11. Counsel for the husband submitted that, whilst the award obtained by the wife at trial exceeded the offer to settle which she had made by the sum asserted by her Counsel, the reality that the husband was afforded time to pay, albeit with CPI adjustments to the capital liability and interest thereon during the period in which the wife’s entitlement remained unpaid, meant that the wife ought not be seen as having achieved a materially more advantageous result than her offer to settle entailed. There is logic in that submission, but it overlooks the reality that what the wife obtained at trial significantly exceeded what the husband offered, and does not appear to be suggested to be, or in fact to be less in real terms than she had offered to accept more than a year previously.

12. There is also substance in the submission of Counsel for the wife that the husband’s failure to accept the wife’s settlement offer in circumstances where he attempted to mislead her and the Court, or to fail to make a full and frank disclosure of relevant financial matters to her and the Court, should be viewed somewhat differently, and more favourably to the wife, than would otherwise have been the case. That submission has some attraction, but ultimately the Court does not need to accept Counsel for the wife’s proposition in order to determine the costs issue. It does overlap the “conduct” submissions made by Counsel for the wife which have been discussed earlier.

13. Until the day for trial, particularly having regard to the nature of the husband’s assets and liabilities, his true financial position was somewhat fluid, and indeed, on the evidence which ultimately emerged, the husband’s net worth would have varied significantly over the period between the date of the wife’s offer of compromise in July 2009 and the trial of the proceedings. The wife’s offer to settle may, until almost the date of trial, represented a greater percentage entitlement than she achieved at trial, but it is unnecessary to speculate about that.

14. As the Court noted in its primary judgment, the husband’s non-disclosure and misdisclosure stood in stark contrast to the balance of his evidence, which was reliable and impressive. To the extent that the wife was put to the cost of a trial as a result of the husband’s indiscretions, so doing was ultimately to her advantage.

15. The Court considers that, in all the circumstances, an order that the husband pay the wife’s costs of the trial of the proceedings would be appropriate. The reasons why that is so have essentially been suggested, but in essence involve in part the husband’s failed attempt to “pull the wool over the Court’s eyes” in the respects referred to in the judgment in the substantive proceedings and the reality that, prior to the commencement of the trial, the wife made an offer to settle which was no less favourable to her than the award which she recovered at trial. Such an order would in the Court’s view be appropriately compensatory, but not unreasonably punitive.

16. The Court is of the opinion that, in all the circumstances, an order that the husband pay the wife’s costs of the trial as agreed or assessed on a party and party basis would be appropriate.

17. Whilst no submissions on behalf of the wife appear to urge the Court to make an order other than on a party and party basis, making an order for costs on that basis would be appropriate having regard to the matter raised by Counsel for the husband to which reference has earlier been referred. In circumstances where the husband’s non-disclosure or deception has rebounded upon him as substantially as it has in this case, solicitor and client or indemnity costs against the husband would not be justified.

I certify that the preceding seventeen (17) paragraphs are a true copy of the Reasons for Judgment (Costs) of the Honourable Justice Coleman delivered on 8 April 2011.

Associate: 

Date:  08.04.11