CANTWELL & CANTWELL

[2018] FamCA 234

FAMILY COURT OF AUSTRALIA

CANTWELL & CANTWELL [2018] FamCA 234

FAMILY LAW – COSTS – Where the application for costs is made out of time – Whether to extend time – Whether there is prejudice to a party if time is extended – Whether there is prejudice to a party if time is not extended – Where there is dispute as to when final orders were made.

FAMILY LAW – COSTS – Between parties – Factors to consider under s 117(2A) of the Family Law Act 1975 (Cth) in determining costs – Whether a party has been wholly unsuccessful – Where the litigation was complex with a number of issues in dispute.

Family Law Act 1975 (Cth) ss 79(1A), 117(2A)
Family Law Rules 2004 (Cth) rr 1.14, 19.08, 19.08(1), 19.08(2),

APPLICANT: Ms Cantwell

RESPONDENT: Mr Cantwell

FILE NUMBER: ADC 1215 of 2014

DATE DELIVERED: 17 April 2018

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 5 April 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Jordan

SOLICITOR FOR THE APPLICANT: ORB Lawyers

COUNSEL FOR THE RESPONDENT: Mr Richards

SOLICITOR FOR THE RESPONDENT: David Burrell & Co

Orders

1. That the wife’s Amended Application in a Case filed 6 February 2018 be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 1215  of 2014

Ms Cantwell

Applicant

And

Mr Cantwell

Respondent

REASONS FOR JUDGMENT

INTRODUCTION 

1. Ms Cantwell (“the wife”) seeks an order for costs fixed in the sum of $75,000 for costs incurred in the period 30 November 2015 to 3 March 2017 which represents the period commencing the first day of the final hearing and the date of delivery of judgment and final orders being made.

2. Following judgment Mr Cantwell (“the husband”) filed a Notice of Appeal which if successful would have reduced the cash payment that the husband was ordered to pay to the wife by one half of a debt which the husband considered was owed to his parents.

3. The husband’s Appeal was dismissed on 4 October 2017.

4. Upon closer consideration of the reasons for judgment the parties agreed that there were certain aspects of the final order made on 3 March 2017 that required rectification.

5. The agreement to rectify was given effect by an order made pursuant to s 79(1A) of the Family Law Act 1975 (Cth) on 13 September 2017 which amended paragraph 1(a) of the final orders by deleting the sum of $923,435 and inserting $484,347.

6. The wife filed her Application for Costs on 31 October 2017. The application was the subject of amendment on 6 February 2018 in the following terms:-

   1.Extension of time to file this application out of time.

   2.      Pursuant to Rule 19.08 the Respondent pay the Applicant’s costs of and incidental to the proceedings from 30/11/15 being the date of service of the wife’s Case Outline document (and the date of the commencement of the trial) until 3/3/17 being the date of judgment.

   3.      That the costs payable under these orders sought be fixed in the amount of $75,000.

7. The amended application was supported by a modest affidavit.

8. The husband’s Response filed 9 March 2018 seeks that the wife’s Application for Costs be dismissed.

9. The wife recognises that she is out of time to bring her application and accordingly seeks an extension of time and, if successful, that the Court fixes the amount of her costs in the sum of $75,000.

IS THE WIFE OUT OF TIME?

1. By reference to Rule 19.08(2)(b) of the Family Law Rules 2004 (Cth) it is reasonable to consider that any application for costs should be made within 28 days of the final order. That consideration is complicated, firstly by the Notice of Appeal and then by the Consent Order made 13 September 2017.

2. Rule 19.08 provides as follows:-

   19.08(1)

   A party may apply for an order that another person pay costs.

   19.08(2)

   An application for costs may be made:

   (a)at any stage during a case; or

   (b)by filing an Application in a Case within 28 days after the final order is made.

3. Rule 1.14 provides for the shortening or extension of time within which to bring an application. The rule provides as follows:-

   1.14(1)

   A party may apply to the Court to shorten or extend a time that is fixed under these Rules or by a procedural order.

   1.14(2)

   A party may make an application under subrule (1) for an order extending a time to be made even though the time fixed by the rule or order has passed.

   1.14(3)

   A party who makes an application under subrule (1) for an extension of time may be ordered to pay any other party’s costs in relation to the application.

4. The wife sought an order in the Amended Initiating Application filed 20 June 2014 that the husband pay her costs of and incidental to the application.

5. Whilst such an application for costs is often included in applications even if there is no likely intention to seek costs, nonetheless it could not be said that the husband was not on notice of the wife’s application.

6. It is a reasonable argument that the wife did not necessarily need to bring a separate application other than where she seeks that her costs be quantified rather than if successful, to be either agreed or assessed.

7. In support of the wife’s application for extension of time she argues that if a formal application is required then it is either not out of time, or that there should be no reasonable opposition to an order be made extending time in circumstances where the husband’s Appeal was determined on 4 October 2017 and her costs application was filed 31 October 2017.

8. She further argues that the order of 13 September 2017 should be considered as the “final order” and if so then her application is out of time by 19 days.

9. The husband argues that the order of 13 September 2017 was effectively rectification made necessary by judicial error and should be considered not dissimilar to an application under the slip rule. It should not therefore be given the status of a “final order” from which time for the wife to bring an application for costs should then run.

10. The status of the consent order made on 13 September 2017 should not be underestimated. It was not a slip rule issue but rather, a decision by the parties to correct what was considered by them to be an error in the judgment resulting in a substantially different settlement sum payable by the husband to the wife.

11. The proceedings were complex. It was reasonable for the parties to consider that until the husband’s Appeal had been determined it was premature for the wife to bring any application for costs.

