Cartham and Cartham

[2009] FamCA 692

FAMILY COURT OF AUSTRALIA

CARTHAM & CARTHAM [2009] FamCA 692

FAMILY LAW – COSTS – Between parties – Financial position of parties – Circumstances justifying order

Family Law Act 1975 (Cth) s 117(2A)

APPLICANT: Mr Cartham

RESPONDENT: Ms Cartham

FILE NUMBER: CSC 75 of 2007

DATE DELIVERED: 3 August 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Cairns

JUDGMENT OF: Watts J

HEARING DATE: 27 March 2009

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Miller Harris Lawyers

COUNSEL FOR THE RESPONDENT: Mr Baston

SOLICITOR FOR THE RESPONDENT: Williams Graham Carman Solicitors

Orders

1. The husband’s application for costs be dismissed. 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: CSC 75 of 2007

MR CARTHAM

Applicant

And

MS CARTHAM

Respondent

REASONS FOR JUDGMENT

1. In this matter orders were made by consent on 27 March 2009. 

2. Those orders effectively transferred a property at S to the husband.  The purpose of the transfer was to enable the husband to extinguish the current mortgage on the S property by refinancing the property with Westpac. 

3. The husband is thereafter further restrained from selling, mortgaging or otherwise encumbering or dealing with the S property. 

4. These interim orders have been made in order to preserve the S property pending the outcome of an amended notice of appeal filed on 18 December 2008.

5. The parties had a final hearing before Justice Benjamin who handed down his decision on 10 October 2008.  That order, amongst other things, required the wife to transfer to the husband her interest in the S property.  Arrangements were put in place by the husband to implement the orders of Justice Benjamin which required a refinance so that the wife could be paid monies.  After the wife appealed, Justice Benjamin on 10 December 2008 stayed the operation of the orders.  The husband says that the effect of this was that he was no longer in a position to pay instalments of principal and interest in respect of the mortgage on the S property (the responsibility for which the husband asserts was stayed in any event by the orders made by Justice Benjamin on 10 December 2008).  The husband asserts that during the stay proceedings the wife did not inform the court that she would not be able to continue to contribute towards the payments on the S property. 

6. A default notice was issued by the mortgagee of the S property on 18 December 2008. 

7. That notice was forwarded to the wife’s solicitors on 24 December 2008.  The wife’s solicitors did not respond until 14 January 2009.  The wife in her affidavit in reply says that although the office of her solicitor opened on 5 January 2009 her solicitor did not return to the office until 14 January 2009.  The wife asserted that the husband had the financial ability to pay mortgage payments and she did not.  She observed that if the husband did not repay the outstanding funds then she would “instruct the mortgagor [sic] to sell the property”.  The husband disputed the wife’s construction as to his responsibilities under the orders. 

8. On 16 January 2009 the husband’s solicitors wrote to the wife’s solicitors asserting that the wife did have the capacity to meet the mortgage payments and stating that an urgent application would need to be made to the Family Court.  In the letter of 16 January 2009 the husband proposed that he take over the responsibility for the mortgage on the basis that the wife transfer the S property to him to enable him to refinance it.  The husband would thereafter be restrained from further dealing with the property. 

9. On 20 January 2009 the wife’s lawyers wrote to the husband’s lawyers reiterating their assertion that the husband had the capacity to continue mortgage payments whereas the wife did not.  That letter, at least by implication, rejected the husband’s proposal to take the S property into his own name and refinance it.

10. A further letter debating issues was sent by the husband’s solicitors on 21 January 2009 and a further request was sent on 28 January 2009 indicating that an application would be made to the court for orders transferring the S property to the husband so that he could refinance it. 

11. Another letter was sent on 6 February 2009 after further correspondence had been received from Kemp Strang, the mortgagee’s solicitors. 

12. An affidavit was prepared and sworn by the husband on 26 February 2009 in support of an application in a case filed 2 March 2009.

13. The wife swore an affidavit on 26 March 2009.  The wife at paragraph 10 of her affidavit asserts that she was prepared to transfer the property to the husband but not upon the condition that he was to obtain finance.  I am unable to see in the correspondence annexed to the husband’s affidavit any indication that that is so. 

14. The wife explained that she could not understand how it was that the husband could make regular repayments of a mortgage that was in his sole name but not make regular repayments of the current mortgage in joint names. 

15. The wife’s affidavit includes email correspondence of 6 February 2009 and 10 February 2009, not annexed to the husband’s affidavit.  The wife deposes to a meeting with the husband on 14 February 2009 at which she showed him her debts and told him how much she had in her bank account.  She said he appeared to understand her financial position.  At that meeting the husband said he was attempting to arrange finance.

16. On 23 February 2009 the wife emailed the husband asking whether or not an agreement that she thought was reached at the meeting on 14 February 2009 would be implemented. 

17. The husband replied by email on 25 February 2009.  The email sets out the husband’s position in terms of resolving the matter on an overall basis.  The wife on that day wrote back to the husband saying that she thought that the husband had altered the position that they had reached in the face to face meeting.  The wife made it clear in the email of 25 February 2009 that there was no prospect of resolving the interim concerns of the husband arising from the notice from the mortgagee of the S property. 

18. The wife asserts that she was unaware of the husband’s application for finance prior to her being served with the affidavit in support of the husband’s application in a case.  The approval letter from Westpac is dated 23 February 2009.  It does not appear from the documents that the wife was given a copy of that approval letter prior to the application in a case being filed.

19. The wife’s contention is that it was only after she became aware that the husband had obtained unconditional finance that she was then prepared to agree to the transfer of the S property.  She said she did not wish to agree to a proposal to transfer the property on some promise that the husband would in the future obtain finance as she had been disappointed in the past by promises that he had made and not kept. 

20. The husband makes an application that the wife pay his costs for work related to the application in a case filed 2 March 2009.

21. The fundamental rule is that both parties are responsible for the payment of their own costs.

22. To make a costs order, circumstances have to justify it. The matters to be considered are set out in s 117(2A) of the Family Law Act1975 (“the Act”).

23. I have not been provided with a full financial statement from either of the parties.  That creates a fundamental problem for the husband in pursuing a costs application in this case.  I know from the affidavits relied upon something about the financial position of the parties.  The wife asserts that the husband’s combined household income is about $85,000 and that her own current financial position is poor.  The husband sets out limited information in relation to his financial position at paragraphs 46 to 51 of his affidavit.  I do not have any information, however, which would indicate to me what the net assets of the parties are nor do I know what the effect of the distribution of assets would be if the wife’s appeal against Benjamin J’s orders is unsuccessful.

24. Putting that problem to one side, however, it appears that the husband relies upon paragraphs 117(2A)(c) and (e) of the Act to pursue the costs application.

25. It is clear that the husband has obtained an order in terms of the application filed.  The wife, however, says that the information in relation to the husband’s ability to refinance only became known to her in the affidavit material in support of the application.  I do not have any information as to when the wife conceded the husband’s application.  In those circumstances the husband cannot heavily rely upon the fact that the wife’s concession means that she was “wholly unsuccessful in the proceedings”. 

26. Nor is there anything in the conduct of the parties that I have detailed in these reasons that would lead me to depart from the general rule that each party to proceedings under the Act should bear his or her own costs.

27. Accordingly I dismiss the husband’s application for costs.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts/

Associate: 

Date:  3 August 2009