12. The order of 13 September 2017 did more than rectify paragraph 1(a) of the final orders. The order contemplated the Appeal. The parties agreed that there should be a stay of the payment of a portion of the rectified settlement sum of $484,347 in the amount of $104,000 which may have represented a further reduction of the settlement sum payable by the husband to the wife in the event that his Appeal was successful.

13. A further consideration is whether it could be said that there is prejudice caused to either party in considering whether the wife’s application for an extension of time should be allowed.

14. The husband has been on notice of the wife’s application for costs arising from the Amended Initiating Application. There are no financial issues raised by the husband which would suggest that he would suffer prejudice by the wife’s application being brought out of time. The affidavit in support of the husband’s response provides little assistance in determining the basis upon which the husband opposes an extension of time. His documents do not allude to any prejudice that is likely to be caused to him if the Court allows the wife’s application.

15. The wife’s position is that there would be prejudice caused to her in that she would be denied the opportunity to have her application for costs heard and determined where there has been notice of her intention to seek costs and the litigation between the parties has continued up until the resolution of the husband’s Appeal on 4 October 2017.

16. To the extent that it is necessary, I propose to extend time for the wife to bring her Application for Costs.

WIFE’S APPLICATION

1. The wife seeks an order for costs to be paid by the husband on a party/party basis but she does not seek indemnity costs.

2. In considering what order should be made, if any, in respect of the wife’s costs, s 117(2A) of the Family Law Act 1975 (Cth) requires the Court to have regard to the following:-

   (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, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of fact, 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 made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g)such other matters as the court considers relevant.

3. Accordingly, I have a wide discretion in respect of matters relating to a potential costs order.

4. The gravamen of the wife’s application is as set out in paragraph 8 of the Affidavit of her solicitor filed 31 October 2017:

   8.I am informed by my client and verily believe that the principal issues between the parties were the ownership/control of the [Cantwell] interest in [Suburb C S Business] and the value of the net asset pool. As to the first issue, in respect of which the husband was wholly unsuccessful. Further, I am informed that the husband failed to provide financial information in a timely manner to enable the value of the asset pool to be ascertained.

5. By reference to the wife’s solicitors further Affidavit filed 6 February 2018, he annexes a copy of the wife’s Case Outline document filed and served on 30 November 2015 which reflects the extent to which the wife was successful in securing the orders sought by her.

6. The focus of the wife’s application is that she considers she has been wholly successful in respect of a significant aspect of the proceedings, with the corollary being that the husband was wholly unsuccessful.

7. The wife argues that the parties had at all material time agreed that there should be an equal division of the asset pool. Whilst there was still some contention as to what the pool should be, the real focus of the dispute was on the husband’s opposition to the suite of orders sought by the husband which would transfer the husband’s interest in CC Trust and the Suburb C S Business Unit Trust which would have the effect of transferring the ownership of the Cantwell interest in Suburb C S Business to the wife.

8. The husband’s counsel argues that in a complex financial matter the extent to which the issues are inter-related cannot be understated.

9. The reasons for judgment provides extensive consideration of a range of other issues between the parties including the following:-

   (1)The manner in which the parties separate interests in the Cantwell Superannuation Fund should be dealt with.

   (2)The determination of certain items of asset and liability that were in dispute between the parties.

   (3)Whether certain notional assets as nominated by the wife should be “added back”.

   (4)The status of the husband’s parents purported loan of $208,000.

   (5)The treatment of legal fees paid by each of the parties.

   (6)The wife’s assertion that the husband’s conduct was “unsatisfactory” by reference to the transfer of funds to Country T in breach of an order and an assertion that he had failed to produce financial information and financial statements in a timely manner.

10. If the parties had been in agreement as to all matters other than who should retain the Cantwell interest in Suburb C S Business, there may have been merit in the wife’s application. The issue of who should retain the Suburb C S Business was integrally related to the entirety of the evidence and many of the issues in dispute were inter-related.

11. The proceedings were made necessary not just because of the dispute as to the Suburb C S Business, but also because the parties were not able to reach a concluded position as to the asset pool.

12. It is relevant that whilst the evidence concluded in May 2016, orders were made extending the time for the parties to file and serve further written submissions and updated balance sheet to September 2016.

13. The wife’s counsel properly highlights that the dispute between the parties concerning the retention of their interest in the Suburb C S Business was a significant dispute, but it ultimately did not constitute the entirety of the dispute.

14. Evidence was heard from three witnesses in support of the husband’s opposition to the wife’s application and it is asserted that there was a significant amount of hearing time taken up with the issue.

15. The affidavit material filed in support of the wife’s application provides the Court with no assistance in that regard. While I accept that the status of the parties interest in Suburb C S Business was a central issue, in the circumstances of this case the determination of the issue did not constitute the overwhelming bulk of the evidence.

16. I am not prepared to find that the husband has been “wholly unsuccessful”. Even if the husband had conceded the transfer of his interest in Suburb C S Business, there would still have been the need for lengthy and complex proceedings.

17. I propose to exercise my discretion and find that each party should bear their own costs.

QUANTUM

1. Given my determination, it is not necessary to significantly consider the quantum of the costs sought by the wife. If it had been necessary, then the affidavit material in support of quantum would have provided no assistance.

2. Notwithstanding that the wife considered the sum as sought would have represented a substantial concession on the total of her fees incurred, the Court was not assisted by any reference to the wife’s costs incurred on a party/party basis, whether there was a significant solicitor/client component, what factors were relevant to determining how the figure of $75,000 was calculated and how the discount was determined.

3. I make orders as appear the commencement of these reasons.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered 17 April 2018.

Associate:

Date:  17 April 2018